Wednesday, August 22, 2012

What Happened After Europe’s Last Three Currency “Unions” Collapsed

from Zero Hedge:

It may come as a surprise to some of our younger readers, that the Eurozone, and its associated currency, is merely the latest in a long series of failed attempts to create a European currency union and a common currency. Three of the most notable predecessors to the EUR include the Hapsburg Empire, the Soviet Union, and Yugoslavia. Obviously, these no longer exist. Just as obvious, all of these unions, having spent time, energy, money, and effort to change the culture and traditions of member countries and to perpetuate said unions, had no desire, just like Brussels nowadays, to see these unions implode. The question then is: what happened after these multi-nation currency unions fails. VOX kindly answers: “they all ended with disastrous hyperinflation.

Read More @ Zero Hedge

Grain Prices Remaining at Lofty Levels / By Dan Norcini / Tuesday, August 21, 2012

Word out of the crop tour this AM has sent both corn and soybean prices strongly higher dragging wheat along for the ride.

The supply seems to keep shrinking as each successive yield estimate comes in with a lower number. Once the market comes to grip with the actual supply number for this year, the focus will shift to the demand side of the equation and whether or not the market is doing its job of rationing supplies.

One thing is for certain – we, the consumer, are going to be reeling at the grocery store very soon.

Take a look at my Grain Composite Index – if you thought grain prices were high back at the peak of the commodity bubble in 2008, you ain’t seen nuthin’ yet! The Index is firmly above that level.


Richard Russell – The Key To Stocks, Gold & Growing Old / August 21, 2012

The Godfather of newsletter writers, Richard Russell, had a number of interesting thoughts regarding gold, stocks and growing old. Here is what Russell had to say: “A lot of my subscribers are over 60 years of age, and no doubt many of you are looking forward to your 80s. So I thought the following might be of interest.”

Richard Russell continues:

“I’m just getting used to being 88 years old. The first thing I notice is that I get tired easily, and I mean really tired. I talk to my sister, Kate, who lives in Greenwich, Connecticut. Kate is 84. Her favorite expression is, ‘Growing old is not for sissies.’

I ask Kate if she gets tired too. She says, yes, she does get very tired. One thing she’s learned is that she can only do one thing a day. In other words, if Kate goes to the market to shop for food supplies, that about does it. She comes home really tired, sits in her easy chair for the afternoon, and watches TV, usually the news.

I’ve discovered that Kate is right. I tell myself I can do two or three things in the morning, but if I do that, then I’m exhausted for the rest of the day. ‘One errand a day’ is my new motto. Also, one alcoholic beverage a day, and that’s it. Two and I’m out of commission.


Silver to surpass $50/oz, Gold to reclaim $1900/oz by late this year

by Smith Mckenna, Bullion Street:

The precious metal boom that was cut short in 2011 could be making a strong comeback in late 2012 and over the next few years, said Stephen Smith, managing member of Smith McKenna, LLC.

He said the metal to keep a watchful eye on is silver. Analysts and precious metal experts are in harmony on predictions of silver surpassing $50/oz. and gold edging above $1,900/oz by as early as year end.

Investing in silver ahead of the future outlook for both the global economy and manufacturing sector could prove to be very rewarding. 2011 marked the end to a bullish few years which made a lot of people very wealthy.

While gold is still expensive, silver is the commodity that investors should be paying special attention to. Silver in relation to gold is priced substantially lower; it’s undervalued and is expected to respond bullishly over the next few years.

Read More @

Jay Taylor: Turning Hard Times Into Good Times

Part 2 listen here

8/21/2012: LIBOR Rigging? Why Would Gold Be Exempt?

Chart of the Day - TransCananda Pipelines (TRP)

The "Chart of the Day" is TransCananda Pipelines (TRP), which showed up on Monday's Barchart "All-Time High" list. Transcananda Pipelines on Monday posted a new all-time high of $46.49 and closed +0.74%. TrendSpotter has been long since July 16 at $42.70. In recent news on the stock, TransCanada on July 27 said that over the next three years it expects to complete $13 billion of projects that are currently in the advanced stages of development. TransCananda Pipelines, with a market cap of $32 billion, is a North American energy company that is focused on natural gas transmission and power services. Their pipeline transports the majority of Western Canada's natural gas production to growing markets in Canada and the United States.


Why Chinese Inflation Risk Is Over Three Times Greater Than In America / By Tyler Durden / August 21, 2012

As everyone awaits (or doubts) the next coordinated central planning bank action – whether Fed QE (Lockhart stymied?), ECB ‘bottomless pockets’ (Merkel’s back), or China RRR (reverse repos?) – the prices of things we need (as opposed to want) continue to rise. Nowhere is this more important than in China with its extremely high levels (and volatility) of deposit flows increasingly levered to re-inflationary actions by the PBoC. The critical aspect of the following analysis is that in the US, the stock market acts as an ‘inflation buffer’ for the rich’s excess disposable income; in China, this is not the case and given the greater than 3.4x leverage compared to the US, PBoC actions flow much more rapidly through the populace to the things they need – and right now more inflation is not what they need or want – which perhaps explains the reverse-repo ‘gradual’ tightening.

1) Chinese deposit volatility is massively high and extremely prone to ‘inverse’ window-dressing (as Bloomberg’s chart of the day pointed out yesterday) which makes the PBoC’s role as credit-monitor very hard. The chart below shows the outrageously obvious pump up in deposits (lower pane) as banks offer incentives to attract deposits and meet PBoC regulatory needs – only to let them flow back out and tighten their offers after…


BOOM! Silver Vaults Higher – Remember That “Big, Big Move” GATA’s Bill Murphy Predicted?


According to Market Watch, Gold futures climbed Monday to close at their highest level since June 19th. Silver was the biggest mover on Monday with a 2.1% gain on the day to a new 2-month high, which the mainstream media attributes to ‘technical trading’.

Maybe. But maybe it’s something more. As our friend Bill Murphy told us on July 19, his London source assured him that “BIG, BIG Gold & Silver Moves Are Coming in August”. It’s August folks, and Ag is on the move. Credit +1 to Bill.

With the European Union staring at the edge of the September 12th abyss, and the big guns like Jacob Rothschild, his minion George Soros and John Paulson literally betting on a collapse, people may be starting to wake up to the cold harsh reality of the potential nightmares we face.

As the financial collapse finally becomes apparent to all, the dumbed down masses will eventually stampede into the precious metals, it’s inevitable. Central Banks across the globe and deep pocketed Billionaires are already rushing into gold. Although for now the big boys appear to be utilizing paper ETF’s to shore up their positions, perhaps in part, as a method to provide propaganda for the general public that “paper gold is perfectly safe”. These folks also own a king’s ransom in physical. Which leaves those of us who know the truth to conclude, “PHYSICAL silver below $30? Still a bargain!”

At this point it may be prudent to revisit the words of James Turk, “A beach ball submerged for far too long only has one way to go upon its release. Straight up.”