"the actual picture for US profigacy dictates that interest rates must not rise much. a'
Which is why, IMO, the Fed is in a desperate position of keeping interest rates low to finance the now almost 18 Trillion in US debt. They have reached the questionable 5.9% unemployment rate with not evidence of inflation (ha!) and yet they continue ZIRP for a supposed weak economy. They are trying to squeeze as much revenue to fund future obligations. Service sector jobs and low wage growth combined with weak European growth and a strengthening dollar are not in their best interests of achieving their goal.
Per the Wall St. Journal from about 3 weeks ago. The avg. interest rate for all US bonds was at 1.87%. Current interest on the US debt is running around 225 Billion per fiscal year. Yes? When the 10 year ran up to around 3% last year it was estimated to add around 25 Billion in interest when total debt was around 17T. We are now approaching 18T.
If the Fed starts raising interest rates then US internationals have to contend with a stronger dollar that hurts their bottom line, negatively impacts the stock markets and thus pension and retirement funds, and increases the interest on the US debt.
There will be an event. Could be the currency markets in a race for devaluation. Emerging markets balance payments in dollars is not pretty with a stronger dollar. Could be several events at once. Pick one.
"This was a milestone that would have likely triggered a flood of capital into both physical gold in this country and into the futures. A move like this would have destroyed the credibility of the U.S. dollar as the world’s reserve currency. It further would reflect the actual truth regarding the collapsing economic/financial condition of the United States."
A parallel argument could be made that the flight to gold and futures would have put pressure on US Treasury buying as a safe haven resulting in a rise in interest rates that the Fed is/was desperately trying to avoid.
The Fed and other CB's are running out of corner and paint, (debt limit/payments and policy).
I'm glad you brought up Mr. George from the ghost. Those were heady days when the 43-101 came out with that 15-18M oz resource. Or was it closer to 20? I have forgotten. Wouldn't it be ironic that George was correct after all.
As for the BCSC, I think an apology would necessitate financial compensation for the company and shareholders and paid psyche therapy for management. It was that dirty deed done cheap that seems to have influenced RBY to the path it is now on.
Perhaps, the cosmic scale will balance. Time will tell. I await for the next GG.
Weather forecast for tonight: Dark with scattered light by morning.
Tomorrow will bring us partly cloudy with sun before noon followed by partly sunny with clouds in the afternoon.
Any thoughts on the new daily pricing mechanism that went into affect almost a couple of weeks ago? It seemed as if silver was not affected as much on the downside when gold was getting taken down. There have been a few days gold was down close to double digits and silver was only down 10-18 cents vs. .45-60 cents for the old daily fixing price. Direct correlation?
I have also read that nothing has really changed since the pricing has moved from London to the CME and Comex. Pricing can be manipulated by the algorithms that the electronics use.
Any thoughts or articles you have read?
Per Bloomber BizWeek he is 61 years old.
Mr. Kevin Cameron Drover has been the Chief Executive Officer and Director at Oracle Mining Corp since November 12, 2013. Mr. Drover serves as a General Director of OJSC Omolon Gold Mining Company. He served as the President of Gold Hawk Resources Inc., from July 17, 2006 to June 30, 2011. He served as the Chief Executive Officer of Gold Hawk Resources Inc., since July 1, 2006. Mr. Drover served as the Chairman of Oracle Mining Corp from October 5, 2010 to June 30, 2011 and served as its Chief Executive Officer from July 1, 2007 to June 30, 2011, President from July 17, 2006 to June 30, 2011 and Chief Operating Officer from July 17, 2006 to July 1, 2007. Mr. Drover served as the Chief Operating Officer of Gold Hawk Resources Inc., from July 17, 2006 to July 1, 2007. He served as the Chief Operating Officer of Central Sun Mining Inc. (Former Name: Glencairn Gold Corp.) from February 2, 2004 to April 30, 2006 and was a responsible its operations in Nicaragua, Costa Rica and Canada. Mr. Drover has more than 30 years of progressive, international management experience in the mining industry. He served as a Vice President of Operations at Kinross Gold from 1999 to December 2003. Mr. Drover served as a Vice President of Underground Operations at Kinross Gold Corp., since February 2003 and also served as its General Manager of Kubaka Mine since December 1998. During his five years with Kinross, he served as General Director of Kinross subsidiary in Russia's far east that owns and operates the Kubaka Mine. Prior to joining Kinross, he served as a General Manager of Black Hawk Mining Inc.'s Keystone Gold Mine in Manitoba. He worked for Lac Minerals, BP Canada Resources and Noranda Mining. He serves as Chairman of the Board at Benz Capital Corp. He served as the Chairman of Gold Hawk Resources Inc. from October 5, 2010 to June 30, 2011. Mr. Drover has been a Director of Benz Capital Corp., since November 9, 2011 and Aurcana Corp
If I remember the bold Davidson statement from long ago and far far away.
GG- 800M shares, roughly.
RBY- 380M shares, roughly.
Seems as if we are on our way. Halfway there.
"What I mentioned as a better alternative a few months ago was a rights offering, where the discount and incentive to purchase would be given to the existing shareholders, and would have prevented the shares from getting crushed by this current selling."
MUX made a similar transaction over a year ago with that guy, Rob whats his name, lol, putting up a sizeable portion of his money into the subscription if I remember correctly:
We are conducting two concurrent rights offerings because we have two classes of shares: common shares of McEwen Mining ("Common Shares"); and shares of Exchange Co. that are exchangeable on a 1-for-1 basis into Common Shares ("Exchangeable Shares"). The Rights Offerings will provide that holders of Common Shares and Exchangeable Shares will participate on an equal and proportional basis with other holders of the same class of shares in purchasing additional shares of the same class of shares at a considerable discount to the current listed price.
"I believe a rights offering, versus all other forms of financing, is the most fair to our shareholders. We are giving the Companies' current shareholders who have been supportive and loyal to the Company the first right on this financing. I am personally backstopping this financing for $60 million because I believe McEwen Mining has a bright future," said Rob McEwen , Chairman and Chief Owner.
Excerpt from the Kid's link:
"Germany’s financial regulator was the first to comment, and likened possible gold, silver, and forex manipulation to the scale of the Libor-scandal, which led to $6 billion in fines against banks. (link)
Tampering with currency and precious metals markets is “particularly serious, because such reference values are based - unlike Libor and Euribor - typically on transactions in liquid markets and not on estimates by the banks,” Elke Koenig, the president of Bafin, said in a speech in Frankfurt on January 15.
The method of ‘fixing’ benchmarks, especially those which hold such a crucial grip on the financial sector, has been questioned in the aftermath of the Libor-rigging scandal, when bankers fixed the interbank lending rate to company gain.
Control over the Libor rate, which is tied to over $300 billion in loans, securities and derivatives may transfer to supervisory hands, possibly to an agency like Reuters or Bloomberg, which have less direct ‘gain’ in setting interbank interest rates higher or lower.
Germany’s biggest bank, Deutsche Bank, has already dismissed currency traders over probes involving alleged forex manipulation.
Libor manipulation has raised questions over other lending rates like the Euribor, WM/Reuters, and the Platts oil benchmark. "
This is not the first mention of LIBOR and gold price fixing lumped together that I have come across the last few months. Interesting.
GDP now includes "Creative content" that never before was measured to be included in GDP. Depending on your viewpoint whether this should or should not have been included in the past....it is included now.
We love our movies, music, vid games (myself excluded), software and apps. This will boost future GDP and perhaps look back at previous GDP as being too low.
Hollywood royalties, for instance, are not secure measures of investment. That's because, even in Hollywood, it's hard to measure what royalties are, or should be. Studios rely on notoriously accounting. Four major studios were hit with lawsuits this year over their accounting of royalties dating all the way back to the 1970's. "Hollywood accounting" is a shorthand for the obscure methods the industry has of turning profit into loss, or losses into hidden profits.
December 5, 2013
Washington, DC – The U.S. Bureau of Economic Analysis (BEA) and the National Endowment for the Arts (NEA) released prototype estimates today from the new Arts and Cultural Production Satellite Account (ACPSA). This is the first federal effort to provide in-depth analysis of the arts and cultural sector's contributions to current-dollar gross domestic product (GDP), a measure of the final dollar value of all goods and services produced in the United States. According to these new estimates, 3.2 percent -- or $504 billion -- of current-dollar GDP in 2011 was attributable to arts and culture. In comparison, BEA's estimated value of the U.S. travel and tourism industry was 2.8 percent of GDP.
In case you missed it, CNBC interviewed a analyst on the Bitcoin phenomena and his conclusion was that Bitcoin was not a currency.........wait for it..........it was.............a commodity. Indian fella too. Salt in wounds is painful.
Dogs and cats sleeping together world.
Would make me very happy. This was my target price after watching the trading range the past few months.
The stock has steadily climbed the ranges .03-.05, .04-.06, .05-.07, and now seem to be in the .065-.085's.
Think about that. A year ago or so this stock was less than .02-.03. 300-400%.
Now we have an actual 8-k and 3 press releases in a time span of 6 weeks! Wow.
.10 by Jan. 1 would be most impressive in my book. I am hoping for .25 by end of summer 2014. I think this is attainable. It is so thinly traded right now that it is easily moved.
Do I wish I had bought more in the .01-.02 range. Sure, but I have been a bag holder since the EK days and only bought more to lower my cost.
I have a DD post on the Chinese ore outlook that I believe is pertinent to Wits. Will try to get it on the board soon.
"I think containing the price of gold is key to a US strategy of dealing with the debt via inflation. The problem right now is that the duration of US debt is fairly short. For the US to try to deal with debt via inflation the duration needs to be longer. So, if you are the US and you want to inflate the problem away you need to convince people to roll their short term debt to the longer term. To do that, you need to somehow convince people that the low interest rates will persist for a long time. That would lead them to try to increase their absolute yield via the longer term debt."
And yet, the Fed continues to issue short term and buy long term.
"The USA's debt passed $17 trillion recently and will be over $20 trillion by the end of Obama's 2nd term. Interest on this at 1% is $200 billion per year while at 5% it is $1 trillion per year....."
Estimated by the CBO that the run up bond yields, from the infamous "Taper speech" until the close to 3% yield on the 10 year, added about 30B in interest to the national debt for the last fiscal year.
"It is obvious that our government cannot allow any inflation as a huge % of the governments expenditures would have to go to pay the interest...."
Thus, the Fed finds itself where it is. Tiger by the tail. Hold on and continue QE with stable rates, stock market wealth effect, and monetized pension funds or let go and be eaten by higher yields. Rising rates are an eventuality, I believe. When? Don't know.
I do know that paying interest on the national debt with rising interest rates will be like running up the down escalator. CBO projects a 4-5% yield on the 10 year about 2017. 3.25% on all interest bearing instruments at a total deficit of 19T is over 600 billion .... a year. 2% GDP growth is not enough to slow down the elevator.
How will the Fed put a square peg in a round hole? They round the square end.
Jane, stop this crazy thing.
The various gold ETF’s, gold certificates, etc.—they are all based on the trustworthiness of the counterparty issuing the paper. The gold bullion is stored in vaults, and paper receipts against it are being issued.
But as more than one precious metals commentator has pointed out, there is more paper issuance of gold than actual gold bullion.
What does this mean? It means that the global precious metals markets are essentially a game of musical chairs, with far fewer seats than players—far less gold than gold holders.
And market participants collectively know this. Which is why they don’t trust their counterparties. Which is why gold isn’t rising like a shot.
There is only one market in gold, not two. There is no way to segregate gold bullion holders from gold certificate holders, and thus create two markets, one for the real thing, one for the paper thing.
Thus the current spot price of gold is reflecting market uncertainty as to who has actual gold, and who has worthless paper certificates of gold.
Do recall: The prices of credit default swaps quickly reached their market prices after the 2008 crisis had passed. They reached those actual market prices once the insolvent counterparties, like AIG, had been identified and isolated.
But before and during the crisis? When it wasn’ clear which credit default swap would be honored and which wouldn’t? CDS prices were jagged—like gold’s is today.
In the long run, assuming that central banks don’t manage to raise rates in time to prevent high- or hyperinflation, gold prices will go parabolic. But between now and then, gold prices will continue to drift, because the markets don’t really know whose gold is real, and whose is worthless paper.
We all know and understand what’s going on with the global economies and the fiat currency system: The global overindebtedness is forcing central banks around the world to devalue their currencies, so as to make the debt burden less onerous.
Many people—and I happen to be one of them—believe that this policy will lead to an inflationary crisis, which will spiral into an uncontrollable hyperinflation event. The key assumption in this scenario is that the only cure for runaway inflation—raising interest rates higher, and hard, like Paul Volcker did in ’79—will never be implemented by the world’s central banks, because they believe (with some justification) that higher rates will shove the global economies into a deflationary death spiral.
Thus a spike in inflation will bleed into hyperinflation, and by the time the central banks wake up and raise interest rates to stop it, it’ll be too late.
In such a case, gold would be the perfect hedge against inflation and eventual hyperinflation. In fact, even better than a hedge, gold would be the perfect investment, an investment that would outpace all other asset classes, because market participants would anticipate this inflation scenario, and thus pile into gold so fast and in such numbers that gold prices would spike parabolically, far outpacing the fiat currency devaluation.
Since everyone with any sense realizes that this is the endgame of the current race to the bottom, gold ought to be rising dramatically.
But that is not happening. Gold rose steady and strong from 2000 through September 2011—but since then it’s been drifting jaggedly.
So why would gold—which is an actual, physical commodity—be acting like credit default swaps did right before the 2008 crisis?
For the same reason: Gold buyers don’t trust the counterparties selling gold.
Because after all, most gold markets are paper markets, not bullion markets.