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Jan 7, 2013

USA Gold | News , Commentary and Analysis (January 7, 2013) .: Future - The gold owner's guide to 2013

Future - The gold owner's guide to 2013
by Michael J. Kosares 

By the time we get to the end of 2013, we will forget much of what shaped 2012. Yet, as we look back at 2012, there are some fundamentally disheartening, if not disturbing, trends that are likely to play a determining role in all financial markets for some time to come, including the gold market.

– The first is the inability of the political sector to deal with the “economic problem” on a global basis. From Jinping’s Beijing flowing west to Putin’s Moscow, from Merkel’s Berlin to Hollande’s Paris, from Cameron’s London to Obama’s D.C. and finally Abe’s Tokyo, the world’s great nation- states are locked in a web of acute and alarming political disarray. The question is no longer whether or not stability can be achieved. It is to what degree the instability can be restrained – a circumstance not unfamiliar to the student of history, but one for which the modern investor is generally unprepared and lacking in defenses.

- The second is the global predisposition to print money. Compliments of the disastrous events following the 2008 financial meltdown, vote-buying politicians globally have defeated usually conservative central bankers in the battle of the printing press. Ben Bernanke’s stewardship of the Federal Reserve has not only been emblematic of the trend, it has served as a bad example and dangerous precedent for other central bankers. You cannot slide a sheet of paper between the monetary policies of Ben Bernanke, Mario Draghi and Mervyn King (soon to be replaced with the even more dovish Mark Carney). Shinzo Abe, who was just elected Japan’s prime minister, has threatened to nationalize the Bank of Japan if it refuses to print money. It is as if John Law were reincarnated simultaneously in every major nation-state in the world.

- The third comes to us via Raoul Pal, the highly-regarded hedge fund manager who once co-managed one of the world’s largest hedge fund groups, GLG Global Macro Fund in London. It has to do with the persistent nature of the debt crisis that began in 2007 and never really went away. Pal outlined the problem at a seminar in Shanghai this past summer for other hedge fund managers — a presentation ZeroHedge called one of the “scariest ever.” In it he predicted a cascading sovereign debt collapse and default that would begin in Europe, jump the Channel to London, then move progressively through Japan, South Korea and even China. Finally, it would envelope the United States. The problem, he says, is that $70 trillion in G-10 sovereign debt is collateral for $700 trillion in derivatives. 

“You have to understand,” he explains, “that a global banking collapse and massive defaults would bring about the biggest economic shock the world has ever seen. There would be no trade finance, no shipping finance, no finance for farmers, no leasing, no bond market, no nothing. The markets are at the frankly terrifying point of realizing that LTRO (long term financing operations), EFSF (European Finance Stability Facility) and QE (quantitative easing) etc. are not going to prevent this collapse.”
(Note: A synopsis of Mr. Pal’s seminar was the most popular post for 2012, and all-time, at the widely-read ZeroHedge website. Recommended.)

I do not know if Raoul Pal is correct. I don’t know if he’s even close. I can tell you that he was successful enough as a hedge fund manager to retire to Spain’s Valencia coast at 36 years of age and that he’s one of those guys like in the old commercial: When he speaks, people listen. I can also tell you that something is in the air — a sea change in investor psychology, of which we should take note. I pass this along as someone who has experienced several similar shifts in investor sentiment over the course of a forty-year career in the gold business. 

In the last two months of 2012, we experienced volumes at USAGOLD not unlike those of 2008 and 2009 — and those were record volume years. The U.S. Mint confirmed our own experience by reporting that U.S. Gold Eagle sales in November and December hit their highest levels in two years. Also, demand for historic, pre-1933 gold coins surged — an important indicator because it tells us the safe-haven investor is back in the market. Since safe-haven investors tend to run ahead of the herd, this bodes well for gold demand as we move into 2013. Wholesalers tell us that the market for British sovereigns, Dutch 10 guilders, Swiss 20 francs, etc. is running very strong both in the United States and Europe. In particular, British sovereign supply has dried up. If I am reading the signs correctly (and I am big believer in letting the market speak for itself), 2013 could turn out to be a very good year for gold.

To read full article
Gold 2012 - 2013
New year outlook & review
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Michael J. Kosares, the editor of USAGOLD News, Commentary and Analysis, is the founder of USAGOLD and the author of "The ABCs of Gold Investing - How To Protect and Build Your Wealth With Gold."
Jonathan Kosares graduated cum laude from the University of Notre Dame with a dual major in Finance and Computer Applications. He has been with USAGOLD since 2002, and currently holds the position of Executive Vice President of Sales and Marketing. He is the moderator of the USAGOLD RoundTable series, has authored numerous articles on the gold market and manages client activity for the high net worth division as well as the USAGOLD Trading and Storage Program.
Peter Grant spent the majority of his career as a global markets analyst. He began trading IMM currency futures at the Chicago Mercantile Exchange in the mid-1980's. Pete spent twelve years with S&P - MMS, where he became the Senior Managing FX Strategist. The financial press frequently reported his personal market insights, risk evaluations and forecasts. Prior to joining USAGOLD, Mr. Grant served as VP of Operations and Chief Metals Trader for a Denver-based investment management firm.
This newsletter is distributed with the understanding that it has been prepared for informational purposes only and the Publisher or Author is not engaged in rendering legal, accounting, financial or other professional services. The information in this newsletter is not intended to create, and receipt of it does not constitute a lawyer-client relationship, accountant-client relationship, or any other type of relationship. If legal or financial advice or other expert assistance is required, the services of a competent professional person should be sought. The Author disclaims all warranties and any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein. Opinions expressed by contributors are strictly their own and publication here does not represent endorsement by USAGOLD.

DOL extends assistance to Massachusetts workers affected by solar industry layoffs: U.S. Department of labor News Release s Update (January 7, 2013).: DOL extends assistance to Massachusetts workers affected by solar industry layoffs


The U.S. Department of Labor today announced a $408,403 National Emergency Grant increment for continued assistance to about 320 workers affected by the 2011 closure of Evergreen Solar Inc. in Devens and Marlborough, Mass., and layoffs of two of its staffing firms.

DOL extends assistance to Massachusetts workers affected by solar industry layoffs

NYT | Global Update (January 7, 2013).: Obama Nominates Hagel as Defense Secretary and Brennan as C.I.A. Chief

The New York Times International Herald Tribune
January 7, 2013
Compiled 21:45 GMT

Global Update


Obama Nominates Hagel as Defense Secretary and Brennan as C.I.A. Chief

President Obama named Chuck Hagel, a former Republican senator, and John O. Brennan, his chief counterterrorism adviser, as his picks for two top national security posts.

China Says It Will Overhaul Re-education System

Legal advocates said that the announcement fueled hopes that the draconian system of labor camps, established in the 1950s, would be significantly modified.

Supporters Back Strike at Newspaper in China

Hundreds of people gathered on Monday, carrying banners and chrysanthemums, to show their support for journalists who declared a strike over censorship.


Choices on Afghanistan

Should there be American troops left in Afghanistan after 2014? Ideally, no, but the Pentagon is pushing for them.

Video: Relocation in the Andes

Perched in the Peruvian Andes is a new town built by a Chinese mining company to which 5,000 people will be relocated.

With Eye on China, Japan Weighs Raising Military Spending

A review ordered by the new conservative government could lead to the first increase in military spending in a decade.

American Delegation Arrives in North Korea on Controversial Private Trip

Bill Richardson, the former governor of New Mexico, and Eric Schmidt, Google's executive chairman, visited North Korea on Monday in what was billed as a humanitarian mission.
India Ink

Delhi Court Bans Reporting From Gang Rape Trial

A New Delhi court banned reporting in the gang rape case on Monday, responding to a chaotic courtroom and a large number of female lawyers who say no one should represent the accused.

Banks Reach Settlements on Mortgages

Banks agreed to pay a total of $18.5 billion in separate deals on Monday involving troubled loans and foreclosure abuses, illustrating the extent of the banks' role in the excesses of the credit boom.
Media Decoder Blog

Sony and BMG Are Said to Team Up on Bid for EMI

Sony and BMG, onetime partners, are said to be teaming up again on a bid to buy - and then divide between themselves - some of the EMI recorded music assets being sold by the Universal Music Group.

France Rejects Plan by Internet Provider to Block Online Ads

Free restored the ads but its gambit set off a debate on who should pay for the communications networks that carry booming online content.

As Sales Slip, TV Makers Strain for the Next Sensation

Television makers are trying to attract attention by supersizing screens and quadrupling the level of detail in images, and they are adding apps and other interactive elements.
Virtual U.

Students Rush to Web Classes, but Profits May Be Much Later

New companies are partnering with universities to offer online courses, in an effort that could define the future of higher education - if anyone can figure out how to make money.

N.H.L. and Players Union Reach Tentative Agreement to End Lockout

The agreement was reached around 5 a.m. at a Midtown Manhattan hotel after a 16-hour negotiating session. Pending ratification by the players and owners, a 48- to 50-game schedule is expected to begin before Jan. 20.

Shortened Season Is Only the Start of N.H.L. Hurdles

After another crippling lockout, the league once again has alienated fans and business partners, and the owners' hard-line demands have helped create an atmosphere of mistrust.

Skier Closes in on a Breakthrough for Slovenia

The skier Tina Maze hopes to become her nation's first overall World Cup champion this season, having previously finished second, third and fourth in the standings.

Plan to End Methadone Use at Albuquerque Jail Prompts Alarm

Many are angered by a plan by Ramon Rustin, the warden of the Metropolitan Detention Center, to end the privately administered treatment of addicts in a state plagued by heroin.

Counterterrorism Adviser to Be Named Chief of C.I.A.

President Obama has chosen John O. Brennan, his counterterrorism adviser and a career Central Intelligence Agency officer, to head the C.I.A., a spokesman said.

At Hearing, Officer Tells of Suspect's Calm After Colorado Massacre

A weeklong court hearing will determine whether there is sufficient evidence to move the case against the suspect, James E. Holmes, to trial.
Op-Ed Columnist

Israel's True Friends

The Hagel nomination will spur a much-needed debate in America on what constitutes friendship toward Israel.
Op-Ed Columnist

The Big Fail

Sometimes good things happen to bad ideas.

Money Show Investors Daily Alert (January 7, 2013).: 4 Value Stocks for 2013.

Investors Daily Alert

The Daily Guru

Jim Jubak on

Today's Top Pros' Top Picks
4 Value Stocks for 2013, J. Royden Ward
2 Big Obamacare Winners, Soula Stephanopoulos

Today's Gurus' Views & Strategies

Today's Charts in Play

Ideas from Around the World

Today's Featured Videos & Exclusive Interviews
Be Your Own Fed, Mark Skousen

DealBook P.M. Edition (January 7, 2013).: White Collar Watch: Asking Hedge Funds to Turn Themselves In.

Monday, January 7, 2013
White Collar Watch: Asking Hedge Funds to Turn Themselves In Peter J. Henning says that the government is weighing whether to require hedge funds to report any suspicious transactions, like insider information or manipulation of stock prices, a move hedge funds are likely to resist.
    Citigroup's Former Internet Analyst Finds New Home at R.B.C. Royal Bank of Canada has hired Mark Mahaney, who was dismissed by Citigroup in October after regulators discovered that he responded to a reporter's e-mail inquiry about the financial results of YouTube, a division of Google, without getting permission from the bank.
    S.E.C. Names New Top Lawyer Geoffrey F. Aronow, a partner in the Washington office of Bingham McCutchen and a former head of enforcement for the Commodity Futures Trading Commission, will be general counsel of the S.E.C.
    Illumina Buys Maker of Down Syndrome Test Amid a report that Roche was no longer interested in a takeover, Illumina made a deal of its own in a sign that DNA sequencing is now moving toward being used for medical diagnosis.
    Citigroup Names Co-Presidents Jamie Forese and Manuel Medina-Mora have been named co-presidents of the bank in the first management reshuffle since Michael L. Corbat became chief executive of Citigroup.
    Bank of America bought Countrywide in 2008.
    Banks Reach Settlements on Mortgages Banks agreed to pay a total of $18.5 billion in separate deals on Monday involving troubled loans and foreclosure abuses, illustrating the extent of the banks' role in the excesses of the credit boom.
    German Property Firm Backed by Goldman Plans I.P.O. LEG Immobilien, a German real estate company owned by the Goldman Sachs investment fund Whitehall, is expected to raise up to $1.3 billion in one of the first initial public offerings in Europe this year.
    Another View: The Financial Crisis in the Courts David Zaring, assistant professor at the Wharton School of Business, says that the executive and legislative branches of the government have responded to the financial crisis, but the courts have played a low-key role thus far.
    Buzz Tracker
    Former Goldman Partner Joins N.B.A. Jason Cahilly, a former partner and telecommunications and media banker at Goldman Sachs, has been named chief financial officer and vice president of strategy for the National Basketball Association, Bloomberg News reports.
    Economic Reports Data to be released on Tuesday includes consumer credit for November.
    Corporate Earnings Companies scheduled to release quarterly earnings reports on Tuesday include Monsanto and Alcoa.
    In the United States On Tuesday, the Consumer Electronics Show begins in Las Vegas and will run through Friday, and the JPMorgan Health Care Conference starts in San Francisco and will take place through Thursday.
    Overseas On Tuesday, the European Union statistics office will report on euro area unemployment.

    Quotation of the Day
    "Together, these agreements are a significant step in resolving our remaining legacy mortgage issues, further streamlining and simplifying the company and reducing expenses over time."
    Brian Moynihan, chief of Bank of America, on paying more than $10 billion to Fannie Mae.

MarketWatch | Wall Street at Close Report (January 7, 2013).: U.S. stocks retreat after last week’s climb.

By Kate Gibson, MarketWatch 

NEW YORK (MarketWatch) — U.S. stocks fell on Monday, with the S&P 500 index retreating from a five-year high, as Wall Street looked to the next day’s start of the fourth-quarter earnings season. 

The S&P 500 index SPX -0.31%  fell 4.58 points, or 0.3%, to end at 1,461.89, with utilities and energy leading the declines and health care and telecommunications faring best among its 10 major sectors. 

The benchmark rose 4.6% last week to its highest close since Dec. 31, 2007. See: U.S. stocks close at highest level since 2007. 

Alcoa set to kick off earnings Alcoa fourth-quarter results on Tuesday kick off earnings season and the Consumer Electronics Show heats up Las Vegas. 

With the threat of steep spending cuts and tax hikes averted, and the next showdown over the debt ceiling not likely to concern investors until February, Wall Street will shift its focus to results from American corporations. 

“Earnings do matter, but what may be as important is the outlook for the first quarter,” said Jim Russell, chief equity strategist and regional investment director at U.S. Bank Wealth Management.
“The equities market is trying so hard to find the all-clear signal, but we think managements will indicate the quarter slowed from October through December, so a slow start to 2013,” he said.
“The fourth quarter could tend to be a bit bumpy this time around, with the outlook for the first quarter cautious because of the Washington situation,” said Russell of the coming showdown over raising the U.S. debt ceiling. 

“We saw evidence of the intensity on the Sunday morning talk shows yesterday. Democrats are looking for additional revenue and Republicans are looking for spending cuts. We are going into this debate with some attitude on both sides,” Russell noted. 

Fourth-quarter earnings for S&P 500 companies are expected to grow 2.8% compared with the same period in 2011, according to Thomson Reuters data. See: Low bar paves way for more earnings blowouts. 
The Dow Jones Industrial Average DJIA -0.38%  dropped 50.92 points, or 0.4%, to end at 13,384.29, with Walt Disney Co. DIS -2.34%  and Boeing Co. BA -2.01%  among the top decliners in the 30-component benchmark.

Reuters Enlarge Image
Sharp unveils new TV technology at the Consumer Electronics Show in Las Vegas Monday.
Intel Corp. INTC +0.43%  was one of the gainers in the Dow, its shares up 0.4% after Lazard Capital Markets upgraded the chip maker. 

Intel, along with Qualcomm Inc. QCOM +0.80%  and some other tech companies, are holding media presentations Monday at the Consumer Electronics Show in Las Vegas. See live coverage of the 2013 Consumer Electronics Show

The Nasdaq Composite index COMP -0.09%  declined 2.84 points, or 0.1%, to 3,098.81.
More than 625 million shares traded on the New York Stock Exchange. 

Composite volume exceeded 3.27 billion.
Shares of Illumina Inc. ILMN -7.06%  fell 7.1% after Roche Holding AG RHHBY -0.14%   CH:ROG -0.53%  said it would not be making an offer for the maker of DNA-sequencing equipment. See: Roche chairman: Illumina bid ‘off the table.’ 

Walgreen Co. WAG +2.29%  added 2.3% after Jefferies Group Inc. raised its rating of the drugstore chain to buy from hold. 

Yahoo Inc. YHOO -2.32%  declined 2.3% after Sanford C. Bernstein & Co. downgraded shares of the search engine. Inc. AMZN +3.59%  gained 3.6% after Morgan Stanley upgraded the online retailer. See: Amazon hits high after ratings upgrade. 

Alcoa Inc. AA +0.44%  reports after Tuesday’s close, with the aluminum producer the first Dow component slated to release fourth-quarter results. 

Mortgage lender Wells Fargo & Co. WFC -0.49%  reports earnings Friday. 

On Capitol Hill, Republicans are linking raising the U.S. debt ceiling to reduced spending on entitlement programs including Medicare. Congress has to move as soon as mid-February to keep the country out of default. See: Battle lines harden for new budget deal. 

The CBOE volatility index VIX -0.29% , a gauge of investor uncertainty, had its biggest weekly drop ever, as fear over the fiscal cliff gave way to relief that a deal had been reached. See: Debt fight may mean ‘fear index’ rebound. 
“The meteoric rise we’ve had in the last week is certainly not sustainable. We had a sizable can kicked down the road, and only kicked a couple of months out,” said Randy Frederick, managing director of trading and derivatives at Charles Schwab & Co. Inc. 

“We’ve had so many distractions the last couple of earnings seasons. The unfortunate thing is I’m not sure earnings are going to be all that good,” said Frederick. 

Still, “expectations have been lowered enough so that even though Q4 earnings will be mediocre at best,” the results should be priced into the market, said Frederick. 

Kate Gibson is a reporter for MarketWatch, based in New York.


NFA Comment Letter (January 7, 2013).: Enhancing Prection Afforded of customers and customers funds Held by Futures Merchants and Deerivatives Clearing Organizations.funds

BIV Today's Business News (January 7, 2013).: Exclusive: BC Place renovation final costs were five times original budget

Politics and Policy

BC Place

Exclusive: BC Place renovation final costs were five times original budget

The cost to renovate BC Place Stadium ended up five times higher than the figure B.C. Pavilion Corp. originally estimated, it has emerged ... READ MORE

Sports and Leisure


NHL return to boost Vancouver businesses

Vancouver sports bars and other tourism businesses stand to see business boosted as National Hockey League ... READ MORE

Mining and Energy


Kitsault energy plan could include oil pipeline terminal

The American millionaire who bought a ghost town north of Prince Rupert says his plans to turn the town of Kitsault into an energy hub could include ... READ MORE

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Vancouver clean-tech, Dow collaborate on fuel-from-plastics process

Calgary poaches CEO of Vancouver Economic Development Commission

Northern B.C. releases skills-training plans

The Economist | New selected articles (January 7, 2013).: Bashar Assad, platinum coins and India's charm offensive

Pomegranate: Brazen Bashar
In a long and rambling speech Syria's president mixes defiance with denial
read more »
Democracy in America: The platinum distraction
The technocratic id is captivated by the nutty idea of the president minting a $1 trillion coin
read more »

Babbage: Difference Engine
Can air travel keep on getting safer and safer?
read more »

Schumpeter: Charming the market
The country's government is wooing investors, but how deep is its commitment to better economic management?
read more »
Prospero: Blue plaques existed here
Budget cuts bring an end to a London institution
read more »
Daily chart: Undue credit
The misery continues for banks in the developed world
read more »

Upcoming debate: World economy
Will the world economy be in better shape in 2013 than in 2012?
read more »