A New Reason Gold Stocks Could Soar

March 20, 2012

Casey Research

By Jeff Clark

There are a number of reasons why many of us believe gold stocks will shoot for the moon before this bull market is over – they’ve done so many times in the past… the gold price still has a long way to climb… and producers are generating record revenue and profits. But I think there’s another reason why gold stocks will soar – one that hasn’t dawned on many in the industry yet.

The premise for my theory first lies in how gold itself is viewed. Some investors see gold as strictly a commodity or the infamous “barbarous relic.” This group sees no compelling reason to buy the metal and so own little to none. Others view it as a play on a rising asset or because of supply and demand imbalances; they buy while those reasons are positive and sell when they turn negative. Still others view gold as a store of value, an alternative currency, or a hedge against inflation; they tend to buy and hold.

Ask yourself why you own gold. Is it because it’s just another asset that offers diversification? Are you buying because it’s going up and someone like Doug Casey thinks it will continue doing so? Or is it due to a genuine concern about the dilution of your currency, both now and in the future?

What’s interesting to note is the shift in the number of investors wanting exposure to gold. Many who ignored it a decade ago are now buying. Those who started buying, say, five years ago, continue purchasing it today in spite of paying twice what they paid then. Slowly but surely, it’s becoming more important to more people. To wit, increasing numbers of investors are viewing gold as a must-own asset.

So, what happens when it becomes a must-own asset to a substantial majority instead of a small minority? Sure, the price will rise, probably parabolically, but putting aside speculation on the price of gold for now, have you thought about what happens if you have trouble finding any actual, physical gold to buy?

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Ten Tips For Anyone Losing Money In The Market Right Now

March 20, 2012

BC Lund

By Brian Lund

If you are not making money in the market right now, you need to seriously re-evaluate your trading (and conversely, if you are making money hand over fist right now, you need to make sure it is because of your trading, not because everything is just going up).

So if your trading P/L is currently bleeding red, here are ten tips that might help put it back in the black.

1. Cut your position size – Everybody goes through losing streaks, and if you are in one right now you should be progressively cutting your position size down until you return to your winning ways. This ensures that you are trading the smallest size during your worst periods. Think of it like an out of control night in Vegas; as it gets later in the evening you should be drinking less, not reaching for the beer-bong.

2. Stop trying to short stocks – No matter what type of market we are in, short selling is probably the hardest thing for a trader to do profitably on a consistent basis. Those that can are part of a very small and specialized group of traders. It may seem “cool” to try to make your money selling short, but what is really cool is just making money. Besides every time you short a stock, somewhere a kitten dies.

3. Trade less (make more) – Take it easy Racer X, you don’t have to be going full bore all the time, (besides you’ll never catch the Mach 5 anyway). There is no law that says you have to trade every day of the week. If you are consistently losing money right now, trading more often will just increase your rate of loss. Dial it back a bit and take that extra time to review your charts and find optimal set ups. Then maybe Trixie will finally pay attention to you.

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In Order To Tame Inflation, Just Tame Uncle Sam

March 20, 2012

321 Gold

By McClellan Financial Publications

I love playing with correlations, and finding seemingly unrelated sets of data that seem to behave the same way. I am always mindful of the admonition that “correlation does not mean causation”, in part because so many people like to remind me of this anytime I mention correlations. But correlation of two data sets does hint at a common thread.

In 1993, when I was just starting out, I heard Jim Bianco of Arbor Research give a presentation at a Market Technicians’ Association conference. One of the fun charts that he shared was this week’s comparison between the number of pages in the Federal Register and consumer price inflation.

The Federal Register “is the official daily publication for rules, proposed rules, and notices of Federal agencies and organizations, as well as executive orders and other presidential documents.” So the size of the Federal Register is a decent gauge of just how busy the US federal government has been. It is published by the Office of the Federal Register, and distributed by the Government Printing Office. The latest edition, if you got it in paper form, weighs over 340 pounds (154 kilograms).

This week’s chart compares the number of pages of the Federal Register to the raw Consumer Price Index for All Urban Consumers (CPI-U). The 12-month change of this CPI measure is the most often cited inflation rate, although Ben Bernanke lately has expressed a preference for using the GDP deflator, perhaps because it is lower.

If we were to look at rates of change for the Federal Register pages and CPI, it would look like this next chart, which uses a 2-year rate of change to smooth out the data more:

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Mysterious Objects At The Edge Of The Electromagnetic Spectrum

March 20, 2012

NASA

By Dauna Coulter, Dr. Tony Phillips

“This is pretty cool. Just imagine what’s out in the universe that we can’t see.” –KTRN

The human eye is crucial to astronomy. Without the ability to see, the luminous universe of stars, planets and galaxies would be closed to us, unknown forever. Nevertheless, astronomers cannot shake their fascination with the invisible.

Outside the realm of human vision is an entire electromagnetic spectrum of wonders. Each type of light–­from radio waves to gamma-rays–reveals something unique about the universe. Some wavelengths are best for studying black holes; others reveal newborn stars and planets; while others illuminate the earliest years of cosmic history.

NASA has many telescopes “working the wavelengths” up and down the electromagnetic spectrum. One of them, the Fermi Gamma-Ray Telescope orbiting Earth, has just crossed a new electromagnetic frontier.

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US Torture Camps ‘Still Operative’

March 20, 2012

RT

By RT

“Let’s just hope this isn’t true …” –KTRN

A new report reveals that US forces continue to send detainees to prisons where torture is practiced, despite NATO’s promise to suspend prison transfers last September.

­The report carried out by the Afghan Independent Rights Commission and the Open Society Foundation documents numerous cases of torture in Afghan detention facilities between February 2011 and January 2012.

The document has credible evidence in 11 recent cases where practices such as “beatings, suspension from the ceiling, electric shocks, threatened or actual sexual abuse, and other forms of mental and physical abuse” were commonplace. Researchers also discovered widespread violations of prisoners’ rights were in evidence, “including the right to counsel and family notification.”

According to the study, these techniques are “routinely used to obtain confessions or other information.”

Abuses were found to be committed both in Afghan National Police facilities (ANP) and the National Directorate of Security facilities (NDS).

Moreover, the document presents evidence that even after NATO announced it would suspend prison transfers in September, “some US forces or personnel continue to transfer individuals to NDS Kandahar.” The risk of torture for the detainees upon arrival was “widely acknowledged.” In spite of this fact, “CIA or other US intelligence officials” may be sending prisoners to banned facilities.

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Ron Paul’s Caucus Strategy Is Authentic Republicanism

March 20, 2012

The Washington Times

By Thomas Mullen

Give yourself a test. Without doing a web search or whipping out that pocket U.S. Constitution that a wild-eyed Tea Partier handed you, fill in the blank in the following sentence: The U.S. Constitution guarantees to every state in the union a _____form of government.

If you are like ninety percent of the American electorate, you answered “democratic” and you were wrong. The answer is “a republican form of government.” There is a drastic difference between the two and one would think that the Republican Party would know it. Instead, they are identical to their rivals in not only ignoring the distinction but promoting democracy instead.

In a democracy, the will of the majority is the law. Fifty-one percent of the vote empowers the winners to exercise any power they wish. Not so in a republic. The reason the founders constructed a constitutional republic was to protect Americans from democracy.

That may sound like sacrilege to most 21st century Americans, but it’s true. James Madison called democracy “the most vile form of government.” Thomas Jefferson said that when majorities oppress an individual they “break up the foundations of society.” Benjamin Franklin mused that democracy was like “two wolves and a sheep voting on what’s for dinner.”

Republicanism is the logical form of government for conservatives. Conservatism at its best protects property rights from an unchecked majority plundering the individual. Liberalism at its best protects property rights from the wealthy conspiring with the government to plunder the masses. At their worst, both conservatism and liberalism legitimize plunder; the former for the few, the latter for the many.

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Barack Obama Prepares for War Footing

March 20, 2012

Huffington Post

By Edwin Black

“Obama is getting ready for more war and he can’t wait.” –KTRN

Last Friday, March 16, President Barack Obama may have quietly placed the United States on a war preparedness footing, perhaps in anticipation of an outbreak of war between Israel, the West, and Iran. A newly-propounded Executive Order, titled “National Defense Resources Preparedness,” renews and updates the president’s power to take control of all civil energy supplies, including oil and natural gas, control and restrict all civil transportation, which is almost 97 percent dependent upon oil; and even provides the option to re-enable a draft in order to achieve both the military and non-military demands of the country, according to a simple reading of the text. The Executive Order was published on the White House website.

The timing of the Order — with little fanfare — could not be explained. Opinions among the very first bloggers on the purpose of the unexpected Executive Order run the gamut from the confused to the absurd. None focus on the obvious sudden need for such a pronouncement: oil and its potential for imminent interruption.

If Iran was struck by Israel or the West, or if Iran thought it might be struck, the Tehran regime has promised it would block the Strait of Hormuz, which would obstruct some 40 percent of the world’s seaborne oil, some twenty percent of the global supply, and about 20 percent of America’s daily needs. Moreover, Tehran has promised military retaliation against any nation it feels has harmed it. The United States is at the top of the list.

Blocking the Strait of Hormuz would create an international and economic calamity of unprecedented severity. Here are the crude realities. America uses approximately 19 to 20 million barrels of oil per day, almost half of which is imported. If we lose just 1 million barrels per day, or suffer the type of damage sustained from Hurricane Katrina, our government will open the Strategic Petroleum Reserve (SPR), which offers a mere six- to eight-week supply of unrefined crude oil. If we lose 1.5 million barrels per day, or approximately 7.5 percent, we will ask our allies in the 28-member International Energy Agency to open their SPRs and otherwise assist. If we lose 2 million barrels per day, or 10 percent, for a protracted period, government crisis monitors say the chaos will be so catastrophic, they cannot even model it. One government oil crisis source recently told me: “We cannot put a price tag on it. If it happens, just cash in your 401(k).”

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Standing Up For Peace – Small Town Get’s Armored Vehicle

March 20, 2012

Truth Out

By Jim Hightower

“Why would a small peaceful town need an armored vehicle?  Anyone else think this is overkill?”  –KTRN

During a recent city council meeting, the mayor of Keene, New Hampshire leaned over to a council member and whispered excitedly: “We’re going to have our own tank.”

Yes, the tank (or, more specifically, the “armored personnel vehicle”) is the latest must-have toy for mayors and police departments. Even in this picture-perfect and tranquil New England town of about 23,000 residents, officials hurl common sense to the wind at the very thought of having such a cool ride parked in front of town hall. Maybe they’ll even get to drive it in the next 4th of July parade! Never mind that Keene has no crime that would warrant rolling out a tank.

Nonetheless, thanks to such richly funded boondoggles as the “war on drugs” and the “war on terrorism,” the federal government is throwing money at cities and states to militarize their various police forces. Thus, Keene was granted $285,000 by the Department of Homeland Security to buy its very own “Bearcat,” an eight-ton combat vehicle.

Of course, corporations that peddle such pricey hardware testily insist that Keene needs a tank. A sales executive for Lenco Industries, which makes the Bearcat, snapped to an inquiring reporter: “I don’t think there’s any place in the country where you can say, ‘That isn’t a likely terrorist target.’ Wouldn’t you rather be prepared?”

The sensible people of Keene, however, aren’t swallowing the fearmonger pill, and they’ve forced the town council to reconsider. Local businesswomen Dorrie O’Meara says she hasn’t met a single person who’s in favor of having “this militaristic thing in Keene.” She calls the tank “completely unnecessary. But it’s more than that,” she adds. “It’s just not who we are. It’s about what kind of town we want to be.”

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Why Is It Hard to Believe President Obama Would Want a Journalist in Prison?

March 20, 2012

FAIR Blog

By Peter Hart

Jeremy Scahill’s piece at the Nation website (“Why Is President Obama Keeping a Journalist in Prison in Yemen?,”3/13/12) about imprisoned Yemeni journalist Abdulelah Haider Shaye is riveting and deeply reported. But to Mother Jones blogger Kevin Drum, the story doesn’t quite add up…because Barack Obama seems like a decent guy.

As Scahill reports, Shaye has “risked his life to travel to areas controlled by Al-Qaeda and to interview its leaders.” He argues that this reporting has not exactly won him friends in the U.S. or Yemeni governments:

His collision course with the U.S. government appears to have been set in December 2009. On December 17, the Yemeni government announced that it had conducted a series of strikes against an Al-Qaeda training camp in the village of al Majala in Yemen’s southern Abyan province, killing a number of Al-Qaeda militants. As the story spread across the world, Shaye traveled to al Majala. What he discovered were the remnants of Tomahawk cruise missiles and cluster bombs, neither of which are in the Yemeni military’s arsenal. He photographed the missile parts, some of them bearing the label “Made in the USA,” and distributed the photos to international media outlets. He revealed that among the victims of the strike were women, children and the elderly. To be exact, 14 women and 21 children were killed.

Shaye was subsequently arrested and likely tortured by Yemeni authorities, who charged and convicted him on terrorism charges. The case has drawn international attention, with media and human rights groups denouncing the trial. Pressure inside Yemen seemed to be working, and a pardon was ready for then-president Ali Abdullah Saleh to sign.
Enter Barack Obama, who “expressed concern” over Shaye’s release. The pardon was shelved; as Scahill reports:

Yemeni journalists, human rights activists and lawyers have said he remains in jail at the request of the White House.

Salon’s Glenn Greenwald weighed in (3/14/12), reminding readers that the initial media accounts of the attacks in Majala were wildly misleading–the strikes were carried out by Yemen, those killed were “militants,” and so on. As Greenwald puts it, the world knows the truth about this attack–which was a U.S. strike using cruise missiles and cluster bombs–because of Shaye’s reporting.

Seems pretty straightforward. But not to everyone. Mother Jones blogger Kevin Drum wrote a response headlined, “Is Barack Obama a Murderous Sociopath?” The crux of Drum’s argument is that Shaye’s reporting isn’t all that important. “I wonder what’s really going on,” writes Drum. “Because here’s the thing: the attack on al Majala was no secret.”
Drum points out that “within a few hours of the strike it was common knowledge that U.S. cruise missiles had done most of the damage and that there were local reports of many civilian casualties.” He adds that

everything that Shaye reported in 2010 had long since been common knowledge. Obama has suffered, as near as I can tell, literally zero embarrassment from this episode. The al Majala attack got a small bit of media attention when it happened and has been completely forgotten since.

Click here for the full report.

The NSA Is Building the Country’s Biggest Spy Center (Watch What You Say)

March 20, 2012

Wired

By James Bamford

“Nothing you say will be private anymore.” –KTRN

The spring air in the small, sand-dusted town has a soft haze to it, and clumps of green-gray sagebrush rustle in the breeze. Bluffdale sits in a bowl-shaped valley in the shadow of Utah’s Wasatch Range to the east and the Oquirrh Mountains to the west. It’s the heart of Mormon country, where religious pioneers first arrived more than 160 years ago. They came to escape the rest of the world, to understand the mysterious words sent down from their god as revealed on buried golden plates, and to practice what has become known as “the principle,” marriage to multiple wives.

Today Bluffdale is home to one of the nation’s largest sects of polygamists, the Apostolic United Brethren, with upwards of 9,000 members. The brethren’s complex includes a chapel, a school, a sports field, and an archive. Membership has doubled since 1978—and the number of plural marriages has tripled—so the sect has recently been looking for ways to purchase more land and expand throughout the town.

But new pioneers have quietly begun moving into the area, secretive outsiders who say little and keep to themselves. Like the pious polygamists, they are focused on deciphering cryptic messages that only they have the power to understand. Just off Beef Hollow Road, less than a mile from brethren headquarters, thousands of hard-hatted construction workers in sweat-soaked T-shirts are laying the groundwork for the newcomers’ own temple and archive, a massive complex so large that it necessitated expanding the town’s boundaries. Once built, it will be more than five times the size of the US Capitol.

Rather than Bibles, prophets, and worshippers, this temple will be filled with servers, computer intelligence experts, and armed guards. And instead of listening for words flowing down from heaven, these newcomers will be secretly capturing, storing, and analyzing vast quantities of words and images hurtling through the world’s telecommunications networks. In the little town of Bluffdale, Big Love and Big Brother have become uneasy neighbors.

Click here for the full report.

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