Gold miners are hugely undervalued

"You can see from the chart that today’s level is 46 percent above the historical norm at 7.6 units to one ounce of gold. By this measure, one can purchase shares of gold mining companies at their second-cheapest level in nearly 30 years. The extreme was in 2008 during the depths of the financial crisis; many share values quadrupled off of those levels." 

CIGA Marc

Will Gold Equity Investors Strike Gold?

Smart Money Europe - New Bold Prediction: By 2015, 10 percent of the S&P 500 will consist of Gold & Silver Stocks!

Gold – long term technical picture

You’re Not Imagining It — The Gold Miners Are Tanking

With gold near a record, most miners should put up ridiculous earnings in the year ahead, which should make their shares act like tech circa 1998, right?

Nope. The biggest miners, whose shares populate the GDX gold miner ETF, did outperform gold (represented here by the GLD ETF) during most of its recent epic run, just as you’d expect. But in April the two trends diverged, and lately the divergence has become a chasm. Gold is up 22% in the past 12 months and the big miners are, as a group, virtually unchanged.  read more

Are We Running Out of Silver?

From Jesse: The Almost Shocking Year-To-Date Divergence Between Gold and the Gold Miners

These are the established companies for the most part.

One can speculate endlessly for the reasons, but it looks to me that there is a paired trade going on, of long bullion and short miners. That is similar to one of my favorite paired trades this year, long bullion and short a broad stock index or the financial sector.

If this is true, if gold breaks out and the stock market recovers somewhat, the miners will play catch up.

But if the stock market falls apart, the miners are much more vulnerable to a selloff than bullion. That is the reason for the paired trade I believe.

GoldMoney documentary on France's fiat money double debacle

Grom GATA, Friday, June 17, 2011

Dear Friend of GATA and Gold:

The GoldMoney Foundation has produced a fascinating 18-minute video documentary about France's double debacle with infinite fiat money in the late 1700s. The documentary features GoldMoney founder James Turk, financial journalist and provocateur Max Keiser, and journalist Pierre Jovanovic. It's 18 minutes long and you can find it in two parts at the GoldMoney Internet site here:

http://www.goldmoney.com/video/fiat-money-inflation-in-france-part-1-joh...

And here:

http://www.goldmoney.com/video/fiat-money-inflation-in-france-part-2-ass...

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

[Fortunate coincidences] Everything We're Doing Now Was Planned BEFORE 9/11

From Washington's Blog:
We've been told that 9/11 changed everything.
Is it true?
Let's look at the facts:

• The Afghanistan war was planned before 9/11 (see this and this)

• The decision to launch the Iraq war was made before 9/11. Indeed, former CIA director George Tenet said that the White House wanted to invade Iraq long before 9/11, and inserted "crap" in its justifications for invading Iraq. Former Treasury Secretary Paul O'Neill - who sat on the National Security Council - alsosays that Bush planned the Iraq war before 9/11. Top British officials say that the U.S. discussed Iraq regime change even before Bush took office. And in 2000, Cheney said a Bush administration might "have to take military action to forcibly remove Saddam from power.''

• Cheney apparently even made Iraqi's oil fields a national security priority before 9/11. And the Sunday Herald reported: "Five months before September 11, the US advocated using force against Iraq ... to secure control of its oil." (remember that Alan Greenspan, John McCain, George W. Bush, Sarah Palin, ahigh-level National Security Council officer and others all say that the Iraq war was really about oil.)

• The Patriot Act was planned before 9/11. Indeed, former Counter Terrorism Czar Richard Clarke told Stanford law professor Lawrence Lessig:

  After 9/11 the government drew up the Patriot Act within 20 days and it was passed.

  The Patriot Act is huge and I remember someone asking a Justice Department official how did they write such a large statute so quickly, and of course the answer was that it has been sitting in the drawers of the Justice Department for the last 20 years waiting for the event where they would pull it out.

  (4:30 into this video).

• Cheney dreamed of giving the White House the powers of a monarch long before 9/11

• Cheney and Rumsfeld actively generated fake intelligence which exaggerated the threat from an enemy in order to justify huge amounts of military spending long before 9/11. And see this

• The government's spying on Americans began before 9/11 (confirmed here and here. And see this)

• The decision to threaten to bomb Iran was made before 9/11

• It was known long before 9/11 that torture doesn't work to produce accurate intelligence ... but is aneffective way to terrorize people

• And - sadly - America played dirty games to justify and win wars before 9/11

9/11 didn't change anything. It was simply an excuse to implement existing plans.

 

The ECB is a bad bank chocked full of toxic assets and will go belly up when Greece will stop playing ball

from Money and Markets:

By Bryan Rich

If you think the Greek debt crisis is the cause of Europe’s major ills, think again. It’s just a symptom of the far deeper problems I’ve been telling you about all along.
As I’ll explain in this issue, the European Central Bank (ECB) is loaded with toxic assets; the entire concept of the euro is flawed; and now it’s finally coming unglued, just as I have been warning week after week, month after month.
Consider the dramatic events of the past week …
On Wednesday, a haymaker was thrown at European Union officials, the IMF and the ECB … all parties that have been trying desperately to keep the crisis in Europe from reaching an impact point.

•   S&P downgraded four Greek banks,
•   And Moody’s warned of downgrades on Portuguese banks and most importantly, FRENCH banks.

These are all institutions that will take huge losses, if not fail, should Greece ultimately default or restructure its debt, and a contagion of sovereign defaults take hold.
This outcome has a chance to be delayed, again, only if the Greek government is willing to accept even more intense austerity measures — and soon. But other events of the day made it clear that the likelihood of that happening was dwindling …

•   When Greek Prime Minister Papandreou couldn’t get parliament to agree on more, tougher austerity measures to satisfy the EU/IMF requirements for more financial aid, making a July default more threatening. Ultimately he “re-shuffled” his cabinet in attempt to ram it through.
•   Then rioters hit the streets in violent protests against austerity. And it was widely covered by global media.

Once again, Greece is the word.

They’re rioting again in the streets of Greece.

It’s the word used to describe the plunge in the U.S. stock market. It’s Greece that’s attributed to a sharp slide in the price of crude oil this week. And it’s the uncertain outcome in Greece that is the subject of greatest concern for global policy makers.
But most casual market followers still don’t understand why Greece doesn’t really matter.
With all of the focus that has been given to the irresponsible spending and social welfare programs that have driven Greece to insolvency, the real problem isn’t Greece at all.
You see …
Greece Is Only a Symptom
of the Real Problem
The problem is European banks, the European Central Bank and a flawed single currency concept — the euro.
In May 2010, we got a clear message from Europe on just how desperate the situation was there. That’s when the powers of Europe gathered to determine a game-plan for dealing with Greece. The European Union, the IMF and the ECB could have backed away and let the country pull-out of the monetary union and go on with its business of mending itself through currency and debt devaluation.
But they didn’t do that!
Instead, in perhaps the most shocking development in the entire global financial crisis, they vowed to rip up the rulebook that the European monetary union was built upon, by using taxpayer money of the stronger countries to support the fiscally irresponsible weaker countries … to the tune of 750 billion euros worth of promised aid.
Moreover, the European Central Bank, built upon the idea of fierce independence, tossed its rulebook out and vowed to be the buyer of last resort of the toxic sovereign debt of the failing euro-zone peripheral countries. AND they continued accepting the toxic collateral from these countries in exchange for short-term liquidity.
They didn’t go to such extreme measures because they really cared about saving the likes of Greece, Portugal and Ireland (and even Spain). They did so because they had to!
When the global financial crisis was at peak severity, much of the world focus was on U.S. bailouts. Meanwhile Europe and the ECB were naively admired as the example of conservatism and rationale.

Advertisement

But throughout the financial crisis, the ECB was offering unlimited funds to its European banks for a paltry 1 percent interest. The stated purpose was to keep credit flowing in its economy. However, the banks weren’t lending to consumers and businesses; they were lending to the PIGS (Portugal, Ireland, Greece and Spain) to keep them alive.
The struggling countries were happy. They were able to borrow at reasonable rates, even though they were maintaining massive budget deficits and burgeoning debt loads …
The banks were happy. They were borrowing at 1 percent and lending at juicy yields …

The ECB was happy to handout euros left and right, but now its strategy has backfired.

And the ECB was happy, because it was aiding the struggling countries through the “back-door” … maintaining adherence to its guiding principles and keeping its appearance as staunchly independent.
But finally, market participants took notice and went on attack, selling the government bonds of the weak euro members. Consequently sending borrowing rates for these countries soaring, exposing their spiraling deficits and the flaws of the greater European monetary union.
So when the decision had to be made by European officials and the IMF, back in May 2010, to let Greece go or go “all-in” … the choice was obvious. They had to go all-in, because the European banks were loaded with Greek debt. If Greece had fallen, the other weak countries would have fallen, putting $2 trillion worth of European bank exposure to the PIGS countries on course for massive write downs — and triggering another financial crisis.
But now, more than a year later, the PIGS remain on the path of default, European banks are still highly exposed, and all of these desperate actions to stave off the ultimate impact day has left the …
ECB Loaded with
Toxic Assets!
As I warned in my Money and Markets May 14 column, the sovereign debt crisis in Europe could make the Lehman Brothers failure pale in comparison.
It’s not just European banks, but the European Central Bank is at risk of failing.
A European think-tank, Open Europe, says the ECB has taken on nearly 400 billion euros of exposure to the four most troubled European countries — selling off its good assets to take on bad assets. And they estimate the ECB is 23 to 24 times leveraged. When Lehman failed it was 30 times leveraged.
They estimate that Greece would have to restructure half of its debt to bring it down to sustainable levels. With that scenario, it would “effectively leave the ECB insolvent.”
If that happens expect another wave of global financial crisis, bigger than the first, where markets trade in two tiers: Risky and safe.
All of this is good news for currency investors, because the BIGGER THE CRISIS, the GREATER the movement of capital within global currencies. And the BIGGER the profit opportunities!
Regards,
Bryan


P.S. My World Currency Trader is specifically designed to protect and grow your wealth during the wild swings in currencies like we’re about to see. Check out my latest presentation.
____________


Related:

American Banks vs. European Banks: A Fun Little Conspiracy Theory

IMF deal fails to halt market fears over contagion from Greek crisis; Greek PM: EU will approve a new bailout package of “mammoth proportions”

Greek Protesters Are Better Economists Than The European Authorities

Could The Eurozone Break Up?

How the Internet Makes False Flags More Difficult

From The Daily Bell, Saturday, June 18, 2011 – by Staff Report


The "Internet Reformation" (as we call it) is a natural outgrowth of our perception that the 'Net itself is a kind of modern-day Gutenberg Press. It's a concept we've been writing about for nearly a decade. Initially, it seemed like an interesting theory, but everything keeps falling into place and the historical parallels are startling. What they seem to reveal is an upcoming electronically-based Renaissance of sorts.
This is of course not necessarily a popular view. The alternative Internet media is often relentlessly gloomy. One is bombarded daily with information about the 5,000-year-old evil of the Illuminati, the impossibility of stopping the New World Order, the invulnerability of the world's great banking families such as the Rothschilds and Rockefellers who are said to control tens or even hundreds of trillions.
And yet, look around. Despite the challenges, there is plenty of evidence of pushback. And why shouldn't this trend continue, no matter what counterattacks are made?
Look at history. The Catholic Church launched its Counter-Reformation but wasn't successful in stopping eitherLutheranism or Protestantism. The elites of the day tried to license printing presses but were not successful. They tried to confiscate books as well. Finally, they tried war, but eventually had to declare a peace via the Treaty of Westphalia that established the modern nation state.
What was seemingly at work then, as now, is Marshall McLuhan's "hive mind." People may scoff at the concept of a hive mind, but humans are seemingly structured to seize on the most modern concepts as part of the struggle to survive and get ahead. The stale nostrums of the modern Dark Age – the 20th century – are giving way to a dawn of knowledge hitherto repressed by the power elite.
The discovery of the 10,000 year-old-city of Dwarka off the coast of India, the probable reality of a universe organized by electricity rather than gravity, the existence of abiotic oil generated by geological processes, the reality of vitamin therapy and naturopathy have all found popularity on the Internet – along with the free-market economics of Austrians such as Ludwig von Mises. Twenty years ago, such concepts and discoveries would not have been mentioned, generally, let alone circulated.


The Internet has begun to blow up power elite memes – the fear-based promotions by which the Anglo-American elites have sought to control society. Literally trillions of dollars have been thrown into an effort to create a network of political structures (UN, IMF, BIS, etc.), think tanks, educational facilities and popular media that can amplify thesedominant social themes. Once they have become part of the public consciousness, authoritarian and globalist solutions are inevitably proposed. It looks like a natural process but in fact, it is an entirely artificial one.


The same process takes place as regards investing. Fear-based themes such as global warming are promoted with increasing fervor over years and decades. International political solutions are introduced along with corporate solutions. Companies large and small proclaim "green" solutions even though global warming has been massively discredited.
And the scale at which the Anglo-American power elite works is almost unfathomable, and the current conspiracy to create One World Government probably goes back at least 300 years. From bases in the City of London, the Vatican and Washington DC, seep deliberate promotions – often seemingly honed within the Tavistock Institute. A handful of great banking families along with their religious, corporate and military facilitators, go to work to waft them around the world.


Once the dominant social themes and sub themes are distributed via the controlled mainstream media, the UN and other internationalist institutions produce solutions that inevitably involve more control for the globalists at the expense of the world's unknowing citizenry.
There are vast sums of money to be made as well within this great game of mind control. Private companies are provided with "solutions" to the elite promotions of the day. These entities, controlled by the elites, funded by their hedge funds and private money, are gradually released onto the world's great exchanges.
Once the companies are public, cash is funneled back to its inevitable elite destination where the "wisemen" have vast seed positions at virtually no cost. The great families and their facilitators siphon off proceeds from their manipulations and invest the funds in more tangible assets such as real estate, oil and precious metals. The real estate is developed; the oil is marketed; the gold and silver finds its way back to Switzerland where it is stored in deep vaults and subject to off-the-books accounting by Switzerland's many private banks.


It is probably that simple. First they seed the fear, then they deliver the dreams, then they blow off their 8.5 x 11 pieces of paper into smaller pieces of paper (fiat money), then they quickly convert that devaluing paper into tangible assets. Central banks are the control hub that gives the elite this power through money creation. Mainstream media is complicit in aiding and abetting the entire societal wealth-draining process, which is cloaked under a statist religion we call "regulatory democracy."


This is the process that seems to have emerged painstakingly over the past century. The artificial business cycle itself helps consolidate this centralization. It is a work of virtual genius that has been elaborated on patiently over decades and centuries. Fortunately for the rest of the world, the Internet and its billions of bloggers and viewers has exposed every part of its operations. This is becoming a problem for the elites as the dollar reserve currency gradually collapses along with faith in individual securities investing to generate retirement income.


All these manipulations are increasingly exposed. How do I know? You're reading this article aren't you? And even those who do not read this article may read similar analyses elsewhere. The same thing happened once the Gutenberg Press was discovered. People read the bible for themselves in vulgate and began to realize that the current corrupt version of the Roman Catholic Church did not correspond to the Holy Word. The word spread; revolutions and regime changes began.


It's happening today for the same reasons. There were financial crises in Europe when the Gutenberg Press was expanding its influence. The financial crises combined with the explosion of information offered by books to create the Renaissance.


The elites of the day tried to manipulate the explosion of knowledge via the Reformation (to split the Catholic church) and by fomenting the French Revolution. But for several hundred years, nothing worked as it should. Secret history seems to show us that no matter what the elites of the day did, freedom and knowledge expanded.


We are still at the beginning of such a point of departure. The elites, having created a second, electronic printing press by mistake may now have to take a step back as they did before, 500 years ago. One can see knowledge spreading.  
Google's search engine provides us with literally tens of millions of cites for Mises, Hayek and free-market economics. There is a great hunger for information about free-markets and free-market thinking and the Internet has made it possible to satisfy that need.
It seems to have taken about 100 years for the Gutenberg Press to spark the Renaissance. The Reformation, the Enlightenment, the Glorious Revolution, the American Revolution, the French Revolution and numerous other social changes. The impact of the Gutenberg Press likely was responsible for a number of ill-defined "Peasant" wars as well, that raged across Europe for 30 years.


The wars were so numerous finally and so wide-ranging that the European leadership of the day had to convene a peace conference in Westphalia that lasted a full decade. Out of it emerged the concept of an inviolate nation state. No country had the right to attack another.
This Peace of Westphalia was deliberately overturned by the UN Security Council in 2005. Something called theResponsibility to Protect (R2P) was substituted in its place. R2P virtually demands that if a leadership is "threatening" it citizens, the big Western powers have an affirmative obligation to intervene. R2P has now embroiled the West in numerous major, military confrontations.


One of the ways that the elites responded to the advent of the Gutenberg Press was through war – and more war. Various low-key wars spread across the length and breadth of Europe. It didn't do much good, though. The Renaissance still happened. The Reformation spun out of control. British royalty was overthrown. The New World was discovered and populated. Freedom was rediscovered and the scientific method was introduced.


One can make a case (and we have) that this paradigm, exactly, is repeating itself. It may be true that an Internet false flag event is being planned by Western elites. War on a false enemy may be declared as a result – and laws passed to restrict the Internet and block the alternative media – all in an attempt to stop truth-telling. But while many who are predicting the demise of the Internet (as a facility for the free dispersal of knowledge), I don't.


There are signs of what is to come. The hacker group Lulzsec recently took down the CIA web site after attacking US Congress web facilities as well. Some have claimed Lulzsec is itself a front for US Intel agencies. Suspicions have been raised as well about the hacker group Anonymous. We reported the other day about CIA Director Leon Panetta, who said in a recent hearing that the US may soon face a cyber attack that would be the equivalent of Pearl Harbor. Alternative Internet websites increasingly have been filled with articles about potential false-flag events.


Over at Washington's Blog, for example, we find an article on false flags entitled, Are Hacker Attacks False Flag Attacks to Justify a Crackdown on the Internet? Washington relates how former Counter Terrorism Czar Richard Clarke told a leading expert on internet free speech, Stanford law professor Lawrence Lessig, that there was going to be an "i-9/11″, in other words, an electronic terrorist act, and an "i-Patriot Act" to crack down on freedoms on the Internet under the guise of protecting against such threats.


Washington, like many from the blogosphere, believes that like The Patriot Act, an i-Patriot Act is "sitting in the drawers of the Justice Department for the last 20 years waiting for the event where they would pull it out." This may well be the case. But there are still stubbornly lingering questions over 9/11, with many, according to surveys, apparently harboring suspicions that 9/11 itself constituted some sort of false flag operation intended to start wars and introduce even more authoritarianism into the US.


If one goes online and queries Google with "Internet false flag" nearly FOUR MILLION cites turn up. There is a good deal of consciousness within the alternative press at this point about such potential false flags. A false flag by definition is a secret manipulation. How can an Internet false flag be introduced logically when everybody knows about it and is expecting it?
There are many ways it can happen of course. But in fact, with secrecy all but undermined as regards these black ops, the Anglosphere elite that surely wishes to undermine the Internet Reformation is going to run into considerable pushback if it tries one of these operations. This is not to say it won't happen, only that it may not be nearly as effective as some are now predicting.


This article has tried to show that what is occurring today with respect to a major societal shift in understanding also happened 500 years ago with the advent of the Gutenberg Press. The parallels exist for anyone who wishes to scrutinize them and the affinity of the trend lines are being drawn realtime.
The elites of the day seemingly could not control the ramifications of the Gutenberg Press no matter what they tried to do, and they evidently tried everything from war, to licensing, to false flag events and social manipulation. It didn't matter; force never solves anything longer term. Indeed, "the pen is mightier than the sword." Now, nearly 600 years after Gutenberg's original invention of mass conversation, a "great shift" – Internet Reformation – has begun anew.


Of course, analyzing history in hindsight is a difficult occupation. Certainly people can come to a different conclusion, or even entirely reject this analysis as facile. But for me the parallels are clear. The Internet Reformation itself may prove a great deal more resilient than some now believe. The human hive mind is busy buzzing. The spread of knowledge – real knowledge – continues. The Dark Ages of the 20th century begin to lift and Dreamtime subsides. Information about free-markets continues to spread. Are these trends reversible? Don't think so.