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Dear CIGAs,
Click here to listen to my interview yesterday from GoldSeek Radio…
Miners: We’re running out of gold
November 25, 2009 – 12:49PM
Gold production will continue to fall, despite a brief boost in 2009 and soaring prices, as deposits are exhausted and new discoveries remain elusive, say miners.
In terms of production, "2009 is the outlier as far as the trend," Omar Jabara, spokesman for US-based Newmont Mining, the second-largest gold producer in the world, told AFP.
Overall, "it’s a fact that gold production from mines has been in decline since 2001 and has gone roughly from 85 million ounces to about 75 million ounces a year," said Vincent Borg, spokesman for number one producer Barrick Gold.
"It sort of goes down about one million ounces every year and our forecast is that it will continue to decline despite the higher price" for gold nowadays, he said.
Almost everywhere, mineral deposits are being exhausted and new deposits are not being found fast enough to replace them, these experts explain.
Jim Sinclair’s Commentary
This is entirely correct and so do the mega billionaires of OTC derivative manufacturing and distribution now speaking to the IMF.
Emerging Market Central Banks Have Scope To Buy More Gold -BlueGold
Tue, Nov 24 2009, 02:51 GMT
SINGAPORE (Dow Jones)–Central banks of emerging markets have substantial scope to expand their gold reserves given their underweight position in the metal relative to developed market central banks, Stephen Jen, managing director of macroeconomics and forex at BlueGold Capital Management, said in a report dated Monday.
According to the report, the average gold holding ratio, or gold holdings as a percentage of total foreign exchange and gold reserves, of the U.S., Japan, ECB, UK, Germany, Italy, France and Switzerland is 37.9% on average.
This compares with an average of 2.2% for a group that includes China, Russia, India, Taiwan, South Korea, Hong Kong, Brazil and Singapore.
"The obvious implication is that the scope for emerging market central banks to buy more gold is substantial, if they decide to diversify into gold," said Jen.
Jen also said the top eight emerging market forex reserve holders have $4.1 trillion in foreign reserves, meaning every 1% reallocation in reserves towards gold would correspond to $41 billion in gold purchases.
A Lesson For Future Central Banks:
Never draw a line in the sand that has no capacity to function, such as $1.50 being a barrier to further appreciation for the euro.
The reason was discussed before and clearly demonstrated today.
When the line in the sand is broken that in fact did not exist in the first place, the result is multiplied.
Today the BS backfired as BS will always do.
This is the terminal weakness of MOPE (Management of Perspective Economics).
Jim Sinclair’s Commentary
Martin Armstrong on real estate:
Jim Sinclair’s Commentary
While everyone is looking at China, China is looking at and buying up Africa.
Where are the bargains? In China, the answer is no. In Africa, the answer is yes.
The inception of the African Common Market is the milestone for Africa’s growth in social, political and economic ascendancy.
Soros Joins Top Names in African Deal
By Lauren Mills
What unites once the world’s most powerful foreign secretary, once the world’s most powerful hedge fund manager and a scion of perhaps once the world’s most powerful banking dynasty? The answer, surprisingly, is a London-based private equity manager investing in Africa, writes James Mawson, editor of Private Equity News.
Helios Investment Partners, an independent firm set up five years ago by two former executives from TPG Capital, a large and very influential buyout group, has pulled off the feat of bringing George Soros, Madeleine Albright and Jacob Rothschild into the same deal to open up mobile phones to the other half of the African population without telecommunication access.
As co-investors in Helios Towers Africa, the four have committed an initial $350m in equity to buy mobile phone masts in the continent outside of Nigeria and boost telecoms penetration rates beyond 45%.
Temitope Lawani, a co-founder of Helios, said the firm had previously invested with Soros Strategic Partners, the private equity operation of the hedge fund manager who effectively forced the devaluation of sterling more than a decade earlier, in Africa. Soros has been a successful backer of US mobile phone towers, having bought Sprint’s 3,000 masts a few years before, and knows the sector well.
Albright and Rothschild are big investors in emerging markets: Madeline through raising $350m for the Albright Capital Markets fund in 2007, while Lord Rothschild has family investments in emerging markets and runs RIT Capital Partners, a listed investment company.
Jim Sinclair’s Commentary
What recovery can be supported by restricted lending?
U.S. lending in the dumps.
The FDIC said in its Q3 report for U.S. banks that bank lending fell by the largest amount since the government began tracking such data, suggesting that banks are still anxious, and that the recovery could suffer as a result. Total loan balances fell by $210.4B, or 3%, the biggest decline since data collection began in 1984. The FDIC also said that a wave of bank failures pushed its fund to backstop deposits into the red (-$8.2B) for just the second time in its history. In anticipation of this, the agency recently approved plans calling for banks to prepay annual assessments through 2012, which will add $45B to the FDIC’s coffers.
Jim Sinclair’s Commentary
Statistically yes, but substantively, where is it?
Unemployment is the basis of this question.
GDP, house prices, consumer confidence rise.
A wider U.S. trade gap and other factors helped clip the government’s Q3 GDP forecast, with Tuesday’s report showing growth at 2.8% vs. the 3.5% the Commerce Department had originally forecast. Still, it was the fastest pace since Q3 2007 as the economy emerges from the worst recession since the Great Depression. The upturn, following a 0.7% contraction in Q2, reflected hefty government spending. Also Tuesday, house prices gained month-on-month, and Conference Board’s measure of consumer confidence rose to 49.5 from an upwardly revised 48.7 in October.
Jim Sinclair’s Commentary
$1224-$1278 by Christmas. Do you know what this time and price discipline is?
It is based on a mathematical formula that is constant in nature, but not Fibonacci.
Jim Sinclair’s Commentary
The Fed knows that nothing has been fixed.
Fed shrugs off risks.
The Fed admitted its near-zero-interest-rate policy could fuel "excessive" speculation in financial markets and thwart expectations for low inflation. Still, policy-makers indicated in minutes from their FOMC Nov. 3-4 meeting, released Tuesday, that rates will likely remain near zero "for an extended period." Fed officials agreed to remain vigilant, but such risks have not escaped Japan and China, where last week finance chiefs accused the Fed of being reckless and potentially endangering the global economy.
Jim Sinclair’s Commentary
Those that least understand why the Cando is going higher are the Canadians.
Russia to Buy Canadian Dollars, Mulls More Currencies (Update2)
By Alex Nicholson and Paul Abelsky
Nov. 25 (Bloomberg) — Russia’s central bank will add Canadian dollars to its reserves and may include more currencies as it seeks to reduce its dependence on the U.S dollar.
“Technical preparations for transactions in Canadian dollars are underway,” Sergei Shvetsov, the bank’s financial operations head, told lawmakers in Moscow today, in remarks confirmed by a Bank Rossii official. “Then there may be one, two other currencies and that’s it.”
Russia aims to diversify its reserves, increase gold holdings and promote regional currencies in trade and finance to reduce risks posed by the dollar’s dominance. President Dmitry Medvedev has blamed the global financial crisis on an over- reliance on the U.S. currency. Russia’s interest in buying assets denominated in Canadian dollars is also part of its strategy of reducing exchange-rate volatility, saidVladimir Bragin, an economist at Trust Investment Bank in Moscow.
“They may not be seeking to invest a large amount of money,” Bragin said. Russia may be interested in buying bonds backed by the Canadian government or high-quality corporate debt, he said, and “the global economic recovery will boost prices for natural resources, strengthening the Canadian dollar.”
Canada’s dollar, nicknamed the loonie, appreciated to the highest in a week after the Russian announcement. The currency strengthened as much as 1.2 percent to C$1.0453 per U.S. dollar, the highest since Nov. 18, and was up 1 percent at 8:07 a.m. in Toronto, from C$1.0580 yesterday.
Jim Sinclair’s Commentary
When gold buyers are persistent governments COT is headed for record losses.
IMF sells 10 tonnes of gold to Sri Lanka
WASHINGTON — The International Monetary Fund said Wednesday it had sold 10 tonnes of gold to Sri Lanka’s central bank for 375 million dollars, as part of a restructuring of IMF financial resources.
It was the third IMF sale of gold in a month as the Washington-based institution seeks to reduce its dependence on lending revenue and bolster its finances amid the global economic crisis.
"The sale was conducted on the basis of market prices prevailing on" Monday, the IMF said in a statement.
Gold prices had hit a record high that day, topping 1,170 dollars an ounce. Since then, the price of the precious metal has soared higher to new all-time peaks as investors seek a safe haven amid economic uncertainty.
The sale brought the total IMF gold sold to central banks to 212 tonnes. India bought 200 tonnes between October 19 and 30 for 6.7 billion dollars and Mauritius bought two tonnes on November 11 for 71.7 million dollars.
Jim Sinclair’s Commentary
Of course they are. FASB lead the way by collapsing on their ethics as a board of ethics.
With that as the command’s performance, why would banks recognize and mark down their losses when major banks were now able to mark up toxic paper? After that of course they would not.
Those who accepted the mission of protecting investors by guarding the rules of accounting let us down. They let down all who look to them for guidance on accounting.
What else would you expect from another bank looking at losses not marked down on their books?
Half of banks’ losses may be unknown: IMF chief
Tue Nov 24, 2009 3:01pm EST
PARIS (Reuters) – Half of the losses suffered by banks could still be hidden in their balance sheets, more so in Europe than in the United States, the International Monetary Fund’s chief, Dominique Strauss-Kahn, was quoted as saying on Tuesday.
In an interview with French newspaper Le Figaro, Strauss-Kahn also said the IMF thought the euro currency was probably a bit too strong.
"There are still some important losses that have not been unveiled," Strauss-Kahn was quoted as saying in response to a question on banks, according to excerpts of the interview that were sent to media ahead of publication on Wednesday.
"It’s possible that 50 percent (of bank losses) are still hidden in their balance sheets. The proportion is greater in Europe than in the United States," he said.
Asked about currencies, Strauss-Kahn noted that Europeans were the ones who have been complaining the most about the strength of their currency.
Jim Sinclair’s Commentary
This defines without any doubt what money is.
They are not shipping large containers of fiat currencies. This should turn a light on in the dullest of brains.
Soon a major NON GOVERNMENT party will seek to buy from the IMF, and if thwarted will seek it elsewhere.
Mystery gold cargo linked to Saad, Gosaibi fued
Frank Kane
* Last Updated: November 25. 2009 8:10PM UAE / November 25. 2009 4:10PM GMT
The Qantas freighter QF71 that took off from Perth Airport on November 3 last year bound for London would not have attracted any special attention, despite the fact that it was carrying 1.2 tonnes of gold bullion, then worth about US$28 million (Dh102.8m).
Perth, in Western Australia, is home to Australia’s Gold Corporation Mint, where bullion is processed and turned into standard 12.5kg bricks.
From there, the ingots are shipped daily around the globe to vaults in America, Europe and Asia, evidence of the world’s apparently insatiable appetite for the precious metal.
But what made this shipment unusual was that it was the first of 15 such cargoes, of varying quantities and values, which over the next seven months were eventually unloaded mainly in London. Smaller amounts were also delivered to Dubai and Zurich.
The total value of the bullion exported in these operations approached $430m at current market prices, and it weighed 10.4 tonnes.
Jim Sinclair’s Commentary
Tapping the banks might have a onetime chance at the well, but not a second.
Much of the financial industry has reported earnings on a cashless basis as the huge profits come mainly from marking up toxic paper resulting from FASB’s violation of its purpose and principles.
FDIC Fund Slides into the Red as Banks Pull Back Lending
It’s official: the overwhelming number of bank failures since the onset of the nation’s financial crisis have pushed the FDIC’s insurance
fund into negative territory. The agency said Tuesday that its reserve used to protect consumers’ deposits when a financial institution goes under is $8.2 billion in the hole.
This marks only the second time in history that the FDIC’s capital supply has fallen below zero. The first occurrence was in the third quarter of 1992, during the agency’s clean-up of the savings and loan crisis.
FDIC officials warned back in September that the government-run deposit insurance fund was heading for broke. Since that foreboding premonition, the agency has implemented a new payment structure requiring insured institutions to prepay three years worth of fees in order to replenish its purse. The FDIC expects to rake in over $45 billion from this unprecedented billing arrangement, but collection of this added capital doesn’t begin until December 30.
Technically, though, the FDIC says it has plenty of money to cover any near-term bank closures. Just as banks set aside capital to cover anticipated loan losses, the agency has stashed away an additional $38.9 billion to deal with what is expected to be another steady stream of institutional failures next year. With this contingent reserve, the FDIC’s finances actually show a positive balance of $30.7 billion.
