Thursday, April 25, 2013

Meet the New $100 Bill, the World’s Most Popular Bank Note

​ ​
The US Federal Reserve just announced that its redesigned $100 bills will go into circulation on October 8. The rollout, originally planned for 2010, was delayed by production issues with the blue ribbon that’s threaded through the note.
Back of the new $100 bill.As Matt Phillips has explained at length before, nearly 80% of all US currency is denominated in $100 bills. There were more than 820 million Ben Franklins out in the world at the end of last year, making it the most popular bank note, by value, among the world’s major currencies. (Here are the circulation figures for the euro; the €50 note is the currency’s most popular by quantity and value.)
A large portion of hundreds are held outside the United States, often shipped abroad by the Fed in pallets worth $64 million each (pdf), though the exact percentage is a matter of debate. The bills are popular among traffickers of drugs and weapons and are also used in unstable economies as a reliable store of value.
The new $100 bills include security features designed to thwart counterfeiters, which you can read about here. They still feature Franklin, one of only two people on a US bank note who was never president of the country. (He was many other things, among them an author, scientist, diplomat, politician, composer, inventor, and newspaper editor; the only profession he chose to list on his epitaph was, fittingly enough, “printer.”) Franklin’s collar is now festooned with “The United States of America” in tiny lettering, and another, ghostly visage of him appears when the bill is held up to light.

GE Capital Stops Lending to Gun Sellers

The financial unit of General Electric, GE Capital, is going to stop financing gun shops, according to a Wednesday report in the Wall Street Journal.
GE Capital actually began pulling away from this business back in 2008, when it stopped taking on new customers. Now existing customers, who were grandfathered in, are being sent letters saying that GE Capital is no longer in this business, according to the Journal.
This isn't exactly surprising. GE Capital is based right next to Newtown, Conn.
From the Journal:
GE is based in Fairfield, Conn., and many of GE's employees live around Newtown, and several have children in the Sandy Hook elementary school, where the shootings took place. Peter Lanza, the father of Sandy Hook gunman Adam Lanza, is an executive at GE Capital. GE Chief Executive Jeff Immelt held a town hall meeting with affected employees after the shooting, and the board has been updated on efforts to help staff, a person familiar with the matter said.
A GE Capital spokesman tells the Journal that the exit from gun financing was spurred by "industry changes, new legislation and tragic events."
There is some room to question how deep GE Capital's commitment to not financing gun sellers really goes. The company is apparently shutting down financing for stores whose primary business is gun sales. That means giant retailers like Walmart, which sells plenty of guns, won't be affected. The little guy loses out again.
Or maybe not. If the past is any guide, the latest news may only spur gun enthusiasts to purchase more guns. There are several independent companies that provide financing for gun purchases, including some that tout things like "No Credit Check Financing." You have to wonder if we're better off pushing gun financing out of GE Capital and into the shadows.

Sandals, burgers and picnic table lunches: Billionaire Mark Zuckerberg enjoys budget Hawaiian vacation with wife Priscilla

He may be worth $13.3 billion, but it seems Mark Zuckerberg still appreciates the simple things in life.
The 28-year-old Facebook founder has been pictured enjoying a low key vacation in Kauai with his Harvard-educated doctor wife, Priscilla Chan, on their latest trip to Hawaii.
But rather than indulging in the lavish dinners the couple can no doubt afford, they have been seen chatting with friends at picnic tables while snacking on Kauai's famous Bubba burgers and smoothies.
The couple, who are notoriously down-to-earth, sported casual wear and Mark wore his now-famous sandals, which are parodied by Jesse Eisenberg in the film about Facebook, The Social Network.
Newtworking: Mark Zuckerberg and wife Priscilla Chan chat with friends as they take a stroll on Kauai
Newtworking: Mark Zuckerberg and wife Priscilla Chan chat with friends as they take a stroll on Kauai

Relaxed: The couple were seen enjoying food from Bubba's Burgers at a picnic table with friends
Relaxed: The couple were seen enjoying food from Bubba's Burgers at a picnic table with friends
Relaxed: The couple were seen enjoying food from Bubba's Burgers at a picnic table with friends
The billionaire formerly said he would only eat meat he killed himself, but it appears he makes an exception when he's on holiday
'We try to stick pretty close to what our goals are and what we believe and what we enjoy doing in life - just simple things,' Chan has previously told The New Yorker.
As the couple headed to their beach front house, they were seen walking past Shave Ice Paradise - a favorite of the Obama family when the First Family vacations in Hawaii.
It is just the latest trip to Hawaii for Zuckerberg and Chan, who switched web surfing for wave surfing in Maui last December. They were seen chatting with beach goers and enjoying lessons in the water.
And while the couple do not appear to be splashing out this trip, it was reported that Zuckerberg did go on a spending spree in the area in January, when he bought several luxury condos in Honolulu.
Stroll: Zuckerberg and his wife laughed as they passed Shave Ice Paradise - an Obama favorite
Stroll: Zuckerberg and his wife laughed as they passed Shave Ice Paradise - an Obama favorite

Taking it easy: The couple, who enjoyed smoothies with friends, also visited Hawaii last December
Taking it easy: The couple, who enjoyed smoothies with friends, also visited Hawaii last December
Vacation: The high-flying couple is staying at a beach house Kauai, Hawaii, pictured
Vacation: The high-flying couple is staying at a beach house Kauai, Hawaii, pictured
He was reportedly interested in buying several units in a 23-story ultra-luxury condominium under development. Each unit costs $1.6 million - with penthouse suites reaching $9 million.
The couple met at a college party in 2003 as they stood in line for the bathroom at Zuckerberg's Jewish fraternity at Harvard University, Alpha Epsilon Pi.
'He was this nerdy guy who was just a little bit out there,' Chan told the New Yorker.
They married in May last year in Zuckerberg's backyard in Palo Alto, California - after telling their unwitting guests the celebration was solely to mark Chan's graduation from medical school.
As well as family and friends, they were joined by their dog Beast and serenaded by Green Day's Billie Joe Armstrong.
Partying: While Zuckerberg enjoyed a low key holiday, the Winklevoss twins, who sued him for allegedly stealing their idea to create Facebook, were seen partying at Coachella music festival
Partying: While Zuckerberg enjoyed a low key holiday, the Winklevoss twins, who sued him for allegedly stealing their idea to create Facebook, were seen partying at Coachella music festival
While the couple were seen taking it easy in Kauai, where they are staying at a beach house, the Winklevoss twins - who sued Zuckerberg for allegedly stealing their idea to create Facebook - were seen partying with women at the Coachella music festival in California.
Zuckerberg was no doubt ready for a holiday following his first foray into politics this month.
With other Silicon Valley leaders, he launched a political group aimed at revamping immigration policy, boosting education and encouraging investment in scientific research.
Zuckerberg announced the formation of (pronounced 'forward us') in an op-ed article in The Washington Post two weeks ago.
Newtworking: Mark Zuckerberg and wife Priscilla Chan chat with friends as they take a stroll on Kauai
Jesse Eisenberg in the Social Network Columbia TriStar
Low key: Zuckerberg was seen sporting his sock sandals - which were parodied in the film about Facebook, The Social Network, by Jesse Eisenberg (right) who plays the Facebook founder

Wedding day: The couple were married last May at their Palo Alto, California home
Wedding day: The couple were married last May at their Palo Alto, California home
In it, he said the U.S. needs a new approach to these issues if it is to get ahead economically. This, he wrote, includes offering talented, skilled immigrants a path to citizenship.
'We have a strange immigration policy for a nation of immigrants, Zuckerberg wrote. 'And it's a policy unfit for today's world.'

Portfolio Manager Greg Orrell: ‘My Belief in Gold Has Not Wavered’

Peter Byrne of The Gold Report (4/24/13)

After the extreme volatility of gold in the last few weeks, OCM Gold Fund Manager Greg Orrell is more convinced than ever of the necessity of owning gold assets. In this interview with The Gold Report, Orrell lays out the rationale for buying these cheap gold stocks around the world, including California of all places.
The Gold Report: How has your bullish view on the gold sector evolved as a series of crises has jolted both the international stock market and the price of gold?
Greg Orrell: First off, my belief in gold as a monetary asset has not wavered. Japan basically admitted that it is bankrupt with its intention to aggressively debase its currency. Normally such actions would invoke, and may still, a race to the bottom as each country engages in economic warfare to deal with its debt issues. At this juncture the fear of global deflation among the G7 crowd remains its worst nightmare, especially as additional stimulus by the Federal Reserve is showing diminishing returns. With high debt levels in both the private and public sectors around the world, stimulating economic growth is proving elusive. These alarming events are setting the stage for the next leg up in the dollar gold price, in my opinion. The fiscal and monetary crisis is ongoing and underscores the necessity of owning gold assets.
Though agonizing, the past 18 months have been nothing more than a consolidation for gold from the September 2011 highs of $1,900/ounce ($1,900/oz). The recent decline in gold prices below $1,500/oz is not the end of the bull market in gold, despite the barrage of negative commentary by those wanting to dance on gold’s grave. The destruction of currencies is in full bloom, but it is not a straight line. The problem for many gold investors is that they can see the endgame. Gold prices rise in a straight line at the end of a monetary system, but we are not there yet. It takes some patience to hold the course while the establishment fights tooth and nail to keep the dollar system from failing.
TGR: The years 2009 and 2010 were better for gold stocks. Can you talk about how things changed after that and how investors can best respond to the precipitous drop in market value?
GO: A number of factors go into the poor performance of the gold shares over the past couple of years besides the gold price. We have seen investor rotation out of defensive posturing and then the gold miners ended up being their own worst enemy. Gold share investors became concerned, and rightfully so, with rising operating and capital costs, poor capital allocation and growing resource nationalization. This in turn made bullion exchange-traded fund (ETF) products more attractive and prompted a trend of shorting the miners versus long gold positions.
Let’s look at the world’s largest producer, Barrick Gold Corp. (ABX:TSX; ABX:NYSE). It incurred cost overruns at the Pascua-Lama project in Latin America. And it overpaid for a copper asset in Africa after spinning off its African gold assets a couple of years earlier. Each of these instances led to contraction of cash flow and net asset value multiples for the whole sector, and set a theme for the industry. At this point, the pendulum has swung too far, with the shares basically discounting everything that could go wrong and more. Therefore, if an investor is not in the gold sector, now is an opportune time to take advantage of the significant decline in share values as there are signs of positive change taking place within the sector.
TGR: Can you provide any insight as to why longer-term investors, and also new gold investors, should buy into the current gold market?
GO: The rationale for owning gold assets remains simple: global deterioration of sovereign credit and a growing need to debase currencies in order to meet future obligations, whether it’s here in the U.S., Europe or Japan. The policy of socializing risk with monetary and fiscal policy has destroyed the balance sheets of the Western world. We are in a phase of experimental central banking, which I believe is going to end badly due to the dislocations of capital it has caused through prolonged periods of negative rates.
In the event economic growth were to take hold, an unleashing of built up reserves in the system would set off inflation with a corresponding rise in rates. Just imagine the effect of a change in the direction of interest rates and the collateral damage that will create in the bond markets and the interest rate derivative markets after all of these years of managing a zero interest rate policy. The cost of funding the U.S. deficit will rise exponentially. More quantitative easing begets more quantitative easing. Investors need to have some type of asset to balance their portfolios. Policymakers who got us into this mess are unlikely to navigate us out of it. History tells us that only gold is a good place to be.
TGR: Is now a good time to be looking at the gold miners, including the juniors?
GO: Absolutely. With current sentiment negative on the miners, it is an incredible opportunity to buy gold shares and recapture lost value. A major problem for the mining industry is that its business model is flawed. Gold investors are not strictly interested in taking money from one hole in the ground and putting it in another. Investors want participation in cash flow through dividends and earnings leverage to higher gold prices along with the potential for increased shareholder value through discovery . Not paying dividends was great for management, geologists, engineers and everyone but the investor who was locked out of the cash flow.
Now falling share prices have put the onus on management to compete with the ETFs for investor dollars. A number of CEOs are being shown the door. Marginal projects are being shelved. Dividends are increasing. Management is beginning to understand that the needs of shareholders must be prioritized. Granted, the decline has been painful, but in my 30 years in the business, this is exactly what needed to happen.
TGR: Has the balance in your portfolio between bullion, large caps, mid caps, small caps, ETFs, royalties and cash changed over the last five years?
GO: Because production is cheap, we are weighting toward the large- and mid-cap producers. They are poised to recapture value as sentiment turns around in that space. The smaller, macro-cap exploration and development companies are bombed out, and a number of companies are trading where market cap per resource ounce is down to $10 or lower. Those companies are interesting as long as they have a balance sheet and they’re not diluting their shares to keep the lights on. Royalty companies have outperformed along with bullion over the last five years because of all the negative factors that I mentioned previously. But I’m not adding to the royalty companies right now because the operating companies offer better value.
TGR: You’re not adding to bullion?
GO: Not at this time. We’re keeping bullion around 5–6%. The miners, in my opinion, offer tremendous value at this point with gold reserves in the ground.
TGR: Who are some of the companies you think are attractive in the middle and small spaces?
GO: Endeavour Mining Corp. (EDV:TSX; EVR:ASX) is interesting right here. The share price has been washed out because it is a higher-cost producer, around $900/oz. Its market cap is down to under $400 million ($400M) with 300,000 oz (300 Koz) of annual production in West Africa, but is slated to grow to 450 Koz over the next couple of years. That’s a 50% increase. Endeavour is driving expansion mostly from internally generated cash flow.
Esperanza Resources Corp. (EPZ:TSX.V) is cashed up with over $70M and with experienced management is developing a couple of attractive heap-leach projects in Mexico. One project can put up 35 Koz/year and another one can do 110 Koz/year. Pan American Silver Corp. (PAA:TSX; PAAS:NASDAQ) is a major shareholder. Esperanza could be an early day Alamos Gold Inc. (AGI:TSX).
Avala Resources Ltd. (AVZ:TSX.V), 50% owned by Dundee Precious Metals Inc. (DPM:TSX), is trading down at dirt prices. The company has an entire Carlin-style belt tied up in Serbia where it has outlined close to 3 million ounces (3 Moz) so far. The company’s market cap is $12–15M, with $9M in the bank; it’s not a bad option—the market will appreciate the optionality value on the company’s assets at some point.
TGR: Are you a fan of the royalty model?
GO: I am a fan of royalty companies. The revenue comes right off the top so royalty holders have no exposure to increases in costs and typically have exposure to increases in reserves. Royalty companies often acquire the royalties from the original property owners. Another form of royalty is the creation of a gold or silver stream: the royalty firm helps to finance the project and receives gold or silver in return. We have seen a pick up of companies selling either net smelter royalties or streaming deals on projects as a way to finance in a marketplace where equity capital has become expensive.
TGR: Are there any royalty companies that people should be looking at?

GO: We own a couple of the big ones in our portfolio— Royal Gold Inc. (RGLD:NASDAQ; RGL:TSX) andFranco-Nevada Corp. (FNV:TSX; FNV:NYSE). We also own Silver Wheaton Corp. (SLW:TSX; SLW:NYSE).Sandstorm Gold Ltd. (SSL:TSX) is the up and coming player in the royalty space. It’s a highly competitive business. Recently a number of junior companies have cobbled together questionable projects that most likely won’t come into production in order to claim that they are royalty companies. Franco, Royal and Silver Wheaton have committed significant dollars to individual projects of late, which increases their risk profiles. However, with the diversification of their asset bases at this point, it should not be a problem with all three positioned to grow revenues substantially over the next three years. So overall I do like the royalty model.
TGR: What is your take on pure-play gold producers?
GO: I prefer pure-play gold producers, but those deposits are hard to find. Randgold Resources Ltd. (GOLD:NASDAQ; RRS:LSE) is a good example of a pure gold play, as are a number of other intermediates and juniors. But often base metals accompany gold. All of the major gold producers produce copper: Goldcorp Inc. (G:TSX; GG:NYSE), Newmont Mining Corp. (NEM:NYSE), Yamana Gold Inc. (YRI:TSX; AUY:NYSE; YAU:LSE), New Gold Inc. (NGD:TSX; NGD:NYSE.MKT) and Barrick. Production has been shelved in many big copper-gold porphyry deposits because it is so capital intensive. Consequently, we are more likely to see the smaller, pure gold projects go forward.
In the past, the majors looked for big projects because they did not want to operate the smaller mines. Now they are focusing on grade and smaller projects that won’t blow up the company. It may be smarter to take on 10 projects producing 150 Koz than to try and capitalize one project capable of producing 1.5 Moz.
TGR: Do any particular firms come to mind in that area?
GO: Gold Fields Ltd. (GFI:NYSE) out of South Africa says it is going to focus on smaller projects, around 150–200 Koz. I’ve heard the same thing from Newmont. Management is not going to be punished for making a small acquisition versus a buy of $5 billion. The big buy days are not likely to return any time soon. Managements’ excuse that it was difficult to manage multiple smaller assets rather than a couple of large ones has been cast aside as the large projects have shown to expose companies to too much risk.
TGR: We both live in California where there’s a history of gold mining, but current public awareness is limited. What the story?
GO: There is gold in the Mother Lode Belt in Northern California, in Imperial County in Southern California and in Siskiyou County in far Northern California. The unemployment rate in those areas is pretty high, so the residents are open to mining’s economic benefits. It is the outsiders who are up in arms about mining. Regulations have been put in place by a very staunch environmental crowd in California, but it’s no different than what we see around the world where local residents are in favor of a mine because of its economic benefits, only to have the professional environmentalists come in and oppose the project.
TGR: What junior gold miners in California are worthwhile?
GO: One project that has the potential to turn mining around in California is the Sutter Gold Mining Inc. (SGM:TSX.V; OTCQX:SGMNF) start up of the Lincoln mine on the Mother Lode Belt in Amador County. It’s a high-grade, underground mine that’s financed by its 50% shareholder, the Rand Merchant Bank. The first 150–200 feet (150–200 ft) of that deposit is going to pay back the capital cost of building and developing the mine. The mines on either side of it historically produced down to 4,000 ft. Production will start off relatively low at about 22 Koz/year. But there are significant growth opportunities at the Lincoln mine and along the Mother Lode Belt for Sutter to exploit once it has established itself. I am very excited about its prospects.
TGR: How do the California companies stack up against Nevada-based mining companies?
GO: Atna Resources Ltd. (ATN:TSX) has a heap-leach mine down in Southern California that has been going for quite some time. New Gold has the old Mesquite mine, which is a heap-leach mine near the border of Mexico. But California has hardly any mining activity, or even exploration activity. So I would say it doesn’t stack up at this point.
TGR: Is that primarily because of environmental regulations or the political climate or the availability of gold?
GO: The perceived difficult environmental and permitting climate in California has been a deterrent. If a company wants to do open-pit mining in California, it must be prepared to backfill the pit. That is not required in most places.
TGR: How expensive is it to backfill?
GO: Handling waste material can be quite expensive. So the real California-based opportunity is underground mining in the Mother Lode Belt and that also is where the higher-grade ore is.
TGR: Maybe we’ll see a replay of 1849.
GO: We’re not going to see a replay of 1849. What we’ll see is a replay of the underground mines of between 1900 and 1940. Some of those were just great mines and were the blue chip companies of their day. The gold is still there.
TGR: Thank you, Greg.
Greg Orrell is the portfolio manager of the OCM Gold Fund. He is also president of Orrell Capital Management, the investment adviser to the fund. Orrell has over 28 years of experience in the gold sector as a retail and institutional broker, investment banker and portfolio manager.
Want to read more Gold Report interviews like this? Sign up for our free e-newsletter, and you’ll learn when new articles have been published. To see a list of recent interviews with industry analysts and commentators, visit our Streetwise Interviews page.
1) Peter Byrne conducted this interview for The Gold Report and provides services to The Gold Report as an independent contractor. He or his family own shares of the following companies mentioned in this interview: None.
2) The following companies mentioned in the interview are sponsors of The Gold Report: Royal Gold Inc., Franco-Nevada Corp. and Goldcorp Inc. Streetwise Reports does not accept stock in exchange for its services or as sponsorship payment.
3) Greg Orrell: I or my family own shares of the following companies mentioned in this interview: Endeavour Mining Corp., Avala Resources Ltd., Esperanza Resources Corp., Newmont Mining Corp., New Gold Inc., Sutter Gold Inc., Randgold Resources Ltd., Royal Gold Inc., Silver Wheaton, Barrick Gold Corp. and Gold Fields Ltd., all owned through holdings in the OCM Gold Fund. I personally am or my family is paid by the following companies mentioned in this interview: None. My company has a financial relationship with the following companies mentioned in this interview: None. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.
4) Interviews are edited for clarity. Streetwise Reports does not make editorial comments or change experts’ statements without their consent.
5) The interview does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer.
6) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned and may make purchases and/or sales of those securities in the open market or otherwise.
Streetwise – The Gold Report is Copyright © 2013 by Streetwise Reports LLC. All rights are reserved. Streetwise Reports LLC hereby grants an unrestricted license to use or disseminate this copyrighted material (i) only in whole (and always including this disclaimer), but (ii) never in part.
Streetwise Reports LLC does not guarantee the accuracy or thoroughness of the information reported.
Streetwise Reports LLC receives a fee from companies that are listed on the home page in the In This Issue section. Their sponsor pages may be considered advertising for the purposes of 18 U.S.C. 1734.
Participating companies provide the logos used in The Gold Report. These logos are trademarks and are the property of the individual companies.
101 Second St., Suite 110
Petaluma, CA 94952
Tel.: (707) 981-8999
Fax: (707) 981-8998

Manufacturing in U.S. Cools as Durables Orders Slump

U.S. March Durable Goods Orders Drop 5.7%
Demand for durable goods slumped in March by the most in seven months, adding to signs manufacturing in the U.S. cooled at the end of the first quarter.
Bookings for merchandise meant to last at least three years fell 5.7 percent after a revised 4.3 percent gain the prior month that was smaller than previously estimated, the Commerce Department reported today in Washington. The less-volatile category that excludes transportation equipment unexpectedly dropped for a second month.
Companies such as Caterpillar Inc. (CAT) are feeling the pinch as customers rein in spending on equipment and inventories on concern that across-the-board federal budget cuts and slower growth overseas will restrain the world’s largest economy. At the same time, gains in housing and autos are benefiting others, including Ford Motor Co. (F), supporting a continued expansion.
“The weakness that we see developing in China, the recession in Europe and the unknown about the weight of the fiscal restraint in the U.S. from the sequester, all those increase uncertainty for business,” said Michael Carey, chief economist at Credit Agricole CIB in New York and the second-best durable-goods forecaster over the past two years, according to data compiled by Bloomberg. Companies “are probably holding back a bit.”
Most stocks rose, extending a rally in the Standard & Poor’s 500 Index to a fourth day, as companies from Boeing Co. to Apple Inc. reported earnings. The S&P 500 (SPX) climbed less than 0.1 percent to 1,579.79 at the close in New York.

Investment Forecast

While the orders data indicated business investment cooled in the first quarter after climbing at an 11.8 percent annual rate in the final three months of 2012, it is “still in a rising trend from a rare summer swoon last year,” Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York, said in an e-mail to clients. Spending on equipment and software dropped at a 2.6 percent rate in last year’s third quarter, the last time concern about global growth mounted.
Overseas, early figures covering the second quarter showed Europe is making little progress emerging from a recession. German business confidence declined in April for a second month after winter weather hindered the recovery in Europe’s largest economy, figures from the Ifo Institute showed today in Munich.
The median forecast of 78 economists surveyed by Bloomberg projected U.S. orders for durable goods would decline 3 percent in March. Estimates ranged from a drop of 6 percent to a 1 percent gain. The Commerce Department revised the February gain down from a previously reported 5.6 percent advance.

Broad Drop

Orders declined in March for commercial aircraft, metals, machinery and electrical equipment, today’s figures showed. Bookings advanced for automobiles, computers and communications gear.
Peoria, Illinois-based Caterpillar, the largest maker of mining equipment, cut its 2013 forecast and “significantly” lowered its outlook for demand from commodities producers. Sales in 2013 will be $57 billion to $61 billion, compared with an earlier forecast of $60 billion to $68 billion.
Capital expenditures by business remain weak, Michael DeWalt, Caterpillar’s director of investor relations, said on an April 22 earnings call. Dealers whittled down inventories, and orders for mining equipment including trucks and bulldozers fell in the first quarter.
Today’s report showed shipments of capital goods, a measure that’s used in calculating gross domestic product, climbed 0.3 percent and were up at a 4.1 percent rate in the past three months. They were up at a 5.1 percent pace in the three months to December.

Growth Projections

Economists at Morgan Stanley and JPMorgan Chase & Co. in New York lowered their first-quarter GDP tracking estimates after today’s report. JPMorgan reduced its projection to 2.9 percent from 3.1 percent, while Morgan Stanley lowered its forecast to 2.7 percent from 2.9 percent.
The Commerce Department will issue its initial estimate of first-quarter growth on April 26.
Today’s figures showed bookings for commercial aircraft, which are often volatile, declined 48.2 percent after surging 86.4 percent in February. Boeing Co. (BA), the Chicago-based aerospace company, said it received orders for 39 aircraft in March, down from 179 placed in February.
Boeing today reported profits that beat analysts’ estimates as the company delivered more profitable 777s and 737s. Revenue fell 2.5 percent to $18.9 billion because of a drop in 787 deliveries and the effect of budget cuts on Boeing’s defense business. Boeing said its commercial and defense backlog rose to a record $392 billion as it gained $20 billion of net orders during the quarter.

Motor Vehicles

Orders for automobiles increased 0.2 percent last month after a 4.7 percent jump in February, today’s durable goods report showed. Cars and light trucks sold at a 15.2 million annual rate in March after 15.3 million the prior month, according to Ward’s Automotive Group data.
Dearborn, Michigan-based Ford, the second-largest U.S. automaker, today also reported first-quarter profit that exceeded estimates as the Fusion sedan bolstered record results for its North American operations.
The company forecast it would build 800,000 vehicles in North America and 390,000 in Europe during the current quarter. That’s up 63,000 in North America and 21,000 in Europe from a year earlier. Automakers record revenue when vehicles are assembled and shipped to dealers.
Bookings for durables excluding transportation equipment decreased 1.4 percent in March after a 1.7 percent drop the prior month, today’s Commerce Department report showed. Those orders were projected to rise 0.5 percent, according to the Bloomberg survey median.
Orders for non-defense capital goods excluding aircraft, a proxy for future business investment in equipment such as computers and communications gear, rose 0.2 percent, capping a 16.7 percent annualized increase in the first three months of the year. That compares with a 20.4 percent fourth-quarter gain and indicates business spending will keep growing.

Sinclair - Full-Blown Panic As People Ask “Where Is The Gold?”

Today legendary trader Jim Sinclair warned King World News about the full-blown panic that has erupted in both the financial world, and the gold market as well, as people ask, “Where is the gold?” Below is what Sinclair, who was once called on by former Fed Chairman Paul Volcker to assist during a Wall Street crisis, had to say in this remarkable interview.
Sinclair: “People have to understand what the motivation was for the recent takedown in the gold price. It was so well organized, strategized, and executed by the gold banks, in unison, even though it has had the unintended consequence of creating a massive and worldwide buying frenzy in the physical gold market.
There is a comparison that is obvious today because I was very involved in the $1 billion loan which had to be made at the time that the Hunt’s positions went into default (in 1980). This was at a time when Bache & Company, and Merrill Lynch were rumored to be at least on the fence, if not entirely insolvent.
You have to understand that back in 1980 when gold had risen to $887.50, and silver traded above $51 an ounce, the financial world was in a full-blown panic and many people firmly believed the dollar was going into oblivion.
It was during this time of panic, but after gold peaked, that I received a call from the Federal Reserve asking me to assist in the liquidation of the Hunt position as the criteria of making the $1 billion loan to bail out both Merrill Lynch and Bache. This is the frightening reality of the kind of fires that were raging behind the scenes in the financial world at that time....
Continue reading the Jim Sinclair interview below...

Ronald Stoeferle, Gary Savage, & Jim Grant: We Were Really Close To Triggering A Default of The Paper Market Last Week. The Buying Frenzy In The Gold Market Was People Looking For A Free Lunch!! Fed Doubling Down On QE, Very Bullish For Gold

Ronald Stoeferle: “Last Week We Were Really Close To A Default of The 130-to-1 Paper Gold Market”

Speaking to the major issue of paper-delivery default, Ronald said, “We’re seeing this rush to physical gold not only in the retail market, but also for the institutional players…[it's] just overwhelming…I [estimate] a 130-to-1 [ratio of paper to physical gold]…and I think in the last week we were really close to [triggering] a default of the paper market.“
As a final comment to reassure battered gold bulls, Ronald stated that, “Physical gold is cash, and it’s probably the most solid and safest [form of] cash that one can own.“

As a final comment to reassure battered gold bulls, Ronald stated that, Physical gold is cash, and it’s probably the most solid and safest [form of] cash that one can own.“ 

Gold Trader: “If You Put 60? TVs On Sale For $100, They’ll Fly Off The Shelves—That’s What’s Happening In Gold”

Following last week’s panic sell-off in gold (and resultant explosion in physical buying worldwide), one of the world’s top gold traders and recent interview guestGary Savage, shared some powerful commentary on the psychology of these buyers.
Gary said, ”The buying frenzy we’re seeing in the gold market isn’t dumb money buying at a top. This isn’t the same thing as we saw in the real estate market in 2006 and tech in 2000. That was every Tom, Dick, Harry and Jane chasing a parabolic move expecting to get rich quick with no effort. That was people looking for a free lunch.
We don’t have those kind of conditions in the metals market at this time. On the contrary gold is making new lows, not new highs. There is no parabolic move, and there never was. In a true bubble, a market will increase 200-500% in a year and a half. Oil doubled in a year and a half. The Nasdaq tripled. Gold was barely able to pull off a 170% increase over a three year period. That isn’t even vaguely parabolic.

Jim Grant: Fed Doubling Down on QE, Very Bullish For Gold

Ron Paul: Washington Will Never Cut Spending!!!

Sinclair – Full-Blown Panic As People Ask “Where Is The Gold?”
The question now is, ‘Where has the gold gone?’ Who has all of this gold? Because of the nature of gold leasing, all of this gold has been purchased and it has gone somewhere. The reality of the empty vaults reveal that the gold has gone missing.
Gold bars in Dubai disappear, some at 750% premiums
The desire to own gold, as an investment and for jewellery purposes, has made itself felt in the physical market in India and in Dubai, where premiums are ruling at an all time high
Gold Trader – “If You Put 60? TVs On Sale For $100, They’ll Fly Off The Shelves—That’s What’s Happening In Gold”
”The buying frenzy we’re seeing in the gold market isn’t dumb money buying at a top. This isn’t the same thing as we saw in the real estate market in 2006 and tech in 2000. That was every Tom, Dick, Harry and Jane chasing a parabolic move expecting t…
Silver demand seen rising in 2013 on industries, investment-GFMS
Strong buying of silver coins and bars by bargain hunters after a sharp price fall this month is expected to underpin investment demand, which may hit an all-time record

David Kranzler- Federal Reserve Publicly Admits They Can Suppress Gold Price

‘White House Attacked, Obama Injured’ AP Tweet Hoax Crashes US Stock Market

Tuesday tweet allegedly from the Associated Press went global claiming two explosions in the White House and that President Barack Obama had been injured – causing the US stock market to crash in minutes

21st Century Wire says…
As supposed hoaxes go, this one was huge, in more ways than one.

The scene was set. America, a country on edge following the attacks at the Boston Marathon last week. An alleged AP ‘hoax tweet’ hits the Twitter wire with talk  of an attack on the White House – all said to be done via hackers accessing the AP social media account, causing US markets to plummet and the CBOE Volatility Index – aka ‘the fear index’, to surge… all in a matter of minutes. As a sweetener, the Tweet also claimed Obama was injured in the attacks. Just like an episode of 24...

Although authorities claim that this tweet is a hack which originated from the “Syrian Electronic Army”, one can’t help but speculate whether or not there is more here than meets the eye to this event which manged to wipe $200 billion worth of market value off of the stock market in a flash.

Looking back at some famous media ‘false-flag false starts’ in history, the most famous being when the BBC announced that WTC building 7 had collapsed 20 minutes ahead of the actual event – from which we wonder whether it’s possible that a real false flag event could be released via the newswires only to be canceled or pulled back instead.

No real bombs went off but ‘someone made a bomb’ on Tues

More likely, one should look at the insider trading implications – as there were  potential billions on the table for anyone savvy enough to short the market in advance of this alleged Twitter hoax. We know that all the conditions were set for an optimal opportunity to do just this in advance of Tuesday.

According to the report below from RT, it was made possible by a perfect storm – new technology that can ‘read’ social media messages and place bets accordingly, and the recent Securities and Exchange Commission (SEC) move that gave companies permission to release vital information through social media such as Twitter and Facebook.

And then this tweet appears, and they’re blaming it on the Syrians..? Just a coincidence? 


The Tweet that rocked Wall Street: $200 billion lost on fake message

A single hoax message sent via Twitter, the social media platform, erased billions of value from US stock markets on Tuesday, drawing attention to an electronic Trojan horse that hackers may manipulate with apparent ease.
A picture may contain a thousand words, but a single fake tweet can blow a hole in financial markets in seconds.
That was the costly lesson learned on Tuesday as a tweet allegedly from the Associated Press went the global rounds just before 1:08 p.m., reporting two explosions in the White House and that President Barack Obama had been injured.
Within minutes AP personnel swung into damage control, attempted to reassure the tweet was a hoax. But the damage was already done: The bogus message sent the Dow Jones Industrial Average into a tailspin, shaving 150 points, or about 1 percent, in the blink of an eye.
The fake Tweet dealt a hammer blow to other markets as well: The S&P 500, the NASDAQ and crude oil all dropped 1 percent. The S&P 500′s losses alone wiped out about $136.5 billion, according to Reuters; the broader market lost nearly $200 billion in value, USA Today reported. At the same time, the yield on the 10-year US Treasury note fell 4 basis points, and the CBOE Volatility Index – the so-called ‘fear index’ – surged 10 percent.
The fallout from the fake tweet, which came as the nation remains on edge following the attacks at the Boston Marathon, was compounded by new technology that can ‘read’ social media messages and place bets accordingly, experts say.
The two-minute period of panic selling forced the Dow down from around 14700 to 14554. By 1:13 p.m., a mere 5 minutes after the message was picked up by traders, the market had recovered most of the ground that had been lost.
Despite the brief pandemonium, the Dow at the closing bell was up 152.29 points, or 1.05%, at 14719.46.
The Securities and Exchange Commission (SEC), said it is investigating trade activity that occurred at the time of the tweet, recently gave companies permission to release vital information through social media such as Twitter and Facebook.
The computer programs that are able to decipher the messages “are incredibly sophisticated,” Eric Pritchett, chief executive at Potamus Trading, a brokerage firm that specializes in electronic trading, told the Wall Street Journal. A program “reading the feed and seeing ‘blowing up’ can also read the one saying the account was ‘hacked,’” Pritchett said.
SEC officials said it was too early to determine if the hoax was an effort on the part of some individuals to profit from the confusion, but some are pointing to such a possibility.
“Imagine a situation where knowing a tweet of this kind can cause a market to go down,” Giovanni Vigna, co-founder and chief technology officer of the security firm Lastline, told WSJ. “You buy at a low price, and when the market rebounds, you make a profit.”
Meanwhile, the seven minutes that elapsed before the market understood it was the victim of a hoax would have given any perpetrators plenty of time to pocket a huge profit…

Comex Physical Drain Accelerates—With Over $7.8B In Gold Disappearing From All Depositories

Bull Market Thinking – by Tekoa Da Silva
As the headline battle between paper sellers and physical buyers of gold escalates, something eerily strange is continuing behind the scenes.
As first reported here on April 9thComex gold inventories have been plummeting, demonstrating the highest levels of physical removal ever during a single quarter in Q1, 2013.  
Most shocking however, is that Comex warehouse inventories are accelerating their downward plunge, with dropping inventories now spreading to the world’s largest fund depositories.
Over the last four weeks alone, total reported inventories of ETFs, funds, and depositories collapsed by over 5.5 million ounces, or in dollar terms, by over $7,000,000,000 dollars.
The largest physical removals were reported by the Comex at about 1.4 million ounces, or nearly $2 billion dollars, and the GLD, which reported total inventory removal of nearly 4 million ounces, or roughly over $5.6 billion dollars.
Here is a chart illustrating the continued gold inventory plunge at Comex warehouses (see initial April 9th. piece for comparison):

(click to enlarge)
Individual reporting by the world’s largest funds and depositories show a spreading phenomenon, with Comex and GLD sticking out like sore thumbs…

(click to enlarge)
This brings to mind important questions, such as…
-Why is there such a panic going on to remove physical gold from Comex registered warehouses and other depositories?
-Why did it begin before the collapse, and why does it now appear to be accelerating? 
-Why is the multi-trillion dollar fund management industry denouncing gold, while it quickly moves inventory out of registered warehouses?
-Where is the gold moving, and what is it telling us?
-Is this wholesale migration signaling an imminent geopolitical or major market event? 
Bottom LineThese are difficult questions to answer, however, one element of truth remains, which is that gold always tells the truth. If it gets up and moves from location to another, you can bet there’s a reason for it.
Furthermore, Hayman Capital’s Kyle Bass is known for having stated that,“We went and looked at the Comex…[they had] $80B in open interest and $2.7B (3.3%) in deliverables at the time…[so] it’s actually an easy decision if you’re a fiduciary…you go get [your gold], and let them worry about the rest.”

Enjoy the article? Please support the site by sharing this URL page link with friends, family, and your favorite chat forum.
Tekoa Da Silva
Bull Market Thinking

JIM SINCLAIR: Now They Are “Cyprusing” Physical Gold!! GET OUT OF THE SYSTEM NOW! Swiss Bank Just Refused To Give My Friend His Gold


Legendary gold trader Jim Sinclair has turned his sights from warning investors to protect themselves with gold to urgently warning them to exit the financial system immediately, and take possession of physical gold held in your own possession. Sinclair, who Friday warned investors that the US will be Cyprus’d and gold will reach $50,000/oz sent an email alert to subscribers Monday night warning that merely owning gold and storing is not enough, and that:
How you own and store becomes of critical and possibly terminal importance. Investors with significant deposits at in the system banks and brokers are in the dead center of harm’s way. Retirement accounts are also in the cross hairs of central planners.

Sinclair urges readers not to become a casualty of the central planners via the coming bail-in deposit confiscations, but to protect yourself by owning physical gold held outside of the financial system.

Now they are “Cyprusing” physical Gold = Sinclair – “Swiss Bank Just Refused To Give My Friend His Gold”

Eric King:  “Maguire spoke on KWN yesterday about the fact that one of his clients went to the LBMA to get the metal from them and could not get it.  They told him he would be cash settled.  This is what you have been talking about is the failure of the physical markets.”

Sinclair:  “A person that I know with significant deposits in one of the primary Swiss banks, in allocated gold, wanted to take out his gold and was just refused on the basis of directives from the central bank….

Are Banks Raiding “Allocated” Gold Accounts?

Beware: “Allocated” Gold May Not Really Be There
In 2007, Morgan Stanley paid out $4.4 million to settle a class-action lawsuit by its clients after Morgan Stanley charged them to buy and “store” precious metals for them,  but neither bought or stored the metals.
(Similarly, a 2011 class-action lawsuit filed in federal court in New York accused UBS Financial Services of misleading silver investors and charging them storage fees for metal that was never actually purchased,  segregated, and stored for them.)
Avery Goodman points out that Morgan Stanley has once again just launched a similar scam, offering “allocated” metals, but gaming the definition so that the holdings are not really allocated.
On May 21st, Matterhorn Asset Management’s Egon von Greyerz alleged that Swiss banks are trading physical gold bullion which is being held in special “allocated” accounts for its customers:
We are stressing to investors to take their gold out of the banking system, not only because there are runs on banks that will continue, but the risk of being in the banking system is major. So you should take the additional step of not just owning physical gold, but also owning it outside of the banking system.
We (just) had an example of a client moving a substantial amount (of gold) from a Swiss bank to our vaults, and we found out the bank didn’t have the gold. This was supposed to be allocated gold, but the bank didn’t have it. We didn’t understand why there was a delay (in our vaults receiving the gold), but eventually we found out why there was a delay (the bank didn’t have the gold). It’s absolutely amazing, but not surprising.
This confirms what I’ve always thought. Not only should you not have gold in banks or even unallocated gold, but even allocated gold. It seems that some banks don’t even possess that. So the risk of having gold in the banking system is major.”
On May 23rd, John Embry – Chief Investment Strategist of Sprott Asset Management, with $10 billionunder management – added:
When the customer finally got his gold, it was 2011 minted bars. This made no sense because he had been holding the allocated gold for years. That’s just another example that even the allocated gold in the banking system has probably been loaned out. Many of these customers will wake up one day and realize they entrusted their gold to the wrong people.”
Jim Willie claims that:
Swiss face hundreds of $million lawsuits, for refusal to deliver Allocated gold.
Similar reports have come from Canada and other countries.
Indeed, Jim Willie alleges today:
Allocated Gold accounts across the Western world have been confiscated, sold, and replaced with shabby paper gold certificates illegally…. The account raid practice has been widespread in Europe, London, and United States.

Seizure of Allocated Gold to Pay for Other Debts

Another danger of letting big banks or other large financial institutions hold your gold: the gold might be seized to pay for their other debts.  For example, Barron’s reported last December that MF Global’s trustee raided “allocated” gold and silver accounts … while continuing to charge storage fees:
It’s one thing for $1.2 billion to vanish into thin air through a series of complex trades, the well-publicized phenomenon at bankrupt MF Global. It’s something else for a bar of silver stashed in a vault to instantly shrink in size by more than 25%.
That, in essence, is what’s happening to investors whose bars of silver and gold were held through accounts with MF Global.
The trustee overseeing the liquidation of the failed brokerage has proposed dumping all remaining customer assets—gold, silver, cash, options, futures and commodities—into a single pool that would pay customers only 72% of the value of their holdings. In other words,while traders already may have paid the full price for delivery of specific bars of gold or silver—and hold “warehouse receipts” to prove it—they’ll have to forfeit 28% of the value.
That has investors fuming. “Warehouse receipts, like gold bars, are our property, 100%,” contends John Roe, a partner in BTR Trading, a Chicago futures-trading firm. He personally lost several hundred thousand dollars in investments via MF Global; his clients lost even more. “We are a unique class, and instead, the trustee is doing a radical redistribution of property,” he says.
Roe and others point out that, unlike other MF Global customers, who held paper assets, those with warehouse receipts have claims on assets that still exist and can be readily identified.
The tussle has been obscured by former CEO Jon Corzine’s appearances on Capitol Hill. But it’s a burning issue for the Commodity Customer Coalition, a group that says it represents some 8,000 investors—many of them hedge funds—with exposure to MF Global…
At stake is an unspecified, but apparently large, volume of gold and silver bars slated for delivery to traders through accounts at MF Global, which filed for bankruptcy on Oct. 31. Adding insult to the injury: Of the 28% haircut, attorney and liquidation trustee James Giddens has frozen all asset classes, meaning that traders have sat helplessly as silver prices have dropped 31% since late August, and gold has fallen 16%. To boot, the traders are still being assessed fees for storage of the commodities…

Taking Matters Into Your Own Hands

Given the numerous reports of supposedly “allocated” gold not being there, it should not be entirely surprising that wealthy investors are taking matters into their own hands … literally.
Kirby Analytics notes:
We are hearing anecdotal accounts that beneficial owners of “allocated” gold bullion in London and other European centers have showing up at bullion banks and demanding their physical metal be a] viewed and assayed, and then b] withdrawn from the vaults of banks.
And as we pointed out in 2010:
Omnis’ Jim Rickards, GATA’s Adrian Douglas and others have demonstrated that the big bullion dealers and ETFs don’t have nearly as much as physical bullion as they claim.
Should a substantial portion of investors in these vehicles demand physical delivery at the same time, it could cause a panic in the gold market which would cause a huge run up in gold prices.
Does this mean you shouldn’t own gold?
No … It just means that you should only buy physical gold, and store it somewhere you can actually get your hands on it.


Signs of extreme physical tightness in the gold and silver markets continue to intensify, with reports of banks and firms refusing their customers physical delivery of their own bullion  increasing nearly by the hour.  
The latest report comes from the CME’s former CEO Leo Mahlamed, who reportedly was refused delivery of 2 gold contracts Tuesday! 
Mahlamed attempted to stand for delivery of 2 April gold contracts (a measly 200 oz), and according to reports from the floor, the CME reportedly refused to physically deliver 200 oz of gold to its former CEO, and would only provide Mahlamed a warehouse receipt!
The music appears to be stopping, and the paper game is up!

The U.S. Will Be Cyprused & We Will See $50,000 Gold
“… Cyprus is in fact the blueprint in the United States for coming financial failures…. The truth is that when we take out these futures markets on a failure, gold is going to $50,000. Not $3,500. $50,000. We are in the midst of a failure right here, right now. That’s what this is all about. This takedown has been the ultimate can-kick. This has been to stop the revelation of what the central planners are so panicked about, and the fact that the US is going to get Cyprused. They have now manufactured a situation right here at this point in time where it is almost impossible to save yourself.”

Former CME CEO Refused Physical Delivery for 2 Gold Contracts!

Signs of extreme physical tightness in the gold and silver markets continue to intensify, with reports of banks and firms refusing their customers physical delivery of their own bullion  increasing nearly by the hour. 
The latest report comes from the CME’s former CEO Leo Mahlamed, who reportedly was refused delivery of 2 gold contracts Tuesday!
Mahlamed attempted to stand for delivery of 2 April gold contracts (a measly 200 oz), and according to reports from the floor, the CME reportedly refused to physically deliver 200 oz of gold to its former CEO, and would only provide Mahlamed a warehouse receipt!
The music appears to be stopping, and the paper game is up!

Mahlamed is reportedly a CURRENT CME Board Member and Chairman Emeritus of the CME, and was the CME’s CEO from 1969-1993, yet the exchange cannot come up with a measly 200 oz of gold to satisfy the delivery requests of one of it’s own!

From JSMineset:
Just received a text from my futures broker at Linn Group:
Just tweeted about your links. Leo Mahlamed former Ch/CEO of CME took delivery of 2 gold contracts. They would only give him a warehouse receipt not the gold. This from the floor.
Fascinating times. See you on May 18th in LA.
Dear John,
I am amazed Leo did not go ballistic.
Got PHYZZ (In your personal possession outside the banking system)? 

"Working Poor" Spark 170% Increase In Britons Needing Food Handouts In Past Year

While the dismal news of endlessly rising food stamp recipients in the US seems to be glossed over by most of the media because, well, stock markets are at all-time highs, in Britain, things are becoming increasingly awful. As the FT reports, the number of people receiving emergency food rations has surged from 130,000 to almost 350,000 in the past year. As inflation eroded incomes and government austerity pushed hundreds of thousands into crisis, the 'working poor' has emerged. The food bank provider estimates about half of the households it helped has at least one person in work. During the Great Depression, the desperation was graphically evident with long lines of families waiting for soup; in the new depression, the record levels of starving and needy are hidden by a blanket of EBT cards and direct transfers from government. The situation is no less terrible - no matter how hidden from view. As one food bank manager noted, "the fundamental thing is that more and more people are living an increasingly precarious life financially."

Via The FT,

The 170 per cent surge in demand for food handouts will fuel debate over the impact of government austerity on poorer households, amid concerns about the effect on demand as consumers cut back on everyday spending.


For policy makers, the high proportion of emergency food going to working households illustrates the wider trend in the post-recession job market, where many new jobs are part time, temporary and low paid – meaning even those in work sometimes struggle to put food on the table.


“There was a real shock with one group [of donors] at the concept of the working poor... We know many people who are doing everything they can; they’re in a job, they can’t find another job that pays more, they’re paying rent, water, council tax, electric, and they honestly struggle to buy food for their family.”


On food bank manager noted... “We are being so pressured to fill the gap that is now being created by the welfare reforms – and we’re not that. We are meant to be short-term help.”


"the fundamental thing is that more and more people are living an increasingly precarious life financially."

Reggie Middleton: 100,000 Euro Insurance Fund Not To Cover Irish Pensions?

Irish Savers & Pensioners Have Just Been Cyprus’d!
As if on cue, a day after my expose on Anglo Irish Bank and its shenanigans (see Global Banking Crisis – How & Why YOU Will Get “Cyprus’d” As This Bank Scrambled For Capital!!!), The Irish Business Post announces senior bondholders will get wiped out. That’s right, a 100% loss! Zilch! Zero! Nada! Now, that’s investing. That’s getting “Cyprus’d”, plus some!!!
This is actually MUCH WORSE than the deal the Cypriots got. These Irish pensioners are facing a total wipeout – 100% LOSS!!!
Reggie Middleton published an Irish news story by Niall Brady that noted:  ”Pensioners who leave retirement funds in Irish banks have no protection from the deposit guarantee scheme that protects savers up to 100,000 Euro.”  Much of Middleton’s story rehashes his previous reporting, which makes yesterday’s article a bit confusing.    Nevertheless, the IBRC precedent does indicate Irish pensioners should not rest easy.

Last February, the Irish Bank Resolution Corporation (IBRC; previously Anglo Irish Bank) was placed in “special liquidation” – basically, setting up a “bad bank” structure to deal with bad loans.  Liquidation hasn’t been without controversy, as pensioners lost savings.
Middleton didn’t provide a full citation on the Niall Brady story (elevate your game, Reggie).  But Ireland does appear to be moving in the direction of not backstopping pensions, as the IBRC example indicates.  We’ll keep an eye on this story.  Meanwhile, we’ll keep our original excerpt from Reggie Middleton’s website as is — even with it’s problematic chronological layout and self congratulatory tone, which gets in the way of actually understanding the story. There has been no Irish-wide reneging on pensions under 100,000 euros held at banks — at least, not yet.   A casual reading of Middleton’s write-up might lead to that mistaken interpretation.

Of course, the story doesn’t end with the bondholders. Exactly as anticipated in the articles mentioned above, and as published in the Irish mainstream media over the weekend…

If you’re not disenfranchised, yet, hold on… It get’s worse, much worse. The Irish Examiner published this today…

Ron Paul: Washington Will Never Cut Spending!!!

Ron Paul: Washington Will Never Cut Spending!!!

Reserve Bank to buy Chinese bonds for reserves

Australia's central bank is gearing up to invest a slice of its foreign currency reserves in Chinese government bonds.
Speaking in Shanghai, RBA deputy Governor Philip Lowe said the bank has sought and received approval to hold about 5 per cent of its $38 billion foreign currency assets in China.
"This decision by the RBA represents the first time that the RBA will have invested directly in a sovereign bond market of an Asian country other than Japan," observed the bank's deputy governor Philip Lowe.
The unprecedented move is part of a bigger plan to strengthen ties with Australia's biggest trading partner, and follows the recent launch of direct trading between the Australian dollar and China's renminbi announced by Prime Minister Julia Gillard around a fortnight ago.
Dr Lowe says the People's Bank of China has approved an initial investment quota, and the two central banks are working through the necessary agreements before the investment is actually made.
"This decision to invest in China is an important one. It reflects the broader economic relationship between China and Australia and our increasing financial ties," he explained.
"It provides greater diversification of our investments and will help with our understanding of the Chinese financial markets."

Guest Post: 24 Signs That Our Once Proud Cities Are Turning Into Poverty-Stricken Hellholes

What is happening to you America?  Once upon a time, the United States was a place where free enterprise thrived and the greatest cities that the world had ever seen sprouted up from coast to coast.  Good jobs were plentiful and a manufacturing boom helped fuel the rise of the largest and most vibrant middle class in the history of the planet.  Cities such as Detroit, Chicago, Milwaukee, Cleveland, Philadelphia and Baltimore were all teeming with economic activity and the rest of the globe looked on our economic miracle with a mixture of wonder and envy.  But now look at us.  Our once proud cities are being transformed into poverty-stricken hellholes.  Did you know that the city of Detroit once actually had the highest per-capita incomein the United States?  Looking at Detroit today, it is hard to imagine that it was once one of the most prosperous cities in the world.  In fact, as you will read about later in this article, tourists now travel to Detroit from all over the globe just to see the ruins of Detroit.  Sadly, the exact same thing that is happening to Detroit is happening to cities all over America.  Detroit is just ahead of the curve.  We are in the midst of a long-term economic collapse that is eating away at us like cancer, and things are going to get a lot worse than this.  So if you still live in a prosperous area of the country, don't laugh at what is happening to others.  What is happening to them will be coming to your area soon enough.
The following are 24 signs that our once proud cities are turning into poverty-stricken hellholes...
#1 According to the New York Times, there are now approximately 70,000 abandoned buildings in Detroit.
#2 At this point, approximately one-third of Detroit's 140 square miles is either vacant or derelict.
#3 Back during the housing bubble, an acre of land in downtown Phoenix, Arizona sold for about $90 a square foot.  Today, an acre in downtown Phoenix sells for about $9 a square foot.
#4 The city of Chicago is so strapped for cash that it is planning to close 54 public schools.  It is being estimated that Chicago schools will run a budget deficit of about a billion dollars in 2013.
#5 The city of Baltimore is already facing unfunded liabilities of more than 3.2 billion dollars, but the city government continues to pile up more debt as if it was going out of style.
#6 Today, the murder rate in East St. Louis is 17 times higher than the national average.
#7 According to USA Today, the "share of jobs located in or near a downtown declined in 91 of the nation's 100 largest metropolitan areas" between 2000 and 2010.
#8 Between December 2000 and December 2010, 48 percent of the manufacturing jobs in the state of Michigan were lost.
#9 There are more than 85,000 streetlights in Detroit, but thieves have stripped so much copper wiring out of the lights that more than half of them are not working.
#10 The unemployment rate in El Centro, California is 24.2 percent, and the unemployment rate in Yuma, Arizona is an astounding 25.6 percent.
#11 It has been estimated that there are more than 1,000 homeless people living in the massive network of flood tunnels under the city of Las Vegas.
#12 Violent crime in the city of Oakland increased by 23 percent during 2012.
#13 If you can believe it, more than 11,000 homes, cars and businesses were burglarized in Oakland during 2012.  That breaks down to approximately 33 burglaries a day.
#14 As I have written about previously, there are only about 200 police officers assigned to Chicago's Gang Enforcement Unit to handle the estimated 100,000 gang members living in the city.
#15 The number of murders in Chicago last year was roughly equivalent to the number of murders in the entire country of Japan during 2012.
#16 The murder rate in Flint, Michigan is higher than the murder rate in Baghdad.
#17 If New Orleans was considered to be a separate nation, it would have the 2nd highest murder rate on the entire planet.
#18 According to the Justice Department’s National Drug Intelligence Center,  Mexican drug cartels were actively operating in 50 different U.S. cities in 2006.  By 2010, that number had skyrocketed to 1,286.
#19 Back in 2007, the number of New York City residents on food stamps was about 1 million.  It is now being projected that the number of New York City residents on food stamps will pass the 2 million mark this summer.
#20 The number of homeless people sleeping in the homeless shelters of New York City has increased by a whopping 19 percent over the past year.
#21 As I noted yesterday, approximately one out of every three children in the United States currently lives in a home without a father.
#22 In Miami, 45 percent of the children are living in poverty.
#23 In Cleveland, more than 50 percent of the children are living in poverty.
#24 According to a recently released report, 60 percent of all children in the city of Detroit are living in poverty.
As I mentioned at the top of this article, the decline of the city of Detroit has become so famous that it has actually become a tourist attraction.  The following is a short excerpt from an article in the New York Times...
But in Detroit, the tours go on, in an unofficial capacity. One afternoon at the ruins of the 3.5-million-square-foot Packard Plant, I ran into a family from Paris. The daughter said she read about the building in Lonely Planet; her father had a camcorder hanging around his neck. Another time, while conducting my own tour for a guest, a group of German college students drove up. When queried as to the appeal of Detroit, one of them gleefully exclaimed, “I came to see the end of the world!”
For much more on the shocking decline of one of America's greatest cities, please see my previous article entitled "Bankrupt, Decaying And Nearly Dead: 24 Facts About The City Of Detroit That Will Shock You".
So are there any areas of the country that are still thriving?
Well, yes, there are a few.  In particular, those areas that are sitting on top of energy resources tend to be doing quite well for now.
One example is Texas.  In recent years people have been absolutely flocking to the state.  There are lots of energy jobs, the cost of living is low and there is no state income tax.
But overall, things are really tough out there.  Over the past decade America has lost millions of good jobs to offshoring, advancements in technology and a declining economy.
Last year, the United States had a trade deficit with the rest of the world of more than half a trillion dollars.  Overall, the U.S. has run a trade deficit with the rest of the world of more than 8 trillion dollars since 1975.
All of that money could have gone to U.S. businesses and U.S. workers.  In turn, taxes would have been paid on all of that income which could have helped keep our cities great.
But instead, our politicians have stood idly by as we have lost tens of thousands of businesses and millions of jobs.  If you can believe it, more than 56,000 manufacturing facilities have closed down permanently in the United States since 2001.
We have allowed our economic infrastructure to be absolutely gutted, and so we should not be surprised that our once proud cities are turning into poverty-stricken hellholes.
And this is just the beginning.  The next wave of the economic collapse is rapidly approaching, and when it strikes unemployment in this country will eventually rise to a level that is more than double what it is now.
When that happens, I wouldn't want to be anywhere near our rotting, decaying cities.
Railroad In Milwaukee