Monday, August 22, 2011

World Situation Update 08/22/11


Submitted by: Francis Soyer

Another great interview as to what is really happening in the global monetary system and it's impending collapse. A Must Watch

http://finance.yahoo.com/blogs/daily-ticker/40-years-later-america-back-gold-standard-114623756.html

Economic, Global, Gold and Silver Update 8/22/11


Submitted by: Francis Soyer


To summarize, things are beginning to heat up. The major issues in front of us in the near term are the following:

The collapse of the European Union and the Euro
The beginnings of a double dip recession here in the U.S. and Globally
Tremendous Losses of wealth as indices world wide tumble
Pending QE programs i.e. more money printing on the horizon
Traditional "flight to safety" routines no longer being safe as treasury / money market returns have become negative
Continued civil unrest globally

The above indeed are very serious issues and I hate being a "doctor doom" type of guy. That said there are solutions to preserve wealth and purchasing power. If you want help email me and I will show you how. As a primer to bring people up to speed as to the larger picture and what is going on I came accross a great presentation that explains things in a language that allows the viewer to understand the key concepts without having a background in finance. Yes it is a bit long ruoghly an hour and a half but well worth while. So instead of watching the ball game or dancing with the stars one evening sit down and watch the whole thing.





Friday, August 19, 2011

Silver and Gold Update 08/19/11


Submitted by: Francis Soyer

One of the more interesting data points regarding precious metals this week was Venezuela's demand for 99 Tons of Gold from banks in London which included The Bank of England, JP Morgan, Barclays and Standard Chartered. I find it interesting that Hugo Chavez waited until Wednesday night just two days prior to options expiration to make the announcement. It is widely known that of the banks mentioned above that JP Morgan has the most risk exposure with naked shorts on gold and silver and at $1,800.00 on Gold and $40.00 on Silver are pressure points risk wise that begin to jeapordize the solvency of the bank given their exposure of which has gotten so large the bank recently began using JP Morgan's own stock as collateral to the various clearing houses. The demand for collateral from JPM in the recent weeks is un presedented historically in that up until recently JPM has card blanch with these clearing houses to short metals with no demands for collateral. Hugo Chavez probably being aware of this in my opinion decided to put the screws to JPM and the other mentioned banks. Smart guy...

Some more background on this story below:

From GoldCore
Perfect Storm Sees Gold & Silver Surge – Chavez Gold Action Leads To Backwardation, Short Squeeze And ‘Havoc’ Concerns


Perfect Storm Sees Gold & Silver Surge – Chavez Gold Action Leads to Backwardation, Short Squeeze and ‘Havoc’ Concerns

All major currencies have fallen sharply against gold and silver again today with gold reaching new record nominal highs in Canadian and New Zealand dollars, in sterling, in euros and of course in dollars as turmoil continues in global markets.


In volatile trade, gold is down 1% from new record highs and is trading at 1,860.10 USD , 1,300.40 EUR , 1,126.40 GBP, 1,470.90 CHF and 142,414 JPY per ounce and has risen some 2% in all currencies. Silver has surged by nearly 3% in all major currencies.


Cross Currency Table


The London AM fix was a third consecutive record nominal high in US dollars. Gold’s London AM fix this morning was USD 1,862, EUR 1299.28, GBP 1126.91 per ounce (from yesterday’s USD 1,794.50, EUR 1,246.44, GBP 1,087.12 per ounce).


Markets continue to assess the ramifications of Venezuela deciding to repatriate their large gold reserves from London to Caracas. Their reserves are large in gold tonnage terms but small in dollar terms.


Venezuela’s central bank is the world’s 15th largest holder of gold, with 365.8 tonnes, of which some 211 tonnes, worth $12.3bn are held in London with the Bank of England and JP Morgan, Barclays, and Bank Of Nova Scotia.

Many analysts and the Gold Anti-Trust Action Commitee (GATA) have long contended that much of the central bank gold reserves have been leased out by bullion banks and that in the event of central banks choosing to repatriate their bullion, significant supply issues could develop which would lead to a short squeeze and a parabolic increases in prices.

The concern is that other central banks concerned about dollar and currency debasement and expropriation of their gold reserves by embattled large debtor sovereign nations may follow suit.


A short squeeze is quite likely given the scale of global investor and central bank demand.


Already, there is a small degree of backwardation developing in the gold market with certain near term futures contracts now trading at higher prices than longer term contracts. The near term August ’11 contract was trading at $1871.40/oz while June ’12 contract is trading at $1,870/oz (1216 GMT). The spread between spot and longer term contracts has fallen suggesting that gold may soon join silver in backwardation.


Silver has been in backwardation for seven months now and backwardation appears to be deepening again. This morning the September ‘11 contract is trading at $41.41 while December ‘12 is trading at $40.65.


The possibility of backwardation in gold suggests that major investors are concerned about the supply of physical gold. Buyers are concerned about securing supply in the future and are willing to pay a premium for spot or immediate delivery.


It could indicate that the short squeeze anticipated by many is taking place and we could see a sharp upward move in gold prices.

This would not be surprising considering the very small size of the physical bullion markets versus the size of the overall financial and currency markets and considering the high demand coming from investors and central banks globally.

It is worth remembering what happened when silver went into backwardation some months ago. It led to a price surge from $30/oz to over $50/oz in 10 weeks.

Backwardation rarely happens in the gold and silver bullion markets. Since gold futures first started to be traded in 1972 (on the Winnipeg Commodity Exchange), there have only been momentary backwardations of a few hours.

It suggests that larger gold bars are difficult to acquire in volume and that the physical market is becoming stressed and less liquid.

Backwardation can end in default, failure to make delivery and in sharply higher prices. A default on the COMEX would have important ramifications for the dollar and could see sharp selling of the dollar and sharp falls on global markets.

Gold backwardation has been warned of by newsletter writer Denis Gartman overnight. He said that if Chavez “does push” for repatriation of $11 billion of gold reserves held in developed nations’ institutions it could lead to backwardation which would wreak ‘havoc’.

Investors should buy “nearer gold” and sell deferred bullion futures, he wrote. October and December futures will trade to premium over February and beyond in this case, Gartman wrote.

Meanwhile, in another sign of gold experiencing a near perfect storm, UBS have said that macro hedge funds were noted buyers and may also have dominated demand during yesterday's Comex sweeps. They said that the funds may have been waiting for a correction to buy but due to concerns of the market moving away from them decided to buy yesterday.


“If participation from the macro hedge fund community has only just started to accelerate, this adds a new dynamic to the gold market.”


In normal financial and economic times, gold would be considered overvalued but we are far from that today and gold is experiencing a near perfect storm which could propel prices higher.


JP Morgan’s call for $2,500 gold by year end does not that outlandish given the fraught financial, economic and monetary conditions today.


A correction remains a real possibility but buying and holding bullion remains the best strategy in today’s volatile markets.


Cost averaging (dollar, euro, pound) is worth considering after the recent price move.

Wednesday, August 17, 2011

Silver and Gold Update 08/17/11


Submitted by: Francis Soyer

This morning the data points as they have been for the past two years confirm the destruction of the U.S. dollar, its purchasing power and the impending fall of the wealth of this nation and its citizens. Nearly 45 million in the U.S. are on food stamps. As another blow to an already deeply hurting group see this that has been been censored by youtube: Now is the time to make preparations for civil unrest.



and this:


Record Number Of People Say They Are Paying More For Groceries Now Than Ever Before


Submitted by Tyler Durden on 08/16/2011 17:48 -0400



Somehow even as all that deflation in home prices continues, like perfectly joined communicating vessels, countervailing inflation continues seeping into pretty much every other aspect of society. But don't take our word for it, (or even gold's, which is just under all time record notional highs): according to Rasmussen, "Americans nationwide continue to lose faith in the Federal Reserve Board to keep inflation under control, with the number who say they are paying more for groceries now at an all-time high." Specifically, "93% of adults report paying more for groceries now than they did a year ago, the highest finding to date. Only four percent (4%) say they’re not paying more for groceries now compared to a year ago. Prior to the latest results, the number that said they are paying more for groceries ranged from low of 75% in April 2010 to a high of 91% in May of this year." However, since many of these same adults are transferring intangible "savings" from their non-payable mortgage check courtesy of a home market that has now ground to a halt for over 6 months, aka squatters rent, to pay for staples, few really mind. They just like to bitch and moan about it because it means fewer Apps downloaded for the iPad.



What is probably just as interesting, is that when it comes to trusting the Fed: that source of unlimited liberal policy, Democrats, as is to be expected, are far more confident that the Fed can keep inflation under control. Or, in other words, have faith that it can do anything at all correctly: a faith that has long since been lost virtually in every other segment of society. Not surprisingly, those whose money is in the market, and are invested in the US, are also hoping the Fed knows what it is doing. Then again as we presented recently, this is a very paltry number on a relative basis, one can see why the bulk of the population is starting to loathe Bernanke and all he represents with a vengeance:

and this straight from the office of the Secretary of Defense Leon Panetta:

http://www.defense.gov/speeches/speech.aspx?speechid=1597

"To all Department of Defense personnel:



As I begin my second month in office as Secretary of Defense, I wanted to take the opportunity to share my thinking with you on one of the key challenges we face as a Department: how to ensure that our military has everything it needs to protect our national security at a time of considerable fiscal challenge in our country.


I know that many of you have been watching with concern the deficit reduction negotiations in Washington. As President Obama has said, our growing national debt, if not addressed, will imperil our prosperity, hurt our credibility and influence around the world, and ultimately put our national security at risk. As part of the nation’s efforts to get its finances in order, defense spending will be – and I believe it must be – part of the solution. "
To summarize, the cause of these financial ills all points to the devaluation of purchasing power and the coming collapse of the global financial system. Paper money is going by the wayside. The only option for safety is and always has been (Kings Money) gold and silver.

Tuesday, August 16, 2011

Silver Update 08/16/11 Continued

Silver Update 08/15/11

Corporate Media Admit They Censor Candidates Who Challenge The Status Quo

Ron Paul wants to disban the Federal Reserve (Private Bank) from running the United States of America's monetary policy. Watch below:

Wednesday, August 10, 2011

Silver Update 08/10/11 London Trader - Many Gold Shorts Wiped Out, Lost Everything!


Submitted by:Francis Soyer

As a follow up to yesterdays summary and commentary case in point see the below.

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/8/10_London_Trader_-_Many_Gold_Shorts_Wiped_Out,_Lost_Everything%21.html


Monday, August 8, 2011

Silver Update 08/08/11


Submitted by: Francis Soyer

Good morning, however if you are watching the tape you will probably notice this morning is anything but good. Here is what we have cooking for today.

S&P Downgrades US To AA+, Outlook Negative
China Says "Has Every Right To Demand US Address Its Debt Problem", Asks For New Global Reserve Currency
Indiana State Treasurer Richard Mourdock demands: "President Obama should fire U.S. Secretary of the Treasury Tim Geithner over the debt downgrade. If Obama won't remove him, then the US Senate should withdraw its consent of Geithner's appointment to U.S. Treasury because someone in the White House needs to be held responsible for this disaster."

Deputy finance ministers from the Group of 20 leading economic powers will hold a conference call on Saturday to discuss the crises in Europe and the United States, a Brazilian finance ministry official said.

Bank Of America Implodes, At $6.87, BAC CDS Up 20% To 260 bps As Bankruptcy Contemplated

GREEK SECURITIES REGULATOR BANS SHORT SELLING FOR 2 MONTHS

S&P To About Commence Cutting Corporates

NYSE invokes Rule 48 (market crisis mode for those not familiar)

The Market Indexed For Dollar Devaluation Is Now Back To Jackson Hole Levels

Former Obama Budget Chief Orszag Says Official Economic Projections "Too Optimistic"

Former PBOC Member:"The Situation Is Unsustainable. The Longer It Continues, The More Violent And Destructive The Final Adjustment Will Be."

Germany Says Italy Is Too Big For EFSF To Save, Refuses To Carry Euro Bailout Burden

Given the above, anyone who thinks gold and silver are in a bubble is fucking brain dead.

Thursday, August 4, 2011

Silver Update 08/04/11


Submitted by: Francis Soyer

Good morning, with currency wars heating up overnight with Japan's central bank selling 500 billion Yen to intervene the recent pull back in the USD and the Swiss National Bank also selling the Swiss Franc to lower its currency as investors flee to safety... Gold and Silver remain strong in the overnights as those late to the game are begining to realize just how screwed the fiat money system is.

Also a good article out from smartknowledge U on Gold and Silver here:

http://www.zerohedge.com/contributed/why-gold-and-silver-prices-will-more-double-again-even-current-expensive-levels?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29

Why Gold and Silver Prices Will More than Double Again Even From Current "Expensive" Levels


smartknowledgeu's picture

Those that are familiar with my writings about gold and silver for the last six years know that I have said gold was cheap at $500, $600, $700, $800, $1000 and $1,200 a troy ounce and know that I have said silver was cheap at $11, $12, $14, $16, $25, and $30 a troy ounce. Today, I will reiterate that gold is still cheap in the $1500 to $1600 range and that silver is still cheap in the $40 range because the largest movements in gold and silver prices as well as gold and silver mining stocks have still not happened and will materialize over the next four to five years. Again, this doesn’t mean that gold and silver can’t or won’t correct or consolidate again in the future because both PMs always do. I have written publicly so much about this topic over the years (and even in much greater depth to my subscribing members) because I truly believe it is insanity not to participate in one of the best ways to invest in gold and silver today - the ownership of physical gold and physical silver.


Hundreds of millions of investors worldwide, influenced by the propaganda of Western bankers, have consciously made poor decisions not to own a single ounce of physical gold and physical silver today. One of the first realities an investor must understand about the gold and silver market is that the Economics 101 concept of price being set by physical supply and physical demand is an utter lie. In today’s world of banking and financial industry lies, the price of gold and silver are NOT set by the physical demand and physical supply of either of these metals, but rather by the artificial supply and demand of paper contracts predominantly backed by no physical metal.


By now, the following facts are very well known by seasoned physical gold and physical silver buyers but likely still unknown to the average investor worldwide. A CPM Group document released in the year 2000 stated, “With the start of the London Bullion Market Association's release of monthly trading data, the market has become aware that 100 times more gold and silver trade hands each year, just in the major markets, than is produced or used. Some market participants have wondered aloud how 10 billion ounces of gold could trade via the major markets each year, compared to 120 million ounces of total supply and demand, while roughly 100 billion ounces of silver change hands, compared to around 628 million ounces of new supply.” Thus, one can see that the fraud perpetrated by bullion banks in the silver futures market exceeds even the fraud they commit in the gold futures markets. Take the figures provided above, and a quick calculation reveals that bankers were trading nearly 160 times of paper ounces of silver every year than the annual physical supply of silver mined from the earth.


However, break down these numbers even more and the fraud becomes even more astounding. While in 2000, about 628 million ounces of new supply of physical silver came to market, in 2010, mine production of new silver supply was slightly higher at 735.9 million ounces. Net government sales accounted for another 44.8 million ounces, old silver scrap provided an additional 215 million ounces, and producer hedging accounted for the final 61.1 million ounces. Thus a total annual supply of roughly 1 billion ounces of silver existed in 2010. However, industrial usage, photography and jewelry used up nearly 78% of the one billion ounces of physical silver supply in 2010 and left less than 100 million ounces available for minting in the form of silver coins. (Source: The Silver Institute). Despite this tightness of new investment silver supply, there have been days in recent months when more than 250 million ounces of paper silver traded on the COMEX in less than one minute! During the times ridiculous volumes of paper silver were trading on the COMEX, usually the price of silver was plummeting in intra-day trading. Thus, bankers were clearly using this massive artificial supply of paper silver contracts to knock down prices. On top of this fraud, bankers have stretched the landscape of imaginary supply of gold and silver with their introduction of the gold ETF, the GLD, and the silver ETF, the SLV, both of which started trading in 2006. Both the GLD and SLV are highly suspect, likely fraudulent vehicles that probably are either (1) only partially backed by physical gold and physical silver and/or (2) respectively backed by unallocated physical gold/silver that have multiple claims upon them. Again, fraudulent derivative paper gold and paper silver products create a perception of increased supply even when there is no REAL increase in the underlying physical supply or even at times when physical supply is shrinking. Bankers have created this mechanism specifically to suppress the price of gold and silver and to keep their Ponzi fiat currency scheme alive - a scheme that they utilize every single day to silently steal wealth from every citizen on this planet.


I have heard the criticisms levied against Eric Sprott and James Turk regarding their pro-silver and pro-gold stance in that they are just selling their books as PM fund managers and bullion dealers. However, I believe these criticisms to be patently unfair. I don’t believe that either Mr. Sprott or Mr. Turk are so enthusiastic about the future prospects of gold and silver returns because they just want to “talk their books”. Rather, I believe that they are so enthusiastic due to their deeper level of understanding about PM markets than the average retail investor and the vast majority of uneducated commercial investment industry advisers. Furthermore, I’ve been one of the most passionate supporters of gold and silver for the last decade and I have never acted as a bullion dealer, have never received any commissions from any sales of mining stocks, and have never accepted a single cent from any mining company to provide coverage of their company to my subscribing members though I have been approached many times to do so over the years.


To illustrate the level of misunderstanding that still exists about gold and silver prices, here’s one piece of investment “advice” that landed in my email inbox on August 16, 2008: “The barbarous relic – gold – is another good choice, usually. But gold has already appreciated from just over $300 an ounce six years ago to almost $900 today. It could be a little late.” This adviser went on to push stocks and confidently declared that stocks would be the “big winner” once again over the next several years. From August 16, 2008 until today, the S&P 500 has lost 2.92% while gold has risen +111.33% and silver, +284.47%. Stocks, the big winner? I think not. But selling stocks is the big bread and butter money winner of most commercial investment advisers so that is the primary reason why they overwhelmingly always push their clients into purchasing stocks as opposed to the real big winner of precious metals. I recall reading a newspaper article several years ago from a financial adviser in Florida that claimed she was proud of convincing here clients NOT to buy gold at $800 an ounce because the gold price was too expensive and that it was her duty to protect her clients against their own foolish impulses. On November 8, 2007, thousands of people that subscribe to my free newsletter read the following statements from me:


“So with gold over $800 an ounce, is it still cheap? Emphatically yes, and here's why. I'm not really sure how all the ‘Gold at 27-year high’ headlines came to be, but… if we experience a correction any time soon, and gold breaks back down to the $720 level again before continuing higher, it will just be really cheap. Here's why. Anyone that's ever studied the formula that is used to calculate the Consumer Price Index(CPI) in the U.S. knows that the formula has been greatly tinkered with over the years to produce absurdly low inflation numbers that are merely an artificially manufactured number that probably fits some pre-determined number the government would like to report.”


So back then, even with gold trading at $800 an ounce, the banker-owned and controlled media in the Western world was filled with stories about an imminent “gold bubble” collapse because gold was at a “27-year high.” It’s important to review history from time to time to be reminded how easily you may have accepted patently absurd proclamations about gold and silver prices in order to avoid falling victim to the same banker-originated and banker-spread propaganda today. The reason I have been overly passionate about gold and silver for years and still am today is because it takes great passion to overcome the widespread ignorance and deceit spread by the commercial investment industry to their clients about gold and silver.


Let’s see how things have panned out in the stocks versus PM investment game over the past few years. From the launch of my Crisis Investment Opportunities newsletter on June 15, 2007 until July 25, 2010, in a little over four years, my newsletter has returned a cumulative profit of +211.49%. Over the same investment period, the S&P500, the FTSE100, the ASX200, and top 5 ETF iShares Dow Jones EPAC Select Dividend Fund have respectively returned -21.39%, -11.99%, -26.51%, and -2.69%. Furthermore, during the next four year period, from 2011 to 2015, I sincerely believe that an attainable goal for my Crisis Investment Opportunities newsletter is to double or even triple my previous four-year cumulative returns, simply due to the following three reasons:


(1) Western bankers are increasingly losing control over the price suppression schemes they have enacted against gold and silver through their creation of bogus paper derivatives;
(2) The conditions that have lead to Euro and US dollar devaluation are worse today than they were 10 years ago and no underlying fundamental problem of the 2008 financial crisis has been adequately addressed as of today; and
(3) The percentage of people that have the amount of faith I hold in gold and silver to produce superior returns around the world is still minute.


Thus, once the average Dick and Jane retail investor finally believe in the facts surrounding gold and silver versus the garbage propaganda disseminated by crooked bankers and ignorant advisers, the price of gold/silver and PM stocks will finally experience a truly parabolic rise.


Once a small percentage of retail investors worldwide, or even just a small percentage of retail investors in a densely populated country like China, finally realize that bankers have created insane massive paper supplies of artificial gold and silver backed by nothing but air and consequently are moved to purchase their first troy ounce of pure gold and/or pure silver, this very small action will exert tremendous upward pressure on the price of gold and silver. And once this happens, I hope that you will have already secured your physical reserves of gold and silver because it is then that PM prices will truly go ballistic.

Wednesday, August 3, 2011

Silver Update Mid Morning 08/03/11


Submitted by: Francis Soyer

In the you can't make this shit up category here we have a story of a mental breakdown of none other than the Bernanke himself after getting hammered at a local bar in NE. Yes silver is up another 3.3 percent this morning. Given the commentary if true and the feel of it is no wonder. Story below:

Drunken Ben Bernanke Tells Everyone At Neighborhood Bar How Screwed U.S. Economy Really Is
 SEWARD, NE—Claiming he wasn't afraid to let everyone in attendance know about "the real mess we're in," Federal Reserve chairman Ben Bernanke reportedly got drunk Tuesday and told everyone at Elwood's Corner Tavern about how absolutely fucked the U.S. economy actually is.

Bernanke, who sources confirmed was "totally sloshed," arrived at the drinking establishment at approximately 5:30 p.m., ensconced himself upon a bar stool, and consumed several bottles of Miller High Life and a half-dozen shots of whiskey while loudly proclaiming to any patron who would listen that the economic outlook was "pretty goddamned awful if you want the God's honest truth."

"Look, they don't want anyone except for the Washington, D.C. bigwigs to know how bad shit really is," said Bernanke, slurring his words as he spoke. "Mounting debt exacerbated—and not relieved—by unchecked consumption, spiraling interest rates, and the grim realities of an inevitable worldwide energy crisis are projected to leave our entire economy in the shitter for, like, a generation, man, I'm telling you."

"And hell, as long as we're being honest, I might as well tell you that a truer estimate of the U.S. unemployment rate is actually up around 16 percent, with a 0.7 percent annual rate of economic growth if we're lucky—if we're lucky," continued Bernanke, nearly knocking a full beer over while gesturing with his hands. "Of course, if everybody knew that, it would likely cripple financial markets across the entire fucking globe, even in various emerging economies with self- sustaining growth."

After launching into an extended 45-minute diatribe about shortsighted moves by "those bastards in Congress" that could potentially exacerbate the nation's already deeply troublesome budget imbalance, the Federal Reserve chairman reportedly bought a round of tequila shots for two customers he had just met who were seated on either side of him, announcing, "I love these guys."

Numerous bar patrons slowly nodded in agreement as Bernanke went on to suggest the United States could pass three or four more stimulus packages and "it wouldn't even matter."

"You think that's going to create long-term economic growth, let alone promote job creation?" Bernanke said. "We're way beyond that, my friend. There are no jobs, okay? There's nothing. I think that calls for another drink, don't you?"

While using beer bottles and pretzel sticks in an attempt to explain to the bartender the importance of infusing $650 billion into the bond market, the inebriated Fed chairman nearly fell off his stool and had to be held up by the patron sitting next to him.

Another bargoer confirmed Bernanke stood about 2 inches from her face and sprayed her with saliva, claiming inflation was going to "totally screw" consumer confidence and then asking if he could bum a smoke.

Silver Update 08/03/11


Submitted by Francis Soyer

There are three things driving silver higher rite now. First is that the U.S. debt ceiling hike of 2.5 trillion will last the U.S. until December at which point congress will need to reconveen and hammer out another increase. So in essence what has occured this week is the U.S. balance sheet or debt to equity ratio has increased on the debt side by 17 percent e.g. diluted the value of the dollar by 17 percent give or take...And in December to get through 2012 the treasury will need to further dilute the value of the dollar by another 5 + trillion or 30% for a total decline in dollar value of roughly 52 percent. By December ish expect Dollar purchasing power to be cut in half especially for core inflation items such as Food and Energy.

Second is that given the above expect the U.S's credit rating to get cut thus making it harder for the U.S. to borrow and making treasuries no longer "Risk Free" as evidence of the CME's decision in margin requirement increases taking treasuries off the list of Risk Free assets.

Third is that Default for the U.S. and most of the European Union is also still a real and probable outcome. Where can investors shelter themselves from this type of environment? Many have fled to the Swiss Franc (which also is being considered to becoming backed by gold) or Gold and Silver itself. Unlike paper these metals can not be printed out of thin air are hard to mine and have a finite supply. Citi Group is looking for silver to be in the $100 range by year end. They are probably correct. In the interim on a six month basis our opportunities to acquire below VWAP prices (volume weighted average price) are over. Those who are a bit late to the game can still try and acquire on a 5 day basis such as in the chart below. The red line represents the VWAP price hence buyers should be looking to add at prices below $18.55.

Cheers

China Downgrades US From A+ To A, Outlook Negative

The U.S. House of Representatives on Monday approved legislation to raise the U.S. debt limit by at least 2.1 trillion U.S. dollars and cut federal spending by 2.4 trillion U.S. dollars, one day before a threatened default.

The downgrade is a result of fights between U.S. political parties over debt issues, which reflects the government's inability to completely solve the debt problem, said Dagong Global.

The interests of the country's creditors are short of systematic protection both politically and economically, said the agency.

China is by far the largest holder of U.S. debt, with holdings amounting to 1.15 trillion U.S. dollars as of the end of April.

Dagong announced last month that it had put the U.S. credit rating on negative watch for a possible downgrade on expectations of a long-term economic recession in the world's largest economy, partially caused by its economic governance and policies.

Dagong downgraded the U.S. rating from AA to A+ in November of last year after the U.S. government announced a second round of quantitative easing.

The agency said the approval to raise the debt ceiling indicated that there will not be any positive changes in factors that will influence the country's debt-paying ability in the long run.