Archive for June, 2013

Jewellers hesitant to invest in gold despite Rs7,000/tola drop – The Nation

The Nation
Jewellers hesitant to invest in gold despite Rs7,000/tola drop
The Nation
According to statistics import of gold rose by 95 per cent in terms of quantity and value and during July-May 2012-2013 gold import stood at 5,752 kg worth $306 million as compared to 2,949 kg amounting to $157 million in the corresponding period last

and more »

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Not wise to invest in gold at current level – Zee News

Zee News
Not wise to invest in gold at current level
Zee News
No it is not wise to invest in gold for investment purpose at this level. You must adopt wait and watch policy. Following the hint of exit from quantitative easing by the US Federal Reserve and expectations of a better US economy, gold prices will
Gold's Worst Quarter Ever Is Finally Over: Where Do Gold Prices Go From Here?International Business Times
These 4 Miners Can Still Thrive With Gold At $1200Motley Fool
Why Is Price Of Gold Dropping?RadioFreeEurope/RadioLiberty
Investment U –
all 286 news articles »
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Porter Stansberry: An urgent warning for middle-class Americans

From Porter Stansberry in The S&A Digest:

Today's Digest is something totally different… I believe it's time to prepare for a crisis – to really prepare. And I think you'll find my advice on how to prosper over the next few years to be unlike anything you've read from me before in these pages…

This is it… The 10-year U.S. Treasury market is beginning to collapse. The debt crisis that began in 2007 is now set to continue. Individuals, nations, and corporations don't become wealthy and powerful by going into debt. Everyone knows this… But this reality has been warped by drastic efforts to manipulate our system of money and banking.

Even so, these facts remain: Americans owe more money, collectively, than ever before in our history – far, far, far more. We owe at every level: $17 trillion at the federal level; $13 trillion in mortgages; another trillion in student loans; nearly $3 trillion in state and local government debt. Put all of these numbers together and you end up with a $60 trillion pile of obligations. That's nearly four years' worth of our entire country's total production.

To make sense of the numbers, just take a bunch of the zeroes away. Put these facts into a storyline that's become all too common in America. Our economy is like a tattooed thug living in Detroit. In between burning broken-down cars and selling crack, he makes $16,000 a year working "security" at a local nightclub. Outside of busting heads, he has no real skills.

And why would he want to work hard to acquire them? Thanks to his public school education, he is convinced other people have a moral obligation to provide for him… especially rich people. They will give him health care, a clean apartment, a phone, etc. In his worldview, that's what's fair.

And if they won't? He's got no qualms about firing first and taking what he needs. After all, they owe him. For now though, he's doing great.

The Korean grocer up the street gave him a credit account. In only a few short years, he's run up a $60,000 tab. What are the chances he's going to drastically cut his expenses, work hard to get a promotion, and find a way to repay these debts? Zero. What are the chances he ends up knocking over the Korean grocer and teaching him something about life in America?

You may object to my metaphor. But believe me, it's far more accurate than most people are comfortable talking about. We live in a country that's coming apart at the seams – financially, culturally, morally, and spiritually. The reason is simple. We have collectively become addicted to living way, way beyond our means.

My favorite example about how absurd our debts have become? The state of New Jersey still owes $110 million for a football stadium (Giants Stadium) that was demolished in 2010. It won't retire this debt until 2025.

Similar debts exist on defunct or torn-down stadiums in Houston, Kansas City, Memphis, Seattle, and Pittsburgh. These stadiums are physical reminders of the absurd promises the government has made to its citizens.

On top of the debt it now owes, our federal government has promised its citizens $124 trillion of additional benefits. That's more than $1 million per citizen. That's not only more money than we could ever finance with tax revenues, it's considerably more money than all of the privately owned assets in the United States (roughly $99 trillion).

Keeping this lie alive… the lie that we can afford our debts (or even our defunct stadiums)… has become the most important national goal. That's why everything stops when Federal Reserve Chairman Ben Bernanke speaks. Our obsession with Fed policy statements is the best proof I have that we're far more concerned with maintaining "The Great Lie" than we are at actually building a better real economy.

Have you ever told a big lie? Did you ever exaggerate something to hide a weakness or insecurity? Or maybe you lied to cover a big mistake you'd made. Did you get away with it? Or did maintaining the lie suddenly consume all of your attention and energy?

Seemingly forgotten in our obsession to maintain the fiction of our solvency are the huge costs of lying, running our country on Asian loans, and keeping the printing press churning. Nobody notices that the purchasing power of the dollar is down by almost 50% in the last 10 years… or that real wages have been falling since the early 1970s… or that almost half of the able-bodied men in our country no longer work. Nobody mentions that most of the students at most of the urban schools in our country either don't graduate or can't achieve test scores above minimum standards. Sooner or later, the consequences of our lies will fall upon us.

I've long warned that when the "End of America" comes – when our ability to maintain the lie I describe above collapses – you'd see the U.S. bond market crash… And the telltale sign – the most important indicator – would be the rate of the U.S. 10-year Treasury.

I've been warning people for years that this crash was inevitable. And for many years, I've been made to look like a fool. The Fed has used its awesome power to manipulate the 10-year Treasury yield lower and lower, creating yet another massive financial bubble. But…

I knew it could not last for a very simple reason: With every new dollar it created, the Fed further undermined confidence in the financial system itself. The 10-year U.S. Treasury yield not only represents the borrowing costs of the U.S. government, it represents faith and trust in the world's system of fiat money and sovereign debts. By cheating that system, the Fed is destroying it.

I've spent much of the last several years warning people about what is about to happen and trying to convince them to take precautions before it was too late.

But let's face it… my work is mostly for wealthy people who mainly want to continue to be wealthy. So I've focused on how to prepare for these changes from the perspective of an investor – someone whose primary goal is to earn a return on his capital. I had precious little to offer regular wage-earners.

But the real danger right now is mostly to the middle class in America. Your taxes are going up. The number of people you will be forced to support (those on disability, food stamps, or Medicare… retirees… people living in war-torn countries…) is soaring. And your ability to pay for these benefits is being destroyed by global competition and the decline of the dollar. America is promising everyone more. And you're the person who will have to pay.

Make no mistake… Every time the president says only the rich will pay taxes, just imagine he's saying "you." That's far closer to the truth.

So far this year, almost 700 Americans have handed in their passports and given up their citizenship. They're doing so knowing that the U.S. Senate plans to pass a law that will permanently bar them from the country. They won't be allowed to return, not even to visit family. Even this draconian measure isn't slowing the pace of people emigrating from America. The numbers are up about 50% from last year. The rich are leaving. And with them will go their capital and our standard of living.

So… what can you do if you're already struggling to maintain your standard of living? How can you hope to maintain your lifestyle as your wages collapse and the rate of economic growth slows or even reverses?

I believe your best alternative is to find a way to build your own business. I decided to build my own business out of necessity. I was fired from the only job I'd ever gotten in finance in 1999.

I still feel a sense of necessity. If I'm right about the coming financial disaster in America, the odds that my financial research company will continue to prosper are not good. So I'm in the midst of starting another company – a consumer-products firm.

The core idea is simple: Everyone wants and can afford a little bit of luxury in his life. I'm working to improve the quality of a basic task, something most of us do every day. I've gotten a substantial amount of interest from several top executives at major companies, whom I'm recruiting to join me. This isn't a lark. I have a great idea – something that could create a substantial amount of wealth and something I could feel very proud to have built.

I don't want to reveal more right now. And yes, I know, the odds that I'll succeed are low. The point is, I'm not going to sit still and watch my standard of living decline. I'm going to take every possible step to safeguard my income and way of life. I am not going to be the guy who tells his wife we can't afford that anymore. That's going to be someone else. I guarantee it.

Nothing good is going to happen for you in your life unless you make it happen. This is a harsh, but important reality…

As an entrepreneur, I've gotten used to this fact. But for most people, it is an impossible hurdle. Most people can contrive an infinite number of reasons why they can't do something for themselves. I used to think it was impossible to coach people past this inertia. But…

I'm reading a book that has changed my mind. It's called Choose Yourself, by James Altucher. I believe this book will become a true classic. Anyone who reads it and follows its advice will become vastly more successful. It is, without a doubt, the best book I've ever read on how to build a new business.

I'm using it as my guidebook. The book covers the basics – including how to brainstorm for new business ideas, how to partner, and how to sell your business. It includes contrarian ideas that I know from experience are real secrets to success – like why you should never negotiate.

But the best part of the book – and the part I'm sure you won't find anywhere else – is James' ideas about how to manage your health and spirit while you're going through the rigors of entrepreneurship. I can tell you that I discovered the same valuable keys – how important it is to exercise, sleep, and be grateful. And I can tell you that when my life gets out of whack, I return to the same kind of daily practice James describes.

Even if you never start your own business, I believe this book can serve as a guide to maintaining your happiness in the face of what's likely to become a tough economy. It might sound strange to say this, but I wish I'd written the book. I think it will be as useful over the next few years as what I publish. James can teach you how to handle pressure, stress, failure, and success. Without these skills, all of the best financial advice in the world won't make much of a difference.

P.S. I appreciate James' idea so much, I worked with him to put together a special offer for my readers… For about $24, you can get a copy of Choose Yourself… plus three more of James' books… plus a report he wrote on retirement investing that you can't get anywhere else. You'll find all the details – including how to get immediate electronic access – right here.

More from Porter:

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Forget gold and silver… This could be the next major commodity to crash

From EconMatters:
We have seen how Gold and Silver were viciously attacked by the shorts this past week, and surprisingly Oil escaped the carnage which is interesting because in April Oil was taken down to the $86 level during the last attack on the Gold and Silver markets.
This is even stranger considering the fundamentals for the Oil market are even more bearish than they were in April from a supply standpoint as exemplified by the latest EIA report on Wednesday on this week.
There is little doubt however that since the easy money is gleaned from the Gold attack, the Feral Hogs will start looking for their next target, and the Oil market will be high on their list in the upcoming months as the summer driving season winds down, and bulging supplies start to weigh on trader's sentiments.

This week's EIA report identifies the problem with the Oil market…

Read full article…
More on oil:
Top commodities trader: Oil set to plunge 30% or more
Jaw-dropping chart shows the U.S. energy renaissance is undeniable now
One of the world's most important commodities could be on the verge of a "colossal" move

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Moody’s reveals a mind-blowing new fact about state pension plans

From Distressed Volatility:
… Moody’s Investors Service, dissatisfied with the way states measure what they owe their retirees, released its own numbers on Thursday, showing that the 50 states have, in aggregate, just 48 cents for every dollar of pensions they have promised.

That is much less than the 74 cents on the dollar that the states now report, suggesting the states are short by some $980 billion, with many local governments, like school districts, on the hook for…

Read full article…
More on pensions:
The 20 most dangerous state and local pension plans in the U.S.
Unbelievable story suggests pension plans have gone completely insane
Sneaky new gov't regulation could destroy the pensions of millions of Americans

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Not just mortgages… Another critical interest rate is set to DOUBLE next week

From Bloomberg:
With just two working days left before the U.S. government doubles a student-loan interest rate, lawmakers are haggling over what to do about it.
The argument isn't over whether to allow the rate on the most popular type of federal loan to rise above 3.4 percent, the level set by law until July 1. It's about how much borrowing costs will increase.
"The likelihood of students keeping the interest rate they had for the last two years is diminishing by the hour," said Terry Hartle, senior vice president at the American Council of Education, the largest lobbying group for colleges and universities. "The outcome will be students will pay more than 3.4 percent in the short term," he said in a telephone interview.
Unless Congress acts, the interest rate for subsidized Stafford loans, available to undergraduates from low-income families, will increase to 6.8 percent from 3.4 percent.
More than 7 million students use that direct-from-Washington loan program.
Instead of passing legislation to extend that rate or set a new flat rate, lawmakers have been negotiating ways to let the rate float by linking it to the yield on the 10-year Treasury note.
Getting an informal agreement on the concept of flexible rates was the easy part. The more challenging part of the negotiations, according to those involved, has been figuring out how much flexibility to build in, and how much profit the government should extract.
Government Profit
Senate Majority Leader Harry Reid contends that there should be no profit at all.
"The issue is this: Republicans want deficit reduction," the Nevada Democrat said June 25. "We don't think there should be deficit reduction based on the backs of these young men and women who are trying to go to college."
Complicating the talks is the more than 50 percent increase in the yield of 10-year Treasury notes, to 2.5 percent, since May 1.
Under a House-passed plan, that would have meant a student loan rate of 4.3 percent, rising to as much as 8.5 percent.
"It's very clear students would be worse off under that proposal than simply allowing interest rates to double" because rates "would be lower initially but rise as interest rates rise," said Pauline Abernathy, vice president of the Institute for College Access & Success, a nonprofit research and advocacy group in Oakland, California.
Exploding Debt
Over the past decade, there has been an explosion of student loan debt. It now totals almost $1.2 trillion, with 85 percent consisting of government-backed loans taken out by students and their parents. The rest are made by private lenders like banks or Sallie Mae (SLM), the largest U.S. education-finance company.
The share of 25-year-old Americans with student debt increased to 43 percent last year from 25 percent in 2003, according to the Federal Reserve Bank of New York. During that nine-year period, the average education-loan balance of people in that age group increased 91 percent, to $20,326 from $10,649, according to the New York Fed.
With so much outstanding student debt, borrowers are having trouble contributing to the U.S. economy in other ways.
It has become harder for young people, especially those between 25 and 30, to secure other types of credit, including home mortgages, according to a February report on household debt and credit by the New York Fed.
Economic Drag
Economists warn that what is owed in student loans may rival home-mortgage indebtedness as a drag on U.S. growth.
"The difficulties borrowers face when trying to manage cash flow may have a broader impact on the economy and society," Rohit Chopra, student-loan ombudsman at the Consumer Financial Protection Bureau, told the Senate Banking Committee on June 25.
"When young workers are putting large portions of their income toward student-loan-payment payments, they're less able to stash away cash for that first down payment."
Private borrowing for student loans grew after Congress overhauled bankruptcy laws and made such debts non-dischargable in personal bankruptcy.
That change meant that "there were very few reasons for banks not to make educational loans to anybody who wants them," Hartle said. "Most students who get in trouble by borrowing huge amounts of money get there because they have borrowed from private lenders" without the knowledge of their college or institution, he said.
It's common for students to have more than one kind of loan, taking out the maximum government loan and then supplementing with private loans.
Loan Types
The most popular government loan is the Stafford. Subsidized Stafford loans are limited to students with lower incomes, and the interest rate is 3.4 percent, set by Congress. The government pays the interest during school. The interest rate will increase to 6.8 percent on new originations if Congress doesn't act by July 1.
Any undergraduate, regardless of income, can get an unsubsidized Stafford loan at a rate of 6.8 percent.
The federal loan limits for undergraduates are $5,500 the first year, $6,500 the second year and $7,500 in the last years. Graduate students no longer dependent on their parents also can take out Stafford loans.
Another type of direct federal loan, called PLUS, carries a rate of 7.9 percent for graduate students and parents of undergraduates.
One-Year Extension
While running for re-election, President Barack Obama pressured lawmakers to extend the fixed rates for a year. Republican challenger Mitt Romney joined the call, and Congress obliged both candidates, acting two days before the rate on subsidized Staffords would have doubled.
Since then, the president has continued public pressure on Congress to address a pressing problem for students.
"It's a different year," said John Kline, the Minnesota Republican who heads the House Education and the Workforce Committee. House Republicans aren't open to a temporary change, Kline said — "We've already been there."
The talk about student loans this week hasn't been limited to federal loans.
Private loans make up about 15 percent of outstanding educational debt. They are considered riskier because their interest rates are usually not fixed, and they don't offer the same type of protections as federal loans, such as income-based repayment when borrowers get into trouble.
Alternatives Needed
A Federal Reserve official told the Senate Banking Committee on June 25 that lenders of private student loans should reduce the risk of default by helping struggling borrowers come up with alternative payment plans.
One of the major lenders, Discover Financial Services (DFS), announced yesterday that its fixed interest rate on student loans was dropping to as low as 5.49 percent.
A doubling of the government's interest rate "would be good news for Discover as its private loans will be more attractive when compared with subsidized federal loans," analyst James Friedman of Susquehanna Financial Group LLC in New York said in an e-mail.
Borrowers could bypass both subsidized and unsubsidized Staffords "and choose Discover's student loans instead."
On May 23, the Republican-run House passed Kline's legislation, which would tie student loan interest rates to the 10-year Treasury note plus 2.5 percent. In the Senate, Reid tried to round up votes for a two-year extension of the current 3.4 percent rate and fell short of a required 60-vote supermajority.
Senate Proposal
Some Senate Democrats say they will try again for an extension — this time going for just one year instead of two, as was sought in the unsuccessful bill, S. 953. Independent
Senator Angus King of Maine questioned that approach. "What will we know in a year that we don't know now?" he said today.
Obama has his own proposal to subject the Stafford loans to interest-rate fluctuations and save the government $3 billion over 10 years.
As July 1 draws closer, with Congress planning a break next week for the July 4 holiday, a bipartisan group of senators say they have come up with a possible breakthrough — a floating rate for Staffords, the 10-year Treasury borrowing rate plus 1.85 percent.
Deficit Reduction
That proposal still has the deficit-reduction element that Reid opposes; it would pare the government's red ink by $1 billion over 10 years, according to a statement from King,
Democratic Senator Joe Manchin of West Virginia and Republican Senators Tom Coburn of Oklahoma, Richard Burr of North Carolina and Lamar Alexander of Tennessee.
Both Senator Tom Harkin, the Iowa Democrat who is chairman of the Senate Health, Education, Labor and Pensions Committee, and the panel's top Republican, Alexander, predicted that the Senate would go home for the week-long July 4 break without acting.
Alexander, a former U.S. education secretary, said that if lawmakers can reach a consensus this week, Congress can return July 8 and approve the change retroactively.
Neither party has been able to gain a political advantage over the other for inaction by Congress.
Unlike a year ago, "this issue has much less traction," said political scientist Bruce Altschuler at the State University of New York at Oswego. "People don't know who to blame. They know somebody is at fault. They are not sure who."
To contact the reporters on this story: James Rowley in Washington at; Janet Lorin in New York at
To contact the editor responsible for this story: Katherine Rizzo at
More on student loans:

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This could be the frightening real reason the Fed is talking about the "end of QE"

From Zero Hedge:
Yesterday the Fed released its latest balance sheet data: at $3,478,672,000,000, the Fed's assets reached a new all time high, up $8 billion from the prior week and up $615 billion from last year…
After all with almost four years in a row of debt monetization or maturity transformation, either the total holdings or the 10-year equivalency of "Bernanke's hedge fund" rise to new record highs week after week.
But that's not the bad news…
The bad news, at least for Bernanke, and why the Fed has no choice but to taper, is monetizations…
[S]ince the Treasury is about to print less paper (recall: lower budget deficit, if only briefly), and the Fed is monetizing the same relative amount of paper, the Treasurys in the private circulation book [become fewer and fewer], as more high-quality collateral is withdrawn by the Fed.
This is precisely what the Treasury Borrowing Advisory Committee warned against in May.
This is also precisely why the Fed's "data-dependent" taper announcement is pure and total hogwash: the Fed knows it can't delay the delay (pardon the pun) of Treasury monetization…
Doing so only risks even further bond market volatility as less Treasury collateral remains in marketable circulation, and as liquidity evaporates with every incremental dollar purchased by the Fed instead of by the private sector.
So just how bad is the situation? Quite bad. As as of last night…
More on the Fed and QE:

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Must-see: New White House study comes to an unexpected conclusion about guns

From SHTFplan:
… Citing the Sandy Hook mass shooting last year, democrats on the hill have claimed that we must restrict gun ownership and strip the Second Amendment for the safety of our children and the general public.
But a new report commissioned by the White House titled Priorities for Research to Reduce the Threat of Firearm-related Violence suggests what many self defense gun proponents have been saying for years.
The report, ordered under one of President Obama's 23 Executive Orders signed in the wake of the Sandy Hook incident, asked the Centers for Disease Control (CDC), the National Research Council, and other federal agencies to identify the "most pressing problems in firearms violence."
To the surprise of the authors and those who would no doubt have used the report to further restrict access to personal defense firearms, the study found that gun ownership actually saves lives and those who have a firearm at their disposal improve their chances of survival and reduce their chance of injury in the event they are confronted by a violent criminal…
More on guns:

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Details on today’s unexpected reversal in gold

From Bloomberg:
Gold prices rebounded from a 34-month low on signs of increased demand for jewelry, coins, and bars after the metal headed for the biggest quarterly drop in at least 93 years.
"We did see physical buying come in a bit, and if that continues it will provide some support," Marc Ground, a commodity strategist at Standard Bank Plc in Johannesburg, said in a telephone interview.
Through yesterday, the spot price slid 25 percent this quarter, poised for the largest decline since 1920, when Bloomberg data starts. Standard Chartered Plc advised buying gold around $1,200 an ounce.
"There is definitely some increase in the pace of physical purchases," Matt Zeman, a strategist at Kingsview Financial in Chicago, said in a telephone interview. "We are also seeing some short covering after prices started rising."
Gold for immediate delivery advanced 1.5 percent to $1,218.81 at 11:56 a.m. New York time. Earlier, the price touched $1,180.50, the lowest since August 2010.
On the Comex in New York, gold futures for August delivery rose 0.5 percent to $1,217.90. Trading was 62 percent above the average in the past 100 days for this time, according to data compiled by Bloomberg.
Spot silver jumped 4.8 percent to $19.386 an ounce, heading for the biggest gain since April 25.
To contact the reporter on this story: Debarati Roy in New York at
To contact the editor responsible for this story: Steve Stroth at
More on gold:

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Nouriel Roubini: A new period of "uncertainty and volatility" has begun

From Money News:
Prepare for more volatility and uncertainty, warns economist Nouriel Roubini.

"A new period of uncertainty and volatility has begun, and it seems likely to lead to choppy economies and choppy markets," Roubini, an economics professor at New York University, writes in an article for Project Syndicate. "Indeed, a broader de-risking cycle for financial markets could be at hand."

Until the recent financial market turbulence, risky assets had rallying since last summer even while economic growth remained slow, he says.

"Now the global economy’s chickens may be coming home to roost."

Roubini provides a worldwide economic view befitting his nickname of "Dr. Doom."

Japan had to turn to Abenomics after decades of stagnation, the United Kingdom is flirting with a triple-dip recession and recession in the eurozone periphery is spreading to…

Read full article…
More on the markets and the economy:
Porter Stansberry: The End of America has arrived
What Jim Rogers thinks about the "End of America"
"Dr. Doom" Marc Faber: Stocks could fall 20% to 30%… easily

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