Happy New Year Everyone (Felice Anno Nuovo A Tutti)

And here's to an even better year in 2011 for gold and silver - ENJOY:

Was The Jobless Claims Number Good? Don't Get Too Excited...

Of course, the seasonally adjusted headline number over which every talking moron in the financial media is doing an end zone dance over looks great.  But here's the golden truth, direct from the Dept of Labor press release:  The advance number of actual initial claims under state programs, unadjusted, totaled 521,834 in the week ending Dec. 25, an increase of 24,879 from the previous week.

Here's the press release if you want to peruse the report:  LINK

So there you have it.  Just more Government and financial media Orwellian/Randian garbage.  The fact of the matter is that our economy is starting to fall of a cliff again.  Expect more QE and higher precious metals prices in 2011.  That will be my only 2011 prediction.

The U.S. Mint Has Suspended Production Of Silver Eagles - Again

I was not aware of this until today, but the press release reads like silver eagle production has been suspended for awhile.  Here's the press release:  LINK

I was told a while ago by someone who is in a position to know that the Mint was under instructions to produce as many gold and silver eagles as possible this year in order to avoid the perception that silver supplies are tight.  This is why big coin dealers like Tulving seem to have an endless supply of silver eagles.

However, this same source also said that he expected, based on thorough knowledge of the entire industry, that there would be a severe silver shortage starting sometime in 2011.

I guess that shortage may have started a bit early...

Is The U.S. Dollar About Ready To Take Another Spill?

Despite a determined, concerted effort by the bullion banks to push the price of gold/silver lower, the precious metals have managed to maintain a surprising degree of buoyancy.  In fact, many of us have been discussing this departure from the usual pattern in which the price of the metals historically during this bull market have typically succumbed to to a painful beating when the cartel decides to work on liquidating the COT open interest. 

As such, i'm wondering if the dollar is getting ready to roll over start heading south again.  Here's a chart (daily, spot basis):

Certainly the fundamentals which underpin the dollar continue to deteriorate pretty quickly. In today's 2-yr Treasury note auction, the primary dealers had to swallow 57% of the deal. That's an unusually large amount for a shorter-duration note auction. The economic data, despite the colorful lipstick being slapped on the pig by the media, is showing some deterioration. And of course the dollar is responding today to the China's interest rate hike.

Having said all that, it is clear to anyone who puts a little thought into it that the only hope the U.S. Government has of financing its deficit spending and possibly stimulating economic activity is to print a lot of money and take the dollar a lot lower.

Gold Has Been A Terrible Investment?

How many of you hear these financial advisor morons get on CNBC and discuss what a lousy investment has been over the years?  What?  Oh, it doesn't pay interest?  Junk bonds paid tremendous interest all thru the 1980's and then the market crashed hard.  99% of the world lost substantially more in capital loss than they earned from the coupon payments.  If you chart U.S. Treasury Bills since 1991, adjusted for inflation, that interest-bearing investment is actually negative.  How many your genius registered reps have you sitting in T-Bills?  Well, here's how this "lousy" investment has done since 1970 - I borrowed this chart from Casey's Reasearch, the edit in red is mine:

The next time your ignorant, idiotic "financial advisor" calls you up to tell you what a lousy investment gold is and what a great opportunity is being presented in the muni bond and mortgage-backed bond market, YOU are the idiot if you don't hang up the phone and find an advisor who knows the facts/truth.

If I find more inspiring material to post I will do so, otherwise I'm off to do some back-country sno-cat skiing tomorrow.  Have a great Christmas/Boxing Day/Holiday weekend!   BUON NATALE A TUTTI!

IMF Done Selling Gold - Look Out Above?

Here's the press release LINK.  The IMF has been unloading an average of 20 tonnes of gold per month into the market since September 2009.  And a lot more than that over the past few months.  If the powers-that-be do not come up with another source of gold to replace the IMF sales, gold will potentially move a lot higher in the near future.

The U.S. Dollar: Backed By The FULL FAITH AND CREDIT Of The Federal Reserve Printing Press

And print money is what the Fed has been doing best - really since 1971 after Nixon closed the gold window:

(click on chart to enlarge)

And really this chart just shows M2, since the Fed has removed its reporting of M3 since March 2006.  The missing component is large eurodollar deposits.  My friend and colleague "Jessie" wrote an excellent summary of how the Fed is exploiting this category to really ramp up the money supply off the books.  His essay can be found HERE

As a follow-up to my commentary yesterday on the looming State/municipal catastrophe, check out this post on Clusterstock today - LINK.  Not only are most large cities strapped with massive budget deficits, but as the analysis in the Clusterstock piece demonstrates, municipal property tax receipts are going to take a big dive.  This will just add gasoline to the fire.  Expect the Federal Government to bail out this situation via even more Fed printing.

Finally, check out this King World News interview with James Turk, who explains why we are in the incipient stages of hyperinflation: 

Rising interest rates along with the surge in commodity prices that we have been seeing in the back half of this year is writing on the wall that hyperinflation is very near.  If anyone needs further proof just look at what QE2 is already doing.  The Fed is turning government debt that the market doesn’t want into currency which is the cause of all hyperinflation.

The link to this quickie is HERE.  Essentially, if you are not accumulating precious metals right now, expect that your financial well-being eventually will be tragically compromised.  I'm thinking the new slogan on U.S. currency should be:  "In the printing press we trust."