Monday, June 27, 2011

Is there an American financial Apocolypse in the making. Martin Weiss of Weiss Research certainly thinks so.

The United States government paid the Brazilia...Image via WikipediaToday there are so many financial pitches in video, on the web, you need a score card to tell just who the Charlatans are and who are trully legitimate financial advisors with good intentions for their clients and prospective clients.

I have posted here the thoughts of other writers with regard to the massive printing machine that is the  U.S. Federal Reserve Bank, and it's enormous influence on world markets, not to mention the United States dollar.

For almost 300 years, the U.S. buck has been the international reserve currency.  That is to say, many world prices of goods and commodities are set in U.S. dollar values, forcing the governments of the world to buy those U.S. dollars to just be able to purchase on the world markets.

That huge advantage for the U.S. economy may now be in jeopardy.

Here is a video presentation by Martin Weiss of Weiss Research Inc (40 years in business) which should scare every investor reading and listening to it, into action.

I make no further comment except to say I have no association with Mr. Weiss, nor do I benefit in any way from his company.  The video presentation is in fact a lead up to joining his firms news letter.  I do not encourage you either way, except to say read, listen and make your own decisions.

The link: http://finance.moneyandmarkets.com/reports/SMR/4349/vsp-smr.php?s=BFPUB&e=4483104

Stay alert

HP

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Thursday, June 16, 2011

Is there slight of hand in the silver futures market? Should you own physical silver?

Silver oreImage via WikipediaGold/Silver Futures Manipulation

by J.S. Kim, SmartknowledgeU.com newsletter

 
Earlier this month, I discussed gold/silver futures manipulation on the Max Keiser Report in the interview below:
In this interview, I discussed the explosion of gold and silver futures transactions in EFP (Exchange of Futures for Physical) and EFS (Exchange of Futures for Swaps) transactions. These two transactions comprised 98% of 99% of all daily transactions in the gold and silver futures market in New York during the month of May. Certain changes in commodities law in February and March of 2005 allowed for paper ETFs and even financial derivative or paper products that tracked the returns of gold and silver to be substituted for the "physical" part of this transaction. This means of course that the commodity regulators in the US, in an effort to keep the US dollar stable, had started to allow fraudulent paper contracts to be substituted for real physical gold and real physical silver in these transactions.
When GATA first uncovered this potential and likely fraud occuring in the futures markets, banker shills responded in online forums by saying that since EFP and EFS transactions were irrelevant because they constituted a very small percent of the total daily transactions in the futures markets. Thus, they concluded, it wouldn't even matter if gold and silver futures contracts were being exchanged for paper airplanes because in essence the volume of EFP and EFS transactions were much too small to impact liquidity and price discovery in the gold/silver futures markets in any kind of meaningful manner.
On Max Keiser's show, when I pointed out the fact that EFP and EFS transactions now comprised nearly 100% of all daily gold/silver futures transactions, I was attacked for making these statements from anonymous (i.e. cowardly) posters  that stated that again, these transactions were irrelevant because they were not true settlements as only true settlements in the futures markets occurred in cash or physical. 
However, this twisting of the facts I had presented was 100% wrong and disingenuous. Here's why. If the economic equivalent of the silver ETF, SLV, shares were exchanged in an EFP transaction for 50 long silver futures contracts, the owner of the SLV shares opens up 50 new long silver futures contracts, but the holder of the 50 long silver futures contracts, in ADDITION to receiving the SLV shares, also opens up 50 short silver futures contracts to offset his long position and effectively close out his long futures position. So the NET effect is that 50 NEW short silver futures contracts are opened with possibly nary a single ounce of REAL PHYSICAL SILVER exchanging hands. Ultimately, this exerts downward pressure on the silver futures prices, AND the silver futures market is robbed of a REAL transaction in REAL PHYSICAL SILVER that would have contributed to price discovery of a silver futures contract. 
To think about this another way, imagine that you could trade two shares of Netflix stock for every one share of Google stock instead of selling Netflix stock and receiving a cash payment. And imagine if 99% of all sales of Netflix stock consisted of Netflix for Google stock swaps. Now imagine that Google stock starts sinking and Netlflix launches a new product in the REAL WORLD that leads to a 50% boost in sales, but 99% of all transactions in Netflix still involve Netflix for Google swaps. Ultimately, the value of Netflix stock is going to be suppressed because these paper for paper swaps lead to no true price discovery of the value of Netflix stock and disregard information that is happening the real world regarding Netflix sales.  
While not a perfect analogy, it is a relevant analogy in that EFP and EFS transactions rob the silver and gold futures markets of real price discovery of how much one troy ounce of PHYSICAL gold should trade for and how much one troy ounce of PHYSICAL silver should also trade for. Furthermore, these EFP and EFS swaps allow the banksters to set prices for gold and silver in the futures markets that ABSOLUTELY DISREGARD the real time supply and demand for PHYSICAL GOLD and PHYSICAL SILVER that happens in the REAL WORLD. When you realize this, would you then consider the futures market to be a real market or a fraudulent market?  And that is precisely why nearly 100% of daily gold/silver futures transactions now consist of these privately negotiated transactions that contribute nothing to true price discovery. If bankers wanted to wield these paper for paper transactions as a weapon to prevent true price discovery of gold and silver, it certainly could be used for this purpose,  and this is precisely my point.   
 
According to the latest June COMEX physical inventory report, JP Morgan, though it owns eligible physical silver (NOT available to settle silver futures contracts), owns NOT ONE TROY OUNCE OF registered physical silver in the COMEX vaults that can be used to settle its short futures silver contracts. As far as I understand the purpose of the futures market, the regulators tell us that the purpose of the futures market is not to allow speculators to create gross distortions in the commodities market for their own personal windfall at the expense of the public, but to allow producers to hedge against rising and falling commodity prices in the free market. Since JP Morgan isn't a silver miner the last time I checked and they hold zero ounces of registered physical silver in the COMEX vaults, why are they even allowed to participate in the silver futures markets? Also realize that total COMEX silver dipped below 100M oz for the first time ever this week.  The fact that the inventory of physical silver that can be used to deliver against silver futures contracts in COMEX vaults is plummeting like a stone in the ocean should serve as a warning to anyone that owns paper gold and paper silver to IMMEDIATELY convert these paper contracts into REAL PHYSICAL GOLD AND SILVER before it is too late.
Lastly, I discuss the similarities of the bankster games when they took down silver from $50 a troy ounce to $33 a troy ounce to the bankster games that they inflicted upon the silver futures markets in 1980 when the Hunt Brothers tried to corner the silver market. Trust me, the price of silver in the REAL physical market, specifically in silver coins, never approached the $33 an ounce that banksters were setting in the futures markets. If you listen to my above interview, you will discover that the banksters used virtually the same blueprint they used to destroy the Hunt Brothers to inflict the same damage to PAPER silver prices this year as well. 

By understanding these bankster games, we at SmartKnowledgeU have been able to consistently outperform the gold/silver sector every year by a very significant margin.  That's not to see that are immune to volatility because if you invest in the gold & silver sector,  you WILL be subject to considerable volatility at times. However, knowing when to sell versus knowing when to be patient will be the difference between large gains at the end of the year or possibly large losses even if you are invested in the right assets. Since the launch of our Crisis Investment Opportunities newsletter in June, 2007, thus far, we have yielded positive returns every single year, and significant returns every year except in 2008, a year in which we ended up just very slightly positive. Still, from January 2008 to May 2011, our CIO newsletter has returned a cumulative yield of +136.84%, nearly doubling the +69.53% performance of #1 globally ranked John Paulson's Advantage Fund during the same investment period.  Right now, we are entering a period will gold and silver mining stocks will be bottoming and when great gains will be made in future years. Buying mining stocks at the right time WILL be the key to earning large profits in future years. 
 
Good investing, 

JS Kim
Managing Director
SmartKnowledgeU Pte. Limited


PS: You can follow Mr. Kim on Facebook and Twitter.
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Friday, June 10, 2011

Ballard Power Systems gains strong partner in Daimler as Germans look to Fuel Cell technology!

Daimler announced this week a partnership in the development of fuel cell technology which includes the grandaddy of that industry, Ballard Power Systems of Burnaby, British Columbia. Ballard (BLD-T)(BLDP-OTC) has, since the 1980s, been quietly developing its PEM fuel cell technology.

Several years ago, (2009) I posted an article entitled, the future of energy, where I laid out the probability of Fuel Cell stacks such as Ballards stacking technology, being developed to the point where they will easily power buses, fork lifts, ships, trains, small towns, and eventually big cities. In the beginning, many pundits speculated on the development of pure hydrogen fuel cell cars.  Eventually those same people began to discount what they called the hydrogen economy, saying that fuel cell cars probably would not ever replace the internal combustion engine.

Since then, there have been inumerable articles and arguments both con and pro, fuel cell investments. Ballard, (and a number of other fuel cell companies nicknamed baby Ballards, such as Plug Power) saw their share prices subsequently wane as investors grew weary of the argument.  Ballard, having partnered earlier with auto makers such as Ford and Chrysler, basically sold off their auto technology to those entities. They concentrated on larger vehicles such as buses, and most recently, the fork lift industry.

Where I believe Ballard really shines is in their fuel cell stacking technology which last year, allowed them to supply a small town in Ohio with a fuel cell power plant as a factory size test of such technology. (see: Worlds largest fuel cell power generations system being tested in Ohio)

Think of towns and cities of the future being powered entirely by hydrogen fel cells, with absolutely no pollution as the only byproduct of the technology is pure water (H2O).  How about cruise ships, tankers, industries and buildings being powered in the same way.  Ballard recently contracted with India to supply over 10,000 smaller stacking units for their growing wireless industry in that country.

Ballard now has fuel cell buses being tested in London, California, Vancouver and Amsterdam.  They are now building fuel cell fork lifts and plan on supplying that market, anywhere in the world where clean energy is a must.  Now, Daimler has announced that it will power its fuel cell fleet with Ballard technology.

This technology, especially its use in stacking up to power plants capable of powering entire populations, just makes sense. Couple hydrogen fuel cell plant power with the emergence of the electric vehicle industry (our investments in lithium production) and, I believe, you will have a big winner, especially in places like China and India. Here in North America natural gas is very abundant with new fracking technologies allowing for an untapped bonanza of natural gas energy capable of powering us for 200 years.

As it turns out, natural gas is a great feed source for hydrogen. In other words, Fuel cells can easily run on natural gas!

Happy investing.

HP
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Thursday, June 2, 2011

Economies of U..S.A. and Canada on divergent paths!

According to the U.S. National Bureau of Economic Research, U.S. and Canadian job markets have struck a divergent path since December of 2007 when the recession in the USA began.  This chart explains how divergent those paths have been in graphic terms.

At this writing, Canada has reproduced all of it's recession job losses and, in fact, has increased that number by 2%.

When the Canadian dollar was trading at .77 cents I wrote an article that basically told you to "hold on to your loonies".  I reiteratted that sentiment over a year later when the loonie was trading at .97 cents to the usd again telling you to hold on to your loonies.  Now, even with the Cannuck buck trading at over $1.04 usd I am reiterrating that same sentiment. Hold on to your loonies!

In the 1950's the Cannuck buck traded around $1.08 to $1.10 to the usd.  I believe those levels will be reached again and will hold true for the forseeable future. There are many reasons for this opinion, not the least of which is the massive debt load of the U.S. and a number of it's states.  The U.S. bond market is in for a financial tsunami at some point beyond when quantitative easing ends, and maybe before that time.

The U.S. has been, for the past year, buying up to two thirds (2/3) of all of it's own debt on the bond market. As that giant Kenseyian experiment ends, listen carefully for the underwater earthquake that could eventually spawn a Tsunami called hyper inflation.

Markets usually like inflation. Commodities like inflation. Even housing likes inflation and remember, the U.S. Federal Reserve always errs on the side of inflation. The problem is, once this Genie is out of the bottle, no one really knows where it will go, but it does not bode well for the usd.

Since commodities love inflation, and Canada is a country rich in almost every single commoditiy from water, to wheat, grains, cattle, oil, gas, gold, silver, lithium, diamonds, gypsum, lumber, seafood, coal, etc. etc  look for the cad to strengthen, even from these levels.  As two billion more people from China to India, Brazil, Russia and Indonesia join the middle class, the demand for all commodities will climb, and climb and climb.

Anyone who thinks the commodities bull market is over will miss out on huge upside. This lull is a buying opportunity and when everyone gets extremely negative over the next month or so, it will be even a better buying opportunity.

Look for Canadian interest rates to remain above U.S. rates, to rise slowly and strengthen the Cannuck buck.

Now remember, "hold on to your loonies"!

Happy investing.

HP



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