Silver Doctors

Foo writes:

Could you please explain the impact of a US Dollar collapse on the Asian countries? From my point of view, due to the exchange rate risk, silver or other precious metals may not be a good investment for Asian people. Could you please share your opinions on my questions?
Hi Doc,
I am from Singapore. I know that when the US keeps printing money, the US dollar will keep depreciating against other currencies, like the Singapore Dollar, and also precious metals will increase in value. For example, Silver buyers in the US achieved 100% return when silver rose from USD20 to USD40. But due to the strengthening of SGD against the USD, Singapore silver buyers only got (40*1.21/(20*1.4) = 73% return.

So, Doc. Could you please explain the impact of US Dollar collapse on the Asian countries? From my point of view, due to the exchange rate risk, silver or other precious metals may not be a good investment for Asian people. Could you please share your opinions on my questions?

Foo:
Great questions!
We share your beliefs that the collapse of the US dollar is inevitable and that silver is likely to surge to $100 and beyond in the coming years.

However, silver’s 10 year bull run has not been entirely the result of dollar debasement.  Silver has exceedingly strong supply and demand fundamentals, even without systemic currency issues with the dollar that could eventually send silver parabolic.
There is a world-wide shortage of physical silver at current manipulated prices.  This is a primary driver of the increase in silver price. 
I won’t go into further details here regarding the industry consumption statistics and rest of the bullish supply/demand figures for silver, as an in-depth analysis can be conducted for yourself by reading The Silver Bullet and The Silver Shield by our friends at Dont-Tread-On.Me.

The other primary driver of gold and silver prices is fiat currency debasement by all nations.
ALL FIAT currencies have been in serious bear markets vs. both gold and silver over the past 10 years.
The SGD is a fiat currency just like the dollar, yen, euro, renminbi, etc.  Even the CHF hasn’t been backed by gold since 1999 (thanks to an IMF mandate).
While the US dollar may win the race to the bottom, all fiat currencies will undergo a MAJOR PARADIGM CHANGE when the US dollar reserve currency system collapses and takes all fiat currencies down with it. 

Lets take a look at the price of silver in Singapore dollars (SGD) over the past 10 years. (this was the only decent long term chart of silver vs. SGD that I could find, and wasn’t able to insert it into this post)

Notice the SGD’s deterioration vs. silver over the past decade from ~8SGD/oz in 2002 to 60SGD/oz in May of 2011! 
You say that silver or gold may not be a good investment for Asian people, yet in your own currency silver is up 650% in 9 years!
Take a look at long term (10 year) charts of various Asian currencies vs. gold or silver.
Let me know if you find one that has gained vs. either gold or silver over the past 10 years.
There is an old saying that is simple, yet true: The trend is your friend.  Until the secular bull market has exhausted itself in gold and silver, continue to accumulate on dips.  Take a long term perspective, and position yourself accordingly.

Friday, the HKMEx launches silver futures in Hong Kong, providing Chinese investors with opportunities to purchase physical silver in 1,000 oz lots.  This has the potential to increase access to physical silver to millions of Chinese, which could result in another long-term driver for higher silver prices to establish market equilibrium with supply. (assuming that the HKMEx is not an extension of the cartel, which is a possibility).

In summary Foo, silver and gold provide excellent protection from fiat currency debasement in all nations, and will also provide protection from the widespread contagion that will quickly develop from a collapse of the US dollar.  The collapse of the US dollar will take down the entire system as we know it.
In short, yes, we would strongly recommend that Asians exchange their fiat currencies for silver.

-Doc

The Euro debt problems pale in comparison to the debt issues of the US. 
US state debt issues have been ignored by the MSM and ratings firms for as long as possible.  It appears it is now no longer possible.

Moody’s Now Threatening Downgrade on 5 U.S. States By Alexander Schachtel
July 19 2011
Ratings agency Moody’s (NYSE:MCO), which in recent weeks has warned that it will downgrade its AAA on the debt of the United States Federal Government, has now issued a new slate of threats to individual states. Today the “investor’s service” released a statement announcing that it has placed five states, Maryland, New Mexico, South Carolina, Tennessee, and the Commonwealth of Virginia, on review for possible downgrade from their current AAA bond ratings.
The agency cites the states’ high federal employment and medicaid exposure as reasons for the review, which will affect a total $24 billion of rated debt.
Hot Feature: 3 Reasons the US Economic Recovery will be Different from Japan.
“While all states are indirectly linked to the U.S. government to some degree, we have identified the five Aaa-rated states that are most vulnerable to changes in the U.S. government rating,” said Nicholas Samuels, a Vice President in Moody’s State Ratings Team. These five states have above average exposure to several sovereign risk factors that Moody’s outlined in a July 13 special comment, “Implications of a U.S. Rating Action for Aaa-Rated U.S. Municipal Credits.” The risk factors are macroeconomic sensitivity, capital markets reliance, and dependence on federal revenues, offset by financial resources available to counteract those risks.”
Moody’s has said that in the event that Washington does not come to agreement on a plan to raise the debt ceiling and enact spending cuts to reduce the deficit, a downgrade of its ratings on federal treasury bonds is highly likely. That downgrade would in turn trigger likely downgrades for the states listed above, and a possible review of an additional ten AAA rated states, “should the sovereign rating be lowered and move by more than one notch.”
Read more:

We said yesterday that the cartel would need to smash silver to prevent a short squeeze and a quick run to the mid $40′s.  Blythe didn’t fail to meet expectations, smashing silver from $41 to $38.51 in a 2 wave take-down. A 3rd mini-take down by the LBMA is also visible on the chart during the overnight hours. Don’t get too upset, because this is actually decent action from a long term prospective, and also provides us with one more chance to accumulate silver in the $30′s.

The action in silver can be summed up: BTFD!
Silver has traded as low as $38.41 this morning, and has the potential to correct further to the $37.50-$38 range, which is substantial support.  A move below $37.50 would indicate silver is back in an even broader range trade from $32-$41, and this is unlikely after silver’s recent strong breakout above the consolidation zone.

We expected gold to retest the previous all-time nominal high of $1577 as Congress agreed to a solution on the debt limit, so price action in gold is no surprise as well.  Gold’s 2 stage drive-by shooting by the cartel yesterday is just as clear as silver’s on the 3-day price chart.  Clearly, a 2nd consecutive close above $1600 was completely unacceptable to Blythe and friends.
The real question now becomes whether support at $1577 will hold, sending gold quickly back above $1600 and off to the races, or if gold corrects further.  Should support at $1577 not hold, look for gold to work down towards $1555. 
In the long term this is just semantics, as gold is headed MUCH HIGHER from here, and likely soon.

The Republican controlled U.S. House, defying a veto threat, voted last night (234-190) to slice federal spending by $6 trillion and require a constitutional amendment for a balanced budget to be sent to the states in exchange for averting a threatened Aug. 2 government default.
Treasury Secretary Timothy Geithner has said the government will run out of options to prevent a default by August 2 – in 13 days time.
Standard & Poor’s Ratings Services and Moody’s Investors Service have said they are likely to downgrade the U.S.’s credit rating if Congress doesn’t act.
An increase in the $14.3 trillion U.S. debt ceiling is inevitable and is a question of when rather than if.
The Bloomberg Chart of the Day shows how gold in dollars is correlated with increases in the U.S.’s debt limit, particularly in the last 10 years.

From Goldcore:
Gold is flat in U.S. dollars and New Zealand dollars but marginally lower in most currencies today as increased risk appetite has seen risk assets rally despite poor fundamentals. Most Asian indices were higher, except the Chinese and Indian markets, and European indices have also risen.
Gold is trading at USD 1,587.00, EUR 1,116.1, GBP 983.50 and CHF 1,302.10 per ounce.

Bloomberg Chart of the Day from Korea Investment
Respite has also been seen in Eurozone debt markets with bond yields falling. Rumours of ECB intervention through peripheral bond buying have helped steady things but the ECB has not given any indication that it is supporting vulnerable European sovereign debt markets.
For now markets appear more interested in Apple’s massive profits than Uncle Sam’s massive debts.

Cross Currency Rates
The Republican controlled U.S. House, defying a veto threat, voted last night (234-190) to slice federal spending by $6 trillion and require a constitutional amendment for a balanced budget to be sent to the states in exchange for averting a threatened Aug. 2 government default.
Treasury Secretary Timothy Geithner has said the government will run out of options to prevent a default by August 2 – in 13 days time.
Standard & Poor’s Ratings Services and Moody’s Investors Service have said they are likely to downgrade the U.S.’s credit rating if Congress doesn’t act.
An increase in the $14.3 trillion U.S. debt ceiling is inevitable and is a question of when rather than if.
The Bloomberg Chart of the Day (see above) shows how gold in dollars is correlated with increases in the U.S.’s debt limit, particularly in the last 10 years.

Bloomberg Composite Gold Inflation Adjusted Spot Price – 1970-2011
Julia Yoo, a Seoul-based analyst at Korea Investment told Bloomberg that “gold’s rally is quite explosive.”
“Increasing the debt limit means you print more dollars, which will weaken the dollar and consequently lift the gold price,” adding to gains this year that were driven by demand from countries including China.”
Gold is 12% higher in dollar terms so far in 2011 and is the best performing currency in the world in the last 12 months.
Gold has risen 33% against the U.S. dollar over the past year, outpacing all of the more than 150 currencies tracked by Bloomberg.

United States Debt Ceiling 1940-2011
However, over the long term gold remains undervalued or at worst fairly valued.
Admittedly, gold has risen by nearly 6.5 times in the last 11 years.
However, in the last bull market in the 1970’s, gold rose 24 times from $35/oz to over $850/oz in 9 years.  Gold remains well below its 1980 record high of $2,400/oz when adjusted for inflation.
The macroeconomic conditions today are even more conducive to gold than they were in the 1970’s.
Most industrial nations such as the US, Japan, Germany etc were creditor nations in the 1970’s.
Today they are debtor nations with the US the largest debtor nation the world has ever seen. The fiscal situation in the US is appalling and deteriorating – with a National Debt of nearly $14.5 trillion and unfunded government liabilities of between $60 trillion and $100 trillion.
As long ago as 2003 we said that this inflation adjusted high price from 1980 would likely be reached and surpassed. We said that at that stage gold could be in a bubble and it would be time to reduce allocations while keeping a core financial insurance holding in gold.
In 2005, we said that the growing property bubbles in the UK, the U.S. and the massive debt levels in the western world (household, mortgage debt and in the banking system) would likely lead to a deterioration in government balance sheets and sovereign debt crises which in turn could lead to currency crises.
We are entering the late intermediate to final stage of this process and the real risk of a currency crises in any one of the major fiat currencies rises by the day.
SILVER
Silver is trading at $38.57/oz, €27.11/oz and £23.89/oz.
PLATINUM GROUP METALS 
Platinum is trading at $1,764.00/oz, palladium at $786/oz and rhodium at $1,900/oz.

NEWS
(Reuters)
Gold inches up on light buying; Europe debt fears persist

(Bloomberg)
Record Gold Price Fails to Deter Buying in India, Jeweler Says

(Emeriates 24/7)
Retail gold buyers in UAE spot booking purchases to beat price rises
(Star News India)
More gold found in Sathya Sai Baba’s cupboards
COMMENTARY
(Market Watch)
How to Make Sense of the Gold-to-Silver Ratio – Silver Catching Up to Do – Myra Saefong
(Mineweb)
Gold price floor to remain above $1000 for at least the next decade -Jeff Christian
(The Gold Report)
Matt Badiali: The Case for Gold Price Manipulation
(ZeroHedge)
Exposing China’s Mysterious Multi-Trillion Shadow Banking System
(ZeroHedge)
Time For Tim Geithner’s Annual Top-Ticking Op-Ed, In Which We Learn That It Is Time To Panic About America’s Banks
(Got Gold Report)
Gene Arensberg: Are the big gold and silver shorts being overrun?
(The Independent)
Why decline of the euro is good for gold – and for Switzerland
(Commondity Online)
Is Silver Still a Good Investment Option?

*UPDATE-  2nd Consecutive Smash in Progress

We said this morning that if Blythe could not muster up a decent raid today (or margin hike) that silver could potentially spike from here.  
Apparently the cartel had the same thoughts.

John Embry’s piece today on KWN had Embry calling for silver to potentially reach triple digits before this thing is over.
While we highly respect Embry, this is such an understatement it could be considered bearish!  Silver has the potential to reach $100 in the next 12 months without a currency event such as hyperinflation or US dollar collapse. 
Throw in a major currency event in the USD, another 5-10 years of gains, plus a public mania phase at the end of the run before the silver bull exhausts itself, and we are looking at the potential for MUCH HIGHER silver prices long term than $100. (although to be fair, Embry doesn’t qualify his expectations for triple digits, leaving himself open to the $100-$999 range)

To view silver from the perspective of our viewpoint- the King of the precious metals community, Jim Sinclair, is now calling for $12,500 gold.  A return to the historic 16:1 silver/gold ratio at this gold price = $781.25 silver.  Personally, we think its highly unlikely that silver will not overrun this historic AVERAGE ratio. 
We think it is likely that silver will overrun up to 5:1 AT A MINIMUM. 
(We’ll be conservative and not-publish our true thoughts on what the gold/silver ratio has the potential of reaching). 
Silver gurus such as Ted Butler, Izzy Friedman, Jason Hommel, and Bix Weir all expect silver to surpass gold in coming years due to consumption of silver.
Temporary parity while a long-shot, remains a viable possibility.  Plug in your own expected g/s ratios at $12,500 gold- and let us know what you come up with. 

Click here for John Embry’s interview with KWN:

Yesterday we reported that HKMEx silver futures will launch this Friday, 7/22.  As many readers have been inquiring as to whether this will end the silver manipulation, or whether the cartel has ties to this new Asian exchange with the intent on continuing gold and silver manipulation, we decided to republish our investigation of the HKMEx board of directors we published in May when HKMEx gold futures launched. 

As our readers are by now aware, the HKMEx will debut gold futures in US dollars in 32 ounce contracts starting May 18th.  We expect HKMEx to soon follow with silver contracts.  Ever since the announcement was made, speculation among the gold and silver community has been swirling about whether HKMEx is an Asian extension of the banking cartel responsible for suppressing gold and silver on the LBMA/ COMEX, or if in fact the HKMEx presents the ultimate competition- an honest, FREE bullion market.

Instead of speculating, The Doc decided to do a little investigation into the HKMEx board of directors.

Honestly, we found less than we had anticipated.  Amazingly, no one from JP Morgan, HSBC, or Goldman Sachs made the board.  Heck, we couldn’t even find a Rothschild.  We did find two possibly noteworthy figures, and the most suspicious is in fact the HKMEx Executive Director and President. 

First, the list of the entire board.

Of the directors we thought are possibly noteworthy, we’ll begin with the Executive Director and President of the HKMex, Albert Helmig.

Per Mr. Helmig’s LinkedIn Profile (facebook for business types), Mr. Helmig’s past includes:

Past

• CEO at Grey House
• member at National Committee US China Relations
• Vice Chairman, Board of Directors, Executive Ctm. at New York Mercantile Exchange (NYMEX)

• Board Memeber at International Precious Metals Institute
• Principle at The Helmig Corp/Energex
• International Commodity Specialist at Prudential Bache
• Head of Trading and Risk Management- CFO. at Helmig & Co. Inc.
• Commodity and FX Broker at Merrill Lynch

Education

• Philadelphia University

Mr Albert HELMIG

From HKMEx: Mr Albert Helmig is an Executive Director and President of the Hong Kong Mercantile Exchange. He leads the day-to-day operation of the Exchange. Together with an international pool of talented professionals, he works to build China’s global marketplace in one of the region’s most prominent financial hubs, Hong Kong. Mr Helmig is the third generation of his family to work in the commodities trading industry. He has more than 35 years of commodities experience on Wall Street and as a commodities merchant spanning both physical commodities and financial instruments on a global basis. He is a former Vice Chairman of the New York Mercantile Exchange, and he served on the Board of Directors and the Executive Committee for 10 years and was Chairman or Vice Chairman of over 20 committees. Mr Helmig was Founder and Chief Executive of Grey House LLC, a private consulting firm on risk management, price models and industry best practices to clients such as financial institutions, producers, integrated energy companies, government agencies and ministries, think tanks and law firms. He is a frequent contributor at industry forums and to the media. He serves on the Advisory Board of Energy Intelligence Group as well as other corporate boards. Mr Helmig holds degrees in Finance and Economics from Philadelphia University.

The second possibly noteworthy director is Alasdair Morrison. 
Mr. Morrison is currently a senior advisor for Citigroup, and previously was Chairman and CEO of Morgan Stanley Asia.

Mr Alasdair G. MORRISON

Mr Alastair Morrison is an Independent Non-Executive Director of the Hong Kong Mercantile Exchange. He is a British national who has lived and worked in Asia since 1971. He holds a number of non-executive directorships and participates in a number of Government and community organizations. He is currently Senior Advisor of Citigroup Asia Pacific, a leading global financial services company, an Independent Non-Executive Director at MTR Corporation Limited, and is also non-executive Chairman of Kang & Company, Limited, based in Hong Kong, a private equity firm founded in late 2007, with offices in Beijing, Hong Kong and Seoul. Previously, Mr Morrison served as Group Managing Director of the Jardine Matheson Group and subsequently as Chairman and CEO for Morgan Stanley Asia. With his many years in Asia, including living and working in Hong Kong, Australia and the Philippines, Mr Morrison has built extensive regional contacts in the corporate and government communities. He has participated in a number of high level government-sponsored working groups and is an active member of the community in Hong Kong. Mr Morrison was born in Scotland on September 29, 1948, and is a graduate of Eton College and Cambridge University. He attended the Program for Management Development at Harvard Business School in 1983. The rest of the board members are Chinese (1 Indian). Click here to read bio’s of entire HKMex board of directors: So in conclusion, Albert Helmig, the HKMEx Director and President is the one board member that appears to possibly have any significant connection to the cartel.  Keep in mind that everything must run through the Director and President of the Board. Perhaps this is the cartel’s man to keep things under control, while not making cartel influence blatantly obvious by filling the entire board with JPM, Goldman etc. officials? With this knowledge in hand, we welcome our reader’s thoughts on the matter. -The Doc

Greek 2 year bonds are reaching parity with recent annual yields in silver!  Too bad Greek bond holders are likely to never receive those gains.
Bloomberg just reported that the ECB is considering a temporary Greek default.
The countdown to Greek expulsion from the Euro, and Lehman 2.0 is on.

European Central Bank council member Ewald Nowotny suggested the bank may compromise and allow a temporary Greek default as officials scramble to fix a sovereign debt crisis that’s spreading to Italy and Spain before a leaders’ summit in two days.

European Central Bank council member Ewald Nowotny suggested the bank may compromise and allow a temporary Greek default as officials scramble to fix a sovereign debt crisis that’s spreading to Italy and Spain before a leaders’ summit in two days. Nowotny said there’s “a full range of options and definitions, from a clear- cut default, selective default, credit event and so on.”
“This has to be studied in a very serious way,” he said. “There are some proposals that deal with a very short-lived selective default situation that will not have major negative consequences.”

Click  here for more from Bloomberg:

Stewart Thomson is back with a heaping dose of reality for those who tried to sell their gold and gold stocks in anticipation of the “summer doldrums” that never materialized.

Those who sold their gold and gold stocks because of coming “seasonal doldrums” now look totally ridiculous. Can you imagine somebody telling you how they tried to trade the long side of the Dow through the crisis of 1929? In this even larger dollar crisis, if you buy the dollar against gold in size repeatedly, you stand to be financially exterminated. It’s only a matter of time before it really happens. What does it take for the amateur investor to really learn? Obviously, the answer is… more pain.

Remember that 93% of gold analysts were bearish at the recent lows for gold and GDX. They were all wrong.  Investors who sold gold stocks into the lows and bought the dollar are now in some serious trouble. The temptation is to try to buy back in, right now, but after this two week surge in price, what could happen is that price then promptly falls, and they (you?) sell at more losses.
Over time, you learn that the most wealth is built by buying into price areas that you never believed could or would happen. If you focus on trading smaller than you “know” is rational most of the time, the rare occasions when price does decline massively will see you allocating your largest amounts of capital, while most investors are liquidating and booking huge losses. You can’t predict when those times occur with any consistency, but you can respond to them as a professional investor, on the buy.

Click here for more from Stewart Thomson:

What a day for both gold and silver yesterday! Silver regained $40,  topped the Google trends list, and most importantly, HKMEx announced the launch of silver futures.
Silver also closed above $40, which as we stated yesterday, was important technically.
Silver has sold of slightly this morning, but the $40 level is holding for now. There are large amounts of shorts who will capitulate and cover if silver begins to move up off of the $40 level. The move from $33 to $40 has been viciously quick, and the shorts are bleeding.

To give you an idea of how fast this move has been, The Doc purchased silver from his normal dealer (who ships silver as soon as payment clears) at $33, and its scheduled to be delivered today. Thats a 23% move from the time The Doc made his purchase! Typically silver is within $1 to $1.50 of the purchase price when its received.
Those on the wrong side of this move are bleeding profusely.  To make matters worse (for the shorts), a large number of traders and funds have stepped out of the silver market temporarily, waiting for a clear sign that the bull trend is back before re-entering.  Consecutive closes above $40 will be enough to convince these funds to leave the sidelines and rush back into silver. If Blythe cannot muster a serious take-down or margin hike this morning, we could be looking at a rapid (and I do mean rapid) run to $44-$45 as shorts are forced to cover, and funds currently on the fence rush back in to silver. 

Gold also has been impressive, setting a new nominal all-time dollar high yesterday, and closing above the critical $1600.  Gold has corrected slightly this morning as well, but like silver at $40, the round $1600 has held thus far.  We would still be surprised if there is not a re-test of $1577 at some point, but gold’s ability to close above $1600 and hold that level indicates it wants to move higher from here. Look for resistance at $1615-$1625, then $1645-$1650.  Sinclair is calling for gold to fly right by his $1650 angel all the way up to $1764.   James Turk is looking for an even bigger move from here (up to $2,000).
Personally, we expect gold to get a very temporary respite next week when Congress compromises and passes the debt limit extension at the last minute. 
Gold should continue to move in Euros and pounds as the euro crisis continues to worsen, and the UK bond sell-off intensifies. 
We’ll leave you with a weak attempt at some humor this morning…
With the UK now entering the debt crisis, ratings firms threatening to downgrade the US, and France entering the picture as the end-game Euro domino…The Doc has come up with a suitable acronym to welcome the newcomers to the debt crisis:

FUK US PIIGS

 Many market participants are expecting a correction in gold at the psychological level of $1,600/oz.
This is quite possible given corrections often take place after reaching record round number highs. Also, corrections tend to happen when there is a lot of noise in the press and media.
Gold’s record high in all currencies is front page news in the Financial Times today which would make any contrarian nervous that the recent move is overdone. However, coverage remains very muted in much of the non specialist financial press – many of whom barely covered or did not even mention the new record gold highs. 
The man or woman in the street, in Europe and much of the western world, remain blissfully unaware of gold’s rising price and unaware of gold’s importance as a store of wealth and an important diversification.
Gold is not overvalued – especially in the long term but even in the short term.
Gold at $1,603/oz is only 2.5% above the recent record nominal price seen on April 29th at $1,563.70/oz. Thus, gold has had a two month correction and consolidation prior to reaching the new nominal highs over $1,600/oz.

From Goldcore:
Gold is trading at $1,604.10/oz, €1,132.20/oz and £995.66/oz.
Gold has fallen in most currencies today and is trading at USD 1,603, EUR 1,130, GBP 995 and CHF 1,315 per ounce. Gold is 0.3% higher in Swiss francs again today after the last two weeks of deepening turmoil saw gold rise in the Swiss franc.

Cross Currency Rates
While Asian equities were mixed, European indices have bounced and Eurozone debt markets have also received a bid as risk appetite is renewed. This is in glaring contrast to yesterday’s real nervousness and shows markets schizophrenic tendencies at the moment.

Gold in USD – 180 Days (Daily)
Many market participants are expecting a correction in gold at the psychological level of $1,600/oz.
This is quite possible given corrections often take place after reaching record round number highs. Also, corrections tend to happen when there is a lot of noise in the press and media.
Gold’s record high in all currencies is front page news in the Financial Times today which would make any contrarian nervous that the recent move is overdone. However, coverage remains very muted in much of the non specialist financial press – many of whom barely covered or did not even mention the new record gold highs.
The man or woman in the street, in Europe and much of the western world, remain blissfully unaware of gold’s rising price and unaware of gold’s importance as a store of wealth and an important diversification.
Gold is not overvalued – especially in the long term but even in the short term.
Gold at $1,603/oz is only 2.5% above the recent record nominal price seen on April 29th at $1,563.70/oz. Thus, gold has had a two month correction and consolidation prior to reaching the new nominal highs over $1,600/oz.

Gold’s Annual Appreciation in the 1970s
Year to date in 2011, gold is only 13% higher in dollars, 7% in euros and 9.4% higher in sterling.
Therefore, it is quite possible that gold targets the next psychological level of $1,700/oz, prior to any meaningful correction.  Higher prices in euros and pounds are especially likely, prior to a correction.
It is worth remembering that in the 1970s gold bull market, gold had annual appreciation of some 30% per annum and had moves of over 73% in 1973 and 66% in 1974 (see table above).
Gold only went parabolic in 1979 when it rose by over 140%.
The conditions today are worse than the 1970s when the U.S. was a net creditor nation and not a net debtor nation – the largest debtor nation the world has ever seen.
‘Armageddon’ has been warned of by President Obama if the United States fails to raise its debt ceiling.
This may be hyperbole used in debt ceiling negotiations with obstinate Republicans but there are many banking analysts, economists and leading financial experts (the ones that predicted the crisis and the continuing crisis) who concur with the American President and are genuinely concerned of an economic meltdown.
We are a long way from gold mania yet and gold coverage in the non specialist financial press remains muted – despite the ‘perfect storm’ for rising gold prices.
More importantly, gold and silver bullion ownership among the population remains very low.

Gold in Swiss Francs – 10 Days (Tick)
As ever, investors would be better served buying gold and silver on the dips and dollar (euro, pound and Swiss franc) cost averaging into allocations.
Attempting to time corrections and speculate on short term moves is extremely difficult and should be avoided by retail investors and all but the most experienced traders.
SILVER 
Silver is trading at $40.33/oz, €28.47/oz and £25.03/oz.
PLATINUM GROUP METALS 
Platinum is trading at $1,779.00/oz, palladium at $791/oz and rhodium at $1,925/oz.
NEWS
(Financial Times)
Gold Beaches £1,000 Barrier – Investors head for havens in debt storm
(Reuters)
Gold hovers below record, extends gains to 12th day
(Bloomberg)
Europe Commodity Day Ahead: Gold May Extend Best Run in 31 Years
(Financial Times)
India’s growing wealth bolsters gold demand
COMMENTARY
(The Telegraph)
Gold bulls and bears clash as price hits new peak
(Irish Independent)
Declan Ganley -Tyranny of Mediocrity in Brussels Will March On – Unless Drastic Action Taken Immediately 
(King World News)
London Trader – Potential for Major Short Covering in Gold
(The Market Oracle)
Marc Faber on Gold, Silver, Deflation and the US Economy
(Zero Hedge)
The Head Of The World’s Biggest Hedge Fund Sees “Economic Collapse” Due To Money Printing By Early 2013 
(Uncommon Wisdom)
Own Gold – The best asset class you can for these kinds of times – Larry Edelson

Ron Paul today blasted the Obama administration as well as those pushing for a continuation of the status quo- more debt and taxes.

Perhaps the most abhorrent bit of chicanery has been the threat that if a deal is not reached to increase the debt by August 2nd, social security checks may not go out.  In reality, the Chief Actuary of Social Security confirmed last week that current Social Security tax receipts are more than enough to cover current outlays.  The only reason those checks would not go out would be if the administration decided to spend those designated funds elsewhere.  It is very telling that the administration would rather frighten seniors dependent on social security checks than alarm their big banking friends, who have already received $5.3 trillion in bailouts, stimulus and quantitative easing.  This instance of trying to blackmail Congress into tax increases by threatening social security demonstrates how scary it is to be completely dependent on government promises and why many young people today would jump at the chance to opt out of Social Security altogether.
DEBT CEILING DRAMA
From Ron Paul:

The debt ceiling debate is providing plenty of opportunity for political theater in Washington. Proponents of raising the debt ceiling are throwing around the usual scare tactics and misinformation in order to intimidate opponents into accepting more debt and taxes. It is important to distinguish the truth from the propaganda.
First of all, politicians need to understand that without real change default is inevitable.  In fact, default happens every day through monetary policy tricks.  Every time the Federal Reserve engages in more quantitative easing and devalues the dollar, it is defaulting on the American people by eroding their purchasing power and inflating their savings away.  The dollar has lost nearly 50% of its value against gold since 2008.  The Fed claims inflation is 2% or less over the past few years; however economists who compile alternate data show a 9% inflation rate if calculated more traditionally.  Alarmingly, the administration is talking about changing the methodology of the CPI calculation yet again to hide the damage of the government’s policies. Changing the CPI will also enable the government to avoid giving seniors a COLA (cost of living adjustment) on their social security checks, and raise taxes via the hidden means of “bracket creep.”  This is a default.  Just because it is a default on the people and not the banks and foreign holders of our debt does not mean it doesn’t count.
Politicians also need to acknowledge that our debt is unsustainable.  For decades our government has been spending and promising far more than it collects in taxes.  But the problem is not that the people are not taxed enough.  The government has managed to run up $61.6 trillion in unfunded liabilities, which works out to $528,000 per household.  A tax policy that would aim to extract even half that amount of money from American families would be unimaginably draconian, and not unlike attempting to squeeze blood from a turnip.  This is, unequivocally, a spending problem brought about by a dramatically inflated view of the proper role of government in a free society.
Perhaps the most abhorrent bit of chicanery has been the threat that if a deal is not reached to increase the debt by August 2nd, social security checks may not go out.  In reality, the Chief Actuary of Social Security confirmed last week that current Social Security tax receipts are more than enough to cover current outlays.  The only reason those checks would not go out would be if the administration decided to spend those designated funds elsewhere.  It is very telling that the administration would rather frighten seniors dependent on social security checks than alarm their big banking friends, who have already received $5.3 trillion in bailouts, stimulus and quantitative easing.  This instance of trying to blackmail Congress into tax increases by threatening social security demonstrates how scary it is to be completely dependent on government promises and why many young people today would jump at the chance to opt out of Social Security altogether.
We are headed for rough economic times either way, but the longer we put it off, the greater the pain will be when the system implodes.  We need to stop adding more programs and entitlements to the problem.  We need to stop expensive bombing campaigns against people on the other side of the globe and bring our troops home.  We need to stop allowing secretive banking cartels to endlessly enslave us through monetary policy trickery.  And we need to drastically rethink government’s role in our lives so we can get it out of the way and get back to work.

As if it weren’t bad enough that silver just passed The Morgue’s stock price, “Silver Prices” just reached the #1 trend on Google!

If silver is at the top of Google trends list now, wait till it crosses $50 and then $100!

Blythe had best start panicking….the sheeple are waking up!

This might not be a technical indicator, but its fun for all of us to point out.

Spot silver has once again surged past JPM’s stock price.

We have a last silver quote of $40.34, and The Morgue at $39.67!

MARKET IS OPEN (Will close in 2 hrs. 28 mins.)
		Metals	Date	Time (EST)	Bid	Ask	Change		Low	High
		GOLD	07/18/2011	14:47	1604.00	1605.00	+9.90	+0.62%	1595.20	1608.50
		SILVER	07/18/2011	14:47	40.24	40.34	+0.97	+2.47%	39.86	40.82

Any predictions for how long until silver doubles up on JPM?

The COMEX Silver Anthem.

(Released as a tribute to Blythe on the day silver regained $40)

This ain’t no temporary typical inventory shortage, uh uh uh
This ain’t no margin hike, cartel smash, “everything’s alright!” one more time, uh uh uh
This is gone (gone) gone (gone) gone (gone) GONE!

Gone!

Gone like a freight-train, gone like yesterday
Gone like a soldier in the civil war, bang bang
Gone like a ’59 Cadillac
Like all the good things that ain’t never coming back
The Silver’s gone (gone) gone (gone) gone (gone) gone, she’s gone

This ain’t no give it time, we’ll call the SLV- maybe we can work it out, uh uh uh
Won’t be no champagne, red rose, bonus, for Blythe this time, uh uh uh
The silver’s gone (gone) gone (gone) gone (gone) GONE!

Gone like a freight-train, gone like yesterday

Gone!

Gone like a soldier in the civil war, bang bang
Gone like a ’59 Cadillac
Like all the good things that ain’t never coming back
She’s gone (gone) gone (gone) gone (gone) GONE!
She’s gone

She’s gone (gone) gone (gone) gone (gone) gone, she’s gone

Gone like a freight-train, gone like yesterday
Gone like a soldier in the civil war, bang bang
Gone like a ’59 Cadillac
Like all the good things that ain’t never coming back
She’s gone (gone) she’s gone (gone) she’s gone (gone) she’s gone
She’s gone

GONE!

Gone like a freight-train, gone like yesterday
Gone like a soldier in the civil war, bang bang
Gone like a ’59 Cadillac
Like all the good things
Well, she’s gone

Long gone, COMEX done me wrong
Never comin’ back, my silver’s gone
Blythe’s at home, sittin’ all alone
She’s packed her bags cause the silver’s gone
Never comin’ back, it’s gone
No no never, no no never, no never comin’ back