Golden Minerals Company

Negative surprises for the U.S. economy are mounting. The latest was the nonfarm payrolls report on Friday, but many worse-than-expected reports have been percolating to the surface in recent weeks in matters ranging from manufacturing output to home prices.

The Federal Reserve, to its credit, has been warning that employment in recent months was improving at a faster pace than the fundamentals merited. So what is its next move?

My expectation is that it will hit the gas, and hard, to lower real interest rates and improve liquidity despite recent protests from regional presidents."

It's many market observer's opinions [including mine] that sometime before summer is out, some form of QE3 will be on its way. This rather short marketwatch.com story is from yesterday...and I thank Florida reader Donna Badach for sending it. The link is here.

During the first few months of 2010 and 2011, America showed encouraging signs of robust economic growth. In both years, though, by the spring or early summer, hopes of the world’s biggest economy mounting a meaningful and sustainable recovery were snuffed out.

That’s why figures showing only a 120,000 rise in US employment in March, released on Friday, have sparked a wave of investor angst. This is the lowest payroll gain since the autumn and just half the previous month’s total. Are we to see a repeat of the “false start” pattern of 2010 and 2011? Surely, this number raises significant questions, again, about the strength of this US recovery.

This story was posted on the telegraph.co.uk website on Saturday...and is Roy Stephens first offering of the day. The link is here.

It's obvious that Mr. Williams is rather underwhelmed by Friday's employment numbers...and doesn't mince words in the King World News blog from yesterday. It's not overly long...and there are some great graphs. It's worth the read...and the link is here.

In the December 2011 testimony to Congress, when Jon Corzine was asked exactly who assured him that transfers were not from any customer funds, he answered: John Corzine: “explicit statements that we were using proper funds, both orally and in writing, to the best of my knowledge…The woman that I spoke to was a Ms. Edith O’Brien.”

With that...and within seconds, an obscure back office employee with the title of Assistant Treasurer, came to the center of what is emerging to be not only one of the largest bankruptcies in U.S. History, but one of the most momentous, as it reaches beyond the financial district of New York into the heartland and creep into the corners of regulatory offices and our judicial system. The growing web around the bankruptcy now brings uncertainty to the very foundations of regulation and judicial oversight in the United States.

And with those words, fiduciary culpability for taking client funds was squarely placed onto 46 year-old Edith O’Brien.

This zerohedge.com story was posted on their website last Friday...and I thank reader Phil Barlett for bringing it to my attention. The link is here.

JPMorgan Chase & Co. trader Bruno Iksil’s outsized bets in credit derivatives are drawing attention to a little-known division that invests the company’s reserves and fueling a debate over whether banks are taking excessive risks with federally insured and subsidized money.

Iksil’s influence in the market has spurred some counterparts to dub him Voldemort, after the Harry Potter villain. He works in London in the bank’s chief investment office, which has assembled traders from across Wall Street to its staff of 400 who help oversee $350 billion in investments. While the firm describes the unit’s main task as hedging risks and investing excess cash, four hedge-fund managers and dealers say the trades are big enough to move indexes and resemble proprietary bets, or wagers made with the bank’s own money.

The trades, first reported by Bloomberg News April 5, stirred debate among U.S. policy makers over the Easter-holiday weekend as they wrangle over this year’s implementation of the so-called Volcker rule, the portion of the Dodd-Frank Act that sets limits on risk-taking by banks with government backing. The law passed after the collapse of the subprime mortgage market triggered the worst financial crisis since the Great Depression.

This story was all over the Internet on the weekend. Who knows, maybe Bruno Iksil's name will show up in a crossword puzzle as well some day. I thank West Virginia reader Elliot Simon for bringing this rather longish Bloomberg story to our attention...and the link is here.

The shortfall in US labor union pension funds is huge and growing rapidly. The latest data, from 2009, from the PBGC showed that these multi-employer plans were 48% underfunded with $331bn of assets to support $686bn of liabilities - and it has hardly been a good ride for those asset values since then.

Critically, as the Financial Times noted yesterday, recent changes by FASB has enabled Credit Suisse to estimate shortfalls more accurately and it paints an ugly picture.

Yes, it certainly does. I thank reader Bob Fitzwilson for sharing this zerohedge.com piece from yesterday with us...and the link is here.

The Obama administration and its European allies plan to open new negotiations with Iran by demanding the immediate closing and ultimate dismantling of a recently completed nuclear facility deep under a mountain, according to American and European diplomats.

They are also calling for a halt in the production of uranium fuel that is considered just a few steps from bomb grade, and the shipment of existing stockpiles of that fuel out of the country, the diplomats said.

That negotiating position will be the opening move in what President Obama has called Iran’s “last chance” to resolve its nuclear confrontation with the United Nations and the West diplomatically. The hard-line approach would require the country’s military leadership to give up the Fordo enrichment plant outside the holy city of Qum, and with it a huge investment in the one facility that is most hardened against airstrikes.

This sounds very much like the "Hull Note" delivered to Japan on November 26, 1941...less than two weeks before the outbreak of hostilities on December 7, 1941 at Pearl Harbor. The Americans knew perfectly well that Japan could not live with this ultimatum...and that war would result. That was the plan...and it worked like a charm.

The above New York Times story from Saturday was something I dug out of yesterday's King Report...and the link is here.

Iran has slammed world powers for imposing preconditions ahead of Saturday’s nuclear talks. The foreign minister, Ali Akbar Salehi, stressed on Monday that “setting conditions before the meeting means drawing conclusions before negotiations.”

­"None of the parties will accept conditions set before the talks," Iran’s PressTV quoted Ali Akbar Salehi as saying, adding that Salehi branded the demands as “completely meaningless.”

The US insists that Tehran should suspend uranium enrichment, which they consider just a few steps from weapons grade, according to leaked reports. Washington also wants Iran to close its underground nuclear facility at Fordo near the holy city of Qom.

This story was posted over at the Russia Times website late last night...and I thank Roy Stephens for sending it along. The link is here.

The first is headlined "Armenia calls for importing Iranian oil products". The second bears the title "India considering return to Iranian gas". And lastly is this story..."Maritime insurer warns over sanctions against Iran". All stories are courtesy of Roy Stephens.

Just as Washington took the unusual step recently of inviting members of the Egyptian Muslim Brotherhood for White House talks to try regain influence in Cairo, Egyptians followed recent gains by the Muslim Brotherhood in parliament to pursue Tehran as strategic partner instead of Washington.

Given the increasingly close cooperation between what could become an Egyptian government run by the Muslim Brotherhood, Washington also may be looking to the Brotherhood as a potential conduit of communications to Iran, a development that could be unsettling to Israel. Publicly, the U.S. is cautioning Egypt against growing ties with Iran, while recognizing the reality of the Brotherhood's possible ascension to leadership in Egypt.

This businessinsider.com story was posted on their website yesterday afternoon...and is another Roy Stephens offering. The link is here.

The Russian military anticipates that an attack will occur on Iran by the summer and has developed an action plan to move Russian troops through neighboring Georgia to stage in Armenia, which borders on the Islamic republic, according to informed Russian sources.

Dmitry Rogozin, who recently was the Russian ambassador to the North Atlantic Treaty Organization, or NATO, warned against an attack on Iran.

"Iran is our neighbor," Rogozin said. "If Iran is involved in any military action, it's a direct threat to our security." Rogozin now is the deputy Russian prime minister and is regarded as anti-Western. He oversees Russia's defense sector.

This is another businessinsider.com story from yesterday afternoon...and another Roy Stephens offering as well. The link is here.

The territorial dispute in the South China Sea between Vietnam, the Philippines, and China is far from over.

The three countries have been going back-and-forth over rights to supposed oil and gas reserves throughout the region, with Malaysia, Taiwan and Brunei also attempting to lay claim on the deposits.

There were hopes the issue would be brought closer to resolution during the recent Association of Southeast Asian Nations summit in Cambodia, but that get-together seems to have had exactly the opposite effect.

This is the third businessinsider.com story in a row. I thank Roy once again...and the link is here.

There are two very big issues that Japan is confronting; energy and taxes. Both of these issues will come to a head over the next sixty days. I don’t see a soft landing.

Fourteen months ago Japan had 54 operating nukes. Today it has one. By the end of May, it will have none. The Japanese press is discussing options such restarting the nukes, but many people want to shut them all down.

There are two significant consequences of the shutdowns: (A) soaring imports of expensive hydrocarbons (LNG, oil and coal), and (B) this summer, there will be as much as a 12% shortfall in electricity to cool homes and run factories.

This rather short zerohedge.com story was posted on their website on Sunday...and I consider it a must read. I thank Phil Barlett for sending it along. The link is here...and the graphs are great.

Warning lights are blinking again in Spain and Italy — the two countries considered most susceptible to a second round of problems — amid signs that banks there are once more loading up on the sovereign debt of their governments.

New data shows that Spanish and Italian banks have been buying such debt in record amounts after the European Central Bank lent financial institutions billions in cheap money over the winter in the hopes that banks would buy more bonds from their own government to tamp down national borrowing costs, which had earlier shot toward the high levels that forced Greece to take a bailout..

From November to February, during which the central bank lent more than 1 trillion euros to 800 European banks, Spanish banks increased their holdings of government securities by 68 billion euros and Italian banks by 54 billion euros, both buying especially debt from their own countries.

This story was posted on The New York Times website on Sunday...and I thank Phil Barlett for sharing it with us. The link is here.

The reliance of eurozone banks on the European Central Bank was demonstrated on Monday when Portugal revealed that its domestic banks were tapping the central bank for record amounts of funding.

The Bank of Portugal said the use by domestic banks for the various facilities available from the ECB rose to €56.3bn in March – up from €47.5bn in February and greater than the previous record level of €49.1bn in August 2010.

Bailed out by the EU and International Monetary Fund in April 2011 for €78bn, Portugal has €12bn earmarked for bolstering its banks' capital positions if necessary in the months ahead.

Just another instance of PIIGS at the trough. Sooner or later they will end up in the same position as Greece is now...default. This story was posted in The Guardian yesterday...and is another Roy Stephens offering. The link is here.

Until the rising reserve powers of Asia, Russia and the Gulf regain trust in the shattered credibility of the world’s two great fiat currencies - if they ever do - gold is unlikely to crash far or remain in the doldrums for long. `Peak gold’ cements the price floor in any case.

The “marginal cost” for mining gold is around $1450. That is when miners leave low-grade ore in the ground and weaker producers shut down. It creates a natural floor of sorts. Besides, `peak gold’ is a more immediate reality than `peak oil’, he said. There has been no equivalent to the shale revolution seen in oil and gas. World output has been stuck for a decade at around 2700 tonnes a year despite a fourfold increase in investment. There are no great finds, no Witwatersrand this time.

There will come a day then the bullion super-cycle finally sputters out. My guess is that it will come once Europe’s monetary system has returned to a viable footing - either by real fiscal union, or by break-up - and once China’s RMB becomes fully convertible and takes it place as the third pillar of the world’s currency system. We are not there yet.

This rather longish [for him] Ambrose Evans-Pritchard offering was posted over at The Telegraph website late on Sunday night...and I plucked it from a GATA release. The link is here.

It was just the tip of the iceberg. We're talking about last week's move by Zijin Mining Group to launch a $299 million bid for Norton Gold Fields, which operates the Paddington goldmine near Kalgoorlie.

There was some surprise expressed at this. While Chinese companies have been snapping up bulk and base metals projects around the world, it was generally thought they had little interest in picking up gold projects.

Think again. A very reliable source close to several gold companies tells us Chinese interests are not only taking stakes in explorers and miners, they are also buying gold directly from producers and shipping it home.

This story was posted over at theaustralian.com.au website yesterday...and is posted in the clear in this GATA release. This story is well worth your time...and the link is here.

The hundreds of gold traders and pawn shops that have sprung up across Greece over the past three or four years are rapidly making it into the police’s crime bulletins on an almost daily basis.

Behind many of the garish store signs advertising “I buy gold,” found on almost every main street in every neighborhood in the country, what is abundantly clear is that laws and regulations stay at the door, as authorities in Greece find themselves stymied by the massive trade in gold and unable to get a grip on the number of such stores that are cropping up or the manner in which they go into business.

The Bank of Greece, which is responsible only for gold traded for investment purposes (in the form of coins, slabs and ingots), has been taken by surprise by the surge in the domestic gold market, but there is little it can do as the street trade in gold is beyond its jurisdiction. What is under its jurisdiction is the “protection of credit,” and according to the interpretation of this task in Law 3601 from 2007, this also includes pawn shops, as it is the duty of the Bank of Greece to issue licenses only to certified professionals.

The people actually practising the trade, however, and even those doing so legally, evoke a regulation issued by the police in 1996 that allows the Greek police to issue licences for shops that buy or trade in gold or act as pawnbrokers, differentiating between those who hold valuables for one month and those who can hold them for up to six months.

This short story was posted over on the Greek website ekathimrini.com...and it's worth running through. I thank reader "David in California" for sending it my way on Sunday night...and the link is here.

Eric Sprott has gained a reputation as an implacable bear. In fact, that has not always been the case. Back in the 1980s, he was bullish on the stock market. But that's ancient history. Since 1999, he has been Canada's highest-profile doomsayer. The markets are in long-term decline and everything is going to hell.

He was in his usual end-of-the-financial world-as-we-know-it form when he spoke to an audience of financial professionals in Toronto last week at the kick-off of his company's annual national road show. In a presentation titled "Mania. Manipulation. Meltdown." Mr. Sprott predicted the collapse of almost everything.

What's the answer for the investor who, after listening to all this, is in a state of near-panic? Surprisingly, not gold. "It was the investment of the last decade," he says dismissively.

The answer is silver. Eric Sprott has become Canada's Silver Bull. And he says his conviction has nothing to do with a new fund his company is launching, the Sprott Silver Equities Class. He's a true believer. "It's the investment of the decade," he proclaims.

The author of this piece, Gordon Pape, like every other main stream pundit, dismisses this without checking the facts of the case. Mr. Pape is the best-selling author/co-author of many acclaimed investment books...but I'll place my bets on Eric's opinion anytime. It's posted over at the gurufocus.com website...and I thank West Virginia reader Elliot Simon for sending it along. The link is here.

As per a decree issued by the Prime Minister's office on April 3, gold has been banned as a medium for exchange, along with seven bullion-related activities that will take effect from May 25.

The decree prohibits use of gold as a medium of exchange; manufacturing gold jewellery without a licence from the central bank; trading gold without a licence; and conducting any other gold-related businesses without the approval of the prime minister and the central bank.

In addition, licensed gold enterprises must satisfy requirements such as having registered capital of 100 billion Vietnamese dong; having operated in gold trading for two years; paying tax above VND500 million; and having at least a branch in three central provinces and cities.

This story showed up on the saigon-gpdaily.com.vn website last week...and is definitely worth the read. I plucked this story from a GATA release...and the link is here.

Sprott Asset Management's John Embry told King World News yesterday that Western governments and central banks would love the gold price to collapse but he adds that gold and gold mining investors shouldn't be overly concerned about ugly price charts because market manipulation is designed to make the charts look ugly and prompt selling.

I thank Chris Powell for providing the headline and the introductory paragraph. The link to the KWN blog is here.

Given last week's selloff in gold and silver, it's time to refresh our "corrections" chart and put the pullback in perspective. The drop in precious metals hasn't been fun for those who already own all the gold they want, but unless one thinks the bull market is over, it's important to end-game profitability to look at corrections as good buying points.

First, for those who've been rattled by this recent selloff, it's times like these when you have to examine the fundamental reasons why you own gold and silver in the first place. If you bought gold primarily as a speculation that would "only go up," I have some bad news: Your reason is weak, and you might get flushed out by one of these corrections before it's really time to exit.

Conversely, if you bought because you genuinely fear what is happening to the value of your currency, or the very real possibility of high inflation, or that global events will affect your personal standard of living, or because "real" interest rates provide a negative return, or you're tired of government meddling and mismanagement, then you understand what gold is really for and will see a temporary pullback for precisely what it is.

This excellent essay appeared in yesterday's edition of Casey's Daily Dispatch...and is preceded by an equally excellent introduction by Casey Research senior metals investment strategist, Louis James. It's a must read...and the link is here.