The Ignorance Is Willful - Dr. Burry

You might remember Dr. Michael Burry as the hedge fund manager who made hundreds of millions of dollars betting on the collapse of the housing market.  You, also, might remember everyone from the mainstream media (MSM) to the Federal Reserve claimed nobody could have seen the 2008 financial collapse coming.  

How did Dr. Burry know a financial catastrophe was on the way while most financial experts and media were totally in the dark?  This year’s commencement address at UCLA’s Department of Economics was given by Dr. Burry, and he says, “The ignorance is willful.”

(Click here to see Dr. Burry’s June 20, 2012,UCLA address.)  

“The ignorance is willful.”  I think you can say the same thing about the ongoing banking crisis.  Last Thursday, credit rating giant Moody’s downgraded the long-term credit ratings of 15 of the biggest North American and European banks.  All but four were cut at least two notches, and these are some of the biggest banks in the world.  RBC, JP Morgan, BNP Paribas, RBS and UBS are household names in Canada, U.S., France, UK and Switzerland.  (Japan’s Numara and Australia’s Macquarie were downgraded earlier by Moody’s.)  (Click here for a complete list of downgraded banks from Business Insider.)  

 I can’t find a time when a major credit ratings company like Moody’s has downgraded this many major banks in so many parts of the world at the same time.  Sure, critics of Moody’s will say they are way behind the curve, but the fact is the company has come out with bold and devastating bank downgrades when the world is being told it is in “recovery.” Please keep in mind, dozens of Italian and Spanish banks were, also, downgraded in the last few months by Moody’s.


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Silver Update 15th June 2012 - Butler and Bernanke

Good break down of recent Ted Butler comments about silver short positions and bullion banks, also the eventual price of silver and silver price manipulation.

China's Gold Investment Demand to Grow More Than 10% - ICBC

Gold-investment demand in China may gain more than 10 percent this year as buyers seek a haven from Europe's debt crisis and the prospect of weakening currencies, according to the country's largest bullion bank.

"Investors here want to hold part of their assets in gold to hedge for the risks, especially now that the financial crisis has evolved into a sovereign crisis," Zheng Zhiguang, general manager of the precious-metals department at Industrial and Commercial Bank of China Ltd., said in an interview in Shanghai.

China will topple India this year as the largest bullion market as rising incomes bolster demand, the World Gold Council forecasts. Gold may gain for a 12th year in 2012 as European policy makers strive to avoid a breakup of the euro zone and the U.S. Federal Reserve weighs more stimulus to aid the recovery. Investors in China, facing lackluster equity markets and property curbs, are looking more to the metal, Zheng said June 6.

"It's necessary for individual, institutional or even government investors to hold gold when the value of money is decreasing at a time of possible quantitative easing or excessive money-printing practices," said Zheng.

Investment demand in China was a record 98.6 metric tons in the first quarter, 13 percent higher the same period in 2011, according to figures from the producer-funded council. Last year, it climbed 38 percent to 258.9 tons compared with 2010, as overall demand gained 20 percent to 769.8 tons. China's total gold demand may reach 1,000 tons this year, the WGC has said.

Debt Crisis
Gold for immediate delivery traded at $1,599.02 an ounce at 12:41 p.m. in Shanghai, 2.3 percent higher this year. The price touched $1,526.97 on May 16, the lowest level since December, as Europe's debt crisis weakened the euro and investors favored increased dollar holdings.
While a stronger dollar may pressure bullion, "I'm optimistic on the gold prices in the long term because of the China demand," said Zheng. "There are too many uncertainties now in the global economy, politics and the financial sector."

ICBC represents more than 20 percent of the turnover on the Shanghai Gold Exchange, China's largest spot market for precious metals, and more than 30 percent of the gold-leasing business in China, according to Zheng. The lender accounted for about 16 percent of nationwide bullion sales last year.

Gold imports by mainland China from Hong Kong climbed 65 percent to a record 103.6 tons in April, according to data from the Census and Statistics Department of the Hong Kong government released on June 5. The increase came even as Lao Feng Xiang Co. (900905), the mainland's biggest gold-jewelry maker, said in May that gold-demand growth in China may stagnate this year as falling prices put off investors and an economic slowdown crimps sales.

Hurt Exports
The second-largest economy expanded 8.1 percent in the first quarter, the slowest pace in almost three years as Europe's crisis hurt exports. Should Greece exit the euro, the expansion may slow to 6.4 percent in 2012 without stimulus, China International Capital Corp. said on May 23.

China, which on June 7 announced the first cut in borrowing costs since 2008, has curbed property investments to avoid a bubble. The Shanghai Composite Index (SHCOMP) declined 15 percent in the past year, while spot bullion gained 5.5 percent.

On a three-month basis, gold demand in China eclipsed India's over the past two quarters, according to the World Gold Council. The increased wealth of China's middle class is helping to drive consumption, Albert Cheng, the council's Far East managing director, said in an interview in May.

Last Resort
Greek voters are set to go the polls for the second time in two months on June 17 in a vote that may determine whether the country stays in the 17-nation euro. Goldman Sachs Group Inc. (GS) said gold remains the so-called currency of last resort, forecasting a rally by year-end, according to a May 9 report.

Spanish Economy Minister Luis de Guindos said on June 9 that he would request as much as 100 billion euros ($126 billion) in emergency loans from the euro area to shore up the country's banking system. That, coupled with weekend trade data from China, helped to boost stocks and commodities today.

As China allowed investors to buy and hold gold only in recent years, "there's explosive, pent-up demand because the Chinese have an attachment to gold," said Zheng, predicting that growth in investment demand will beat the expansion in jewelry sales. "There's great potential for expanding China's physical-gold investment market."

China's Gold Investment Demand to Grow More Than 10% - ICBC