Eurobonds in Favor Against U.S. Bonds

In a previous article in March 2012 I pointed out that it was the perfect time to get out of U.S. bonds and go into eurobonds. Just recently we have a huge confirmation that the market is favoring European bonds (EU) over U.S. bonds (TLT) (Chart 1). We see that the WisdomTree Dreyfus Euro ETF (EU) has shot upwards on 21 August 2012 on news that the ECB would buy Italian and Spanish bonds. That day, the euro jumped to a seven-week peak against the U.S. dollar.

Chart 1: TLT Vs. EU

U.S. bonds yields have not kept pace (yields have not risen) with the rise of european bonds according to the correlation in Chart 1. So investors should quickly take action. Read more here.

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Mike Maloney Survives Car Crash

Mike Maloney is one of those people I look up to and I just heard about his incredible story about him being in a frontal car crash.

http://goldsilver.com/article/mike-maloney-in-horrible-car-crash-with-tesla/

Luckily, Mike survived this car crash and I'm glad nothing of permanent damage was incurred.

I always say: "you can have all the gold and silver on this world, but health will always come first."

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Peter Schiff Goes Undercover: DNC Convention 2012

Peter Schiff goes undercover at the Democratic National Convention (DNC) convention in North Carolina.

Top notch comedy! Peter is talking the complete opposite of his own opinions and shows how ridiculous it sounds.

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Is it too late to buy Silver Lake Resources?

Silver Lake Resources (SLR) is one of those Australian gold companies that has defied gravity in the gold mining industry. While the 2008 economic crisis hit the whole world, Silver Lake Resources managed to return more than a 1000% in gains starting from year 2008 up to today (Chart 1). The question is, how much can it still go up?

Find out the answer here.

Chart 1: Silver Lake Resources (SLR)

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CME adds Silver Stock Depository: CNT DEPOSITORY, INC.

Today the CNT Depository has been added to the already existing warehouse stock depositories at the COMEX (CME): Brink's, J.P. Morgan Chase Bank, Scotia Mocatta, HSBC Bank, Delaware Depository. The CNT Depository is located at 722 Bedford St., Bridgewater, MA. CNT, Inc. began as a small numismatic business in 1973. Since that time they have grown into the largest privately owned company in the precious metals industry. CNT, Inc. has an annual net revenue of $8 Billion in 2011. Other than silver, the company also distributes platinum, palladium and gold.

The initial amount of silver currently deposited is from the eligible class and is in the amount of 631389 troy ounce or 0.4% of the total silver stock at the COMEX. This amount is so small that there shouldn't be any effect at all on the other competing depositories.

Investors have an extra alternative at hand now to store their physical silver (SLV) bullion.

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Chart 1: Silver Stocks CME

As for the silver warehouse stock level at the COMEX (Chart 1), it has been in a rising trend since August 2012, which possibly means there is a temporary declining demand in silver.

Silver lease rates (Chart 2) have been declining sharply and investors need to watch out for a spike in lease rates, which accompanies a drop in the price of silver.

I advise investors to at least put a stop limit in silver in case the silver price plunges.

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Chart 2: Silver Lease Rates

The reason why I anticipate a correction in the silver price is because technically, the silver price is overbought, with the MACD topping out for the 1 year silver chart (Chart 3).

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Chart 3: Silver Price

As for the long/short positions in silver, we noted that the LCNS level has increased quite a bit, indicating higher silver prices in the future as I pointed out in this article.

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Chart 4: Silver LCNS (Got Gold Report)

Last but not least, the premium on silver has been rising slowly and based on historic correlations, this is bullish for the price of silver (Chart 5).

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Chart 5: Sprott Physical Silver (PSLV) Premium

Conclusion:

Overall I'm bullish on the silver price considering the macroeconomic indicators of rising debt, extra QE stimulus, rising unemployment. But the short term technical indicators point to a possible short term correction. It's advisable that investors put a stop limit on their silver positions in case of a plunge in the silver price.

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U.S. Debt at 16 Trillion

It's official, U.S. debt has exceeded 16 trillion dollars. It's like having a birthday or something, but we shouldn't celebrate.

Chart 1: Total Public Debt

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Gold - Silver Ratio breaks down

The gold - silver ratio has finally started to break down and there is still a ways to go lower.

That means you buy silver turbos or AGQ.

Chart 1: Gold Silver Ratio

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