Captain Switcheroo

Cash out of gold!!! - Financial Times

Cash out of gold and send kids to college

By Peter Tasker

Just like the non-barking dog in the Sherlock Holmes story, the gold price has become strangely insensitive to the usual stimuli.

The eurozone remains locked in an existential crisis. Growth is fading in the US and China, and policy makers appear conflicted or just plain clueless about how to respond. Meanwhile, losses and scandals at large banks are coming to light weekly.

Unsurprisingly, investors are running scared. The global flight to safety has seen capital flood into “core” sovereign bond markets, driving yields down almost to vanishing point.

Yet, despite this perfect storm of financial instability, the gold price remains becalmed. In fact, over the past year gold bullion has behaved like a “risk on” asset, rising and falling in sync with stock markets.

This makes sense. For most of human history, gold existed as an alternative to conventional finance, a “store of value” that could be relied on in times of distress and crisis. Gold bugs may hate to admit it, but those days are long gone. Gold has become just another financial asset, as vulnerable to the shifts of investor sentiment as an emerging market. It is symbolic of today’s world that one of the largest exchange traded funds is invested in gold bullion, not equities.

So why has the golden dog suddenly gone silent? One likely reason is that the price has simply become too rich.

Read the full article @ http://www.ft.com/cms/s/0/312bf416-d1a7-11e1-bb82-00144feabdc0.html#ixzz237sWWVwx

Crisis Armour...

An Old Farmer's Advice

Keep skunks and bankers at a distance.

Life is simpler when you plow around the stump.

A bumble bee is considerably faster than a John Deere tractor.

Words that soak into your ears are whispered...not yelled.

Meanness don't just happen overnight.

Forgive your enemies; it messes up their heads.

Do not corner something that you know is meaner than you.

It don't take a very big person to carry a grudge.

You cannot unsay a cruel word.

Every path has a few puddles.

When you wallow with pigs, expect to get dirty.

The best sermons are lived, not preached.

Most of the stuff people worry about, ain't never gonna happen anyway.

Don 't judge folks by their relatives.

Remember that silence is sometimes the best answer.

Live a good and honorable life, then when you get older and think back, you'll enjoy it a second time.

Don 't interfere with somethin' that ain't bothering you none.

Timing has a lot to do with the outcome of a rain dance.

If you find yourself in a hole, the first thing to do is stop diggin'.

Sometimes you get, and sometimes you get got.

The biggest troublemaker you'll probably ever have to deal with, watches you from the mirror every mornin'.

Always drink upstream from the herd.

Good judgment comes from experience, and a lotta that comes from bad judgment.

Lettin' the cat outta the bag is a whole lot easier than puttin' it back in.

If you get to thinkin' you're a person of some influence, try orderin' somebody else's dog around.

Live simply, love generously, care deeply, speak kindly, and leave the rest to God.

Don't pick a fight with an old man. If he is too old to fight, he'll just kill you.

Chinese Yuan the next reserve currency?

Gold and why you might want to hold some

What is LIBOR

Most of you would have heard about the ongoing LIBOR saga that has engulfed the financial landscape recently? Here is a brief explanation for those who are unsure as to what it stands for and the significance of it (cut and pasted from www.tfmetalsreport.com):

What Is LIBOR?

Submitted by OutLookingIn on July 5, 2012 - 4:04pm.

Some Know. Many do not.

LIBOR = London Inter Bank Offered Rate.

The LIBOR is the interest rate guide at which banks lend to each other. Many other interest rates are calculated using the LIBOR, such as mortgage rates, forward rate agreements, futures contracts, interest rate swaps, floating rate notes, syndicated loans, currencies, (especially the US dollar) and over-the-counter derivatives.

Every day, the British Bankers Association (BBA) surveys a panel of internationally active banks, asking them to provide the rates at which they could borrow "reasonable amounts" in a particular currency and maturity at 11:00 GMT. The BBA then eliminates the highest and lowest quartiles of the distribution and averaging the remaining quotes, to arrive at the LIBOR fix rate.

Around $350 trillion of lending and derivatives is priced of LIBOR. If misconduct by banks caused LIBOR to increase by a mere one tenth of one basis point (0.001%), this amounts to $35 billion a year in extra interest.

Barkleys, RBS and the Bof E are just the tip of the iceberg. More revelations to come.

Watch the LIBOR over this next month as it is now under the global financial microscope, as rates will invariably  rise, which is not good for the fragile global economy that is showing concrete signs of slowing down.