Twenty-four Canadian mining companies, 17 universities and a federal agency have teamed up in a five-year, $11.8-million project to advance mineral exploration techniques. Announced May 14 to mark National Mining Week, the Footprints program “is expected to enhance the ability of geologists to assess the range, depth and composition of ore bodies and mineral deposits, even those lying hundreds of metres underground,” according to a statement from Laurentian University.

The money comes from the Natural Sciences and Engineering Research Council, a federal agency that’s contributing $5.1 million, and the Canada Mining Innovation Council, an industry group that’s putting up $2.8 million in cash and another $3.9 million in kind. The project will involve over 40 geoscientists from universities across Canada.

Barrick VP Francois Robert discusses Footprints
at a CMIC event prior to the funding announcement.

“Essentially the work we’re pursuing will allow us to better detect the subtle signals or ‘footprints’ of mineral deposits far below the surface,” stated Michael Lesher, research chairperson in mineral exploration and professor of economic geology at Laurentian University. “It will help us devise better tools for remotely sensing deeply buried ore bodies and, ultimately, we believe it can improve the way we approach mineral exploration and resource development in Canada and around the world.”

Francois Robert, VP and chief geologist for global exploration at Barrick Gold TSX:ABX, said the project “results from an unprecedented level of collaboration among the exploration industry, service providers, government institutions, researchers and universities. Such a level of collaboration sets a new standard for our industry.”

An NSERC statement added that grants like these “enable companies to access the expertise, knowledge and facilities at universities and provide training to students in the essential technical skills required by industry.”

In a separate news release CMIC exploration research director Alan Galley said, “The buy-in of a broad range of service providers as well as industry sponsors was crucial to ensuring the project had a commercialization component. Most research proposals include acquiring data and generating knowledge, but Footprints includes commercialization as the extra step towards true innovation.”

Watch a video of Francois Robert discussing the Footprints project: Exploration can be “like trying to find a needle in a haystack but through the roof of a barn.”

Golden Predator to become royalties and streaming company Gold Bullion Royalty Corp

by Greg Klein

(Update: Effective February 22, 2013, Golden Predator Corp began trading as Americas Bullion Royalty Corp TSX:AMB.)

In a late afternoon announcement January 18, Golden Predator Corp TSX:GPD proposed a new name and strategy. Currently an advanced-stage exploration company moving towards production, Golden Predator plans to become Gold Bullion Royalty Corp, a company “focused entirely on royalty creation.”

The proposed new company, Golden Predator Canada Corp,
would continue advancing Yukon’s Brewery Creek towards
its targeted 2014 gold production.

The company stated it “intends to build on its existing portfolio of 34 projects to increase revenue and provide lower risk exposure to shareholders through a variety of gold and silver projects in which it will retain a royalty, metal stream or other interest.

“The company plans to divest Golden Predator Canada Corp, which will continue to advance the Brewery Creek Project, as well as a number of other significant properties across the Yukon. This proposed segregation of its two main business components, by spin-out or other mechanism, is designed to maximize shareholder value by allowing the market to independently value two very different businesses.”

How that will happen has yet to be determined. Pending tax and legal advice, the process could involve “a plan of arrangement, dividend or other suitable method” which would have shareholders owning both companies, which would be staffed independently. Golden Predator Canada Corp would apply for a TSX or TSXV listing.

The Gold Bullion portfolio already includes gross proceeds royalties on Midway Gold’s TSXV:MDW Pan and Gold Rock deposits, a 4% GPR on Barrick Gold’s TSX:ABX DTR property, a 1% GPR on a nearby Barrick property and a 2% NSR on Silver Predator’s TSX:SPD Taylor Silver project.

The statement added, “The company controls a royalty package of 34 North America properties, most of which are owned by Gold Bullion Royalty Corp and under lease to a variety of companies including Evolving Gold [TSX:EVG], Orsa Ventures [TSXV:ORN], Columbus Gold [TSXV:CGT],” among others.

“The royalty portfolio also includes several deeded royalties covering projects of McEwen Mining [TSX:MUX], NV Gold [TSXV:NVX] and Silver Scott Mines [OTCPK:SILS].” While the royalty packages brought in $799,762 last year, the company expects royalty revenue to increase as its portfolio grows and projects advance.

The royalty portfolio is “unique in the mineral development industry due to its ability to receive the majority of projected revenues in-kind (gold bullion as opposed to cash),” the statement added.

Golden Predator Corp’s stock opened January 18 at $0.345, a penny higher than its previous close. The shares then reached $0.35 before closing on $0.33. With 153 million shares outstanding, the company had a press time market cap of $50.49 million.

A mining and exploration retrospect for December 8 to 14, 2012

by Greg Klein

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U.S. politicians ponder windfall royalties

The United States has joined the list of countries considering additional ways to mine miners, according to a Wednesday Reuters story. Some American politicians are talking about royalties as high as 12.5%, the same benchmark applied to certain other resources, including oil and gas.

Reuters said the proposal would get about $700 million during the lifespan of Freeport-McMoRan’s copper-molybdenum operations in Colorado, Arizona and New Mexico. Last year alone, the royalty could have taken $150 million from Barrick’s TSX:ABX Goldstrike mine in Nevada, according to Reuters’ figures. Barrick told the news agency the company’s taxes have already jumped four-fold over five years.

Democrat Representative Raul Grijalva, a proponent of the 12.5% levy, sees it differently. “As we face these fiscal challenges, these are the pennies that we should pinch,” Reuters quoted him. Along with some other U.S. federal politicians, Grijalva also wants to review miners’ tax breaks.

Previous attempts to raise miners’ taxes have failed, Reuters stated, “as the industry has strong political allies.” The story added that “state and local governments often catch a windfall from mining revenue.”

Ivory Coast hikes taxes but overestimates profits, miner says

A new tax on Ivory Coast gold extraction underestimates cash costs by nearly 50%, according to at least one source. New legislation that applies to 2012 production assumes cash costs of $615 an ounce, Reuters stated on Friday. The tax on “profits” above that amount will fluctuate with the yellow metal’s price. At $1,600, that comes to 17%. The rate will be lower for companies that pay the country a corporate tax, the news agency added. Randgold Resources CEO Mark Bristow called the new levy, expected to raise $79.8 million, a “punitive tax,” Reuters said.

In a December 7 Bloomberg report, Endeavour Mining TSX:EDV spokesperson Nouho Kone said Ivory Coast gold production can actually cost between $1,000 and $1,200 an ounce. “The worst-case scenario would be to see companies shut down their mines in the short term,” he told Bloomberg. Reuters stated that Perseus Mining TSX:PRU put its $160-million Sissingue project on hold last September “pending clarification of the fiscal regime applicable to the project.”

Maybe Ghana too

Ghanaian President John Dramani Mahama’s re-election brings to mind his previous effort to impose a 10% tax on windfall profits, Monday’s Financial Post reported.

The government had already raised miners’ corporate taxes from 25% to 35% and imposed “a uniform regime for capital allowance of 20% for five years of mining,” the FP stated. But the government’s intended windfall tax had been shelved due to industry pressure, according to a Wednesday Reuters dispatch.

Reuters added that government discussions with gold miners are underway “to loosen up so-called ‘stability agreements’ held by some firms that lock in royalty and tax rates.” This year Ghana raised gold royalties from 3% to 5%, but the stability agreement exempted companies like AngloGold Ashanti and Newmont Mining TSX:NMC, the news agency stated.

Unions lose bid to block foreign workers from staffing B.C. mine

HD Mining International called it a “massive victory,” the Globe and Mail reported Friday. A federal court judge has allowed the company to import Chinese workers for its proposed Murray River coal mine in British Columbia. Two unions had applied for an injunction blocking the work permits after learning that HD Mining planned to staff its underground operation exclusively with Chinese workers—which would total over 400 at full production.

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Investors embrace resource estimates from Pretium and Golden Reign

by Greg Klein

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Visible gold shines through core samples from
Pretium Resources’ Valley of the Kings zone.

Two resource estimates announced November 20 received warm market welcomes. Pretium Resources TSX:PVG increased the indicated category of its Brucejack Project in northwestern British Columbia by 66%. Golden Reign Resources TSXV:GRR, meanwhile, debuted the San Albino-Murra Property in western Nicaragua with its first-ever estimate.

Pretium last released updates on September 7 for both the Valley of the Kings zone and the West zone 500 metres north. The November 20 update concerns Valley of the Kings only.

Using a cutoff of 5 g/t gold-equivalent, the resource shows:

• an indicated category of 16.1 million tonnes averaging 16.4 g/t gold and 14.2 g/t silver for 8.5 million gold ounces and 7.3 million silver ounces
• an inferred category of 5.4 million tonnes averaging 17 g/t gold and 15.7 g/t silver for 2.9 million gold ounces and 2.7 million silver ounces

The Valley of the Kings resource now includes drilling from Galena Hill, previously thought to be a separate zone. The company stated that the Valley remains open to the east and west along strike and at depth.

By boosting the indicated category 66%, the resource pushes Brucejack further along its feasibility study, Pretium president/CEO Bob Quartermain tells ResourceClips. “This gives us a really good base to do the feasibility study and develop a mine plan around the high-grade resource at the Valley of the Kings,” he says. He hopes to have feasibility complete by the first half of next year.

“We continue to de-risk the project and I think the next major catalyst for the company will be the feasibility study,” he adds. “There’s also the underground bulk sample, which we’re hoping to take again in the second half of next year. Those continue to create value for our shareholders. Obviously the market likes the way we’re de-risking the project and certainly reacted positively today.”

Indeed Pretium opened November 20 at $13.07 and reached $13.25 before settling back at a $12.95 close—still comfortably above the previous day’s $12.77 close. The stock has a 52-week high of $18.15 and low of $8.27. With 94.83 million shares outstanding, the press-time market cap came to $1.23 billion.

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A mining and exploration retrospect for November 3 to 9, 2012

by Greg Klein

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“So why buy the seniors?”

Briefly but significantly, Goldcorp TSX:G overtook Barrick TSX:ABX to become the world’s biggest gold miner by market cap. Goldcorp closed Tuesday with a $35.32-billion cap, slightly above Barrick’s $35.3 billion, Reuters stated.

That, despite the fact Barrick produces far more gold, with guidance of 7.3 million to 7.5 million ounces this year, compared to Goldcorp’s 2.35 million to 2.45 million ounces. Newmont, the world’s second-largest gold producer, expects to come in “at the low end” of its projected 5 million to 5.1 million ounces.

“It’s not necessarily that Goldcorp is doing so well, it’s just that Barrick is doing so poorly,” Reuters quoted John Ing, Maison Placements Canada president and mining analyst. The news agency noted that Barrick shares fell nearly 25% so far this year, while Goldcorp weathered the storms with a mere 3.5% drop.

In a Friday Bloomberg article, one of Barrick’s fired CEOs pointed out the proportionately greater potential of smaller companies. “You’ve got no growth in total in the industry and a lot of your mines are aging and closing down, so you have to work very hard just to stay even,” Randall Oliphant told the news agency. Now executive chairman of New Gold TSX:NGD, Oliphant was Barrick’s CEO from 1999 to 2003. He told Bloomberg that once a company’s producing more than two million ounces a year, shareholders’ growth expectations are hard to meet.

Bloomberg’s index of 20 mid-tier gold miners “rose 1.3% in the past three years through [Thursday], compared with a 19% decline in a gauge of 14 seniors. In the same period, New Gold has climbed 154% in Toronto, while Barrick slumped 18%,” the agency reported.

Craig West, an analyst with GMP Securities, told Bloomberg, “Barrick isn’t going to grow by 50% in the next three years. I can name eight different juniors that will, so why buy the seniors?”

The juniors West referred to might have been mid-caps like New Gold, which closed Friday with 462.55 million shares outstanding at $10.74 for a market cap of $4.97 billion. But some micro-caps don’t do too badly. On Monday Brixton Metals’ TSXV:BBB share price rose 33%, from $0.15 to $0.20, on news from its Thorn silver-gold-polymetallic project in British Columbia. The $13.55-million-market-cap company closed Friday at $0.215, with 63.03 million shares outstanding.

By Wednesday’s close, Barrick’s market cap was back on top. The giant closed Friday with a billion shares outstanding at $36.06 for a market cap of $36.08 billion. On October 31 Barrick announced a quarterly dividend of $0.20.

Goldcorp closed the week with 811.21 million shares at $44.24 for a market cap of $35.89 billion. Goldcorp announced a monthly dividend on November 5 of $0.045.

Friday’s closing bell found Newmont with 491.54 million shares at $48.07 for a $23.63-billion market cap. On October 31 the company announced a quarterly dividend of $0.35.

Cow Mountain no bull, says Barkerville

Still under a Cease Trade Order imposed last August, Barkerville Gold Mines TSXV:BGM intends to release a revised resource estimate later this month, Business in Vancouver reported on Tuesday. The CTO remains in effect until the company’s Cow Mountain resource estimate meets the B.C. Securities Commission’s satisfaction.

Last June Barkerville shocked and awed the market with an indicated resource of 69 million tons (not tonnes) grading an average 5.28 g/t gold for 10.63 million gold ounces.

On June 28 close, Barkerville’s stock sat at $0.81. The following day, when the Cow resource was announced, Barkerville opened at $1.35 and closed at $1.21. That evening the company announced “incentive stock options to certain directors, officers, employees and consultants of the company to purchase up to an aggregate of 634,980 common shares” at $1.21 a share. The next trading day, July 3, the stock hit a 52-week high of $1.67. On the August 13 CTO it closed at $1.22.

Investor enthusiasm aside, some observers were skeptical, even derisive of the resource estimate. “Hilarious” was the Northern Miner’s response.

Barkerville’s June 29 press release also suggested a non-43-101 “total geological potential” for the Island Mountain/Cow Mountain/Barkerville Mountain trend of 405 million to 684 million tons with an average grade between 4.11 g/t and 5.49 g/t for 65 million to 90 million gold ounces. Those numbers, the company stressed, were potential “and it is uncertain if further exploration will result in the delineation of mineral resources.”

Referring to the 43-101 resource estimate, Barkerville president/CEO Frank Callaghan told BIV, “We’re really confident in the numbers. We support the guy that’s done the work and we’re not prepared to throw him under the bus. He’s done a good job.”

The company has been twinning holes and drilling deeper, and has contracted Snowden Mining Industry Consultants to oversee the new 43-101. As a result it should be “very, very comprehensive to a point where a 10-year-old is going to be able to read it and understand it,” Callaghan told BIV.

The story quoted Northern Securities mining analyst Matthew Zylstra, who said that Snowden “adds some credibility. So whatever they come out with, I think this is going to be viewed a lot more positively.”

But he added, “I think they’re going to use a lot more strict criteria, so my feeling is that they won’t come out with the same kind of numbers that [the previous QP] Peter George did.”

Sub-Saharan Klondike

Where better to find an elephant country than in elephant country? Except for oil, South Sudan’s underground riches have long been neglected. But, according to a Friday Reuters dispatch, artisanal miners talk of finding the occasional nugget grading 200 grams or more. Now foreign companies are lining up in anticipation of new mining legislation scheduled to pass later this month. It’s expected to spark a licensing and exploration rush for several minerals.

“Nobody knows the extent of South Sudan’s mineral reserves because the 22-year war prevented exploration,” Reuters stated. “The latest geological surveys date back to the 1970s and ‘80s, but mining officials say diamond and gold deposits in South Sudan’s mineral-rich neighbours are encouraging. They describe the 16-month-old country as virgin territory.” South Sudan split from Sudan last year.

The news agency noted the trials of working “in a landlocked country with just 300 kilometres of paved road.” As government adviser Rainer Hengstmann told Reuters, “You need a railway if you want to go large-scale. It will take time. They really need roads and power.”

In the meantime artisanal miners prevail. Reuters described dozens of “Toposa tribesmen and women, festooned with plastic necklaces, brass piercings and beaded amulets, hack[ing] away at the red soil with metal poles and shovels, digging small craters in a boozy revelry.”

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Good news leaves investors unimpressed

By Greg Klein

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Impressive drill results can do wonders for an exploration company’s stock. Or they can leave people wondering. A darling of the junior resource sector, GoldQuest Mining TSXV:GQC announced more gold results on September 25. But if a share price bump was going to happen, it didn’t happen immediately.

Here are highlights from three holes at the Romero Gold-Copper Discovery of the company’s Las Tres Palmas Trend in the Dominican Republic.

• 2.64 grams per tonne gold (uncut) or 2.5 g/t gold (top cut) and 0.33% copper over 122.7 metres
• (including 6.35 g/t gold (uncut) or 5.97 g/t gold (top cut) and 0.53% copper over 44 metres)
• 0.59 g/t gold and 0.24% copper over 110 metres
• (including 1 g/t gold and 0.32% copper over 50 metres)
• 0.42 g/t gold and 0.74% copper over 146.5 metres
• (including 0.54 g/t gold and 1.47% copper over 72 metres)
• 0.53 g/t gold and 0.16% copper over 71.7 metres

Drill core samples from SnipGold Corp’s Bronson Slope in northwestern B.C.

An arbitrary top cut of 50 g/t gold was used pending further geostatistical data. The top cut was applied to all results, but affected only one interval. True widths were not provided. Depths extend to 476 metres.

With these results, GoldQuest has now reported assays from 10 holes at Romero. Still to come are results for five additional holes. Drilling continues.

Two years ago GoldQuest stock traded just over $0.20. Its price gradually doubled but then sunk all the way to $0.04 last May 16. But despite the market downturn, May 23 began the company’s rapid recovery. That’s when assays from the Romero Discovery first hit the market. GoldQuest shot up to an August 21 high of $2.03 before dropping back. It climbed again to $2.00 on September 20, then fell to a September 24 close of $1.83. Despite the September 25 assays, however, the stock opened the day at $1.35 before a press time close of $1.23.

GoldQuest’s closest Tres Palmas neighbour is Unigold’s TSXV:UGD 22,616-hectare flagship Candelones Project. On September 13 Unigold released assays including

• 0.71 g/t gold, 1.2 g/t silver, 0.09% copper and 0.42% zinc over 165.65 metres
• (including 1.38 g/t gold, 4.1 g/t silver, 0.06% copper and 1.25% zinc over 27.65 metres)
• 0.56 g/t gold, 1.8 g/t silver, 0.06% copper and 0.08% zinc over 89 metres
• (including 1 g/t gold, 5.1 g/t silver, 0.11% copper and 0.21% zinc over 25 metres)
• (including 1.3 g/t gold, 2.1 g/t silver and 0.22% copper over 10 metres)
• 0.49 g/t gold, 0.6 g/t silver, 0.07% copper and 0.01% zinc over 28 metres
• 0.62 g/t gold, 0.5 g/t silver, 0.09% copper and 0.06% zinc over 12 metres

The company estimates intervals to be true widths. No top cut was applied. Depths extend to 476 metres.

Unigold says the results support its belief that the Candelones Extension Zone remains open in three directions. Data from 36 holes has been released so far, with assays pending for seven more from the Candelones Extension. The company states that mineralization shows a strong correlation with IP chargeability anomalies.

On September 13 Unigold also closed a $5-million private placement of 11.2 million shares at $0.45.

The little country’s biggest mining project is Pueblo Viejo, which began pouring gold on August 14. With proven and probable reserves totalling 25.3 million gold ounces, the project is a 60%-40% JV between Barrick TSX:ABX and Goldcorp TSX:G. Barrick operates the mine, which is expected to reach commercial production in Q4 this year.

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New gold results boost optimism in northwestern B.C.

By Greg Klein

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The location is northwestern British Columbia, east of the Alaska Panhandle. The terrain is mountainous. Winters aren’t friendly. The nearest town is Stewart, population 670. But the region is a hive of exploration, with several companies holding inter-related interests. On September 13 two of them announced additional gold assays.

The companies are JV partners Decade Resources Ltd TSXV:DEC and Mountain Boy Minerals Ltd TSXV:MTB, with drill results from their Red Cliff Property. Highlights include

Rugged terrain presents challenges to those who would mine northwestern B.C.

• 18.62 grams per tonne gold over 11 metres
• 9.81 g/t over 6.25 metres
• 14.33 g/t over 1.83 metres
• 4.14 g/t over 6.1 metres
• 2.5 g/t over 10.1 metres
• 3.21 g/t over 4.67 metres
• 4.75 g/t over 1.68 metres

True widths were not available. Depths extend to 99 metres except for one result (grading 2.5 g/t over 10.1 metres), an intercept from 564.63 metres to 574.7 metres. That hole tested the Upper Montrose Zone at depth in the area of the Lower Montrose Zone, where the other intercepts were drilled. The Red Cliff Property hosts the Upper Montrose, Lower Montrose and Red Cliff Copper-Gold zones.

Red Cliff lies 20 kilometres north of Stewart, Canada’s most northerly ice-free port. The property is 1.5 kilometres by road from a paved highway.

The companies state that this year’s work has shown gold-bearing zones within a 30-metre-wide shear zone that has been followed over two kilometres in a north-south direction. Anomalous geochemical stream sediment samples north of the present work area indicate potential for an additional kilometre of strike length.

So far 65 holes have been sunk along the Lower and Upper Montrose zones, which remain open to depth and along strike.

Decade holds a 65% interest in the Red Cliff Property and acts as operator, with an option to earn 100%. Decade is also earning a 100% interest, subject to a 2% NSR, in the Silver Crown 6 claim directly north of Red Cliff. Decade owns 100% of the Red Cliff Extension claim immediately east of Silver Crown 6.

Decade’s Silver Crown 6 option is with Teuton Resources Corp TSXV:TUO and Silver Grail Resources Ltd. Teuton’s other activities in the region include its High Property, where two rigs are now in operation, following last year’s gold sampling and trenching.

Last February Teuton optioned its Tennyson Gold-Copper Property, 40 kilometres north of Stewart, to a private company in the Hunter Dickinson group. The deal was worth $500,000 cash and $7 million in shares.

About 150 metres north of Teuton’s High Property begins Pretium Resources’ TSX:PVG Brucejack Property, which last week released an updated resource for its Valley of the Kings Deposit. The estimate shows an indicated category with 5.1 million ounces gold and 4.5 million ounces silver, and an inferred category with 5.1 million ounces gold and 2 million ounces silver. The cutoff comes to 5 g/t gold-equivalent.

The company now has nine rigs drilling Valley of the Kings and satellite zones.

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Midway Gold Corp TSXV:MDW in joint venture with Barrick Gold Exploration Inc TSX:ABX announced results from their Spring Valley Project in Nevada. Highlights include

1.94 grams per tonne gold over 26 metres
(including 5.74 g/t over 2 metres)
1.12 g/t over 12 metres
1.4 g/t over 36 metres
(including 7.33 g/t over 1 metre)
2.09 g/t over 12 metres
(including 4.98 g/t over 3 metres)
4.89 g/t over 13 metres
(including 25.1 g/t over 1.5 metres)
1.88 g/t over 16 metres
(including 6.22 g/t over 1 metre)
1.02 g/t over 6 metres
2.13 g/t over 5 metres

Barrick can earn a 60% interest in the project by spending US$30 million before December 31, 2013. Barrick plans to spend US$7 million this year, for a total of US$16 million by December 31, 2011.

Midway President/CEO Ken Brunk commented, “We are very pleased with Barrick’s continued progress at our Spring Valley project. The exploration phase of this year’s program continues to show growth potential, particularly in the north, as well as identifying new targets. Emphasis is now shifting to complete this year’s project development program in support of an initial economic evaluation. Barrick continues to fund its earn-in requirement ahead of schedule.”

View Company Profile

Midway Gold Corp
720.979.0900

Barrick Gold Exploration Inc
416.861.9911

by Kevin Michael Grace

August 9, 2012

By Kevin Michael Grace

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Gold was down (at press time) $4.80 (-0.3%) for the fortnight to $1,615, and silver was up $0.49 (+1.8%) to $27.94. According to GoldCore, “Recent dollar strength and a lack of clarity in the minds of many market participants regarding whether the [European Central Bank] or the US Federal Reserve Bank will employ more quantitative easing to prevent double-dip recessions and even depressions may be partly to blame for gold’s lack of gains recently.”

However, “The dollar is set to weaken again due to the appalling US fiscal situation, and further quantitative easing and money printing on behalf of the Fed, ECB and [Bank of England] is almost inevitable.” We shall see.

The planted axiom in all such predictions is that the State has the power to compel the economy to do its bidding. One wonders for how long the State, as currently constituted, will be able to presume to hold such power.

Berlin, 1848: To the barricades again?

Reuters reports August 7, “Italy shrank further into recession in the second quarter for a 2.5% yearly decline, data showed on Tuesday, threatening attempts by Mario Monti’s technocrat government to control a debt crisis that is undermining the whole Eurozone.” What does “technocrat government” mean?

Wikipedia explains that on November 16, 2011, Monti, an unelected Senator for life, “was officially sworn in as Prime Minister of Italy, after unveiling a technocratic cabinet composed entirely of unelected professionals.” It would appear then that Monti is a dictator, and his cabinet ministers are consuls. That’s the Old Roman way, but it’s not what we understand as constitutional democracy.

Why the European Union expects Monti’s diktaks to be obeyed by the Italian people is anyone’s guess. The EU has not yet appointed a dictator for Spain, but the same problem applies. Mario “Batman” Draghi is now the Pontifex Maximus of the Church of Europe, just as Benedict XVI is the Pontiff of the Roman Catholic Church. They were both elected solely by their peers, but the difference is that no one is compelled to remain a Catholic, while apostasy from the European Church is not an option.

Peter Schiff, the prophet of the housing collapse, declaims, “Two-thousand and eight was just an overture. The opera is coming. The real financial crisis is coming in 2013, 2014. And so, we’ll get a real choice, a fork in the road. One way is going to lead toward complete authoritarianism, complete totalitarian government, and the other way is going to lead back to freedom.” Unfortunately, Schiff does not specify the means by which the road to freedom will be constructed.

At the Automatic Earth, Raúl Ilargi Meijer argues, “Here’s your key: It’s the people, stupid! Not the economy; it’s only the economy if that economy can actually be resurrected. The future of Spain and Europe will be decided in streets and kitchens and living rooms, not in bank vaults and boardrooms. You can only squeeze the people so far. That’s not some political statement, nothing to do with socialism or anticapitalism; it’s just a basic fact. Apparently, it’s going to take a brush with reality for many loud-mouthed pundits and politicians to figure that one out. So be it.”

Call him hysterical or dangerous, but he could be right. It is a commonplace in the West that political violence is “unthinkable.” But this is merely a shibboleth of our post-1945 regime. Not for the first time (and not for the last), this space defers to James Burnham’s (1943) The Machiavellians, which could have been titled, The Way The World Really Works. Here he paraphrases the French syndicalist Georges Sorel: “The lessening of overt acts of violence in social relationships is merely the correlative of an increase in fraud and corruption. Fraud, rather than violence, has become the more usual road to success and privilege. Naturally, therefore, those who are more adept at fraud than at force take kindly to humanitarian ideals. Crimes of fraud excite no such moral horror as acts of violence.”

Burnham then quotes Sorel directly, “We have finally come to believe that it would be extremely unjust to condemn bankrupt merchants and lawyers who retire after moderate catastrophes, while the princes of financial swindling continue to lead gay lives. Gradually the new industrial system has created a new and extraordinary indulgence for all crimes of fraud in the great capitalist societies.” Remarkably prescient for a book published in 1906.

Ilargi contends, “The ‘resolution’ of the LIBOR scandal (which will probably never be completed) will show us once again that we have a choice to make between either saving the banks or saving our economies and societies. We can’t do both. But in all honesty, I doubt that the prospect of such a choice is real. It looks to me like the choice has long since been made by a succession of unrepresentative representatives we elected with our empty votes, and who have left us with a runaway crossover between Frankenstein and the Sorcerer’s Apprentice. I wasn’t kidding when I said the other day that if you want your vote to count, you’ll have to get out into the streets to do so.”

Again, we shall see. As for QE3 being “almost inevitable,” Peter Schiff dispenses with the “almost.” “When Ben Bernanke says we’re only going to give the economy more stimulus if it needs it, it’s like telling a heroin addict, ‘We’ll only give you more heroin if you need it.’ The economy is going to need it, because without it, it’s going to collapse. But it’s not right to give a heroin addict more heroin just because it’ll keep him high.” Not right but certainly good for gold.

Stock Tips and Joke of the Week

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July 5, 2012

By Kevin Michael Grace

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Gold was up (at press time) $52.20 (+3.4%) for the week to $1,604.30, and silver was up $1.38 (+5.2%) to $27.67. Reuters attributed the increase to “increasingly poor economic data rais[ing] expectations that leading central banks will ease policy further to stimulate growth.”

The Bank of England announced a further £50 billion in quantitative easing Thursday, but gold fell $17.50 in response, which was blamed on the European Central Bank having “cut the main refinancing rate to record low of 0.75%.” According to Goldcore, “Analysts from Standard Bank in London say that a rate cut implies a lower real interest rate, which ultimately is bullish for gold.”

Further bullishness is indicated by the extraordinary events in London, where shamed former Barclays chief Bob Diamond testified before Parliament, a performance so graceless he will, in the words of Matt Taibbi of Rolling Stone, “likely now replace Jamie Dimon (who replaced Lloyd Blankfein, who replaced Angelo Mozilo, etc) as the reigning hateable-white-guy Face of World Financial Corruption.”

Las Vegas Mob Museum: Pikers compared to Wall Street and the City.

In advance of his testimony, Barclays released a 2008 email demonstrating that it had been coerced into manipulating Libor rates by the Bank of England, at the behest of Whitehall, ie, the British government, which implied it was high time Barclays joined the winning team.

Strangely enough, Diamond denied that pressure had been applied by the Bank of England and Whitehall, despite the evidence. Writing before the testimony, Taibbi suggested that Diamond would “have a difficult time, if this whole thing comes down to a test of his public credibility,” which is one explanation for his memory lapse. Another is that he remained true to the Gangsta Code: Stop Snitchin’.

The Daily Mail reports that Diamond is a fan of a former real-life banger who has since amassed a $450-million fortune peddling murderous fantasies to the white middle class: Jay Z. Diamond is pictured with his lovely daughter, Nell, at a private box at a 2011 concert by the “99 Problems” rapper making the “diamond” sign emblematic of Roc-A-Feller (sic) Records. Princeton-educated Nell, already at 23 an analyst for Deutsche Bank, reacted to her father’s dishonour with a tweet telling Chancellor George Osborne and Labour leader Ed Milliband to “go ahead and #HMD.” (A foul oath that won’t be repeated here.) What’s bred in the bone…

Alex Brummer declares that Diamond’s downfall marks “the downfall of genteel banking.” Brummer compares Barclays’ corrupt Protium scheme to “the scene in the gangster movie Goodfellas where the Robert de Niro character warns his fellow hoods to stash the money until it is safe so as not to attract the attention of the Feds.”

These days it’s hard to tell the hoods without a scorecard. Jay Z admires the Rockefeller name because he sees gangsta in it, while Bob Diamond and his insouciant scion admire gangsta Jay Z presumably because he’s richer than they are and has set the gold standard for bling. As for gentility, that and $16 will get you a glass of orange juice at the Savoy. And the would-be coppers are either bought off or part of the scam.

Nevertheless, the “rig is up,” says Jim Sinclair. “The Bank of England turning their backs on Barclays, the company who did their bidding, will be the event in time marking the trend change.” In other words, the gold and silver cartel is finished. “The paper trail is there. The worm has turned. Even more importantly is that this fight in the $1,540 gold price area was not for regaining the old high in gold. The six attempts to kill gold, supported by some gold writers looking for favours from the riggers was a now failed attempt to keep gold from trading above $3,500. The battle to stop gold has been lost.” He concludes, “I write this with total intellectual and spiritual certainty.”

Elsewhere, Ben Davies of Hinde Capital sees gold going to $4,500 or $6,000, while Dan Amoss at the Daily Reckoning claims, “There’s a plausible path to $10,000-an-ounce gold.”

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