Gold and Silver Now Legal Tender in Arizona

Arizona state senators voted to allow gold and silver to be used as legal tender in the state.

Privately minted gold and silver will now be given the same authority and status as paper money in Arizona. That means the residents of Arizona will be able to pay their bills within the state boundaries using the two precious metals.

Along with Arizona, other states have already implemented or are looking into similar proposals. While the constitution doesn't allow states to create their own currencies, there is nothing to suggest a state can't allow coins minted by private companies to be used as legal tender.

There was some additional drama in the process of confirming the bill, which came of course from a Democrat, this one being someone named Sen. Steve Farley from Tucson,

I will hand him this, he got it right on when he attacked the approval of the proposal, seeing how it makes the failing U.S. dollar look. Farley said, "I believe the bill itself ridicules our financial system." Right you are Steve. It does all of that for sure.

What he's of course referring to is the implementation of an alternative underscores the disastrous and monstrous policies of the Federal Reserve and Ben Bernanke, where they work together to debase the currency in the name of saving the economy.

The inclusion of gold and silver as a currency, every day points to these failed policies and teaches those willing to listen that Keynesianism is dead, and printing or digitizing endless amounts of dollars to prop up an economic system that should be allowed to flush itself out so it can be really healed, is what people like this Farley oppose.

In order to work out the details of the initiative, the effective date to implement gold and silver as legal tender in Arizona was pushed out till after the 2014 legislative session.

Gold Futures Drop as Investors Take Profits

After a couple of days of gold futures surging, investors decided to take some profits off of the table, as gold for April delivery dropped $19.80, or 1.2 percent, to close at $1,595.70 an ounce on the Comex division of the New York Mercantile Exchange.

Some media outlets suggested it was positive macroeconomic data out of the U.S. and Europe that resulted in the downturn, but that's doubtful after Federal Reserve Chairman Ben Bernanke stated he has no intention of stopping stimulus measures, which of course confirms the extreme fragile global and American economy.

Another thing is any investor that believes in any way that Europe has anything positive economically to base an investing decision upon, is setting themselves up for failure, as Europe is and will continue to be an economic basket case no matter what positive spin the financial media attempt to put on it.

For example, some news reports said gold futures fell because Italian political parties are starting to work on the possibility of forming a government. So what? Italy is working on forming a government. That's meaningless. Italy is going to have a government no matter what the news reports say. So the idea is put forward that they are working on it is considered news and a reason for gold investors to sell. That would mean gold investors bought gold because there were concerns over whether or not Italy would form a government. It's irrelevant of course.

Britain also continues to be an economically challenged area, where its economy contracted by 0.3 percent from the last quarter.

The only positive economic news in the United States continues to be the housing sector, where pending home sales in January were up a little more than expected. Other than that, most of the economic news in America is dismal.

Durable goods orders were reported as having fallen in January, a nod towards extremely weak manufacturing sector. Durable goods orders in the U.S. plunged 5.2 percent last month, where economists were looking for a drop of about 4.0 percent.

As for currencies, the euro U.S. dollar rose to $1.3101. The dollar index, which measures the U.S. dollar against a basket of currencies, was also down on the day.

Gold Prices in QE3 Environment

Now that Ben Bernanke and the FOMC have implemented another round of quantitative easing - one that could go on indefinitely with the promise to purchase $40 billion in mortgaged-backed securities on a monthly basis - gold and silver prices are about to go ballistic, as there's absolutely nothing in the way now to keep them from resuming their upward climb.

Gold shot up by over $38 an ounce on the news, while silver climbed over 4 percent in response to the highly anticipated move, which was more aggressive than thought by most.

The U.S. dollar is about to reverse directions, set to weaken in response to the stimulus move.

As for gold in general, there is nowhere for prices to go except up, at least until there is a reversal in job numbers in the U.S., which could take years to improve if we are to measure it by the prior response to QE1 and QE2 by the U.S. economy.

What has been a volatile and unsure economic environment because of there being no response from the Fed in the recent past concerning more stimulus, has now become much more stable in the sense of knowing what is coming from the central bank in the near and long term.

That will result in investors moving into commodities in droves as they seek to protect their assets from inflation and the falling value of the U.S. dollar.

In the short term we'll also see a big boost in the equity markets, but that has a lot more risk to it with stimulus than commodities do.

Barrick Gold jumped, trading at $1.50, up 3.78 percent, as of 2.51 PM EDT. Silver Wheaton was at $38.22, up 2.00, or 5.52 percent, as of 2:52 PM EDT. Goldcorp (GG) was trading at $45.17, up $2.11, or 4.90 percent. First Majestic Silver was at $21.91, up $0.87, or 4.13 percent.

Barrick (ABX) (GG) (NEM) Jump on Stimulus Expectations

Gold giants Newmont Mining (NEM), Goldcorp (GG) and Barrick Gold (ABX) jumped on Friday after the August nonfarm payrolls report revealed a dismal month, with an anemic 96,000 jobs created, far below the 125,000 analysts were looking for.

Other commodities and related companies jumped as well, as it pointed towards the likelihood that Ben Bernanke and the Federal Reserve will institute another round of quantitative easing in hopes of jump starting the economy.

As for gold itself, on the Comex division of the New York Mercantile Exchange, the most active contract for December deliver jumped $34.90, or 2.1 percent, to settle at $1,740.50. The last time gold settled that high was on February 28.

If Bernanke does pull the stimulus trigger, when coupled with the potentially unlimited bond-buying program launched by the ECB, gold, silver, and other commodities will soar again in response.

But even if the Fed decides to wait till later in the year, it appears a floor has been placed under the market for now. The longer nothing else is down though, the shakier that floor will become.

Bernanke and the Fed probably only have one real shot left at making it appear they can do something to help the economy recover, so while it's probable there will be some type of stimulus offered next week, it's also possible the decision will be made to wait a little longer.

That would put some downward pressure on gold and silver, along with other commodities in the near term, but it probably won't take long to recover once investors realize it's only a matter of when, and not if, the stimulus will come.

Stocks on the other hand will get crushed if nothing is done be Bernanke.

Barrick Gold closed Friday at $40.16, gaining $1.16, or 3.0 percent. GoldCorp ended the session at $43.00, up $0.86, or 2.0 percent. Newmont Mining closed at $51.69, rising $.79, or 1.6 percent.

Fed Awaits ECB and Payrolls Reports

The Thursday meeting of the European Central Bank (ECB) is vitally important to the Federal Reserve and Chairman Ben Bernanke, as the promised response to the ongoing debt crisis in Europe will be a large part of what the Federal Reserve may or may not do at its meeting on September 12 and 13.

Ever since ECB President Mario Draghi promised to taek whatever action was needed to attempt to solve the debt crisis, it has placed support under the markets, which have awaited to see exactly what it is Draghi will do.

Also of importance to the actions of the Fed will be the payrolls report due on Friday, which will surely have a major impact on the decision of the Federal Reserve and Ben Bernanke going forward.

Already one major element has ramped up the possibility of QE3, which was the disappointing manufacturing numbers recently released by the Institute of Supply Management, which showed manufacturing in the U.S. contracted by the most in over three years. Some think this could be enough for Bernanke to pull the trigger next week.

If payrolls drop below 125,000, which appears to be the targeted number for a decision to be made, then it's very likely Bernanke will implement another round of quantitative easing.

A secondary element in the mix is exactly what the ECB does decide to do. If it's significant and deep, Bernanke and the Fed may get some wiggle room to wait till later in the year to throw more money into the U.S. economy.

While the typical reporting that opposition in Europe could suppress some actions, the recent past has proven that to be more political posturing for the sake of constituents, especially in Germany.

In the end, of the ECB implements strong measures, it will without a doubt pass again, even while the press reports it as being opposed by some in the euro zone.

ECB Making Plans for Bond Acquisitions

In the short term the announcement by ECB President Mario Draghi that the European Central Bank drew a yawn from the markets after his aggressive posturing recently on how he'll do anything to support the euro.

"The Governing Council, within its mandate to maintain price stability over the medium term and in observance of its independence in determining monetary policy, may undertake outright open market operations of a size adequate to reach its objective," said Draghi.

"The Governing Council will consider further non-standard monetary policy measures according to what is required to repair monetary policy transmission. In the coming weeks we will design the appropriate modalities for such policy measures," he added.

The Federal Reserve is also expected to make a move at its next meeting in September, as Chairman Ben Bernanke noted in the recent meeting that the U.S. economy was faltering and the central bank stands ready to take action when needed.

What this means is come the latter part of August and early September we should see a big upward move in stocks and commodities in response to the two probable initiatives by the ECB and the Federal Reserve.

The move by the ECB will probably be very close to the same move by the Fed.

With little reason for Bernanke waiting, it appears he's caved to pressure to wait until it could make the economy look better as the election approaches, giving a potential boost to Obama, who is in danger of losing the election in the midst of the disastrous economy and his atrocious economic policies.

Fed Appears Ready to Stimulate

Although it could go either way, it's increasingly likely the Federal Reserve and Ben Bernanke are could act sooner rather than later in attempts to stimulate the economy with another round of quantitative easing.

The market responded to the news by jumping in the morning, pulling back as the day went on. The DJIA closed the day at 12,657.05, jumping 58.73, or 0.47 percent.

The NASDAQ didn't get much help, as Apple (AAPL) and Radio Shack (RSH) took big hits on disappointing earnings. It closed at 2,854.24, losing 8.57, or 0.31 percent.

For the S&P 500, it closed slightly down at $1,337.89, falling 0.42, or 0.03 percent.

Not unexpectedly, commodities jumped on the rising expectations of a sooner than expected stimulus, with gold, silver, copper and oil all settling up on the day.

Gold closed at $1,603, up $27.30, or 1.73 percent. Silver climbed to finish at $27.285, jumping $0.47, or 1.77 percent. Copper ended the session at $3.385, inching up $0.03, or 0.95 percent. Oil closed at $90.669998, up $0.61, or 0.68 percent.

The growing weakness of the U.S., European and Chinese economies has put pressure on the Fed to attempt to get the U.S. economy growing again, as the pace it's currently at isn't considered enough to strengthen it enough to grow on its own.

There is no longer a question of if the Fed will move, if some still believed that was the case (many oddly enough still do), but rather of how quickly to move and with what mechanism.

It's most likely it'll acquire mortgage-backed securities, but that's not a surety. Now that the economy is continuing to sputter, the Fed will probably attempt to make a statement by whatever means is uses to try to support the economy in a way that will inspire confidence. Anything too small would possibly be ignored or more detrimental than not doing anything at all.

For some time it was believed the Fed would wait until September before announcing any stimulus, but that is increasingly unlikely as each day goes by and pressure mounts for something to be done in light of its next meeting starting on July 31.

Now that the assumption the Fed will moved shored up the markets after three straight days of triple-digit losses, it's even more likely we'll see some action taken very quickly.

What is challenging for the Fed, and increasing the pressure on the institution is, do they wait until September and risk being perceived as weak and behind the times if the economy continues to tank, or do they wait for a couple of months to see which direction the economy goes.

I think the failure risk is too great for the Fed to wait. But we'll find out in a few days either way. My guess is they'll announce another round of stimulation next week.

Merrill Lynch Predicts $2,000 Gold

With expectations the Federal Reserve will be forced to provide another round of quantitative easing, Merrill Lynch said they see the price of gold jumping to $2,000 an ounce.

According to Francisco Blanch, Head of Global Commodity & Multi-Asset Strategy Research at Merrill, he sees the Fed adding up to $500 billion more to its asset-purchasing program sometime in the second half of 2012.

Blanch said this on Squawk Box:

"We think that $2,000 an ounce is sort of the right number. We believe that ultimately the Fed will be forced to do quantitative easing. If it happens in September, as our economists expect, we will get a rally sooner in gold. If it happens after the election, we will get the rally a little bit later; probably we will touch $2000 an ounce sometime next year."

Many high profile investors concur with the bullish view on gold, as they assert the Federal Reserve and other central banks won't be able or willing to refrain from attempts at "stimulating" their economies, even though it had done nothing to help in the past.

That points to eventual inflation, which favors gold, silver, and other commodities which trade in U.S. dollars, which will also eventually plunge from its temporary lofty position.

Some people even think that when Ben Bernanke talks to Congress next week about the economy that he could at that time announce another stimulus package.

Since the U.S. dollar has risen to fast and high recently, Bernanke could in fact make a move next week, as he favors a weak dollar as his tactic for attempting to alleviate a recession.

Another factor on the U.S. side is the presidential election, where the horrible American economy threatens the reelection of Obama. There will be pressure behind the scenes to make it look like something is being done to address the issue in order for Obama to look good.

More stimulus is a certainty. It's only a matter of when, not if. At that time the price of gold will soar again, pulling up many other commodities with it.

Gold Could Jump on Inflation, Dollar, India Jewelry Demand

Gold prices may be poised to rebound as several elements are combining to give the yellow metal a probable boost.

Federal Reserve Chairman Ben Bernanke made a statement that rising oil prices could spark inflation, the U.S. dollar has been under pressure, and jewelers in India are ending a 5-day shutdown protesting proposed tax increases from the Indian government; all of which could push gold prices up quickly over the short term.

Another major factor is the ongoing sovereign debt crisis in Europe, which continues to weigh down the Zone. The media has neglected it recently, so it hasn't been part of the conversation, even though it's a significant factor in the movement of gold prices.

Bernanke was extremely bearish on European banks, which points to the fact there will be more quantitative easing coming, which is also very bullish for gold.

So far in 2012 gas prices in the U.S. have soared 18 percent, reaching a ten-month high of $3.864 a gallon Wednesday. Not only is inflation a trigger for gold prices to rise, but in the case of higher gas prices, it takes away from consumer spending, which weakens the economy, which also can push gold prices higher.

Gold for April delivery on New York Mercantile Exchange the Comex division of the New York Mercantile Exchange settled at $1,650.30 an ounce, up $3.30, or 0.2 percent.

Gold, Silver Would Be Legal Tender Under Colorado Bill

If a bill sponsored by Colorado Sen. Kent Lambert, R, passes, it'll make Colorado the second state in the nation to recognize gold and silver as currency. Utah is the first and only state at this time to recognize gold and silver as a medium of exchange.

The growing movement of states to move in this direction is precipitated by the out of control spending of the Obama administration and the ongoing creation of money out of thin air by Ben Bernanke and the Federal Reserve.

That combination always ends up weakening the value of the U.S. dollar, or any currency where that is the standard practice of leaders of a country.

Along with the devaluation of the U.S. dollar, Senator Lambert also noted the growing public debt as a reason behind recognizing gold and silver as currency in the state.

Colorado is one of a dozen states in the U.S. to consider allowing gold and silver coins to be once again used as legal tender.

States Looking to Gold, Silver as New Currencies

With the Ben Bernanke and the Federal Reserve out of control, and Obama spending taxpayers money at unprecedented rates, a number of states are looking to silver and gold as options for a competing currency.

Utah has already implemented such a program in March 2011, now recognizing any gold and silver coin issued by a mint in the United States as legal tender.

The law includes a provision for the coins used in Utah to be viewed the same as the U.S. dollar, which means there is no capital gains tax on the metal coins.

As for the printing of paper money, that is forbidden by the Constitution in regard to states, although they do have the power to create "gold and silver Coin a Tender in Payment of Debts."

Interestingly, local communities are legally empowered to have their own paper currencies, with the caveat that they aren't confused with the look of the U.S. dollar.

Of course creating a paper currency without anything backing in is just as bad at any government level, as the Federal Reserve's assault on the U.S. dollar has proven. The dollar has dropped 95 percent value since the creation of the Fed.

How Utah is doing it via its Utah Gold & Silver Depository, is it's developing a systme which links gold or silver holdings of people to a debit card created for that purpose. So when they use the card, money is moved back and forth between accounts in private depositories created for that purpose. That's similar to how it's done now when countries sell gold, except on a much smaller basis.

At this time, 13 states have proposals to issue alternative currencies.

Ron Paul has sponsored a bill called the "Free Competition in Currency Act," which would give states power to create their own currencies.

Tech (CSCO) (INTC) (MSFT) Leading Markets Up

Tech is leading a rebound in the market today, with Cisco Systems(NASDAQ:CSCO), Intel (NASDAQ: INTC) and Microsoft (NASDAQ:MSFT) topping the field.

Much of this is in response to Federal Reserve Chairman's Ben Bernanke saying at the next Fed meeting there will be discussion of more so-called "stimulus" measures in September.

Bernanke said, "In addition to refining our forward guidance, the Federal Reserve has a range of tools that could be used to provide additional monetary stimulus. We discussed the relative merits and costs of such tools at our August meeting. We will continue to consider those and other pertinent issues, including of course economic and financial developments, at our meeting in September, which has been scheduled for two days (the 20th and the 21st) instead of one to allow a fuller discussion. The Committee will continue to assess the economic outlook in light of incoming information and is prepared to employ its tools as appropriate to promote a stronger economic recovery in a context of price stability."

Intel was trading at $19.79, up $0.37, or 1.91, as of 12:00 PM EDT. Cisco was at $15.47, jumping $0.39, or 2.55 percent. Microsoft was at $25.25, climbing $0.68, or 2.77 percent.

ProShares UltraShort Silver (ZSL) Jumps As Silver Pulls Back

Shares of ProShares UltraShort Silver (NYSE:ZSL) were soaring as investors played the expected pullback in silver prices by going short.

Other silver investment vehicles like ProShares Ultra Silver (NYSE:AGQ) and iShares Silver Trust (NYSE:SLV) were getting hammered on the day.

U.S. silver futures fell as much as 5.4 percent to $44.61 an ounce before fighting back to gain some lost ground.

The plunge in silver came partly from simply taking a breather, but also from an options expiration coming later in the day, as well as waiting to see what Federal Reserve Chairman Ben Bernanke has to say.

ProShares UltraShort Silver was trading at $15.91, gaining $1.33, or 9.12 percent, as of 12:15 PM EDT. ProShares Ultra Silver was trading at $315.61, falling $29.14, or 8.45 percent. iShares Silver Trust was at $43.74, down $2.09, or 4.56 percent.

Gold Companies (AU) (TRE) (NXG) (EGI) Up on Record Gold Prices

Gold companies Tanzanian Royalty Exploration (AMEX:TRE), AngloGold Ashanti NYSE:AU), Northgate Minerals (AMEX:NXG) and Entree Gold Inc (NYSE:EGI) jumped on Tuesday as gold prices rose to $1,455.50 an ounce to reach a record high.

Gold for June delivery was up $19.50, or 1.4%, to $1,452.50 an ounce on the Comex division of the New York Mercantile Exchange.

Continuing unrest in the Middle East, the EU sovereign debt crisis, Japan's struggle and political uncertainty in the United States is the major impetus behind the action.

The inevitability that Federal Reserve Chairman Ben Bernanke won't stop printing money is also a major part of the continuing rise in gold prices.

Entree Gold Inc closed Tuesday at $3.07, gaining $0.06, or 1.99 percent. Northgate Minerals closed at $2.74, rising $0.07, or 2.62 percent. Tanzanian Royalty Exploration closed at $6.43, up $0.08, or 1.26 percent. AngloGold Ashanti ended the session at $50.32, increasing $1.66, or 3.41 percent.

Gold Miners (GOLD) (NG) (GBG) (GFI) Up on Record Gold Prices

Gold miners Randgold Resources (NASDAQ:GOLD), NovaGold Resources (AMEX:NG), Great Basin Gold (AMEX:GBG) and Gold Fields Ltd. (NYSE:GFI) jumped on Tuesday as gold prices rose to $1,455.50 an ounce to reach a record high.

Gold for June delivery was up $19.50, or 1.4%, to $1,452.50 an ounce on the Comex division of the New York Mercantile Exchange.

Continuing unrest in the Middle East, the EU sovereign debt crisis, Japan's struggle and political uncertainty in the United States is the major impetus behind the action.

The inevitability that Federal Reserve Chairman Ben Bernanke won't stop printing money is also a major part of the continuing rise in gold prices.

Gold Fields Ltd. closed Tuesday at $18.29, gaining $0.69, or 3.92 percent. Great Basin Gold closed at $2.73, rising $0.14, or 5.41 percent. NovaGold Resources closed at $13.79, up $0.91, or 7.07 percent. Randgold Resources ended the session at $87.84, increasing $6.27, or 7.69 percent.

Gold Miners (GRS) (NSU) (CGC) (BVN) Soar on Record Gold Prices

Gold companies Gammon Gold (NYSE:GRS), Nevsun Resources (AMEX:NSU), Capital Gold Corp. (AMEX:CGC) and Compania de Minas (NYSE:BVN) soared on Tuesday as gold prices rose to $1,455.50 an ounce to reach a record high.

Gold for June delivery climbed $19.50, or 1.4%, to $1,452.50 an ounce on the Comex division of the New York Mercantile Exchange.

Continuing unrest in the Middle East, the EU sovereign debt crisis, Japan's struggle and political uncertainty in the United States is the major impetus behind the action.

The certainty that Federal Reserve Chairman Ben Bernanke won't stop printing money is also a major part of the continuing rise in gold prices.

Compania de Minas closed Tuesday at $44.16, gaining $2.11, or 5.02 percent. Capital Gold Corp. closed at $6.30, rising $0.25, or 4.13 percent. Nevsun Resources closed at $6.29, up $0.32, or 5.36 percent. Gammon Gold ended the session at $10.12, increasing $0.28, or 2.85 percent.

Gold Miners (RGLD) (ANV) (AGIGF) (AZK) Surge on Record Gold Prices

Gold companies Royal Gold (Nasdaq:RGLD), Allied Nevada Gold (AMEX:ANV), Alamos Gold (OTC:AGIGF.PK) and Aurizon Mines (AMEX:AZK) soared on Tuesday as gold prices rose to $1,455.50 an ounce to attain a record high.

Gold for June delivery jumped $19.50, or 1.4%, to $1,452.50 an ounce on the Comex division of the New York Mercantile Exchange.

Continuing unrest in the Middle East, the EU sovereign debt crisis, Japan's struggle and political uncertainty in the United States is the major impetus behind the action.

The thought that Federal Reserve Chairman Ben Bernanke won't stop printing money is also a relevant factor behind the continuing rise in gold prices.

Aurizon Mines closed Tuesday at $7.14, gaining $0.41, or 6.09 percent. Alamos Gold closed at $16.36, rising $0.66, or 4.20 percent. Allied Nevada Gold closed at $40.31, up $2.64, or 7.01 percent. Royal Gold ended the session at $53.27, increasing $1.17, or 2.25 percent.

Gold Miners (IVN) (IAG) (GSS) (AEM) Surge on Record Gold Prices

Gold miners Ivanhoe (NYSE:IVN), IAMGOLD (NYSE:IAG) Golden Star Resources (Amex:GSS) and Agnico-Eagle (NYSE:AEM) soared on Tuesday as gold prices rose to $1,455.50 an ounce to reach a record high.

Gold for June delivery jumped $19.50, or 1.4%, to $1,452.50 an ounce on the Comex division of the New York Mercantile Exchange.

Continuing unrest in the Middle East, the EU sovereign debt crisis, Japan's struggle and political uncertainty in the United States is the major impetus behind the action.

The idea that Federal Reserve Chairman Ben Bernanke won't stop printing money is also a key factor behind the continuing rise in gold prices.

Agnico-Eagle closed Tuesday at $66.81, gaining $2.67, or 4.16 percent. Golden Star Resources closed at $3.08, rising $0.21, or 7.32 percent. IAMGOLD closed at $22.90, up $1.16, or 5.34 percent. Ivanhoe ended the session at $28.44, increasing $0.84, or 3.04 percent.

Visa (V), Mastercard (MA) Jump on Debit Card Fee Delay Expectations

Shares of Visa (NYSE:V) and Mastercard (NYSE:MA) have received a boost on expectations the proposed rules which would limit the amount banks can charge for debit-card swipe fees will be delayed.

Federal Reserve Chairman Ben Bernanke recently stated in a letter to Congress that it's very improbable that in the next Federal Reserve meeting they'll be able to meet the deadline of April 21 for the final rules concerning the fees to be put in place.

Growing opposition over limiting the fees is slowing down the process and looking increasingly questionable as to whether they'll become part of the way banks will have to do business.

Visa closed Wednesday at $74.23, gaining $2.03, or 2.81 percent. Mastercard closed at $253.66, up $1.95, or 0.77 percent.

Jim Rogers Says "End the Fed"

Jim Rogers said in an interview on "Breakout," the new financial show offered by Yahoo! Finance (NASDAQ:YHOO), that the Ben Bernanke and the Federal Reserve continue to be a disaster, and if he was instated as Chairman of the Federal Reserve, he would shut it down quickly in order to start working on the problems it has created.

He says Bernanke continues to make things worse by throwing "fuel on the fire," rather than dealing with the underlying issues.

Rogers ultimately sees higher interest rates and inflation going forward, and a major pullback in equities, especially in the tech sector.