Trelawney Intersects 304.00 Metres of 1.65 g/t Gold in 200-Metre Step-Out Hole From the Cote Lake Deposit

TORONTO, ONTARIO -- Trelawney Mining and Exploration Inc. (the "Company" or "Trelawney") (TSXV:TRR)(FRANKFURT:RTW) announces additional drill results from the Cote Lake Deposit on the Chester Project located halfway between Timmins and Sudbury in northern Ontario. Highlights of the current drilling include:

    * Hole E11-48 – 285.80 metres of 1.18 g/t gold
    * Hole E11-49 – 275.00 metres of 1.26 g/t gold
    * Hole E11-53 – 304.00 metres of 1.65 g/t gold

Expansion drilling of the Cote Lake Deposit continues to intersect wide zones of low to moderate grade gold mineralization. The results of drilling released today are from step-outs to the west of the Inferred Resource for the Cote Lake Deposit which currently stands at 131 million tonnes grading 1.0 g/t gold for a total of 4.2 million ounces gold as reported in Trelawney's March 7, 2011 press release. Hole E11-48, collared on section 88E and the first 100-metre step-out west of the resource, intersected mineralization at a vertical depth of 140 metres. Additional drilling has been conducted to follow the mineralization upward toward surface. Holes E11-49 and E11-53 were drilled an additional 100 metres to the west, on section 87E, and therefore 200 metres west of the reported resource; both holes intersected wide zones of gold mineralization. Hole E11-53 was collared in mineralization and returned a 304.00 metre intersection of 1.65 g/t gold, including 3.57 g/t gold in the first 85 metres of the hole. Overburden depth at this location is approximately 8 metres.

Including drill results released today, mineralization of the Cote Lake Deposit has now been intersected over a strike-length of 900 metres and remains open along strike, and at depth on all sections that have been drilled. The mineralization delineated by drilling to date, coincides well with a NE-SW-trending IP anomaly. Results of the IP survey over the Cote Lake Deposit area suggest additional strike extensions of the mineralization are possible. A copy of the induced polarization survey map over the Cote Lake Deposit along with updated drill sections will be posted on the Company's website within the week.

The Cote Lake Deposit consists of low to moderate grade gold +/- copper mineralization which is associated with brecciated intermediate to felsic, and locally mafic intrusive rocks. Mineralization occurs in the form of disseminated and fracture-controlled sulfides which generally correlate to the gold values. Visible gold is commonly observed. The zones are bleached with the prevalent alteration being feldspathic, chloritic and biotitic. The nature of the alteration and mineralization is indicative of a porphyry-style deposit.

The expansion and exploration drill program continues with five drills currently working. The majority of the winter drilling has been completed on the wetlands and an aggressive program will now be conducted following the mineralization to southwest. Infill drilling of the deposit has also commenced; this will increase the confidence of the resource and facilitate future upgrades in the resource category.

Greg Gibson, Trelawney's President and CEO commented, "We are very pleased with the results of this initial step-out drilling. These drill results confirm our belief that our initial resource estimate can be expanded significantly, along with potential increases in grade as these results are above the average grade reported in our initial resource."

BonTerra continues drilling & hitting gold, eastern extension

Article Source:
TSX Gold

BonTerra Resources Inc. (TSX.V: BTR; FSE: 9BR) (the “Company”, “BonTerra”) is in receipt of gold assays for an additional four drill holes on the Eastern Extension Gold Project (“the Property”). The Property isBonterra Logo 04.28.11.jpg located 170km northeast of Val d’Or, Quebec in the Abitibi Greenstone Belt.

The Company completed four (4) holes on the ice. These holes were drilled to test a large Induced Polarity (“IP”) anomaly. This anomaly appears to be a broad gold bearing shear zone approximately 550 metres in length. Shear zones are prime targets for gold concentration. Significant gold values are shown in table 1 below. The Company plans on continuing exploration drilling to make the gold zones larger. The IP survey is one of the tools being used to plan future drilling.

The Company is awaiting assays from three (3) additional holes drilled on land in the eastern zone as well as one (1) deep hole under the main zone that is nearing completion.

Since August 2010, the Company has drilled thirty (30) holes totaling approximately 6,500 metres. Over the past eight months, BonTerra’s drill program has returned gold assays on 29 of 31 holes and developed a greater understanding of the potential of the Property. BonTerra continues to hit gold on the property throughout its ongoing drill program. After a week off during spring break up, drill crews are once again on the Property. The project continues to grow in size with continued drilling at this time.

Mitchell Adam, President, states, “BonTerra is close to outlining a strike length of gold mineralization a half a kilometer in length. These ongoing drill results coupled with our infrastructure, stockpiled fuel and our commitment to expand the gold zones cements BonTerra as a significant player in the eastern Abitibi region of Quebec.”

Table 1: Significant Gold Intercepts

Drill Hole




From (m)


To      (m)


Length  (m)


Gold        (g/t)


From (ft)


To      (ft)


Length  (ft)


Gold     (Oz/t)

BA-11-18


24.00


25.50


1.50


1.04


78.74


83.66


4.92


0.03

BA-11-19


95.50


101.40


5.90


1.90


313.32


332.68


19.36


0.06

Including


95.50


96.50


1.00


5.29


313.32


316.6


3.28


0.15

Including


100.30


101.40


1.10


5.11


329.07


332.68


3.61


0.15

BA-11-20


140.00


141.00


1.00


10.10


459.32


462.6


3.28


0.29

BA-11-20


180.00


187.50


7.50


1.31


590.55


615.16


24.61


0.04

BA-11-21


125.00


126.00


1.00


4.08


410.1


413.39


3.28


0.12


Qualified Person

This press release has been reviewed by Thomas Clarke, Pr.Sci.Nat., a Director of BonTerra. Mr. Clarke is a Qualified Person under NI 43-101.

The drill program and sampling is being supervised on behalf of the Company by Geologica Inc. of Val d’Or, Quebec. These are sample results, taken from mineralized zones of the drill hole. Depths and lengths are core lengths and not true widths. Samples were submitted to ALS Chemex of Val d’Or, Quebec for crushing, pulverizing and fire-assay for gold. Samples fire-assaying greater than 10 grams per tonne gold are then fire-assayed with a gravimetric finish. Assay samples are taken from drill core, sawed in half along the core axis; one half is sent to ALS Chemex Laboratories and the other half retained for future reference. The Company applies a full quality assurance and quality control (QAQC) system for every batch of samples submitted to the lab. The QAQC samples include a standard, duplicate and blank.

About BonTerra

BonTerra is a Canadian gold exploration company focused continuing to expand the known gold zone on its Eastern Extension property, part of the world famous Abitibi Greenstone Belt of Quebec. BonTerra has a total of four properties in the Urban-Barry belt, all gold exploration targets. BonTerra’s Eastern Extension, Lavoie, Urban-Barry and Anderson properties are located approximately 170 km NE of Val-d’Or and 125 km SW of Chibougamau in the Urban, Barry and Bailly townships in Québec. Neighboring Companies in the region are Metanor, Abitex, Amseco, Beaufield, Eagle Hill, Glen Eagle, Urbana and Freewest, Murgor and Noront. The company has an option to earn 100% of the Eastern Extension property subject to a 2% NSR.

Bayfield Drills 7.60m of 5.70 G/T Au and 24.27 G/T Ag

Bayfield Ventures Corp. (TSX VENTURE:BYV) (FRANKFURT:B4N) iBayfield Ventures Corp.s pleased to announce an additional significant gold intercept on its 100% owned Burns Block property in the Rainy River District of north-western Ontario. The Burns Block is situated adjacent to the east and on strike to Rainy River Resources' (TSX-V: RR) multi-million ounce gold deposit. Rainy River's February 2011 NI 43-101 resource calculation shows a drill indicated resource of 3.42 million ounces of gold, averaging 1.1 g/t gold, in addition to an inferred resource of 3.17 million ounces of gold, averaging 0.91 g/t gold. The deposit has a 0.35 g/t Au cut-off for open pit mineralization.

Rainy River gold properties claims map:

http://www.bayfieldventures.com/i/pdf/BYVRRArea.pdf

Highlights:

    * Notable gold and silver intercept: 5.7 g/t Ag and 24.27 g/t Ag over 7.6m within 79.25m of 0.85 g/t Au and 7.62 g/t Ag in drill hole RR11-32
    * A separate intercept of 1.48 g/t Au and 3.16 g/t Ag over 4.6m found 50 metres below the main zone in RR11-32
    * Hole RR11-32 is part of the current infill program on the north exploration fence at Burns
    * Infill drilling continues to define multi-gram grades at depths less than 150 metres from surface
    * Exploration on a more northerly exploration fence is being initiated based on the current drill results with the goal of continuing to define mineralization in a shallow, up-dip position on the Burns Block
    * Follow-up drilling both east and west of new discovery hole RR11-14 is continuing
    * Expansion drilling of the continuation of the ODM17 zone to the east on the Burns Block will continue with the newly arrived third rig
    * Assays pending for eleven more holes

Discussion of Results from Hole RR11-32:

Hole RR11-32 was collared on the north exploration fence, 50 metres east of the west boundary of the Burns Block and is part of the Company's continued exploration and delineation of the high grade gold chute located on the western portion of the Burns Block.

Blebs and fractures fillings of electrum were noted during logging of the mineralized interval which commenced at 124.05 metres down hole. Accessory minerals include abundant dark brown sphalerite, blebs of chalcopyrite and arsenopyrite as well as deformed pyrite stringer veins and cross cutting galena veinlets. Significant assay results from RR11-32 and all other completed assays are summarized in the table below.

Updated Burns Block drilling exploration map:

http://www.bayfieldventures.com/i/maps/BYV_Burns_Exploration_Map_July_2010.jpg

Gold Standard acquires leases adjacent to Railroad property from Newmont

Gold Standard Ventures Corp. (TSXV: GV; OTCQX: GDVXF) announced  today it has entered into a “Minerals Lease and Agreement” to lease four sections totaling 2,560 acres from Newmont USA Limited, a subsidiary of Newmont Mining Corporation.  Two of the four sections are staked public lands which carry no underlying royalty. The other two sections are private surface and minerals lands subject to an underlying 5 % net smelter royalty (NSR).  With this acquisition, Gold Standard owns or controls 22 square miles, or more than 14,000 acres, of prospective target area on the prolific Carlin Gold Trend.

The Lease lies between the Rain mining district to the north and the Railroad district controlled by Gold Standard Ventures.  Gold Standard’s North Bullion fault target is immediately south and east of the east flank of the Lease. Holes drilled in 2010 by Gold Standard on the North Bullion fault target encountered thick intercepts of 1+ gm/t gold. This acquisition allows Gold Standard to expand its assessment of this target to the west and potentially develop new targets.

 “We don’t know exactly where our exploration will lead us but it seems very logical that the area between two adjacent mining camps covering two of the four windows on the Carlin Gold Trend constitutes a real opportunity.   The Rain and Railroad windows consist of intrusive-centered, geologic domes with locally gold-bearing, permissive rock units exposed at the surface.  Deposits of note in the Rain district include Rain, Northwest Rain, Tess, Saddle and Emigrant.   Very little exploration has been conducted to date between these two centers of mineralization,” states Dave Mathewson, Gold Standard Venture’s Vice President of Exploration. “We look forward to applying the most advanced exploration methods available to evaluate the potential of this area in the process of developing our current discoveries.”

Under the terms of the agreement, the Company will be subject to escalating yearly work commitments in the aggregate amount of US$2.5 million over a period of six years. The first year is free of spending commitments and Gold Standard will incorporate this area in a planned detailed structural mapping program of the district.

Newmont has a first back-in right on or before delivery of a positive feasibility study, enabling Newmont to earn a 51% interest in the Lease by incurring expenditures totaling 150 per cent of the expenditures made by Gold Standard.  Should Newmont not back in, Newmont will deed the claims and assign the leases on the fee lands to GSV in exchange for GSV executing a royalty deed conveying a 3% Net Smelter Return Royalty on the claims and a 1% Net Smelter Return royalty on the fee lands to Newmont.. The royalty paid to Newmont would be less any underlying royalties, subject to a 1-per-cent minimum. Should Newmont exercise it first back-in, it has a second back-in right to earn an additional 19% interest in the Lease by expending an additional 100 per cent of the expenditures made by Gold Standard. The project would then revert to a Newmont/Gold Standard (70-per-cent/30-per-cent) joint venture.

Gold Standard President and CEO John Awde noted that Gold Standard has not agreed to back-in rights on any of its other properties “but this opportunity is exceptional because the land is contiguous with one of our best targets and gives us plenty of room to pursue that target. If we are successful at North Bullion, we have already tied up the neighboring ground.”

The lease agreement is subject to regulatory approval.

ABOUT GOLD STANDARD VENTURES– Gold Standard Ventures is focused on the acquisition and exploration of gold projects in North Central Nevada.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

On behalf of the Board of Directors of Gold Standard,

Silver price swings led by Shanghai trades

hinese speculators have emerged as a big driver of silver’s spectacular rally and subsequent crash with trading in the metal in Shanghai soaring nearly 30-fold since the start of the year.

The commodity, nicknamed “the devil’s metal” for its wild price swings, surged 175 per cent from August to a peak of almost $50 a troy ounce two weeks ago. Since then, it has plummeted 35 per cent, hitting a low of $32.33 on Thursday.

At the same time, silver turnover on the Shanghai Gold Exchange, China’s main precious metals trading hub spiked, rising 2,837 per cent from the start of this year to a peak of 70m ounces on April 26, according to exchange data.

The number of contracts outstanding, an indicator of investor exposure, doubled over the same period.

Edel Tully, precious metals strategist at UBS, said Chinese investors were “one big factor behind silver’s rally, particularly in April”.

The surge in silver prices has attracted investors the world over, from China and India to the US, where the metal has become the investment of choice for Americans distrustful of the actions of the government and central bank. Silver’s stunning rise has inspired a rash of conspiracy theories as investors and analysts struggle to explain the speed and scale of the rally.

Silver trading in Shanghai remains below the levels in London and New York, the two main global hubs, but its rapid growth means its has become increasingly significant in driving prices, bankers said. Turnover in New York silver futures, the most liquid futures contract in the metal, averaged about 700m ounces a day in April.

“I’m pretty certain it’s the Chinese retail [investment] that is driving this move,” one senior precious metals banker said. “There’s an enormous amount of speculation going on out there, they’ve got the bit between their teeth.”

Ms Tully said Chinese investors cut their positions in silver sharply last week as prices tumbled, before returning to the market early this week and driving a short-lived rebound in prices. “No less than during silver’s swift ascent, [Chinese] agency was very evident in its tumbling descent.”

Whether Chinese buying continues “will be a major determinant of whether silver can finally take out $50”, she added.

Silver’s collapse last week began a rout that sent global commodities’ prices 10 per cent lower, raising concerns that a two-year boom may be over.

Ivan Glasenberg, chief executive of Glencore, the commodity trader that plans to float this month, dismissed the drop as “froth” being flushed out of the market, saying that supply and demand fundamentals remained strong.

Daily Market Update 5/13/11

GOLD
Gold closed today at $1,494.20, down $8.10 an ounce for the day on light trading. Look for a test of the $1,500 area in Asia on Monday, based on the direction of the US dollar.

The two issues that are effecting the movement in the Gold market today are:

    * the strength or weakness of the US Dollar, finally closing near the highs of the day at $1.40 to the euro
    * the Eurozone debt issues

Greece, Ireland, and Portugal, the euro region countries that needed 256 billion euros ($366 billion) in emergency aid to avoid default, may all see their debt loads exceed the size of their economies this year. Greece’s debt, already the biggest in the euro’s history at 143% of gross domestic product last year, will jump to almost 158% this year and 166% in 2012, the European Commission said today in Brussels. Portuguese debt will surpass total economic output for the first time this year, growing to 101.7% of GDP, while Irish debt will reach 112%.



SILVER
Silver strengthened in choppy trading in Asia overnight, closing in the US at $35.30 an ounce, up $0.73 for the day. Silver needs to find support above $35 on Monday trading or we will probably test the lows again. Investor demand for Physical silver continues to
grow. Premiums and delivery on 1oz US .999 Silver eagles and 1st quality .999 Silver trade units are delayed up to 6 weeks.  The U.S. Mint is producing Silver eagles 24/7 and cannot keep up with demand.  The Silver futures market is in backwardation, confirmation of the heavy demand.



Today's Other Important News

    * The Shanghai Gold Exchange (SGE) will cut silver margin requirements back to 18% from 19% from May 13 settlements if there is no sharp movement in prices, it said on Friday.
    * Inflation concerns is a major focus of the People's Bank of China, who announcement that in an effort to slow down economic growth they will raise the banking reserve ratio 0.5 percentage points to a record 21% from next week. The announcement came after the release of core inflation data earlier this week showed growth of 5.3%, down from 5.4% in March.
    * Platinum, which fell to a six-week low of $1,750 in the previous session, rebounded along with the rest of the complex. It last traded at $1,765. Palladium comfortably regained the $700 mark - it fell to to $715 yesterday, its worst low since the March 17th low of  $697.50.
    * The U.S. Labor Department reported today that U.S. consumer prices rose a seasonally adjusted 0.4% in April, led by higher gasoline costs.



Tune in Saturday evening for my weekly radio show on Talk Radio 790 KABC in the Southern California area, or listen to www.kabc.com at 9pm PST to hear an extended program on Gold, Silver and precious metals. The show is live (not recorded), so you can call in with your comments or questions (800) 222-5222. Special guest this week is Matt Federgreen, one of the owners of Beverly Hills Baseball Card Shop.

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The Physical Gold IRA

The Physical Gold IRA

Why gold makes sense in your retirement plan

    As the ultimate long-term store of value, gold coins and bullion may very well be the ultimate retirement asset. Among the primary asset classes most often used in retirement planning -- stocks, bonds, annuities and savings accounts -- the tangible king of metals stands out as the only one that does not rely on the performance of another individual or institution for value. Former French president Charles DeGaulle once famously said of gold, it 'has no nationality and is eternally and universally accepted as the unalterable fiduciary value par excellence'. What better way to save for retirement than with the ultimate savings vehicle -- physical gold. We invite you to establish your gold retirement plan through USAGOLD.

Rollovers

    gold IRARolling over a Traditional or Roth IRA into a gold-backed IRA is relatively simple. The term "rollover" actually refers to the rolling over of assets in a 401(k) plan when the employee has separated from his/her employment. Separation from employment is the key to the ability to rollover the 401(k) assets into a gold-backed IRA. If no separation has occurred, then chances are very high that the plan holder will be barred from moving the assets out of the employer's 401(k) plan. However, there are exceptions to every rule, and a telephone consultation is always in order to see if the exception applies to you.

    When it comes to existing IRAs, then the term "transfer" applies. Existing IRAs with banks, credit unions, stock brokerage firms or other financial service providers can be transferred directly to one of our referred trust companies. One very convenient option is to transfer either the cash in the account or the securities themselves. However, this arrangement is not always acceptable to the firm who is transferring your account. Again, for every rule there are exceptions -- which is why telelphone consultation is highly encouraged.

Approved precious metals investments

    GOLD BARS & COINS: At present, gold bars with a purity of 24 karat (0.995+ fineness) are allowed into an IRA. They must be hallmarked by a NYMEX- or COMEX-approved refiner/assayer. These bars come in the following sizes: 1 ounce, 10 ounces, kilo (32.15 ounces), 100 ounces, and 400 ounces. Gold coins having a purity of 24 karat (0.9999 fineness) are the only ones allowed in an IRA, with the exception of the 22 karat US Gold Eagle. Readily acceptable for gold IRAs are the popular bullion coins from America, Australia, Austria and Canada. The South African Krugerrand, being a 22 karat bullion coin, is not allowed.

    SILVER: Regarding silver investments, only silver coins and bars with 0.999+ fineness are allowed. These include the 1 oz. US Silver Eagle, Canadian Silver Maple Leaf, and the Mexican Silver Libertad bullion coins. Investors can purchase 100 oz. silver bars and also 1000 oz. silver bars. Pre-1965 bags of US silver coins (dimes, quarters, half dollars, and silver dollars) are not allowed in an IRA because their alloy contains only 90% silver and thus does not meet the fineness standard.

    PLATINUM GROUP METALS: Platinum and palladium bars and coins of 0.9995+ fineness can also be placed into a precious metals IRA. Both the US and Canadian Mints make 1 oz. platinum coins. Other countries, such as Great Britain and Australia, have 1 oz. platinum coins which are not as well known but also qualify. All platinum and palladium bars and coins must be from a NYMEX- or COMEX-approved refiner/assayer. Private companies with well-established hallmarks, such as Johnson Matthey and Englehard, manufacture platinum and palladium bars ranging in size from 1 oz. to 100 oz.

Preferred IRA Custodians

    At present, there are two companies from which to choose. Please call for a free consultation for more information and assistance in choosing the right custodian for your needs.

IRA Investing in the News

    DOW JONES NEWSWIRES / written by Allen Sykora
    IRA Investors Increasingly Turning to Precious Metals

George R. Cooper, USAGOLD's Retirement Specialist

    George Cooper graduated with honors from the University of Chicago. During his college education, he studied for one year in Germany at the Albert-Ludwigs Universitaet in Freiburg. After graduating college, he attended law school at the University of Denver College of Law. Since that time he has worked as a lawyer in both private industry and in the private practice of law. From 1986 to 1990 he worked at Centennial Precious Metals as the operations manager. Following a brief departure to pursue the practice of law, he returned to our firm as an account executive in 1994.



 gold retirement account

If you choose USAGOLD-Centennial Precious Metals to assist with your Gold IRA, you choose a firm that specializes in precious metals and has the expertise to match your portfolio selections with your long-term retirement goals.

We have helped hundreds successfully include precious metals in their retirement plans. We can help you.

Testimonials

I discovered USAGOLD several years ago after I decided to put the majority of my SIMPLE IRA account (which had lost 25% of its value in 2001) into gold. Although I knew little about holding physical gold, George Cooper patiently explained the process and provided copies of the USAGold tutorial publications. No hard sell. I am quite pleased with my ongoing relationship with USA Gold, and will continue to refer others who want to know about holding gold.

CR - Mechanicsville, Virginia

I recently converted my wife's traditional IRA and 401k to a precious metal IRA. With the assistance of George Cooper at Centennial Precious Metals the transfer was quick, efficient, and financially rewarding. Her account is up 20% since a little over a year ago, which is even more impressive in light of the shaky stock market conditions during the same time. We are still contributing the annual maximum to our accounts and will always use CPM for our purchases.

JM - Sulphur Springs, Indiana

I wanted to diversify some of my IRA holdings, so I recently set up a Precious Metals IRA Account to hold physical gold coins. George Cooper was able to help me set it up with only a phone call or two. George and Centennial Precious Metals are set up as my designated representatives. Now, with each new transfer of funds into the account, George contacts me to arrange for the purchase of additional coins. Each purchase is stored separately in the IRA under my name only, and not commingled with any other IRA assets. I recommend this type of account to anyone who wants more choices in their investment plan. The government specifically allows this kind of retirement investment, so why not take advantage of it? When I retire, I want to have something real. Paper is paper, but gold is forever. Thanks,

MH - San Antonio, Texas

gold retirement account

Gold sheds Rs 240 to Rs 22,230 on weak spot demand

Gold sheds Rs 240 to Rs 22,230 on weak spot demand
Press Trust of India / New Delhi May 14, 2011, 15:31 IST

Gold and silver fell today due to a weakening global trend and slackened spot demand. While gold declined by by Rs 240 to Rs 22,230 per 10 grams, silver took a plunge of Rs 540 to Rs 54,410 per kg.

Trading sentiments turned bearish as gold in global markets showed weakness due to a stronger dollar eroding appeal of the precious metal as an alternative asset.

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Gold in global markets, which normally sets a price trend on the domestic front, fell by $11.70 to $1,495.20 an ounce. In addition, lack of demand at spot markets despite the ongoing marriage season, also kept pressure on the prices, traders said.

On the domestic front, gold of 99.9 and 99.5% purity fell by Rs 240 each to Rs 22,230 and Rs 22,120 per 10 grams, respectively. It rose by Rs 300 in yesterday's trade. Sovereigns followed suit and declined by Rs 100 to Rs 18,400 per piece of eight grams.

In line with a general trend, silver ready dropped by Rs 540 to Rs 54,410 per kg. The metal had gained Rs 1,650 in last trading session. Silver-weekly-based delivery lost Rs 440 to Rs 53,810 per kg, after gaining Rs 1,950 in the previous session.

Silver coins also tumbled by Rs 1,000 to Rs 60,000 for buying and Rs 61,000 for selling of 100 pieces.

Gold Consolidates Around $1,500 As US Economy Founders

Gold continues to trade above and below $1,500 amid further indications that the anemic economic recovery in the US is faltering. The Philly Fed's Q2 Survey of Professional Forecasters reflects expectations of slower growth over the next 4-years. The trimming of expectations from the group surveyed by the Philly Fed comes on the heels of Commerce Department data released late last month that showed real Q1 GDP has slowed to 1.8%, down significantly from a 3.1% pace in Q4-10.

The Philly Fed survey participants see growth slowing to 2.7% in 2011, down from 3.2% in the previous survey. They also lowered their estimates of 2012 growth slightly to 3% and in 2013 to 2.8%. These outlooks are consistent with recent downgrades to growth forecasts from Goldman Sachs and Morgan Stanley, among others. Obviously, GDP straddling the 3% level over the next several years does not bode well for job creation, nor for any kind of improvement in the housing market. We may in fact already be entrenched in our own "lost decade," much like Japan has been for the past couple of decades.


With market participants increasingly resolving themselves to anemic growth, recent expectations that the Fed would at least begin dabbling at tighter monetary policy have begun to erode. While the Fed continues to profess that QE2 will end on schedule in June, quantitative easing in the form of reinvestment of maturing Treasuries will continue into H2, so-called QE-lite, and speculation about a QE3 simply refuses to go away.

Paul Krugman, the Nobel prize winning economist at the NY Times and a unabashed Keynesian recently said, "I would be doing a QE3 that would be both larger and broader-based than QE2." In other words, Krugman and other economists of his ilk believe the economy is languishing because the government and central bank simply haven't done enough. More stimulus, more bailout for individuals and corporations and more quantitative easing may indeed increase demand, but at the expense of further discouraging saving, moral hazard, inflation and more asset bubbles that lead to heightened systemic risks. Then of course, the massive debt that is wrung-up in such an environment must eventually be paid back.

With Treasury Secretary Geithner recently saying that he can push back the day of reckoning associated with our current $14.3 trillion debt ceiling until August, any momentum on reconciling our fiscal disaster seems to have evaporated. The mindset in Washington all too often seems to be, 'why deal with a problem today that can be put off until tomorrow?' What they seem to consistently ignore is; that's a sure-fire way to allow manageable problems to grow into catastrophic problems -- as our debt arguably has become.

Obviously there are still considerable political wranglings going on behind the scenes, but both sides seem to be digging in their heels. The Republicans want to wrest big spending concessions from the Democrats. Meanwhile, the Democrats would like to see higher taxes on corporations and wealthy individuals, or at least demonize the wealthy and corporations in he eyes of the rest of the country. In the end, the absence of any semblance of sound fiscal policy will continue to foist the responsibility on the Fed, who will maintain their über-loose monetary policy stance. The dollar will continue to deteriorate and we all suffer.

Historically, the government and the Fed have always viewed risks to growth as being a far greater threat than price risks. Inflation be damned; in an economy that is driven by consumption, quite literally -- and frequently against our own personal best interests -- we must be cajoled into spending our money, lest the economy whither and die. In that respect, inflation is a useful tool, people are more inclined to buy now if they think the price will be higher tomorrow. In holding interest rates down below the real rate of inflation, there is little incentive to put ones money in a money market account or CD because their real yield is a negative one. Savers are actually losing money.

And so there is an ever-growing cadre of those who choose to save in gold. Steadily and constantly converting excess dollars to gold, positioning themselves to weather any storm that might be brewing beyond the horizon: inflation, deflation, stagflation, systemic collapse, political turmoil to name just the most obvious.

Peter Grant is USAGOLD's resident economist and a well-known analyst globally in the forex and precious metals markets.