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The Race That Will Not End Well
By Michael Lombardi | Business 2 Community – Fri, Nov 22, 2013 2:56 PM EST
http://smallbusiness.yahoo.com/advisor/race-not-end-well-195613587.html
Central banks around the global economy are involved in a race that will not end well. Of course, I’m talking about the race to the bottom of currency devaluation, which is being achieved through the printing of more and more paper money backed by nothing.
Almost weekly, I hear news about different central banks in the global economy cranking up the speed of their printing presses; they are fixated on printing money because these central banks believe they can solve their economic problems by printing. They are wrong!
Our own Federal Reserve is creating $85.0 billion a month in money with the hopes of bringing economic growth to the U.S. economy. But this strategy is failing the masses in America. Those who have benefited the most from this exercise have been big banks, Wall Street, and the rich. The poor and middle-class are in a worse situation now than in 2007!
But it’s not just the Federal Reserve that’s printing massive amounts of new money. Other central banks are doing the same under a fancy phrase: “quantitative easing.”
In its most recent monetary policy statement, the Bank of Japan reiterated it’s take on printing. It said the central bank will continue to work towards increasing the monetary base in the country by 60 trillion to 70 trillion yen per annum. The central bank will buy Japanese government bonds, exchange-traded funds (ETFs), and real estate investment trusts with the freshly printed money. (Source: Bank of Japan, November 21, 2013.) (Yes, the Bank of Japan is buying securities that trade on the stock market. As our next American financial crisis approaches, I wouldn’t be surprised to see the Fed do the same thing.)
The European Central Bank (ECB) just lowered its benchmark interest rate again and has hinted it might be taking its own quantitative easing action. (Only if eurozone member Germany would consent!)
We have seen the central bank of Switzerland and the Bank of England both participate in quantitative easing, and the central banks of emerging markets are doing the same! The central bank of India’s M1 money supply (total paper money notes and coins in circulation) has gone up 402% between the years 2000 and 2012. (Source: Federal Reserve Bank of St. Louis web site, last accessed November 21, 2013.)
And the governor of the Reserve Bank of Australia, Glenn Stevens, said this week that “It [quantitative easing] remains part of the toolkit.” (Source: “RBA not ruling out intervention on $A,” The Australian, November 22, 2013.)
But despite this unprecedented world central bank race to create more paper money out of thin air, gold bullion prices decline. How can that be? Dear reader, my “job” in these pages is not to present a boring economic analysis on the “why,” but rather, my focus is on the “opportunities.” And when I see gold nearing $1,000 per ounce (after the Federal Reserve has created about $3.0 trillion in new money and continues to print more), I see gold as a bargain.
Yes, I’ve heard the talk about deflation hurting gold prices. But right now we are seeing a vast amount of monetary inflation (the creation of new money with no backing). Going back throughout history, I’ve never seen a time when monetary inflation hasn’t eventually caused price inflation.
Denver Gold Forum - PRESENTATION DETAILS
Presentation Details
09/23/2013
http://www.lsgold.com/files/doc_presentations/DenverGoldForum-2013-09-23.pdf
http://www.lsgold.com/Investor-Centre/Presentations/PresentationDetails/2013/Denver-Gold-Forum/default.aspx
http://www.lsgold.com
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=92271516
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God Bless
Gold: “Taper This”
Tuesday September 17, 2013 11:48
http://www.kitco.com/ind/Tanashian/2013-09-17-Gold-Taper-This.html
Unmistakeable uptrend in the last 6 weeks or so... Up $62 last week.
Strong Contrarian Buy Signal on Gold Stocks
Friday July 19, 2013 15:51
http://www.kitco.com/ind/Trendsman/2013-07-19-Strong-Contrarian-Buy-Signal-on-Gold-Stocks.html
Long Rates Threaten Gold?
Friday July 05, 2013 12:39
http://www.kitco.com/ind/Hamilton/2013-07-05-Long-Rates-Threaten-Gold.html
As gold has plunged in the past couple months, yields on benchmark US 10-year Treasury Notes have soared. Many Wall Street analysts claim these rising long rates are very bearish for gold, and have exacerbated its recent weakness. Since the metal yields nothing, higher bond yields make investing in gold less attractive. This thesis certainly sounds logical, but do rising long rates really threaten gold?
Like any market theory, this one is best tested against the record of history and precedent. If rising or higher bond yields hammered gold prices in the past, then the gold bears’ warnings about their impact this time around are probably justified. And given the extraordinary surge in 10y Treasury yields in the past couple months, gold investors really need to consider how these yields affected gold historically.
Between early May and late June, 10y Treasury yields skyrocketed 56% higher from 1.66% to 2.59%! That is the biggest increase in this benchmark yield in such a short span in at least a half century, if not ever. Nothing even remotely close to this has ever been witnessed before per the Federal Reserve’s own data, which stretches all the way back to early 1962. We are in uncharted territory for long-rate surges.
And the Fed itself is the sole reason why 10y Treasury yields are soaring. Its latest debt-monetization campaign of pure inflation is widely known as Quantitative Easing 3. The $45b-per-month Treasury-buying portion of this was launched at the Federal Open Market Committee’s December meeting. Ever since, the Fed has been the biggest and dominant buyer of US Treasuries. No one else comes close.
The Fed literally creates brand-new fiat dollars out of thin air to purchase these Treasuries, which is pure inflation. All this artificial demand has naturally boosted the prices of Treasury bonds, and of course yields move inverse to bond prices. So when fears began emerging of the Fed’s massive QE3 buying starting to wind down, bond investors wisely dumped Treasuries ahead of the Fed’s price-collapsing exit.
The widespread belief that rising or higher Treasury yields are bearish for gold extends back to the early 1980s. After a popular-mania-driven parabolic explosion higher in late 1979, the last secular gold bull climaxed in January 1980. The day gold topped, 10y Treasury yields were running 11.0%! And they were heading higher still, reaching an unthinkable 15.8% in September 1981. Gold prices just collapsed.
But that doesn’t tell the whole story, correlation doesn’t necessarily imply causation. After soaring 182.6% higher in just 5 months leading into that parabolic climax, gold was due for a brutal bear no matter what long rates did. Provocatively between August 1976 and January 1980 when gold rocketed 731.7% higher, 10y Treasury yields relentlessly climbed 42.2% from 7.7% to 11.0%. Gold still exploded higher.
Despite the popular misconception, long rates are not always highly correlated with gold. And this too makes sense. Gold has never paid a yield, yet it has remained a popular investment for millennia. The investors buying gold are not looking for yields from that portion of their portfolio. They want proven protection from monetary inflation, financial insurance for unforeseen market events, and most of all capital gains.
The gold-has-no-yield-therefore-it-cannot-be-valued thesis is perpetually popular among gold bears, but it is a flimsy red-herring argument. While bond investors indeed buy bonds largely for yields, that has never been the case with most stock investors. Though there are elite blue-chip companies with high dividend yields, they are a tiny exception to the norm. The vast majority of stocks never pay any material dividends.
Investors happily buy technology stocks even though very few pay dividends. And the ones that do offer dividends almost always have trivial yields relative to their stock prices. Capital gains are the dominant reason investors invest outside of the bond world, and even inside it among professionals. Yields are nice, but certainly not necessary to stoke investment demand. Investors simply want to buy things that go up.
That is why gold has thrived many times in rising-yield environments. Like everything else, the gold price rises and falls based on supply and demand. And investors demand it when they believe it is going to rise, long rates are irrelevant. The vast majority of gold investors are not refugee bond investors looking for income and begrudgingly settling on zero-yielding gold. Those guys stay in bonds and high-dividend stocks.
And the other investors around the world who catapulted gold 638.2% higher between April 2001 and August 2011 didn’t buy this metal because low bond yields left them no choice. This first chart looks at benchmark 10-year Treasury yields and the gold price over the last dozen years of the latter’s secular bull. For nearly its entire bull run, gold thrived in long-yield environments much higher than today’s.
This chart really frustrates me. It would take an experienced Wall Street analyst about a minute to superimpose gold over long Treasury yields, and about 5 minutes to digest the resulting chart. This stuff is child’s play for honest students of the markets. Yet Wall Street analysts refuse to investigate. They keep repeating their tired mantra that rising bond yields hurt gold whether history proves that true or not.
Late last month the benchmark 10y Treasury yields indeed rocketed their fastest ever to 2.6%. And this was indeed much higher than their July 2012 all-time record low just above 1.4%. And yes, after averaging just 1.8% in 2012, 2.5%+ 10y Treasury yields are high relative to recent history. They are already wreaking havoc in other markets, including mortgages which are absolutely critical for US jobs growth.
But the recent super-low Treasury yields are a new phenomenon caused by the Fed’s wildly unprecedented quantitative-easing campaigns. What is now known as QE1 began in late 2008, and the Fed started buying Treasuries in early 2009. This continued through QE2 and now QE3. All this artificial demand drove up Treasury prices, forcing down their yields. Before that nearly the entirety of gold’s secular-bull gains occurred at way-higher yields.
After its stealthy birth in the depths of secular-bear despair in April 2001, gold achieved its first major high over 5 years later in May 2006. Over that 5.1-year span, this metal nearly tripled with a 180.6% gain. And during that time, the average yield in benchmark 10y Treasuries was over 4.4%! If far-higher long rates than recent history indeed discourage investors from buying gold, it never should have rallied in the early 2000s.
During the first 7 years of gold’s secular bull climaxing in March 2008, the metal nearly quadrupled with a 291.7% gain. Yet over that entire span, 10y Treasury yields averaged 4.5%. Gold investment demand was obviously quite independent of bond yields. Gold investors bought gold looking for capital gains in a secular-bull market, while bond investors bought bonds looking for recurring income through yields.
By December 2009 gold’s secular bull had been powering higher for nearly 9 years, and somehow managed to gain 373.5% across a once-in-a-century stock panic over a secular span where the 10y Treasury yield averaged 4.3%. Like everything else in the global financial markets, that epic fear superstorm led to wild gyrations in Treasury-bond prices and yields that ultimately dwarfed 2013’s.
And if Wall Street analysts are correct that rising long rates are bearish for gold, then falling long rates must be bullish for gold right? If yields fall low enough, then bond investors should get so discouraged that they say to hell with bonds and shift their capital into gold. The stock panic’s extreme volatility in 10y Treasuries offers a great laboratory to test this popular bearish notion. History shows it is simply false.
Between October and December 2008 as fear catapulted off the charts, investors flooded into bonds with a vengeance. This crushed 10y Treasury yields down 49% from 4.1% to 2.1% in just a couple months! Now with yields plunging to such dismal all-time record lows at the time, bond investors should have fled into gold per the Wall Street theory. Yet the gold price merely rallied 2.2% over this exceptional span.
And then between December 2008 and June 2009 as the global financial markets stabilized, investors aggressively sold Treasuries which forced the 10y yield up 91% to 4.0% in just under 6 months. Man, with stellar 4% yields available in “risk-free” US government debt who on earth would want to own gold? It yields nothing, zero, zilch, so it must be worthless. Yet the metal rallied 11.6% over this big and fast yield-spike span!
Gold continued way higher after that as the Fed’s highly-inflationary Treasury buying artificially forced bond yields lower. But over the entire 10.4-year span of gold’s secular bull to its latest August 2011 interim high, this metal soared 638.2% higher during a time where benchmark 10y Treasury yields averaged 4.1%. Thus gold’s entire secular bull happened when 10y Treasury yields were 2/3rds higher than today’s!
The Wall Street notion that higher bond yields sap gold investment demand, which I’ve probably heard a hundred times on CNBC in the last couple months, is a red herring. It is an argument that sounds logical on the surface, but is simply untrue. Rising long rates weren’t a threat to gold in its last secular bull, and they weren’t a threat to gold in this secular bull. Another case in point is crystal clear in the chart above.
Between June 2003 and June 2006, 10y Treasury yields soared 68% higher from 3.1% to 5.3%. Surely 5%+ yields would crush gold, right? All those deluded fools buying that anachronistic zero-yielding relic would see the error in their irrational ways and shift into good safe Treasuries. But that’s not what happened. Over that 3-year span, the gold price climbed 63.8% despite a steady rising-long-rate environment!
Wall Street claims rising long rates threaten gold not because it is true, but because they don’t like gold, never have, and don’t understand it. During that 10.4-year span where gold surged 638.2% higher in a mighty secular bull, the beloved flagship S&P 500 stock index fell 1.9%. It was languishing in a secular bear, a massive sideways grind. Despite this vast performance difference, Wall Street never warmed to gold.
They view gold as competing with stock markets rather than complementing them. They see higher gold prices as a barometer of higher inflation and greater uncertainty that will scare investors out of general stocks. And lower stock investment and stock trading means much lower incomes for the entire Wall Street industry. So for gold’s entire run higher, Wall Street either ignored or scoffed at gold’s massive bull.
Bearish theories were always advanced, no matter how far gold ran. But since it has suffered a normal correction that cascaded into a brutal plunge this year driven by a couple key unsustainable and waning anomalous factors I explain in depth in our new July newsletter, there is suddenly a huge market for gold bearishness. And the old gold perma-bears on Wall Street are of course happy to oblige, savaging gold.
Traders crave bearish gold theories today like this thoroughly-disproven bond-yield one because they want to rationalize 2013’s exceptional gold plunge. They want to believe it is fundamentally righteous instead of a short-lived extreme emotional anomaly driven by extreme fear that is already burning itself out. And just like after 2008’s extreme stock panic, a massive rebound upleg in gold is imminent as fear fades.
Rather amusingly, bond yields will likely play a role. But not how you’d expect. In the coming weeks, bond investors are going to get their Q2 financial statements and be shocked to see double-digit losses in their principal invested in supposedly risk-free and safe US Treasury funds. In just one quarter, all their yields earned in the past 4 or 5 years were totally wiped out! They will be dismayed, outraged, and scared.
No doubt some will decide 2%, 3%, or even 4% nominal yields (much lower after true inflation) aren’t worth the growing risks of staying invested in a generational bond bubble while the Federal Reserve contemplates scaling back its unprecedented Treasury buying. Some will likely decide to move some of their bond capital into gold. Sure there’s no yield, but gold is low and due to rise while bonds are high and due to fall.
So the surging long rates could actually increase gold investment demand! You’ll never hear that on CNBC, even though the capital losses in existing bond portfolios driven by rising yields have coincided with huge gold uplegs in the past decade. Interestingly the rates that affect gold most are not the long ones dominating headlines in the past month, but real rates. These are bond yields after inflation.
I wrote my first real rates and gold essay back in July 2001 when the metal traded at $270. I pointed out how bullish negative real rates were for gold, a hugely ridiculed contrarian position back then. My latest essay on this thread was published last November. So if you want to dig deeper, read that. But for today, just take my word for it after over a decade of study that negative real interest rates are very bullish for gold.
This final chart looks at negative real rates and gold. They are not based on 10y Treasury-note yields which require capital to be tied up for a decade, but 1-year Treasury-bill yields. From these inflation per the year-over-year change in the lowballed Consumer Price Index is subtracted. The result is real interest rates, and they have contributed considerably to the gigantic surge in gold investment demand globally since early 2001.
Forget about 2013’s epically anomalous gold selloff for a second, and look at how gold has fared over the past dozen years with low and negative real rates. In a negative-real-rate environment, bond investors actually lose purchasing power by owning bonds. The yields they earn are below the inflation rate, so they effectively pay for the privilege of lending their own money! Thus negative real rates drive bond investors into gold.
Sure gold has no yield. But it more than keeps pace with inflation over most reasonable timespans, so investors’ capital isn’t shrinking in real terms. And real rates have been overwhelmingly negative since December 2008 when Bernanke’s Fed embarked on its asinine anti-saver anti-economic-growth zero-interest-rate policy. The total failure of ZIRP is what led to the inflationary abomination of quantitative easing.
While the Fed has totally lost control of the long end of the yield curve in the past couple months, it still controls short rates with an iron fist. It directly sets the federal-funds rate, which banks use to lend to each other mostly overnight. And all short yields are keyed off of that. The shorter their maturity, the greater the Fed’s influence. And even out on 1-year Treasury bills, the federal-funds rate still utterly dominates.
In the FOMC’s latest meeting, it said it intends to keep ZIRP in place for “at least as long” as unemployment remains over 6.5% and inflation a year or two out is not expected to exceed 2.5%. Traders rightfully interpret this as meaning years into the future. As long as ZIRP is active, 1y Treasury yields are not going to rise much above current levels. And even lowballed CPI inflation isn’t likely to fall under 1%.
So negative real rates are not dependent on quantitative easing like long rates, but ZIRP. And the Fed is going to hold rates near zero for years to come. It can’t even reduce the pace of its balance-sheet expansion from all the QE debt monetization, let alone even start thinking about raising rates yet. As long as negative real rates persist, investment demand for gold is going to continue to grow on balance. It’s that simple.
So don’t worry about long rates and gold, one of Wall Street’s many anti-gold red-herring arguments. The real story on bonds and gold is real rates. And until the Fed musters the courage to catapult its federal-funds rate from zero to at least 1.5%, negative real rates are going to remain firmly entrenched. And they are wildly bullish for gold as the past dozen years have proven. 2013 was an anomaly that is already passing.
At Zeal we never accept any market argument without first investigating it ourselves. This has led us to a hardcore contrarian worldview. We buy low when others are afraid and sell high when others are brave. Thus we remain super-bullish on gold today despite the epic bearishness pervading it. Just like after 2008’s stock panic, the biggest uplegs ever seen are born out of the most extreme bearish sentiment.
Because of the extreme bearishness in gold, gold stocks have been pummeled to their most oversold and undervalued levels in the last dozen years if not ever. We’ve been buying them aggressively in our latest newsletters. And we continue to research them to uncover the fundamental elite.
The bottom line is rising long rates don’t threaten gold. Throughout its secular bull, gold has thrived while 10-year Treasury yields were higher or rising dramatically. Bond investors and gold investors are distinct groups with different goals. Gold investors aren’t looking for yield, they seek capital gains. And global gold investment demand grows for many reasons whether long rates happen to be rising or falling.
You can actually make the case that the severe capital losses in bonds driven by fast-rising yields are bullish for gold. There is no sense parking capital in bonds when they are being sold off aggressively, leaving gold much more attractive. And as long as real interest rates remain negative, which will persist for as long as the Fed holds rates artificially low near zero, gold investment demand will continue growing.
By Adam Hamilton, CPA
http://www.ZealLLC.com
Bottom action maybe...
One week price drop of $100.30... biggest I've ever seen...
Gold price jumps after Fed eases QE fears
Frik Els | January 30, 2013
http://www.mining.com/gold-price-jumps-after-fed-eases-qe-fears-81276/
Silver and gold starting to decouple in price... silver is stronger...
GOLDEN STAR RESOURC (BATS: GSS) fiat$1.730 -0.040 (-2.26%)
Realtime Price / Updated: 3:45 PM EST, Jan 4, 2013 /
http://markets.wnd.com/worldnetdaily./quote?Symbol=899%3A688905
A comparison of managements performance a must -
its often repeat itself -
E.g.,
Major Gold producer GSS EPS -$0.05 P/E N/A
vs. ex.
Penny Gold producer CALVF EPS $0.02 P/E 5.00
NO DEBT - dd....
http://markets.wnd.com/worldnetdaily./quote?Symbol=130%3A680485
http://shortsqueeze.com/?symbol=GSS&submit=Short+Quote%99
USA / USGIF Silver & Gold - Debt Collapse -
Gold & Silver gone bonkers today/Dollar over the cliff...
Gold futures market heading for crisis
by Alasdair Macleod - http://www.FinanceAndEconomics.org
Published : December 11th, 2012
http://www.24hgold.com/english/news-gold-silver-gold-futures-market-heading-for-crisis.aspx?article=4154222960G10020&redirect=false&contributor=Alasdair+MacLeod
I thought I had a good idea what disasters we might face in 2013, and then I saw the most recent US Commodity Futures Trading Commission’s Bank Participation Report for gold and silver. On the basis of recent BPRs these markets are heading for a crisis, which is generally unexpected. I shall break the reader in gently by looking at gold first.
The first chart below shows US banks’ net short exposure to gold up to December 4. Between February and August the US banks managed to reduce their net shorts from 104,717 to 57,689 contracts against a background of a declining gold price. This is logical, to be expected and sensible position management. However, when the gold price turned up after the August BPR, net shorts rapidly rose to new highs, and over the last month unexpectedly increased again while the gold price actually declined. This is a sign that the US banks, of which only five made returns for December, are having difficulty keeping a lid on the market that emotionally at best is neutral, but most probably somewhat oversold. This differs from an over-bought market with potential profit-takers to shake out, as was the case when gold traded at $1,900 per ounce and the same banks were able to bring the gold price back under control.
The next chart is of Non-US banks’ net shorts, which tells a very different story. From October 2011 these banks increased their short positions, with a sudden jump between August and October, before sharply reducing their net positions to 44,707 contracts this month. It appears that some of the shorts have ended up on the US banks’ books, pushing their shorts to uncomfortable levels as shown in the first chart.
The jump in these net shorts between August and October was comprised of sharp rises in both longs and shorts involving swap dealers and the other commercials. Longs more than tripled from 9,199 to 34,881 and shorts rose even more from 49,772 to 113,445 on a rising gold price. The likely explanation is that buyers materialised through some of these non-US banks, who hedged by buying futures contracts. A dealer or dealers at one or more other non-US banks saw the price go against their shorts and tried to kill it by massive intervention. Subsequently, when the US banks sold the market down from the October rally these non-US banks took the opportunity to reduce their shorts to more normal levels.
This information is particularly revealing, given that the Commitment of Traders Report shows a substantial reduction in the Commercials’ net position by 34,551 contracts for the week to the same date as the BPR, giving an impression of a market being brought back under control. The BPR suggests otherwise.
Silver
While there is a large stock of gold that can theoretically become available at higher prices, the same cannot be said for silver. We shall look at the position of the US banks first. The first silver chart shows that even though silver is trading well below its 2011 highs, US banks’ net shorts are substantially higher than might be expected. The long figure is down to only 625 contracts, while the shorts are 40,198, so these less-than-four-banks that reported last week have a net short exposure of nearly 200,000,000 ounces, or twice the estimated annual supply of silver available to investors after industrial demand is allowed for.
The final chart shows the non-US banks’ net shorts. Unlike their exposure to gold, these banks are in the same deep trouble as the US banks, having made the mistake of turning a broadly level book as recently as the August BPR into a record net short position on the August-October price rise. This is a vicious bear squeeze on them, which added to the US banks’ position amounts to a total short of 290,000,000 ounces. This figure compares with net shorts of only 120,000,000 ounces when the price was successfully taken down from its all-time highs early last year.
Conclusion
The silver does not exist to cover these short positions, and it will take very little further buying to set off a crisis in this important market. In the case of gold, there have always been central banks with physical bullion available to ease market shortages, but so far as we are aware the strategic silver stockpiles of previous decades are exhausted. There is therefore no price at which these shorts can be closed.
Bank positions in both silver and gold seem to have been adversely affected by “events unknown” from the August BPR onwards. All attempts by the banking community to regain control of these important markets appear to have failed.
Since the date of the latest BPR (December 4), there have been three serious attempts to reduce these short positions and each time the same $32.60 level has held firm. This suggests that a buyer or buyers larger than the banks are prepared to take them on by buying the dips. This price action supports anecdotal evidence that physical bullion in important markets such as London is in short supply.
On this evidence, and assuming the trend continues, there will shortly come a time where NYMEX will be forced to declare force majeure in this market, which they can do under their rule book. The consequences of this extreme action could well be destabilising not only for the price and demand for silver but also disruptive for gold.
Therefore, we must add the breakdown of precious metals markets to the list of systemic dangers we face in the New Year.
Thanks to Alasdair Macleod from http://www.goldmoney.com
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403-346-5266
auric@telus.net
http://www.jaxville.com
Jaggards Pty Ltd. (Established 1963)
Bullion and Rare Coin Dealers
Level 8, 74 Pitt St.
Sydney, NSW, Australia
contact: Robert or Yen
at +61 2 9230 0886
info@jaggards.com.au
http://www.jaggards.com.au
JH Mint
13241 Grass Valley Ave.
Grass Valley, California 95945
530-273-8175
silver_support@vzw.blackberry.net
http://www.jhmint.com
Kitco
178 West Service Road
Champlain, N.Y. 12919
Toll Free:1-877-775-4826
Fax: 518-298-3457
...and
620 Cathcart, Suite 900
Montreal, Quebec H3B 1M1
Canada
Toll-free:1-800-363-7053
Fax: 514-875-6484
http://www.kitco.com
Liberty Coin and Precious Metals
1125 Camino Del Mar, Suite C
Del Mar, California 92014
1-877-511-COIN
http://libertycpm.com/
Liberty Coin Service
Bank of America Building
Frandor Shopping Center
300 Frandor Ave.
Lansing, Michigan 48912
Patrick A. Heller, Owner
path@libertycoinservice.com
Contact: Allan Beegle or Tom Coulson
allanb@libertycoinservice.com
800-933-4720 or 517-351-4720
http://www.libertycoinservice.com
LinGOLD.com
41A Route des Jeunes
1227 Geneva, Switzerland
+41 (0) 225 180 200
Fax: +41 (0) 225 180 199
info@lingold.com
http://www.lingold.com
LINGORO.com
Plaza de Carlos Trias Bertran 4, 2
28020 Madrid, Spain
+34-911-86-80-90
Fax: +34-911-86-80-91
contacto@lingoro.com
http://www.lingoro.com/
Merit Financial
The Gold and Silver People
1300 4th St., Suite 303
Santa Monica, California 90401
Toll-free: 1-800-555-2631x213
Contact: David Weishaar, Senior Account Executive
david@meritfinancial.com
http://www.meritgold.com
MRCS Canada
12303-118 Ave. NW
Edmonton, Alberta T5L 2K2
Canada
Michael Riedel, Proprietor
1-877-TRY-MRCS
1-877-879-6727
mrcscanada@shaw.ca
http://www.mrcscanada.com
Miles Franklin Ltd.
801 Twelve Oaks Center Drive
Suite 834
Wayzata, MN 55391
1-800-822-8080
Contacts: David Schectman,
Andy Schectman, and Bob Sichel
http://www.milesfranklin.com
Missouri Coin Co.
11742 Manchester Road
St. Louis, MO 63131-4614
info@mocoin.com
314-965-9797
1-800-280-9797
http://www.mocoin.com
Northwest Territorial Mint
2505 S. 320th St.
Federal Way, Washington 98003
1-800-344-6468
bullioninfo@NWTMint.com
http://bullion.NWTMint.com
Pacific Coin Exchange
300 Carlsbad Village Drive, Suite 207
Carlsbad, California 92008
Proprietor: Phil Onori
877-917-5266
phil@pacificcoinexchange.com
http://www.pacificcoinexchange.com
Precious Metal House
3-1136 Centre St., Suite 626 Thornhill
Toronto, Ontario L4J 3M8
Canada
Toll-free in North America: 1-888-764-4151
Local/International: +1-647-799-2083
sales@preciousmetalhouse.com
http://www.preciousmetalhouse.com/
Precious Metals International Ltd.
Anderson Square Building, 3rd Floor
George Town, Grand Cayman
P.O. Box 866
Cayman Islands, British West Indies
Proprietor: Richard S. Love
http://www.PMILimited.com
PMI@PMILimited.com
Toll-free: 866-764-2878
Local: 242-394-5527
Resource Consultants Inc.
6139 South Rural Road
Suite 103
Tempe, Arizona 85283-2929
Pat Gorman, Proprietor
1-800-494-4149, 480-820-5877
Metalguys@aol.com
http://www.buysilvernow.com
Royal Crown Precious Metals Ltd.
Suite 1500, HSBC Building
885 West Georgia St.
Vancouver, British Columbia V6C 3E8
Canada
Andreas Runge, President
Toll-free: 866-769-2521
604-639-2150
Info@royalcrownmetals.com
http://www.RoyalCrownMetals.com
Scottsdale Silver & Gold
20701 North Scottsdale Road
Suite 107-266
Scottsdale, Arizona 85255
1-888-SIL-BARZ or 1-888-745-2279
sales@scottsdalesilver.com
http://www.ScottsdaleSilver.com
Seekbullion Gold and Silver Auctions
8420 S. Continental Divide Road
Suite 221
Littleton, Colorado 80127
Peter Spina, Owner
PeterSpina@goldseek.com
http://www.seekbullion.com
Sheldon's Finest Coins
P.O. Box 194
30 Noelle Court
Lincoln Park, New Jersey 07035-2256
1-888-786-5678
Ed Sheldon CPA, Proprietor
Agbug777@SheldonsFinestCoins.com
http://www.SheldonsFinestCoins.com
Silver Gold Bull Inc.
4819 45th St. / Box 2612
Rocky Mountain House, Alberta T4T 1L6
Canada
877-646-5303 or 877-646-5304
Fax: 403-845-5511
Sales@SilverGoldBull.com
http://www.SilverGoldBull.com
Silver Trading Co.
445 Montgomery St.
PO Box 876
Shreveport, Louisiana 71107
Larry LaBorde, Proprietor
318-470-7291
LLaBord@silvertrading.net
http://www.silvertrading.net
SprottMoney Ltd.
Royal Bank South Tower
200 Bay St.
Suite 2750, P.O. Box 90
Toronto, Ontario M5J 2J2
Canada
416-861-0775
or toll-free 888-861-0775
sales@sprottmoney.com
http://www.sprottmoney.com
Swiss America Trading Corp.
15018 North Tatum Blvd.
Phoenix, Arizona 85032
Dean Heskin, CEO
1-800-BUY-COIN
hes@swissamerica.com
http://www.swissamerica.com
The Moneychanger
Box 178
Westpoint, Tennessee 38486
Franklin Sanders, Proprietor
1-888-218-9226, 931-766-6066
http://www.the-moneychanger.com
Treasure Island Coins Inc.
1002 43rd St. SW
Fargo, North Dakota 58103
701-282-4747
http://www.treasureislandcoins.com
True Metals Group
728 West Ave., Suite 1100
Cocoa, Florida 32927
Daniel and Karina Ward, Owners
866-303-0781
Sales@silver50.com
http://www.silver50.com
Worldwide Precious Metals (Canada) Ltd.
Suite 1488, 777 Hornby St.
Vancouver, British Columbia V6Z 1S4
Canada
President: John P. Downes
Toll-free: 1-866-623-2002
Local 778-945-2002
info@wwpmc.com
http://www.wwpmc.com
JIM WILLIE: CENTRAL BANK GOLD REHYPOTHECATION SCANDAL TO TAKE GOLD TO $5,000/OZ
NOVEMBER 22, 2012
By Jim Willie, http://www.GoldenJackass.com
http://www.silverdoctors.com/jim-willie-central-bank-gold-rehypothecation-scandal-to-take-gold-to-5000oz/
-The battle is on for delivery and verification for official gold accounts
-Evidence grows that much of it is gone, and when demanded, replaced with urgency
-It is soon to transform into a global gold war
-The German Govt gold demand to the London and NY City bankers represents a big escalation in the gold war
-The central bank coordinated QE to Infinity has brought questions of gold account location and integrity
-The Allocated Gold Account scandal is a natural event to follow the LIBOR banker scandal
-QE3 will assure a gold rise past the $2000 mark, but the new scandal will take the gold price to $5000
-The powerful gold factors are aligned and in place, led by permanent ZIRP and unlimited QE
A nasty Golden Harp could soon have its cords plucked, with the resonance working to shake loose the bankster cover of improper illicit duplicitous and probably highly illegal usage of Allocated Gold Accounts. When diverse scattered accounts are pilfered and depleted without authorization in Switzerland, resulting in several multi-$billion class action lawsuits in Zurich, all kept dutifully out of the news, that is one thing. But when a few key official government gold accounts are ransacked in systematic fashion from established trusted locations, defying and betraying the trust of the German Govt and other national governments, that is quite another. To be sure, the system can tolerate ransacking and replacing with scurried harried efforts the Venezuelan gold account like in 2011. The media told the story with creativity and aplomb, avoiding the truth, inventing a tale, but finding a credible pile of dung to feed the public, which swallowed it whole. The global monetary war has been raging for four years, ever since the Lehman Brothers firm was targeted and destroyed with planning and motivated execution, for the benefit of Goldman Sachs full CDS redemptions and exploit by JPMorgan in war chest reload under cover of bankruptcy court orders. The media prefers regularly to refer to the global financial crisis incorrectly and improperly. A crisis passes after a year or so. This war lingers like WWI and WW2 and Vietnam, with a clear emerging agenda to defend the USDollar regime from global isolation shun, to conceal the USTreasury Bond support mechanisms in derivatives, to avoid the US banking system from grotesque insolvency but kept afloat by grand money laundering channels, and to motivate an endless war to secure resource thefts and control that center on oil fields and the poppy fields. Witness the slow gradual inexorable collapse of the global monetary and financial system.
This is a global monetary war as last hurrah for the longest running fiat paper currency regime in modern history, which has run from 1971. The current dying regime has been held up by pressure to maintain USDollar support and not diversify away from it. It has been held up by amplified usage of derivative support in the form of Interest Rate Swap contracts, thereby keeping USTBond yields ultra-low in the face of chronic $1.3 trillion USGovt deficits, and creating an illusion of a flight to safe haven. It has been held up diverse comical USFed support in the form of a cornucopia of liquidity programs, to supply the big US banks with never ending bond redemption and carry trade aid. The current dying USDollar regime has culminated in an admitted permanent monetary policy identified by a toxic 0% official rate and the emerging reality of limitless bond monetization. It has been held up profound distortion of economic statistics, which have become almost laughable in the abuse.
To call this a financial crisis is like calling Hurricane Sandy just a bad storm, or calling a devastating drought just a dry spell, or calling raging cancer just a growth aberration, or calling a rape violation just an unfortunate encounter, or calling a death sequence just a passing, or calling a business bankruptcy just a bad skein on its account, or calling a home foreclosure just an opportunity to clean house. The nation and the world are undergoing a death sequence for the USDollar regime, and a vigorous corrupt defense to extend its life, in order to maintain power, to continue gigantic thefts, to perpetuate gigantic bond frauds, and to enable foreign account thefts of the traditional type and related to gold. The hidden motive in the Libyan overthrow of Qaddafi was to steal his 144 tons of gold held in London. The banksters needed it. The action and the reporting of the events were typical distractions laced with fiction.
HORRENDOUS STORM DAMAGE
The nation is heavily distracted by the Hurricane Sandy, its wind, its water, the resulting floods, the resulting electrical power outage, and ruined businesses, the controversies over flood damage versus wind rain and storm damage for insurance coverage. Look for Sandy to surpass Katrina in its total storm damage, which was $105 billion in 2005. Basic research indicates Sandy and Katrina had much in common, as the mad scientists attempt to play god. The efforts to produce a mild winter a year ago might have had a sling shot effect of generating a potent drought. The path was open for a unique storm, called once in a century, for the NorthEast. My memory is clear of the last hurricane to hit the region, which was Julia. The Jackass taped windows in the Boston area all for naught, since the 50-60 mph winds were nothing but a nuisance and cause for numerous downed trees on power lines. This storm is for the history books, perhaps retaliation by Mother Nature for messing in her kitchen, maybe worse. She always reaps her wrath and delivers her vengeance. The High Frequency Active Auroral Research Program has a shady sinister tone, but it is beyond the scope of the Hat Trick Letter. What Mengele was to medicine, HAARP is to meteorology. What Fort Dietrich is to viral weaponry, it is to weather control and seismic generations. What Monsanto is to modified genetic foods, it is to weather developments. The public seems laughably ignorant of devices to produce earthquakes and to amplify then steer storms, with nuclear power packs. Tesla notes and dreams have indeed come to life. Some personal contacts have close colleagues who actually worked on the project for the Boyz.
The delusional dopey derelict US economists have surfaced with their errant vacant viewpoints of a reconstruction benefit boost to the USEconomy. If only all could break windows and direct garden hoses in living rooms, the national economy could recover quickly. The key news item is that finally the New York Stock Exchange was finally shut down for two days due to uncontrollable liquidity and its widespread damage, due to a Hurricane Sandy Weill margin call on systemic failure. No amount of high frequency flashes to dry out the systems could succeed. No amount of plunge protection teams could open the drains beneath the damage. No amount of derivative exercises could bring workers to the trading pits.
The storm damage is estimated at $20 to $25 billion, again in a process divorced from the real world. Recall the Fannie Mae bailout estimates for $50 to $100 billion at first. Recall that the Iraqi War costs were $200 to $400 billion at first. The Jackass cited cost forecasts multiples higher, all accurate. Quick footnote on storm aftermath. Think Desert Storm, or Desert Shield, or whatever mucky name they offer. The yellow painted bricks taken from the Iraqi central bank were really gold bricks, stolen, then covered by a lame news network story gobbled up by the incredibly braindead public. In a few weeks, some concocted story might emerge about how the New York Fed was without electrical power, its vault systems left unsecure.
The Hurricane Sandy storm damage will reach far past the $100 billion level, probably closer to $200 billion. The center of the impact was the NorthEast, the most densely populated area of the country. Already 20% of the entire US population has been affected, with almost 7 million homes without power. Insurance firms will be depleted, at a time when their income has been hampered by the ultra-low USTBond yields, coupled with mortgage bond losses. The USFed will receive a big boost in destroying final demand, as the central bank has conducted a hidden agenda to keep commodity prices down by harming the general economy and thus reducing final demand. They will next enjoy hypocrisy of high order, as the economy pauses, then energizes with rebuilding and cleanup. The central bankers will talk of a boost and stimulus. The price of lumber and cement might become a problem later on. Time to fix the broken windows and mop up the flooded living rooms. It is all good, as people are back to work, the economic recovery enhanced.
GOLD WAR STAGE SET
Back to the topic today. The global monetary war has escalated. It began with a profound bond fraud backed by mortgages, often with duplicate usage of income streams. It extended to sovereign bond wreckage, from deep government deficits, from wasteful bank aid to ward off insolvency, and lost trust of heretofore sacrosanct bonds. The war continues. It extended to the desperation by big Western banks to redeem their bonds by USFed and EuroCB largesse, even if illegal, even if unsterilized, even if the averted liquidations wreck the national economies, even if the actions directly result in a higher cost structure, even if bank runs are inevitable. It extended to destabilize further the fragile Middle East nations already beset by rising food prices, so that the departing leaders could either leave with gold wealth (see Tunisia) or have their foreign accounts stolen (see Libya). Tiny Ghana demanded its gold return from London, but suddenly its leader showed up dead. Syria does not have oil wealth, but it does possess valuable ports (see Russian naval port in Tartus). The global monetary war extended to collateral grabs and seizures, like in Greece, but with an entire table full of similar attachments being done in Italy, Spain, France, Portugal, and elsewhere, mostly in deep secrecy. It extended to exert extreme pressures on the European Commission to bend the rules, and to European Central Bank to bend the rules, and on the German High Court to bend the rules. The banker elite require rule changes in order to perpetuate the redemption of their busted portfolios at public expense from additional government deficits. One must be a billionaire to receive public aid, as the commoners need not apply.
THE GOLD WAR BEGINS
The absence of solutions offered has forced the major central banks into heretic caustic and destructive policies that are stuck in place. The nations involved are all uniformly subjected to the 0% corner, with their monetary spew reaching all corners of the world. The US Federal Reserve leads the way in justifying the highly destructive ZIRP and QE, the powerful 0% free money clarion call joined by endless bond monetization to pay for the wide stream of federal deficits. The Weimar America has produced a Pied Piper effect among the major central banks, coerced by a powerful Competing Currency War factor, where all must join or see their currencies rise to dangerous levels, sufficient to render deep economic damage in the vaunted export trade. The USFed in effect attacks the successful coveted export trades by monetary recklessness. The impact from the Global QE to Infinity, which the Jackass made reference to in 2011 long before other analysts, is to cause a defense from currency debasement. Wealth is under heavy attack. The impact has caused an undercurrent by the US and UK bankers in pursuit of gold supply to satisfy demands, like from Venezuela. The principal sources of gold continue to be the Bank of England, the Bank For Intl Settlements, and the Roman catacombs. The elite are having their gold vaults raided, done as loans to the major central banks and bullion bank centers. Resentment builds.
Alternative supply sources have been urgently needed, thus the project in Libya. Thus the MFGlobal thefts. The list goes on, but the need is rising far faster than the channels can be supplied. Desperation has set in with the major bullion bankers and their clever craftsmen who manage markets with leverage, derivatives, and propaganda. The Gold War is escalating, as the insolvent bankrupt and desperate Western bankers are resorting to whatever means to locate gold assets. They have a two-fold double whammy at work. They must find new gold supply in order to shore up their own insolvent systems based upon gigantic flawed paper structures built atop debt structures. They must also find new gold supply in order to satisfy gold demands within the LBMA and COMEX, or else face market defaults that expose the acute shortage of Gold & Silver. The MFGlobal theft of private accounts was a direct assault and crime scene designed to satisfy a Silver market demand delivery schedule. Investors awaiting silver delivery had their accounts stolen. While permitted by regulators and the courts, the warning was given for a call to arms to protect and preserve true wealth held in gold accounts. It must be located and secured before it is stolen by the London and New York bankers.
OFFICIAL GOLD REQUESTS AS ESCALATION
The bond fraud and gold market fraud and futures brokerage fraud and central bank bond monetizations, and desperate reactions to insolvent broken national banking systems, and continued flow of government red ink in deficits, all these activities have motivated nations to check their gold bank accounts. What they see scares them witless, but it pushes them into action. The demand by Chavez in Venezuela over a year ago served as a stark wakeup call. Imagine mature experienced savvy German bank officials observing a socialist backwater Latino renegade like Chavez leading the way in defense from Western banker corruption and colossal thefts. Finally, the Germans are taking action. They tried in September to view their gold account in the New York Fed, but were turned away with insults and disdain. Word has come that the shun event in the Big Apple was probably the fifth time in the last few years that a German delegation has been turned away. The situation is as complex as it is dicey. The Germans under the Deutsche Bank flagship had been a principal accomplice and cooperative partner in the great gold game, where as a large collusive group they leased national gold, dumped it on the market, supported their paper currencies, while the banking elite speculated and profited in the $trillions on leveraged bets that were basic betrayals of their nation. The Jackass prefers the words financial treason. To use the metaphor, the Golden Harp will be busy causing deep damage to the global financial structures, from its broken bond foundation to its uncollateralized major currencies. The Golden Harp will act as a great destroyer from the financial tectonic plates that stand as the faulty bond foundation, to the stormy ether in which the baseless currencies float in infinite volumes.
Some historical research reveals that the infamous Brown Folly had a basis in aiding Deutsche Bank. The Bank of England was directed to sell a huge lot of its national gold treasure between 1999 and 2002 to mark the Gold market bottom. It was not sold, but rather handed to D-Bank in order to satisfy a big margin call. They aided both D-Bank and Goldman Sachs, each heavily short and at risk. The Gordon Brown action was done with two unusual signpost markings. The sale was announced in advance, thus permitting front running by London and New York bank buddies. It was done in auction, to assure the lowest possible price. The actions set the low. But the actions bailed out D-Bank secretly. The aid to GSax was one of a string of ugly pearls, which the arrogant elite firm never seems to mind and never bothers to cover up too effectively. They benefited from the TARP Funds as #1 son in the family. They did work feverishly in 2009 to conceal their Unix box for tapping into the NYSE for peeking at trades, front running them, and skimming pennies on billions of trades. They enlisted the help of the FBI to arrest the Russian rogue, painting him as a villain, even prosecuting him, despite the clear legal violations from the GSax tool. He tried to show the world what scum GSax was, how they were common criminals in white collar crime. Back to Germany.
In the summer 2012 months, a significant sequence of events took place. The CEO Josef Ackerman was ousted finally. Few realized that his removal was a key event in the change of tide against the Western banker elite. The story went largely unreported. As leader of D-Bank during many years of solid cooperation with London and New York banker games and gimmicks, he knew too much. My best info source reported last spring that several Interpol agents and high level investigators occupied Ackerman’s office while he was present. They obtained files, downloaded documents, and had their way. The shocked CEO made a phone call to an attorney, and was frustrated at the lack of pull. He made another phone call to a ranking judge, but again was frustrated at the lack of pull. He was told that the raid was done from a higher level than the German Govt. The Jackass was told that the raid was the work of a powerful new sheriff in town, with Eastern entity connections, hell-bent on justice, with a no nonsense attitude, with staggering wealth at their disposal.
The global monetary war extended in March, April, May, and June to a profound powerful run of gold bullion by Eastern entities against London banks. Margin calls of unusual type prevailed, where cash cannot satisfy the margin calls, where wrecked leveraged bets on currencies and bonds demand action taken to fortify the margin. In all, approximately 6000 metric tons have departed London bank vaults since March, all headed East, in the biggest raids in modern history. The US press, London press, and Western European press have been silent. The silent spring reminds one of the missing bird chatter from DDT decades ago, chronicled by Rachel Carson. The toxic paper has a chemical parallel. These London trades have been the object of Jackass study for a couple months. My firm belief, backed up by hints of confirmation from sources, indicates the Eastern pressures on London banks could involved enormous amounts of Official Gold Accounts and private Allocated Gold Accounts, improperly used (rifled, pilfered, stolen) for the original margin placement. Satisfy the margin call with like kind asset. Conceal the gold account seizures, but in the process the owners recall their gold bullion in huge volumes, with deals cut and secrecy maintained. The London bankers find their nether onions caught in a powerful vise, and the Easterners are hardly in the mood to relieve the pressure.
GERMAN AND DUTCH DEMANDS
The German Govt demands a full accounting of its official gold accounts held in foreign lands. They demand a careful accounting that involves inspections, weighing, assurance of gold proof, and examination of markings, perhaps even some testing of bar cores. They demand an accounting that cites locations and storage. They demand a full complete audit. The distrust is thick. James Turk, founder of Gold Money, believes the German gold is all gone, used up in the two decades of gold games that defended the fiat paper currency regime. He lives and works in London, has ties there, and probably is privy to the grapevines. The order is part of a compromise between the German central bank and the Audit Court, which has called on the Bundesbank to take stock of its gold holdings outside Germany, saying it has never verified their existence. Apparently, no longer will the word of the New York Fed or the Bank of England be sufficient. They have been caught lying too often. They have been implicated in deep bank corruption too often. They are being depleted of their gold, in regular shipments to cover the demands, the evidence for which is detailed in the October Hat Trick Letter. Call it backlash from the Quantitative Easing and infinite endless unlimited bond monetization that is an absolute guarantee of systemic currency ruin. Call it a backlash from the sequence of rogue bond redemption plans declared by King Draghi at the Euro Central Bank. The Western Governments are scurrying to locate their Gold reserves, realizing that Gold is the only wealth asset they possess, except for the buildings and edifices that house their depleted gutted central banks.
My firm belief is that the Gold Wars have reached a new level, where Germany will be disappointed when it learns the gold is gone. To be sure, big distractions and absurd excuses will be offered. The pressure is on. The Dutch have joined the movement in making demands on London and New York. The call to the corrupt fortress is plain: WHERE IS OUR GOLD?? Maybe like with Jericho, after several calls the walls will fall. The irony is thick, since for 20 years the Western leaders have proclaimed gold as a barbarous relic that pays no yield, a dead asset. So the Germans with Dutch echo want a full accounting of their prized so-called dead asset, which in the end will provide salvation when the new monetary system is put in place. That system is ready, with full trade settlement foundation. It awaits the monetary system full collapse.
The outcome will be shown soon enough. The London and New York bankers improperly used the German gold, and official gold from numerous accounts like from France and Spain, from Venezuela to Mexico, to enforce the Strong Dollar Policy and to defend against its collapse. The Mexicans this month performed a formal genuflection before the London Banker Kings, announcing no need to repatriate their gold, as full confidence was expressed. What lackeys, likely offered a bone somewhere. Allocated Gold Accounts have been pilfered with governments as the owners. They will be angry. They must walk a fine line to express outrage but to protect from revelations pointing to their own complicity and benign neglect. The flagship bank of Germany which bears the national name has been deeply involved. In recent months, D-Bank has been cooperating with the Interpol and Intl Court of Hague in pursuing the banker corruption and high crimes against currency, wealth, savings, and humanity. Delicate deals have been struck with D-Bank. It will be interesting to observe how the German demands for gold account audit are met, and how the German Govt reacts to delays and coverup. My belief is that the D-Bank flip was key to the breaking of the LIBOR bank scandal.
GOLD PRICE REACTION
The Allocated Gold Account scandal is at the doorstep. The German Govt demand for full accounting of its foreign gold account is the knock at the door. They were shown extreme disrespect by the New York Fed in September. The recent demand is the consequence, in a ramped up escalation of the conflict, better described as gold war. My best gold trader source has assured that the eruption of the Allocated Gold Account scandal will come in the wake of the LIBOR scandal. They are related links in the exposure of big bank corruption. The LIBOR scandal began the process of investigation, discovery, and action, if not prosecution. Word repeats from key sources that the biggest banker criminals will never see justice. They will just vanish. An important consequence of the LIBOR followup is the lack of trust between bankers. They are all under investigation for collusion, and therefore must be silent as each is subject to indictment and lawsuit damages. The discovery process is unique, as the investigations can legally pursue and request documents, conversations, emails, and testimony that was previously not available. The strong crowbar is being used widely by strong arms and hands, with formidable bodyguards behind them. The Allocated Gold Account scandal is at the doorstep, possibly to break open by German demands.
The official in major nations are catching on. Expect more national government officials to make demands of London and New York. They suspect their national accounts are stolen, replaced by gold paper certificates, kind of an IOU left behind by the thief with defiant signature. Now a new twist. Romania has joined, as they recently demanded a full audit of their national gold account held by the Kremlin. The irony and contrast is due next. Expect the Kremlin to comply with the request from Bucharest. Their responsible response will put additional pressure on the corrupt Anglo banking centers, the site which the Jackass has long described as the center of the financial crime syndicate. The contrast will be embarrassing to the Western financial centers and their leaders, the dons to syndicate power.
The Gold price is sure to respond to the realization that the London and New York bank vaults do not contain the official gold on account. Supply is not in existence, sure to have an effect on price, as demand escalates globally. The trust has been violated. The anger will be acute. The global reaction will be recognition that the Western Governments do not possess the gold they claim to reinforce the integrity and value of their entire monetary systems. What faith remains in the fiat paper system will vanish quickly. Not only are the various sovereign bonds nearly worthless, but the collateral understood to reinforce their value is gone. The monetary system deserves to be foreclosed upon. The global currency system with the USDollar at its center deserves to be removed, replaced, and reconstructed.
Recall Jim Sinclair and his numerous calls between years 2005 and 2007 for a $1560 Gold price. Many called him crazy, but he was proved correct. The critics to the Gold Sound Money Movement still do not show respect. Rather they are loaded with contempt, clinging to failed Keynesian principles and empty beliefs that central banks can install solutions. They are best qualified to manage their gold thefts, manage the heavy narco money laundering, manage the multi-$trillion grants to banker colleagues, manage the bond shell games, and clean up after the mortgage bond frauds. Those are their best work accomplishments. The Gold bull market is entering an important second gear after a long year of consolidation. The feckless idiots who claim the Gold Bull is done seem the most ignorant in the financial classroom, the dumbest and most deficient in mental processes.
The Gold bull market has several primary cylinders.
1) Negative real rate of interest. With official interest rates stuck under 1% by all major central banks, the actual interest rate after subtracting price inflation is deeply negative. This factor has been and will continue to serve as the most important among many factors. It is the gigantic blind spot among gold critics. The long-term USTreasurys offer a mere 2% or 3% at most, far below the prevailing price inflation in the real world. Effective returns are thus negative. Investment in Gold as a hedge against the absent compensation for the erosion of money, it just makes sense.
2) Bond monetization. With unlimited bond purchases from QE1, then QE2, then Operation Twist, now QE3, and on and on until QE175, the debasement of currency is entrenched, absolute, and shocking. The movement is joined by the Euro Central Bank, the Bank of England, the Swiss National Bank, and the Bank of Japan. The debasement of money is powerful and without abatement. Investment in Gold as a hedge against the reckless production of bond supply, it just makes sense.
3) Unsterilized bond purchases. The QE3 admission of associated bond sales was a story not adequately told. In fact, it was a story told by omission. In the past, especially with the deceptive Operation Twist, the bond purchases were often made with funds derived from other bond sales. Like sell short-term USTBills in order to have funds to buy long-term USTBonds. The QE3 details indicate that Weimar Amerika has arrived, with extraordinary bond purchases using printed money. The debasement of money has turned nuclear. Investment in Gold as a hedge against the unchecked debasement of money, it just makes sense.
4) Permanence of QE. In the summer months of 2009, the Jackass was vocal and adamant, claiming that the Exit Strategy was a ruse, an impossible door to depart from the drastic desperate duplicitous central bank monetary policy. My stated forecast was that the ZIRP would remain and become permanent, and that QE would come in force. The buyers of USTBonds are long gone, except for other central banks playing the Competing Currency War games. The USFed under Bernanke announced last month that ZIRP would be extended until the end of year 2015. This is an admission that it is permanent. Every three to four months, they assure another year of permanence. The debasement of money has become a permanent fixture in a broken buggy. Investment in Gold as a hedge against the permanent debasement of money, it just makes sense.
GOLD BULL BILLBOARDS
The Quantitative Easing coupled with Zero Percent Interest Policy are dual firing chambers of a central bank shotgun aimed at destroying money. They will destroy wealth. They will destroy economies. They will destroy banking systems. They have already destroyed the central bank franchise system and bank integrity. Their actions will lead to a global rebellion against the USDollar, a movement well along. They will assure a USDollar isolation. They will bring about a replacement trade settlement system, which is actually almost in place. When combined with flat-footed Iran sanctions, the movement has accelerated to find USDollar alternatives in trade, and to diversify away from US$-based assets held in reserve.
More importantly, the QE and ZIRP assure the Gold price will rise past the $2000 mark, and that the Silver price will rise past the $60 mark. That is the direct eventual unavoidable effect of QE & ZIRP, the signal flares of central bank failure and monetary system ruin. Their permanent monetary easing is incredibly bullish for the Gold price, a guarantee of an endless bull market. As long as the bond monetization continues with the 0% official rate, the Gold bull market will be equally enduring and endless. It is that simple!!
The QE & ZIRP assure the breakout to new highs. However, the Allocated Gold Account scandal will assure the Gold price reaches $5000 and the Silver price reaches $200. The scandal has begun. The stage is set. The official Gold Accounts from foreign nations have been taken. Choose your word: improperly used, illicitly seized, illegally stolen, desperately hypothecated. The point is that national gold treasures held in London and New York have vanished over the last 20 years, a process begun with the Clinton-Rubin Admin, continued with the Bush-Paulson Admin, defended by the Obama-Geithner Admin. The names of the administrations must include the Goldman Sachs representative in charge of the USDept Treasury, the guy with the stealing rights, as my friend in Reno colorfully calls it.
The Most Important Chart for an Investor in Gold, and it Remains Bullish
Friday November 23, 2012 2:10 PM
http://www.kitco.com/reports/KitcoNews20121123JW_technical.html
If you are a gold market bull, and especially if you are a longer-term "buy and hold" investor, then the monthly continuation bar chart on nearby Comex gold futures is just what you want to be seeing. Gold prices have been in an accelerating uptrend for 11 years, since the 2001 low of $255 an ounce, basis nearby Comex futures. If you are a trader or investor, "the trend is your friend." The longer-term price trend in gold remains up, and there are no significant technical clues to suggest the uptrend will end any time soon. Thus, the path of least resistance for gold prices in the coming months will likely remain sideways to higher. I would not be surprised to see nearby gold futures prices push above $2,000.00 an ounce in 2013.
Monthly Charts Clarify Prognosis For Gold & Silver
Jordan Roy-Byrne, CMT (Certified Market Technician)
21 November 2012
http://www.thedailygold.com
http://www.gold-eagle.com/editorials_12/roy-byrne112112.html
We've been surprised at the recent action in the precious metals complex. During the recent correction the shares were showing quite a bit more strength than the metals. Then the shares took a dive below support yet the metals maintained their recent lows! How do we interpret this wild volatility in the relationship between the shares and the metals? Quite often we look at daily and weekly charts. Now is the time to take a look at the monthly charts which can help us get a better read on the larger trends at hand.
The monthly chart of Gold shows the yellow metal in a very healthy consolidation between $1550 and $1800. Gold's current retreat from $1800 has lasted two months. Back in 2009, Gold brokeout to a new all-time high in the seventh month of its consolidation. Presently, Gold's bollinger band width is at a multi-year low and its three-month volume average is at a two year low. Also, the RSI has bottomed and made a higher low. Even if Gold touched $1600, it would remain in healthy position for a breakout in 2013.
Gold's companion Silver is currently trading in a tighter consolidation with $35 as resistance and $27 as support. Note that Silver has tested and held above $27 six times in the last fifteen months. Silver also held above the rising 40-month moving average which supported the market in 2009 and 2010. The RSI has also made a higher low and volume has trended down during the past seven months.
Meanwhile, the gold stocks (HUI) look weaker than the metals. Momentum hasn't confirmed its bottom as the market is in a clear range from 400 (support) and 525 (resistance). Note the current 11% decline in the HUI for the month while Gold and Silver are still in positive territory. Nevertheless, if and when the HUI prints a monthly close above 525, this chart would like quite bullish and general sentiment would certainly pick up.
The evidence argues that the bottoms remain well intact and the metals are consolidating before the next breakout which entails Gold breaking $1800 and Silver $35. However, these breakouts are by no means imminent. Since we are dealing with monthly charts that means potentially three or four more months of consolidation. Furthermore, sentiment data such as the COT structure and public opinion polls need some improvement before the market could sustain a breakout. Thus, more consolidation could be the order of the day for the metals.
Continued consolidation in the metals also helps explain recent weakness in the HUI, which is simply testing the lower half of its own consolidation. The shares see the weakness in the overall market and perhaps sense that an immediate breakout in the metals is unlikely Furthermore, while central banks have put themselves in position to act they haven't actually done anything yet. When the market senses their action it will likely mark a final low within this consolidation.
The good news is the metals remain in fine shape and so to do most of the mining equities we follow. If we are indeed correct that the metals and shares will remain range bound then your task is simple. Prepare yourself for further consolidation by having your buy list ready and then be ready to act when the time comes. A wise friend once told me that in a bull market the goal is to accumulate positions at the lowest prices possible. With mining equities trading well off their highs, now is the time to do your research and find the companies that will lead the next leg higher and outperform the gold stock sector.
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If you'd be interested in professional guidance in uncovering the producers and explorers poised for big gains then we invite you to learn more about our service.
Good Luck!
Jordan Roy-Byrne, CMT
Jordan@TheDailyGold.com
A link some may find helpful:
http://goldinvestingnews.com/
Gold shall crash so sayith the lord.
This price of 1776 shall stand no more. For now is our Independance day from the tyrany of high gold prices.
Lawrence Roulston Spots Gold Juniors with Bright Futures
Thursday August 23, 2012 11:09
http://www.kitco.com/ind/GoldReport/20120823.html
Source: Peter Byrne of The Gold Report (8/22/12)
http://www.theaureport.com/pub/na/14178
In the topsy-turvy gold equities market, it can be difficult to spot junior mining firms capable of delivering a substantial pay-off. In this exclusive interview with The Gold Report, top market analyst and Resource Opportunities newsletter editor Lawrence Roulston discusses how to identify undervalued firms from Africa to British Columbia that have high-quality assets, access to development cash, solid management teams and bright futures.
The Gold Report: You recently observed that there's $9 trillion of gold stashed away worldwide. Does this mean that short-term gold traders are setting the market price for gold?
Lawrence Roulston: Most of the gold in the world is held for the long term. Only a small portion of total gold holdings is actively traded. Short-term price fluctuations are largely the result of traders reacting to news. A long-term chart of the gold price tells the real story. Gold is trending higher and there are short-term fluctuations, but the long-term direction is obvious.
The important message is that the long-term outlook for gold remains extremely bullish. The gold producers have an ongoing need to replace reserves, and they want to grow their businesses. That's the basis for viewing the exploration and development companies. You're going to beat yourself up trying to figure out what the next short-term move is going to be in the gold price, but if you take this long-term uptrend seriously and look at the companies developing deposits that are likely to be taken over by the larger companies, that's a much better way to play the gold market.
TGR: In February, you told The Gold Report that for gold shares, "the worst is over." Do you still feel that way? Are there signs that a bottom for equities has been reached?
LR: That call was premature. There was a brief rally. It turned around when the gold price dropped. The U.S. dollar replaced gold as a safe haven as people fled from the uncertainty in Europe. At that time, I differentiated between the resource markets overall and the higher-quality junior companies. The message still applies. Better-quality companies with good assets, cash on hand and strong management are building strong bases in their share prices at this time. Some of these companies have come down to the bottom and are trading at cash value. There is not a lot of downside once they're trading at cash value.
We are in the midst of the summer doldrums. People aren't really paying attention to the junior markets. That's going to change in September when people come back from holidays. Investors are going to recognize that companies with good assets are trading for cash value or near that level, and that there is more upside potential than there is downside risk.
The big factor that is really going to drive the markets is takeovers. We're seeing it now, and that's going to make savvy investors pay attention.
TGR: What specific political and economic trends are affecting the price of bullion and the price of gold equities?
LR: Short-term prices are impacted by news headlines, but headlines are not all that accurate. We hear constantly about the slowdown in China. In reality, China is the largest consumer of metal and its economy is growing at better than 7% a year. That's less than the 8–9% growth of recent periods, but it's still a phenomenal pace of growth for the second largest economy in the world.
TGR: What about the so-called euro dilemma?
LR: The situation in Europe is the most significant element impacting investor sentiment. Markets have pretty much discounted a complete collapse of the euro. Personally, I don't think we're going to see a complete collapse of the euro. I think a more practical outlook is that the powers in Europe are moving ever closer toward a wide-open monetary easing in the same way that the Americans used monetary policy to overcome the 2008 global financial crisis. And it worked very effectively in the U.S. The American economy is not booming yet, but it has certainly rebounded from a recession to a period of slow growth.
TGR: What would be the effect of quantitative easing in Europe on gold investors?
LR: Over time, it will be very positive for hard assets in general, and especially for gold, but also positive for the whole range of commodities. Monetary easing depresses the value of currencies. It's inflationary. Hard assets like gold and other metals are going to effectively hold their value in real terms as the value of currencies decline. In the long term, the easing could be very bullish for commodities in general.
TGR: Given that now is a good time to bargain hunt for junior mining stocks, what standards should investors use when evaluating whether a particular junior has a solid chance at making it through the next year or so and emerging as a contender?
LR: The biggest payoff for a junior exploration company comes with a new discovery. The value of a quality asset increases as the owner expands and upgrades the resource by conducting engineering studies and moving toward production. Companies with solid mining assets and good management teams that are advancing toward production provide the best balance.
It's hard for companies to raise money. Financings can be dilutive to the point where a company may never recover. But enterprises with cash in hand are in strong positions. And companies with good assets and strong management can still raise money. To be a winner, a project has to have size and it has to have grade. It has to be well located with regard to infrastructure and jurisdiction. Now, having said that, the number of good jurisdictions is shrinking. It's getting harder and harder to find good-quality assets in favorable jurisdictions.
TGR: Is that good or bad for the junior investor?
LR: Long term, it's good. The value of the good-quality assets will appreciate. In decades gone by, there was a surplus of good-quality metal deposits available for development. When metal prices rose, a lot of new deposits came onstream and knocked back the metal prices. We saw that cycle repeated several times over the last few decades. But the situation has dramatically changed; there is no longer a surplus of good-quality assets. Finding large, high-grade deposits is getting harder. That means that when a company makes a discovery, the discovery is more likely to yield a high value for shareholders.
TGR: Looking at the relative share prices of junior companies over a two-year window, we see some that are still holding value, despite some downturn in share price. Do you consider this type of comparison to be an indicator of company strength for the long term?
LR: Yes. There are several ways to explain undervaluation of high quality firms. Some individual investors are terrified and are selling across the board; they want out of all equities. Another huge component in the selling is investment funds, hedge funds and other institutional-type investors who came into the resource sector not really knowing what they were doing. Now they are looking to get whatever they can get for their positions. Consequently, sophisticated investors are picking up great bargains. That companies are still holding value indicates that they have tangible assets and solid management.
TGR: I wonder about Africa, which has a host of political and infrastructure obstacles. Have juniors in Africa ever drawn your attention?
LR: When you look at countries within Africa that have various levels of political risk, it comes down to a tradeoff between risk and potential reward. There are some places in Africa that I wouldn't touch under any circumstances, but there are other places that are quite attractive in terms of their level of geopolitical risk, are extremely prospective geologically and, therefore, provide an excellent balance of risk and potential reward.
TGR: What other regions would fit those criteria?
LR: West Africa in general is very positive. Ghana is a good place to be. Ghana and many other countries over the past couple of years have bumped up its rates of taxation and royalties on the mining industry in response to high metal prices. That's turned off a lot of investors, not so much about the level that the royalties and taxes are at this time, but the political situation creates uncertainty as to what it is going to do next. We saw the same thing in Mongolia, which bumped up taxes, said it was satisfied with that, then came back a year or two later and said, "no, we want more." That's really the biggest problem right now, the uncertainty of what's coming next.
TGR: For the retail investor, what are some of the major metrics that an investor could look at to tell the difference between a good-quality company and one that's maybe not so good in today's market?
LR: You have to realize that most of the junior exploration companies have the best intentions in the world of making a discovery next week or next month. They're good geologists, they're well intentioned, but if they're not successful at making a new discovery, they're not going to deliver a lot of value to shareholders. Some of them will make discoveries, and they will provide enormous payoffs for shareholders. But, unless they make a discovery, there may not be a lot of value in the vast majority of the companies in this sector.
I like to focus on firms that have a tangible asset in hand. They have made a discovery or they've reinvigorated a discovery that was made at some point in the past. So they have something tangible, and they're adding value to it. It's important to realize that the mining industry has changed dramatically over the past couple of decades. There were discoveries made in the 1980s, 1990s and even the early part of the 2000s that didn't make economic sense at that time. The grade was too low or it was too remote. And of course the metal prices at that time were very much lower than they are today. With higher metal prices and with changing metrics in a number of areas, discoveries from way back are now extremely valuable and, in fact, are some of the best deposits available to the mining industry.
TGR: Before we conclude, is there another area you would recommend?
LR: British Columbia is really coming back into the forefront. Not a lot of investors have appreciated the significance of what's happening in British Columbia.
TGR: Well, it has infrastructure. It is politically stable. There are a fair amount of new discoveries going on.
LR: It's one of the most highly prospective geologic areas. It has had a lot of work done in the past, and there are many companies that are now building on that historic work. In fact, I'm working now on a special issue of a newsletter devoted to British Columbia.
TGR: In terms of new extraction techniques?
LR: In terms of companies that are building on work that was conducted in the province in the past. Until recently, it was perceived as having no value, but this might end up being one of the most significant porphyry copper-gold prospects anywhere. There are a lot of situations like this in British Columbia. The province was explored pretty thoroughly in the 1970s and 1980s but at that time, the grades that the enterprises were coming up with weren't high enough to be economic in the context of metal prices. But now the gold price in the last decade is six times higher and the copper price is six times higher. Situations that had little value a decade ago are now highly prospective.
TGR: Do you have any parting words?
LR: A lot of people recognize the long-term fundamentals in gold and the mining industry in general, but they are terrified about the situation in Europe and they're standing back. They're waiting for a signal that the markets are at the bottom. Nobody is going to ring a bell to announce that the market is at the bottom. We saw in the early part of 2009 how quickly the markets could rebound. Within a couple of weeks, the Toronto Stock Exchange Venture Index was up 50% and went on to triple over the next two years.
TGR: We could be in a similar situation.
LR: I believe we are. The really important point is that the high-quality companies are already seeing strong bases building in their share prices and many of them, in fact, are beginning to trend upward. If people wait until there's a signal that the markets are on the way up, it's going to be too late to get a position in the good-quality companies.
TGR: Thank you very much for your time. It's been a pleasure talking to you.
Lawrence Roulston, editor of Resource Opportunities, is a geologist with engineering and business training and more than 25 years of hands-on experience in the resource industry. After completing his studies at the University of British Columbia in 1975, Roulston worked as an analyst for Cominco Ltd. and for a mid-size Calgary oil group for several years. In 1984 he became the CFO for a group of mineral exploration companies. He was also vice president in an investment management firm focused on the resource industry. From 1994 to 1997, Roulston was CEO and director of a mineral exploration company. Since then, he has been a resource industry consultant and independent mining analyst. Roulston's years of hands-on experience and extensive personal contacts in the industry provide unique insights that have generated an impressive track record for Resource Opportunities.
For more, see the link above...
Gold Bulls Strongest in Nine Months as Hoard Builds: Commodities
By Nicholas Larkin - Aug 23, 2012 10:26 PM ET
http://www.bloomberg.com/news/2012-08-23/gold-bulls-strongest-in-nine-months-as-hoard-builds-commodities.html
Gold traders are the most bullish in nine months after investors’ bullion holdings expanded to a record on mounting speculation that central banks will do more to bolster economic growth.
Twenty-nine of 35 analysts surveyed by Bloomberg expect prices to rise next week and three were bearish. A further three were neutral, making the proportion of bulls the highest since Nov. 11. Investors bought 51.7 metric tons valued at $2.77 billion through gold-backed exchange-traded products this month, the most since November, overtaking France as the world’s fourth-largest hoard when compared with national reserves.
Data released yesterday showed Chinese manufacturing at its weakest since November, signaling the nation may need more action to rebound from six quarters of slowing growth. European leaders are still struggling to contain the debt crisis. Minutes of the Federal Reserve’s most recent meeting showed many policy makers favor more stimulus. Gold rose 70 percent as the Fed bought $2.3 trillion of debt in two rounds of quantitative easing from December 2008 through June 2011.
“Additional stimulus is inevitable, the question is how it comes,” said Charles Morris, who oversees about $2.5 billion of assets at HSBC Global Asset Management in London. “There’s no doubt about it, this is gold’s moment. All the long-term trend signals suggest that gold is in a very strong bull market.”
Gold’s Rally
Gold rose 6.8 percent to $1,669.30 an ounce in London this year, reaching a four-month high yesterday and extending 11 consecutive annual gains. The Standard & Poor’s GSCI gauge of 24 commodities advanced 4.6 percent and the MSCI All-Country World Index of equities added 8 percent. Treasuries returned 2 percent, a Bank of America Corp. index shows.
Gold ETP holdings overtook France’s reserves on Aug. 21 after rising 90.4 tons this year to 2,447.1 tons, data compiled by Bloomberg show. Only the U.S., Germany and Italy hold more, International Monetary Fund data show. The IMF itself holds 2,814 tons of bullion, placing it between Germany and Italy.
Billionaire John Paulson raised his stake in the SPDR Gold Trust, the biggest gold ETP, by 26 percent in the second quarter and George Soros more than doubled his holdings, U.S. Securities and Exchange Commission filings showed Aug. 14. Investors will buy 150 tons through ETPs this year and next, Barclays Plc estimates.
Fed Meeting
Fed policy makers said further action would probably be needed “fairly soon” without evidence of a “substantial and sustainable” improvement in the recovery, according to minutes of the July 31-Aug. 1 meeting released Aug. 22. They next meet Sept. 12-13. Monetary easing can devalue currencies and accelerate inflation, boosting the allure of gold, which generally earns investors returns only through price gains.
Gold closed above its 200-day moving average on Aug. 22 for the first time since March, and that may be a “shot in the arm” for prices to rally toward $1,700, CMC Markets U.K. Plc said in a report that day. The metal held above the measure from the beginning of 2009 through the end of last year, a period in which it reached a record $1,921.15 in September.
Other technical indicators signal the rally could stall. Bullion’s 14-day relative-strength index (MXWD) was at 71.4 today, above the level of 70 that indicates to some analysts who study such charts that a drop in prices may be imminent.
Hedge Funds
The increase in prices and ETP holdings has yet to be reflected in speculative wagers in U.S. futures markets. Hedge funds and other money managers cut bets on a rally by 58 percent since the end of February, U.S. Commodity Futures Trading Commission data show. The net-long position fell 4 percent in the week to Aug. 14 and is near the lowest since 2008.
Physical demand is slowing elsewhere, with sales of American Eagle gold coins by the U.S. Mint dropping 49 percent to 30,500 ounces last month, the lowest since April. The mint sold 21,500 ounces so far in August, data on its website show.
Gold imports in India, last year’s biggest buyer, are set to fall as much as 50 percent in the September to December period from a year earlier, Prithviraj Kothari, president of the Bombay Bullion Association, said Aug. 21. Local prices reached a record today, data compiled by Bloomberg show. That may crimp demand at a time when a below-average monsoon in the country threatens rural incomes.
Wedding Demand
Bullion should be supported toward the end of this year and the beginning of 2013 on rising seasonal wedding and festival demand in Asia, Ronald Stoeferle, a commodity analyst at Erste Group Bank AG in Vienna, said in a report e-mailed Aug. 22.
Republican drafters of their party’s 2012 platform called for the creation of a commission to “consider the feasibility” of returning the U.S. dollar to the gold standard “to set a fixed value” for the currency, according to a 60-page draft of political positions and principles that will be submitted for adoption when the Republican National Convention begins Aug. 27 in Tampa, Florida.
In other commodities, 11 of 22 traders and analysts surveyed by Bloomberg expect copper to gain next week and five predicted a drop. The metal for delivery in three months, the London Metal Exchange’s benchmark contract, added 0.6 percent to $7,644 a ton this year.
Five of 10 people surveyed said raw sugar will decline next week and four expect an increase. The commodity slid 16 percent to 19.63 cents a pound since the start of January on ICE Futures U.S. in New York.
Corn Outlook
Thirteen of 23 people surveyed anticipate higher corn prices next week and five were bearish, while 17 of 23 said soybeans will increase and three predicted declines. Corn jumped 27 percent to $8.2125 a bushel in Chicago this year and reached a record $8.49 on Aug. 10 as the worst U.S. drought in half a century damaged crops. Soybeans set an all-time high yesterday and are up 43 percent this year at $17.3125 a bushel.
The S&P GSCI gauge of raw materials entered a bull market on Aug. 21, climbing more than 20 percent from this year’s lowest close on June 21. The global economy will expand 3.5 percent this year and 3.9 percent in 2013, the IMF estimates. Developing nations will grow 5.6 percent in 2012, it predicts.
“In the short-term, it would be difficult to see considerably higher commodity prices without quantitative easing from central banks,” said Daniel Briesemann, an analyst at Commerzbank AG in Frankfurt. “In the long term, I don’t think that commodities need quantitative easing measures, as they can rise without it. The economy should recover and demand in emerging markets is still relatively robust.”
- Gold survey results: Bullish: 29 Bearish: 3 Hold: 3 Copper survey results: Bullish: 11 Bearish: 5 Hold: 6 Corn survey results: Bullish: 13 Bearish: 5 Hold: 5 Soybean survey results: Bullish: 17 Bearish: 3 Hold: 3 Raw sugar survey results: Bullish: 4 Bearish: 5 Hold: 1 White sugar survey results: Bullish: 4 Bearish: 4 Hold: 2 White sugar premium results: Widen: 2 Narrow: 4 Neutral: 4 To contact the reporter on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net
Gold Rises After FOMC Minutes Show Discussion About More Monetary Easing
22 August 2012, 2:54 p.m.
By Debbie Carlson and Allen Sykora
Of Kitco News
http://www.kitco.com/
http://www.kitco.com/reports/KitcoNews20120822JW_pm.html
(Kitco News) - Gold prices rose in afternoon trading following the minutes from the most recent Federal Open Market Committee meeting that showed a discussion of additional monetary-policy accommodation.
December gold futures on the Comex division of the New York Mercantile Exchange were trading around $1,652.60 an ounce at 2:45 p.m. EDT on Thursday in the thinly traded afternoon session. December gold had settled the day session at $1,640.50.
One minute ahead of the release of the minutes, Comex December gold trading was weaker for the day at $1,638.90 an ounce. But the market quickly added roughly $15 to a new high of $1,654.80 that was the contract’s strongest level since early June.
According to the meeting minutes, the members of the FOMC have taken a step closer to a third round of quantitative easing, or bond-buying purchases to lower long-term interest rates. The Fed signaled that members were concerned about economic growth.
“Many members judged that additional monetary accommodation would likely be warranted fairly soon unless incoming information pointed to a substantial and sustainable strengthening in the pace of the economic recovery,” according to the minutes.
After the actual meeting on Aug. 1, the FOMC statement said the Fed would “provide additional accommodation as needed.”
Gold bulls were encouraged when the minutes showed FOMC policy-setters had a discussion on whether to undertake QE3, said Frank Lesh, broker and futures analyst with FuturePath Trading. “The expectations for QE3 are alive and well,” Lesh said.
Still, the language was not explicit in suggesting that more stimulus was the way to go.
“The Fed is walking its verbiage tightrope again,” said Sterling Smith, futures specialist, commodity research at Citibank Institutional Client Group.
Since that meeting, some economic data has improved, such as the July payrolls and higher retail sales, although Smith said that data might not make a difference in the Fed’s view just yet.
One of the tools under consideration was a change in the date for how long the Fed plans to keep its federal funds target at 0% and 0.25%, along with a statement that said a “highly accommodative stance” would be kept even if the U.S. economy started to pick up.
Market participants have been hoping for some sort of stimulus or quantitative easing from the Fed but thus far have been disappointed.
Smith said the Fed might wait to see what happens with food and energy costs. With both stronger, “that might make people nervous,” he said.
Further, there’s the risk of embarking on another stimulus, but having it offset if food and energy costs continue to rise, he said. “Monetary policy is not a panacea,” Smith said.
With the release of the minutes, the markets will now focus on next week’s Jackson Hole, Wyo., Fed symposium to see whether Chairman Ben Bernanke will give any clues about QE3. It was at this confab two years ago that Bernanke signaled the second round of easing which gave rise to a massive asset market rally across the board.
Smith said he doesn’t expect Bernanke to say anything “shockingly” different than what’s been said before. “The Fed has vowed to stay apolitical and we’re just about to head into the heart of the (presidential) campaign so that might have a chilling effect on any commentary,” he said.
Lesh noted market participants will still have to wait a while before any actual accommodation, since the next policy meeting is not until mid-September.
“So you’ve got almost a month to stew about whether you’re going to get any more or not,” Lesh said. “Clearly the Fed won’t move until they get the next set of employment data. But it (the minutes) keeps the hope alive. But you have to hold that hope for a month.”
Meanwhile, Lesh pointed out, the market is also on the lookout for further possible stimulus measures from the People’s Bank of China and European Central Bank. This means potential for three of the largest central banks in the world to provide accommodation. “That’s what gold wants to hear,” Lesh said.
Follow me on Twitter! If you want to keep up with metals news and features, then follow me on Twitter. It's free, too. My account is @dcarlsonkitco .
By Debbie Carlson and Allen Sykora of Kitco News; dcarlson@kitco.com and asykora@kitco.com
All the futures boards are for metals discussion NOT individual stocks. Period.
Bloomberg: Billionaires go for gold
Updated 08:54 AM Aug 15, 2012
http://www.todayonline.com/Business/EDC120815-0000070/Billionaires-go-for-gold
NEW YORK - Billionaire investors George Soros and John Paulson increased their stakes in the biggest exchange-traded fund backed by gold as prices posted the largest quarterly drop since 2008.
Soros Fund Management more than doubled its investment in the SPDR Gold Trust to 884,400 shares as of June 30, compared with three months earlier, a United States Securities and Exchange Commission filing for second-quarter holdings showed yesterday. Paulson & Co increased its holdings by 26 per cent to 21.8 million shares.
Gold slumped 4 per cent in the second quarter, the biggest such loss since Sept 30, 2008. Prices fell as European Central Bank President Mario Draghi and Federal Reserve Chairman Ben S Bernanke failed to increase stimulus measures, damping the outlook for global growth and demand for the metal as a hedge against inflation. The price is down 0.1 per cent since June 30.
"It's all about easing, and people are waiting for the Fed since investors expect prices will rise," if the central bank announces more bond purchases, said Mr Walter "Bucky" Hellwig, who helps manage US$17 billion (S$21.2 billion) of assets at BB&T Wealth Management in Birmingham, Alabama. "People are willing to hold on to gold to see what the Fed will say."
The metal surged 70 per cent from the end of December 2008 to June 2011 as the Fed kept borrowing costs at a record low and bought US$2.3 trillion of debt in two rounds of so-called quantitative easing. Gold erased its gains this year in May as investors favored sovereign debt and the dollar as economic growth slowed.
Spokesmen for Mr Paulson and Mr Soros declined comment. BLOOMBERG
A High Frequency Attack on Gold
By: Dimitri Speck
Thu, Aug 9, 2012
http://www.safehaven.com/article/26474/a-high-frequency-attack-on-gold
On June 7th, 2012, the price of gold dropped by $22 in less than a second, guided by a computer algorithm during late trading.
Sharp price drops in gold, for example $10 within a few minutes, can be observed frequently. Often they occur several times per week. The decline that happened on June 7, 2012 looks, at first glance, like such a drop as well, although some observers immediately noticed the extremely high speed. Market reports assessed the timeframe from "43 seconds" to "less than 5 minutes". According to spot price data with minute precision, the decrease was $20 in less than 2 minutes. The intraday chart below shows the price development in the spot market on June 7, 2012. The relevant decline is marked in red.
Gold often drops sharply within a few minutes for no obvious reason. It did so on June 7, when the decline during late trading was very fast.
Fig 1.
A High Frequency Attack
However, what took place in the late evening hours of June 7th on the futures market is of a wholly different quality. As part of the CME Group, COMEX is the largest exchange for gold futures contracts. The exchange records each single trade with the exact time, price and quantity. These records are called Times & Sales report and are available from the CME. They reveal for June 7, 2012 for the period of one second, namely at 9:21 PM and 20 seconds CDT, a complex price attack in the high frequency range which can be performed only by especially programmed computers.
During that one second 501 prices were determined, among them 490 with volume, while during all other 3599 seconds of this trading hour on average only 1.87 trades per second were registered. In this once second the number of trades suddenly rose 260-fold! Figure 2 shows an excerpt of the Times & Sales report with the start of the relevant second for the most active August contract.
The future exchange provides Times & Sales reports with all trades. At 21:21 (9:21 PM) there was one trade in each of the seconds 16 - 19. However, in second 20 a total of 501 quotes were registered. The first of which was already pointing downwards.
Fig. 2, Source: CME
Investigation of the Exchange's Records
The left column shows the trade time with a resolution of one second. Next to it, the figure lists the price, the volume and where applicable additional information (such as cancel). During the first seconds, we can see a low trading activity with one trade per second. This is normal for this period late in the evening. Then the high frequency attack started. Please consider that the excerpt below only shows the first seven of a total of 490 trades of the second 21:21:20. Faster than a machine gun, one trade after another is executed in milliseconds or faster. The excerpt shows that the price dropped already $3.7 at the start of the relevant second. The many small trades also demonstrate that the reason for this activity was not just a large misplaced order. But during this one second more oddities occurred. Figure 3 shows another excerpt from the Times & Sales report of the relevant second.
During second 20, a series of sharp drops took place in the range of milliseconds. The example shows a drop of 8.3, down from 1578.1 to 1569.8.
Fig. 3, Source: CME
Flash Drops within Milliseconds...
The excerpt starts with two trades at $1578 and a small rise to $1578.1. But then the price abruptly drops by $8.3! As quick as a flash, one trade after another is executed at this much lower price of $1569.8 with the volume of only one contract. We notice significantly lower prices appear in the most active contract within milliseconds. Actually one would expect that there were many trades in between due to limited buy orders being in the market. As the price sank, there was no execution all the way down the 83 steps of $0.1 each. But then there were eight trades at once at $1569.8 with a volume of exactly one. It seems as if the trades have been shot under the buy limits of other market participants.
...Followed by Recoveries
However, this low shot is not an isolated case. Sudden drops of at least $7 without a price in between appeared five times in the relevant second. In addition there were several smaller declines. But the prices recovered almost always completely in between! Thus there are apparently some buy orders. This rapid up and down appears as if the other market participants awakened from milliseconds of sleep, then placed their orders, only to fall right back into another millisecond nap. In reality, however, a high frequency computer program was active which generated a large number of individual trades to manipulate the price.
The Attack's Second in Detail
Now we look closely at the second 21:21:20. The figure below shows all the prices in the relevant second, an Intra-Second Chart, so to speak. As is common, the vertical axis indicates the price in dollars per ounce. On the horizontal axis the trades during that second are sequentially numbered. In addition, the prices before and after are shown, and so-called indicative prices (in red).
The almost 500 trades of second 20: Clearly visible are many sharp drops, followed by recoveries. These movements happened in fractions of a second.
Fig. 4, Data source: CME
High Frequency Up & Down
We can clearly see the up and down of the prices. Neither a mistrade, nor a move in the spot market, nor a building up of several high frequency programs (like in the flash crash of the stock market on 6 May, 2010) can cause such swings. In addition, the hundredfold increased number of trades and volume can eliminate such causes. Also the spot market can't be the cause in question, as it lagged behind the sharp drop. Instead it was a phenomenon of the futures market. Generally, no person but only a high frequency computer program can act so fast. Due to the lack of any suitable alternative, its purpose must have been price manipulation. Indeed it was achieved: the price stayed more than $20 lower for hours - time enough to get back the costs of the operation.
The Trading System of the Exchange
At this point a look at the trading system of the CME is merited. Due to the conspicuous price movements, the CME halted trading on 7 June 2012 already during second 21:21:20 for 40 seconds by a program called Stop Spike Logic. This also means that the 500 price movements took place in less than a second! While this reaction of the trading system makes sense, other procedures are questionable. For instance so called indicative prices should appear only when no trading takes place (indicative prices are estimates where supply and demand would meet). However, the Times & Sales report shows indicative prices during trading even before the halt (see Figure 4). These prices stood repeatedly at $1556 or about $22 lower than in the second before. At the same time this was already the level at which trading should start again after the halt. The CME was not able or not willing to explain how this could happen despite repeated inquiry and detailed explanations of the facts. For the sake of completeness, it should be noted that at this point there were no news for the gold market and that other markets such as currencies, bonds or stocks showed no significant price movements (except of silver).
Conclusion
High frequency programs which now account for a significant share of trading activity have rightly fallen into disrepute in recent times. They might be useful in some cases such as avoiding market impact while placing large orders. However, unequal access to the market is questionable as are highly technical efforts which are ultimately done only to pull money out of the pockets of slower market participants. At the very latest, limits of legality are touched when high frequency programs are used for front running or to manipulate prices. Such a price manipulation took place on June 7, 2012, at 9:21 PM and 20 seconds in form of a high frequency attack on gold. One second was enough to manipulate the price of gold down by more than one per cent for the duration of several hours. Although in the past central banks repeatedly intervened in the gold market, it is unlikely that this action was done by a central bank. In the field of high frequency trading, the technical complexity and the necessary level of experience and specialization are probably too high. Therefore, a private financial institution must have done the high frequency price manipulation to achieve a trading profit. This was a well-defined incident in thin trading, limited to a short time period and to a single market. These conditions make it ideal for a successful investigation by the regulatory authorities.
A gold standard is a monetary system in which a fixed weight of gold becomes the store of monetary value. Under the gold standard, bank notes and coins can be exchanged for gold. If multiple countries follow a gold standard, their foreign exchange rates become fixed. The international gold standard emerged in the late nineteenth century following an extended period of monetary instability characterized by disruptions related to silver shortages and the gradual emergence of central banks. The stability subsequently following this international gold standard is credited with facilitating the first era of globalization prior to WWI. A gold standard of some form persisted for about a century, until the Bretton Woods agreement collapsed in the 1970s when the US stopped exchanging dollars for gold. A return to the gold standard has contemporary advocates. They claim the gold standard could help insulate the world economy from government monetary mismanagement.
US Treasury Bonds False Safe Haven, GOLD is the True Sanctuary
Interest-Rates / US Bonds
Jul 26, 2012 - 02:11 AM
By: Jim_Willie_CB
http://www.marketoracle.co.uk/Article35775.html
As preface, consider that the USTreasury 10-year yield went below 1.4% this week. Some unenlightened celebrate the asset appreciation and point to a successful asset in performance in an otherwise dismal financial market. The Jackass said in the June 6th public article "USTBonds: Black Hole Dynamics" that such a success is a marquee billboard message of economic meltdown and systemic failure. As the rally continues, possibly the onliest rally outside of corn and soybeans in yet another disaster, people should focus on whether the systemic collapse will occur before the 10-yield hits 1.0% in my warning. Focus on four major points:
~ The unspoken effect of ZIRP (0%) is the powerful ongoing destruction of capital, as the entire cost structure rises
~ As equipment goes off line further, the USEconomy will weaken further, in a powerful vicious cycle
~ The official Zero Percent Interest Policy is the calling card of the Gold Bull Market, powered by negative inflation adjusted returns on savings
~ The USTBonds will fail from their own success, unleashing the Gold Price when the investment community and global creditors realize no further potential appreciation in the most massive asset bubble in modern history, supported by Interest Rate Swap derivative machinery. Money will eventually fly out of bonds and seek true safe haven.
Fear not. The USTBond 10-year yield (TNX) will not and cannot reach below 1.0% as all ponderings of a world with 0% on 10-year yield are divorced from reality. The Black Hole is working hard, gathering force, amplifying the gravitational field. It is happening right on schedule, no surprise here, a very easy correct forecast. The original supposed Flight to Safety in the USTBonds was totally fabricated and phony. As mentioned at least a dozen times by the Jackass, the last half of year 2010 saw the dutiful Wall Street outpost Morgan Stanley devote a fresh $8 trillion in interest rate derivatives, fully documented by the Office of the Comptroller to the Currency. Their reports never make the headlines, since they are so chock full of rancid fetid scum. As the TNX marches down the swirling pathways within the vast USGovt debt sewer-like cisterns, their energy will be derived from the massive recession that has engulfed the USEconomy. Not only is the flight to safety in the USTBond complex a total fabrication falsehood, but the USEconomic recovery is also a fiction written on political propaganda posters. The followon flight to the bubble ridden USTBond is based upon economic wreckage and broad disintegration of the entire periphery and surrounding core to the bond market. The great sucking sound can be heard, much like during the non-earthquake in Virginia in September 2011. Experienced traders are looking at each other, in full recognition that the TNX rally is indeed an endgame signal.
THE BRUSH FIRE PHENOMENON
The LIBOR scandal unleashed brush fires. They started in London but extend throughout the entire Western banking treeline. The scandal that started at Barclays and Lloyds has hit Deutsche Bank, as well as Citibank and JPMorgan. Many more pages will be written on the LIBOR brush fire, as the damages are delineated by those on the opposite side of the price rigging table. The USFed, Bank of England, and Euro Central Bank are directly implicated, casting corrupt light on the central bank franchise system. The clownish supposed economic expert Larry Kudlow actually attempted to claim the crime scene had no victims, as all benefit across the system. The naive Wall Street defender (carnival barker) must not be aware of the damages claimed by the mortgage underwriters in the lending industry, by corporations seeking stable bond yields, and by the swap recipients in countless state government agencies. A figure was put forth this week that caught my eye. For every single basis point in the LIBOR price rig, fully $50 billion in effects result. The market is huge, involving a staggering $370 trillion in worldwide debt. Expect hundreds of high profile lawsuits. Expect dozens of class action lawsuits. Expect well over $1 trillion in total declared damages from the legal attempts at remedy. LIBOR will not go away, since it is actually the heart & soul of the entire lending industry, and of the shadowy derivative market. LIBOR funds the vast derivative market, which is becoming frazzled in a slow disintegration. The brush fire will burn down the USTBond Tower and render useless its Interest Rate Swap buttress structural support, both of which are in an implosion mode.
This article is not about LIBOR and its inner workings, the damage suffered by mortgage underwriters, the short changing of corporations and state agencies involved in swaps. Instead, this article is about the serious jumps in the brush fire, jumps to new areas of scandal, which will take down the system. In no way is the list of potential new fire zones comprehensive. Perhaps a few more will result, since large burning tree branches have a way of being lifted by the high winds of controversy fanned by deep suspicion. The entire document discovery process will be exploited to the fullest, a vast crowbar. Once the lid is lifted via legal discovery of LIBOR criminal collusion, all is fair game to be viewed and pulled out of the vast sea of scum, filth, and rancid paper floating within the big bank balance sheets. It is all admissible evidence. Then there are the communications often shown to be highly revealing to establish motive and paint the pictures in more detail. No longer are those analysts like the Jackass considered biased, tilted, and off the mark when they cite financial corruption as an ongoing theme year after year. The corruption is coming to the surface, fully visible, in a manner to render perhaps fatal damage to the system. My theme has been systemic failure from the inefficiencies and corruption wrought by the Fascist Business Model. Witness it!
My focus is on jumps in the big brush fire that escalate the financial criminal exposures. Entirely new areas of criminal exposure, investigation, and prosecution will emerge. LIBOR was the center, and Barclays was the banker's bank, which owns sizeable equity shares of numerous global banks. Leave aside the difficult questions as to why and how the LIBOR fraud was revealed, and why and how the crime was not shoved under the rug as usual, and what higher power is controlling and orchestrating the maneuvers. LIBOR and Barclays lie at the heart of the Western banking cartel and power structure, labeled corrupt to the core. The big banker brush fire has begun. It is raging, but it will spread to create several other nasty brush fires. The jumps will occur easily, the process having already begun.
MONEY LAUNDERING & NARCOTICS DEPENDENCE
Just in the last ten days, the brush fire jumped into the drug money laundering forest. Permit an imagery jump as well, even though mixed imagery is a cardinal sin of composition. But since on the topic of jumping, a shift in the blaze of imagery might be appropriate. The money laundering of narotics funds is a vast industry. The United Nation task force identified the United States as being unduly reliant upon the benefits of drug money infusion into the banking system following the 2008 Lehman bust, sufficient to prevent a collapse. The UN document reports were published in 2009 and again in 2010. What better place to funnel the money than into the primary banking system from the USGovt agencies responsible for the vast clearing house functions. Representative Ron Paul has addressed this problem in direct accusations. Here is the imagery jump. The operations of money laundering are like a collection of wires without insulated coatings laid out on dark basement floors, one from each bank. The participating big banks do not always have full knowledge of the other and their activities. Many countries are involved, as the distribution rings are vast, like with Mexico in the recent incident. So the wires occasionally cross each other and cause troublesome sparks. The High Scandal in Bank Collusion has already caught fire in the money laundering rings. The bank in the spotlight has been encouraged to align its wires properly, according to the Cooperative Installation Alignment codes from the Underwriters Lab south of WashingtonDC. They will comply, or else resignations will be the least concern of the bank executives. Their lights might go out. This is a topic loaded with risk. The message to take away is that all the major US banks are deeply committed to narco money laundering, which tie in with defense contractors who serve as errand boys and delivery hosts.
INTEREST RATE SWAP & FALSE USTBOND SAFE HAVEN
The next jump in the banker brush fire might be the revelation of the primary role played by the Interest Rate Swap derivative contract device. The JPMorgan chief investment office is tasked with fabricating the USTreasury Bond rally. They must maintain the near 0% bond climate despite chronic $1.5 trillion deficts to securitize and largely absent foreign creditors. They farm out the duty to their Morgan Stanley outpost. Hundreds of $billions in artificial USTBond demand can be produced, with trumpets blown by strumpets calling the flight to safety in toxic USTBonds. Recall that the cost of funding the IRSwap mechanical abuse is the ultra-cheap LIBOR rate. Notice the tight correlation between the US FedFunds official rate and the LIBOR rate. The price rigging in the LIBOR came about since the banks refused to lend at the absurd 0% rate dictated by the USFed, working in close concert with the Bank of England. The banks were willing to speculate at that rate, but not to lend at that rate. The target could not be sustained. So the participants to the consensus procedure lied to each other, complete with memos, adorned by winks. The practicality of the ZIRP could not extend into the real world without further collusion.
The scandal will hit the Interest Rate Swap devices and reveal the artificial nature of the entire flight to safety in the USTreasury Bonds. They will be more visible under document discovery amidst the LIBOR investigations. The heavy machinery of the IRSwaps has been exposed to some extent from the May losses suffered by JPMorgan, as reported by the Jackass and confirmed by CEO Dimon. They lied and gave blame to the European sovereign debt fluctuations, when they were actually stable during the focused period of six weeks. Big fluctuations were seen in the USTBond market though, identified in my past analysis. Expect further revelations and documented evidence of vast rigging process in the USTBond market, using the IRSwap devices. The flight to safety will be revealed as a sham. It is only natural in the brush fire jumps.
INSOLVENT BANK RECOGNITION & FASB ACCOUNTING
Another jump in the banker brush fire might be the revelation of the deep insolvency within the big US banks, managed and kept hidden by vast accounting fraud. Recall that in April 2009, the USCongress passed a law to bless FASB rules which allow for accounting fraud. The big banks were permitted to declare any value they wish for all manner of toxic and rancid assets lying within their balance sheet. So they went on course to choose the original book value for many imploded toxic assets like mortgage bonds, like worthless collateralized bond obligations, and many other wonders of financial engineering devised by the wrecking crew on Wall Street. Imagine a raft of memos from bank executives like the chief financial officers, admitting that they are all too aware that balance sheet items were being declared as having untrue values, during quarterly earnings reports. The Sarbanes Oxley violations are too numerous to count.
Imagine the stream of memos expressing concerns over revelation that the banks were aware of the false values disclosed. They will be more visible under document discovery amidst the LIBOR investigations. Imagine mention with relief that the officially sanctioned FASB accounting rules permitted the fraud, replete with fictional values set for assets to share holders in the legal exercise. The giant banks are almost all dead zombies, insolvent to the core. The scandal will likely hit the Financial Accounting Standards Board (FASB) methods and the coverup of deep insolvency. The banks are not performing their normal lending function, since they are insolvent, citing tighter borrower requirements. Tragically, both the borrower is impaired and the lender is insolvent. Expect further revelations and documented evidence of vast falsification of the accounting process in the legally required financial reporting, using phony FASB rules. It is only natural in the brush fire jumps.
NON-US$ TRADE SETTLEMENT & BANK RESERVES MGMT
Another jump in the banker brush fire might be the revelation that the big US banks are preparing for a Paradigm Shift. The Eastern nations are well along a path to settle trade outside the USDollar. The Chinese have arranged for bilateral currency swap agreements with a gaggle of nations, mostly from the East, but also Brazil in the West. Consider such agreements to be the foundation for barter systems coming into vogue. The key is their non-US$ nature. The entire loss of global trade settlement done in the US$ terms is being elevated in importance. Some day soon, it might become the majority of trade. The tipping point could come when over 50% in trade excluding crude oil is managed outside the US$ settlement. Later, like in a year or so, maybe a bigger tipping point could come with over 50% of all trade including crude oil being managed ouside the US$ sphere. The big banks must see the trend, unless they wear blinders, unless their arrogance is so thick, or unless they are so pre-occupied with other brush fires that they leave themselves vulnerable and unprepared.
A very important tenet of global trade and banking is that trade dictates banking activity, not the other way around. It used to be for decades that the USDollar global standard required all trade to be settled in its reserve currency. The banking structures must reflect the reality of trade settlement methods and practices. However, the mortgage bond crisis laden with banking fraud in mortgages and foreclosures rendered damage. The TARP Fund patch job with bait & switch in executive largesse rendered damage. The USFed bond monetization (called euphemistically Quantitative Easing) went out of control, causing a global rise in energy and food prices. The result was great damage rendered. The endless foreign wars on a credit card have caused deep resentment, replete with fraud among the service contractors, also rendered damage. The Iran sanctions, further distracting from the basic violation of Iranian oil sales outside the US$ sphere, have resulted in tremendous insurrection against the global reserve currency.
The major Paradigm Shift in trade has been the emergence of non-US$ trade settlement and the development of devices to facilitate the skirting end around process. Therefore, the banking system must adapt or be left isolated. The big US banks might soon be caught in revelations that they are preparing for shunning of the USDollar in trade payments and satisfaction. They might reveal processes already in place to dump USTreasury Bonds at their artificially lofty values, maintained by high powered Interest Rate Swap machinery during a falsely engineering flight to safety. Imagine open communications about demanded IRSwap usage to maintion artificially rigged high bond principal values. They will be more visible under document discovery amidst the LIBOR investigations. If the big US banks are shown to be diversifying out of USTBonds during the current crisis, it would indeed be devastating news against the Dollar Fortress. Expect further revelations and documented evidence of diversification away from the bubblicious overvalued USTBonds, as the trade settlement pathways avoid the US bull chits. It is only natural in the brush fire jumps.
ALLOCATED GOLD & 40 THOUSAND METRIC TONS SHORT
An assured jump in the banker brush fire will be the revelation of massive raids on Allocated Gold accounts done systematically over two decades. The big Western banks have been illegally grabbing the gold bars via unauthorized leasing, then selling them in the open market in order to maintain the artificially low Gold & Silver prices. The process of revelation is already well along, with important major lawsuits in Switzerland. The Matterhorn case where Von Greyerz pointed out the long delays for his fund investors to receive their gold bars from Allocated accounts has added to the controversy. The gold bars arrived with stamps and dates much younger than the original bars owned, lifting the veil of fraud. The scandal has not yet reached the public eye, but it will very soon. Some Gold experts call it The Mother of All Gold Scandals. Several class action lawsuits totaling several $billion are underway in the elite banker nation of Switzerland. So far, the coopted press has kept a lid on the story. The leaks will be natural, like an overflow of chocolate from the vat. The documents concerning the serious illegal activity will be more visible amidst document discovery during the LIBOR investigations.
My best source shared in 2010 that at least 20 thousand tons of Gold had improperly been taken, leased, and replaced with gold paper certificates in vaulted locations. The bullion bankers were dangerously short. In 2011, he admitted that the criminal activity had easily surpassed 40 thousand tons of Gold illegally leased, resulting in a massive short position for the bullion banks. In 2012, he increased his estimate to between 40 and 60 thousand metric tons of gold illegally seized from Allocated Gold accounts, the short position totally out of control and absolutely impossible to bring into balance with short covering. In the last week, he passed along a communication with a veteran Gold expert with decades of savvy experience. They concluded that remedy for the vast gigantic short position by the gold bullion bankers will send the Gold price well over $10,000 per ounce. They believe probably by the end of the criminal prosecution remedy, the resolution of the defrauded Allocated gold accounts, and the installation of the new trade system alternative, the Gold price will find a natural value at least twice that elevated value. Expect further revelations and documented evidence of vast Allocated Gold account raids, and improper raids to gut the Exchange Traded Funds (GLD, SLV). It is only natural in the brush fire jumps.
The Gold Bull will hit on all eight cylinders, and adopt another four cylinders, when the Allocated Gold account fraud is revealed and hits the news. Only then will public calls for broad criminal prosecution be accompanied by equal calls by the very wealthy. By then, speculation will extend to how high the Gold price can go, and to what limit. Think at that point, unlimited extensive money growth, a gaggle of futile bank aid packages, and currency debasement abuse from the hyper monetary inflation underway for over four years. The Gold price must match the abuse stride for stride, when at the same time react to forced bullion banker purchases of Gold in order to replace the raided Allocated accounts. A frenzy will come.
2011 BANK HEIST & DISPOSITION OF ASSETS
A potential disruptive jump in the banker brush fire would be the revelation of disposition of World Trade Center vaulted assets. Only a moron would believe they vanished. Refer to the enormous amount of purported missing gold bullion, the enormous amount of purported missing bearer bonds, the enormous amount of purported missing diamonds from the infamous 911 event. The political implications would be vast, far more damning than the smoking guns by scientists. They would eclipse any and all claims made by engineers and architects (see AE1000 Group) that undermine the official poppycock story. The documents concerning the flow of gold, bonds, and diamonds might be more visible under document discovery amidst the LIBOR investigations, if a bank heist were to be demonstrated. It is a difficult task to conceal the movement of $100 billion in gold bars, $100 billion in bearer bonds, and $100 billion in diamonds, if indeed it was a bank heist. The Jackass scientific background has consistently brought attention to the vast inconsistencies due to gravitation pull in freefall, to the inadequate burning temperature of jet fuel to alter structural steel, and the absence of aircraft debris on the Pentagon lawn. All official stories have seemed like music on the other side of logic and physics.
Only flag waving morons sporting red white and blue jockey shorts believe the official story, in addition to diehard types who hold scientific evidence in contempt, along with senile veterans well past the octagenarian mark. No disrespect is meant to veterans, who often seem incapable of sorting evidence or even identifying a financial fascist out of uniform. Even the 911 Commissioners admit they were coerced to omit widespread evidence, including testimony from the New York Police Dept captains. They could not voice their objection too loudly, or else lose their jobs and likely pensions too. Whereas in 2003 and 2004 the critics seemed like crackpots, no longer do they seem so wild-eyed and lunatic. Some very well informed people believe the 911 event was actually a bank heist. The odd new twist is the reports that many people at the World Trade Center who were eyewitnesses have died mysterious deaths. Harken back to the Grassy Knoll from that infamous November 1963 event in Dallas. By the 1990 decade, a few dozen people had died from mysterious deaths, many being violent deaths, to the point that no eyewitnesses had survived. A mission accomplished in the sordid history of the United States. The bond trails already cast extremely suspicious light on Cantor Fitzgerald, which curiously moved all its data storage backup facilities to New Jersey only a few months before the incident. Perhaps further potential revelations and documented evidence toward disposition of WTC site assets will surface during the never ending discovery process. It is only natural in the brush fire jumps. One can only wonder what George Washington, Thomas Jefferson, John Adams, and Benjamin Franklin would have to say about these events, or even Dwight Eisenhower and Douglas MacArthur. The notion of patriotism has been redefined by force. Many patriots prefer to think and use the brain stem, turning away from the goose step. Then again, perhaps several hundred discrepancies, inconsistencies, and contradictions to the official story are just a coincidence and the work of our enemies.
MUTUALLY ASSURED DESTRUCTION
A very unusual phenomenon is at work. The three banker camps from the United States, London, and Western Europe are naturally going to protect their own pillboxes. A well connected banker source from Central Europe has shared that Deutsche Bank has already begun to cooperate with the International Court of Hague, working with Interpol officers, bank examiners, experienced attorneys, and judges to assist the prosecution of London and New York bankers. But Deutsche Bank cannot stop the assault by USGovt officials and their army of legal prosecutors, who will tear D-Bank apart. The London bankers have been exposed, laid bare, for the entire world to attack them. The resignations will continue like a parade, soon to involve the privileged groups among the Anglo elite. Expect far more lawsuit effects than prosecutions, since the USGovt legal staff is loaded to the gills with Wall Street friendlies.
The CFTC and SEC and FDIC and FBI have to date been attack dogs and protectors to the Syndicate in the entire scandalous decade. They are the Fascist Business Model soldiers in the field. To be sure, each of the three camps will attack in round after round, bringing charges, seeking remedy, forcing executive sacks, levying fines, and more. They will each enable high ranking bank executives to turn state's evidence, to flip, but the lines of jurisdiction cannot be altered. Each region will protect its own, and attack the other two. A fight to the death might have begun. The banker attacks will not put each other's executives in jail, as much as wreck the Western banking structures. Witness the Competing Currency War in a late stage, as it has reached a new level of financial violence. The Wall Street marketing corps, and the noble financial press, have chosen to trumpet the message that European weakness translates to American advantage. It is like Al Capone competing with Bugsy Moran. It is like John Gotti pointing a finger at Michael Corleone. In the end, they will both succumb to the pressures and the light. Their ships at sea are listing and taking on water. They will all sink. The life boats are made of Gold with Silver linings
GOLD IS THE TRUE SANCTUARY
The concept of solutions for the global monetary system, the global currency system, and the global banking system, have become outright laughable and an insult to the intelligence of observers. The paper system has become weighed down by toxic assets to the point of rendering the entire system insolvent and sinking its future prospects. No new debt can repair and provide remedy for the fatally sick and current overly indebted dying system. The new trade settlement facilities are ready to put in place, based upon a Gold & Silver core. That word has come from a source directly involved in the preparation process for the Eastern Fortress. The trade notes will provide the lubrication to complete trade, which will have a hard asset core. The USDollar will gradually fade away from trade settlement, except for the United States, Canada, the United Kingdom, and possibly Southern Europe. The great tipping point approaches, whereby over half of global trade will be settled outside the domain of the crippled toxic USDollar. The foreign participants can no longer tolerate the bank bond fraud, the central bank debasement, and the usage of bank devices as weapons.
Major changes are coming. A return to a certain type of Gold Standard is right around the corner, awaiting the Western collapse that is in a late stage of pathogenesis. The jumping brush fires that the London, New York, and Western European bankers must contend with will eventually envelop them, doling out massive smoke inhalation. Worst of all, the jumps will expose new areas of corruption every few weeks, sufficient to bring down the system. After all, it is a fiat faith based system. The faith has long ago vanished. All that remains is power politics, arrogance, and corruption. The new system will force the Gold price above $5000 per ounce on a conservative basis. It is all part of the plan not yet revealed. The Gold/Silver Ratio will revert to 20:1 in time. That translates for the math impaired to a $250 per ounce Silver price. These are conservative figures.
THE HAT TRICK LETTER PROFITS IN THE CURRENT CRISIS.
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by Jim Willie CB
Editor of the “HAT TRICK LETTER”
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HKEx will be able to use its influence with Beijing
ex.... to funnel
far more of China's metals buying activity through its
LME subsidiary -
http://www.telegraph.co.uk/finance/comment/damianreece/9335026/Like-a-lamb-London-surrenders-London-Metal-Exchange.html
GOLD to fiat$25K/oz + + with a fair level playing field -
without banksters 666 cult super red manipulations -
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=75921900
history often repeat itself -
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=76703885
God Bless
khazarian banksters 666 cult is too brainwashed
to care for their own or their family life -
the 666 total focus money, money, money -
http://doreenellenbelldotan.info/AdolfRothschildHitler.htm
Bolschevick khazarian (NOT Jews!) Killed 100 Million Mainly White Christians
Socialite says Socialism is Anti-Social
(And Locking in prices is "price fixing")
Silver Stock Report
by Jason Hommel, June 17th, 2012
(via e-mail)
Socialite says that Socialism is Anti-Social
Pro-Life' on 'Gold Futures Index -
thanks great charts -
Fyi. your opinion on CALVF would be appreciated -
Caledonia Mining Corporation
CALVF Q1Rep. Net profit $7,111,000.-- after tax
for the 1stQuarter 2012 was $7,111,000.--
welcome back to Caledonia Mining Corporation (CALVF
good to see you and thanks for your opinion
CALVF Q1Report; Net profit after tax for the Quarter was
$7,111,000.-
compared to
$1,369,000 in the preceding quarter (which included
an impairment of $3,884,000) and
$1,894,000 in the comparable
quarter.
Basic earnings per share for the Quarter were
1.4 cents per share,
compared to
0.27 cents in the preceding quarter and
0.38 cents
in the comparable quarter.
At March 31, 2012 the Corporation had cash and cash equivalents of
$16,288,000.--
compared to
$9,686,000 at December 31, 2011 and
$2,217,000 at March 31, 2011.
Cash flow from operations in the Quarter before capital
investment was
$8,130,000 compared to
$3,506,000 in the
preceding quarter and
$4,686,000 in the comparable quarter.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=75452985
http://tmx.quotemedia.com/article.php?newsid=51148032&qm_symbol=CAL
CALVF is a well diversified company -
a subsidiary to CALVF holding the Blanket Gold Mine,
its 51% is sold for $30 million and
it may be final agreement by 2014 -
mugabe has used it to gain votes for the last 20yrs -
but lost the last election to -
Prime Minister Tsvangirai of Zimbabwe -
who got the majority and should be the President -
don't want it (and declared it null and void) -
mugabe 88yrs old with prostate cancer etc.
the time working in the right direction for CALVF -
Welcome to CALVF - Caledonia Mining Corporation -
well, good to see all @ CALVF
Presentations 2012 04-18-2012 Global Mining Finance
Spring Conference, London -
http://www.caledoniamining.com/pdfs/CALPres04182012.pdf
Q4 Results presentation Caledonia 2011 Annual 04-02-2012 -
http://www.caledoniamining.com/pdfs/CALPres04022012.pdf
Blanket Mine: A Photographic Tour 12-06-2011 -
http://www.caledoniamining.com/pdfs/CALPres12062011.pdf
the time flying and CALVF flying have repeated
its self twice great bull runs since I started to ride along
history often repeat itself -
http://chfir.com/mining/CAL
http://www.slideshare.net/CHFIR/caledonia-mining-corporation-april-2012
Global Mining Finance Spring Conference, London April 2012 -
http://www.caledoniamining.com/pdfs/CALPres04182012.pdf
Caledonia Mining - a low cost African Gold
$521.-/oz producer @ Q4/2011 -
http://investorshub.advfn.com/boards/replies.aspx?msg=59249631
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 -
For the fiscal year ended December 31, 2011
http://secfilings.com/searchresultswide.aspx?link=2&filingid=8590980
http://www.caledoniamining.com/
God Bless
Jim Rogers: Buy Gold, Silver Before ‘More Turmoil’ Jolts the Globe
Friday, 18 May 2012 09:02 AM
By Forrest Jones
http://www.moneynews.com/StreetTalk/Rogers-Gold-Silver-Turmoil/2012/05/18/id/439515?s=al&promo_code=EF13-1
Roiling capital markets aren't going to calm any time soon so investors would be better off putting their money in hard assets like gold, silver and agricultural commodities, says international investor Jim Rogers.
Greece is teetering on the brink of default, while the debt crisis appears to be spreading to Spain, as evidenced by a Moody's decision to cut ratings on 16 banks there.
"The world's got serious problems facing it, I don't particularly like saying it, but it's true," Rogers tells CNBC.com.
"Unfortunately there will be more debt and currency turmoil to come."
Greece goes to the polls on June 17 to elect a new parliament, and many worry voters will elect enough leftist and other fringe politicians who favor ditching austerity measures in exchange for bailout money, which could precipitate the country's exit from the eurozone.
The euro has taken a pounding on European uncertainty lately and will continue to do so.
"I hope the euro survives, I think it will survive in some shape and form," Rogers says, adding he's avoiding equities right now.
"I own real assets because if the world economy gets better I'll make money because of shortages and if things get worse they'll print more money," Rogers says, referring to loose monetary policies designed to spur growth amid downturns, which push up commodities prices as a side effect.
Greeks pulled the euro equivalent of close to $1 billion out of the country's banks on one day alone recently, as worried depositors stock up on euros fearing the country will ditch the currency and revert to the drachma, which would be much weaker.
Continued withdrawals will bruise an already beleaguered financial system, experts say.
"If you have significant deposit withdrawals, that's difficult for any institution to overcome no matter the macroeconomic factors. Of course that's not even taking into account everything going on in Greece," says Kris Niswander, associate director of European financial institutions for SNL Financial, according to CNNMoney.
Charts... P.M. Kitco Metals Roundup: Comex Gold Ends at Bullish Weekly High Close Friday, to Begin to Suggest Market Bottom in Place
Friday May 18, 2012 2:33 AM
http://www.kitco.com/reports/KitcoNews20120518JW_pm.html
Comex gold futures prices surged late this week on short covering and bargain hunting, but more importantly on fresh safe-haven investment demand, following recent selling pressure that drove gold prices to a 10-month low of $1,526.70 on Wednesday. Gold produced a bullish weekly high close on Friday, which is an early technical clue that a near-term market bottom is in place for the yellow metal. June gold last traded up $14.90 at $1,589.80 an ounce. Spot gold was last quoted up $15.70 an ounce at $1,590.50. July Comex silver last traded up $0.61 at $28.63 an ounce.
The world market place was impacted late in the week by a weaker-than-expected U.S. business activity report from the Philadelphia Federal Reserve on Thursday morning. That economic data came on the heels of Wednesday’s FOMC minutes that hinted further quantitative easing of U.S. monetary policy is possible if the economy were to continue its lethargic ways. The U.S. and Asian stock markets sputtered in the wake of the Philly Fed report, while European stock markets tried to stabilize following recent selling pressure related to the EU debt crisis in their own back yard.
There is now fresh talk of further quantitative easing of U.S. monetary policy (QE3). Such would arguably be commodity-market bullish and possibly stock market bullish, despite the specter of reduced demand prospects due to the sluggish economy.
There is still high anxiety in the market place, as the EU debt crisis saga rolls on. On Friday, 16 Spanish banks credit ratings were downgraded by Moody’s. There was also talk in the market place that U.S. banking heavyweight JP Morgan may have $100 billion in risky bonds in its risk-management portfolio. Remember what happened to MF Global and its risky bets on European debt.
Importantly, the fact gold started to rally strongly from its recent selling pressure suggests the rally is more than just short covering. Gold saw decent safe-haven investment demand late in the week, heading into a weekend of trader/investor jitters. The fact that gold rallied strongly late this week also hints the market place is feeling even higher anxiety. It could be a very active trading day on Monday. Gold bulls are presently feeling much better than they have the past couple weeks.
The European Union debt and financial crisis is still on the front burner of the market place. After the early-week failed efforts by Greek politicians to form a coalition government, fresh Greek elections are now scheduled for mid-June. Concerns regarding Greece leaving the Euro zone are high, as the Greeks’ commitment to financial austerity is highly questionable. There were reports Friday that EU officials are preparing a plan in case they are forced to kick Greece out of the EU. Spanish and Italian bond yields were above 6% most of the week, which is also stressing the EU financial system.
The U.S. dollar index is traded near steady Friday and hit another fresh four-month high. The greenback has benefited recently on fresh safe-haven demand mainly due to the EU situation. During times of keen investor uncertainty, history has shown that gold and the U.S. dollar can both appreciate at the same time. The dollar index bulls still have good upside near-term technical momentum. Meantime, crude oil futures prices were lower Friday and hit a fresh 6.5-month low of $91.40 a barrel. Crude oil remains in a bearish fundamental and technical posture.
The London P.M. gold fixing was $1,589.50 versus the previous London P.M. fixing of $1,554.00.
Technically, June gold futures prices closed at a bullish weekly high close on Friday and that begins to suggest a near-term market bottom is in place. However, gold bears still have the overall near-term technical advantage at present. A 2.5-month-old downtrend is still in place on the daily bar chart. The gold bulls’ next upside price breakout objective is to produce a close above psychological resistance at $1,600.00. Bears' next near-term downside price objective is closing prices below solid technical support at this week’s low of $1,526.70. First resistance is seen at Friday’s high of $1,597.50 and then at $1,600.00. First support is seen at $1,580.00 and then at Friday’s low of $1,567.80. Wyckoff’s Market Rating: 3.5.
(Note: For a complete explanation of my exclusive “Wyckoff’s Market Rating,” just send me an email at jwyckoff@kitco.com and I’ll email it back to you.—Jim)
July silver futures prices also saw a bullish weekly high close on Friday, but bulls have more work to do to begin to suggest a market low is in place. The market saw short covering and bargain hunting after prices Wednesday hit a 4.5-month low. Silver prices are still in a 2.5-month-old downtrend on the daily bar chart. The silver bears still have the overall near-term technical advantage. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at this week’s high of $29.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at the December low of $26.50. First resistance is seen at Friday’s high of $28.895 and then at $29.00. Next support is seen $28.00 and then at Friday’s low of $27.78. Wyckoff’s Market Rating: 3.0.
......
......
Indian central bank challenged in court to Repatriate Country's Gold -
RBI Gets High Court Notice to Explain Gold Deposits with Bank of England = AdolfRothschildHitler =
http://doreenellenbelldotan.info/AdolfRothschildHitler.htm
By Dinesh Thite
Pune Mirror, Pune, India
Friday, May 4, 2012
http://www.punemirror.in/article/62/2012050420120504025313609120ae2ba/RBI-gets-HC-notice-to-explain-gold-deposits-with-Bank-of-England.html
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=75430215
God Bless
Ps. fyi...
Adolf666RothschildHitler red pawn -
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=75419945
http://www.dontvoteobama.net/
Oh no... The Inflation Trade is On: Bernanke Has Broken the Dollar Rally
Friday May 04, 2012 10:19
http://www.kitco.com/ind/Conner/20120504.html
It may not seem like much happened yesterday, but a very important event occurred. Yesterday the dollar index breached 78.65. The reason that is significant is because 78.65 marked the intraday low of the prior daily cycle. A penetration of that level indicates that the current daily cycle has now topped in a left translated manner and a new pattern of lower lows and lower highs has begun. Any time a daily cycle tops in a left translated manner it almost always indicates that the intermediate cycle has also topped.
In this case it would indicate that the intermediate dollar cycle topped on week two and should now move generally lower for the next 10-12 weeks, bottoming sometime in late June or early July, about the time Operation Twist ends.
Now that we have confirmation that Bernanke has broken the dollar rally I'm confident in calling April 4th an intermediate bottom (B-Wave bottom) in the gold market. Gold should now be entering the consolidation phase of the next C-wave. I expect a test of the all-time highs sometime this summer as the dollar moves down into its intermediate cycle bottom.
That being said I have no interest in a 15% rally in gold. The real money will be made as the mining stocks exit their bear market, re-enter the consolidation zone between 500 and 600, and move up to retest the old highs. It's not inconceivable that we could see a 30-45% gain in mining stocks over the next 2 1/2 months.
Sentiment in the mining index has reached the same levels of bearishness that were seen in the fall of 2008. That black pessimism drove a 300+ percent rally over the next two years. I have little doubt this time will be any different.
Now what we need to see is a change in character. We need the mining stocks to stop generating these sharp bear market rallies and transition into the wall of worry type rally that characterizes a bull market. So far that is exactly what is happening. The miners are rallying very hesitantly, and as long as this continues it will camouflage the move and keep sentiment depressed. That's exactly what we need to happen to drive a long sustained rally back up to the old highs.
The problem with the rocket launch type rallies we've seen over the last year and a half is that they swing sentiment very quickly to the bullish side and we run out of buyers.
As long as the bottoming process proceeds gradually I think there's a very good chance the HUI could break back above the 200 day moving average, and possibly test the 600 level by mid-July.
So far all of the pieces are starting to fall in place to initiate the very early stages of what I think will eventually become another huge momentum move similar to what happened in silver and gold last year. This scenario may well culminate in a parabolic blow-off top sometime in late 2014 as the dollar moves down into its next three year cycle low.
Now is the time to invest in this sector as it struggles to transition from a bear market back to the secular bull trend. The time to enter is at the very beginning when no one believes. This is when the really big money is made. If you wait till your emotions give you the all clear, half the move will be over.
Most traders are going to jump back into the general stock market or tech stocks. You have to be smarter than that. The stock market, including tech, have already generated a massive move out of the October bottom. That kind of move usually leads to a multi-week, or month, consolidation. The odds of another 20 to 30% rally in the stock market are very slim.
The odds of a 20 to 30% rally as the mining stocks resume the secular bull trend are extremely high.
The combination of extreme downside momentum and irrational human nature has created the kind of oversold conditions and extreme undervaluation that generates an opportunity that only comes around once or twice a decade.
By Toby Connor
GoldScents
http://www.goldscents.blogspot.com
Throwing aside the P&F chart, which says the bearish price objective is 1550, and looking at recent action and MA's, I think the price of $GOLD is headed higher... as well, there are analysts that are buying equities now as they are badly beaten down... Mike Swanson is one of them.
Last week's daily action had 2 bullish candles and a strong uptrend looks to be in order. The weekly chart shows the price is supported by the weekly MA60 but below the benchmark MA40... why would one want to buy puts when the price is already below the benchmark weekly MA40 and the benchmark daily MA200?
Be very careful out there... Gold/Silver are in a super bull cycle and have been for about 10 years... don't buck the major trend!!!
Only the highest and best!!!
Pro-Life, I'm thinking about picking up some GLD puts. What are your thoughts on where the price action of gold is heading?
Failed Bottom in Gold Stocks Initiates Start of Capitulation
Monday April 09, 2012 12:45
http://www.kitco.com/ind/Trendsman/20120409.html
It was only a week ago we felt the gold stocks had a great chance of putting in a bottom. Monday supported our thesis but after Tuesday’s action and Bernanke’s jawboning it was apparent that the gold shares were in for a very difficult period. We immediately went long DUST to hedge long positions and trimmed some of our most vulnerable positions. We aren’t day traders personally or professionally (in our service) but sometimes you have to be considering the day to day volatility in this sector. Having accounted for the short-term, the next move is to gameplan for a potential major bottom in the sector.
Below we show the HUI Gold Bugs Index, which declined by 7% last week and closed at the lows of the week at 441. When a market is breaking down or plunging, it is our job to identify areas of strong support which could temporarily reverse the trend and potentially establish a bottom. The 50% retracement from the 2008 low comes in at 395 and 375 marks mid 2009 resistance and early 2010 support.
It is not groundbreaking news that sentiment in this sector is terrible. It is nearing 2008 levels. Yet, is the extreme bearish sentiment justified? We posit this because the HUI is currently 31% off its highs. Including 2008, this is the 6th correction of at least 30% or more. The HUI could fall another 13% to 385 and this decline would remain similar to declines in previous years. Sure, there is reason to be negative. This sector couldn’t perform with Gold, couldn’t mount any rebound from an oversold condition and now it is breaking down. However, the decline is likely to remain in line with past declines and the bull market is far from over.
Over the past few weeks we were not sure if the gold stocks would form a stealth bottom or if we would get a panic selloff that would develop into a V bottom. As time passed we thought a stealth bottom could be forming. Now it is more than obvious that the market is likely to make a V bottom. The bad news is the V has barely begun. More pain is ahead. The good news is the market likely will be substantially higher six months and one year after the low.
This sector produced significant gains following the major bottoms from 2005 and 2008. Sentiment argues that his time will not be any different. First things first. Investors must identify strong support that could produce a V bottom or reversal. Second, investors should have a shopping list ready. This should include premier companies with strong fundamentals that can be bought at a discount as well as speculative ideas and instruments with extremely favorable risk reward scenarios. If you’d like professional guidance in this endeavour then we invite you to learn more about our premium service.
Good Luck!
Jordan Roy-Byrne, CMT
Jordan@TheDailyGold.com
TheDailyGold
Now Is Not The Time To Be Scared Of Gold
Wednesday April 04, 2012 09:27
http://www.kitco.com/ind/swanson/20120404.html
I titled last month’s issue of this newsletter “Mining Stocks May Become the Big Play for the Second Half of 2012.” I wasn’t saying that it was time to buy them, but that I thought that when the correction they are in, which has been going on now since way back in September, came to an end they would likely put on a big performance through the rest of this year.
Now the correction hasn’t ended yet and they have fallen a bit more this past month. That fact has caused many people to throw in the towel on them and I’ve even seen articles and blog posts on the Internet declaring that gold is now in a bear market. For instance just a few weeks ago frequent CNBC talking head Dennis Gartman announced that he was out of gold after pounding the table on it in January.
Right now most people are captivated by Apple stock since it has been going straight up so far this year. Very few investors are thinking about gold or silver anymore. But I don’t want you to forget about them, because when mining stocks go up they can go up like Internet stocks did back in the late 1990’s. In 2011 the price of silver practically doubled in the space of three months. Gold and silver have been in secular bull markets now for over ten years and during that time I have played several big runs in the stocks and I think we’re going to see another one start in the future and we have to be prepared and ready for it. We have to recognize it when it starts. And we can’t be too fearful because of what gold and silver have done so far this year. I’m also worth listening to on them, because I’ve had experience in trading them and I have been negative on them since they peaked out last August. I’m not some Kitco gold bug that has been telling you to buy them as they have kept dropping.
Now a lot of people are ringing their hands trying to figure out what exactly is behind the weakness in gold and silver. Everyone knows there is inflation now, because oil prices are rising and so is the price you are paying for gas at the pump and just about everything else. Everyone knows the Fed is printing money like mad. And everyone thinks gold should be going up, because of all of this. But it hasn’t been.
You are probably wondering why. The reasons are pretty simple. It’s how financial markets work. To understand what I’m talking about let’s look at the rest of the stock market first. I want to show you a simple concept and then we can apply it to what is happening in gold and silver.
In big bull markets you get pullbacks and consolidation periods that last a year or even longer. For example in the last bull market from 2003 till 2007 there were two periods of consolidation for the S&P 500 that lasted almost an entire year and several times that the broad market experienced very sharp pullbacks.
And of course in this current cyclical bull market we saw a big pullback last fall and consolidation period in the summer of 2010. In the broad market these pullbacks and consolidation periods tend to happen after the market has experienced a big run and investor sentiment gets wildly bullish. They happen after a big top in which just about everyone out there that can buys into it and everyone is bullish. At that point there are few people left to buy stocks so a corrective phase begins. And the thing is the bigger the run that happens before that pullback the more likely a long consolidation phase occurs.
Right now there is no sign that a top is in for this market rally, but it does appear to be heading to the type of top that comes right before a big correction or long consolidation phase. According to last week’s Investors Intelligence survey 22% of the those polled are bearish on the stock market while 50.5% are bullish. This is the lowest number of bears since July of last year. Most of the time though the big tops come in when the bulls are over 55%. The survey isn’t there yet, but could possibly get there over the next few weeks or months. It’s something we’ll keep an eye on together.
But if a big top does come, it probably wouldn’t mean a new big bear market, but simply a pullback or consolidation phase like the last two we’ve seen. The reason why is because we haven’t seen the type technical divergences which tend to lead up to new bear markets, such as a declining advance/decline line as the averages go up.
Also historically most bear markets start AFTER the Federal Reserve has raised interest rates several times and the Fed has pledged not to do that for at least another year and a half. In the last bull market the Fed raised interest rates 17 times from 2004 to 2006 before the market finally topped in 2007. During this time rates went from a low of 1% to 5.25%.
What is more over the past twenty-years the Fed has tended to keep interest rates top low for too long and thereby created bubbles that once popped damaged the entire economy. It was the Fed that helped to create the Internet and technology stock bubble of 1999 and the real estate bubble that led to the country’s banking crisis and current malaise.
If history repeats again and there is no sign at all of a change in Fed philosophy then the Fed will create another bubble during this cyclical bull market too. Some are saying bonds are the bubble. But whether or not that is the case bubbles are likely to form in commodities and inflation alike in the 1970’s and in the end that means higher gold and silver prices will come. It’s Dave Skarica’s “Great Supercycle.”
Putting some perspective on things it doesn’t seem likely that the Fed is going to pop the current cyclical bull market with higher rates now for another 2-5 years. They’ll keep rates too low again for too long. In fact they probably already are when it comes to the economy.
Think about real estate. If you are thinking of buying or building a new home you really have no reason to go out and do it now, because the real estate market is weak and the Fed says it won’t raise rates for at least another year and a half. So why go hurry and do anything in real estate? However, if you knew that the Fed was going to start raising rates and that mortgage rates would start to rise in a few months then you probably would go out and build or buy a home if you are thinking about it.
So the Fed’s policy of keeping rates at zero at this point is actually probably doing more harm than good for the economy. You’ll see in two years or so once rates start to go up I bet we’ll actually see a nice pickup in the economy occur. And the other thing is that I bet you that once we get in the last few years of this cyclical bull market we’ll see a big pickup in inflation and commodity prices just like what happened in the 1970’s at the end of that secular bear market, because this cyclical bull market will probably be the final cyclical bull market of this 10+ year secular cycle just like you saw at the end of the 1970’s, and both periods can be characterized by completely reckless monetary policy and weak political leadership in the United States.
As far as gold stocks go they aren’t in some giant bear market, but have merely been in a correction for the past six months. And it shouldn’t be a giant shocker to you, because these type of corrections happen after big runs. Gold and silver stocks went up 400% from their low of 2008 to high of last year. That’s a GIANT move.
After such big moves a year or even two years of consolidation is normal and that appears to me to be exactly what is happening with mining stocks. We’ve seen them do this many times before over the past ten years throughout this secular bull market for gold.
Gold has been in a secular bull market since 2002 and during this time has gone through long one year plus consolidation phases several times. These consolidation phases have come to end when its 200-day Bollinger Bands have come together - this is something that should happen at the end of this year or first half of next year, after which gold should begin another big leg up for its secular bull market in which the price of gold could easily double. And silver prices. I’d expect them to simply explode.
So right now this means gold and silver stocks are in a big long drawn out sideways phase and are moving towards the bottom of this sideways channel. They may have reached a bottom now or they may do it later this spring or summer on a broad market pullback. My bet is on the latter, but probably not from prices too much lower than here.
Whatever the case though once this pullback is over I plan on building a nice position in mining stocks myself. My goal is to build a position in them over the course of this year with the aim of participating in the next big bull move up that I think will likely start next year and lead to mining stock prices double or triple what they are now.
One thing about them is that mining stocks are now priced so cheap on a fundamental valuation basis that the upside potential for them once they start a new bull trend is enormous. Take a look at mining giant Newmont mining for example. It currently is paying a dividend yield of 2.7%, has a forward P/E of 9, and a PEG ratio of 0.23. It’s not the only mining company this cheap. Barrick has a forward P/E of 7.21 and PEG 0.28 while Anglogold has a forward P/E of 7.20 and PEG of 0.14. These are the big cap mining stocks that mutual funds and hedge funds buy when they pile into gold stocks.
And some of the big cap silver stocks also have low valuations like this too. Silver standard for example has a forward P/E of 8.40 and PEG of 0.04! These are crazy cheap valuations. If gold and silver and the mining stocks turn around like a I think then these low valuations now will lead to giant gains later. This is the power of gold.
Of course no one will pay attention until they start to go up. CNBC isn’t talking about mining stocks. Everyone is glued and obsessed with the movements in Apple right now. But we have to be forward thinking to what the next big trend may be and not just what is happening right at this moment to make money. That’s why I’m watching what is happening very closely to gold and silver prices and why I don’t want you to forget about them either.
By Michael Swanson
http://www.wallstreetwindow.com
Very nice day! Held 8 contracts over from friday. Just exited the position and waiting for a pullback on the 60 minute chart. It was getting a little over extended
Risk vs. Reward (Au Style)
Friday March 23, 2012 13:56
http://www.kitco.com/ind/Tanashian/20120323.html
The broad market, supported by the glorified boiler rooms on Wall Street, the glorified infomercials in the mainstream financial media and the glorified monetary clerks at the Fed, operates to its own set of rules and cycles. For instance, now we have conventional investors who used make cracks about their 401k's becoming 201k's actually becoming hopeful that they will regain all of their lost value. The wonders of inflationary monetary policy has brought this prospect tantalizingly close to becoming reality. Close, but...
Over in the gold sector however, where investment is actually a form of revolution (against inflationary fiat monetary systems), it is not so easy. Investors simply must be mindful of the risk vs. reward setups at all times because the same forces arrayed in support of the stock market are lined up against the barbarous relic. I am not saying this is a conspiratorial cabal, but I am saying that macro manipulation (like the recent 'reworking' of US Treasury yield curves) is just the way it is, whether it is planned out in the shadows to the most minute details, or just the result of embedded 'business as usual' academic myopia in a fiat system.
Take today for instance; it is a fine day for precious metals investors who are prepared for it. The caution signals were all there and it is now time to think like a capitalist... like a predator... like a revolutionary... like someone who avoided the worst of what the manipulative entities had to dish out and is now in evaluation mode as to how to proceed. You are a precious metals player? You are at war. Win the friggin' thing.
With that, we take a quick reading of two indicators NFTRH and its subscribers have been watching.
Bullish Percent Index on the GDM gold miner index can continue to decline to target. Will this come with a final regurgitation and capitulation? I don't know, so that is why I am slowly picking off individual items as they come on sale. We began watching this one when HUI/GDM failed to make a higher high at the equivalent of HUI 555 in February.
We have been watching for a projected double bottom in the leading HUI-Gold ratio for the better part of a year now, since it broke below an important moving average. This has allowed NFTRH analysis to temper its enthusiasm despite wildly bullish bigger picture projections. We are almost there folks, and I suspect a large portion of the gold 'community' wishes it had more cash reserves in the event this signal registers.
When you are at war, you do not personalize the enemy. You plot, you analyze, you gain intelligence and you survive long enough to employ tactical countermeasures.
Given the sentiment backdrop, which we have also been keeping a close eye on, one wonders if the massive topping pattern on the weekly HUI (yes, we are factoring that as well) is little more than fodder for trend followers and gold perma bears to scare gold bugs with.
What the heck, let's throw up (apt wording, isn't it?) one more graph. Sentimentrader.com's Public Opinion data out just two days ago has finally taken a hard lurch down to where a precious metals bull with cash on hand would want to see it. Unless the rules have changed, you never but never feel actionably bullish when the public is red lining bullish optimism and you never but never get bearish - as long as the secular bull remains intact - when it is green lined.
The working price target for Au is lower, but we are getting there and I am getting more bullish by the week because data points are starting to converge all over the place. There is a level of concern about the technical pattern on HUI, GDM, etc., but in the precious metals, sentiment usually wins and it surely has the power to invalidate a chart pattern; neuter it if you will. We shall certainly see soon enough.
You have got to love the markets. You really have got to.
By Gary Tanashian
http://www.biiwii.com
Welcome!!! A big day today... +$22
Been on ihub for a little while. Didnt know they had a gold futures board. Seems there are not to many futures traders on here. I trade futures for a living. Nice to finally find a home on ihub
Finally! I found a board on ihub where im at home. I trade futures for a living. Didnt know they had a futures board on ihub. We are going to see a nice rise in gold in the week and into the next week. Here is the daily chart. We have an inverted head & shoulders pattern inside a nice pennant pattern. Ive been holding this position since friday.
PDAC2012: Murenbeeld: Bullish Reasons Outweigh Bearish Reasons For Gold's Outlook
04 March 2012, 6:29 p.m.
By Debbie Carlson,
Global news editor, Kitco News
http://www.kitco.com/
http://www.kitco.com/reports/Kitco_News_Extensive_Coverage_DeC_Murenbeeld.html
Toronto-(Kitco News)--Gold prices still have further room to rise as more bullish reasons than bearish reasons give the yellow metal support, said a leading Canadian economist on Sunday.
Martin Murenbeeld, chief economist for DundeeWealth, said his forecast for the average price for gold in 2012 is $1,825 an ounce, and he sees gold trading at $1,942 by the end of the year. His 2013 average price forecast is $2,145. He said, however, that price outlook makes "no allowance for geopolitics."
He spoke at the PDAC2012, the Prospectors & Developers Association of Canada's annual convention, which occurs from Sunday to Wednesday in Toronto.
There are 10 bullish reasons why gold should go up and eight bearish reasons why gold should go down, Murenbeeld said, which makes him favorable toward the yellow metal.
On the bullish side, gold is supported by the following reasons, Murenbeeld said:
- Monetary reflation as the U.S. Federal Reserve and European Central Bank print money
- a fundamentally weak dollar
- countries seeking to diversify their currency reserves
- central bank buying
- only a slight increase in mine supply
- investment demand
- the commodity price cycle remains bullish
- gold is not in a bubble and has room to rise
- inflation in the emerging markets
- and potential geopolitical conflicts send people back to gold as a safe haven.
Of all of those reasons, monetary reflation is the most important, Mureenbeeld said. It's the liquidity that is in the market from ultra-low interest rates from central banks around the world, and the stimulus programs to encourage demand that is giving support to gold and other markets. Since 2001 when the current long-term bull market started in gold, there have been seven corrections in price that were more than 10%, including when the global recession hit in 2008-09 and last year during the European worries, he said. Yet since the lows reached during the 2008-09 recession, when prices fell to the low $700 an ounce area, gold prices have rallied to more than double that level.
He also doesn't think that gold's rally is over. Since 1800, gold's shortest rally was 10 years. The current gold bull market is just 10 years old. Given the influence of the "BRIC" countries – Brazil, Russia, India and China and the debt problems of western nations, he doesn't see gold's rally ending soon.
Murenbeeld cautioned that gold has some potential drawbacks to its outlook that those who wish to buy the metal should consider. He listed eight reasons that might weigh down gold:
-The EU recession could lead to fiscal retrenchment and deflation
-China falls into a recession and commodity demand plunges
-physical demand weakens because of high prices and weak economic growth
-the U.S. dollar strengthens
-gold becomes the liquidity of the last resort for cash-strapped countries and investors
-equity markets improve
-miners stop dehedging and begin hedging again
-and monetary policy changes and real interest rates rise again.
Recessions are price-negative for gold and commodities in general. When he mentioned the chance of China falling into a recession, he said that means China having growth under 6%.
Also, he said there is talk about governments selling gold to pay down their debts, including the U.S. selling its gold reserves to do deal with their debts. "That would be the most stupid thing to do. You never sell your gold when you can print money," he said about the U.S.
"When you need to sell your gold is when no one wants whatever else you can give them," he added.
After his session, Murenbeeld was asked what might happen to gold if Israel attacked Iran. He said gold would rally, much as it did during other politically tense situations. He said there were some media reports that if Israel struck Iran and Iran closed the Strait Hormuz, that oil prices might spike to $400 a barrel. If oil prices rose to that level, then gold prices would easily go over $2,000 an ounce quickly. That's just a guess, he said. But while it sounds like a sharp gold price jump, he points out that while a $500 move for gold, from about $1,700 to about $2,200 sounds like a lot, as a percentage it is not as big as oil going to $400 from the current $110 a barrel it is currently trading at.
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