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POG has smashed through the P&F Bullish Price Objective as if it never existed.
Silver is next. But look how far this prediction is.
The Silver Price Will Rise 4.83 Times as Far as Gold Price
http://goldprice.org/silver-and-gold-prices/2008/12/silver-price-will-rise-483-times-as-far.html
Unless you understand this one principle, you understand nought about precious metals' bull markets: monetary demand, and monetary demand alone, drives both gold AND silver. It's not Indian wedding demand or the popularity of silver jewelry that drives their prices, but sheer monetary demand, holding them as "money" because the alternatives -- national currencies -- are clearly failing.
WHEREFORE, before this bull market ends, you will need only 16 ounces of silver to buy one ounce of gold, which means from here that the silver price will rise 4.83 times as far as the gold price. Forget the siren song of the "gold-only" bugs, who have fallen for the myths of the money interest: both silver and gold are money, and always will be.
Marc Faber bats for gold, silver against US dollar
2009-11-13 22:15:00
http://www.commodityonline.com/news/Marc-Faber-bats-for-gold-silver-against-US-dollar-22901-2-1.html
Dr.Marc Faber
The United States is dedicated to debasing its currency, the US Dollar. Are you ready? There is a risk in holding cash in an environment of asset price inflation – a condition that usually occurs when governments create large fiscal deficits and inflate the money supply. The practice is endemic to banana republics and declining empires...and it is happening in the US at this very moment.
The global recession and financial crisis have refocused attention on government stimulus packages. These packages typically emphasize spending, predicated on the view that the expenditure 'multipliers' are greater than one – so that gross domestic product expands by more than government spending itself. Stimulus packages typically also feature tax reductions, designed partly to boost consumer demand (by raising disposable income) and partly to stimulate work effort, production and investment (by lowering rates).
The existing empirical evidence on the response of real gross domestic product to added government spending and tax changes is thin. But the evidence is quite strong that these policy responses usually trigger inflation.
Get historical quotes on India gold, silver futures
I suppose that even someone without any common sense might understand that a "strong currency" over longer periods of time reflects a high degree of prosperity and economic success, whereas a chronically weak currency is symptomatic of economic imbalances, such as a lack of competitiveness or overconsumption, arising usually from excessive supply of money and credit.
I would also suppose that even if someone never travels overseas, he would understand that if the US Dollar loses 50% of its value against all the other world currencies (everything else being equal), it means the US is 50% poorer relative to the rest of the world. (Now, this is not entirely correct, since the US has overseas assets that would appreciate in value in USD terms).
Moreover, stock price movements become extremely volatile and erratic in countries with a depreciating currency. In the long run, the depreciation of the currency will usually more than eliminate the gains in local currency terms. So, whereas in 2007 both the Dow Jones and the S&P 500 exceeded their previous highs reached in 2000 in US Dollar terms, these indices failed to make new highs in Euro terms. In addition, whereas the US economy expanded in US Dollar terms between 2001 and 2007, in Euro terms it actually contracted!
Even with the S&P 500 having shot up since the beginning of the year by over 25%, it has merely kept pace with the price of Gold. And during the last 10 years, the S&P has lagged behind the official US inflation rate...while lagging VERY far behind both the Euro and gold. Since the end of 1999, the S&P 500 has delivered a total return after inflation of about minus 25%.Unfortunately, the US is not the only country that is busily debasing its currency. "Everyone" is doing it. Because of the current collective debasement of all paper currencies by central bankers, I believe that precious metals and mining companies will maintain their purchasing power.
In the 1980s the US Dollar was a very strong paper currency compared to the Mexican Peso. Today, there is no paper currency that is as strong relative to the US Dollar as the US Dollar was relative to the Peso in the 1980s! The only "currencies" that have a chance of becoming as strong against the US Dollar as the US Dollar was against the Peso between 1979 and 1988 are precious metals such as gold, silver, platinum, and palladium.
Also, I should add that precious metals could appreciate even if the US Dollar miraculously recovered strongly against foreign currencies for an extended period of time. Such Dollar strength would probably be a symptom of some horrible economic or political problems around the world, which could be friendly to precious metals.
Central bankers and pundits seem to believe that they have averted the second Great Depression, while ignoring the fact that more and more debt produces less and less GDP and fewer and fewer jobs.
For now, though, the low ten-year bond yield is the lifeline from which all support flows. Much of the investment universe holds together because money can still be had for cheap – not by the volition of a cooperative private sector, rather induced by a US government that simply distributes money for free. Such an ill-conceived idea could only have been born in the test tube of a central banker.
Private lenders comprehend the difficulty of making profits when being forced to lend for nothing, so the government increasingly finds itself to be the interest-free lender of last resort.
Ultimately, if central bankers continue this process for long enough, it is the Dollar, and any currency or economy still pegged to it, that could eventually crash. Therefore, we investors find ourselves in the precarious position of having to maintain sufficient liquidity, but not too much in case the real value of these liquid reserves is wiped out by politicians and central bankers gone mad.
Courtesy: www.bullionvault.com
Yes, too many for a mortally wounded economy. The worst inflation scenario may be set to unfold in the coming 3-5 years.
Member mark #5 for sharing the news/DD... Keep it coming, OK? Thanks.
LARGELY A DOLLAR STORY
Sliding dollar helps powers gold toward $1,120
The dollar index fell to 15-month lows as the yellow metal ventured ever closer to the $1,120 mark
http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=92597&sn=Detail
Author: Jan Harvey (Reuters)
Posted: Wednesday , 11 Nov 2009
LONDON (Reuters) -
Gold hit record highs near $1,120 an ounce on Wednesday as the dollar index .DXY fell to 15-month lows, with expectations that an erratic U.S. economic recovery will keep American interest rates low.
The metal is now poised for more gains, analysts said, with the weak dollar helping gold build on a rally that began last week after the IMF sold 200 tonnes of bullion to India's central bank, raising the prospect of more official sector buying.
Spot gold hit a high of $1,117.95 an ounce and was bid at $1,115.75 at 1441 GMT versus $1,105.30 late on Tuesday.
U.S. gold futures for December delivery on the COMEX division of the New York Mercantile Exchange rose $12.90 to $1,115.40 an ounce.
"Today's move has been largely a dollar story -- you've got euro/dollar testing fresh lows, the same with the dollar index," said Daniel Major, an analyst with RBS Global Banking & Markets.
"The trend for dollar weakness seems to be reasonably firmly in place, which of course is supporting gold."
The dollar index fell a quarter of a percent to a 15-month low of 74.831 and the euro rose to a two-week peak within sight of last month's 2009 high of just over $1.5060.
Analysts said the dollar was smarting after Fed officials said on Tuesday that high unemployment and sluggish consumer spending were risks to recovery in the U.S. economy, which may keep the Fed funds rate low.
Weakness in the unit boosts gold's appeal as an alternative asset, and makes dollar-priced commodities cheaper for holders of other currencies.
Gold prices also rose in non-dollar terms. Euro-denominated gold reached its highest since March at 743.27 euros.
"The way gold keeps accelerating away from its previous highs is quite incredible," said Saxo Bank senior manager Ole Hansen. "Continued momentum is driving prices higher. Whenever we see new highs, we see more momentum buying."
BARRICK SEES RECORD MARGINS
In supply news, Barrick Gold Corp (ABX.TO), the world's biggest gold producer, told Reuters it sees the potential for record margins in the fourth quarter as gold prices hit new peaks and costs are stable or lower.
In major gold producer South Africa, the country's biggest union said it had received the go-ahead from authorities for its workers to strike at Gold Fields (GFIJ.J) over a disputed recruitment assessment method.
On the demand side, physical buying was slack in Asia, with traders in India -- the world's biggest bullion consumer last year -- keeping to the sidelines as prices rose.
Vietnam's central bank said it will allow imports of gold -- banned since May last year -- after bullion prices rose sharply in recent days, potentially opening up a new source of demand.
Interest in gold exchange-traded funds also remained soft, with holdings of the largest bullion-backed ETF, New York's SPDR Gold Trust, unchanged on Tuesday.
But with the prospect of persistent dollar weakness boosting fund interest in gold and further central bank purchases seen as a distinct possibility, the outlook for gold prices is positive.
U.S. investment bank Goldman Sachs said on Tuesday gold could rise to record highs in a range from $1,150 to $1,200 an ounce, driven by falling real interest rates and renewed buying interest by central banks.
Among other precious metals, spot silver was bid at $17.63 an ounce against $17.32, tracking gold higher, while platinum was at $1,368 an ounce against $1,349.50.
Palladium was bid at $343.00 against $331.50.
Earlier it touched $346.75 an ounce, the highest since August 2008, partly because of fund buying and partly because demand expectations have been bolstered by strong car sales data from China, traders said.
World Jumping on Gold Boom Bandwagon
NOVEMBER 10, 2009 09:46
http://english.donga.com/srv/service.php3?biid=2009111013688
The rapidly soaring demand for gold has led to surging prices of the valuable metal.
With gold growing as a prominent investment product, gold refiners are gathering gold rings, bracelets and necklaces to be turned into gold bars from across the world. Some are even attempting to develop new gold mines.
In a nutshell, a new “golden era” for the metal has arrived.
The small Swiss city of Mendrisio produces a third of the world’s gold bars. Argor-Heraeus SA is a major refiner in Mendrisio that processes roughly 400 tons of gold per year.
In an interview with the New York Times, Argor-Heraeus SA CEO Erhard Oberli said, “As gold prices have recently surged, a large amount of bangles, bracelets and necklaces arrive in plastic bags from souks in the Middle East, from pawn shops in Asia, and from corner jewelers in Europe and North America every day.”
According to the World Gold Council, gold investment jumped 51 percent in the second quarter but spending on gold accessories such as bracelets, necklaces, and rings fell 20 percent. That means gold accessories have been rapidly replaced with gold bars.
In a media interview, Suki Cooper, a metal strategist for Barclays Capital, said, “The global gold frenzy has been fed by hedge funds and central banks. Even individual investors have also fueled the frenzy. It’s a structural shift we’re seeing on the investing side.”
In cooperation with Swiss gold refiner PAMP, upscale London department store Harrods has begun selling gold products ranging from tiny one-gram ingots to hefty 12.5-kilogram gold bricks.
Chris Hall, head of Harrods Gold Bullion “The response has been astounding. Bars are definitely more popular than coins. The 100-gram bar is the most popular.”
In the United States, even ads for gold bars or ingots are securing late-night television spots.
Amid the gold frenzy, the spot price for gold jumped to a record 1,104.80 U.S. dollars per ounce on the London Commodity Exchange yesterday. Moreover, the gold price for December delivery hit 1,105.4 dollars per ounce, another record high.
Experts, however, are mixed over the prospects of gold prices. Jim Rogers, chairman of Singapore-based Rogers Holdings, said gold could reach 2,000 dollars per ounce.
Nouriel Roubini, professor of economics at New York University`s Stern School of Business, however, derided this forecast as “utter nonsense,” citing lack of inflationary or economic pressure that could drive the price of gold to that level.
they are eye opening now to find out when the gold thats in the ground will start paying.
The newest eye opening charts have been added to the i-Box and these reflect the state of the underlying fundamentals as much as anything else...
really far.. American dollar is done nobody wants to use it anymore e/m
Gold running hard... how far will this go???
Not since March '08 has Gold in the spot (or cash) market closed this high... knowing that the cash market in the metals leads the futures markets, looking for much higher prices in fiat terms seems logical.
Please see the charts and data -
http://www.kitco.com/scripts/hist_charts/yearly_graphs.plx
Recently, the charts showed a potential triple top but we know that bull markets in commodities are long cycle markets typically lasting 20+ years and we should have been able to guess this was going to have a bullish resolution...
Check all the closing prices here for precious/semi-precious metals -
http://www.kitco.com/
ONWARD 'N UPWARD!!!
MUST READ... 13 Reasons for Major Gold Breakout
By Jim Willie CB
Sep 10 2009 4:26PM
http://www.kitco.com/ind/willie/sep102009.html
http://www.GoldenJackass.com
Can't keep it down today... Gold seasonality -
History Lesson: September Is Best Month for Gold
http://www.kitco.com/ind/Holmes/holmes_aug312009.html
and overnight in the electronic spot market, gold goes to $1008.00/oz.
Track it here -
http://www.kitco.com/
China pushes silver and gold investment to the masses
A report suggests that the Chinese government is pushing the general public into buying gold and silver bullion, which could have a dramatic effect on the markets.
http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=88452&sn=Detail
Author: Lawrence Williams
Posted: Thursday , 03 Sep 2009
LONDON -
We are indebted again to Paul Mylchreest's Thunder Road Report for news that will bring big smiles to gold and silver investors everywhere. Apparently China is pushing the idea of buying gold and silver for investment purposes to the general population in the way that Western television sells soap powder. If 1.3 billion Chinese citizens start buying gold and silver, even in tiny quantities, imagine what that will do to the market!
The report notes that China's Central Television, the main state-owned television company, has run a news programme letting the public know how easy it is to buy precious metals as an investment. On silver investment the announcer is quoted as saying " China has introduced its first ever investment opportunity for silver bullion. The bars are available in 500g, 1kg, 2kg and 5kg with a purity of 99.9%. Figures show that gold was fifty times more expensive than silver in 2007, but now that figure has reached over seventy times. Analysts say that silver has been undervalued in recent years. They add that the metal is the right investment for individual investors and could be a good way to cash in."
What appears to have happened in China is a total relaxation of strictures on holding precious metals by the individual with the government pushing gold and silver as an investment option, seemingly at every opportunity. This is a far cry from the situation only a few years ago where the distribution of gold and silver was strictly controlled. Now, the Thunder Road Report notes that every bank will sell gold and silver bullion bars in four different sizes to individuals and gold related investments are said to be soaring in popularity.
Around a year ago, Leyshon Resources managing director, Paul Atherley, in an investor presentation in London - and no doubt delivered elsewhere in the world too - commented that some employees at the company's gold mining project in northern China would, on pay day, go to the local bank and buy a small gold bar as an investment and wealth protector. To an extent we put this down at the time to mining company hype - but this seems to be exactly the same phenomenon noted by Thunder Road. The Chinese are being converted from being the lowest per capita gold consumers in the world to a nation of small precious metals investors. Now, by next year, Chinese consumption of gold is likely to exceed that of India, which has been for years the world's biggest gold market. And one suspects that the potential for gold purchasing by individuals is only in its earliest stages. As more and more Chinese move into the cities and individual wealth grows, this trend is only likely to accelerate.
Paul ends the piece on Chinese gold and silver potential with the following comment: "Simply put, the Chinese government is trying to trigger a national gold craze...and it's working. The Chinese public now has gold trading platforms on steroids.... ...Also, for the first time in history, Chinese investors can even trade gold abroad (in London) with the swipe of a ‘Lucky Gold' card. I can't even get Bank of America to open a foreign currency account."
This may be an overstatement of the case from a precious metals bull - or it may not! Certainly if China is indeed pushing the public to buy gold then there may well be a hidden agenda here. It's unlikely they are doing it and will suddenly pull the rug out from under millions of investors. A cynic (or a raging gold bull) would suggest that this will precede a move to switch a good proportion of the country's reserves into gold which would have a huge effect on the global gold price and could prove disastrous for the dollar. Maybe it's not in China's interests to drive the dollar down too much until it has managed to divest itself of the huge dollar overhang (see the article on Chinese Sovereign Wealth Funds we published yesterday - Chinese sovereign wealth fund dumping dollars for strategic investments like gold ). The country may well already be, of course, surreptitiously building its gold reserves without reporting the build-up.
If the Chinese are indeed beginning to buy gold and silver as the quoted report suggests then this has to be a strong signal that prices are going to rise, and perhaps rise dramatically, in the relatively near future. We await comment from other China watchers for confirmation of the gold and silver buying spree, but with global gold production at best flat and probably in decline, even a small increase in Chinese buying could have a substantial impact on gold and silver prices.
Gold has a bullish price objective of $1005 on the P&F chart... almost there!!!
Gold jumped as the FOMC spoke... today it's up again!!!
U.S. Mint gold, silver coin sales 'temporarily suspended' - again
Sales and suspension of gold and silver coin or bullion coin sales by the U.S. Mint are becoming a regular part of doing business as overloaded refiners and mint facilities struggle to meet continuing high demand.
Author: Dorothy Kosich
Posted: Tuesday , 14 Jul 2009
http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=86213&sn=Detail
That revelation is really important... even countries are going back to gold as the dollar is not the longterm answer.
Northwestern Mutual Makes First Gold Buy in 152 Years (Update2)
By Andrew Frye
June 1 (Bloomberg) -- Northwestern Mutual Life Insurance Co., the third-largest U.S. life insurer by 2008 sales, has bought gold for the first time the company’s 152-year history to hedge against further asset declines.
“Gold just seems to make sense; it’s a store of value,” Chief Executive Officer Edward Zore said in an interview following his comments at a conference hosted by Standard & Poor’s in Brooklyn. “In the Depression, gold did very, very well.”
Northwestern Mutual has accumulated about $400 million in gold, and Zore said the price could double or even rise fivefold if the economy continues to weaken. Gold gained 10 percent last month, the most since November. The commodity has more than tripled since 2000, rising for eight straight years. Gold futures for August delivery slipped $4.80 to $975.50 at 4:03 p.m. in New York.
“The downside risk is limited, but the upside is large,” Zore said. “We have stocks in our portfolio that lost 95 percent.” Gold “is not going down to $90.”
Policyholder-owned Northwestern Mutual, based in Milwaukee, ranks third by 2008 life insurance premiums according to data from the National Association of Insurance Commissioners. The data excludes annuities.
To contact the reporter on this story: Andrew Frye in New York at afrye@bloomberg.net
Last Updated: June 1, 2009 16:34 EDT
William Murphy of GATA (Gold Anti-Trust Action Committee) explains how the 'Cartel' suppresses the price of gold
http://www.thedailybell.com/index.asp?fl=
The Daily Bell
The editors of the Daily Bell are pleased to present this comprehensive and exclusive interview conducted by Scott Smith with William Murphy of the Gold Anti-Trust Action Committee.
Introduction: Bill Murphy grew up in Glen Ridge, New Jersey and graduated from the School of Hotel Administration at Cornell University in 1968. His senior year he broke all the single season Ivy League pass receiving records and was Honorable Mention on the All-America Football team. He went on to become the starting wide receiver for the Boston Patriots in 1968. Bill went on to a career in the futures industry as a commodities broker. Early on he worked for Shearson Hayden Stone and Drexel Burnham before starting up his own introducing brokerage on 5th Avenue in New York. In 1998 he opened up LeMetropoleCafe.com, a financial market website geared to the gold market. In January 1999 Bill became chairman of the Gold Anti-Trust Action Committee (GATA) to expose the manipulation of the gold price by The Gold Cartel.
Daily Bell: Thanks for spending some time with us.
Bill Murphy: Thanks for thinking of GATA.
Daily Bell: Some people would say you have done more to move the price of gold upward than the Federal Reserve - with all its blundering. How do you respond to that?
Bill Murphy: That certainly would not be the opinion in the mainstream gold world who have fought against GATA's efforts and discoveries from day one. The Federal Reserve is a dichotomy as to the price of gold. They have been instrumental in their efforts to suppress the price of gold in their role in The Gold Cartel. At the same time their "quantitative easing" could not be more gold friendly. For those who believe GATA has had a substantial impact on the gold price, we thank them.
Daily Bell: You seem to view the world through a free-market prism - that's fairly obvious. Would you consider yourself fully a free-market "Austrian" in terms of your economic philosophy?
Bill Murphy: Don't really get into it that much. I used to trade commodities on a rather large scale and like to think I know a fair amount about the markets and how they work. A few weeks after I opened my website, LeMetropoleCafe.com, Long Term Capital Management blew up. My colleagues and I knew they were short more than 300 tonnes of gold on a "carry trade." When they were forced to cover that short, the price should have gone ballistic. Instead, the bullion banks (Goldman Sachs, Deutsche Bank, Chase Bank), who were short too, bailed them out and stopped gold's advances cold on a daily basis around $300 per ounce. That couldn't have been clearer by the price action and the reports from the Comex floor.
Daily Bell: How convinced are you that the monetary elite manipulates the price of gold? How did you come to that conclusion?
Bill Murphy: The Gold Anti-Trust Action Committee's basic assertion for the past 10+ years is that there is a Gold Cartel out there suppressing the gold price. It consists of the US Government, including the Fed and Treasury, various other central banks, and bullion banks like Goldman Sachs and JP Morgan Chase. Bullion banks such as Goldman and Morgan became The Gold Cartel's hit men, trading the gold market from the short side and bombing the market in coordinated anti-trust fashion at the beck and call of our government, making a great deal of money in the process. It seems to have all started with Robert Rubin:
Before he was CEO of Goldman Sachs and then US Treasury Secretary, Robert Rubin worked as the top dog in London for Goldman Sachs. One of his duties was to oversee their gold trading operations. We know this because the CEO of Kirkland Lake Gold, Brian Hinchcliffe, whose firm is a staunch GATA supporter, worked in London back then for Goldman Sachs and reported directly to Robert Rubin.
This was many years ago (late 80's) and interest rates in the US were very high, say from 8 to 12%. Rubin had Goldman Sachs borrow gold from the central banks to fund their basic operations, doing so at about a 1 % interest rate. Then they sold the physical gold in the marketplace, using the proceeds as they so desired. This was like FREE money, as long as the price of gold did not rise to any sustained degree for any length of time.
Soon other major financial institutions realized what Goldman Sachs was doing and copied them. Rubin continued these operations as the overall Goldman Sachs CEO in New York and then took it to a new level as US Treasury Secretary. That is how the gold price suppression became the lynchpin of his widely acclaimed "Strong Dollar Policy." GATA's Reg Howe caught onto this notion by finding a paper titled, "Gibson's Paradox and The Gold Standard," co-authored by Lawrence Summers in 1988. Summers, a professor at Harvard at the time, succeeded Rubin as US Treasury Secretary. The bottom line of Summer's analysis is that "gold prices in a free market should move inversely to real interest rates." Control gold and it will help to control interest rates.
From GATA's standpoint it is a serious bummer that Summers is now the Director of the White House's National Economic Council for President Obama. Our energetic new President has the architect of America's economic demise as his key advisor.
I met with Bart Chilton, an outstanding and receptive commissioner with the CFTC, on December 19, 2008 and laid out GATA's evidence of the gold market manipulation. There were three others at our meeting from the CFTC, including their senior counsel. Bart took copious notes and I suggested he take what GATA had to say to the Obama people ... emphasizing the gold price suppression scheme would blow up before President Obama's watch was over due to dwindling available central bank gold to suppress the price. Better to let the gold price trade freely now and blame what occurred on the Bush Administration, rather than let the scheme go on and eat the problem on his administration's watch down the road.
Daily Bell: How about silver?
Bill Murphy: No question about it ... MANIPULATED! JP Morgan Chase is by far the major silver short and its position is way too concentrated for a free market. Silver needed to be manipulated along with gold in order to keep attention away from the price suppression scheme. Ted Butler, well known in the precious metals internet world, knows as much about the silver market as anyone, and has brilliantly articulated just how much silver has been manipulated ... and by whom.
Daily Bell: What motivates those who do this in your estimation?
Bill Murphy: The motives of "the cabal" are to give support to the dollar, keep US interest rates lower than they should be, and to tone down the widely watched US barometer of US financial market health, that being the gold price. After all, whenever the price of gold soars, it congers up talk of too much inflation, a sinking dollar, or a crisis of some sort ... all negative for Wall Street and the incumbent administration. That's exactly the sort of commentary you will be reading about in the weeks and months ahead as the price of gold soars.
Daily Bell: Can you expand on what motivates you?
Bill Murphy: I stumbled onto this 10 years ago. I was complaining about the obvious gold price manipulation scheme and a new subscriber, Chris Powell, who had extensive anti-trust experience working with his newspaper, said I should stop just complaining and do something about it. He said he would put up $500, if I would, to form a committee ... with the notion we could do something about it.
Ten years later, this is what I do and it has been the most fascinating and rewarding experience in my life ... especially the people I have met. Gradually our tiny group has learned how the US financial world really works. The lack of transparency and extent of the collusive market manipulation of it all is both staggering and frightening.
Daily Bell: Why hasn't this been a topic of investigation for the mainstream media?
Bill Murphy: By some fluke I was asked to be a guest on CNBC in early February of 1999. That was the last time I was seen on US television, once they heard what I had to say. GATA is taking on the richest and most powerful people in the world and the establishment doesn't like it.
One of the most enlightening things in my life was to learn we don't really have a free press in America. Our name (Gold Anti-Trust Action Committee, or GATA) doesn't even show up in print, or get mentioned on the air, and we have been right for the last nine years in a row about the direction of the price of gold ... when most of the establishment has been offside ... most having been neutral to bearish.
Daily Bell: Have you ever been worried about a backlash? Have you ever been threatened in any way as a result of your activities or intimidated?
Bill Murphy: About 8 years ago, the following happened within a six week period ... nothing like it before or since:
• My car was stolen. It was found a month later on a nearby highway the day after my insurance company paid me. There was not even a dent on it, money was left in the glove compartment, and a cashmere sweater remained in the backseat.
• My web site was hacked with someone sending out some dreadful, goofy email that made me look daffy.
• Coming out of a nearby restaurant on a Saturday evening in a fashionable neighborhood (one block from where I live), somebody knocked me out with a brass knuckle punch. I thought my jaw was broken.
Were those incidents over a six-week period just a fluke? Got me. But, they were awfully suggestive that someone out there wanted GATA to back off.
Daily Bell: Do you expect that some sort of smoking gun regarding the manipulation of money metals will be found through litigation or some other legal process?
Bill Murphy: It surely could and GATA has been on that case since December 2000 when GATA consultant Reg Howe filed this complaint:
The following Complaint was filed on December 7, 2000, in the United States District Court for the District of Massachusetts, Boston, MA.
UNITED STATES DISTRICT COURT
District of Massachusetts
Civil Action No.
00-CV-12485-RCL
______________________________________
Reginald H. Howe,
Plaintiff,
v.
Bank for International Settlements,
Alan Greenspan,
William J. McDonough,
J.P. Morgan & Co. Inc.,
Chase Manhattan Corp.,
Citigroup, Inc.,
Goldman Sachs Group, Inc.,
Deutsche Bank AG and
Lawrence H. Summers,
Secretary of the Treasury,
Defendants.
______________________________________
COMPLAINT
I. Jurisdiction
1. This is a complaint for damages and injunctive relief arising out of manipulative activities in the gold market from 1994 to the present time orchestrated by government officials acting outside the scope of their legal or constitutional authority and certain large bullion banks active in the over-the-counter gold derivatives markets and on the Commodities Exchange ("COMEX") in New York. The complaint alleges horizontal price fixing in violation of Section 1 of the Sherman Act, securities fraud in violation of Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934 ("Exchange Act"), common law fraud and breach of fiduciary duty by the directors of the Bank for International Settlements with regard to holders of its American issue, and violations of the Constitution by federal officials acting under color of federal law but wholly outside the scope of their legal or constitutional authority...
The judge did not dismiss anything Reg presented ... nothing ... but dismissed the case because he ruled that Reg did not have proper legal standing to go any further.
Daily Bell: There was at one time a lawsuit against Barrick Gold that ended in an out of court settlement. You were hopeful that this would cast light on larger manipulations. What do you think happened?
Bill Murphy: Barrick Gold was into the gold price suppression scheme up to their eyeballs and GATA was all over their case from the get-go. We believe Blanchard & Co's out of court settlement against Barrick and JP Morgan Chase (following the suit by GATA's Reg Howe) was a huge victory for Blanchard and the GATA camp. Note what happened in late 2003. One day Barrick Chairman Peter Munk was extolling their massive hedge program and the next day he did a 180-degree reversal (HUH?) ... AND, Barrick's CEO flew to New Orleans the next day where the case was being tried ... unable to make a scheduled presentation in London.
Reuters
UPDATE - Barrick changes policy, drops gold hedging
Friday November 21, 8:19 am ET
By Veronica Brown
LONDON, Nov 21 (Reuters) - Barrick Gold Corp stunned bullion markets on Friday by saying it was changing its hedging policy, and is no longer committed to selling the metal on forward markets as it is now cash rich....
As Canada's biggest gold producer, Barrick is the world's second-largest gold miner by market value and one of the largest bullion producers.
ABOUT-TURN FROM PREVIOUS POSITION
On Thursday, Munk had extolled the virtues of hedging by Barrick, which has one of the largest gold hedgebooks in the industry...
What do you think that was all about? Munk had dementia? Nope, Blanchard forced Barrick to stop hedging. What fun! It is SO obvious what really transpired. GO GATA! GO Blanchard!
Daily Bell: Are there other lawsuits on the horizon, or other information that can come to light soon that will provide full proof of your thesis?
Bill Murphy: GATA's Chris Powell sent out the following dispatch on April 14 of this year...
Responding to President Obama's instruction to government agencies of January 21 this year, seeking greater openness in government, GATA today reformulated and resubmitted to the US Treasury Department and Federal Reserve Board our requests of last year seeking access to records of swaps involving the US gold reserve. You may recall that the Treasury entirely rejected GATA's request last year while the Fed withheld most documents of any substance, contending, in part, that disclosure would harm certain proprietary interests, among others.
That there should be any secrecy at all involving the US gold reserve may be construed as another proof of surreptitious US government intervention in the worldwide gold, currency, and bond markets.
Despite the president's instruction for greater openness, of course, GATA does not expect a more favorable response to its new requests for information. We continue to believe that, given the market rigging long under way, the disposition of US and Western central bank gold reserves is considered a secret more sensitive than the plans for construction of nuclear weapons. But we hope that our renewed requests will call more attention to our issue and that their rejection will build acceptance of GATA's work over time.
Further, assuming that these new requests also will be denied, GATA may bring lawsuits against the Treasury Department and the Federal Reserve in federal court if sufficient financial support can be obtained.
To read GATA's new request to the Treasury Department, click here.
To read GATA's new request to the Federal Reserve, click here.
Daily Bell: Can you describe in the simplest possible terms the main kinds of gold manipulations. How do they work?
Bill Murphy: The Gold Cartel surreptitiously sells physical gold into the market at key strategic times. This added supply has a negative effect on the price when done in size enough to overwhelm demand. This has been going on for more than a decade. They use the derivatives markets to flush out speculative longs on the Comex. When the specs flee, The Gold Cartel gradually covers their shorts and then start their selling all over again on the next price rise.
The Gold Cartel's efforts can also be viewed on a daily basis. They tend to strike in London (3 AM New York time) when the cabal traders report to work; after the PM Fix in London when the physical market pricing has concluded for the day; and with few traders around in the lightly traded Access Market following the Comex close, in order to influence the price lower.
Daily Bell: Have you gathered enough proof to prove this sort of explanation - if it were presented to a truly unbiased examiner?
Bill Murphy: It might be helpful to think of what GATA has put together on The Gold Cartel and compare it to a jury listening to the evidence against them in a capital murder case ... some of which is circumstantial evidence, but taken all together, you can come up with no other conclusion than to end up with a verdict of guilty beyond a reasonable doubt ... with the death penalty as the appropriate punishment.
Ironically, there is a significant amount of evidence on the public record to support GATA's claims, going all the way back to Alan Greenspan's illuminating comment before Congress in July of 1998, "Central banks stand ready to lease gold in increasing quantities should the price rise" ... and that's just what they have done.
And then you have:
• The Reserve Bank of Australia confessed to the gold price suppression scheme in its annual report for 2003. "Foreign currency reserve assets and gold," the RBA's report said, "are held primarily to support intervention in the foreign exchange market."
• The head of the monetary and economic department of the Bank for International Settlements, William S. White, in a speech to a BIS conference in Basel, Switzerland, in June 2005:
"There are five main purposes of central bank cooperation, White announced, and one of them is "the provision of international credits and joint efforts to influence asset prices (especially gold and foreign exchange) in circumstances where this might be thought useful."
• Nearly two years ago, the US Treasury quietly made a subtle change to its weekly reports of the US International Reserve Position, which includes the US Gold Reserve.
In stating the US Gold Reserve is 261.499 million ounces, the gold is now reported 'including gold deposits and, if appropriate, gold swapped.'
This description provides clear evidence that the US Gold Reserve is in play. Gold has been removed from US Treasury vaults and placed on deposit, presumably in the couple of bullion banks the Treasury has selected to assist with its gold price-capping efforts.
Daily Bell: You've received a lot of coverage for your views in our estimation. But obviously you're not cover material for the mainstream press. Can you give us some insight into what is obviously a bias against your point of view and arguments?
Bill Murphy: In a way we are like Harry Markopolis who went to the SEC with evidence that Bernie Madoff's investment business was nothing more than a giant Ponzi scheme ... and he showed them the evidence to prove it, like we have to the CFTC and the financial market media.
Did the SEC pay any attention? NO! Madoff was so-called respected establishment with the most proper credentials. Now, realize GATA is showing up Goldman, Morgan and the US Government. That is a no-no in the Wall Street media world. It is not respectable to challenge those giants and our press doesn't want to hear about it ... after all, who are the biggest advertisers?
What we are going through can also be compared to those who cried foul about Enron, an energy trading firm which blew up after being voted America's finest corporation five years in a row by a major US financial publication. Scandals, such as the one GATA has uncovered, are ignored by the financial press when they are about Wall Street's esteemed until it is too late and the money is gone.
If I might say, GATA is no rag tag organization with all of us coming from the so-called establishment world during our careers. The background and credentials of our GATA camp aren't too shabby. From the speakers roster at Gold Rush 21 in the Yukon:
• Reg Howe - Harvard Law, Golden Sextant Advisors
• Bob Landis - Harvard Law, Golden Sextant Advisors
• John Brimelow - Stanford Business School, Wall Street gold broker
• Catherine Austin Fitts - MBA at Wharton School at the University of Pennsylvania, and was the Assistant Secretary of Housing and Federal Housing Commissioner at the United States Department of Housing and Urban Development in the first Bush Administration
• Hugo Salinas Price -The "Mr. Silver" of Mexico and President of the Mexican Civic Association for Silver
• Peter George - Oxford University ... The "Mr. Gold" of South Africa
• James Turk - Chase Manhattan Bank and www.goldmoney.com
• John Embry - Royal Bank of Canada and now Chief Investment Strategist at Sprott Asset Management
• Adam Fleming - Chairman of Wits Gold and former chairman of Harmony Gold
• JP Schumacher - Top-Gold Fund and former partner of legendary Swiss Banker, Ferdinand Lips, author of "The Gold Wars."
• Chris Powell - Editor of the Journal Inquirer in Manchester, Connecticut, GATA Secretary/Treasurer
• Bill Murphy - Cornell School of Hotel Administration, GATA Chairman
Daily Bell: Have you had run-ins with the mainstream media where individuals refused to recognize fairly evident truths?
Bill Murphy: We have nothing but run-ins with the mainstream gold world and the US financial press. Most refuse to acknowledge we exist and others, who say they are going to write up our claims, have their stories scuttled by their editors.
Daily Bell: Did you know that Wikipedia, which has articles about everything under the sun, does not have a GATA link? It was deleted with the rationale being that your organization is a fringe source. Can you comment on that?
Bill Murphy: Fringe source? What a hoot! The Russians know who GATA is...
The London Bullion Market Association
Bullion Market Forum
Baltschug Kempinsky Hotel, Moscow
June 3-4, 2004
Perspectives on Gold: Central Bank Viewpoint
By Oleg V. Mozhaiskov, Deputy Chairman
Bank of Russia
"This dualism in gold price formation distinguishes it from other commodities and makes the movements in the price sometimes so enigmatic that market analysts need to invent fantastic intrigues to explain price dynamics. Many have heard of the group of economists who came together in the society known as the Gold Anti-Trust Action Committee and started a number of lawsuits against the US government, accusing it of organzsing an anti-gold conspiracy. They believe that with the assistance of a number of major financial institutions (they mention in particular the Bank for International Settlements, J.P. Morgan Chase, Citigroup, Deutsche Bank, and others), some senior officials have been manipulating the market since 1994. As a result, the price dropped below US$300 an ounce at a time when it should, if it had kept pace with inflation, have reached US$740-760."
Those comments stunned the bullion dealers in attendance, who then refused to send us a copy of the speech. After months of futile efforts, the Chairman of the Moscow Norodny Bank in London sent a translated copy to GATA. A year later, Andrey Bykov, an economic consultant to Russia's President Putin, attended GATA's conference in the Yukon. Two days later the price of a comatose gold exploded and rose $300 per ounce in the ensuing nine months.
Not for nothing, GATA has held three international gold conferences:
• The "GATA African Gold Summit" in Durban, South Africa on May 10, 2001, attended by 5 sub-Saharan African nations, the South African Reserve Bank, leading SA gold producers, the South African unions, etc., - an event that was given prime time coverage on SABC television.
• On August 8th and 9th 2005, "Gold Rush 21" in Dawson City, Canada, a historic conference held in the Yukon to expose the manipulation of the gold market. One hundred delegates attended from 14 countries, including the aforementioned Andrey Bykov.
• The "GATA Goes To Washington" conference in Arlington, Virginia. 180 attendees came from 17 countries for the gathering. The conference showcased GATA's FOIA efforts to learn the truth about US gold reserves from the Fed and US Treasury.
This past year I (representing GATA) was a part of three conference calls with the Chinese Investment Corporation, one of the largest sovereign wealth funds in the world.
Then, just a few weeks ago Adam Fleming, mentioned above and related to Ian Fleming of James Bond, threw GATA a fund raising reception in London, attended by many of the elites in the London Gold World. My colleague Chris Powell, Sprott Asset Management's John Embry, and I went over for the presentation.
If all that is fringe, GATA is fringe.
Daily Bell: With the prices of gold and silver much higher than at the start of the decade, does the manipulation continue as aggressively as a decade ago, or is it diminishing?
Bill Murphy: It was this clandestine feeding of central bank gold into the marketplace which clued GATA into the gold price suppression scheme. Three GATA consultants, Reg Howe, Frank Veneroso and James Turk, using independent, sophisticated methodologies, came to the same conclusion years ago ... that the central banks have far less gold than the 30,000 tonnes of gold they say they have. The GATA camp research shows they have less than half that amount in their vaults, the difference being the amount that has been fed surreptitiously into the physical market to suppress the price. Since demand for physical gold exceeds mine and scrap supply by well over than 1,000 tonnes per year, this central bank gold is vital to prevent the price from exploding.
The central banks are gradually running out of enough available central bank gold to keep the price suppressed. Their ammo is dwindling, so they are in a managed retreat. Meanwhile, other central banks don't want to be seen selling much anymore, especially after China announced they had increased their official gold reserves by 454 tonnes.
The GATA camp's credibility soared after that announcement, as we documented in my commentary in late 2003 that the Chinese Government began buying and even got the total tonnage just about right. No one else in the mainstream gold world did so. This is important because GATA has been accounting for the extra supply flow (via the Gold Cartel's lending) to meet demand for gold which is far greater then acknowledged by the gold industry.
Daily Bell: As the price of gold goes up will it finally unravel large derivative bets that have been placed against it?
Bill Murphy: A fair amount of the leased gold is hedged to some degree by way out of the money calls. WHEN gold goes berserk, which it will, all sorts of counterparty, derivatives problems could be set off. In today's financial environment, that won't be a huge surprise.
Just out recently from GATA consultant Reg Howe:
May 25, 2009, Gold Derivatives: The Tide Turns
On May 19, 2009, the Bank for International Settlements released its regular semi-annual report (click here to read) on the over-the-counter derivatives of major banks and dealers in the G-10 countries and Switzerland for the six months ending December 31, 2008. See A. Moses, Derivatives Market Declines for First Time on Record (Update 1, click here to read article), Bloomberg.com (May 19, 2009). The total notional value of all gold derivatives declined from $649 billion at mid-year to $395 billion at year-end, or almost 40%. Although gold prices fell from $930 to $870 (London PM) during the period, gross market values dropped only marginally from $68 to $65 billion, probably reflecting the impact of increased volatility on valuing options...
The significant declines in worldwide gold derivatives reported by the BIS for the last half of 2008 stand in stark contrast to the figures for US commercial banks reported by the Office of the Comptroller of the Currency (click here to read). From June 30 to December 31, 2008, the total notional amount of gold derivatives held by US commercial banks fell from $114 billion to $107 billion, or just over 6%, compared to the 40% drop for all major banks and dealers in the G-10 plus Switzerland. JP Morgan Chase's gold derivatives fell from $85.3 to $82.5 billion, scarcely 3.3%, and HSBC's from $27.5 to $19.2 billion....
Derivatives can be and are used to push markets around. Nowhere has this phenomenon been more obvious than in the gold market, where as former Federal Reserve chairman Alan Greenspan boasted to the House Banking Committee in 1998: "...central banks stand ready to lease gold in increasing quantities should the price rise." Gold lending by central banks provided the fuel for gold derivatives, particularly forwards and swaps, and the ammunition used by the bullion banks to suppress gold prices, thereby making the US dollar and other major currencies appear sounder than their fundamentals warranted.
Note how JP Morgan Chase stands out.
Daily Bell: Has the Internet proved problematic for the forces interested in money manipulation?
Bill Murphy: For sure. That is how I met all of my colleagues, who happen to be the smartest and nicest group of individuals I have ever met in my life.
Daily Bell: Do you foresee a return to a free-market gold and silver standard? Would you just prefer gold?
You got me. GATA is for a free, fair, and transparent gold price. At Gold Rush 21, with gold at $436, I predicted a gold price of $3,000 to $5,000 in the years ahead. That is what it is going to take to "clear" the market and I stick with those numbers. No big deal. It is generally acknowledged that if gold had kept up with the generally accepted inflation numbers in the US, the price of gold would already be about $2,300 per ounce. It is not there right now BECAUSE of THE GOLD CARTEL.
Daily Bell: What lies ahead, deflation, inflation or both. Is there a chance for hyperinflation?
Bill Murphy: With the US printing press going the way it is, there will be massive inflation. It is written.
Daily Bell: Do you believe junior gold and silver stocks will begin to rally as this business cycle matures?
Bill Murphy: You mean the comatose ones? Yes, they are just beginning to show signs of life. When gold clears $1,000 and holds it, gold and silver investments are going to be the GO TO investments among the general public ... even a clueless Wall Street will come to life on that score. As the public pours into our tiny market cap sector, the shares of all the quality gold/silver stocks (juniors and explorations) will go ballistic ... ten baggers will be commonplace.
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Daily Bell: What are some of the most important issues pertaining to free-markets in your opinion?
Bill Murphy: The rigging of the price of gold may be one of the most significant financial events of our time. Last year GATA said so publicly and in the most visible of fashion (see below).
Daily Bell: What endeavors are you involved in that you want to point out to our audience. What's most important to you that you would like our audience to be aware of and support?
Bill Murphy: GATA is an ACTION organization ... we do more than just pontificate. We have traveled the world in an attempt to win the day ... including meetings with James Saxton, vice-chairman of the House Joint Economic Committee; Dennis Hastert, The Speaker of the House; Spencer Bachus, the vice-chairman of the sub-Committee on Domestic and International Monetary Policy; and boyhood friends of President Bush, including Tom Craddick, Speaker of the Texas House of Representatives.
To meet our objectives we need funds to carry on. The Gold Anti-Trust Action Committee seeks financial and moral support from gold mining companies, investors in gold mining companies and physical gold, and people who seek to preserve gold's vital role in the world's economy. To help us, click here.
Daily Bell: What is the most important campaign that you are working on now pertaining to GATA?
Bill Murphy: To get the attention of the media to allow what we have discovered to see the light of day.
Daily Bell: What are the most important - seminal -- works of yours that you would encourage everyone to read? Where can they be found?
Bill Murphy: Besides all the evidence of gold market manipulation we have gathered (much of it can be read at The Matisse Table at my website, LeMetropoleCafe.com), our three international conferences stand out. Gold Rush 21 will go down as an historic conference. Video of part of the presentations may be viewed by clicking here.
In addition, GATA placed a full-page color ad in the Wall Street Journal on January 31, 2008 with the DOW about 12,500. GATA went out of its way (paying $264,426.26), to warn the world what was coming as a result of the price suppression scheme. It can be viewed by clicking here.
Note these two points GATA made about what was to come:
• "This manipulation has been a primary cause of the catastrophic excesses in the market that now threaten the whole world."
• "Serious manipulation by government is leading the world to disaster."
By not allowing the price of gold to trade freely and rise in price, US interest rates were kept too low for too long ... and directly led to the financial market chaos we are presently experiencing.
To this day I have not had ONE inquiry from the mainstream financial press how we could have been so right ... with nobody even asking "Who are those guys?" and why would they spend so much money with that message?
Daily Bell: On behalf of all of our readers we thank you for sharing your views with us - and for your courageous and important work. And we encourage all readers to visit your site and consider learning more about GATA and its activities.
Bill Murphy: Thanks much ... GATA's website is www.GATA.org.
Building a base for take off... see why -
http://www.gold-eagle.com/editorials_08/cote043009.html
Video chart of $GOLD from Claytrader -
http://investorshub.advfn.com/boards/playvideo.aspx?v_id=321
According to “a survey of the CEOs of emerging to mid-tier gold producers,” American stimulus will “spark the onset of hyperinflation as early as this fall. And that will swiftly and unequivocally establish the $1,000 mark as gold's next key support level.”
Via Stock Research Portal (http://www.stockresearchportal.com)
Gold and gold companies are going up.
The 2 day monster rally is signalling "goodbye dolla'"... way to go banksters.
Yep... $GOLD punched through $1K/oz. and holding steady...
The behavior of gold is signaling real trouble for anyone willing to listen.
There will always be up and down days in the stock market, but I don't think you'll see gold stock going anywhere. They're in there for the long hall.
Thanks!!! Gold now doin' the bump and grind on the top Bollinger Band!!!
Nice Board FJ!
interesting article:
In the U.S, in 1973 gold held by central bank was 8,584 tonnes and currency in circulation was $61 bn. If we divide the gold held by the currency in circulation, we get a ratio of 141.2 i.e. 141.2 tonnes were held per 1 billion of currency in circulation. In 2007, the U.S central bank held 8,133 tonnes and the money in circulation was $759 bn. The ratio has now become 10.7 i.e. only 10.7 tonnes of gold held per billion dollars in circulation.
The falling trend indicates that more and more paper currency issues in circulation is backed by less and less gold. The backing comes only in form of the faith in the Government, which is fast dwindling due to the financial crisis and the massive bail outs, especially in US.
Gold Prices On Revenge and Retaliatory Mood -
http://www.commodityonline.com/news/Gold-prices-on-revenge-and-retaliatory-mood-13682-3-1.html
Thank God That We Cannot Print Gold
http://www.commodityonline.com/news/Thank-God-we-cannot-print-gold!-13693-3-1.html
Which one is getting kicked in the teeth??? Which one is intrisically worth nothing???The weekly big picture trend revealing view looks sickening for the purchasing power we have around the world... Bazturd bankers - thanks for nothing!!!
GOLD today rose 16.50, but its 835.40 close is still
14.60 shy of the magic number, 850 (25 year resistance).
Be patient, it is pushing toward that barrier. Once through
that it will run, run, run. For the first time since
24 October, gold's 17 day moving average has risen
above the 50 DMA, a good sign confirming upward
momentum.
Franklin Sanders
The MoneyChanger
http://www.the-moneychanger.com
An absolute must read... Red Alert: Gold Backwardation!!!
Antal E. Fekete
Gold Standard University Live
http://news.goldseek.com/GoldSeek/1228499200.php
Gold Buyers Smash Records 12/3/08
http://www.kitcocasey.com/articles/2422/gold-buyers-smash-records-12-3-08/
“Citigroup says gold could rise above $2,000 next year as world unravels. Gold is poised for a dramatic surge and could blast through $2,000 an ounce by the end of next year as central banks flood the world's monetary system with liquidity, according to an internal client note from the US bank Citigroup.” “Citigroup said the blast-off was likely to occur within two years, and possibly as soon as 2009.” “Gold has tripled in value over the last seven years, vastly outperforming Wall Street…”
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/3526645
Those lease rates show a lower high and a now a lower low... interesting -
BACK TO GOLD LEASE RATES
(More of the Jim Willie article... I mentioned this first on the forum... right?)
http://www.kitco.com/ind/willie/oct302008.html
The gold lease rates have jumped significantly. Lease rates have more than tripled in the last month alone! They have not subsided. The last time rates on the one-month lease were in this neighborhood was over a decade ago in another crisis. It means that vault owners who control large quantities of gold are much less willing to permit other parties to borrow it, plain and simple. The COMEX, where paper gold is traded, might not be able to acquire much needed gold from central bank vaults and other bullion bank vaults in order to satisfy delivery requirements. Vault owners must expect higher gold prices to come. Clearly, the gold market is experiencing shortage. The lease market is an excellent forward indicator on physical price movement. Silver lease rates have also tripled, just like gold, and not subsided either. The lease game is thoroughly perverse. One effect rarely noted is that short sellers within the futures contracts might be squeezed due to leasing challenges. If they have a harder time to roll over contracts, by means of higher required posted margin or higher cost of leased gold, then they must cover. A price rally ensues.
Steven Isenberg, chief executive officer of M Partners in Toronto pointed out that the cost of borrowing gold rose dramatically in March 2001, when central banks were making less bullion available to speculators, mining companies, and jewelers. Gold promptly rallied more than 12% in the following two months. He said, “This [the lease rate for gold] usually precedes a sharp move in the gold price.”
Ross Norman, director of TheBullionDesk.com, said the latest lease rate spike “is indicative of perhaps an even tighter market still yet to come.” While gold miners and jewelry groups are the most frequent borrowers, central banks are the traditional lenders. Fat Prophets offers an excellent interpretation on lease rates, given on October 12. “Today’s commentary concerns the last carry trade left in the markets, i.e. gold. Gold peaked at $1032 in March this year. However, since then it has fallen steadily, trading as low as $734. While this fall has been in line with a rising USD dollar, it has also been orchestrated. The current spike in gold lease rates indicates that demand for physical gold is extremely high and growing quickly. We may well be witnessing the first seeds of the gold price breaking free from the short sellers and the end (death) of the gold carry trade, which so many bullion banks made such large profits on in the 1990s. The lease rates (available on TheBullionDesk.com) will be the key indicator to watch.”
The margin requirements at COMEX have been increased. Could this move be intended to hinder gold investors? Yep! Is the move consistent with rising gold lease rates? Yep! Will the devious maneuver halt a gold price response? Nope! Margin collateral demands in a general sense have risen by 500% in many hedge fund accounts. The pressure extends to India, where withholding credit from major buyers has inhibited gold buying. The trend is clear, as pressure by authorities has been to reduce leverage by force. When liquidation is late, price reversal comes swiftly.
Upcoming Gold Default by Jim Willie CB
http://www.kitco.com/ind/willie/oct302008.html
The gold & silver futures markets are each hurtling down a dangerous path toward possible default. The artificial paper price has created enormous physical demand, and hampered supply production, if not delivery. The gap between the corrupted paper price and the legitimate physical price in actual trading markets has grown sharply, enough to force a breakdown like in any distorted market. When December contracts in gold & silver are demanded to be satisfied via delivery of the metal, we could easily see the COMEX fail in delivery. A default is highly likely.
About silver-
Got Gold Report – COMEX Commercials Least Net Short Silver In Years
http://www.resourceinvestor.com/pebble.asp?relid=47362
At a much more dramatic pace coming out of a mind numbing negative rate, the Chart of Parabolic Silver Lease Rates confirms Gold rates!!! -
http://www.kitco.com/charts/s_leaserates.html
http://www.kitco.com/market/LFrate.html
Gold lease rates are headed UP!!! I think that gold is headed for quite a rise... Silver too!
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