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- Today in Commodities
- Bottom in Gold and Breakdown in USD
- Despite Abbott Parting With Gralise, Depomed's Future Looks Bright
- Why Oil Is Going to $120
- Gaddafi's "Gold of Mass Destruction"
- Surf Warning: Tsunami to Lift Gold
- Portuguese Government on Verge of Collapse
- Central Banking vs. Free Banking and the Gold Standard
- Sovereign wealth funds give support to silver price
- $1440 $37
- ECB : No change in Gold assets last week
- Will JPMorgan Now Make and Take 'Delivery' of Its Own Silver Shorts?
- Gold: Buy, Hold Or Sell? Update #25
- Silver lures Indians as gold goes ballistic
- The world's best places to hide and store precious metals
- Euro CRISIS: The Portuguese government is on the brink of collapse
- This could be the "end game" for the U.S. dollar
- How Japan will create huge buying pressure for coal and natural gas
- Top economist Shiller: The next superbubble is forming here
- Gold Projection
- Paging Blythe, get out of bed and resume shorting silver, its above your level-your birthday is over, Paging Blythe
| Posted: 23 Mar 2011 07:12 AM PDT Matthew Bradbard submits: Crude has advanced five out of the last six sessions and is trading back near the contract highs. The bulls remain in control but we would not rule out a sell off on a dollar bounce in the coming sessions so lighten up and tighten stops. We're not advocating bearish plays but booking partial profits would be our suggestion. Natural gas put on an additional 2% today, which marks just over a 15% appreciation in three weeks. We've advised clients already to book profits on longs and will be looking to buy back in on a retracement. We are on the sidelines in the indices but forced into the market we would be buyers as our upside target in the Dow is 12,300 and 1325 in the S&P. If our assessment is correct we would expect the debt complex to melt down; our favored play is bearish positioning in 10-yr Complete Story » |
| Bottom in Gold and Breakdown in USD Posted: 23 Mar 2011 06:54 AM PDT
In our previous essay entitled Significant Breakdown in Gold or a Short-term Bottom in Platinum we mentioned that the recent breakdown in price of gold from the yen perspective should not make Gold Investors concerned about the healthiness of the bull market as there was a good fundamental explanation behind this phenomenon. The price has reversed quickly and is back in the rising trend channel, so there are no longer any short-term bearish signals coming from this market whatsoever. Before moving on the timing-related part of the essay, we would like to comment on one of the interesting concepts that we've read recently. Namely, we have been reading a positive spin on Japan's tragedy that this destruction will be the catalyst for rebuilding that might jumpstart Japan's economy as it did after World War II. This is the belief that the destruction of wealth fuels its creation. We would like to put that one to rest. It's called "the broken window" fallacy. Frederic Bastiat, a 19th century economist explains this by means of an allegory. It goes like this—when a kid throws a rock at a shop window and breaks it everyone in the vicinity regrets the unfortunate incident. But a man who happens upon the scene points out that this is not a bad thing after all. The man fixing the window will get money for doing so. The money might be spent on a new suit, and so, the tailor too will get money. The tailor will spend money on other items, and the circle of rising prosperity will expand without end. In the 1946 book Economics in One Lesson, Austrian School economist Henry Hazlitt exposed the fallacy. No man burns down his own house on the theory that the need to rebuild it will stimulate his energies. One cannot argue the massive destruction will be a net benefit to the Japanese economy. Hazlitt wrote: The wanton destruction of anything of real value is always a net loss, a misfortune, or a disaster, and whatever the offsetting considerations in a particular instance, can never be, on net balance, a boon or a blessing. If the broken window really produces wealth, why not break all windows up and down the whole city block? The only "beneficiary" for the disaster in Japan might be Australia which exports to Japan essential goods such as iron, meat, sugar, coal and natural gas. And Japan will most likely need coal and natural gas for its energy needs. After the Kobe quake, Australia's exports to Japan rose by 10%. With so much happening around the globe, let's move to the timing-related part of the essay. We will begin with the correlation matrix analysis. In the short term, significant negative correlations are seen between the precious metals and the USD. The bearish implications going forward for the USD Index will likely mean bullish news for gold, silver, and gold and silver mining stocks. Silver has been somewhat positively correlated with the general stock market in the medium term, but overall, the metals have been rather weakly correlated with stocks in the short term. Quick bounce in stocks is still likely lead to higher precious metals prices as well (note very high correlation between the HUI Index and stocks in the 10-day column). Although the implications are not much clear at this moment, they are in place. They are much clearer for the short run for metals and the USD. To have a clear picture on this, let's have a look into the performance of the USD Index (charts courtesy by http://stockcharts.com.) On the above chart, we see that the recent breakdown below the rising support line has now been verified. This increases the odds that further declines will be seen from here with the 2009 low the next significant level to be reached. This would be slightly above the 74 level and the next resistance would be slightly below 72 which was the 2008 low. The outlook is rather bearish and if some sideways movement is seen, followed by further declines, then the situation will turn to clearly bearish. There are no bullish signals here for the time being. Keeping in mind what we mentioned while analyzing the correlation between gold and the USD, we see that the situation is now bullish for gold. Turning to the long-term chart for gold itself, we see that its price has moved to the long-term support level and bounced a bit. Since this level has been reached, we have seen a significant bounce and right now gold is once again testing its previous highs. Gold is not making the headlines right now, so it seems that there is a lot of capital waiting on the sidelines that could fuel the rally once previous highs are taken out. Consequently, the situation appears quite bullish and it will become much more bullish if we see a confirmed breakout above the previous highs. There are several bullish signs present and in the following part of the essay we will present two of them. First, let's take a look at the relative performance of gold stocks to gold itself. In the HUI:Gold chart above, which represents the above-mentioned ratio, we see that a move to the level of recent local bottoms has been reached. This often coincided with local bottoms in gold, silver and mining stocks as well. So, since the history often rhymes, we may have just seen a local bottom in the precious metals sector. On the other hand, it might seem that the pattern between September 2010 and today could be viewed as a head-and-shoulders pattern, but we would take the bearish implications into account only if see a significant move below the current level. Overall, gold and silver mining stocks appear to be ready to move higher. The bullish scenario is further confirmed by the SP Gold Stock Extreme Indicator. We've lately seen a quick move above the upper dotted line. This has coincided with local bottoms for gold stocks every time this line was crossed since 2008. As we can see, not each and every bottom was indicated, but when we have actually seen SP Gold Stock Extreme Indicator flashing a signal, each time a short-term rally followed. This happened on most occasions prior to 2008 but every time since. While it doesn't prove that all signals will always be correct, the 2008-today 100% accuracy simply cannot be ignored! Summing up, if the local bottom is in, then the trend is up, and the situation is bullish – simple as that. We have seen a rally since March 17th, but based on today's bullish price action (gold and silver moving to new highs) it seems that the rally is not over yet. To make sure that you are notified once the new features are implemented, and get immediate access to my free thoughts on the market, including information not available publicly, we urge you to sign up for our free e-mail list. Sign up for our gold & silver mailing list today and you'll also get free, 7-day access to the Premium Sections on my website, including valuable tools and charts dedicated to serious PM Investors and Speculators. It's free and you may unsubscribe at any time. Thank you for reading. Have a great and profitable week! P. Radomski Sunshine Profits provides professional support for Gold & Silver Investors and Traders. All essays, research and information found above represent analyses and opinions of Mr. Radomski and Sunshine Profits' associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Mr. Radomski and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above belong to Mr. Radomski or respective associates and are neither an offer nor a recommendation to purchase or sell securities. Mr. Radomski is not a Registered Securities Advisor. Mr. Radomski does not recommend services, products, business or investment in any company mentioned in any of his essays or reports. Materials published above have been prepared for your private use and their sole purpose is to educate readers about various investments. By reading Mr. Radomski's essays or reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these essays or reports. Investing, trading and speculation in any financial markets may involve high risk of loss. We strongly advise that you consult a certified investment advisor and we encourage you to do your own research before making any investment decision. Mr. Radomski, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
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| Despite Abbott Parting With Gralise, Depomed's Future Looks Bright Posted: 23 Mar 2011 06:26 AM PDT Tro Kalayjian submits: During the past week, Depomed (DEPO) announced two significant business development updates. On March 15th, Depomed granted non-exclusive rights for its proprietary extended-release metformin patents, this time, to Boehringer Ingelheim. On March 16th, Depomed announced that they and Abbott (ABT) have reached an agreement over Gralise. Moving Forward From Abbott The details of the agreement between Abbott and Depomed, were released in an SEC filing, after the market close. The filing provides for, the immediate termination of the previous agreement, a $40 million dollar payment to Depomed, and a transition plan for Gralise back to Depomed. Many industry commentators have been puzzled by the negotiations between Abbott and Depomed. Some believe that Abbott's lack of interest is due in-part to Gralise's lack of "blockbuster" potential. Adam Feuerestien, a biotech columnist for Street.com, was puzzled about "how Complete Story » |
| Posted: 23 Mar 2011 05:50 AM PDT Simit Patel submits: Oil is at $105.82 at the time of this writing. In this post, I'll share my rationale for why I believe it could be headed to $120 in the near future, using both fundamental and technical reasons. The fundamental reasons are as follows:
Complete Story » |
| Gaddafi's "Gold of Mass Destruction" Posted: 23 Mar 2011 05:41 AM PDT Gold Bullion is for bad guys. I read it in the paper... |
| Surf Warning: Tsunami to Lift Gold Posted: 23 Mar 2011 05:35 AM PDT
The entire world struggles to determine the fallout effects of the Japanese earthquake and tsunami, along with the ensuing problems. The effects are so pervasive, so profound, so critical, that it is no wonder the news networks focus on two things only. They have switched emphasis to the Libyan civil war, a pitched battle to retain a tyrant and his larcenous rule. But the news stories out of Japan focus 98% on their Fukushima nuclear complex, with hardly a peep about the long list of other economic and financial effects. This article will focus on what they leave out, dutifully reporting amidst the purposeful new vacuum in a grand distraction. The Japanese factor in early 2011 will turn out to be the most important factor to influence major global economies and the financial markets since the death of the US banking system in September 2008. Gold investors should not expect a similar commodity price meltdown like in 2008 after the Wall Street death event. Gold & Silver each sold off sharply during the ensuing months after the collapse of the US banking system, as a liquidity drain was joined by a Wall Street attack of hedge funds. This time is totally opposite. Back in 2008 no Quantitative Easing program was in place, as hyper-inflation engines had not been turned on like now. QE will be global next. The central banker pact not only endorses the monetary hyper-inflation by the USFed, it extends it globally with a loud ring. What comes next is a global inflationary recession with gusto and power. The path had already been clearly entered, but now it is fully engaged with a jet assist. Great confusion comes, equal to the harmful momentum from numerous fronts.
The impact is comprehensive and profound as several important triggers have been hit simultaneously. Economic fallout is greatest inside Japan itself. The financial impact is greatest with the United States and Japan. A point to never lose sight of in the last two weeks is that the USGovt manages a monetary nuclear reactor that is also in core meltdown, with USTreasury Bonds as the fuel rods whose radiation has a USDollar odor. The accelerating piles of debt and money have been routinely spread systematically in a grand complicated coordinated reaction, the core of which is the United States. Watch for any interruption to the massive flow of funds into the reactor, which the G-7 central bankers were keenly aware of last week, but without mention. As with all asset bubbles, the required funds grows exponentially to maintain the asset bubble, here the USTreasury Bond. The reactor cannot lose its flow, or else a meltdown occurs. An interruption had begun, was addressed, but they will not be capable of replacing it except with more toxic money, the fiat funds. The pressure on the USFed will be shared across the major central bank offices. The inflation engineers and high priests who preach on asset bubbles will face enormous challenges to avoid a nuclear financial core meltdown. They will not succeed, and Gold & Silver will be the meter for the failed efforts that lead to meltdown. Both precious metals will double in price in the next few years. Nothing is fixed and Mother Nature just kicked the elite bankers in the shins, or a point one meter higher if the truth be told.
The recession will be deeper from the supply chain disruption and higher cost structure. The monetary inflation will be more uniform and with greater volume. The major currencies within the global monetary system will suffer much more debasement, as value erodes badly. At the same time, the boogeyman image of the US Federal Reserve will be mitigated by the full chorus of central bankers eagerly coming to the Yen currency rescue. Witness Global Quantitative Easing with extreme force, the printing presses in high gear straining to produce enough funny money to build seawalls strong enough to withstand the destructive tsunami. Wreckage from previous overwhelmed platforms has begun after three decades of funny money abuse, whose waves of busted bubbles and failed assets have been doling out powerful blows for over three years. Witness the Global QE, as all major nations will help the USFed to print money, wreck currencies, destroy capital, ruin businesses, and cause an easily recognized price inflation. Of course, they will continue to aid the elite bankers who are mostly responsible for ruin. Notice how the USDollar continued to decline, going below the 76 support level for the DX index. Despite the weak futile pathetic rebound, the DX index remains the former support under 76. Three imagines come to mind on the destructive forces: a gattling gun, a daisy chain centrifuge, and overhead office building spray.
The amazing storm will contain a nasty paradox, as the Yen currency will not stop rising. Japan as a nation will lose the ability to purchase foreign assets, a means by which they could keep their currency down. A vicious cycle has begun to take shape. Inflation will originate from the four corners of the earth, come in many forms, and have staggering effect on both the global recession and global price inflation. Assets and incomes will go into worse decline, while commodities including Gold & Silver rise powerful. Actually, Gold & Silver are money, the great anti-bubble. The USTreasury Bond will be under absolute siege for months until a climax conclusion in the near future. Consider the following major effects and forces, presented in an order to reflect their importance, not their flow of domino effects in sequential destruction. For those who grow weary of Jackass comments about destruction and ruin, it is time to wake up to reality as the nightmare persists during the waking hours. Darwin is at work, removing the failures from the gene pool, including those who refuse to acknowledge the unfolding disaster and fail to take proper defensive action. Nature is very busy challenging the managers of the earth. The people must defend and salvage their life savings before it is forfeited to a unique combination of natural asset bubble wreckage forces and syndicate planned duplicity, swindles, and seizures. Beware of false messages.
YEN CARRY TRADE CLIMAX EFFECT
JAPAN TRIGGERS GLOBAL QE3
EMERGENCY FUNDS FOR SUPPORT
SALE OF FOREIGN ASSETS
REPATRIATION EFFECT
COMMODITY DEMAND EFFECT
FOOD PRICE EFFECT
PRICE INFLATION EFFECT
EXPORT TRADE EFFECT
GOLD & SILVER EFFECT
BREAKOUT !!!
See the March Gold & Currency reports within the Hat Trick Letter after placing a subscription order. A more full analysis of the rapidly deteriorating Yen Carry Trade is provided in the proprietary Gold report. This carry trade is so critical, so devastating to currency markets, such a grand threat to the USTreasury Bond bubble, that the G-7 Finance Ministers did not address it, cite its unwind, or give it any mention. Their Yen Selling Pact was all about preventing a system blowout at the USDollar nuclear reactor. Their pact was a disguised USDollar rescue doomed to failure. They must have discussed the Yen Carry Trade unwind effect at half the meeting. The Japanese fallout could be the exogenous force that breaks the USTBond bubble. It will take time. At the least they have lit a gigantic bonfire under Gold & Silver markets, where precious little metals exists in the COMEX or LBMA. The global financial crisis is spreading in a horrible contagion. Big powerful price breakouts are to be expected for Gold & Silver in the coming weeks and months. They notice the grand debasement of money, even if for emergency purposes.
The USFed is no longer isolated in the monetary hyper-inflation. However, even as a group central banks cannot stop what comes, the ruin of fiat paper, both the currencies and the sovereign debt that supports the global monetary system. In fact, their group central bank actions intensify the ruin of money itself from prolific debasement. The meter, the measuring device on the wall, is the Gold & Silver price. Today, each metal registered new record high prices for the last couple decades. By year end, look for a Gold price around $1550 to $1600 and a Silver price at least $50. Gains in silver will triple gains in Gold. The quantum jump really means that enormous breath-taking huge upward moves can and should be expected. Do not be surprised if the Gold price rises $50 in a single day, or the Silver price to rise by $2.00 on a single day, in the near future. A systemic breakdown is occurring, in the Weimarization of the USDollar. Last Thursday, the world went Weimar. Gold noticed, and its scout Silver pulls the golden bridle bit.
THE HAT TRICK LETTER PROFITS IN THE CURRENT CRISIS. From subscribers and readers: At least 30 recently on correct forecasts regarding the bailout parade, numerous nationalization deals such as for Fannie Mae and the grand Mortgage Rescue.
"When I initially read your writings, they provoked a wide range of emotions in me from fear and anger to outright laughter. Initially some of your predictions ranged from the ridiculous to impossible. Yet time and again, over the past five years, I have watched with incredulity as they came true. Your analysis contains cogent analysis that benefits from a solid network of private contacts coupled with your scouring of the internet for information." (PaulM in Missouri) "Your analysis is absolutely superior to anything available out there. Like no other publication, yours places a premium on telling the truth and provides a true macro perspective with forecasts that are uncannily accurate. I eagerly await each month's issues and spend hours reading and studying them. Many times I go back and re-read the most current issue just make sure I did not miss anything the first time!" (DevM from Virginia) "I think that your newsletter is brilliant. It wil |
| Portuguese Government on Verge of Collapse Posted: 23 Mar 2011 05:11 AM PDT Global Economic Analysis |
| Central Banking vs. Free Banking and the Gold Standard Posted: 23 Mar 2011 05:08 AM PDT
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| Sovereign wealth funds give support to silver price Posted: 23 Mar 2011 04:09 AM PDT Goldmoney |
| Posted: 23 Mar 2011 03:34 AM PDT Am I the only one watching Gold and Silver today? :biggrin: :banana::banana: .............   |
| ECB : No change in Gold assets last week Posted: 23 Mar 2011 03:29 AM PDT
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| Will JPMorgan Now Make and Take 'Delivery' of Its Own Silver Shorts? Posted: 23 Mar 2011 03:00 AM PDT Will JPMorgan Now Make and Take 'Delivery' of Its Own Silver Shorts? by: Avery Goodman March 22, 2011 http://seekingalpha.com/article/2595...-silver-shorts There is nothing inherently wrong and certainly nothing "illegal" about J.P. Morgan Chase (JPM) gaining a vault license for storing and taking delivery of gold/silver/platinum/palladium from the futures markets known as NYMEX/COMEX. However, the speed, timing and manner in which the exchanges just granted it troubles us. The process of being approved as a licensed vault or weigh-master/assayer for the NYMEX/COMEX futures exchange usually involves a careful security inspection of the vaults, a full report of that inspection, and a completely transparent package submitted to the U.S. Commodity Futures Exchange Commission (CFTC) for approval. This process will ordinarily consume considerably more than 45 days. Apparently, such correct and careful practices apply only to banks and independent storage facilities that are not J.P. Morgan Chase. Some vault operators are more equal than others. JPM appears immune from processes that everyone else must suffer through. On March 15, 2011, the Commodity Exchange (COMEX) and the New York Mercantile Exchange (NYMEX) advised the CFTC that they had approved J.P. Morgan's application to become a licensed vault facility, using a "self-certification" process. The newly licensed vault, located at 1 Chase Manhattan Plaza, NY, NY, is ready to roll as both "weighmaster" and depository, for delivery of gold, silver, platinum and palladium contracts, as of March 17, 2011, two days later. As a smaller player, the NYSE-Liffe exchange uses COMEX licensed depositories for delivery and storage of its metals. The new JPM vault, therefore, will also qualify to accept delivery of metal coming from the maturity of NYSE-Liffe gold and silver futures contracts, including the smaller 1,000 ounce silver contract. Departures from usual practices, and special treatment in favor of some over others are events that lawyers describe as having "the appearance of impropriety", if nothing more. J.P. Morgan is a huge player in the London precious metals market, especially in derivatives. It has always been a very important player at NYMEX/COMEX, especially if you include its Bear Stearns division. The bank is heavily involved in infamous "unallocated storage" schemes in London. A more complete description of London-style storage can be found in my previous article. JPM is one of six big bank owners of the London Precious Metals Clearing Limited (LPMCL) which clears, "delivers" and sets standards for "storing" precious metals allegedly "sold" at the London Bullion Market Association (LBMA) and the London Platinum and Palladium Market (LPPM). Unallocated storage is the norm at LPMCL member banks, including J.P. Morgan Chase. Allocated storage, however, is the norm for precious metals vaults licensed by NYMEX and COMEX. The two futures exchanges have approved a small group of vault operators, who provide allocated storage to clearing members and their customers. This has given greater legitimacy to the NY exchange traded precious metals venue than the LBMA now has. It is true that NYMEX/COMEX warehouse supplies are wholly insufficient to cover the number of short contracts the exchange allows its clearing members to write. However, at least the numbers are transparent and published. That is more than can be said for the storage facilities that participate in the secretive LPMCL in London. Allocated storage, under the common law, is known as a "bailment." When precious metal is allocated, the vault is the "bailee" and the owner is the "bailor". The bailee is keeping the property safe for the bailor and, in return, it charges a fee for its services, but the property belongs to the bailor at all times. The property cannot be legally leased, loaned, borrowed or used in any way without overt consent by the bailor. Whereas unallocated metal is an asset that is seized by a vault's creditors in bankruptcy, allocated metal is immune from this. A bailment cannot be legally seized or encumbered by the bailee's creditors. Some of the NYMEX/COMEX vaults require a written bailment contract, setting out all rights and responsibilities of the customer and vault. Others operate in the old fashioned way (though the handshake is now often electronic) and, in such cases, the agreement between bailor and bailee is governed by traditional common law standards with no need to sign anything. There are two storage categories in the NYMEX/COMEX scheme, known as "registered" and "eligible". Regardless of the category, all bars are allocated by title, and are always of a size, weight and composition that would satisfy "good delivery" if the owner decided to deliver it. An exception to the idea of "global" allocation may occur if "registered" metal is kept in the name of a clearing member, but the bars actually belong to a customer. This might happen when and if the clearing broker uses the bars as a form of "collateral" to back up performance bonds in a customer account. In such a case, the "bailment" (and allocated storage) would exist between the vault and the clearing member. I use the word "collateral" loosely because true collateral would remain titled to the debtor. In the NYMEX/COMEX scheme, registered bars are always titled in the name of a clearing member of the exchange, whereas eligible bars can be titled in the name of a customer or a clearing member. In order to be delivered, eligible bars must be transferred into the registered category. This involves nothing more than an electronic entry, "wrapping" the correct number of units into what is called a warehouse "warrant." Each warrant constitutes a "good delivery" unit of metal sufficient to satisfy one short contract obligation. "Good delivery" means that each bar must be of a standard weight sufficient to meet the rules of the exchange and must be numbered and weighed. Each storage facility must always keep a "chain of title" history record for each bar. Delivery at NYMEX/COMEX is first made to any licensed vault facility. Once the unit of metal arrives, title is transferred to the new owner. The new owner can do whatever he wants with his property. He can remove it from the bailment and take it into his own personal possession. He can transfer to a different vault. Or, he can keep the metal at the initial point of delivery. In many cases, the last option is chosen, so, often the bar never leaves the delivery vault until it is eventually resold and, usually, not even then. Bars can be delivered, and title transferred, without ever having left the vault. Until now, JP Morgan did not have a NYMEX/COMEX vault license. They had to send silver, for example, to HSBC, Brinks, Scotia Mocatta and/or the Delaware Depository in order to "deliver" it on COMEX. Those vaults have been NYMEX/COMEX licensed for a very long time. But now J.P. Morgan has its own vault license, and the manner in which it seems to have obtained it, is troubling. The bank can now, potentially, deliver short obligations to itself. Yes, you read that correctly. The bank itself, if it still holds short silver positions, and/or the hedge funds/related financial institutions who may have taken over the positions, can now deliver the alleged metal to J.P. Morgan's own vault. The American legal standard requires us to maintain a presumption of innocence until guilt is proven. That doesn't mean Americans are stupid. Only a fool would ignore the testimony given at the CFTC hearing held on March 25, 2010, or the fact that J.P. Morgan Chase is being sued, in two different class actions, accused of being a racketeering and corrupt influenced organization (RICO). Both lawsuits claim that the bank is using allegedly immense silver short positions in various venues, including COMEX, to manipulate prices. If a short seller must deliver a commodity, and the commodity is not readily available, there is no better way to buy extra time than to be able to deliver into its own vault. Most of the metal will never leave the vault, and most delivered metal that will leave the vault won't leave right away. Indeed, paperwork tasks of transferring title can consume a few days. Thus, a late delivery may not be noticed if it is to the short seller's own vault if the vault operation staff chooses to remain silent. Why was JPM awarded a vault license almost overnight, avoiding the lengthy vetting process others must undergo? Why did it happen in the middle of a major COMEX silver delivery month, during a massive worldwide silver short squeeze, at a time when physical silver is in severe shortage? We do not know the answers to these questions. The exchange rules should prohibit proprietary trading divisions, hedge funds and other closely associated or controlled financial institutions, from delivering to vaults owned or controlled by their own family of companies. Yet, no such rules exist. Does the licensing of a NYMEX/COMEX JPM vault reflect short-seller panic? Paper money can be printed, of course, ad infinitum and endless reams of it can be borrowed from the Fed. The issue is how much paper money is needed to pry sufficient physical silver loose from the hands of its owners. We believe that an equilibrium level of about $52 per troy ounce would be sufficient. Assuming that the holdings of the various ETFs are not the scam that some have claimed, there is a huge potential supply right there. Large delivery requirements can be met by cashing in on "baskets" of ETF shares for silver. There is also a huge supply of hoarded bars outside of ETFs, waiting for the right price to set them free. If supply problems continue, the price must rise further until sufficient selling occurs. Most owners of ETF shares, as well as holders of real physical silver, are not momentum chasers. They buy low and sell high in a traditional manner. Momentum chasers are irrelevant because they generally have only paper, and no real metal to deliver. Remember, your bars can be transferred from one licensed facility to another very quickly. If any storage facility imposes a significant delay, that should be publicized, and met with resolute opposition. Neither silver nor other metals must be stored at licensed vault. They certainly need not be left at the first point of delivery. If you intend to use silver, for example, in commerce (such as a jeweler or industrial user might) or if you expect to keep it off the market for 20 years or so as a retirement fund, it is economically more efficient to physically remove the metal. If anyone has any positive or negative experiences with the newly licensed J.P. Morgan vault, we would be very interested in learning about them. Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I hold long positions in precious metals. |
| Gold: Buy, Hold Or Sell? Update #25 Posted: 23 Mar 2011 02:31 AM PDT |
| Silver lures Indians as gold goes ballistic Posted: 23 Mar 2011 01:34 AM PDT |
| The world's best places to hide and store precious metals Posted: 23 Mar 2011 01:09 AM PDT By Jeff Clark, editor of Casey's BIG GOLD: It's official... The greatest number of responses to any article I've written since joining Casey Research was to "Robbed!," the story of my friend's gold being stolen and the suggestions for storage. It's clear the article struck a nerve – from those who've also been a victim of theft, to those who were simply looking for additional ideas for storage locations. Based on the number and quality of responses, I thought it would be useful to pass some of them along. Here are the (edited) emails I received, along with our comments… Other Stories of Stolen Gold: "I had 136 American gold Eagles stolen from my home... $198,500 worth of gold. Besides the loss, I will lose the tremendous appreciation of the next few years. So be warned: HIDE YOUR GOLD!" "Another sad story of robbery was the reportof a Canadian man being robbed of his entire life savings. The article says he was punched, stabbed and tied up by home invaders who made off with his life savings in silver bars. The two thugs, wearing fake police uniforms, made off with $750,000 in silver the man had bought as an investment last year." Comment: There are more horror stories than I think most of us are aware of. The message is the same... Read full article... More on storing valuables: Seven places to hide cash in your house A burglar tells you where to hide valuables in your home Why it's a huge mistake to store all your precious metals at home |
| Euro CRISIS: The Portuguese government is on the brink of collapse Posted: 23 Mar 2011 12:52 AM PDT From Mish's Global Economic Trend Analysis: Unless there's an unexpected breakthrough within hours, it's likely the end of the line for Portugal's Prime Minister, who has threatened to resign if parliament does not approve austerity measures he seeks. Please consider "Portugal Braces for Govt Collapse Over Debt Vote": Portugal's government is on the verge of collapse after opposition parties withdrew their support for... Read full article... More on the euro: Whatever you do, don't forget about the euro crisis While the world worries about the Middle East, this country continues to fall apart Forget Greece and Ireland... one of the most important eurozone countries just took a turn for the worse |
| This could be the "end game" for the U.S. dollar Posted: 23 Mar 2011 12:50 AM PDT From Gold Scents: For months and months, I've been warning investors that the dollar was going to come under extreme pressure sometime this year. I expected it to probably happen in the spring. Many people thought I was nuts. They were sure it was the euro that would collapse, despite the fact that the EU is doing everything it can to protect its currency, while Bernanke is doing everything he can to destroy ours. On Friday, the last confirmation occurred to signal the final collapse is now underway. On Friday, the November yearly cycle low was violated. Cyclically, this event is a major catastrophe. We are now going to see the dollar get absolutely hammered for the next couple months. The viability of the dollar as a currency will be questioned... Read full article... More on the U.S. dollar: The U.S. dollar could be in serious trouble This could be your last great chance to get out of the dollar Legendary advisor Jim Grant: What the Federal Reserve should do now |
| How Japan will create huge buying pressure for coal and natural gas Posted: 23 Mar 2011 12:48 AM PDT From Newsmax: Japan's nuclear crisis could reverberate through global energy markets for years to come, pushing up prices as suppliers look to take advantage of a surge in demand for non-nuclear fuels from the world's third-largest economy. The 9.0-magnitude earthquake and tsunami that likely killed more than 18,000 people earlier this month shut down 11 of Japan's 54 nuclear power plants – a source that provided 30 percent of the country's power. That means producers of natural gas, coal and oil – particularly in Asia – will be called on to help fuel conventional sources of power generation in Japan. The government is still struggling to contain radiation leaks at the crippled Fukushima Dai-ichi nuclear power plant in the devastated northeast. Damage from the tsunami and attempts to cool reactor cores by dumping sea water by helicopter almost certainly means the plant is out of action permanently. The future of some of the other plants is... Read full article... More on coal and natural gas: Why you should invest in the new "black gold" The easiest way to profit from skyrocketing coal prices This beaten-down commodity is now the No. 1 "safe energy bet" |
| Top economist Shiller: The next superbubble is forming here Posted: 23 Mar 2011 12:43 AM PDT From Pragmatic Capitalism: I've laid my cards on the table and so have a few other notable bubble spotters. But few would argue that Robert Shiller is not the king bubble spotter... and in an article today, Professor Shiller showed his hand. Where's the next big bubble? Like John Hussman and I believe, Shiller says a bubble is forming in commodities, but Shiller is far more exact. He says the commodity bubble is leading to a much bigger bubble in... Read full article... More on bubbles: One of the most dangerous bubbles in history is about to explode Richard Russell: Forget everything you've heard about a gold bubble The biggest bubble on the planet has nothing to do with stocks, bonds, gold, or commodities |
| Posted: 23 Mar 2011 12:40 AM PDT From Richard Russell's newsletter comes this gold forecast of Ian McAvity: "I don't do specific forecasts in my work, but I think there's a prospect of gold pushing into the $2,000 to $2,400 range this year or perhaps in 2012. This presumes an element of monetary panic relating to the US dollar or the euro [...] |
| Posted: 22 Mar 2011 11:56 PM PDT Well. Great session overnight. Seems like our girl had to many cocktails last night and has overslept her usual shorting session. Get ready for some volatility, and as always, BTFD. I am assuming the 9 am fix is about to commence. The $US has also gained a bid, so one of these has to come down, and I think I know which one is more manipulated than the swine flu vaccine.... Fasten your |
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