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• The Dollar Is Still Very Weak
• Today In Commodities: Moves To Come
• Currency ETFs Show More Fear While Volatility ETNs Show Less
• Gold Seeker Closing Report: Gold and Silver Fall Over 2% More
• 8 Financial Stocks With Excellent Growth Potential (Part 1)
• WATCH: Global Warming Nonsense
• How to Raise the Price of Gold & Silver
• JAPAN BIZ TRACK: Automakers look for comeback year in 2012
• Gold Rebounds Off Lows
• Silver’s Beta is Irrelevant
• The End of The EU
• The Cartel Showed the World its “Jack High” Hand
• The Monetary Case For $10,000 Gold
• The US Treasury’s Secret
• Gold Price to Fly
• Keith Neumeyer: How to Build a Major Silver Producer
• Gold Support at 200 DMA at $1618/oz, Massive Chinese Demand and Gartman Flip Flops
• LISTEN: Jeff Christian on Metals
• If you pay for these common travel expenses, you're probably getting ripped off
• Top manager Zuluaf: "Depression" will lead to a euro collapse
• Morning Outlook from the Trade Desk - 12/13/11
• Gold price to fly higher as inflation outpaces interest yields
• The Scramble For US Safety
• Keiser Report: World Currency War I
• Mega Fail: 17 Signs
• When Extreme Volatility in Gold & Commodities will Hit
• Trading Comments, 13 December 2011 (posted 14h15 CET):
• Tanzania increases gold license fees
• The $30 Trillion “Problem”
• FT's John Dizard: Gold Borrowed From Governments or ETFs May Be Propping Up European Banks

The Dollar Is Still Very Weak Posted: 13 Dec 2011 07:41 AM PST By Calafia Beach Pundit: Since the end of April, just before the eurozone sovereign debt crisis started heating up, the dollar has risen against other major currencies by about 10% (see top chart above). A stronger dollar is always good news, in my opinion, since the strength of the dollar is a significant part of our standard of living and reflects importantly on the overall health and viability of our economy. But most of the dollar's gains this year have come at the expense of the confidence-weakened euro, and that's hardly a ringing endorsement of the dollar. As the second chart above shows, the real value of the dollar (adjusted for relative inflation differentials) is still very low from an historical perspective; by my estimates, the dollar today is only about 7.5% above its recent all-time low against a large basket of currencies. Measuring the value of the dollar against other commodities is certainly Complete Story »
Today In Commodities: Moves To Come Posted: 13 Dec 2011 07:36 AM PST By Matthew Bradbard: Follow the flow of money as the dollar and Treasuries should benefit and stocks and commodities should suffer. Almost a $4 trading range and Crude is higher by just shy of 2% as of this post. The key today will be if prices close above or below the 9 day MA at $99.90 in January. We will continue to fade any strength as long as last week's highs continue to cap further upside. Natural gas appears to be in the green today making it the last two sessions… a very small victory all things considered. We would need to see exhaustion at the lows or a volume spike that fills the overhead gap to feel a low is in. Some clients own very small size a few months out and we are fine with that for now. Stocks should finish lower by approximately 1% making new lows on the week Complete Story »
Currency ETFs Show More Fear While Volatility ETNs Show Less Posted: 13 Dec 2011 07:33 AM PST By Gary Gordon: By several measures, investors are every bit as afraid today as they were in the first week of October, when U.S. stocks had reached 52-week lows. Yet the S&P 500 is 11.5% higher than it was on 10/3/11. How can we tell that investors are still petrified? They're flocking back to the perceived safety of the U.S. dollar and piling back into U.S. treasuries. ETF enthusiasts can see this fear-induced activity in PowerShares DB Dollar Bullish (UUP) as well as the iShares 7-10 Year Treasury Bond Fund (IEF). The current price for each safer haven is above a 50-day trendline. Click to enlarge In addition, if investors were genuinely comfortable with the pace of progress in Europe's debt talks, one might expect the euro-dollar to attract interest. Instead, the euro via CurrencyShares Euro Trust (FXE) is hitting 11-month lows. Also, the current price for FXE is well below a 50-day Complete Story »
Gold Seeker Closing Report: Gold and Silver Fall Over 2% More Posted: 13 Dec 2011 07:22 AM PST Gold fell almost 1% to $1651.48 in Asia before it rebounded to $1677.87 in early New York trade, but it then fell back off for most of the rest of the day and ended with a loss of 2.08%. Silver dropped to $30.898 in Asia before it rose to $31.95 in early New York trade, but it then fell back off into the close and ended with a loss of 2.14%.
8 Financial Stocks With Excellent Growth Potential (Part 1) Posted: 13 Dec 2011 06:49 AM PST By Stock Croc: Ever since the economic meltdown of 2008, investors have viewed financial firms in a different light. The debacle that was marked by the collapse of Bear Stearns and Lehman Brothers changed the financial sector from one of stability and confidence to a collection of speculative plays marred by government intervention and interference. In spite of this conception, there are several financial firms that offer excellent growth potential that is not necessarily limited by high levels of risk. What follows is a discussion of some of the fastest growing financial firms trading today. While each should be evaluated within the context of one's own portfolio, these companies are worth consideration for inclusion in a well-constructed portfolio. Cninsure, Inc. (CISG) – Offering an interesting way for investors to make a China play, CISG offers insurance brokerage services in China, including in auto insurance. With the expected growth in the number of drivers Complete Story »
WATCH: Global Warming Nonsense Posted: 13 Dec 2011 05:14 AM PST Delusion, Trick & Fraud: 'Global Warming Nonsense Lobby To Collapse' Canada has pulled out of the 1997 anti-global warming Kyoto protocol, saying the treaty is 'not working'. The departure comes a day after further climate talks in South Africa led to a new agreement, which is set to replace Kyoto by 2015. Piers Corbyn, the founder of the Weather Action Foundation, hopes Canada withdrawal will lead to the collapse of "useless" Kyoto protocol. ~TVR
How to Raise the Price of Gold & Silver Posted: 13 Dec 2011 05:11 AM PST by Peter Souleles, Gold-Eagle.com: I have always told my children from a young age that the heart must make the initial choice but that the mind must make the final decision. Emotion and passion of the heart is great, but if left unfiltered by the brain it can lead to one disaster after another. Well we all remember the brilliant and witty Max Keiser (this is my genuine appraisal of the man) some months ago when he was ranting and raving with his $500 silver campaign. No doubt quite a few souls got excited and enlisted in his crusade. I, like many others hoped Max would succeed, but shortly after Max had embarked upon his starry eyed crusade, I penned a piece on the 26th November, 2010 titled "Why Silver Will Not Go to $500". Unfortunately, Max's armada sank at the port having barely managed to get to $43.49 on August 22, 2011. Read More @ Gold-Eagle.com
JAPAN BIZ TRACK: Automakers look for comeback year in 2012 Posted: 13 Dec 2011 04:15 AM PST The year 2011 was a trying one for Japan's auto industry. Manufacturers were ravaged by the unprecedented brutal forces of nature as a large earthquake struck in spring, two major typhoons made landfall in summer, and torrential flooding hit Thailand in autumn. And, as if to rub salt in the wound, the yen soared to historic levels against the dollar, driving Japan into an economic corner... Read
Gold Rebounds Off Lows Posted: 13 Dec 2011 03:18 AM PST Gold Rebounds Off Lows, Fed Meeting In Focus by Susan Thomas, Reuters.com: Spot gold rebounded from a seven-week trough on Tuesday, tracking equities and the euro higher as investors positioned themselves for a Federal Reserve meeting and turning attention away from the euro zone credit crisis for the moment. The Fed is expected to make a policy announcement at 2:15 p.m. (1915 GMT), and while few expect any new action at this meeting, analysts said any signals from the Fed that it may be willing to take action next year would weigh on the dollar. The euro rose to a session high against the dollar. A weaker dollar makes gold priced in the unit cheaper for holders of other currencies. .DXY. "Markets were languishing at lower numbers and once they broke out of that range there were probably close-rated stops," a London-based metals trader said. Read More @ Reuters.com
Silver’s Beta is Irrelevant Posted: 13 Dec 2011 03:17 AM PST by Dr. Jeffrey Lewis, SilverSeek.com: Beta is a financial term that describes an asset's volatility relative to the S&P500 index. In scoring individual assets against the equity markets, financiers hope to find a collection of securities that provide the best possible appreciation with the least amount of beta. That is, financiers are compensated to make many different investments to form the perfect portfolio that, over time, goes up in the straightest line possible. There are obviously a few short-comings with any beta figure for any non-equity investment. First, silver is a commodity, not a company, so the comparison here isn't very applicable. You wouldn't compare the relative volatility of your automobile to the stock market, even if it makes up a large part of your net worth. There just isn't enough basis for comparison. Even then, we can afford to give financiers the benefit of the doubt in applying a beta measurement to commodities on this particular point. Read More @ SilverSeek.com
The End of The EU Posted: 13 Dec 2011 03:16 AM PST by Alasdair Macleod, GoldMoney.com: Last Friday, David Cameron came back from Brussels having rejected proposals to draft a new European Union treaty, having failed to get promises of adequate safeguards to protect Britain's financial sector. But given that the UK has no veto over Brussels' power to regulate anyway, the prima facie reasons presented to were therefore not crystal clear. However, Cameron must have been aware that ratifying a new treaty without safeguards was a non-starter, and the fact that the dominant mainland powers were not even prepared to consider them is a reflection of their lack of rational thinking rather than his. After all, they should have been briefed that any treaty changes now require a referendum under UK law, and given the EU's self-aggrandising tendencies, any treaty changes would be a tough sell to Parliament – let alone the electorate. What was proposed in Brussels was a typically dirigiste response to unwelcome economic reality. Perhaps the script intended was as follows: we go through the motions of imposing fiscal controls and responsibility, and that should be enough to get the European Central Bank – working with the International Monetary Fund if necessary – to release the money to continue to finance our political ambitions. This is not the direction of travel for the UK. Read More @ GoldMoney.com
The Cartel Showed the World its “Jack High” Hand Posted: 13 Dec 2011 03:13 AM PST by David Schectman, MilesFranklin.com: It's Sunday morning, and I'm starting early as there are just too many "horrible topics" to wait until Monday! The title of today's RANT is the self-explanatory "REHYPOTHECATION," but that's not where I'm starting.  Instead, let's talk about the "news" that German newswire service MNI "retracted" Thursday's headline that the Federal Reserve, Bank of England, and Bank of International Settlements sold gold when it spiked above $1,750 following the ECB rate cut Thursday morning.  No official denials, no fanfare, just a "retraction" that apparently no one anywhere saw, only discovered by grilling MNI's spokespeople. Market News International retracts report about central bank gold sales Have no fear, Precious Metal Army!  This is yet another lie, ruse, or both, from the enemy camp, to scare you out of positions with misdirection and smokescreens.  If this were a football game, it would be the equivalent of the "Statue of Liberty" play, which to my knowledge has only succeeded ONCE in perhaps TEN MILLION attempts in professional, college, and high school football, and perhaps ONCE in TEN BILLION times in schoolyard pickup games. Read More @ MilesFranklin.com
The Monetary Case For $10,000 Gold Posted: 13 Dec 2011 03:10 AM PST Central Bank Appetite And The Monetary Case For $10,000 Gold by Frank Holmes, Forbes.com: What do you get when you mix negative real interest rates with stimulative money supply efforts by global central banks? An exceptionally potent formula for higher gold prices that could send gold to the unimaginable level of $10,000 an ounce. Negative real interest rates and strong money supply growth are two key factors of what I refer to as the Fear Trade. Negative real interest rates occur when the inflationary rate, or CPI, is greater than the current interest rate. A quick account of the G-7 and E-7 countries shows that the majority have negative real interest rates. Across the developed G-7 countries, British citizens are the worst off with real interest rates in the U.K. sitting at negative 4.5 percent. U.S investors aren't doing much better with rates at negative 3.25 percent and the Fed has all but guaranteed rates will remain there. Only Japan has a positive real interest rate among the G-7 and that rate is barely above zero. Read More @ Forbes.com
The US Treasury’s Secret Posted: 13 Dec 2011 03:09 AM PST Fearfully, the US Treasury's Secret, 75-Year-Old Fund and Its Dark History Has Been Exposed? from The Daily Bell: After months of work, the video series on the Treasury's Exchange Stabilization Fund is finally finished! Why you should watch these five videos: It is impossible to understand the world today without knowing what the ESF is and what it has been doing. Officially in charge of defending the dollar, the ESF is the government agency which controls the New York Fed, runs the CIA's black budget, and is the architect of the world's monetary system (IMF, World Bank, etc). ESF financing (through the OSS and then the CIA) built up the worldwide propaganda network which has so badly distorted history today (including erasing awareness of its existence from popular consciousness). It has been directly involved in virtually every major US fraud/scandal since its creation in 1934: the London gold pool, the Kennedy assassinations, Iran-Contra, CIA drug trafficking, HIV, and worse … " – Market Skeptics Dominant Social Theme: The US Government has taken over the world and the ESF has been its weapon of choice. Free-Market Analysis: We're not sure who Eric deCarbonnel is, but he has posted five YouTube videos that contain extraordinary allegations about the US Government's Exchange Stabilization Fund. In aggregate, the series is called, "What I have been afraid to blog about: THE ESF AND ITS HISTORY." Read More @ TheDailyBell.com
Gold Price to Fly Posted: 13 Dec 2011 03:06 AM PST Gold Price to Fly Higher as Inflation Outpaces Interest Yields from GoldMoney.com: The front-month Comex gold contract settled down $48.60 (2.8%) yesterday, settling at $1,664.20 per troy ounce. The silver price fell by more than $1 (3.1%) – at one point trading below $31 per troy ounce; however, silver recovered later in the day, regaining ground above $31. The continuing rise in the US dollar is generating headwinds for precious metals and the wider commodity complex. Yesterday the Dollar Index (USDX) gained 1.15% to close at 79.53 – less than 50 basis points from its high from early October, and not far from its year-high of just over 81 that it reached in early January. On the decade-long USDX chart, a big double top is still visible – with peaks in the 87-89 range in early 2009 (at the trough of the current US recession/depression), and again in the early summer of 2010, when concerns over European sovereign debt were reaching a critical state. Despite all the gloom-and-doom surrounding the euro, the greenback remains exceedingly vulnerable to a big sell-off from both a technical and fundamental standpoint. Read More @ GoldMoney.com
Keith Neumeyer: How to Build a Major Silver Producer Posted: 13 Dec 2011 02:53 AM PST The Hera Research Newsletter (HRN) is pleased to present an informative interview with Keith Neumeyer, Chief Executive Officer, President and Director of First Majestic Silver Corp. (TSX:FR / NYSE:AG). Mr. Neumeyer began his career at the Vancouver Stock Exchange and worked in the investment community for 26 years beginning his career in a series of Canadian national brokerage firms including McLeod Young Weir (now Scotia McLeod), then Richardson Greenshields and then Walwyn Stogell McCuthchen (which became Midland Walwyn).
Gold Support at 200 DMA at $1618/oz, Massive Chinese Demand and Gartman Flip Flops Posted: 13 Dec 2011 01:41 AM PST
LISTEN: Jeff Christian on Metals Posted: 13 Dec 2011 01:29 AM PST From Jim Puplava and Financial Sense: Jeff Christian:  Gold and silver could see a short-term peak in the first quarter 2012. Jim is joined by Jeff Christian of CPM Group to discuss the precious metals. Jeff believes gold and silver are consolidating, but may peak short-term in first quarter 2012. Longer-term, Jeff believes platinum and palladium represent a better buying opportunity. Much More @ FinancialSense.com
If you pay for these common travel expenses, you're probably getting ripped off Posted: 13 Dec 2011 12:32 AM PST From Financial Highway: Hidden and unexpected fees are part and parcel of the travel experience. There are some instances however, where you are able to control the costs that others typically dish out for. Here are several areas where you may have the ability to forego certain expenses. Baggage Fees While certain excursions may require excess luggage, learning how to travel light is an excellent money-saving skill to have. Efficiently packing your carry-on bag, using your allowed personal item to its full storage potential and wearing travel clothing with extra and hidden pockets to hold additional items are all excellent ways to skip checked baggage fees altogether. You'll definitely need to... Read full article... More on saving money: How to cut down on your five biggest expenses A simple plan to avoid a holiday spending "hangover" Why you should start paying attention to the price of gold
Top manager Zuluaf: "Depression" will lead to a euro collapse Posted: 13 Dec 2011 12:26 AM PST From Pragmatic Capitalism: Feliz Zulauf was interview by King World News over the weekend and offered some excellent macro insights on the situation in Europe. The Swiss macro money manager, unfortunately, has been right about the Euro's developments over the last few years and has a very dire outlook. He says the periphery is entering a periphery that will eventually lead to several nations leaving the currency union: "I think the periphery goes into depression. When you look at a country like Greece, it's now been in recession for three years. GDP is probably down 15% from the top. The stock market is down 90%, which is the equivalent of 1929 to 1932 in the U.S. This is depression-like. ...Then I expect next year one country, probably three, will exit the euro. That will make 2012 very interesting because there are no rules on... Read full article... More on the euro crisis: A brilliant Op-Ed on the ongoing euro crisis stupidity Top Wall Street analysts: This week's euro summit has failed S&P threatens to downgrade every major European bank... and the entire EU itself
Morning Outlook from the Trade Desk - 12/13/11 Posted: 13 Dec 2011 12:14 AM PST Tough day at the desk yesterday. Metals hanging on. Pressure is lower, BUT, options expiry this week, triple witching, may create some buying in equities which will push metals higher. Better safe than sorry. The smallest headline could create a significant move. Need to find another model for comparison. Twiigy is getting staid and Victoria Secret's alumni do not match the metaphor.
Gold price to fly higher as inflation outpaces interest yields Posted: 13 Dec 2011 12:00 AM PST The front-month Comex gold contract settled down $48.60 (2.8%) yesterday, settling at $1,664.20 per troy ounce. The silver price fell by more than $1 (3.1%) - at one point trading below $31 per ...
The Scramble For US Safety Posted: 12 Dec 2011 11:58 PM PST The Scramble For US Safety, As Europe Imploded, Offset The $357 Billion Plunge In Q3 Shadow Banking from ZeroHedge: In continuing our exclusive analysis of the periodic variations in the by now all important shadow banking system, we next look at the change in third quarter (3 Months ended 9/30) shadow liabilities as disclosed by the just released Flow of Funds (Z.1) report by the Fed. As by now should have been made all too clear, if there is one threat above all to the monetary regime, primarily of the US but by extension, global, it is the ongoing collapse in shadow banking, which is simply an unregulated pass-thru funding conduit for all the non-traditional banks and bank holding company firms which perform one or all of the three banking functions: maturity, credit and liquidity transformations. As such these are critical because having peaked at $21 trillion, the shadow banking system was always substantially larger than the traditional banking system since Q4 of 1990 when it finally overtook in terms of total notional, and provided far more broad "credit-money" liquidity to the global financial system than regulated (and we emphasize this word with bold and underline) entities. And since the burst of the credit bubble, the liquidity is now evaporating on a quarterly basis. So cutting to the chase, in Q3, US shadow banking declined by $357 billion to $15.2 trillion in liabilities, a decline of $654 billion in 2011 YTD, and a drop of $5.7 trillion from the $20.9 trillion peak in March of 2008. Such an uncontrolled ongoing collapse, primarily brought by the disappearance of dumb incremental (marginal) money originating in Germany (Landesbanks) and Spain (Cajas), as well as various Asian sources of dumb money, is beyond a shadow of a doubt the biggest deleveraging threat to the global monetary system bar none. And here is where the central banks step in. Read More @ ZeroHedge.com
Keiser Report: World Currency War I Posted: 12 Dec 2011 11:56 PM PST Every week Max Keiser looks at all the scandal behind the financial news headlines. This week Max Keiser and co-host, Stacy Herbert, discuss virtual dollars and American plots and tinned goods and small-caliber weapons. In the second half of the show, Max talks to Detlev Schlichter about elastic money and financial crises. ~TVR
Mega Fail: 17 Signs Posted: 12 Dec 2011 11:49 PM PST Mega Fail: 17 Signs That The European Financial System Is Heading For An Implosion Of Historic Proportions from The Economic Collapse Blog: What happens when you attempt a cold shutdown of one of the biggest debt spirals that the world has ever seen? Well, we are about to find out. The politicians in Europe have decided that they are going to "take their medicine" and put strict limits on budget deficits. They have also decided that the European Central Bank is not going to engage in reckless money printing to "paper over" the debts of troubled nations. This may all sound wonderful to many of you, but the reality is that there is always a tremendous amount of pain whenever a massive debt spiral is interrupted. Just look at what happened to Greece. Greece was forced to raise taxes and implement brutal austerity measures. That caused the economy to slow down and tax revenues to decline and so government debt figures did not improve as much as anticipated. So Greece was forced to implement even more brutal austerity measures. Well, that caused the economy to slow down even more and tax revenues declined again. In Greece this cycle has been repeated several times and now Greece is experiencing a full-blown economic depression. 100,000 businesses have closed and a third of the population is living in poverty. But now Germany and France intend to impose the "Greek solution" on the rest of Europe. This is going to create the conditions needed for a "perfect storm" to develop and it means that the European financial system is heading for an implosion of historic proportions. Read More @ TheEconomicCollapseBlog.com
When Extreme Volatility in Gold & Commodities will Hit Posted: 12 Dec 2011 11:47 PM PST from King World News: With continued volatility in global markets, today Michael Pento, of Pento Portfolio Strategies writes for King World News to let KWN readers globally know what to expect in the coming year, "The original parameters used to construct the European Monetary Union were set up by the Maastricht Treaty of 1992. The Treaty on European Union contained strict limits on debt and deficits. In particular, deficits were not to exceed 3% of GDP and gross public debt was to be south of 60% of total output. Today, not even Germany can claim to have held true to those strictures. In fact, most countries in the EU have egregiously violated the Treaty's mandates." Continue reading @ KingWorldNews.com
Trading Comments, 13 December 2011 (posted 14h15 CET): Posted: 12 Dec 2011 11:15 PM PST The bottom will be in place soon enough. When the metals eventually turn higher, be ready to buy on strength. Gold 1) The position bought at $1700.00 on December 12, 2011 was sold later the
Tanzania increases gold license fees Posted: 12 Dec 2011 10:45 PM PST The Tanzanian government is planning to increase its license fees on the production and export of gold. African Barrick Gold has already agreed to this increase; over the next 14 years the government ...
The $30 Trillion “Problem” Posted: 12 Dec 2011 10:24 PM PST The $30 Trillion "Problem" At The Heart Of Shadow Banking – A Teaser from ZeroHedge: Frequent readers know about Zero Hedge's fascination with the murky world of "shadow banking" a topic we have been covering since late 2009, which can best be summarized as follows: the near-infinite fungibility of electronic credit-money equivalents within the infinitely interconnected modern financial system. The recent escalation in the discovery of massive broker capital deficiency courtesy of the MF Global bankruptcy as a result of a collapse in one of the numerous shadow banking funding pathways, namely rehypothecation, is just the very tip of the iceberg. Much more is coming, as shadow banking continues to be unwound day after day (we will post an update of the Q3 data later in the day). In the meantime, we go back to that one certain Citi report from September 5, 2008 which explained just how broken the financial system was that according to some, the realization, and not some ulterior deathwish, is what sparked the run on Lehman, and subsequently money market, ABCP, repos, synthetics, structured products, securities lenders, AIG, and everything else that the Fed had to step in with a roughly $30 trillion bail out. Why was it $30 trillion? Simple: because at its heart, the "shadow banking" system has a $30+ trillion diabolic funding mechanism, where when one cuts out all the fancy nomenclature, acronyms, abbreviations, and jargon, the bottom line is that there are increasingly less and less hard assets (i.e., cash-flow generating), funding ever more and more liabilities, and where one's assets are another's liabilities in a "fractional reserve" recursive loop, and which in that shadowy sub-center of modern banking – London (because New York is just for regulatory diversion)- the loop can go on literally in perpetuity. Read More @ ZeroHedge.com
FT's John Dizard: Gold Borrowed From Governments or ETFs May Be Propping Up European Banks Posted: 12 Dec 2011 09:26 PM PST ¤ Yesterday in Gold and Silver Gold traded quietly and virtually unchanged until 9:30 a.m. Hong Kong time.  Then the bid disappeared and the gold price cratered more that fifteen bucks in minutes.  After that, gold went into a gentle decline that accelerated to the downside the moment that trading began on the Comex in New York. The bottom was in around 10:25 a.m. Eastern...but the subsequent rally wasn't allowed to get far.  The gold price then traded sideways into the close of the New York Access Market at 5:15 p.m. Eastern time. Gold closed at $1,665.30 spot, down $46.00 on the day.  This blew the doors off the 50-day moving average which, I'm sure, was the object of the exercise...plus they didn't want any money fleeing Europe to end up in gold. Considering the size of the price decline, the volume wasn't that heavy...about 165,000 contracts Silver, as always, was the precious metal that really got it in the neck yesterday.  The high in silver was Friday night's close, as silver was under pressure right from the New York open on Sunday night.  The interesting thing about the take-down in silver on Sunday night was that it began at 9:00 a.m. Hong Kong time during their Monday morning, whereas the gold take-down occurred at 9:30...a half hour later.  Normally these not-for-profit sellers take down both metals at the same time. From that point, silver fell in fits and starts through all of early London trading...and into the New York session.  The bottom, like gold, came around 10:25 a.m...and the nice rally that came after that got crushed.  Then another rally began shortly before Comex trading ended at 1:30 p.m. Eastern time...and the silver price struggled back to its New York opening price. From it's Friday night close, to it's New York low on Monday morning, silver got hit for $1.45...about 4.5%.  Silver closed in New York at $31.29 spot...down 94 cents on the day...2.9%.  Volume wasn't overly heavy at 37,000 contracts...and the vast majority of that was high-frequency traders doing their thing. The dollar was on a tear on Monday...but the rally didn't really switch into high gear until 2:00 a.m. Eastern...3:00 p.m. Hong Kong time...and the rally was basically done by 2:00 p.m. New York time. If you check the gold and silver charts, you'll note that if the brute force take-down in gold hadn't occurred, gold would have been only down about $12 at the New York open...despite the huge dollar rally.  Then there's the matter of the rally in both gold and silver between 10:30 and 11:30 a.m. in New York.  The dollar rally was in full force at that time as well. I'd bet a huge sum that if 'da boyz' hadn't been foolin' with gold and silver prices throughout the entire Monday trading session world wide, the gold and silver charts would have looked quite a bit different...with, or without, a rally in the dollar. The gold stocks gapped down...and then stayed down all day long.  A recovery of sorts began shortly before 3:00 p.m. in New York...and by the close of trading, the HUI had recovered over a percent of its loses, closing down 3.47%.  Considering that the gold price got hit for $46...it could have been a lot worse. The silver stocks got hit just as hard...and Nick Laird's Silver Sentiment Index got hit for 3.15%. (Click on image to enlarge) I've had two e-mails from readers during the last week asking for an explanation of what the Silver Sentiment Index means...and how it is to be interpreted.  Well, I thought it was pretty self-evident, but obviously not. The Silver Sentiment Index is comprised of the seven largest silver stocks that are traded on North American exchanges.  Their U.S. ticker symbols are posted on the graph at all times.  I'm not sure if Nick weights them by market cap or by yearly silver production...not that it matters.  Nick's SSI is the silver equivalent of the HUI.  I hope that clears things up. The CME's Daily Delivery Report showed that 361 gold and 2 whole silver contracts were posted for delivery tomorrow.  The big shorts/issuers were Barclays and ABN Amro...and the big long/receiver, taking 90% of the deliveries, was the Bank of Nova Scotia.  The link to the Issuers and Stoppers report is here. There was a smallish withdrawal of 19,450 ounces of gold reported out of GLD yesterday...and no changes in SLV. The Mint had another sales report.  They sold another 4,000 ounces of gold eagles...500 one-ounce 24K gold buffaloes...along with 478,000 silver eagles.  Month-to-date the mint has reported selling 20,000 ounces of gold eagles...8,500 one-ounce 24K gold buffaloes...and 1,384,000 silver eagles. I sure do hope you're getting your share, dear reader.  When the precious metals [particularly silver] are getting trashed, this is the time to be buying.  As Warren Buffett has always said, you have to be brave when others are fearful...and fearful when others are brave.  This is one of these historic times that you have to think like that.  Besides which, silver makes an excellent Christmas gift. There are two things about giving precious metals away as gifts that you can 100% count on... a]  the person who receives it, will never forget the person who gave it to them, and... b] it's one of the very few gifts that you will ever give [or receive] that will never, ever be thrown out...ever!!! Precious metals are the gifts that literally last a lifetime.  So give generously! The CME's Daily Delivery Report showed that they received 770,734 troy ounces of silver last Friday...and shipped out 271,713 ounces.  The link to that action is here. Silver analyst Ted Butler sent out his weekend review to his paying subscribers...and here are two free paragraphs.. "I use the word incomprehensible to describe the daily price changes because I know the price volatility cannot be explained in terms related to normal supply/demand factors. Gold does not normally fluctuate $40 to $50, nor silver by a dollar or more, in a very short time frame with little direct news. This being the case, I also know this volatility is unnerving to most investors and observers. Therefore, it is important to try to understand the cause behind the great volatility. Clearly, the volatility can be traced to the relatively new trading mechanism of computerized High Frequency Trading (HFT), chiefly encouraged by the CME Group to enhance their trading fee revenue. Simply put, the unnerving price volatility would not exist were it not for HFT activities." "In a very real sense, many markets, including gold and silver, have been overtaken by the rise of day trading computer robots and algorithms. On a typical day, more than 90% of all trading volume on the COMEX is conducted by HFT programs. This has been acknowledged by the markets' prime regulator, the CFTC. It is easy to demonstrate that this HFT activity is day trading by changes in daily open interest. Therefore, this trading is of no real benefit to legitimate hedging or price discovery. In essence, all this HFT activity is only to the benefit of the few traders involved in it and all other market participants, including legitimate hedgers and the vast bulk of outside investors, are held captive by it. Barring regulatory intervention, all the long term investor can do is to steel himself against the irrational daily price volatility and use it, where possible, to his advantage (such as buying on extreme price declines). Day-trading induced price volatility, as much as it unnerves us, will not influence long term price trends." Being Tuesday, I have a lot of stories for you today...and if you can't read them all, at least take the time to read the two or three paragraphs from each story that I cut and paste as introduction, so you at least get a flavour for them. Email Print Any silver price declines from here won't involve very much real volume...and certainly won't be representative of true supply and demand. Gold Producers Rush to Boost Dividends. Indians increasingly monetize gold as collateral for loans. Gold: Supply Crunch? What Supply Crunch? - Louis James ¤ Critical Reads Subscribe MF Global: A romance with risk that brought on a panic Soon after taking the reins of MF Global in 2010, Jon S. Corzine visited the Wall Street firm's Chicago offices for the first time, greeting the brokers, analysts and sales staff there. One broker, Cy Monley, caught Mr. Corzine's eye. Unknown to MF Global's top management in New York, the employee, whose job was to match buyers and sellers in energy derivatives, was also trading a small account on the side, using the firm's capital. "How are you making money on side bets? What else are you guys doing to make money here?" Mr. Corzine asked enthusiastically, his eyes widening, the broker recalled. The new chief executive grabbed a seat and spent an hour questioning Mr. Monley as other top executives from New York hovered impatiently nearby. This story was posted over at The New York Times website late on Sunday evening...and I snatched it from a GATA release late last night.  I consider this story very much worth reading...and the link is here. View full GSD edition The Denials Begin: Interactive Brokers Is First To Claim It Has Not Engaged In Commingling Rehypothecation Now that the re-hypothecation bogeyman has been let loose, and the question of just how many paper (and apparently physical) assets have been double, triple, and n-counted (where 'n' can be a number up to "infinity") by the infinitely daisy-chained modern global financial system in which one's liability is someone else's asset....apparently up to infinity times, the next logical step was for the firms named in the original Reuters article to step up and begin denials they had anything to do with anything. Sure enough, below is the first such response, by Interactive Brokers, claiming it has been greatly misunderstood and unlike MF Global, it has done nothing wrong at all. This zerohedge.com story from Sunday was sent to me by reader Phil Barlett...ad the link is here. View full GSD edition MF Global collapse will push commodity trading to Asia, Rogers says Commodities investor Jim Rogers told Bull Market Thinking's Tekoa Da Silva this week that while the collapse of the MF Global brokerage house is a disaster for the firm's clients, its most important effect may be to push commodity trading away from Chicago and into Asia. We'd probably wish as much, at least until the new chairman of the Chinese Communist Party turned out to be Gee Me Dy-Minh. I thank Chris Powell for providing the above introduction...plus the imaginative translation of Jamie Dimon into Mandarin Chinese. A summary and full audio of the interview with Rogers are posted at the bullmarketthinging.com website...and the link is here. View full GSD edition Alasdair Macleod: Deflating the derivatives balloon Economist and former banker Alasdair Macleod, who spoke at GATA's Gold Rush 2011 conference in London in August, writes at GoldMoney that the collapse of the MF Global brokerage house may herald the collapse of the futures and options markets as investors realize that their money is protected neither by exchanges nor governments. A transfer of trading from futures markets to physical markets, Macleod notes, would be very bad for the big short positions in gold and silver run by bullion banks. This story is certainly worth your time, if you have it.  I thank Chris Powell for wordsmithing the introduction..and the link to this short essay, posted at the goldmoney.com website, is here. View full GSD edition Chris Powell: Suspend habeas corpus and enact martial law? Americans seem ready to forfeit their most basic civil liberty -- actually, all their civil liberties -- without a whimper. By a vote of 93-7 the Senate this month approved a military appropriations bill empowering the government to designate any U.S. citizen within the country as a terrorist and to have the military hold him indefinitely without trial and without the right to habeas corpus, the right to be brought before a court for a judgment on the legality of one's imprisonment. In effect the legislation is a declaration of martial law throughout the country. GATA secretary-treasurer Chris Powell is the managing editor of the Journal Inquirer in his day job.  Here's an editorial he posted in the paper early yesterday afternoon.  It's an absolute must read...and the link is here. View full GSD edition
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