Gold World News Flash 2

saveyourassetsfirst3

Net Worth Implosion: It's Not Just Housing
Gaining from Exposés and Realities
The USD Trap Is Closing: Dollar Exclusion Zone Crosses The Pacific As Brazil Signs China Currency Swap
Daily Pfennig: The Need For A Blueprint…
When Will Reality Intrude?
Summer Lows At Hand?
Money-Good Asset Stocks Shrivel Prompting Collateral Crisis
Germany Court delays ESM/Moody;s downgrades 16 banks/Morgan Stanley hurt the worst/China has lousy PMI numbers/USA also bad PMI
On The Energy Cliff's Early Warning Signal
Gloom and doom back in style
Davincij: Silver Price Smash
Greyerz – We Are Headed For Panic As Global Markets Tumble
Turk – Gold & Stocks Smashed, Expect Massive Spike In Fear
Vegas: Market Meltdown, Major Bank Downgrades
Oil & the CRB Approaching a Final Bottom
'Find of the Century' - Massive Gold Trove Sparks Archeological Dispute
Bianco: Twist, Fed Easing, Gold, & More
Silver Update: Silver Message(s)
Gold & Silver on the Verge – Are You Ready?
In A Ro-Ro Market: When the Going Gets Tough, Change the Rules
Gold still at risk of a large downward move before the rally
The Lost Padre Gold Mine
Gold Hits 8-Session Low but ‘Bank Buying Supports’
Gold Hits 8-Session Low Post-Fed, But “Central Bank Buying Supports”
The Last Contango
The Japanese Yen And Volatility Sit At The Cusp Of Renewed Risk Aversion

Net Worth Implosion: It's Not Just Housing

Posted: 22 Jun 2012 05:12 AM PDT

Americans' net worth collapsed in recent years, but don't blame the housing market for it all. A CNNMoney analysis of new Census Bureau data shows that if you strip out the effects of the housing collapse, median household net worth still fell by 25% between 2005 and 2010...

Read

Gaining from Exposés and Realities

Posted: 22 Jun 2012 04:24 AM PDT

"The U.S. economy looks weaker than it did when the Fed last met in April. Growth was more sluggish in the first three months of the year than first estimated.

"Job growth averaged only 73,000 in April and May, after average gains of 226,000 per month in the first three months of the year.

"The number of people seeking unemployment benefits has risen about 5 percent in the past six weeks, and employers posted sharply fewer jobs openings in April compared to the previous month.

"And economists worry the debt crisis in Europe is worsening, even after Greek election results increased the likelihood that Greece will stay in the euro currency alliance.

"Yet it's unclear whether any further Fed action would help the economy much. Long-term U.S. interest rates have already touched record lows. Businesses and consumers who aren't borrowing now might not be moved to do so if rates slipped a bit more.

"Critics have complained about the Fed's efforts to boost growth over the past three years by purchasing more than $2 trillion in bonds. They say the extra money added to the banking system could ignite inflation once the economy rebounds."

"Fed extends 'Twist' program to drive rates lower"
Martin Crutsinger, AP Economics Writer, Associated Press, 6/20/12

With all the Chaos in Markets and Economies these days, Investors seeking Gain and Protection are well advised to focus on Realities rather than Main Stream Media and Official Fictions.

Here in summary are Key Realities:

--Neither the U.S. nor Eurozone Economies is recovering. They continue to be in recession (when one considers the Real Numbers – see below) and continue to contract as we and a few others have been saying for months. Thus the 6/20/12 AP Report above is not a surprise to us.

--Leading Sovereigns, and not just the PIIGS, are suffering from Debt Hypersaturation. This includes France, the U.K., and the USA, whose debt is growing at $1.5 Trillion per Year.

--Likewise, Major Banks are suffering from Debt Saturation (i.e. holding non-performing "Assets"). In other words, Solvency is the Fundamental Challenge for Major Sovereign Nations and Banks, not Liquidity. Merely piling more Debt upon Unpayable Debt and/or increasing money Printing (i.e. Q.E.) is no solution, but is actually harmful in the long run.

--Under any reasonable optimistic Economic Growth Scenario, none of the Debts of the aforementioned can ever be repaid; indeed it is becoming difficult or impossible for certain Sovereign Nations even to pay interest on the debt. This makes Partial Defaults and more Q.E. are the most likely "Solutions."

--And even China is suffering from a Debt Saturation Problem though they have the resources to prevent it from being Economically Catastrophic.

--What China finds it increasingly difficult to successfully address is the demands of its increasingly affluent 1.3 billion people (growing by at least 20 million per year) for food and fuel. India, with one billion people, faces the same problem.

--Thus China is the Major Purchaser of Iranian Oil. Could they, would they, stand by if Iran is attacked or any of their other present or prospective energy (or food) sources were threatened?

--Given all the Problems elsewhere, the $US is currently the Most Attractive Major, but Ultimately Doomed, Fiat Currency, at least over the Short Term. Thus the U.S. Dollar has been rising as a share of Global Bank reserves to nearly 2/3. But the prospect of "Q.E. to Infinity" will weaken the $US Purchasing Power and generate Hyperinflation.

--The US Fed and ECB's repeatedly expressing willingness to "do what it takes" to bolster the economy, as well as their action (e.g., most recently the Fed's extension of Operation Twist) both have periodically served to boost Equities Markets but with increasingly less effect. Witness the Equities Markets Swoon, one day after the Operation Twist Extension Announcement. The private-for-profit Fed very much need to be audited, so the American people can determine whether it is acting in their best interest, or the interest of the Mega-Banks which own it.

--The foregoing indicates an increasingly serious economic and financial situation. For example, in the U.S.A. unfunded State pension liabilities are $3.9 Trillion according to a recent J. P. Morgan Chase study.

--Official Data of Key Major Economies is Bogus; the U.S. and China are two leading Purveyors of Bogus Economic Data. Therefore, critically important for Investors is use of Real Data. In the U.S., for example, Real Inflation is 9.3%, Real Unemployment is 22.7% and Real GDP a Negative -2.17% per shadowstats.com*

*Shadowstats.com calculates Key Statistics the way they were calculated in the 1980s and 1990s before Official Data Manipulation began in earnest. Consider

Bogus Official Numbers vs. Real Numbers (per Shadowstats.com)

Annual U.S. Consumer Price Inflation reported June 14, 2012
1.70% / 9.30%

U.S. Unemployment reported June 1, 2012
8.2% / 22.7%

U.S. GDP Annual Growth/Decline reported May 31, 2012
1.99% / -2.17%

U.S. M3 reported June 18, 2012 (Month of May, Y.O.Y.)
No Official Report / 2.52%

--Note that the Real U.S. Inflation Rate of 9.3% is already threshold Hyperinflationary. This is why Deepcaster's High Yield Portfolio is specifically aimed at generating a Total Return (Gain plus Yield) in excess of Real Inflation (see Note 2).

--One Especially Essential Reality: Gold and Silver have been much better investments than Equities over the past decade, with Gold up over 500%. This will continue to be the case notwithstanding ongoing Cartel (Note 1) Price Suppression Actions. Equities-in-general have been losers over the past decade when Real Inflation is factored in.

--As to Strategy, Bill Murphy, the Midas Proprietor of LeMetropoleCafe.com, provides us the Key: Buy Physical on Dips just like certain Mega-Bankers and other Major Investors are doing, ever so quietly.

"The Gold Cartel has been going all out to get the prices of gold and silver down. The nature of their selling appears to be showing a bit of desperation by doing what they are doing. Desperation because we are in a No Solution situation in Europe, and even in the US. The only course of action available which won't get the politicians in both countries kicked out of office is massive amounts of money printing. This is why The Gold Cartel is so desperate to take the prices of gold and silver off the radar screen as much as possible; hence, their constant bombings.

"Yet, for all their huffing and puffing, the Gold Cartel is not blowing down the precious metals. And this is because the 'big money' is buying up suddenly cheap gold (and silver) after their attacks. They have become SO blatant, with their moves expected, the buyers continue to scoop up gold and silver when the cabal forces make their move … which is why the prices keep rebounding after the raids. I know that is a bit repetitive, but it is important to emphasize the price action dynamics because this buying is building formidable bases in both precious metals … bases which can support moves to much higher price levels."

Bill Murphy, lemetropolecafe.com, 06/18/2012

A concluding Object Lesson for the Wise: The 'Big Boys' keep Buying, quietly Buying on the Dips. Carpe Diem! Just recently we hear:

"(The GoldCore site has two pleasant reports) – that Russia bought 500,000 oz of gold for FX reserve purposes, and an unsourced interview:

'Eugene Kim, chief investment officer at the central bank's foreign-exchange reserve management group, said its gold holdings are "too small" given the size of its forex reserves…Mr. Kim said the central bank needs to boost its gold holdings even after two purchases last year that took the amount to 54.4 metric tons, or about 1% of the total reserves… "the BOK needs to buy more. We may do so this year," he said.'

"See http://www.goldcore.com/goldcore_blo...y-more"-gold."

Courtesy of JBGJ, 06/21/12

Best regards,

Deepcaster
June 22, 2012

Note 1: We encourage those who doubt the scope and power of Overt and Covert Interventions by a Fed-led Cartel of Key Central Bankers and Favored Financial Institutions to read Deepcaster's December, 2009, Special Alert containing a summary overview of Intervention entitled "Forecasts and December, 2009 Special Alert: Profiting From The Cartel's Dark Interventions - III" and Deepcaster's July, 2010 Letter entitled "Profit from a Weakening Cartel; Buy Reco; Forecasts: Gold, Silver, Equities, Crude Oil, U.S. Dollar & U.S. T-Notes & T-Bonds" in the 'Alerts Cache' and 'Latest Letter' Cache at www.deepcaster.com. Also consider the substantial evidence collected by the Gold AntiTrust Action Committee at www.gata.org, including testimony before the CFTC, for information on precious metals price manipulation. Virtually all of the evidence for Intervention has been gleaned from publicly available records. Deepcaster's profitable recommendations displayed at www.deepcaster.com have been facilitated by attention to these "Interventionals." Attention to The Interventionals facilitated Deepcaster's recommending five short positions prior to the Fall, 2008 Market Crash all of which were subsequently liquidated profitably.

Note 2: There are Magnificent Opportunities in the Ongoing Crises of Debt Saturation, Rising Unemployment, negative Real GDP growth, nearly 10% Real U.S. Inflation (per Shadowstats.com) and prospective Sovereign and other Defaults.

One Sector full of Opportunities is the High-Yield Sector. Deepcaster's High Yield Portfolio is aimed at generating Total Return (Gain + Yield) well in excess of Real Consumer Price Inflation (9.94% per year in the U.S. per Shadowstats.com).

To consider our High-Yield Stocks Portfolio with Recent Yields of 18.5%, 8.6%, 10.6%, 26%, 6.7%, 8%, 10.6%, 14.9%, 10% and 15.6% when added to the portfolio; go to www.deepcaster.com and click on 'High Yield Portfolio'.

There is great Profit Potential and Income in our High Yield Portfolio and other Portfolio selections. For example, Deepcaster recommended taking profits on two tranches of one of the stocks in this High Yield Portfolio as follows:

87% Total Return on Agricultural Blue Chip (Tr. 2) on April 23, 2012 after just 208 days (i.e., about 152% profit annualized on the remaining half of the original position)

57% Profit on Agricultural Blue Chip (Tr. 1) on February 24, 2012 after just 149 days (i.e., about 140% annualized!)

56% Profit on Premium Gold Miner on June 1, 2012 after just 2 days (i.e., about 10,100% annualized!)

The USD Trap Is Closing: Dollar Exclusion Zone Crosses The Pacific As Brazil Signs China Currency Swap

Posted: 22 Jun 2012 02:22 AM PDT

from zerohedge.com:

When the US Dollar is ultimately dethroned as the world's reserve currency (and finally gets rid of all those ridiculous three letter post-Keynesian economic "theories") nobody will have seen it coming. Well, nobody except for the following headlines: ""World's Second (China) And Third Largest (Japan) Economies To Bypass Dollar, Engage In Direct Currency Trade", "China, Russia Drop Dollar In Bilateral Trade", "China And Iran To Bypass Dollar, Plan Oil Barter System", "India and Japan sign new $15bn currency swap agreement", "Iran, Russia Replace Dollar With Rial, Ruble in Trade, Fars Says", "India Joins Asian Dollar Exclusion Zone, Will Transact With Iran In Rupees." And while the expansion of the "dollar exclusion zone" was actually quite glaring to anyone who dared to look, one thing was obvious: it was confined to Asia. No more courtesy of the following FT headline: "Brazil and China agree currency swap." More: "Brazil has provided a vote of confidence in China's efforts to promote the renminbi as a reserve currency by becoming the biggest economy yet to agree a swap deal with Beijing. Brazil and China announced the R$60bn (US$29bn) local currency swap after a bilateral meeting between Wen Jiabao, the Chinese premier, and Dilma Rousseff, Brazil's president, on the sidelines of the Rio+20 environmental summit in Rio de Janeiro."

"It is a measure that reinforces the economies of both countries," Guido Mantega, Brazil's finance minister, said late on Thursday night.
Well, that… and also a measure which shows that one by one every country in the world is starting to think of the post-dollar world.

Keep on reading @ zerohedge.com

Daily Pfennig: The Need For A Blueprint…

Posted: 22 Jun 2012 02:13 AM PDT

from caseyresearch.com:

In This Issue…

* Risk assets plunge on Huge sell off…
* U.S. data is awful and dollar gets rewarded…
* Chuck sets agenda for Eurozone leaders…
* Gold & Silver get rocked!

And, Now, Today's Pfennig For Your Thoughts!

The Need For A Blueprint…

Good day… And a Happy Friday to one and all! Whew! I'm glad yesterday finally ended for the risk assets, as they got shot down in cold blood yesterday… There we were, looking at the currencies having a decent day of trading, and then the trap door sprung, and there was blood in the streets… I've seen sell offs before, but this one was in the top ten for sure. So, there I was looking for the reasons that not only currencies and metals were getting sold, but so too were stocks…

When you get right down to it, U.S. Treasuries weren't exactly the main beneficiary of the risk asset sell off, the 10-year lost (gained in price) 4 basis points… So, let's go to the tape, and take a look at what I think triggered this massive sell off yesterday… First, we had some really awful economic prints here in the U.S. and if we were back "in the day" of fundamental trading, these reports would have triggered a dollar sell off… Reports like the Weekly Initial Jobless Claims showing more claims filed than forecast, and the previous week's number being revised upward… And the Philly Fed report on manufacturing in that region, which followed up May's negative index number of -5.8, with an even worse negative index number of -16.6…

Keep on reading @ caseyresearch.com

When Will Reality Intrude?

Posted: 22 Jun 2012 02:10 AM PDT

from peakprosperity.com:

If we pursue the line of inquiry established by Chris Martenson's recent call to Buckle Up — Market Breakdown in Progress, we come to these basic questions: When will the market reflect the fundamental weakness of the global economy? And when will the market finally hit bottom?

First, we have to stipulate that the correlation between the real economy and the stock market is tenuous at times. According to the National Bureau of Economic Research (NBER), the widely recognized designator of recessions, the most recent recession began in December 2007 and ended in June 2009. Fully six months into the downturn (June 2008), the S&P 500 stock market index was still resiliently hovering around 1,400. The market did not break down until September 2009, the tenth month of recession.

A mere three months after the market bottomed in March 2009, the recession ended (as determined by the NBER).

Clearly, the correlation between market action and the underlying economy is weak. While many would declare the stock market to be a "lagging indicator" of recession, even that may be overstating the connection. If we have learned anything in the past three years, it's that weakening the dollar to foster the illusion of rising corporate profits, central bank monetary easing (QE), and central state borrow-and-spend stimulus can goose the market higher even as the underlying economy remains weak or recessionary.

Properly inflated with cheap liquidity, the stock market could continue rising even as the real economy (as measured not just by profits but by employment, household earnings, and tax revenues) sags into recession.

Keep on reading @ peakprosperity.com

Summer Lows At Hand?

Posted: 22 Jun 2012 02:02 AM PDT

from news.goldseek.com:

In a key turnaround, gold bounced up from its December lows this month on fresh safe haven buying as QE3 possibilities came back to the table.

The psychological $1600 level was quickly surpassed. This is essentially the level that will determine if 2012 ends up being the 12th consecutive up year for gold.

For now, we are seeing some backing and filling, which isn't a bad thing… as long as the December lows hold. This is currently a very important juncture for gold, and for silver.

HELP ON THE WAY?

When Europe or the U.S. looks vulnerable, especially in the jobs area, it quickly fuels emotions. And we all know how Bernanke feels about this… he will save the system at all costs. In fact, all of the monetary policy makers worldwide are being pressured to help the ailing global economy.

This is why the markets bounced up after their sell-off. A liquidity infusion would be bullish for gold.

Keep on reading @ news.goldseek.com

Money-Good Asset Stocks Shrivel Prompting Collateral Crisis

Posted: 22 Jun 2012 01:48 AM PDT

from wealthcycles.com:

"Gold is money, everything else is credit."
One need not look any farther than the above quote representing the seminal example of credit risk valuation, from John Pierpont Morgan.

But if gold is money, then what is a money-good asset?

A "money-good" asset is considered by market participants to be "as good as money," a "safe asset," or more clearly, an asset expected to have virtually no counterparty risk of default.

"Bernanke admitted in his recent speech, on this very issue, [that] there are very few "safe" assets to leverage the rest of the system upon." Read more in the WealthCycles.com article IMF Sees Gold as Safe Asset as Crisis Looms, in which we look at the opinion of the IMF (see pie chart).

Keep on reading @ wealthcycles.com

Germany Court delays ESM/Moody;s downgrades 16 banks/Morgan Stanley hurt the worst/China has lousy PMI numbers/USA also bad PMI

Posted: 22 Jun 2012 01:46 AM PDT

from harveyorgan.blogspot.ca:

Good evening Ladies and Gentlemen:

Gold closed down today by a huge $54.30, finishing the comex session at $1564.30 Silver also followed her stronger and wiser cousin by falling $1.55 to $26.83. There is no question that the world turmoil is certainly having its effect on our paper precious metals. With all bourses in the red, many are reading the tea leaves and have figured out that the Greek problem is unsolvable as is the problems in Spain and Italy. Greece only has 2 billion euros left in the kitty and by the first of July they will find that Germany is not willing to offer any new fresh euros which will force these guys out of the Euro and onto the drachma. As things heat up, the problems in Spain and Italy may force Germany to leave the Euro leaving the rest of the Eurozone boys to settle their massive problems. The major news event which shaped trading throughout the globe was the lousy PMI manufacturing data from China.Early in the morning rumours started to spread that Moody's was going to downgrade UK banks and then later, major USA banks were also going to be hit. Those two big negatives was all Wall Street needed as the Dow plummeted by 250 points and gold and silver were taken prisoner by the banker to hide the real catastrophe that is lurking behind the scenes. We will discuss all of these stories plus others but first let us see the damage at the comex.

Keep on reading @ harveyorgan.blogspot.ca

On The Energy Cliff's Early Warning Signal

Posted: 22 Jun 2012 01:44 AM PDT

from zerohedge.com:

The XLE closed yesterday at 63 – only a buck above the June 1 lows. For the year, XLE is now down a whopping 8 bucks. And of course oil, which started the year at 103 and peaked at 110, has dropped to 78. Jefferies David Zervos offers some critical insight into the energy sector bloodbath in the last few months, which of course begs the question – what in the world is going on? Shouldn't all this accomodative policy by the Fed, ECB, SNB, BoE and BOJ be sending commodities to the moon? The BoJ has been implementing additional QE, the Swiss have been printing francs at a breakneck pace to hold the peg, the BoE just announced the ECTRF (Extended Collateral Term Repo Facility), and Ben just extended the twist for 6 more months. Of course the ECB, as always, has been behind the easy money curve – but all signals point to some action in July: an MRO cut, a depo cut and some relaxation of the collateral lending rules. Maybe we even get another LTRO. So back to the original question; if the worlds' central banks are so easy, why is energy collapsing? And how can gold be unchanged YTD?

[ZH - As an aside - Oil priced in ounces of gold has slipped back to an important level here]

Keep on reading @ zerohedge.com

Gloom and doom back in style

Posted: 22 Jun 2012 01:36 AM PDT

from goldmoney.com:

Weak economic data from the US and China has encouraged selling of stocks and commodities over the last 24 hours. Americans' claims for unemployment benefits remained at essentially the same level as last month, while a Philly Fed regional manufacturing survey showed yet another contraction. Brent crude futures fell 3.7% to settle at $89.23 a barrel – their lowest close since December 2010, while WTI lost 4% on the day to settle at $78.20, the lowest since October. Coming just a day after the Fed disappointed investors with its "no QE3 yet" message, it's little surprise that we're seeing the same old dash to the US dollar and Treasuries, as deflation expectations rise. The Dollar Index (USDX) is back above 82.00, while the yield on the 10-Year Treasury Note has fallen to 1.62%.

Precious metals are under pressure again, with gold falling towards $1,550 and silver breaking below $27. We saw strong buying support show up for gold last month when it fell below $1,550 courtesy of Asian central banks, so bulls will have to hope the same buyers come to the rescue. Likewise, silver tested the $26 mark at the end of last year, but encountered strong buying support that sent the metal on a $10 rally to $36 by the end of February. $26 is critical support.

Keep on reading @ goldmoney.com

Davincij: Silver Price Smash

Posted: 22 Jun 2012 12:12 AM PDT

Silver got smashed and will be going lower but have no fear it's JPM in the market selling paper silver so you can buy physical on the cheap.

from davincij15:

~TVR

Greyerz – We Are Headed For Panic As Global Markets Tumble

Posted: 21 Jun 2012 11:20 PM PDT

from kingworldnews.com:

With global stock markets plunging and gold coming under serious selling pressure, today Egon von Greyerz told King World News the entire financial system is under immense pressure and we will eventually see a massive panic. Egon von Greyerz is founder and managing partner at Matterhorn Asset Management out of Switzerland. Here is what Greyerz had to say about the ongoing crisis: "Eric, the entire financial system is under immense pressure. First you have the ESFS, the European Stability Fund, they are saying they must buy euro debt. The problem is that fund is now just 440 billion euros, which is nowhere near enough to support all of these failing European countries or their banking systems."

Egon von Greyerz continues:

"The Fed has just extended Operation Twist. This is just an indirect way of printing money. But what the Fed hinted at is even more important, which is significant downside risk. The risk in the financial world as a whole right now is enormous. The Fed knows this and they are trying to avoid direct QE, but they will not be able to do that for very long.

Keep on reading @ kingworldnews.com

Turk – Gold & Stocks Smashed, Expect Massive Spike In Fear

Posted: 21 Jun 2012 11:06 PM PDT

from kingworldnews.com:

With gold and silver getting smashed, along with stocks and commodities, today King World News interviewed James Turk out of Europe. Turk told KWN, "while the Lehman Brothers (event) was bad, it was just a warmup for a much worse financial catastrophe … We're just getting started in terms of a fear event." Here is what Turk had to say regarding what is taking place: "Everything is getting smashed today, Eric, but this is what you can expect when you are going into a 'Fear Event.' Doesn't this (type of action) feel a lot like what happened when we went into the Lehman collapse?"

James Turk continues:

"The T-Bonds are up, the T-Notes are up, the dollar is stronger and the Dow and gold are getting hit. I think you are going to see gold and the Dow start separating here, particularly given the fact that the Federal Reserve really didn't come in with QE yesterday.

Keep on reading @ kingworldnews.com

Vegas: Market Meltdown, Major Bank Downgrades

Posted: 21 Jun 2012 10:47 PM PDT

In this video I discuss recent market activity, precious metals, and where the short term equities, bonds, and gold may be going.
Link to my website: http://www.lulu.com/spotlight/thegameisrigged

from gregvegas5909:

~TVR

Oil & the CRB Approaching a Final Bottom

Posted: 21 Jun 2012 09:49 PM PDT

June has been the month of major bottoms. Stocks and gold have already formed major yearly cycle lows. Now it's the CRB's turn to put in a major three year cycle bottom. This bottom will almost certainly form well above the 2009 low.

'Find of the Century' - Massive Gold Trove Sparks Archeological Dispute

Posted: 21 Jun 2012 09:14 PM PDT

¤ Yesterday in Gold and Silver

Gold sold off about seven dollars from the Far East open on their Thursday morning, right up until 12:40 p.m. in London...which was 7:40 a.m. in New York...forty minutes before the Comex open.

At that point the dollar index began its 80 basis point rally...and the precious metals headed for the nether reaches of the earth.

The gold price made a bit of a recovery once the London p.m. gold fix was in...but the engineered price decline began anew shortly before 11:00 a.m. Eastern time. Gold hit its low price tick of the day [$1,563.30 spot] right at the 1:30 p.m. Comex close...and from there it basically traded ruler flat into the 5:15 p.m. electronic close.

Gold closed at $1,565.20 spot...down a whopping $41.60 on the day. For the second day in a row, net volume was immense at 207,000 contracts.

It was pretty much an identical story in silver, as the price declined below the $28 spot mark shortly after trading began in the Far East on Thursday...and then bumped along that price ceiling right up until the same 12:40 p.m. London time as gold, before suffering the same fate as the gold price. Up until that time, silver was only down about two bits.

Silver's absolute low price tick [26.77 spot] came a couple of minutes before the close of Comex trading. The price recovered a bit from there, but then traded flat into the electronic close. Silver's intraday price move was $1.35...or 4.80%.

Silver closed the Thursday trading session at $26.88 spot...down a whopping $1.24 on the day. Net volume was pretty chunky as well...43,000 contracts, give or take.

The dollar index opened around 81.53 on Thursday morning...and didn't do much of anything until it hit its 'low' of the day at 81.50 about 7:20 a.m. in New York. Then away it went to the upside, with the high of the day [82.36] coming about 3:15 p.m. Eastern time...and closed the day almost on that high at 82.30. From top to bottom, the dollar index rally was 86 points...up 1.06%.

There certainly was an amazing amount of carnage in the precious metals prices all things considered. If you look at the almost 80 basis point decline that the dollar index had on Tuesday, there is no sign of that in the price of any of the precious metals on that day. I pointed that abnormality out in this column on Wednesday...and you can read about it here.

So, was the big dollar index rally yesterday the cause of the big decline in the precious metals. Partly, I'm sure, but it was convenient cover for JPMorgan et al to really beat the living snot out of them one more time...especially silver.

Here's the 3-day dollar index chart so you can see the almost equally large decline on Tuesday...which had no effect on the gold price at all.

The gold stocks got smoked. They gapped down big...and continued to decline...finishing right on their lows of the day. The HUI finished down 5.28%.

The silver stocks got in the ear as well. Nick Laird's Silver Sentiment Index closed down a huge 6.81%.

(Click on image to enlarge)

The CME's Daily Delivery Report showed that six gold and one lonely silver contract were posted for delivery on Monday.

There were no reported changes in either GLD or SLV yesterday.

But the U.S. Mint had a sales report. They sold 7,000 ounces of gold eagles...1,000 one-ounce 24K gold buffaloes...and 275,000 silver eagles. Month-to-date the mint has sold 32,500 ounces of gold eagles...6,000 one-ounce 24K gold buffaloes...and 1,975,000 silver eagles. So far this month, silver eagles are outselling gold eagles/buffaloes by a 51:1 ratio.

Over at the Comex-approved depositories on Wednesday, they reported receiving 1,184,987 troy ounces of silver...and shipped 463,513 ounces of the stuff out the door. The link to that action is here.

Here's a chart that Washington state reader S.A. stole from some story posted on the Zero Hedge website yesterday. It shows the Spanish and US GDPs compared to the size of bailouts...if the US received a bailout in proportion to the Spanish bailout.

(Click on image to enlarge)

I have a lot fewer stories today, but if you read nothing else, the first story is a must read...and I'll leave the final edit of the rest up to you.

Well, there's no denying the fact that it was a pretty ugly day yesterday, regardless of whether it was free-market forces or 'da boyz'.

CNBC Asia posts video of interview with GATA's Chris Powell. Silver regains sheen as coin sales see a pickup. Debt crisis: desperate Monti needs Merkel summit deal to stop revolt at home.

¤ Critical Reads

The Scam Wall Street Learned From the Mafia: Matt Taibbi

How America's biggest banks took part in a nationwide bid-rigging conspiracy - until they were caught on tape.

Someday, it will go down in history as the first trial of the modern American mafia. Of course, you won't hear the recent financial corruption case, United States of America v. Carollo, Goldberg and Grimm, called anything like that. If you heard about it at all, you're probably either in the municipal bond business or married to an antitrust lawyer. Even then, all you probably heard was that a threesome of bit players on Wall Street got convicted of obscure antitrust violations in one of the most inscrutable, jargon-packed legal snoozefests since the government's massive case against Microsoft in the Nineties – not exactly the thrilling courtroom drama offered by the famed trials of old-school mobsters like Al Capone or Anthony "Tony Ducks" Corallo.

But this just-completed trial in downtown New York against three faceless financial executives really was historic. Over 10 years in the making, the case allowed federal prosecutors to make public for the first time the astonishing inner workings of the reigning American crime syndicate, which now operates not out of Little Italy and Las Vegas, but out of Wall Street.

This Matt Taibbi essay was posted on the rollingstone.com website about lunchtime yesterday...and is from the July 5th issue of Rolling Stone magazine. It's a very long must read...and I thank reader U.D. for being the first one through the door with it. The link is here.

View full GSD edition

Moody's Downgrades Global Banks

Ratings agency Moody's downgraded the long-term credit ratings of 15 major U.S., Canadian, and European banks today after markets in New York closed.

Of the 15 firms downgraded this afternoon, none were hit more than Moody's originally said was possible when it placed them on review in February.

The action will likely force many of the banks targeted post additional collateral against trades held on their books.

The fact of the matter is that most, if not all, of these banks are insolvent anyway. Only rule changes and 'new and improved' accounting procedures make them look good on paper. There is no market for most of the paper 'assets' they have on their respective books. This story was posted on the businessinsider.com website yesterday...and I thank Roy Stephens for sending it. The link is here.

View full GSD edition

Mario Monti: we have a week to save the eurozone

Italy's prime minister, Mario Monti, has warned of the apocalyptic consequences of failure at next week's summit of EU leaders, outlining a potential death spiral whose consequences would become more political than economic.

The Italian leader is to hold talks with Chancellor Angela Merkel of Germany, the French president, François Hollande, and Spain's prime minister, Mariano Rajoy, in the hope that the single currency's big four countries can pave the way for a breakthrough at next week's meeting.

Speaking to The Guardian and a group of leading European newspapers, Monti said that, without a successful outcome at the summit, "there would be progressively greater speculative attacks on individual countries, with harassment of the weaker countries". The attacks would be focused not only on those who had failed to respect EU guidelines, but also on those like Italy, which he said had abided by the rules "but which carry with them from the past a high debt".

This story was filed from Rome yesterday...and is posted on the guardian.co.uk Internet site...and I thank Bob Fitzwilson for sending it. The link is here.

View full GSD edition

Debt crisis: desperate Monti needs Merkel summit deal to stop revolt at home

Italy's technocrat government risks a parliamentary mutiny unless premier Mario Monti can secure major concessions from Germany at a crucial summit of the eurozone's Big Four powers in Rome on Friday.

"Monti is desperate. Reform fatigue has breached breaking point," said a top Italian official. "There is a feeling here that the euro is basically dead already. Unless Germany offers a road map out of this crisis, Monti is not going to be able to hold it together much longer."

This story is the same as the one from The Guardian, except it has a whole different spin on it. Ambrose Evans-Pritchard does the honours in this piece posted on The Telegraph's website yesterday evening. I thank Roy for sending it my way...and it's certainly worth the read. the link is here.

View full GSD edition

Spain to seek bank aid as borrowing costs soar

Independent auditors said Spanish banks may need up to €62 billion in extra capital, to be filled mostly by a euro zone bailout, after Spain's medium-term borrowing costs spiraled to a euro-era record on Thursday.

Euro zone finance ministers met in Luxembourg to discuss how to channel up to €100 billion ($126 billion) in aid to Spanish lenders weighed down by bad debts from a burst property bubble. Madrid's economy minister said a formal request would be made in days for the bailout, which was agreed two weeks ago.

Many in the markets see the package as a mere prelude to a full program for the Spanish state, which Madrid vehemently denies it will need.

A prelude it is, as neither €62 or €100 billion will fix the Spanish banking system. This Reuters story was posted on their website yesterday evening Eastern time...and I thank Roy Stephens once again for bringing it to our attention. The link is here.

View full GSD edition

Greek government seeks two-year extension to bailout

A meeting of eurozone finance ministers in Luxembourg was expected to send the "troika" of officials from the European Central Bank, European Commission and IMF back to Athens after the elections last weekend.

The new government, a fragile coalition which faces a strong far-Left opposition, has asked the EU for an extra two years to hit austerity targets set as part of the country's €240bn (£193bn) bail-out.

Eurozone finance ministers, relieved that a pro-bailout Greek government has been formed, saving the EU's single currency from almost certain break-up, are sympathetic to giving Greece more time.

This is another story posted on the telegraph.co.uk Internet site. This one was filed around 1:00 p.m. Eastern time. As usual, I thank Roy Stephens for sending it...and the link is here.

View full GSD edition

IMF unveils its blueprint to salvage the stricken euro

The International Monetary Fund has directly confronted Germany by urging the eurozone to take a "determined and forceful move" to "complete economic and monetary union" by sharing government debt and underwriting failing banks.

Christine Lagarde, the IMF's managing director, last night unveiled the blueprint to save the euro while warning that the EU's single currency was under "acute stress" that threatened "the viability of the monetary union itself".

The IMF's intervention is timed to tip the balance against Angela Merkel at a critical summit between Germany, France, Italy and Spain in Rome today where the embattled German Chancellor will be fighting off identical demands.

This Roy Stephens offering was posted on The Telegraph's website just before midnight British Summer Time. It's a must read in my opinion...and the link is here.

View full GSD edition

Air France to shed over 5,000 jobs by 2014

Air France said Thursday it is to slash over 5,000 jobs or around 10 percent of its workforce in voluntary departures by 2014 as part of a vast plan to make the struggling French airline profitable.

A total of 5,122 jobs will be shed and the carrier said in a statement that all departures would be voluntary provided a new framework agreement can be signed with unions.

"Air France has chosen to work in complete transparency and to privilege social dialogue to find structural and sustainable solutions, included in corporate agreements," it said.

This story was posted over on The Economic Times of India website earlier this morning...and is another story from Roy. The link is

Bianco: Twist, Fed Easing, Gold, & More

Posted: 21 Jun 2012 08:25 PM PDT

TrimTabs President and CEO Charles Biderman talks with Jim Bianco of Bianco research.
from trimtabs:

Part One

Part Two

~TVR

Silver Update: Silver Message(s)

Posted: 21 Jun 2012 08:24 PM PDT

BJF discusses Ag, Mike Maloney, and the idea Don Harrold could be a govt shill.
from brotherjohnf:

In all fairness, Don's reply to BJF.
from daytradeshow:

~TVR

Gold & Silver on the Verge – Are You Ready?

Posted: 21 Jun 2012 07:38 PM PDT

The price movements we have seen for both gold and silver indicate we are just warming up for something really big to happen. It could be a massive parabolic rally to ridiculous new highs in 2012/2013 or it could be a huge unwinding.

In A Ro-Ro Market: When the Going Gets Tough, Change the Rules

Posted: 21 Jun 2012 05:12 PM PDT

'Ro-ro'...short for risk on, risk off.

It's just another acronym dreamed up by the market to describe the daily see-saw action in asset prices. Despite the complexity of the market and the millions of signals it throws off, we have managed to distil the daily price action down to either risk on or risk off.

Or perhaps it's because of the complexity. It's a complexity driven by constant government interference with the business cycle. We're not sure exactly when it happened, but at some point over the past few decades governments decided that they could, and would, do everything in their power to avoid recession.

This resulted in lower and lower interest rates...because apparently all a downturn needs is lower interest rates to fire things back up again. But a lower rate of interest is just another term for the mis-pricing of credit. Holding the cost of credit below the market rate (the rate at which a free market would set the price) is a recipe for disaster.

It's a policy that discourages savings and rewards consumption. Central banks make up for the lack of real savings by pumping reserves into the banking system, which pushes interest rates down. Then, when interest rates can go no lower, they start doing other stupid things like printing money outright.

All this does is creates a whole bunch of electronic money swirling around the system in a blind panic. The result is either risk on, or risk off.

Today, we are definitely risk off. And if you heeded the words of our resident technical analyst, Slipstream Trader editor Murray Dawes earlier this week, you wouldn't be surprised at today's market action. In Wednesday's edition of the Daily Reckoning, on the eve of the Fed's supposed new QE announcement, Murray wrote:

'I have rarely seen a market so beautifully poised for disappointment. Pavlov's dogs are salivating at the thought of more free money spewing out of the Fed tonight. If the Fed disappoints you are going to wake up to a US market down 2-3% tomorrow morning.'

Ok, so Murray was off by about 24 hours. Still, that's some decent prognosticating. And he thinks this latest sell-off sets the market up for an even greater downside move in the coming weeks. To find out how Murray plans to trade this situation, keep your eye out for his special report, which should hit your inbox next week.

While traders love this sort of market action, it's a real trying time for investors. Are there any left? We long for the time when the market was simply representative of the capital structure of the economy. When the equity market reflected the 'equity' value of all the listed companies and was sensitive to its various cycles. Or similarly, when the credit (debt) markets reflected the value of a company's debt capital.

We suppose the markets still do this. But constant intervention and the advent of 'ro-ro' means you're seeing increased synchronisation in all markets. There are few places left to hide...few natural hedges left.

Take gold for example. Throughout history it has fulfilled the role of being a natural hedge against financial upheaval. It still is, of course. But the creation of gold derivatives means there is more paper gold traded than there is physical gold in existence.

Therefore, the 'paper' gold market sets the price. And because of increasing market synchronisation, selling in one sector begets selling in another. What you think is insurance doesn't act like insurance but actually still is insurance...confused? That's not surprising. We're drowning in a world of paper. As cracks appear in the façade, the solution is to create more paper...which creates more cracks.

Speaking of cracks, we just spotted a few more. This morning's Financial Review reports:

'China's manufacturing sector has contracted for the eight consecutive month, according to a private sector survey, bringing concerns about the pace of slowdown in Australia's largest trading partner back to the fore.'

'...New export orders recorded their biggest monthly contraction since March 2009, during the global financial crisis.'

And here, we learn that China's big four banks have only lent 25 billion yuan so far this month. This compares to a month long lending target of 1 trillion yuan. Given the big four account for nearly 40% of system wide lending, China's banking sector has a bit of catching up to do.

But it will be ok; China's leaders won't let anything bad happen.

Crack number two? Moody's downgraded the credit ratings of 15 banks last night. We're not sure what to make of this. The ratings agencies are always behind the ball. They report on the past, not the future. But a downgrade does have ramifications. It increases the cost of debt capital for these banks. It also can impact collateral requirements, which has a whole host of implications.

But ratings agencies can only have so much of an impact. If they get too zealous, TPTB (The Powers That Be) change the rules of the game.

According to the Financial Times:

'The European Central Bank is expected to give Spanish banks a much-needed boost with a significant loosening of rules on collateral required to obtain its liquidity, which could be followed by steps to reduce the role of credit-rating agencies in its operations.

'The concession, which could be announced as early as Friday, would allow Spanish banks to make greater use of asset-backed securities when drawing ECB funds. The move - coming as European authorities and Madrid draw up plans to recapitalise the country's banks - will help to offset a possible liquidity squeeze caused by downgrades by credit rating agencies.

'The decision by the ECB's 22-strong governing council is part of a review of collateral rules aimed at ensuring liquidity continues to flow to sound eurozone banks - and to reduce its reliance on external bodies such as Standard & Poor's and Moody's.'

In case you were dozing off, we underlined the important bits.

Seriously, can you believe it? We've now got to the point where the authorities want to ignore the credit ratings agencies because it doesn't suit them anymore. This is a turnaround from the pre-credit crisis days where the agencies ignored the growing problems and bankrupt balance sheets of the banks. Now that they decide to get serious no one wants to listen to them.

You couldn't make this stuff up. It's hilarious in its absurdity. The rules of capital allocation, of risk and reward, no longer count. It's little wonder the world is caught in a cycle of 'ro-ro'. Outcomes are now binary. There is no place for nuance. You're either in or you're out.

But in a worrying sign for Europe, the authorities look increasingly like they are going 'all in'. Europe is descending into farce. Watch and weep.

Regards,

Greg Canavan
for The Daily Reckoning Australia