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Sunday, July 29, 2012

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Mario Draghi's Real Message: Some Euro Countries Will Collapse, And Soon

Posted: 29 Jul 2012 12:03 PM PDT

By James F. Wood:

Mario Draghi, the European Central Bank President, announced yesterday that he would do everything possible to save the Euro. But the real message seems to be that desperation is taking over and that therefore collapse is near. There are four powerful arguments why this interpretation of Draghi's statement is true.

First, we must make clear what is the problem of Europe: the problem is solvency of the southern countries, not liquidity. See detailed explanation here. The southern countries are going broke (as opposed to needing a temporary loan while they work out the problem, perhaps helped with a printing press). The countries are going broke as well as their national banking systems. A business goes broke when its revenues are less than expenses for an extended time. And this is true for the Southern European governments as well as their national banking systems. The southern countries' banks' and national governments'


Complete Story »

Amazon.com's Bezos Continues To Create Long-Term Value

Posted: 29 Jul 2012 10:18 AM PDT

By Robert Broens:

Shares of Amazon.com (AMZN) rose almost 8% on Friday after the company published its second quarter results. Shares rose to $237 per share, approaching its all time highs set in October last year.

Second Quarter Results

Amazon.com reported a 29% increase in second quarter revenues to $12.83 billion. Sales were negatively impacted by $272 million as a result of a strong US dollar. Operating income fell from $201 million to $107 million. Net income fell 96% to a mere $7 million, or $0.01 per share. Analysts were anticipating earnings of $0.03 per share. Earnings fell as the company took a $65 million charge related to the acquisition of Kiva Systems, back in March of this year.

Amazon, which backs LivingSocial, said that the coupon company posted $138 million in revenues for the second quarter, compared to $59 million last year. At the same time losses narrowed from $198 million to


Complete Story »

India's gold imports plunge 35 per cent in July

Posted: 29 Jul 2012 08:00 AM PDT

from timesofoman.com:

Mumbai: Gold imports by India, the world's biggest buyer, probably declined as much as 35 per cent this month as near-record domestic prices trimmed demand, an industry group said.

Purchases may drop to 40 metric tonnes to 50 tonnes in July, Prithviraj Kothari, president of the Bombay Bullion Association, said yesterday without giving figures for last year. "Inflation is high, the equity market is negative and the real estate market is on the downside, so it all impacts the purchasing power.-

Buying in India may fall for a second year as consumers cut spending and switch to cash because of concern about the economy, Ajay Mitra, managing director, Middle East and India at the World Gold Council said July 16.

The economy grew 5.3 per cent in the first quarter, the slowest pace in nine years, and inflation exceeded seven per cent for a fifth month in June. Poor monsoon rains will also cut demand in a country where according to UBS rural areas account for about 60 per cent of gold buying.

"Demand may see some improvement by the first week of September because of festivals, but not in a great way,- said Bachhraj Bamalwa, chairman of the All India Gems & Jewellery Trade Federation. The festival season, which runs from August end to November, is the peak demand period as buying gold is considered auspicious.

Keep on reading @ timesofoman.com

Afghanistan gold demand up during Ramadan

Posted: 29 Jul 2012 07:57 AM PDT

from bullionstreet.com:

NEW DELHI(BullionStreet): Gold and fuel prices eased in Afghanistan during the week as one gram of Arabian gold was sold at 2,150 afghanis, down from last week's price of 2,200 afghanis.

According to reports, the same quantity of Iranian variety sold for 1,800 afghanis against its last week's price of 1,850 afghanis.

A liter of petrol was at 57afghanis, compared to its last week's price of 58 afghanis, Diesel rate decreased from 57 afghanis, to 56 afghanis while liquefied gas stayed stable at 40 afghanis, a kilo, the same rate as last week.

The marginal decrease in price for gold attracted customers during the holy month of Ramadan as poorer families, the overwhelming majority in this impoverished nation,save up and borrow from friends and family members to buy gold during the season.

Most of them often they buy Iranian gold, which is cheaper than Arabic gold.

However, gold shops in Kbaul remained highly decorrated to attract customers. More than 90 percent of the stores' glass cases are filled with gold, much of it imported from Saudi Arabia and Bahrain.

Gold jewellery making in Afghnaistan is still far away from global standards but is climbing up recently, analysts added.

The war torn nation is reported to have huge mineral reserves including gold. The US Department of Defense estimates that Afghanistan's reserves of iron ore, copper and gold are worth $1 trillion.

Keep on reading @ bullionstreet.com

Nepal Gold imports down to Rs 22.82 billion

Posted: 29 Jul 2012 07:55 AM PDT

from bullionstreet.com:

KATHMANDU(BullionStreet): Himalayan nation Nepal's gold imports hit Nepal Rs 22.82 billion till mid June this year, according to country's central bank.

The Nepal Rastra Bank said petroleum products and gold top the list of the country's import bill as the country imported Nepal Rs 419.57 billion worth merchandise till mid-June.

The statement said "Of the total imports of Rs 272.26 billion from India, petroleum products is the largest import followed by MS billet and vehicles and spare parts.

Gold is the largest import from third world country's followed by crude and soybean oil.

However, the import of gold has slowed down in the last two years. In the 11 months of fiscal year 2009-10, Nepal had imported gold worth Nepal Rs 39.40 billion.

The central bank said the combined import bill of the top five merchandise totals Nepal Rs 149.52 billion but the total export bill of the country is Nepal Rs 67.21 billion hat is not enough to pay the import bill of a single product, petroleum products, from India.

Keep on reading @ bullionstreet.com

Gold exports earned Sudan $603 million

Posted: 29 Jul 2012 07:53 AM PDT

from bullionstreet.com:

KHARTOUM(BullionStreet): Sudan said Gold exports earned $603 million for the country till June this fiscal and hopes to double the quantity by the end of the year.

According to country's mineral ministry, gold exports revenue can take up some of the economic slack created by lost oil revenues.

Although the potential $3 billion in gold exports falls short of the $5 billion oil brought to Sudan in 2010, it is hoped that it can plug the gap while Khartoum continues its wrangling with South Sudan at the negotiating table.

When South Sudan seceded in 2011, it took with it more than three-quarters of what was Khartoum's oil-producing capacity.

However, Khartoum retained the strategic clout to keep afloat, as it owns much of the infrastructure, including the pipeline which transported oil from landlocked South Sudan to Port Sudan on the Red Sea.

Keep on reading @ bullionstreet.com

Gold steady, set for best week since May

Posted: 29 Jul 2012 07:49 AM PDT

from thenews.com.pk:

SINGAPORE: Gold held steady above $1,600 an ounce on Friday, on course for its biggest weekly gain in almost two months, after European Central Bank President Mario Draghi signalled the bank would do whatever was necessary to hold the Eurozone together.

Gold in the past few months has moved largely in tandem with the euro and riskier assets, with a relentless debt crisis in the Eurozone chipping away at bullion's safe-haven appeal and investors piling into assets perceived safer, such as the dollar, yen and US Treasuries.

While gold drew support from firm stock markets and a steady euro after Draghi's pledge, investors were seen turning their focus to US gross domestic product data scheduled for later in the day for fresh trading cues.

US GDP likely grew at a 1.5 percent annual rate in the second quarter, according to a Reuters poll, which would be the slowest pace since the second quarter of 2011. The data may shed light on the stance of the US Federal Reserve on further monetary stimulus.

"If the US GDP number falls short of expectations, it would once again fuel speculations on Fed easing, which would help gold," said Lynette Tan, an analyst at Phillip Futures in Singapore.

Keep on reading @ thenews.com.pk

Keep a Close Eye on Gold Prices Next Week

Posted: 29 Jul 2012 07:46 AM PDT

from moneymorning.com:

The U.S. Federal Reserve is about to give a huge boost to gold prices, and the first push could come as soon as next week.

The parade of dismal economic reports both here and abroad has stoked hopes that more stimulus, in the form of a third round of quantitative easing, is imminent. A clear signal of when we can expect QE3 could come at next week's two-day Federal Open Market Committee (FOMC) meeting that starts July 31.

An increasing number of Federal Reserve officials are convinced the central bank must expand its stimulus operation immediately amid the recent spate of glum data signaling economic growth has hit a roadblock. Several members will push for urgent action, although some may move to delay a decision until September.

Fed Chairman Ben Bernanke told Congress last week that a fresh round of quantitative easing is an option the FOMC is mulling to try and lower the elevated unemployment level.

"We are committed to ensuring, or at least doing all we can to ensure, that we continue to make progress on unemployment," Bernanke said just last week.

Central Banks Boost Gold Prices
Most agree that QE3 will be the most effective measure in jump-starting the struggling U.S. economy. QE3, in which the Fed will buy financial assets to inject money into the economy, will also be very bullish for gold prices.

More dollars in circulation raises the risk of inflation and devalues the greenback. Gold has long been coveted as a tangible asset against inflation, and will become more attractive compared to the weakening dollar.

The United States isn't the only economy helping gold prices. The European Central Bank on Thursday sent the strongest signal to date that it's willing to use its power to print money and preserve the euro. Investors took the news as a sign the bank will engage in massive purchases in the region's bond market to monetize the ailing Eurozone economy – i.e., flood the area with money.

Keep on reading @ moneymorning.com

Gold Climbs to Five-Week High on Stimulus Speculation

Posted: 29 Jul 2012 07:43 AM PDT

from bloomberg.com:

Gold futures rose to a five-week high on speculation that central banks in the U.S. and Europe will add to stimulus programs in an effort to spur faltering economies.

European Central Bank President Mario Draghi will hold talks with Bundesbank President Jens Weidmann in the coming days on measures including bond purchases, two central bank officials said. Yesterday, Draghi said policy makers will do whatever is needed to save the euro. The U.S. economy cooled in the second quarter, government data showed today.

"It seems the ECB is pulling out at all stops to protect the euro," William O'Neill, a partner at Logic Advisors in Upper Saddle River, New Jersey, said in a telephone interview. "The GDP numbers provided some support as expectations of some form of easing remain alive."

Gold futures for December delivery rose 0.2 percent to settle at $1,622.70 an ounce at 1:40 p.m. on the Comex in New York. Earlier, the price reached $1,633.30, the highest for a most-active contract since June 19. This week, the metal rose 2.5 percent, the most since June 1.

Fed Chairman Ben S. Bernanke said last week that U.S. policy makers are "looking for ways to address the weakness in the economy should more action be needed to promote a sustained recovery in the labor market."

Bullion surged 70 percent from the end of December 2008 to June 2011 as the Fed kept borrowing costs at a record low and bought $2.3 trillion of debt in two rounds of so-called quantitative easing.

Keep on reading @ bloomberg.com

A Weekend Pass

Posted: 29 Jul 2012 07:39 AM PDT

from tfmetalsreport.com:

The charts are so compelling that I felt I had to update the site today. I've also got a special promo for you some come on in..

First of all, the charts. I was alerted to this development yesterday by this terrific piece of analysis from KWN. Tom Fitzpatrick of Citigroup is a competent technician and his analysis here is spot-on.(http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/7/27_KWN_-_Special_Friday_Gold_%26_Silver_Chart_Mania.html) The metals then closed strongly yesterday and we did, in fact, get bullish outside reversals in both gold and silver. Again, this is not a be-all-end-all indicator of a pending bull rush…but…it's certainly another log for the fire. Note, too, that even on the short-term charts, the metals have broken out of their recent pennants and seem to be setting sights on the horizontal, top-of-range resistance levels of $1640 and $29.

Trader Dan has posted some excellent charts, too. When you have a moment, you should check them out. http://www.traderdannorcini.blogspot.com/2012/07/gold-chart-and-comments.html

Yesterday's CoT was very, very interesting…at least in gold. The silver CoT was lifeless but at least it maintains a very bullish posture. The gold CoT is where the action was but, even there, it comes with a caveat. The survey was taken so close to August contract expiration that it was undoubtedly affected by it. Some of this will come out in the wash next week but, for now, the gold CoT was very bullish. Below is a C&P of my comments written shortly after the report was published at 3:30 yesterday. If you want to see the report yourself, here's a link: http://news.goldseek.com/COT/1343417555.php

Keep on reading @ tfmetalsreport.com

An Absolutely Stunning Development In The Silver Market

Posted: 29 Jul 2012 07:37 AM PDT

from kingworldnews.com:

Today King World News is reporting on an absolutely stunning development, this time in the silver market. Acclaimed commodity trader Dan Norcini told KWN that in the silver market, "… the hedge fund outright short position is the largest position that I've got on my records going back to the beginning of 2007. We're talking about a five and a half year period."

Norcini also noted there would be a huge move in silver, "if they (hedge funds shorts) get caught on the wrong side of that market … because all of those shorts are going to head to the exits at the same time."

Keep on reading @ kingworldnews.com

Little Silver, Big Gold

Posted: 29 Jul 2012 07:32 AM PDT

from goldnews.bullionvault.com:

Platinum has never been so cheap versus the Gold Price. Meaning what…?

PLATINUM is a highly useful metal, writes Adrian Ash at BullionVault. So too is gold.

But where gold's use is primarily social – a store of value and wealth – platinum (from platina, Modern Latin via Spanish for "little silver") is first and foremost an industrial metal. Which isn't helping platinum versus the Gold Price one bit right now.

Little silver was only identified as a precious metal in the mid-18th century. So it lacks the long history of gold's use, which stretches back to the very earliest civilizations. Platinum has always traded however at a steep premium to gold – a 46% premium per ounce in fact in our modern age of global commodity markets, unbacked fiat currency, and fast-growing car ownership.

Hence the problem in today's economic depression. Gold has never before been this expensive in comparison. Because "platinum lacks safe haven status and has limited investment demand," explains Morgan Stanley's commodities team.

Yes, jewelry accounted last year for nearly one-third of global platinum demand. But little of that was store-of-value demand such as gold enjoys. Investment demand remains only a sliver of world off-take. Whereas demand from the glass, medical, chemical and petroleum industries comes on top of a further 38% of demand in 2011 coming from the auto sector. Most notably in Europe, because earlier tax incentives now mean 1-in-3 vehicles on the continent's roads runs on diesel, thus needing a platinum-only catalyst instead of the platinum-rhodium or palladium mix in gasoline engines.

So platinum demand is directly exposed to the Eurozone crisis. So exposed, in fact, that London bullion prices are now nearing mine-production costs around $1400 per ounce. Cue the bullish outlook:

"It is hard to see any exploration or investment in new mines taking place until platinum prices push up well above $1,600/oz," says French investment and bullion bank Natixis. "Already some producers are making cutbacks," notes Nikos Kavalis at RBS, adding that "Current price levels are unsustainable." Dan Smith of Standard Chartered is also bullish, telling Reuters that "High-cost producers are currently losing money on an operating-cost basis, and the pressure on the industry can already be seen."

Keep on reading @ goldnews.bullionvault.com

The Triumph of Politics

Posted: 29 Jul 2012 07:28 AM PDT

from whiskeyandgunpowder.com:

On August 15, 1971, President Richard Nixon declared that the United States would no longer honour its promise to exchange US dollars held by foreign central banks for gold at a fixed price of $35 an ounce. The innocuous term 'Nixon closed the gold window' that is now widely used to describe this act does not quite convey its significance. (Was something to be stopped from going out or from coming in through the window? Can the window be reopened again?)

What Nixon did was cut the last remaining official link between the world's leading reserve currency and gold and thus remove the last constraint on fiat money creation.

Was this a big deal? – It was very big deal. In fact, we are only now beginning to realize the full consequences of it. In fact, the present crisis is nothing but the endgame of this system, or non-system, of this, mankind's latest and so far most ambitious, experiment with unrestricted fiat money. The first truly global paper standard.

Nixon knew that it was big. On TV that day he felt compelled to reassure the American public that this was only temporary and that the purchasing power of the dollar was secure. Forty-one years later we are still on the same system (or non-system), and the dollar has lost 80% of its purchasing power.

This wasn't really a "system", however. No one designed it. It was merely the result of political opportunism. But, the mainstream economists, who weren't even involved in designing this system (or non-system) today tell us that this system is great and that it is to our advantage. We should be grateful for it.

The 80% drop in purchasing power quoted above isn't the whole story. That is only the consumer price index. For the past thirty years, a lot of the newly created money was channeled predominantly not into the markets for consumer goods but into the stock market, the bond market, the real estate market, and again the bond market. This created illusions of wealth. It also created a lot of debt, overstretched banks, a gigantic financial industry, various bubbles, and yet more debt. It did so around the world. And whenever this house of cards looks like it could come crashing down on us – we print more money!

Simple. What could go wrong?

Of course, there was also real economic progress over those forty-one years. Entrepreneurship, trade, innovation, saving, and all that old fashioned stuff that modern, enlightened economists don't talk about any more. But on top of that real prosperity an ever thicker layer of make-believe prosperity accumulated. And our economists have adapted to this new reality – a reality created not by them, or their theories, but simply borne out of cynical political expediency – and become experts in the various techniques of governments to create illusory prosperity and short-term growth spurts. Stimulus. Growth through low interest rates. Growth through more debt. Growth through currency debasement. Growth through fiscal policy. Growth through monetary policy.

Modern economists don't know capitalism. They certainly don't care about it. If the economy grows it is because of good policy, which means low interest rates and stimulus. If the economy doesn't grow, it is because of bad policy, which means interest rates are too high (even if they are zero) or the central bank does not print enough money. Since Nixon 'closed the gold window', we have progressively replaced savings with cheap credit, the market with policy, and entrepreneurs and innovation with the FOMC and the G20.

Keep on reading @ whiskeyandgunpowder.com

Gold: One More Drop

Posted: 29 Jul 2012 06:47 AM PDT

By Avi Gilburt:

First, I want to thank all of you for your kind emails and wishes for my wife's recovery. Unfortunately, due to family needs at this time, I have not been able to publish of late, and I hope to return soon to writing regular posts.

As for gold, until now, I had been expecting a strong rally in the metals. In truth, I had initially expected it to begin in the spring. However, here we are in the summer, and we have not seen the parabolic rally that I have been expecting. Yet, we seem to be slowly "leaking" downwards, which is not the usual manner in which the metals move. However, I am still of the opinion that it will likely begin in the not too distant future.

I had said in numerous articles that if either of the metals breaks down below their December 2011 lows, it would


Complete Story »

Ronald Reagan – Nomination Acceptance Speech of 1980

Posted: 29 Jul 2012 06:00 AM PDT

Fifth in a series. Then governor Ronald W. Reagan's acceptance speech for the republican nomination for president at the republican national convention in July of 1980. 

From a time when there was a clear and unambiguous difference between the two major political parties in the United States, not unlike today.  Listen for the important quote by President Reagan of F.D.R. toward the end of the speech and contrast FDR's words then, in 1932, with the democratic party of today. 

 

A few notable quotes:

"Trust me government" asks that we concentrate our hopes and dreams on one man, that we trust him to do what's best for us.  Well, my view of government places trust not in one person or one party, but in those values that transcend persons and parties. That trust is where it belongs – in the people."

Contnued...

"As your nominee I pledge to you to restore to the federal government the capacity to do the people's work without dominating their lives."

"Government is never more dangerous than when our desire to have it help us blinds us to its great power to harm us."

"The first republican president once said, 'While the people retain their virtue and their vigilance, no administration by extreme of wickedness or folly can seriously injure the government in the short space of four years.' If Mr. Lincoln could see what has happened in the last three and a half years he might hedge a little on that statement."

"High taxes we are told are somehow good for us, as if when government spends out money it isn't inflationary but when we spend it, it is."

On environmental extremism: "The economic prosperity of our people is a fundamental part of our environment."

"Can anyone look at the record of (the Carter) administration and say, well done?"

"We are going to put an end to the notion that the American taxpayer exists to fund the federal government. The federal government exists to serve the American people."

"When we deprive people of what they have earned or take away jobs, we destroy their dignity and undermine their families.  We can't support families unless there are jobs. We can't have jobs unless the people have both money to invest and the faith to invest it."

"We are taxing ourselves into economic exhaustion and stagnation, crushing our ability and incentive to save, invest and produce.  This must stop.  We must halt this fiscal self destruction and restore sanity to our economic system."

"There may be a sailor at the helm of the ship of state, but the ship has no rudder."

"No American should vote until he or she has asked; Is the United States stronger and more respected now than it was three and a half years ago?" 

Source: Reagan Foundation via YouTube
http://www.youtube.com/watch?feature=player_detailpage&list=PL5C86CFFC78F7EF8C&v=IwRvdGkVMx4

20120729-RonaldReagan

Apple, Wynn And Sands: The Chinese Consumer May Be Weakening Fast

Posted: 29 Jul 2012 05:45 AM PDT

By Ranjan Hulugalle:

When you speak to many people who have expertise on the Chinese economy, one of the major issues that comes up is the integrity of the data. Many analysts wonder if the GDP or inflation figures are accurate. They also question the non-performing loans at the banks, and the integrity of the data coming out of state controlled enterprises (which account for much of the economy).

With the Euro-zone entering a recession, and the U.S. barely keeping its head above water, one of the main questions on the minds of investors is the fate of the Chinese economy. Is China going to have a hard or soft landing? Maybe the conclusion is even worse. Maybe the Chinese economy is a house of cards that will collapse much like the U.S. housing bubble. Since the integrity of much of the data is in question, an interesting way to look inside China


Complete Story »

Shortage followup questions

Posted: 29 Jul 2012 05:36 AM PDT

Some good questions from a thread on my shortage interview at silverstackers.com forum, cut and paste below:

Bron

In that interview I was sort of covering the material in this discussion.

The summary text "invest large amounts of capital towards ramping up production" I think got mixed up, what I was saying was WHILE production has been expanded, it is not enough.

When push comes to shove, Depository clients will get preferential supply for collection requests as we have a legal obligation to make delivery whereas we don't have a legal obligation to sell coins to someone off the street, so to speak.

Gino

And yet, even though there were two month delivery lead times, it didn't move the price of silver at all in 2008/09. there was no price spike to reflect the demand pressures in the investment market and the apparently constrained supply. It was very interesting as an investor participating and not at all what one would expect. But then the reason was it wasn't the raw material that was in short supply, only the blanks for coins. Although I recall delays on bars as well.

So is the point here that there may be physical delays, but don't necessarily interpret that as a resource availability issue? But if the price does move, what would it mean? Does the price just come down to the paper markets and the manipulations of it by TPTB?

Bron

The thing about rationing or high premiums is that it takes pressure off the underlying wholesale market. For example if people are paying 40% premiums for silver coins when the normal is 10% premium, then $30 out of every $140 spent is going to retailers/mints as extra profits rather than buying more silver. If mints were able to keep up then of that $140, $130 would be going to buying (or bidding up the price) of silver.

Excess premiums, whether it is in coins or say PSLV, just means less ounces are being bought. That is why I don't think high premiums are anything to celebrate.

The price is driven by both the physical market and paper market, which is more dominant changes over time.

southerncross

Would you not agree tho that paper is the dominant market? Say for example just as a thought exercise that just silver alone was for some unexpected reason deemed only acceptable in it's physical form as a means of trade and that all the phantom paper Silver disappeared overnight due to some sort of black swan event.

People who have an PMDS for example cant just pick up the phone and buy X amount instantly and those sorts with unallocated accounts etc cant just use their phone to "say" they actually own it, they have to physically produce it.

Bron

Certainly paper often has the upper hand, but many desk-based commentators who aren't in the markets don't realise how much physical is also traded. Blogger FOFOA has a theory that since bullion bank unallocated accounts are fractionally backed bullion bankers are particularly concerned when the physical market starts to suck out metal, draining their reserves (which if left unchecked could take too much physical and result in a bullion bank run). His theory is they push the price UP (not down) as that means the same dollars buy LESS ounces, taking pressure off their reserves. I hope this gives one example of how complex the physical vs paper dynamics can be.

Not sure I understand your point about PMDS. If we went to a physical only market then we would only sell to a PMDS client if we could get/had physical silver.

southerncross

Now I know it's a far flung what if and an extreme example, and I am not by any means saying that the Perth Mint itself is selling more Silver on paper than what it physically holds, but there are many examples around the world of paper precious metals magically teleporting from or too certain vaults with nothing more than the push of a keyboard and a few typed lines of evidence to say that they actually exist. Literally millions of ounces that would need a convoy of armoured car's and associated security personnel to transport that don't actually happen in the real physical world.

Bron

It is a common misunderstanding that the ETF allocations involve physical movement. As most of them store their metal in London, all that is happening is that silver already in the vault (which belonged to someone else who sold it to a bullion bank) is just sold to the ETF authorised participant and they just change a computer record saying that bar in the vault now belongs to the ETF AP (who then transfers title to the ETF trust).

southerncross

Q: Would you as a personal investor in precious metals trust anyone else apart from the Perth Mint if you invested solely in paper or unallocated Precious Metals ?

Bron

It all comes down to the custodian. You either trust them or not. If you don't then not even allocated will be safe. Regarding unallocated, I don't think apart from ourselves and Kitco that there are many who explicitly state that their unallocated is 100% backed, and that is really only possible for businesses which have physical as part of their business. If you are buying unallocated from a bank, then very high chance it is being lent in some form as that is what banks do.

southerncross

Sorry Bron two questions actually, And this one go's back to the statement I quoted of yours above. Q: Do you think the paper market is manipulated by able bodied self interested parties? Again I ask this with no reflection on the Perth Mint as they are not a Bank or associated with the rise and fall of the stock market etc just on your statement on the physical and paper market.

Bron

I would not be surprised if the metals markets are manipulated, but as we are not traders in the big paper markets (eg COMEX) we don't have any evidence one way or the other. However I don't believe the metals markets are suppressed, which I distinguish from manipulation (which is short term). Suppressed means the price is kept lower over a number of years. Those who think this way don't appreciate (or is that respect) the power of the physical market, by which I mean to suppress you ultimately have to supply physical to the market and there is only so much above ground in the hands of the central bankers.

Black_Sun

Yes, all metal is NOT held physically at PM... all explained in goldchat.

Bron

To clarify, unallocated is backed by physical in our operations in Perth, but also by some physical in transit and temporarily sitting in overseas warehouses on its way to distributors, and by a bit of unallocated held with bullion banks (which is converted to physical on a regular basis). If you're not comfortable with the unallocated business model then go with allocated. 85% of Depository clients (by ounces) hold unallocated, the rest allocated.

Matthew 26:14

"Bron Suchecki, who's in charge of strategy for the famed Perth Mint, is warning all precious metals investors that the next crisis will lead to heightened precious metals demand so expect shortages and mint rationing. This is exactly what happened in 2008, and the next crisis could very well be worse." Curious statement. In 2008 the ass fell out of silver while there was a supposed physical shortage? Defies logic and economic norms.

Bron

You're confused because you're not using precise terminology. Restated: "In 2008 the ass fell out of silver due to selling by leveraged paper players needing cash to pay for other losses, while there was a physical shortage of RETAIL sized coins and bars." In fact, the leveraged paper selling, because of arbitrage, would have resulted in associated physical wholesale sized silver (ie 1000oz) bars coming into the market. This is why we didn't have any problem getting hold of 1000oz bars out of London during 2008 even while we were maxed out in the factory making coins.

Links 7/29/12

Posted: 29 Jul 2012 03:55 AM PDT

Bloated 'Monster' Washes Up in New York Epoch Times (Chuck L)

AIDS Cure Quest Advances As Cancer Drug Finds Hidden HIV Bloomberg

Outbreak of Ebola in Uganda kills 13 BBC

Thousands expected for latest Japanese nuclear protest AFP

Social Media Bubble: Investors See More Signs That It's Popping Reuters

London 2012 Olympics: Empty seats on the opening day prompts investigation Telegraph

RBS pays more than £25m to businessman David Agar over interest rate swaps Telegraph

23 crucial days for Greece Yanis Varoufakis

Syria: A Turn In Western Media Coverage? Moon of Alabama

Bradley Manning to Testify on 'Unlawful Pretrial Punishment' He Endured Kevin Gosztola Firedoglake

Eagle Scouts Return Their Badges to Stand With LGBT Population Alterner (Dr. Kevin)

There's A Battle Brewing Over The Only Chick-Fil-A In New York City Clusterstock

Yes, It's 2012: Black Couple Denied Wedding in the Predominantly White Church That They Attend Pam Spaulding, Firedoglake

TV Stations Charge 'Super-Gouge' Ad Rates For Super-PACS Bloomberg. Finding it hard to muster much sympathy.

ALEC Rock YouTube (Aquifer via Bill Moyers)

Romney least liked candidate in recent history? Polling numbers say no Guardian. While interesting, the writer seems unaware of the reliability of the various pollsters. Gallup is the gold standard and it comes up with poor results for Romney. But the flip side is it's not hard to see Obama as not attractive either.

The Shredder Campaign Charles Pierce, Esquire (Chuck L)

Mitt Romney's insults and mistakes while at the London Olympics aren't gaffes as much as a fair representation of his worldview Slate (Chuck L)

Barack Obama, Changeling Truthout (Richard R)

George Farah on Presidential Debates Bill Moyers (Aquifer). Some history.

The real story behind RealtyTrac's foreclosure data Phoenix Business Journal (Matt Weidner)

The Great Trade Quantities Collapse VoxEU

GM Ramps Up Risky Subprime Auto Loans To Drive Sales Investors Business Daily. Scott: "As General Motors goes, so goes the nation."

Fed Governor Speaks Out For Stronger Rules Simon Johnson

Antidote du jour:


Gold Chart

Posted: 29 Jul 2012 03:45 AM PDT

Weekly Spot Gold On Tuesday, 7-17-12 At 1pm NYC Time

Note the strong support for gold just above $1,550. That support channel goes all the way back into the middle of 2011. Normally, on the cycles and time, precious metals begin the fall rallies at the end of July, or some time in August. Check previous years to see the take-off rally points and prices. With all the excitement coming in the 4th quarter of 2012, we could easily see a double top at $1,923 and most probably a run to the 50-day average at $1,679. Our minimum fall high for gold remains at $1,736.50 on the technicals. The probability of a higher price is very strong despite manipulation by influential, larger trading banks, funds, and central bankers.

The RSI Relative Strength Index (Top Box) is bottom crawling sideways near lows. Price appears firmly supported at $1,585 today. Volume is low but we can see a new escalation by the end of July. Note the MACD moving averages (lower box) are nearing a base and should cross-over to rise in a few more days as the vertical blue histogram bars edge higher toward positive. Gradual trends are good signals for new direction.


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Links for 2012-07-28 [del.icio.us]

Posted: 29 Jul 2012 12:00 AM PDT

Federal Reserve Follies : what really started the Great Depression

Posted: 28 Jul 2012 10:00 PM PDT

Gold University

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