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- FX Positioning And Outlook: No Sign Turn Is At Hand
- What Can Gold Do For You?
- McDonald's: Cultural Adaptability To Bring Continued Success
- 5 Big Sells By George Soros
- 3 Major Trends Heading Into The End Of 2012
- Gold, Silver, Natural Gas Sitting In Deep Contango
- What voting can look like
- Links for 2012-09-08 [del.icio.us]
- Update On $80 Million in Seized Gold Coins: Judge Rules They “Belong to the U.S. Government”
- Are We Seeing A Change In The Character of Markets?
- Technicals: Charting the Gold to Silver Ratio
- James Dines: The Super Major Bull Market in Gold & Silver
- Blazer Metals Report: Silver & Gold Explode
- Greg: Confiscation of Gold, Silver, 401K's
- AIH: Silver Warning, Raid Ahead?
- Matthew Stein: Being Prepared
- Rob Kirby: A Very Dire Outlook
- Bob Chapman On The Tungsten Gold Bars
- Got Gold Report - Euro Close to All Time Low Purchasing Power Relative to Gold
- Silver Steals the Spotlight from Gold: But Watch Out for Silver's Volatility
| FX Positioning And Outlook: No Sign Turn Is At Hand Posted: 09 Sep 2012 09:01 AM PDT By Marc Chandler: Key policy makers are preparing new efforts to address the deterioration of financial and economic conditions. This is seen reducing tail risks, which allowed the rally in risk assets to be extended, and undermined the dollar. China is providing new fiscal support. The ECB announced its new Outright Market Transactions. The disappointing US employment figures increases the risk that the FOMC will go beyond changing its guidance and offer a balance sheet response. In the first eight months of the year, the US economy has grown an average of 150k private sector jobs a month. During the same period in 2011, the monthly average job growth was 10% higher. Perceptions of reduced tail risks, which in turn allowed a further extension of the recent moves that have lifted equity markets, rallied the European peripheral bonds, and sent the US dollar lower. There are many who are now talking as if Complete Story » |
| Posted: 09 Sep 2012 07:24 AM PDT By As a young investor, I am always researching and tweaking my portfolio to find the right combination of investments. Gold has been a major missing link to it. I have been following the precious metal for a long time but just haven't ever bought any. I decided to do some more due diligence and see if it was the right time to add some gold to my portfolio. Sure, it may seem to be a simple investment/hedge/protection for any portfolio, but I have always found it to be an interesting investment so I wanted to go more in depth. History According to the National Mining Association's history of gold, the first recorded discovery of gold in the United States was in 1799 in North Carolina. Looking at the timeline, I learned some interesting new things about gold; its ownership was banned in the US for a period (before my time), Complete Story » |
| McDonald's: Cultural Adaptability To Bring Continued Success Posted: 09 Sep 2012 06:08 AM PDT By David Zanoni: The McDonald's (MCD) of the United States is much different than the McDonald's in Japan, China, and India. The company has committed to understanding the preferred foods in specific cultures. It has adapted the menu to include foods that are popular in specific countries. This has allowed McDonald's to be successful in international market growth. According to the company's 10-Q report for Q2 2012, McDonald's derives 67.6% of its business from outside the U.S. The long-term effect of the falling value of the dollar is paramount for the company to ensure its success outside the United States. In China, McDonald's features an all chicken burger using thigh meat as opposed to the standard breast meat. The thigh meat is preferred in China over breast meat. There is also a Chinese New Year meal which includes the Grilled Chicken Burger, curly fries, and a horoscope of the 12 animals of Chinese Complete Story » |
| Posted: 09 Sep 2012 06:01 AM PDT By Osman Gulseven: George Soros is the Hungarian-American business magnate known for being "the man who broke the Bank of England" in a single trade in 1992. Soros' Quantum Fund is famous for its annual returns of 30% that spanned 3 decades up to 2000. Soros is a macro manager with a truly global portfolio. From 1973 to 2010, the Soros Fund Management was reported to have made $32 billion in profits. As of 2011, Soros is reported to have net worth of $14.5 billion. The billionaire is also known for his being a philanthropist and an activist. The Soros Fund Management sold all its holdings in over a hundred stocks this second quarter based on data from Whalewisdom.com. Interestingly, Soros bought more gold and let go of a huge number of financial stocks including JPMorgan Chase (JPM), Capital One (COF), and Wells Fargo (WFC) among others. Soros also let go of his Complete Story » |
| 3 Major Trends Heading Into The End Of 2012 Posted: 09 Sep 2012 05:02 AM PDT By Allan Harris: This past week saw an acceleration of trends that have been churning throughout the summer. Market indices, precious metals, commodities as well as financial and technology sectors all were up strongly in the four trading sessions post-Labor Day. Thursday was a blockbuster day in the markets. Why? The FED; ECB; QE3; Obama; Romney; Bernanke; unemployment; inflation; deflation; cycles; astrology; flipping a coin.....we should never have to explain the "why" of any market action, least of all price movement in the direction of the dominant trend. Once established and identified, price moves don't have to be steep, impulsive or perfect to be profitable, they only need be in the direction of the prevailing trend.
Complete Story » |
| Gold, Silver, Natural Gas Sitting In Deep Contango Posted: 09 Sep 2012 03:14 AM PDT By CommodityHQ: by Jared Cummans Below, we outline three commodities currently exhibiting contango to help keep investors up to date on the current futures environment GoldGold futures are among the most popularly traded in the world, as investors have adopted this precious metal as a speculative instrument. Currently, gold futures are sitting in Complete Story » |
| Posted: 09 Sep 2012 12:00 AM PDT By lambert strether Last week in Quebec, they held a provincial election. Quebec Liberal Charest lost and claims to have left politics, and Parti Quebecois Pauline Marois won, and formed a minority government. But although the election may turn out to be important to the fortunes of the carré rouge movement, it's not the subject of this post. Instead, I want to talk about the dry topic of voting systems. You see, in Canada, they use hand-marked paper ballots, hand counted in public. Among other things, that process means that we can actually be sure who won. And if the elections of 2000 and 2008 are any guide, and the race stays as close as the pollsters sat it is, we might, on Wednesday, November 7, not be sure who won. Hand marked, hand counted paper ballots are "the gold standard* of democracy." Brad Friedman of Brad Blog writes:
Here are some Montreal bloggers discussing how their paper-based hand-counted system works after last week's vote was taken. They seem to be voting geeks, but maybe that's a consequence of a minority (Anglos) being very conscious of the effects that an election can have. I like geekery, so I'm going to quote the detail:
A "scrutineer" observes the counting of ballot papers, in order to check that election rules are followed.
Now comes the really keen geekery where they explain how the keep the ballots anonymous (your vote secret) while still being able to count them and avoid fraud!
It could be that more of a "public" is needed than "two people." Perhaps everthing should be videotaped. Or perhaps a lot more people could be involved, so that counting ballots turned into a convivial, commmunity-building exercise. So, summing up:
We have an election coming up, and hence potential for wrongly counted votes, or even election fraud. It's not only the Presidential election that matters, but all the Congressional races, the state races, and the local elections, including referenda, recalls, and charter changes. Your jurisdiction is going to be counting all those elections in the same way, whether through touch-screen voting, optical scanners, mechanical devices, or even still on paper (don't change, though maybe you should consider the Canadian "counterfoil" system). So, if your jurisdiction is thinking about buying electronic voting machine, you might consider using the information in this post as a starting point to dissuade them. And if your jurisdiction already uses e-voting, perhaps you can roll back that decision. If you or your committee don't have the budget to travel to Quebec to observe a working system, here's a good book on how paper-based voting is done. NOTE * Sorry for the metaphor. NOTE The referendum on Quebec sovereignty in 1995 was the exception that proves the rule:
Yes, even when hand marked, hand counted paper ballots are counted in public, humans can attempt to game the system. In Quebec, however, that the voting system was robust enough to withstand the attack. (If Mulcair was correct that the Parti Quebecois was out to steal the referendum to win sovereignty, we should also assume they gave it their best shot. Secessionists don't win by taking half measures.) Further, the record was clear, because the paper ballots were the vote, and not a (software-driven, therefore vulnerable) paper trail of the vote, so if the results of the election bad been contested, the evidence would have been solid.
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| Links for 2012-09-08 [del.icio.us] Posted: 09 Sep 2012 12:00 AM PDT
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| Update On $80 Million in Seized Gold Coins: Judge Rules They “Belong to the U.S. Government” Posted: 08 Sep 2012 11:00 PM PDT |
| Are We Seeing A Change In The Character of Markets? Posted: 08 Sep 2012 10:56 PM PDT Share/SaveThe following table provides last week's returns on a variety of assets: Close Gain/Loss On Week Gold $1736.50 +$36.20 +2.64% Silver $33.65 +$1.01 +6.00% XAU 179.28 +3.17% +5.53% HUI 483.38 +2.77% +5.45% GDM 1391.77 +2.65% +5.16% JSE Gold 2372.63 +50.99 +7.00% USD 80.18 -0.91 -1.27% Euro 128.10 +1.78 +1.80% Yen 127.79 +0.99 +0.02% Oil |
| Technicals: Charting the Gold to Silver Ratio Posted: 08 Sep 2012 05:53 PM PDT |
| James Dines: The Super Major Bull Market in Gold & Silver Posted: 08 Sep 2012 05:52 PM PDT
Click Here to listen to the interview: James Dines: Founder of The Dines Letter & Acclaimed Author – He is legendary for his bull market predictions including correct forecasts that were in complete contradiction to the rest of the financial community. In an industry where it takes courage and conviction to go against the crowd, Mr. Dines defiantly warned investors of the "invisible crash" that would bring down stocks in 1966, the unexpected gold boom of 1974, the Internet revolution of 1996, the market top in 2000, the "Coming Uranium Boom" and more. |
| Blazer Metals Report: Silver & Gold Explode Posted: 08 Sep 2012 05:47 PM PDT |
| Greg: Confiscation of Gold, Silver, 401K's Posted: 08 Sep 2012 05:45 PM PDT |
| AIH: Silver Warning, Raid Ahead? Posted: 08 Sep 2012 05:43 PM PDT |
| Posted: 08 Sep 2012 05:33 PM PDT During the height of the 'goldilocks economy' of the mid-1990s, Mat Stein wrote When Technology Fails, a master compendium of do-it-yourself preparation skills. Fast-forward to today's Great Recession, drought-stricken, $100+ oil, post-Katrina, post-Fukushima world — many are realizing the prudence of taking basic precautionary steps to reduce their vulnerability to whatever the future may bring. from chrismartensondotcom: Whether you're concerned about the fallout from a breakdown of today's weakened global economy, or simply want to be better able to deal with the aftermath of a natural disaster if you live in an earthquake/hurricane/flood/wildfire/tornado-prone part of the world — the personal resiliency measures Mat recommends make sense for almost everyone to consider. In this interview, Mat begins with his universal advice for developing basic preparedness — a 72-hour kit covering the basics needs for living, an emergency plan for your family, lining up local and out-of-town contacts, etc — and discusses specifics on what gear to procure and steps to take in unexpected emergencies. For more protracted periods without access to central services, many more situations are covered in his books and at his website. It's important to note that Mat isn't a doomer fanning fears of a zombie apocalypse (though those concened about social collapse will find much utility in his work). Like Chris, he believes that our current fossil fuel-driven, hyper-consumptive, and over-leveraged way of life is not sustainable. So before the unsustainable, by definition, stops – it's best to invest now in developing the skills and habits that will serve us in this new future; one sure to place a higher premium on self-reliance. ~TVR |
| Rob Kirby: A Very Dire Outlook Posted: 08 Sep 2012 05:26 PM PDT Rob Kirby of Kirby Analytics joins SGT to explain the depth and breadth of the MASSIVE LIBOR rigging crimes, which started in 07-08. Rob says Barclay's involvement is merely the tip of the iceberg, and that the crimes of LIBOR began at the U.S. Treasury and the Exchange Stabilization Fund. from sgtbull07: In Part 2 of the conversation, Rob Kirby describes the very dire outlook for America when the dollar is no longer the world's reserve currency. Rob also expresses his fear for America's citizens given the expanding police state. Rob says he will not step foot in the United States again, at least not until Liberty is recovered. |
| Bob Chapman On The Tungsten Gold Bars Posted: 08 Sep 2012 03:25 PM PDT Bob Chapman On The Tungsten Gold Bars Bob Chapman returns on the Tungsten... [[ This is a content summary only. Visit my blog http://www.bobchapman.blogspot.com for the full Story ]] |
| Got Gold Report - Euro Close to All Time Low Purchasing Power Relative to Gold Posted: 08 Sep 2012 02:18 PM PDT HOUSTON – Gold is breaking out of long period consolidations. Lots of them. For example, gold in terms of Euros is getting close to its all time high. The Gold:Euro exchange rate is challenging its February turning high and appears to be breaking out of a wide triangular consolidation as evidenced by the graph below which compares the gold price to the Euro Index (as a proxy for the Euro itself).
Breakouts (or breakdowns) from long-period consolidations indicate that the myriad conditions which conspired to contain the trading within the technical pattern are now changing. Breakouts are a signal that money flow has turned positive for the issue, meaning more liquidity is flowing into it than out of it. Triangular consolidations are often continuation patterns that resolve in the direction of the prevailing trend sooner or later. Note the label "Euro Crisis 2011-2012?" The question mark is not whether there has been a crisis for the period; that is self-evident. It is there to denote our skepticism that the European crisis ends this year. With European reliance on socialist central planning, technocrats and anti-productive, highly producer-discouraging tax policies, we seriously wonder whether the crisis on 'The Continent' will end this decade. For contrast, below is the same chart using the Canadian Dollar Index as a proxy for the Loonie. The smaller, but better-managed (so far) Canadian Dollar reflects market perceptions that the government in Ottawa has been more responsible and somewhat less profligate than their neighbors to the immediate south. Thus, the Canuck buck is farther from challenging its purchasing power lows (gold purchasing power highs) than the Euro, but clearly it too is breaking out of a consolidation. Clearly gold is once again gaining purchasing power in most or all fiat currencies. The charts above are irrefutable proof of it. Probably no one believes that is just a random effect, or a movement on the market's whim. The very powerful consolidation breakouts are answering something the market has been anticipating. Put simply, the collective market has been anticipating that governments would attempt to "print their way out of a giant debt hole." We can point to one trigger across 'the pond,' with the European Central Bank announcing its intention to do "unlimited bond buying" for a 3-year period, ushering in a new round of fiat money printing. Other catalysts include less than good economic data here in the U.S., the U.S. presidential election now just two months away with the U.S. headline unemployment rate still over 8% and the incumbent's chances for reelection flagging ... along with statements by the Federal Reserve that poor U.S. jobs performance is of "grave concern." Those and similar signals are all hinting that the Fed intends to do additional accommodative monetary policy action (more Q.E.) soon, perhaps in their September gathering. The Federal Open Market Committee (FOMC) statement from that meeting is expected September 13, one day after the German Constitutional Court rules on the constitutionality of the proposed monetary constructs of the European central planners. The consensus is that the German court will find a way to throw the Maastricht Treaty constrictions and sound money rules that induced inflation-paranoid Germany to sign on in the first place under a double-decker bus, enabling the elites in Brussels to, as ECB high priest Mario Draghi put it, "do whatever it takes to preserve the Euro." Our own opinion is that if the German court does find a way to thread the rule needle to allow ECB bond buying – in any form – it is akin to our own U.S. Supreme Court stretching and contorting it's own role under Chief Justice Roberts to find the only way that 'Obamacare' could be ruled constitutional. We can only guess that such a ruling would also sow the seeds of mass discontent in Germany just as the Robert's 5-4 majority opinion has here. Add to that increasing expectations of monetary stimulus in China despite a change in government to occur shortly, and witness the collective market attempting to price it all in, in advance – in the form of breakouts by gold to consolidation patterns aplenty. Race to Debase Currency debasement (increasing the amount of money – fiat currency - out of nothing in order to buy government debt is one example), is "bullish" for gold (and silver) as investors seek to protect wealth and preserve purchasing power. At the same time, governments seek to diversify their reserves out of deteriorating fiat currencies and into other, tangible assets, including gold. The best evidence of that has been central banks becoming net buyers of gold at a 500-plus tonne per year pace lately and heavier than ever imports of gold through Hong Kong into China. (The amounts are large enough to suggest that the government of China is 'secretly' increasing their gold reserves, to be disclosed at some future date when Beijing believes it will be to their advantage to disclose it.) As a side point, we note once again that it is gold that stands the test of time as trusted universal money. Fiat currency exchange rates to gold are merely the markets attempting to price paper currencies more in line with their overly-diluted supply relative to the naturally limited supply of the yellow metal. Soon the same will be true for silver in our opinion. It already is to a small degree. Note that the Euro (represented by the first chart), which has been in crisis mode for the better part of a year and a half, is the closest of the three currencies to reaching a new low in purchasing power relative to gold (a new high in gold purchasing power relative to the common European currency). The chart below is a more intuitive representation of the evaporating purchasing power of the Euro. It shows the acceleration of the Euro's loss of purchasing power since the 2005 breakout of gold in all fiat currencies – reflecting the market's realization that politicians were no longer even pretending to keep a lid on money printing. The fact that it has taught three generations of people to expect more than is actually sustainably possible from government; the fact that it has doomed a large fraction of the population to a new kind of social slavery and government dependence is just not relevant to the short-sighted, have-to-get-reelected-to-retain-power pols - yet. Without high price-inflation and its attendant social chaos showing up to give them away (as it did in the 1970s), why should the politicians even bother to change their tax, borrow and spend to get elected stripes? With only a few courageous exceptions in Congress, the American people have continued to elect the pols who promised them more and more government goodies – no matter the consequences. Instead of voting for good government leadership, the American people have collectively fallen for the Big Lie – that more and more government and less of a free market is the answer to all their ills. As H.L. Mencken warned, they have gotten exactly what they asked for "good and hard." Price inflation is evident to just about anyone who shops, eats or uses energy (just about everyone). But it is tame according to government statistics – so far. But that's where gold comes in and that's partly why the government and central planners ridicule and manipulate gold where and when they can – where and when the market will let them. Gold is a forward looking barometer. It reflects the monetary inflation (debasement and dilution of currencies) that has already occurred, with a lag. Gold predicts the coming inevitable price inflation that always follows monetary inflation sooner or later. In 2002 gold finally started answering the monetary inflation that governments all over the world racked up in the 1980s and 1990s as it accelerated right after 9-11 (2001). Since 2005 monetary inflation has gotten much worse and the world's inflation barometer, gold, has picked up the pace of its reflection of it. When the global supply of paper, electronic and digital currency explodes higher there is much, much more of the paper currency to be divided into a relatively finite amount of gold. In truth the amount of paper currency is growing at a much faster rate than the 1% to 2% per year of gold that can be added through new mining and production. The result of politicians' and central planners' profligacy has been that it takes more and more of the easily "printed" paper and binary chits to "buy" an ounce of gold. Hope for Change (But Prepare for More of the Same) With the focus likely to turn back to the extremely high and rapidly rising accumulated national debt in the U.S., now more than $16 trillion, we cannot be surprised to see the Gold:USD ratio (third chart above) playing a game of "catch up" to the Euro in terms of new lows in dollar buying power (highs in the USD price of gold), especially if the Federal Reserve announces more Q.E. in its next FOMC meeting just ahead on September 13. If the Fed disappoints or throws the gold market a curveball, it could cause a short term pullback in gold, but we think it is important to remember that the currency debasement underway is not just USD-centric. The 'race to debase' involves multiple sovereign contestants this time, similar to the 2005 period which opened the gold bull market floodgates. That 2005 event was an important, conclusive signal that our global experiment with under-backed fiat paper currency – where not even one official currency was backed by gold - has entered the terminal phase. We believe it is helpful to view the gold market through a longer term, monthly lens. Doing so eliminates some of the technical "noise" and allows major, longer-term secular trends to show clearly. For the last year gold has been consolidating its September, 2011 Eurozone-crisis-inspired thrust to $1,923, finding overwhelming support near $1,525 after a roughly 20% correction. Gold closed the year 2011 at $1,564.80 on the Cash Market. It is "up 11%" since then closing Friday, September 7, at $1,737.60. Well, actually, we should just say it now takes about 173 more paper dollars to exchange watered down greenbacks for real money – thanks to the U.S. Congress' lack of adult supervision and their total disrespect for what our currency used to be. As our friend Rick Rule says, the U.S. Congress has become a lair of counterfeiters. One thing, and perhaps the only thing that will stop them is a full blown currency crisis, in our own opinion. The breakout of gold in all currencies in 2005 was a sign that Big Smart Money all over the world began to accept that a currency crisis is coming. The most recent breakout of wide consolidation formations on technical charts (instead of the consolidations breaking down) could be signaling that we have entered another accelerated phase of currency confidence destruction. It also very well could be a sign we are that much closer to when the central planners can no longer control the inflationary forces they have taxed, borrowed, bought and paid for on our behalf. The good news is that at least today the massive government debt, the gigantic trillion-dollar-plus deficits, the runaway government spending, the crippling, job killing over-regulation, confiscatory taxation and the U.S. Federal Government erosion of our freedom are all now in the public debate (and much higher on the political priority totem pole than they used to be). It is a long overdue debate in our opinion. Believe it or not, that is one of the longer-term positive signs we take some comfort in. Heck, gold even made an appearance as a plank in the GOP platform for the first time since the 1980s. Even if it is only to form a commission to study the feasibility of returning the dollar to a gold standard, it is a triumph of Congressman Ron Paul who has been a lonely, courageous voice in the Washington political wilderness for sound money. That it shows up now is also a klaxon sounding to all of us that gold has repaired a lot of the psychological damage that occurred to it following its mania-blow-off top, its collapse in January, 1980 and the 20-year bear market that followed. The long-term positive signs include gold's acceptance as cash-equivalent collateral in multiple venues and perhaps even on bank balance sheets as a tier-1 asset beginning this coming January. A new gold standard may or may not be adopted in the near future, but just as it has for more than four millennia, gold is reasserting its historic role as money of the first and last resort globally, regardless of what the central planners say or think about it – just as we have been saying it would since 1999. Until the elimination of the income tax on capital gains for gold and silver (which is actually a tax on dollar depreciation), neither gold nor silver can be considered as true currencies, but perhaps that (elimination of the income tax on gold and silver) is also something we can look forward to if we choose well in November. Senators Rand Paul (R-Ky), Jim DeMint (R-SC) and Mike Lee (R-UT) as well as other real leaders in Congress have already proposed such a measure (Sound Money Promotion Act), so it's not at all farfetched to suggest it. Consider how arrogant and evil it is that the politicians who write the tax laws can destroy the value of our currency and then collect a tax on the one "currency" that appreciates on account of their bad stewardship. Politicians first ruin the money we are forced, at the point of a gun through legal tender laws to use, and then charge all of us a high tax because of it. There ought to be a special, very acrid, sulfurous, extra hot place in Hell for those pols… We need to show the "good guys" our moral and financial support – to let them know they are on the right path – right now, while they can still benefit from our support. We'll leave it there for now, except to say: Stay informed and vote responsibly. |
| Silver Steals the Spotlight from Gold: But Watch Out for Silver's Volatility Posted: 08 Sep 2012 06:38 AM PDT ¤ Yesterday in Gold and SilverGold got sold off about ten bucks during the morning trading session in the Far East. But the bottom was in by 1:00 p.m. Hong Kong time...and the gold price crawled higher from there until the jobs numbers were released at 8:30 a.m. in New York. The rest, as they say, is history. Gold blasted thirty dollars higher in about fifteen minutes...and this had all the hallmarks of a short-covering rally. Once that was done, the gold price worked its way higher from there until it ran out of gas...or into a not-for-profit seller...about ten minutes before London closed for the weekend. From there it more or less traded sideways into the 5:15 p.m. Eastern close. Gold finished the Friday trading session at $1,735.50 spot up $34.20 spot. Volume was an absolutely gargantuan 230,000 contracts.
The silver chart looks the same as the gold chart, so I'll spare you the play-by-play on that. Silver's low tick [under $32.00 spot] came during the Hong Kong lunch hour...and the high tick [$33.80 spot] came shortly before the Comex close in New York. Silver closed up 98 cents at $33.69 spot...but had an intraday move of 5.5%. Volume was way up there at 57,000 contracts.
The dollar index opened at 81.12...and began to slide lower starting at the open of London trading. The real decline began at 8:30 a.m. in New York...and by 10:40 a.m. most of the decline was in...and the dollar more or less traded sideways into the close. The dollar index finished the Friday trading session at 80.17...down 96 basis points, or 1.23%. Gold and silver prices were almost the inverse of the move in the dollar index...but to say that there was an exact relationship between the two is a bit of a stretch.
The gold stocks gapped higher at the open...moved a bit higher from there...and only sold off a hair into the close. The HUI finished up 2.77%.
Despite the big move in silver yesterday, the stocks didn't do as well as one would expect...and a few actually finished down on the day here in Canada, with Silver Standard Resources being the most prominent...although a few junior producers put in a first-class showing. But, overall, I was underwhelmed. I felt the same with Thursday's silver stock price action as well. But, having said all that, Nick Laird's Silver Sentiment Index closed up 2.99%.
(Click on image to enlarge) The CME's Daily Delivery Report showed that 23 gold and 3 silver contracts were posted for delivery on Tuesday. Nothing to see here. For the second day in a row, there were no reported changes in either GLD or SLV. One can only imagine just how much metal is owed to both these ETFs...especially SLV. I'm sure that the authorized participants were forced to short the shares again both Thursday and yesterday. In an e-mail from Nick Laird in the wee hours of this morning, he informed me that Sprott did an offering on their Physical Gold Trust...and added 172,270 troy ounces of gold to it yesterday...along with another 89,848 troy ounces of silver to PSLV. I have more on Sprott's gold offering in the 'Critical Reads' section further down. The U.S. Mint had a sales report yesterday. They sold 4,000 ounces of gold eagles...1,000 one-ounce 24K gold buffaloes...and 304,000 silver eagles. For the first four business days of September, the mint has sold 10,500 ounces of gold eagles...1,500 one-ounce 24K gold buffaloes...and 679,000 silver eagles. The silver/gold ratio based on these sales is just a bit under 57 to 1. It was a rather quiet day over at the Comex-approved depositories on Thursday. They reported receiving 600,848 troy ounces of silver...and shipped a smallish 30,599 ounces of the stuff out the door. The link to that activity is here. Here's a rather interesting chart that Nick Laird sent me early this morning...and the chart title says it all. The 'click to enlarge' feature comes in handy here.
(Click on image to enlarge) For the second week in a row, the Commitment of Traders Report was not happy reading. The Commercial net short position increased by another 6,346 contracts, or 31.7 million ounces. Ted Butler said that JPMorgan went short an additional 4,000 contracts...and the raptors sold another 1,000 long positions...and the rest of the increase was spread related. The Commercial net short position now stands at 224.6 million ounces. The 'big 4' shorts in the Commercial category are short 210.9 million ounces of silver...and the '5 through 8' big shorts add another 40.6 million ounces. In total, the 'Big 8' are short 251.5 million ounces of silver. On a net basis, the 'big 4' are short 43.0% of the entire Comex futures market...and the '5 through 8' add another 8.3 percentage points to that total. Adding it up, eight traders are short 51.3% of the entire Comex futures market in silver. Ted said that JPMorgan's short position is now 26,000 contracts [130 million ounces] at a minimum...and that represents 26.3% of the entire Comex futures market in silver. Ted was incensed...and you should be as well, dear reader. One trader holding such a position is outrageous beyond belief. The CFTC and CME should be doing the perp walk for this...along with Jamie Dimon at JPMorgan. In gold, the Commercial net short position increased another chunky 15,762 contracts, or 1.56 million ounces. Ted Butler said that all of the increase was the 'Big 4' traders going short against all comers. The Commercial net short position now sits at 21.94 million ounces. The 'big 4' traders are short 11.51 million ounces of gold...and the '5 through 8' traders are short an additional 5.29 million ounces. The 'big 8' are short 16.8 million ounces of gold, or 76.6% of the Commercial net short position. On a net basis, once you subtract the market-neutral spread trades out of the Non-Commercial category, the 'big 4' are short 27.7% of the entire Comex futures market in gold...and the '5 through 8' are short an additional 12.7 percentage points. Straight addition shows that the 'Big 8' are short 40.4% of the entire Comex futures market in gold. Without doubt, the situation has deteriorated significantly once you consider the price action during the Friday trading session in both silver and gold. Here's Nick Laird's "Days of World Production to Cover Short Contracts". Over two thirds of the red bar in silver is JPMorgan's short position. At 26,000 Comex futures contracts...130 million ounces...that's about 65 days of world silver production. The tiny difference between the red and green bar in silver, is the short position of the '5 through 8' largest traders. It's easy to see that the bulk of the short position in silver is held by only four traders...and almost all of that is held by JPMorgan.
(Click on image to enlarge) It should come as no surprise, that the September Bank Participation Report, which is derived from the same data set as yesterday's Commitment of Traders Report, was pretty ugly as well. During the prior month, the 4 U.S. banks that hold Comex futures contracts in the silver market, increased their short position by 8,295 Comex futures contracts...and I'm guessing that most of that amount would have been JPMorgan. The BPR states that these four U.S. banks are now net short 28,760 Comex silver contracts...29.3% of the entire Comex futures market. Don't forget that Ted figures that JPMorgan is short 26,000 Comex silver contracts on its own, so that doesn't leave too many short positions left to be divided up between the other three U.S. banks in this category, now does it? Reader E.W.F...who sends me a complete set of COT charts based on the Disaggregated Commitment of Traders Report made the following comment..."The U.S. bank net short position in silver hasn't been this large since 11/2/2010, the day before QE2 was announced." The 13 non-U.S. banks that hold Comex futures positions in the silver market were net long 828 Comex futures contracts in silver in the August report, but in the September report, they now are net short 2,801 contracts...a swing of 3,629 contracts in one month, but only 215 Comex contracts per bank on average, which is a rounding error in the grand scheme of things...especially when JPM is short 26,000 Comex silver contracts on its own. So, in one month, the world's banks have increased their short position in the Comex silver futures market by 11,924 contracts...or 59.6 million ounces of silver. But it's still a "Made in the U.S.A. by JPMorgan" silver price management scheme from top to bottom. In gold the situation is just about as egregious. The 4 U.S. banks that hold Comex futures contracts are now net short 84,583 contracts, or 8.46 million ounces...an increase of 26,894 contracts [2.69 million ounces] from the August Bank Participation Report. The 20 non-U.S. banks are short 53,434 Comex contracts in gold...5.34 million ounces, an increase of 12,861 contracts [1.29 million ounces] since the August BPR. On a net basis, the 4 U.S. banks are short 20.3% of the entire Comex futures market...and the 20 non-U.S. banks are short 12.8%...making the grand total 33.1% of the entire Comex futures market in gold. The short positions in gold are much more spread out between all the world's banks...but in silver, it's all U.S.A...and virtually all JPMorgan. Reader Scott Pluschau has posted commentary over at his Internet site headlined "Bull Pennant" forms as the "Triangle" target gets nailed in Gold...and the link is here. With some ruthless editing on my part, I managed to keep the number of stories down to a reasonable level, so I hope you have the time to at least skim them all over what's left of the weekend. All we can hope for is that we've covered all the bases in our own personal efforts to protect ourselves from what lies ahead. Sprott Physical Gold Trust has offering of US$341,320,000. Jeff Clark: What to Do When – Not If – Inflation Gets Out of Hand. Fractal Analysis: Huge dollar devaluation will drive gold much higher. ¤ Critical ReadsSubscribeJobs Report: Men See Lowest Participation Rate on RecordThe monthly U.S. jobs report generated its usual plethora of data, much of it discouraging. Fewer jobs than expected were created in August, and the welcome decline in the unemployment rate has to be significantly tempered by its link to the 368,000 people who departed the counted work force. Leading the pack of the woeful were the numbers on the labor force participation rate. There are a couple of reasons for this view. One, you should pay attention when data are either at the lowest or the highest level in years. In this case, the lowest. More important, a declining percentage of people in the work force means long-term problems. Too many people discouraged, with atrophying skills. Bad news for them and their families, economically and psychologically. Bad news for the overall economy that loses productive capacity and willing and able consumers. Bad news for the overall spirit and optimism of pretty much everyone. This commentary showed up as a blog posted on The Wall Street Journal website yesterday just before lunch in New York. I thank Ulrike Marx for providing today's first story...and the link is here.  Investors yank $3.7 billion out of stocksThe move out of the U.S. stock market continued through the final week of summer, as investors remained stuck in a rut and refrained from making any big moves ahead of Federal Reserve chairman Ben Bernanke's big speech in Jackson Hole. In fact, investors pulled another $3.7 billion from U.S. stock market mutual funds during the week ended Aug. 31, according to the Investment Company Institute, bringing the 2012 outflow total to more than $76 billion. By comparison, those funds lost in the neighborhood of $70 billion during the first eight months of 2011, and just $52 billion during the first eight months of 2010. This story was posted over at the money.cnn.com Internet site on Thursday...and I borrowed it from yesterday's edition of the King Report. The link is here.  ECB Collateral Moves Reopen 'Soup Kitchen' for Struggling BanksThe European Central Bank's decision to relax bank funding rules to mirror conditions last seen after Lehman Brothers Holdings Inc.'s collapse signals hard times for lenders. "The soup kitchen for impoverished euro-zone banks is re- opening," said Simon Maughan, a strategist at Olivetree Securities Ltd. in London. The easing shows "some peripheral banks have run out of collateral and so we need to widen the bounds of acceptability to accommodate them." ECB President Mario Draghi said yesterday the central bank will lend against assets in dollars, pounds and Japanese yen, as well as in euros, reopening a program that ran for two years following the September 2008 bankruptcy of the U.S. investment bank. The ECB also eased borrowing against government-issued or guaranteed assets by dropping rating requirements. Kicking the can down the road...until the currency itself is worthless. That fact is showing up plainly in the precious metals market at the moment. This Bloomberg story, filed from London early yesterday morning Eastern time, was sent to me by reader Ulrike Marx...and the link is here.  The World from Berlin: 'The ECB Is Doing Governments' Dirty Work'The ECB's announcement on Thursday that it is prepared to make unlimited bond purchases in order to lower borrowing costs for countries in crisis could mark a turning point in the euro crisis. German commentators, however, criticize the bank for becoming a hostage to politics. But the criticism of the ECB's course continued in Germany. Bundesbank President Weidmann reiterated his opposition to the move, saying it was too close to "state financing via the money presses." Alexander Dobrindt, general secretary of Bavaria's conservative Christian Social Union, said that the ECB must be "a stability bank and not an inflation bank". Jörg Asmussen, a German member of the ECB's Executive Board, defended the decision, however. "We have no inflationary pressure," he said. "Everyone has to do their part to make the euro irreversible." On Friday, German commentators expressed their considerable doubts about the plan. This story showed up on the German website spiegel.de yesterday...and I thank Ulrike Marx for her second offering in a row. The link is here.  Nationalist backlash in Italy and Spain to test Mario Draghi bond planThe European Central Bank's ground-breaking plan for mass purchases of Spanish and Italian bonds is fraught with political risk and may soon be overwhelmed by nationalist anger in the crisis states, leading economists and statesmen warned at a gathering of the European policy elites in Italy. "The ECB move is helpful but is not a game-changer. The eurozone is still in crisis," said Nouriel Roubini, head of Roubini Global Economics. "Unless Europe stops the recession and offers people in the peripheral countries some light at the end of the tunnel - not in five years but within 12 months - the political backlash will be overwhelming, with strikes, riots and weak governments collapsing." Professor Roubini said the German Bundesbank and will insist that "severe" conditions are imposed on Spain once the country requests a rescue from the eurozone EFSF/ESM bail-out funds and signs a memorandum ceding budgetary sovereignty. This Ambrose Evans-Pritchard story was posted on the telegraph.co.uk Internet site late yesterday afternoon BST...and is another item courtesy of Ulrike Marx. The link is here.  |
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