Gold World News Flash |
- Bundesbank's Official Statment On Where It's Gold Is (And Isn't)
- Bundesbank yields some confidentiality but still won't answer critical questions
- Bundesbank Official Statement on Gold Reserves: Gold Must Be Held Abroad for Liquidity
- Technocratic Control Over Greek Gold is Reason For Destruction of Economy
- On Europe And The Future Of International Relations
- Meanwhile In Japan...
- Bundesbank's Official Statment On Where It's Gold Is (And Isn't)
- Sure, there's probably still gold in central bank vaults, but how many claims to it?
- James Turk on recent Gold and Silver Price moves
- "Go South, Young Man": The Africa Scramble
- China Warns It Will Respond "Forcefully" To Japanese Violation Of Its "Territorial Sovereignty"
- Obama vs Romney Yard Sign (Politics)
- This Past Week in Gold
- WHAT CAN YOU DO FOR ME NATION
- Gold Article
- Gold Mining Stock Margins Will Expand Further
- The US Presidential Election, Gold, Dollar and Stocks
- Jeff Clark–Casey Research’s Unabashed Silver Bull 25.Oct.12
- Why Are Americans Underinvested In Gold and Silver?
- Greyerz - Two Absolutely Incredible & Key Gold Charts
| Bundesbank's Official Statment On Where It's Gold Is (And Isn't) Posted: 27 Oct 2012 11:37 PM PDT [Ed. Note: The lady doth protest too much, methinks - William Shakespeare] from Zero Hedge:
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| Bundesbank yields some confidentiality but still won't answer critical questions Posted: 27 Oct 2012 09:20 PM PDT 10:16p CT Saturday, October 27, 2012 Dear Friend of GATA and Gold: Zero Hedge tonight calls attention to and mocks a statement given two days ago by Carl-Ludwig Thiele, a member of the Executive Board of Germany's central bank, the Bundesbank, to the German Press Agency (Deutsche Presse-Agentur), that the Bundesbank's gold reserves are stored securely abroad. Zero Hedge notes that the Bundesbank official's statement fails to explain the recently disclosed withdrawal of German gold from the Bank of England: http://www.zerohedge.com/news/2012-10-24/why-did-bundesbank-secretly-wit... The Bundesbank's statement further fails to answer the questions GATA long has raised: 1) Does the Bundesbank have gold swap arrangements with any agency of the United States government or any other government? 2) Have such gold swap arrangements ever been implemented and, if so, how and why? 3) Exactly what are the "strategic activities" facilitated by the Bundesbank's placement of the German gold reserves abroad, "strategic activities" admitted by the Bundesbank to the German journalist Lars Schall in December 2010?: Interestingly, while the Bundesbank told Schall in December 2010 that the identity of the depositories of the German gold and the exact amounts kept at each were "confidential" and could not be disclosed, the Bundesbank's statement to the German Press Agency two days ago discards that confidentiality and identifies the depositories and the amounts of gold kept at each. Apparently enough clamor has been raised in Germany and internationally to show that this claim of confidentiality was not persuasive and has embarrassed the Bundesbank into a tiny bit of accountability. But so much more accountability remains to be achieved. Will the Bundesbank disclose its gold swap arrangements? Will the Bundesbank disclose all its gold records and its "strategic activities" in the gold market and explain their purposes? Will Germany ever reclaim its rightful, hard-earned place as a sovereign nation? Why not? The Bundesbank's statement to the German Press Agency is posted at the Bundesbank's Internet site here: http://www.bundesbank.de/Redaktion/EN/Interviews/2012_10_25_thiele_dpa.h... CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Prophecy Platinum Intercepts Best Pt+Pd+Au Grades Yet Company Press Release VANCOUVER, British Columbia -- Prophecy Platinum Corp. 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Join GATA here: Vancouver Resource Investment Conference * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT GoldMoney adds Toronto vaulting option In addition to its precious metals storage facilities in Hong Kong, Switzerland, and the United Kingdom, GoldMoney customers now can store their gold and silver in a high-security vault operated by Brink's in Toronto, Ontario, Canada. 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| Bundesbank Official Statement on Gold Reserves: Gold Must Be Held Abroad for Liquidity Posted: 27 Oct 2012 08:44 PM PDT The Deutshe Bundesbank has responded to inquiries regarding holding the majority of Germany's gold reserves in Paris, London, and New York. The Bundesbank is apparently attempting to calm the panic over Germany's gold instigated by the Federal Accountability Office, stating, … Continue reading
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| Technocratic Control Over Greek Gold is Reason For Destruction of Economy Posted: 27 Oct 2012 07:30 PM PDT by Susanne Posel, Occupy Corporatism:
Overseas, Germany's central bank has neglected to audit the country's estimated 3,400 tons of gold reserves. This resource would be desirable to the technocrats at this critical time – when they are endeavoring to implode fiat currencies in the EuroZone. Those gold stores are in the hands of the Federal Reserve headed by Ben Bernanke. It is supposed that the same 3,400 tons of gold (valued at an estimated $190 billion) is currently in the possession of the central bankers in the US, France and England; assuming that this gold is the same gold that was stored at the end of the Cold War. Read More @ OccupyCorporatism.com
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| On Europe And The Future Of International Relations Posted: 27 Oct 2012 06:17 PM PDT Authored by Rodrigo Serrano of Rational Capitalist Speculator, Since the 2008 financial crisis the foundations of the global economy have been in repair, translating into a prolonged period of economic frailty. Against this backdrop, social and political tensions have increased between citizens and government, international institutions and governments, and individual nation states. This murky political environment is fertile ground for international relations theory to: produce a better understanding of the forces affecting these developments, as well as offer potential solutions to these increasingly apparent conflicts. The European debt crisis remains the largest challenge facing the global economy. A negative resolution emanating from the world's largest economic bloc would cause harmful ripple effects worldwide in global trade flows. More importantly, it could also mark a paradigm shift in international relations, dealing a critical blow to what has been a relentless trend towards liberalism since the end of World War II, while providing fecund ground for a resurgence in realist ideology. Interestingly though, constructivism may be at the forefront in explaining the current dilemma between the European core and its periphery. It is therefore important for officials and institutions in leadership positions to analyze the situation through a constructivist lens. Given the fast-paced nature of the political situation in the Eurozone, it is important to invoke a constructive approach when analyzing the competing forces affecting the region. Presently, we are witnessing a clash between long-standing and embedded "regulative norms" versus relatively recent "constitutive norms." Both classes are best defined in Margaret Keck and Kathryn Sinkkink's article: International Norm Dynamics and Political Change. "Scholars across disciplines have recognized different types of categories of norms. The most common distinction is between regulative norms, which order and constrain behavior, and constitutive norms, which create new actors, interests, or categories of action" (Keck and Sikkink 1998, p.891). In peripheral nations such as Spain, Greece, and Italy, long-standing social welfare systems have served to entrench a cohesive array of regulative norms among society commensurate with a distinctive and generous standard of living. Meanwhile constitutive norms, such as the desire to erase the horrid memories of World War II along with the desire for economic prosperity, converged in the mid-to-late 1990s to create the European Monetary Union (EMU). Ironically, the bloc's defining characteristic, the Euro, is now the impetus of the current conflict between these norms. "Whereas Germany, still staggering under the financial burden of reunification, impressively massaged down its labor costs, trimmed its welfare spending, and became competitive again, many of the peripheral countries allowed their unit labor costs to soar" (Garton Ash Sept/Oct 2012, p. 3). In order to resolve the crisis, labor productivity must improve and labor costs lowered throughout the periphery to better compete in today's demanding global marketplace. This means that social welfare systems in these countries will need to be substantially curtailed. In essence, for regulative norms throughout the periphery, the Euro and kryptonite are akin. The discordance of these two powerful sets of norms has given rise to political activist groups such as Los Indignados in Spain and anti-Euro protesters in Greece, respectably demanding a softening of austerity measures and in the extreme case, advocating an exit from the EMU altogether. Like the Arab Spring, these groups bring to light what Ann-Marie Slaughter calls The New Foreign Policy Frontier. "But [Hillary] Clinton herself insists that 21st-century diplomacy must not only be government to government, but also government to society and society to society, a process facilitated and legitimated by government. That much broader concept opens the door to a do-it-yourself foreign policy, in which individuals and groups can invent and execute an idea -- for good or ill – that can affect their own and other countries in ways that once only governments could." (Slaughter 2011, p.1-2). The aforementioned groups are having an increasing effect on German and European Union (EU) policy, with Germany's Christian Social Union party leader Horst Seehofer recently softening his stance on Greek austerity and Angela Merkel appearing more receptive toward Spain requesting aid without further conditionalities. Moreover, the conflict of these norms increases the threat of internal war, which adds another layer of complexity to the tenuous balance of power between sovereign states versus the supranational organization that is the EU. "As such, free trade that jeopardizes a state's key industries or allows potential adversaries to become relatively stronger may not be in a state's interest even if the economy of the state gains in an absolute sense. Better to subsidize an inefficient group of producers than face the threat of a violent challenge to the regime" (David 1998, p. 89). In simple terms, core countries demanding further austerity from an already recession-wracked periphery should tone down their rhetoric and give these countries a much needed breather or risk an anti-Euro political faction upending all progress up to date. While examining the current situation in Europe through a constructive viewpoint seems most prudent, it does not significantly discount realism as a viable alternative when analyzing the current state of affairs. On the contrary, realism remains an underlying force in the current precarious condition between the core and periphery nations. "The economic expert, dominated in the main by laissez-faire doctrine, considers the hypothetical economic interest of the world as a whole, and is content to assume that this is identical with the interests of each individual country. The politician pursues the concrete interest of his country, and assumes (if he makes any assumptions at all) that the interest of the world as a whole is identical with it… Laissez-faire, in international relations as in those between labor and capital, is the paradise of the economically strong. State control, whether in the form of protective legislation or of protective tariffs, is the weapon of self-defense invoked by the economically weak" (Carr 2008, p. 74). Furthermore, beneath the veneer of constructivist analysis and potential solutions that such analysis may provide, lies the specter of a powerful resurgence of crude realist ideology. A negative settlement within Europe could lead to a fragmenting EMU in tandem with a significant reduction in the perceived power of a panoply of liberal-style institutions such as the European Commission, the European Parliament, the European Central Bank (ECB), and the International Monetary Fund (IMF); dealing a critical blow to a bedrock of Institutional Liberalism, one espoused by Robert O Keohane: "Collapse is avoided because as Joseph Nye and I wrote in Power and Interdependence, 'a set of networks, norms and institutions, once established, will be difficult either to eradicate or drastically rearrange'" (Keohane 2012, p. 136). Additionally, the likely subsequent global economic downturn would create an effective incubator for a renaissance of realism not only in Europe, as discarded ex-EMU nations are once again left to fend for themselves, but abroad, as a worsened economic climate leads to declining trust and an increased focus on individual interests. While liberals may point to the importance of economic interdependence as well as an eventual climatic repeat of "the Monnet method" as key factors in the ultimate creation of a political and fiscal union, the chronic competitive divide between European core countries and their peripheral counterparts increases the likelihood that austerity will continue, further fueling the popularity of nascent nationalistic political parties, such as the Golden Dawn in Greece, the 5 Star Movement in Italy, and both the Basque Nationalist Party and EH Bildu in Spain. At some point, one of these parties will assume power setting the stage for a repudiation of the country's "odious debt". As Dani Rodrik stated in The Globalization Paradox, "When globalization collides with domestic politics, the smart money bets on politics" (Rodrik 2011, p. 188). From a realist point of view, Kenneth Waltz's thoughts on the security of organizations deserve intense introspection. "Organizations have at least two aims: to get something done and to maintain themselves as organizations. Many of their activities are directed toward the second purpose… In making political decisions, the first and most important concern is not to achieve the aims the members of an organization may have but to secure the continuity and health of the organization itself" (Waltz 1979, p. 111 – cf. Diesing 1962, p. 198-204; Downs 1967, p. 262-70). Indeed, to ensure its own survival an institution is likely to "break the rules". An ongoing and increasingly appropriate example of this behavior is the ECB and its recent announcement of Outright Monetary Transactions (OMT), a policy that seemed unthinkable only a year ago. This policy ventures into the gray area with regards to monetizing government debt, which is illegal as per Article 123 of the bank's founding treaty. While Mario Draghi continues to reassure that the bank will under no circumstance begin printing money to buy government debt without strict conditionalities from Eurozone governments, it would be naïve to confidently think that they would simply stand by if the survival of the Eurozone solely depended on committing to cap government bond yields. While there's a significant probability that, if faced with extinction, the ECB would resort to monetary financing, would Germany, haunted by its past experience with Weimer hyperinflation (due to printing money), acquiesce to such a policy? In the face of such significant and critical challenges facing the global economy and political order, what can be done? Using a constructivist approach, one must be cognizant of the strengthening trend of nationalistic sentiment and possible development of ensuing norms in periphery countries. It is of great import that these trends are arrested by implementing various targeted, profound, and didactic educational campaigns throughout Europe, most importantly in core countries, so as to encourage continued cooperation (fiscal stimulus?) in exchange for sustained efforts on the part of periphery countries to reconstruct their labor markets. Nations under intense economic hardship need to feel that core countries understand their dilemma and that they are committed to their long-term prosperity. Demanding continued austerity without some sort of relief risks a breakdown of trust between both poles. Additionally, award-winning Czech journalist Jan Machá?ek, speaking at Columbia's School of International and Public Affairs on October 4th, advocated educating European citizens about the constitutional structure of Federalism and the fact that it is not centralism. Perhaps these educational policies will lead to the socio-dynamic version of critical mass. All in all, these strategies require immense patience from all parties. An alternative policy may also lie in the realization that we have a tension between national democracy and global markets that is extremely close to its breaking point. From Dani Rodrik's The Globalization Paradox: "How do we manage the tension between national democracy and global markets? We have three options. We can restrict democracy in the interest of minimizing international transaction costs, disregarding the economic and social whiplash that the global economy occasionally produces. We can limit globalization, in the hope of building democratic legitimacy at home. Or we can globalize democracy, at the cost of national sovereignty… The menu captures the fundamental political trilemma of the world economy: we cannot have hyperglobalization, democracy, and national self-determination all that once… We cannot fudge the role of nation states and proceed on the assumption that we are witnessing the birth of a global political community… Hyperglobalization cannot be achieved, and we should not pretend that it can" (Rodrik 2011, p. 200). Perhaps it would be more sensible to pare back visions of supranational governance in exchange for increased flexibility within the current political order. The financial crisis in 2008 has resulted in a protracted period of economic frailty, which has tested the resiliency of today's global political order. Increased tensions, not only in Europe but also throughout the world, must be diligently analyzed to determine their causes in order to present effective and sustainable solutions to ameliorate their negative effects. In a theoretical sense, liberalism helps little to solve the current dilemma in Europe. In fact, one could say that the region is experiencing an overdose, as institutions such as the European Parliament, European Commission, IMF, G-8, OECD have thus far failed to resolve the crisis. Today's circumstances require thinking outside the box and embracing constructivism as a tool to both evaluate the brisk-paced nature of the Eurozone debt crisis as well as produce potential solutions that focus on educating the citizens of Europe on the intricacies of a currency union and constitutional federalism. It would also be wise to ponder the idea of whether a supranational government could exist. Proceeding down a path with a likely dead end would consume precious resources and lead to widespread suffering among every day citizens.
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| Posted: 27 Oct 2012 04:46 PM PDT Two of the saving features that allowed Japan to internalize 30-some years of failed fiscal and monetary policy (and yes, not one, not two, but now 8 failed iterations of quantitative easing) and to offset one relentless deflationary vortex was i) its demographics coupled with an investing culture that favors deposits and bonds over equities, which incentivized its aging population to invest its savings into government bonds, and ii) its trade surplus which led to foreign capital flows to enter the country. Well, as far as i) is concerned, Japan may have reached its demographic limit, since as reported several months ago, Japan's pension funds are now not only selling JGBs to meet redemption and cash needs, but forced to do truly stupid things like investing in the riskiest of assets to generate a return at any cost. In other words, demographics will no longer be a natural source of demand for deficit funds. As for ii), well... here is what has happened with Japan's trade surplus status in recent weeks following the collapse in the country's foreign relationship with China.
In other words, so much for net exports also being a source of capital. Some more thoughts on this from Sean Corrigan of Diapason:
And that's two birds with one stone. The only source of "capital" left - BOJ monetization. The only problem, of course, is that Japan already has well over 200% of national debt to GDP. And that's the smaller problem. The bigger problem: even the smallest increase in prevailing interest rates, and the entire Japanese house of cards topples. Recall these charts:
As well as this chart of sovereign interest to revenue, in which Japan is also an outlier:
And certainly this chart showing Japan's straight diagonal line of debt/GDP:
.... .... .... But how many have seen this chart showing global sovereign debt as a percentage of total government revenues?
So - is Europe still the biggest unresolved issue as conventional wisdom would have everyone believe? Or is Japan finally preparing to reclaim its rightful place as the straw that broke the Keynesian camel's back?
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| Bundesbank's Official Statment On Where It's Gold Is (And Isn't) Posted: 27 Oct 2012 02:09 PM PDT Three days ago, as a result of recent discoveries relating to Germany's official sovereign gold inventory, we asked a rhetorical question: "Why Did The Bundesbank Secretly Withdraw Two-Thirds Of Its London Gold?" There we presented the chonology of official disclosure regarding the whereabouts of German gold over the past decade, with an emphasis on its reclamation from London-based official vaults to the safety of the motherland, and left off with another open-ended statement that: "what is left unsaid in all of the above is that Germany has done nothing wrong! It simply demanded a reclamation of what is rightfully Germany's to demand." Nonetheless, the fact that Germany did this has opened a Pandora's box of unanswered questions, and even demands that Germany promptly demand delivery all of its gold - the second largest such hoard in the world only after the US - held abroad. Below is the official response by the Bundesbank. Here is the gist::
How about if you need collateral in your own currency, such as the de facto reserve currency of Europe, the DEM? Crickets? The punchline:
And what otherwise would pass as Saturday Humor:
In other words, German gold is being held hostage by the "highly esteemed central banks" of the US and the UK, due to the reserve currency status of the US Dollar, and apparently the British Pound. And the only way a central bank - read the Fed or the BOE - can extend a loan against gold-based collateral, is if said gold is already on location in the US or the UK. Which of course, does not explain why Germany decided to withdraw two-thirds of its gold from London, as opposed to withdrawing none... or all, if indeed the logic above made sense. But fear not: Buba has has nothing but the best experiences with its partners in New York, London and Paris, and as a result will gladly continue to allow them sole physical custody of Germany's gold. Good luck, however, if Germany ever needs to repatriate said gold... From the Bundesbank: Gold reserves stored securely Questions posed by DPA to Carl-Ludwig Thiele, Member of the Executive Board of the Deutsche Bundesbank How much German gold is stored in the United States, how much in Frankfurt and how much in Great Britain? The Deutsche Bundesbank keeps part of its gold holdings in its own vaults in Ger-many, while other stocks of gold are stored at the central banks located in major gold trading centres. Specifically, these are
Isn't storing gold abroad an expensive anachronism? The New York Fed and the Banque de France also offer to store gold holdings for other central banks free of charge. The Bank of England charges warehousing fees amount-ing to roughly €500,000 per year. Storage in the Bundesbank's own vaults, too, involves costs. Matters of cost, however, are not the sole consideration in determining the choice of storage facility. The usability of gold as a reserve asset and storage security are much more important. During repeated visits to New York, London and Paris, our internal auditors have satisfied themselves that the security precautions in place there meet the same high standards as those in Frankfurt. What makes the Bundesbank so certain that German gold holdings are being stored securely abroad – even though, according to the German Federal Court of Auditors, these reserves have never been "physically inventoried and checked for authenticity and weight" by the Bundesbank itself or by independ-ent auditors? At the beginning of the last decade, we brought 930 tonnes of gold to Frankfurt from London and subjected it to a painstaking inspection. Part of the gold was melted down in order to create new bars which conform with the "Good Delivery Standard" which is customary nowadays in gold trading. Of the 930 tonnes of gold, not one gram was missing. We do not have the slightest doubt that our holdings in New York and Paris are also made up of the purest fine gold. We have at our disposal fully documented lists of the bars, and our partner central banks send us every year confirmation not only of the bars' existence but also of their quality. We receive confirmation of our gold reserves, measured in troy ounces. The Bundesbank has been drawing up its accounts on this basis since it came into existence. All external auditors have confirmed our accounting practices outright since then. Why doesn't the Bundesbank bring the gold back to Germany? The reasons for storing gold reserves with foreign partner central banks are historical since, at the time, gold at these trading centres was transferred to the Bundesbank. To be more specific: in October 1951 the Bank deutscher Länder, the Bundesbank's predecessor, purchased its first gold for DM 2.5 million; that was 529 kilograms at the time. By 1956, the gold reserves had risen to DM 6.2 billion, or 1,328 tonnes; upon its foundation in 1957, the Bundesbank took over these reserves. No further gold was added until the 1970s. During that entire period, we had nothing but the best of experiences with our partners in New York, London and Paris. There was never any doubt about the security of Germany's gold. In future, we wish to continue to keep gold at international gold trading centres so that, when push comes to shove, we can have it available as a reserve asset as soon as possible. Gold stored in your home safe is not immediately available as collateral in case you need foreign currency. Take, for instance, the key role that the US dollar plays as a reserve currency in the global financial system. The gold held with the New York Fed can, in a crisis, be pledged with the Federal Reserve Bank as collateral against US dollar-denominated liquidity. Similar pound sterling liquidity could be obtained by pledging the gold that is held with the Bank of England. In the statement it issued on Tuesday, the Bundesbank said that it would "take up suggestions by the FCA wherever possible." What does that mean specifically? When, and at what intervals, will Bundesbank auditors physically view the gold being held abroad? The Bundesbank has decided to strive for a more balanced distribution of gold re-serve holdings at home and broad, thereby taking increased account of gold's function of preserving trust and confidence. After all, reserve assets have psychological significance, so to speak. In the next three years, we will repatriate 50 tonnes of gold annually from New York to Germany. That will give us the opportunity to inspect these bars, melt them down and convert them into "Good Delivery Standard" bars. That will therefore be a sort of spot check. Moreover, we are currently in the middle of discussions about a further expansion of our rights to conduct audits in New York, London and Paris. But, please: for years, our gold has been stored by the highly esteemed central banks of the United States, Great Britain and France without provoking any complaints whatsoever – not by just any fly-by-night operators. Part of the debate in Germany has veered somewhat towards the absurd.
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| Sure, there's probably still gold in central bank vaults, but how many claims to it? Posted: 27 Oct 2012 12:03 PM PDT 1:18p CT Saturday, October 27, 2012 Dear Friend of GATA and Gold: In his otherwise spectacularly obtuse commentary the other day about the clamor to audit Germany's gold reserve -- http://www.gata.org/node/11868 -- CNBC Senior Editor John Carney stumbled onto a point often made by GATA about the unreliability of central bank claims about gold vaulting. In reference to the foreign gold vaulted at the Federal Reserve Bank of New York, Carney wrote: "The compartments do not have labels reading 'Germany's gold' and so on. They are instead numbered, and only a few people at the Fed know what numbers correspond to which country. The Fed says it does this to protect the privacy of the depositors. But this also makes actual inspection less reliable. There's no way for Germany to know that the gold it is being shown is Germany's, as opposed to some other depositor's. In an extreme case -- which I have no reason to believe is true -- miscreants at the Fed could just show everyone who came to visit the same pile of gold." ADVERTISEMENT Fred Goldstein and Tim Murphy open All Pro Gold Longtime GATA supporters Fred Goldstein and Tim Murphy have brought their many years of experience in the precious metals and numismatic coins to All Pro Gold as metals brokers who specialize in the delivery of gold and silver bullion bars and coins as well as numismatic gold and silver coins. Fred and Tim follow these markets closely and are assisted by a team of consultants in monitoring market trends. All Pro Gold offers GATA supporters competitive pricing on all bullion products and welcomes inquiries. Tim can be reached at 602-299-2585 and Tim@allprogold.com, Fred at 602-799-8378 and Fred@allprogold.com. Ask about their ratio strategy and the relationship of generic $20 dollar gold pieces to 1-ounce gold bullion coins. Visit their Internet site at http://www.allprogold.com/. Of course mere "miscreants" at the Fed are hardly the problem; the problem is policy throughout Western central banking that, in support of the gold price suppression scheme, facilitates the double-counting (or multiple-counting) of gold reserves. For example, the International Monetary Fund long has allowed central bank members to count leased gold as if it is still in the vault of the bank leasing it. Thus multiple claims develop to the same gold and the world's gold supply is perceived to be larger than it really is, suppressing the gold price. The same thing happens with the major gold and silver exchange-traded funds when their shares are allowed to be borrowed and shorted -- multiple claims develop to the same gold. There is much suspicion about the major gold and silver ETFs, GLD and SLV, because of the grotesque conflicts of interest on which they operate, the custodian of GLD's gold being HSBC, the world's biggest gold shorter, and the custodian of SLV's silver, JPMorganChase & Co., being the world's biggest silver shorter. The London Bullion Market Association runs a fractional-reserve gold banking system in which claims are issued against gold that is not in the possession of the issuer of the claim. This too increases the perception of the world's gold supply and suppresses the price. The great disparagement about gold in recent years has been that even with its strong price appreciation it has not kept up with inflation over the longer term. The most likely explanation for gold's failure to keep up with inflation is the creation by bullion banks, backstopped by central banks, of a vast imaginary supply, "paper gold." The fear of paper gold is behind the growing belief in Germany that the country should repatriate its gold reserve. As central banks are the issuers of currencies that compete with the natural currencies, gold and silver, they have a powerful interest in controlling and weakening their competitors. As the issuers of claims to monetary metal they don't possess, bullion banks have an identical interest. GATA long has documented secret transactions in gold by central banks and their refusal to answer specific questions about their custody of national gold reserves: http://www.gata.org/taxonomy/term/21 So the scenario raised but disbelieved by CNBC's Carney wherein a stash of gold might stand in for multiple stashes is hardly farfetched. That is almost certainly why the major gold and silver ETFs were created -- to corner the investing public's gold and silver so it might be applied in emergencies, against their investors' interest, for price control. Evidence of this cornering was produced inadvertently last year when HSBC invited CNBC's Bob Pisani to visit the secret GLD gold vault and, when he arrived, presented him with a GLD gold bar to display for his audience -- only for the bar later to be identified as being registered to a different ETF. One gold stash was standing in for another stash: http://www.gata.org/node/10368 http://www.gata.org/node/10372 http://www.gata.org/node/10427 No one seriously doubts that there is some gold in the basement vaults of the New York Fed. But merely inspecting it would not prove anything. The serious questions here are about ownership title -- questions that can be answered only by a full disclosure of central bank gold records. How much gold is there and how many ownership claims are there to it? If central banks are merely vaulting their gold and not using it to manipulate markets, if there are no secret schemes being undertaken with official gold, there should be no problem with disclosing these records. But of course, as was demonstrated by GATA's recent lawsuit against the Federal Reserve for access to its gold records, particularly records involving gold swaps -- -- and by GATA's recent questioning of other central banks about their gold reserves -- http://www.gata.org/node/11862 -- this examination of title to gold is exactly where central banks become most secretive. Thus this is also where serious financial journalism about gold would start, if any was ever permitted and undertaken. CHRIS POWELL, Secretary/Treasurer Join GATA here: Vancouver Resource Investment Conference * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT Opinion Around the World Is Changing When Deutschebank calls gold "good money" and paper "bad money". ... http://www.gata.org/node/11765 When the president of the German central bank, the Bundesbank, pays tribute to gold as "a timeless classic". ... http://www.forbes.com/sites/ralphbenko/2012/09/24/signs-of-the-gold-stan... When a leading member of the policy committee of the People's Bank of China calls the gold standard "an excellent monetary system". ... http://www.forbes.com/sites/ralphbenko/2012/10/01/signs-of-the-gold-stan... When a CNN reporter writes in The China Post that the "gold commission" plank in the 2012 Republican platform will "reverberate around the world". ... http://www.thegoldstandardnow.org/key-blogs/1563-china-post-the-gop-gold... When the Subcommittee on Domestic Monetary Policy of the U.S. House of Representatives twice called on economist, historian, and gold standard advocate Lewis E. Lehrman to testify. ... World opinion is changing in favor of gold. How can you learn why and what it will mean to you? Read the newly updated and expanded edition of Lehrman's book, "The True Gold Standard." Financial journalist James Grant says of "The True Gold Standard": "If you have ever wondered how the world can get from here to there -- from the chaos of depreciating paper to a convertible currency worthy of our children and our grandchildren -- wonder no more. The answer, brilliantly expounded, is between these covers. America has long needed a modern Alexander Hamilton. In Lewis E. Lehrman she has finally found him." To buy a copy of "The True Gold Standard," please visit: http://www.thegoldstandardnow.com/publications/the-true-gold-standard
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| James Turk on recent Gold and Silver Price moves Posted: 27 Oct 2012 11:39 AM PDT GoldSeek Radio's Chris Waltzek talks to JAMES... [[ This is a content summary only. Visit my website http://goldbasics.blogspot.com for full Content ]] 
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| "Go South, Young Man": The Africa Scramble Posted: 27 Oct 2012 11:31 AM PDT While those in the power and money echelons of the "developed" world scramble day after day to hold the pieces of the collapsing tower of cards in place (and manipulating public perception that all is well), knowing full well what the final outcome eventually will be, those who still have the capacity to look, and invest, in the future, are looking neither toward the US, nor Asia, and certainly not Europe, for one simple reason: there is no more incremental debt capacity at any level: sovereign, household, financial or corporate. Because without the ability to create debt out of thin air, be it on a secured or unsecured basis, the ability to "create" growth, at least in the current Keynesian paradigm, goes away with it. Yet there is one place where there is untapped credit creation potential, if not on an unsecured (i.e., future cash flow discounting), then certainly on a secured (hard asset collateral) basis. The place is Africa, and according to some estimates the continent, Africa can create between $5 and $10 trillion in secured debt, using its extensive untapped resources as first-lien collateral. Africa is precisely where the smart money (and those who quietly run the abovementioned "power echelons"), namely China and Goldman Sachs, have refocused all their attention in the past year precisely because they both realize that Africa is the last and only bastion of untapped credit growth and capacity. But you won't read about it in the mainstream papers: the last thing those who are currently splitting up Africa into its constituent parts want is for the general public to become aware what is in play. You will, however, read about it on these pages (see here and here and here). Also, if you are a Goldman client, you will certainly know all about it, as the firm ventures out with reverse inquiry indications of interest to its wealthy clients giving them the right of first equity refusal, and slowly but surely providing "financial services" to the last great hope for the developing world, which ironically is what most still consider the poorest continent... Africa in geographical perspective...
And in every other, from Goldman Sachs:
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| Posted: 27 Oct 2012 10:59 AM PDT While the topic of the Japanese purchase of the contested [Senkaku|Diaoyu] Islands may have receded from the front pages of global media for lack of any major recent developments, the issue is still quite ripe in the minds of over 1 billion Chinese (and several hundred million Japanese, not to mention the executives of Japanese car and electronics makers who have seen a cliff-like collapse in purchases of their products by Chinese consumers in the past month). However, just because it is out of sight, does not mean it is out of mind, the front page of the official Chinese Daily is out with a big piece titled "China says no concession on territorial sovereignty" in which it makes it abundantly clear that Japan will have no choice but to back down in what China continues to consider an "aggressive" invasion of its territorial sovereignty. And to avoid any confision. Xinhua clarifies that if "anyone wants to challenge China's bottom line on the issue of sovereignty, China will have no alternative but to respond forcefully so as to remove disturbance and obstacles and move steadily on the path of peaceful development." So just like Europe, where nothing has been resolved, but merely swept under the ECB's ever bigger rug, and is merely waiting to be unleashed in the next risk-flaring episode, so the territorial dispute in Asia will escalate until either Japan backs down, or China finally makes good on its threat. One can only hope the two don't coincide as the system, already stressed out to the max, will see another major exogenous shock, only this time with the Fed already 'all in', there is nothing incremental that Bernanke's policy will be able to do to avoid the subsequent shock as the global financial system takes another major step down, precisely as David Einhorn warned. From the front page of China Daily:
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| Obama vs Romney Yard Sign (Politics) Posted: 27 Oct 2012 08:55 AM PDT As much as we would like to cast our own vote for the Libertarian candidate in the election just ahead, there is no question that would be a wasted effort. With that in mind, this yard sign spotted in Glenview IL captures a part of the essence of our own view of the two major party candidates. Stay informed and vote. "Politics" is from the Latin root "poly," meaning many, and the English "ticks," meaning blood sucking insects." - Rick Rule
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| Posted: 27 Oct 2012 08:38 AM PDT Summary: Long term - on major sell signal. Short term - on sell signals. A multi-week correction is in progress. Read More...
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| Posted: 27 Oct 2012 06:13 AM PDT Allowing parents to pick their school would result in the schools that do a crappy job and employ lousy teachers to be closed. The teachers unions and government bureaucrats scream bloody murder at the possibility of their comfortable little tenured world, and gold plated pension and health benefits, being disrupted by having to teach well.
Ben Carson on America's education challengeFriday, October 26,2012
In the midst of the third presidential debate in Florida, which was supposedly about foreign policy, President Obama interjected a few words about American education. The rationale was not unreasonable. A better-educated America will be a better-performing and more internationally competitive America. "Let's talk about what we need to compete. … Let's take an example that we know is going to make a difference in the 21st century and that's our education policy," he said. Unfortunately, as is so often the case with politicians, what we hear sounds so logical, so compelling. If only it had anything to do with reality. According to the fractured political logic on education, which is not much different from what we hear regarding most areas of public policy, the reason we have failure is we're not doing enough of what already isn't working. In the case of education, we're spending a lot of money and not getting results. So the problem must be, in the brilliant political take on matters, we're just not spending enough money. "I now want to hire more teachers, especially in math and science, because we know that we've fallen behind when it comes to math and science," Obama said. "And those teachers can make a difference." But, Mr. President, what information do you have that leads you to conclude that more teachers can make a difference? According to information recently published by Face the Facts USA, a nonpartisan project of the George Washington University School of Media and Public Affairs, over the last decade the federal government spent $293 billion and states spent a combined $5.5 trillion — money targeted to improving academic performance — with no discernable change in reading and math scores. "A quarter of high school seniors don't meet basic reading standards and a third fall below basic math proficiency," Face the Facts USA reports. Throwing money at education may make those who get the money better off, but there is little, if any, evidence that it makes any difference at all in improving academic performance. Recently, I sat down and interviewed one of my heroes: Dr. Ben Carson, director of pediatric neurosurgery at Johns Hopkins Hospital. Outside of his work, Carson's passion is education. As someone who grew up in a Detroit ghetto, whose mother was a domestic who could not read, he has some idea what it means to start with nothing and achieve the American dream. But listening to Carson — whose latest book is titled "America the Beautiful: Rediscovering What Made This Nation Great" — you get a much different take on what is wrong with education and our nation today than what we hear from politicians. Carson says, "We were a 'can do' nation and now we're a 'what can you do for me' nation." He talks about the two biggest influences when he was a boy: a demanding and caring mother and his church. According to Carson, "we're being crucified by political correctness — that any lifestyle is equivalent to any other lifestyle." Through the Carson Scholars Fund, he provides $1,000 college scholarships to kids "who excel academically and are dedicated to serving their communities." He also builds reading rooms — there are now 77 at schools in 11 states — designed to provoke kids to want to read. After a half-hour interview with Carson (see www.CureAmerica.us), here's my takeaway: Education is about family, meaning, personal responsibility, standards of right and wrong, and appreciating the uniqueness of every child. Without these fundamentals, truckloads of taxpayer money will accomplish nothing. Which is why the trillions being spent are poured into a black hole. I would add that, given the realities of today's public schools — defined by the political correctness that Carson says is crucifying us — there is no hope of meeting his standards for education without giving parents freedom to choose where to send their kid to school. Star Parker is an author and president of CURE, Center for Urban Renewal and Education. Contact her at www.urbancure.org.
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| Posted: 27 Oct 2012 05:31 AM PDT The following is automatically syndicated from Grandich's blog. You can view the original post here. Stay up to date on his model portfolio! October 27, 2012 03:27 AM Read [url]http://www.grandich.com/[/url] grandich.com...
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| Gold Mining Stock Margins Will Expand Further Posted: 27 Oct 2012 04:14 AM PDT Longtime readers know that we are a fan of intermarket analysis. The movement of certain markets influences other markets so it is always wise to analyze a handful of markets rather than just a single market by itself. Several years ago we learned from others before us how intermarket analysis can help us get a handle on the margins of gold (and silver) miners. Generally, Oil (energy) represents about 25% of the cost of mining while industrial metals prices can be a proxy for the costs of trucks, chemicals and blasting agents (like cyanide). It has been a while since we’ve looked at these charts but with the gold stocks having put in a major bottom it is time to analyze whether it is sustainable or not.
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| The US Presidential Election, Gold, Dollar and Stocks Posted: 27 Oct 2012 04:09 AM PDT With the US presidential election drawing near, it is beginning to look like Mitt Romney may actually have a shot at the white House. This prompts gold investors to wonder how such an outcome might affect financial markets and especially gold. What if Mitt Romney wins? The election may impact everything from mortgage costs to the cost of financing the U.S. debt. Trillions are at stake. The theory goes that Romney will replace Fed Chairman Ben Bernanke whose current term will expire in any case on January 2014. He has said as much. This might slow down the perpetual money printing machine, which would be a bearish signal for gold. It would add uncertainty to monetary policy and increase market volatility.
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| Jeff Clark–Casey Research’s Unabashed Silver Bull 25.Oct.12 Posted: 27 Oct 2012 03:25 AM PDT www.FinancialSurvivalNetwork.com presents We caught up with Jeff Clark, publisher of Casey Research's Big Gold after a rousing discussion about where silver is and where it's heading. The market is so small with so little surplus capacity, that a demand spike could easily result in a major mania. Of course the tree does not grow to the sky, but it can get very tall. Jeff offered a number of scenarios that put silver's peak price well over $100, approaching several multiples of that. It's not very difficult to envision these types of situations emerging from the world's chaotic economic system. Go to www.FinancialSurvivalNetwork.com for the latest info on the economy and precious metals markets
This posting includes an audio/video/photo media file: Download Now |
| Why Are Americans Underinvested In Gold and Silver? Posted: 27 Oct 2012 02:01 AM PDT Although there are no definitive statistics on how many Americans own gold or silver, the number is certainly small. A Gallup poll earlier this year showed that 28% of respondents thought that gold was the "best investment" but the actual number of people actually owning some form of gold or silver bullion is far less. [...]
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| Greyerz - Two Absolutely Incredible & Key Gold Charts Posted: 26 Oct 2012 03:06 PM PDT  Today Egon von Greyerz sent two incredibly important and extremely key gold charts exclusively to King World News. Greyerz, who is founder and managing partner at Matterhorn Asset Management, also spoke with KWN about these key charts and their importance in the gold market going forward." But first, Greyerz had to say: "What I am focusing on is the economy is deteriorating everywhere, in Europe and in the US. I just saw some very interesting statistics, the US hourly earnings are down, in real terms, against gold they are down 90% since 1971, and down 81% since 2001."
This posting includes an audio/video/photo media file: Download Now |
"We do not have the slightest doubt that our holdings in New York and Paris are also made up of the purest fine gold. We have at our disposal fully documented lists of the bars, and our partner central banks send us every year confirmation not only of the bars' existence but also of their quality…. We had nothing but the best of experiences with our partners in New York, London and Paris. There was never any doubt about the security of Germany's gold. In future, we wish to continue to keep gold at international gold trading centres so that, when push comes to shove, we can have it available as a reserve asset as soon as possible. Gold stored in your home safe is not immediately available as collateral in case you need foreign currency….for years, our gold has been stored by the highly esteemed central banks of the United States, Great Britain and France without provoking any complaints whatsoever – not by just any 
Last week, gold 
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