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Tuesday, November 27, 2012

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Rick Rule: Be A Risk Manager, Not A Reward Chaser

Posted: 27 Nov 2012 09:51 AM PST

By The Gold Report:

The Gold Report met up with Rick Rule, founder and chairman of Sprott Global Resource Investments Ltd, at the Hard Assets Conference in San Francisco. In this interview with The Gold Report, he shares his belief in the power of gold as both "catastrophe insurance" and an investment vehicle. As to equities, he sees a new discovery cycle lifting the prospects of majors and juniors alike, as long as they act like "rational" businesses.

The Gold Report: Rick, you believe the natural resources sector is experiencing a cyclical decline in a secular bull market similar to the 1970s. Is that true for other sectors as well?

Rick Rule: I learned the hard way not to assume that my success in the natural resource business was transferable to other sectors, so I am going to stick with resources.

However, there are parallels with the gold market. In


Complete Story »

Jim Willie: Immutable Gold Laws

Posted: 27 Nov 2012 09:47 AM PST

Some immutable gold laws must be cited:

  • Their validity is becoming more recognized as firm in recent months
  • The Gold Standard will return out of the force of value and valid solution
  • The Zero Percent Interest Rate Policy assures the continued Gold Bull Market
  • The continued Quantitative Easing assures the shrinking profit margins, job cuts, reduced business
  • The ZIRP & QE assure eventual USGovt debt default and systemic failure
  • Criminal activity is rising to keep the fiat paper currency system in place
  • With the rise in official govt gold accounts demanded for repatriation,
  • THE ALLOCATED GOLD ACCOUNT SCANDAL is growing near
  • The movement of large Gold volume from London to East brings with it a grand shift in geopolitical power
  • The advent of Gold Wars comes after sovereign bond busts, allocated gold account demands
  • A Wild Card comes with the imminent death of King Abdullah, as the House of Saud will fall
  • With it goes the Petro-Dollar, a crippling blow to the USDollar itself
  • The Gold Price will break out in all major currencies, having been led by the EuroGold price


From Jim Willie of goldenjackass.com:

Several immutable Gold Rules appear to be self-evident and powerfully manifested in the modern world of banker corruption, financial market intervention, currency debasement, phony accounting, and economic deterioration, all amidst powerful incessant media propaganda, against a backdrop of endless war. The global fascism movement has taken deepest root in what during the 1960 through 1980 decade was the capitalism regions steeped in democracy. Since the Lehman Brother scuttle and the Fannie Mae adoption and the AIG black hole admission, the financial crisis that began with the housing bubble and subprime mortgage bust has turned virulent. The global financial crisis is better described as a global monetary war to defend the toxic USDollar, whose sunset can be seen. In the last 12 to 18 months, the monetary war has again morphed, this time into a far more serious and financially violent global Gold War. Nations are fast realizing that their only true liquid assets of value are their gold reserves, and even they have been tampered with or stolen in a vast re-hypothecation scheme.

 

The Gold War is on, having moved to a higher gear, but nowhere near a climax gear. The true value of gold is being realized. The strength of gold during insolvency crisis is being observed. The resistance and rescue from the plague of insolvency is being made clear on a global stage. The new important part of the Gold War comes with the Allocated Gold Account scandal which will dwarf the LIBOR and MFGlobal scandals. The demands for repatriated gold accounts, primarily from the criminal bank sectors in London and New York, have amplified. Germany has finally joined with demands for gold repatriation. The demands will continue to grow even as tampered gold bars add to the motivation to repatriate. If only Chavez of Venezuela knew that he was to start a global trend to call gold home, in a Gran Aletazo de Mariposas. The grand butterfly flapping has caused a whirlwind that will turn into a tornado to wreck the central banks in a final death blow.

 

GOLD STANDARD RECALL

The law can be stated: The Gold Standard will return from a sheer standpoint of value, stability, and resistance to storms based in failed bond auctions, debt writedowns, and insolvency consequences. Only a hard asset backed new currency can replace a fiat paper currency reserve.

 

The law is self-evident and being manifested, with alarm if not deep trepidation by the financial leadership among the Western nations. While the central banks and the finance ministers stumble around seeking solutions, applying patches, making money free, redeeming toxic bonds, and otherwise bumbling in the midst of their own balance sheet and fiscal ruin, the emergence of Gold has become clear. It is the only asset rising of recognized value during the grand debasement of money committed by the central banks. It is the only asset whose value is being demonstrated as strong during the fiscal cliffs that so many major industrial nations have already gone over. They are not approaching fiscal cliffs. Four consecutive years of USGovt deficits over $1.3 trillion amply demonstrate to anyone with an uncorrupted view and unaltered pulse that the crash into the canyon floor is next, not the plunge over the cliff. Downward acceleration and speed have already been achieved.

 

As nations and continents come to realize their new debt compositions are nothing more than a series of shots of tequila for the patient suffering delirious tremens from alcohol poisoning, they are coming to the painful conclusion (for them) that a Gold Standard is the only solution. Applications of more paper mache accomplish nothing when the base of paper is rotten. The Gold Standard will be imposed upon them by the global rebellion against the USDollar, which will emanate from the trade sector. The Gold Standard will return, in the form of trade settlement as its payment core, as in the short-term trade notes. The bank cartel will be brought into the standard from which they broke away in 1971 with the abandoned Bretton Woods Accord. They will be brought in kicking and screaming, since only Gold can and will properly bring the nations out of the wilderness from the chaos. Once more, the banking systems will follow the trade system, rather than the corrupt banks dictating terms on reserves management in fiat paper currencies which disseminate toxic bonds. It has been backwards for 30 years.

 

CENTRAL BANK EXTREMES

The law can be stated: The Gold Bull continues unbounded with the Zero Percent Interest Policy (ZIRP) as its primary cylinder, while the artificial 0% distorts all financial markets, all assets, and all value. The Gold Bull will continue until the USGovt debt default, and until the USDollar retirement.

 

The 0% official rate has been declared as permanent, if the words of USFed Chairman Bernanke are properly interpreted. A sliding forward promise, first told as end 2013, later revised to end 2014, later to be end 2015, is a clear signal to those with an active brain stem. It is permanent. The 0% rate, however maintained like with Interest Rate Swap contracts, renders all financial markets as grossly distorted, since most assets have a value that extends from the cost of money. But practically, the USGovt debt cannot manage a rate hike, or else the borrowing costs approach the size of major social programs, even approach the size of the USMilitary offense budget. A rate hike would break the entire debt structure and result in a quick default and wreckage of the entire USTreasury Bond complex. Worse, a rate hike would cause a sudden collapse of the support structures bound within the vast derivative complex. This complex has enabled the US financial structure from a collapse that should have occurred around the 1998 to 2001 timeframe. Also, a rate hike would bring ruin to the big US banks heavily committed to the USTBond carry trade, for easy risk-free profits. Recall the Jackass forecast of a USGovt debt default, the position stated in the last months of 2008. The event is coming true.

 

The Gold Bull is powered by the negative real rate of interest. Its calculation is made simple by the 0% official rate. But take the prevailing consumer price inflation rate of about 8% to 10%, subtract it from the rate earned, tied to long-term USTBonds. The result is a negative real rate at minus 6% or minus 7%, sufficient to power the Gold Bull Market. Given the permanent ZIRP policy, the Gold Bull is in permanent mode. All talk about the Gold Bull Market having run its course is based on vacant arguments and nonexistent logic. It is the propaganda of fools, even desperate people. Calls that the bull in gold has run its course since it hit the $1000 level were laughed at by the Jackass a few years ago. Calls from the same scummy deceptive corners that the bull in gold has run its course since it almost reached the $2000 level are also ridiculed. No solutions have been installed, and the grand debasement of money persists without end. Many doubters and critics of the Gold Bull Market will be humbled when it vaults past that level. The justification, numerous as they are, are gaining attention. The Jackass is glad to help the process along, and to silence the corrupt corners.

 

The law can be stated: The bond monetization known as Quantitative Easing (QE) powers the upward move in the cost structure for the global economy. The result is a shrinking profit margins imposed on the entire economies, felt in job cuts and reduced budgets for expansion, even maintenance.

 

The expanded bond monetization has been declared as permanent, if the words of USFed Chairman Bernanke are properly interpreted. A sequence of bond purchase commitments, including both USTBonds and Mortgage Bonds, to meet urgent calls to address the quagmire, is a clear signal to those with an active brain stem. It is permanent. In fact, the QE3 has some rather obvious motive to cover the multi-$trillion mortgage bond fraud, thus permitting a possible housing market recovery. Not gonna happen. The foreign bond creditors have vanished, with only a scattering of Japanese and Chinese investors serving as the bulk of foreign demand. In order to prevent the short-term USTBill yields from shooting up to 5% suddenly, in order to prevent the long-term USTBond yields from shooting up to 10% suddenly, the USFed has made a series of commitments to buy the USGovt debt. Nobody seems to want it, nobody seems to afford it (savings vanishing act), nobody seems to find it as holding value anymore. Besides, deep criminal banker fraud is becoming recognized in story after story. Without the vast QE, despite all its deception and chicanery like Operation Twist, and without the vast apparatus of interest rate derivatives to maintain the 0% artificial rate, the USTBond structure would collapse. If these words seems absurd, then the reader is probably ignorant, uneducated, or wearing red white & blue jockey shorts.

 

The law can be stated, as a profound consequence: The combination of ZIRP & QE lead to capital destruction and systemic breakdown. Observe the fast falling Money Velocity while money supply grows at a staggering pace.

 

The telltale signals are the capital destruction, the retirement of equipment, the shutdown of unprofitable businesses and business segments. The USEconomy is not in recovery, but rather in a grand deterioration process. The evidence is overwhelming, shown on a regular basis within the Hat Trick Letter reports. Whether reduced rail shipments, or fast rising Food Stamp participation, or significant declines in payroll tax withholdings, or still growing state budget deficits, or the stunning fall in Money Velocity, those among the aware crowd can see the pathogenesis. The principal cause is the Zero Percent Interest Rate matched by Quantitative Easing, which kill capital as they lift costs. This is the glaring shocking blind spot among hack US economists, most of whom are compromised by either Wall Street or university grants. Hardly any have my respect, since abject apologists for the failed system with few if any valued lucid perceptions. They are the corrupt harlots of Wall Street. They are the vapid academic talking heads. The path paved by fiat paper currency has led to insolvent systems.

 

The current monetary policy coordinated by the major central banks of the United States, Europe, United Kingdom, Switzerland, and Japan assure no deviation from the path driven by momentum of the grand sovereign debt defaults and ultimate systemic breakdown. In fact, no solution is even attempted, a consistent Jackass point, since the policies and actions are directed toward preservation of power and away from big bank liquidation. The commitment to the failed system increases every year, assuring the impact of the systemic breakdown to be greater as well.

 

ENTRENCHED DISORDER

The law can be stated: The anti-Gold system continues to attempt to reinforce itself until its final implosion. Criminal means and false accounting backed by media propaganda are their tools that reinforce the current power structure. It will yield to foreign designed trade settlement systems, to the forced Gold Standard return, and to vast liquidation.

 

For the US and UK and Europe and Japan, the 0% official rate will continue until the debt defaults occur, which are in progress. The government deficits will not come down. They will instead escalate, as the economies produce fewer tax receipts and the calls for socialist relief programs expand. The political apparatus is being recognized as broken, a travesty in full view. The economies are experiencing a permanence in the shock from the ZIRP & QE in tandem. Households feel the higher cost of food, energy, utilities, town services, and even property taxes. Businesses feel the higher costs of everything from energy to materials to shipping. Lately they will react to the Obama Care as the health care tax is imposed, against their will. The financial firms have been guilty of doctored gimmicked financial statements ever since April 2009, when the USCongress blessed the decision by the Financial Accounting Standards Board. The FASB decided to permit the financial firms to declare any value they wish for rotten assets, the collection of impaired assets not to face the grim reaper of reality. The parade of Zombie Banks has reeked havoc ever since upon the economies.

 

Criminal deeds have become the norm. The established norm has been for outsized naked short positions for the Big Four US Banks. They are an everyday fixture. No laws are enforced for selling enormous supply without metal. Why on November 15th, my colleague Turd Ferguson reported the following gold ambush. In the TFMetals Report, he summarized the ambush as he wrote, "Over the course of about 5 minutes, one single order was filled. This massive dump of about 25,000 gold contracts managed to move the price of gold down by nearly $20. To give you an appreciation of the size and scale of this deliberately criminal act, 25,000 contracts is the paper equivalent of 2.5 million ounces of gold, or roughly 77 metric tonnes, the paper equivalent to the alleged physical holdings of Australia or Indonesia." No end to the naked shorting. The financial press reported not a peep on order by the Syndicate, who act as advertisers on the network channels.

 

On November 2nd, the Silver Doctor reported a similar silver ambush. NetDania provides a service, to estimate volume from five separate market sources. It is not an exact indicator of volume data, but does shed much accurate light on the deeply corrupted market. According to NetDania, a total volume of 38,400 contracts, equal to 191.99 million ounces of paper silver were dumped on the market in only ten minutes between 8:30am and 8:40am EST. The Boyz chose to execute the raid precisely on the day of the gimmicked Non-Farm Payroll data release. They smelled a potential for a precious metals price uprising, and snuffed it. The volume for those ten minutes corresponds to nearly one quarter of annual global silver production! Not the US output, but global output. No response by market regulators, business as usual.

 

Criminal deeds have become the norm. Money laundering has kept the entire major US banks afloat, the money laced with narcotics. Overnight satisfaction of loans is sometimes done with heroin paper packets the size of bricks. For the last 20 years, the New York and London bankers have illicitly (nicer word than illegally) leased official gold accounts. Those nations are one by one demanding their gold repatriation. Hot war has been justified in order to win the release of official gold held in accounts. Plenty of Arab despots sit in power, but the Libyan seat was targeted as special for its 144 tons of gold. The London bankers pilfered the Libyan gold account in the Qaddafi name, offering flimsy requirements for its return to their people, demands which will never be met. The stolen private accounts at MFGlobal waiting for silver delivery served as another criminal deed. The crime scene was protected by the US regulators and the courts. Apparently, the wrong interpretation of bankruptcy law matters little. MFGlobal was a brokerage firm, not a financial firm. Therefore, the private accounts should have been held first in line for redemption, not last.

 

The criminal appellate court upheld the wrong decision. The newest criminal streak involves tungsten lacing in fake gold bars. The story was cited here in early 2010, with Rob Kirby taking the lead. My source informs that two important characteristics are noteworthy. The Hong Kong banks are the biggest among the victims. The distribution routes run through a crucial Central American nation, just like the narcotics. Fort Knox was systematically gutted as its content bars were swapped, whose extent has yet to be determined. Expect some deep consequences for the counterfeit in Tungsten bars. Refer to TRIAD for old fashioned justice, and the Intl Court of the Hague for justice with more procedure involved. Perhaps the unusual story of bankers simply vanishing will be the case.

 

ALLOCATED GOLD ACCOUNT SCANDAL

The most prominent criminal practice has been challenged, the illicit usage for leasing of official gold accounts in the name of sovereign governments. The challenge will make for the grandest banker scandal in modern history. My source estimates that over 40 thousand metric tons have been vacated from the official accounts over the last two decades. Clearly, the volume indicates a lot of unofficial unaccounted gold, which nonetheless exists. The pressure has finally come to the London bankers largely responsible for the happy fingers. The New York and Swiss banks have been working overtime, often in midnight emergency shipments, to avoid a direct default. That would be both embarrassing and an invitation for prosecution which would be difficult to prevent, given the public outcry. As the London bankers struggle to meet the repatriation demands, the pressure will not relent. They must replace the leased gold or see their crime scene exposed.

 

Only when the vast Swiss repository is denied to the London banksters, the drain will erupt into a major gold default event with glaring publicity. It is when they are exposed, when the urgent need to replace the improperly leased (stolen) gold is realized, when the public and financial community is made aware of the altered Supply & Demand dynamics, that the Gold Price will shoot upward fast hard and without stopping. Far less gold is held in supply

Housing Update: Prices Continue To Firm

Posted: 27 Nov 2012 09:46 AM PST

By Calafia Beach Pundit:

According to the Case Shiller indices of housing prices, the housing market has been consolidating for the past three years, and that comes after 3 years of the most brutal collapse in home prices in modern times. Altogether, the housing market has undergone six years of intense adjustment. With prices stabilizing (and even going up in some markets) and housing starts up fully 65% since early last year, there's ample reason to think that we've seen the worst, and that the housing market is now getting back on its feet.

(click to enlarge)
(Click to enlarge)

Both of these indices of housing prices show year over year gains: the Case Shiller index is up 3%, and the Radar Logic index is up 5%. Moreover, both indices are relatively unchanged for the past three years.


Complete Story »

Gold as Insurance. Why? How?

Posted: 27 Nov 2012 09:39 AM PST

We have always put emphasis on the need to diversify while putting together your portfolio. Of various kinds of diversification, one is particularly important at the very beginning, when you decide to commit yourself to the precious metals market. This is the ability to divide your capital into three separate parts, each managed in a different way, and to stick with this structure even when the market is getting hot.

We are of the opinion that such a division:

  • Limits your risk,

  • Provides significant upside potential and exposure to the great bull market in silver and gold,

  • Takes into account key major factors that could come into play in the following years like a collapse of financial system, and lack thereof.

So what is exactly our suggested portfolio structure? Please, take a look at the table below.

A short description of this structure:

  • Insurance - this is your protection against the large financial crisis that is very likely to be seen in the next decade. You may have read somewhere that even those who hate gold and silver should still own some "just in case." This insurance part of your portfolio is kept in precious metals. It's essential that it be held in physical bullion; geographically diversified if possible at all times -even if you think that gold and silver are likely to decline.

  • Investment – this is the part of your portfolio that like the insurance part is kept invested for the long term. Unlike the insurance part of the portfolio, you can temporarily limit the exposure by hedging or selling your holdings before highly probable and significant declines (like the 2008 one).

  • Trading capital – this is the part of your portfolio that you use for trading i.e. for betting on short-term rallies and/or declines in gold, silver and/or mining stocks.

While the general idea of dividing your portfolio between long-term and speculative capital (the latter is only the money you can afford to lose) is not a particularly new one, the inclusion of the insurance part in the portfolio may make it more robust to financial blow-ups. We will now focus on that – gold and silver as insurance against severe financial turmoil.

Gold may be perceived as insurance if you believe that, because of psychological reasons, it appeals to investors as a wealth-preservation vehicle. In case of financial turmoil they turn to precious metals, the increased demand causes an increase in the price and gold and silver deliver on their promise to provide an alternative to government bonds.

There is also another dimension to it: in the past gold and silver were used as money. As a matter of fact, gold had been indirectly used as money up to 1971 when U.S. president Richard Nixon officially announced that the U.S. government would cease to adhere to its promise to redeem the greenback in gold. Since that moment money has been only paper and a promise of the government to accept payments in it.

Some investors fear that excessive deficits as seen in the U.S. will result in money being printed on a large scale (which actually is already the case: open-ended QE) or even in the implosion of the dollar. The bigger the deficits, the more likely such a scenario seems. This is shown on the chart below.

It seems that since 2000 increases in the U.S. debt have been accompanied by increases in the price of gold. This might reflect investors' fear that the U.S. government will eventually default and their belief that gold may be a safe haven in case of such a development.

The abovementioned points may lead to the conclusion that gold may in fact skyrocket if things get out of hand in the U.S. or in the European Union. The main problem here is that nobody knows when (if at all) the paper currencies will begin to visibly deteriorate or disappear completely. Precisely because of that, we suggest holding on to gold and silver at all times with a part of your portfolio.

We call this part of your portfolio "Insurance," because by holding on to gold and silver even during corrections you accept small losses in hope of enormous gains should serious economic turmoil materialize. Economic crises have the inherent quality of catching most investors off-guard. We don't want you to be among them.

This is, however, not all there is to gold as insurance. Namely, the idea described above only makes sense if the insurance part of your portfolio is put into physical gold, NOT into any kinds of gold futures, options, ETFs, ETNs or CFDs. If the scenario you are insured against (a financial crisis far more severe than the one that started in 2008) occurs, gold derivatives will most likely be rendered worthless or trading rules will change in a way which will prevent you from fully enjoying your profits. What is more, your counterparties could default on their obligations leaving you with nothing at all.

Even though such a course of events seems unlikely, it is still a possibility you need to consider. Particularly if you keep in mind that in the past serious appreciation of metals led to enormous increases in margin requirements for futures contracts. This was the case for palladium in 2000.

In 2000 palladium appreciated from the level of $443 to the level of $956 boasting a stunning rate of return of 115.8%. During that time, however, the New York Mercantile Exchange raised margin requirements for palladium futures contracts in a series of steps which brought the margins as high as to $168,750 for a $72,000 contract. That meant that just to maintain your position open and reap the profits, you had to make a deposit exceeding the size of your position by 133.1% (!) At one point, the Tokyo Commodities Exchange even ceased trading palladium futures and demanded all positions in futures be liquidated.

If this case is anything to go by, exponential growth in the price of gold or silver (possibly 100% in one year) during the third stage of the bull market could result in hikes in margin requirements or in trading restrictions on the part of commodity exchanges. This alone could render paper gold, futures, options and other financial instruments not backed with physical gold worthless or at least suppress their value. And if you realize that your counterparty could simply go bankrupt or default on their obligations, it becomes clear that from the insurance point of view physical gold and silver (or physically backed funds) are the only way to go.

To add an additional layer of insurance to your holdings, you should also diversify your physical holdings geographically. This is an appropriate way to preserve your investments if capital controls are introduced or governments begin to confiscate precious metals.

You can read more on the topic of how to divide your investment capital in our essay on gold and silver portfolio structuring. You will also be able to find an exhaustive list of methods to invest in gold and silver in our guide on how to buy gold and silver.

Thank you for reading. Have a great and profitable week!

Przemyslaw Radomski, CFA

Founder, Editor-in-chief

Gold & Silver Investment & Trading Website – SunshineProfits.com

* * * * *

About Sunshine Profits

Sunshine Profits enables anyone to forecast market changes with a level of accuracy that was once only available to closed-door institutions. It provides free trial access to its best investment tools (including lists of best gold stocks and best silver stocks), proprietary gold & silver indicators, buy & sell signals, weekly newsletter, and more. Seeing is believing.

Disclaimer

All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

Technicals: Silver and Milk Riots

Posted: 27 Nov 2012 08:43 AM PST

Milk Riots – Silver – EQT 2012.11.27

from endlessmountain:

~TVR

MEGA’S OCAP PROGRAM CONTINUES TO ADD GOLD MINERALIZATION WITHIN THE PROPOSED OPEN PIT AT THE MONUMENT BAYGOLD CAMP

Posted: 27 Nov 2012 08:30 AM PST

Mega Precious Metals Inc. (MGP:TSX-V) ("Mega") is pleased to report that the Old Core Assay Program (OCAP), designed to sample previously unassayed mineralized core, continues to add significant gold mineralization in an additional 16 diamond drill holes totaling 6,190 m. During 2012, over 30 holes (> 11,568 m) from the OCAP program have converted greater than 20% of the previously outlined waste into gold mineralized intervals.

All of the results from the OCAP program have been successful in outlining continuous mineralization that is equal to or greater than the current economic cutoff grade. As such, bringing these new assay drill results into the database is expected to have a positive effect on updated planned resource estimate update is expected to be completed in first half 2013.

The OCAP library has over 75,000 m of historical core from previous operators who were testing for narrow high grade veins.  Drill holes tested too date suggest continuity of gold mineralization between higher grade vein hits. This has the potential to enhance the open pit potential of this large gold bearing system and each of the zones remains open along strike and down dip.

More...

Results from the 2012 OCAP program have not been included in the NI 43-101 resource which was released in February 2012 estimated to contain a NI 43-101 compliant Measured Resource of 1.4M tonnes grading 3.3 g/tonne for 143,785 ounces, plus an Indicated Resource of 11.6M tonnes grading 2.43 g/tonne for 902,225 ounces plus Inferred Resources of 14.2M tonnes grading 3.78 g/tonne for 1,726,674 ounces.  Mega plans to continue the OCAP program by testing the remaining 63,809 m of core throughout 2013 followed by an updated NI 43-101.

HIGHLIGHTS:

  • TL 11-368 pre OCAPintersected, 3.0metres at 2.42 g/t gold and 1.0 metres at 5.10 g/t gold
    • Post OCAP intersected 2 mineralized zones:
      • 30.0metres at 0.68 g/t gold
      • 6.0 metres at 1.00 g/t gold
  • TL 11-371 pre OCAP intersected, 11.0 metres at 1.08 g/t gold
    • Post OCAP intersected 4 mineralized zones:
      • 18.7 metres at 0.58 g/t gold
      • 23.0 metres at 0.43 g/t gold
      • 15.0 metres at 0.55 g/t gold
      •   3.4 metres at 1.31 g/t gold

  • TL 11-380 pre OCAP intersected 2.0metres at 9.15 g/t gold and 2.5 metres at 6.70 g/t gold
    • Post OCAP intersected, 23.0 metres at 1.00 g/t gold, 12.5 metres at 2.05 g/t gold
  • TL 11-397pre OCAP intersected 5.2 metres at 2.29 g/t gold
    • Post OCAP intersected 2 mineralized zones:
      • 49.0 metres at 1.04 g/t gold
      • 6.0 metres at 0.40 g/t gold
  • TL 11-441pre OCAP intersected no significant values
    • Post OCAP intersected 2 mineralized zones:
      • 5.0 metres at 0.80 g/t gold
      • 21.0 metres at 0.69 g/t gold
  • TL 11-442pre OCAP intersected no significant values
    • Post OCAP intersected 4 mineralized zones:
      • 5.0 metres at 0.45 g/t gold
      • 7.0 metres at 0.99 g/t gold
      • 5.0 metres at 0.69 g/t gold
      • 50.0 metres at 1.04 g/t gold

A summary of the OCAP results are listed below.

Monument Bay Pre-OCAP
(as of February 2012)

Monument Bay Post-OCAP
(as of September 2012)

HOLE#

 

FROM

(m)

TO

(m)

INTERCEPT (m)

Au Grade (g/t)

FROM

(m)

TO

(m)

INTERCEPT (m)

Au Grade (g/t)

TL-11-368

354.0

357.0

3.0

2.42

350.0

380.0

30.0

0.68

378.1

379.1

1.0

5.10

447.0

453.0

6.0

1.00

 

 

 

 

 

 

 

 

TL-11-371

381.2

392.2

11.0

1.08

380.2

398.9

18.7

0.58

 

 

 

 

417.0

440.0

23.0

0.43

460.0

475.0

15.0

0.55

500.0

503.4

3.4

1.31

 

 

 

 

TL-11-372

490.0

508.0

18.0

1.49

475.0

508.0

33.0

0.90

 

 

 

 

531.0

534.0

3.0

1.39

 

 

 

 

 

 

 

 

TL-11-380

423.2

425.2

2.0

9.15

420.2

444.0

23.8

1.00

497.5

500.0

2.5

6.70

496.5

509.0

12.5

2.05

 

 

 

 

 

 

.

 

TL-11-386

97.3

100.0

2.7

2.40

62.0

105.0

43.0

0.78

98.0

99.0

1.0

3.41

 

 

 

 

104.0

105.0

1.0

3.36

 

 

 

 

 

 

 

 

 

 

 

 

TL-11-392

135.8

138.8

3.0

1.77

135.0

172.6

37.6

0.62

167.8

172.6

4.8

1.47

 

 

 

 

 

 

 

 

 

 

 

 

TL-11-397

457.0

462.2

5.2

7.91

432.0

481.0

49.0

1.04

 

 

 

 

544.3

550.3

6.0

0.40

 

 

 

 

 

 

TL-11-439

188.0

194.0

6.0

1.23

136.0

138.0

2.0

0.75

216.0

221.0

5.0

0.52

188.0

195.0

7.0

1.08

232.0

256.0

24.0

0.43

232.0

360.0

128.0

0.41

266.0

281.4

15.5

0.63

 

 

 

 

320.0

359.0

39.0

0.55

 

 

 

 

 

 

 

 

 

 

 

 

TL-11-441

 

 

 

NSV

51.0

56.0

5.0

0.80

116.0

137.0

21.0

0.69

 

 

 

 

 

 

 

 

TL-11-442

 

 

 

NSV

163.0

168.0

5.0

0.45

 

 

 

 

261.0

268.0

7.0

0.99

 

 

 

 

386.0

391.0

5.0

0.69

 

 

 

 

491.0

541.0

50.0

1.04

 

 

 

 

 

 

 

 

TL-11-443

 

 

 

NSV

59.0

73.0

14.0

0.41

 

 

 

 

 

 

 

 

TL-11-444

 

 

 

NSV

84.0

105.9

21.9

0.78

 

 

 

 

 

 

 

 

TL-12-454

157.0

184.0

26.0

1.60

109.0

113.0

4.0

0.97

 

 

 

 

138.0

186.0

48.0

0.97

 

 

 

 

 

 

 

 

TL-12-463

119.0

170.0

51.0

1.25

114.0

174.0

60.0

1.12

 

 

 

 

214.0

226.0

12.0

0.40

 

 

 

 

 

 

 

 

TL-12-469

 

 

 

NSV

251.0

261.0

10.0

1.04

 

 

 

 

 

 

 

 

TL-12-472

 

 

 

NSV

181.0

189.0

8.0

0.72

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Image, no wrap/insert)

 

 Continued... 

 

 

 

 

 

 

 

 

Mega's President & Interim Chief Executive Officer, Glen Kuntz commented "These latest OCAP program results continue to provide further encouragement for the company that we're well on track to continue to expand the mineral resource base within the proposed open pit.

Our team continues to demonstrate that the OCAP program's historical drilling database has the potential to add significant ounces and future targets and it has also allowed us to improve our understanding in the relationship between rock types, structure, alteration, and the presence of tungsten within gold mineralization. Collectively, this information has been successful at targeting new ounces and finding them at a very low cost throughout our Monument Bay Gold Camp."

Please see the recent University of Manitoba Presentation that outlines these geological controls further. http://www.megapmi.com/assets/files/monument_bay/Ryus_St._Pierre_-_Mines_and_Minerals_Presentation.pdf

Mega's focused exploration program continues to demonstrate that additional gold mineralization occurs both within the current pit and outside the existing resource boundary or in areas that are currently estimated as low grade and classified in the inferred category.

Plan View

20121127Mega1

Cross sections

CME Declares Force Majeure Due To “Operational Limitations” On NYC Gold Depository

Posted: 27 Nov 2012 07:33 AM PST

gold.ie

Short-Term Gold Profits From Euromageddon - Soros Style

Posted: 27 Nov 2012 06:40 AM PST

By One Eyed Guide:

Whether you think that gold is a bubble that is deflating or a monetary metal that is going higher you can still take advantage of short term profit potential from additional gold investing.

George Soros called gold the ultimate bubble and yet he (or his funds) are buying it today - Why? It's unlikely that he's changed the fact-based Keynesian economic theory (which concludes that gold in not money) that has made him a billionaire so what does Soros think is going to happen? Is there a fact-based model to support it?

I haven't talked to him lately - Ok, I've never talked to him but his investment fund files a 13F each quarter. In the second quarter, Soros' funds dumped $50 million in financials including JP Morgan (JPM), Citigroup (C) and Goldman Sachs (GS) and bought $130 million of the SPDR gold EFT (GLD).


Complete Story »

2013’s Formula: Strong Dollar for Jobs & Profits

Posted: 27 Nov 2012 06:31 AM PST

While news that the euro zone had reached a deal on the next installment of aid for Greece initially pressured the US dollar and lifted gold and the euro a tad, its impact wore off relatively quickly and markets opened with a different tenor this morning.

Riverstone Starts Drilling on Liguidi Permit

Posted: 27 Nov 2012 06:24 AM PST

Riverstone Resources Inc. (TSX-V: RVS) ("Riverstone" or the "Company") is pleased to announce the start of a Reverse Circulation ("RC") drilling program on its 100% owned Liguidi Malguem Exploration Permit ("Liguidi") in Burkina Faso, West Africa. The RC drill program is intended to follow up on a recently completed Rotary Air Blast ("RAB") drilling program that tested portions of a 13 km long by up to 4 km wide soil geochemical anomaly. This soil anomaly represents one of the largest and strongest continuously mineralized gold anomalies in Burkina Faso.



The Liguidi property contains several distinct artisanal sites within the soil anomaly, which is characterized by highly anomalous gold values in excess of 100 ppb gold, and which is open to the southwest.  It is approximately 4 kilometres to the property boundary. The soil anomaly closely follows a strong deformation zone, thought to represent a splay off of the Markoye Fault Zone. The Markoye Fault Zone and associated structures hosts in excess of 15 million ounces of gold in Burkina Faso alone.

From northeast to southwest, the artisanal sites are Wayalguin, Three Hills, the Quartz Zone and Legare's Zone. The Quartz Zone is a strong 1000 m by 150 m zone of anomalous quartz-sulphide boulders that graded greater than 1.0 g/t gold that was confirmed with RAB drilling.  Legare's Zone is a 6 km long trend of gold mineralization, with a parallel 2 km long zones to the southeast, which were also confirmed with RAB drilling. Previous results include (see Riverstone news releases dated September 18, 2012 and September 20, 2012):
Trench ("TR") or
Drill Hole		Interval
(m)		Average Gold
Grade (g/t )		Location
TR-01 8 2.18 Wayalguin
RC-07 4.5 1.66 Wayalguin
TR-04 111 0.63 Three Hills
including 18 1.45
and 18 1.53
RAB-042 15.5 1.24 Quartz Zone
including 3 5.07
RAB-232 11 1 Quartz Zone
incliding 3 3.27
LMG-12-RAB-436 11 1.69 Legare's Zone
LMG-12-RAB-499 18 1.02 Legare's Zone
LMG-12-RAB-523 24 1.43 Legare's Zone
including 12 2.78
LMG-12-RAB-538 12 1.46 Legare's Zone
LMG-12-RAB-590 3 4.14 Legare's Zone
LMG-12-RAB-613 3 2.8 Legare's Zone
LMG-12-RAB-864 6 1.98 Legare's Zone
LMG-12-RAB-869 12 1.28 Legare's Zone

"We are excited about the start of the RC drill program. The recently completed RAB drilling program confirms that the 13 km long soil geochemical anomaly hosts significant gold grades throughout its strike length", commented Dwayne L. Melrose, President and CEO of Riverstone.  "The RC drilling program is expected to build on the previous RAB results along the Markoye Fault Zone that hosts the greatest concentration of gold resources delineated to date in Burkina Faso".

About Riverstone

Riverstone is active in Burkina Faso, West Africa, where it holds a portfolio of four high quality exploration projects covering in excess of 2,000 km.  Riverstone's flagship project is the Karma Gold Project in Burkina Faso, West Africa (the "Karma Project"), which comprises a NI 43-101 compliant in-pit Whittle total indicated resources of approximately 1.9 million ounces of gold in 56.5 million tonnes with an average grade of 1.07 g/t gold and total inferred resources of approximately 492 thousand ounces of gold in 15.4 million tonnes with an average grade of 1.0 g/t gold (see Riverstone's news release dated October 3, 2012 and independent NI 43-101 compliant Technical Report titled, "Technical Report and Updated Resource Estimate on the Karma Project, Burkina Faso, West Africa", dated effective October 1, 2012, filed on SEDAR (www.sedar.com) November 7, 2012).  The results of an independent Preliminary Economic Assessment ("PEA") (see Riverstone news release dated August 20, 2012 and independent NI 43-101 compliant Technical Report titled, "Preliminary Economic Assessment Report for the Karma Project, Burkina Faso, West Africa", dated effective August 2, 2012, filed on SEDAR (www.sedar.com) September 17, 2012), highlights the Karma Project to have robust economics. The PEA is based on Riverstone's previous January 9, 2012 resource estimate and while relevant and valid in regards of the January 9, 2012 estimate cannot necessarily be extrapolated to the updated resource estimate announced on October 3, 2012. 

The PEA is considered preliminary in nature and includes Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves and there is no certainty that the production profile concluded in the PEA will be realized.  Mineral Resources that are not Mineral Reserves have not yet demonstrated economic viability.

Paul Anderson, M.Sc., P. Geo., the Company's Vice-President, Exploration, is the Company's  Qualified Person for the purposes of National Instrument 43-101 and has reviewed and approved the technical contents of this release.

Additional information about Riverstone and its activities may be found on Riverstone's website at www.riverstoneresources.com and under Riverstone's profile at www.sedar.com. 

ON BEHALF OF THE BOARD
"Dwayne L. Melrose"
Dwayne L. Melrose, President & CEO

For further information contact:
Vancouver Office:
Dwayne L. Melrose  604-801-5020
Email:  info@riverstoneresources.com

Don Mosher, Corporate Development 604-685-6465
Raju Wani, Investor Relations 403-240-0555
Ron Cooper, Investor Relations 604-986-0112


Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Certain statements made and information contained in this news release and elsewhere constitutes "forward-looking information" within the meaning of Canadian securities legislation. Such forward-looking statements are based on certain assumptions and are subject to risks and uncertainties which could cause actual events or results to differ from those reflected in the forward-looking statements, including, without limitation, with respect to statements regarding the updated resources estimate, the assumptions set forth in this news release and in the Company's news releases of January 9, 2012, August 20, 2012, October 3, 2012 and risks and uncertainties relating to the interpretation of drill results and the estimation of mineral resources, the geology, grade and continuity of mineral deposits, the possibility that future exploration, development results will not be consistent with the Company's expectations, accidents, equipment breakdowns, risk of undiscovered, title defects and surface access, labour disputes, the potential for delays in exploration and permitting activities, the potential for unexpected costs and expenses, commodity price fluctuations, currency fluctuations, political risk and other risks and uncertainties, including those described under Risk Factors in each management discussion and analysis and in the Company's annual information form which are available under the Company's profile at www.sedar.com.  Forward-looking information is based on various assumptions including, without limitation, the expectations and beliefs of management, the assumed long term price of gold, that the Company will receive required permits and access to surface rights, that the Company can access financing, appropriate equipment and sufficient labour and that the political environment within Burkina Faso will continue to support the development of environmentally safe mining projects. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking statements. Accordingly, readers are advised not to place undue reliance on forward-looking statements.

This news release may use the terms "measured", "indicated" and "inferred" as these terms are defined under Canada's National Instrument 43-101.  U.S. Investors are advised that, while such terms are recognized and required by Canadian regulations, they are not recognized by the United States Securities and Exchange Commission ("SEC") and may not be comparable to similar information for United States mining or exploration companies.  As such, certain information contained on this news release concerning descriptions of mineralization and resources under Canadian standards is not comparable to similar information made public by United States companies subject to the reporting and disclosure requirements of the SEC. U.S. investors are cautioned not to assume that any part or all of the mineral deposits described in these categories will ever be converted into proven or probable reserves, as defined in the SEC's Industry Guide No. 7. 

Disclosure:  Riverstone Resources is a Vulture Bargain Candidate of Interest (VBCI) and is our fully fledged Vulture Bargain #3. Members of the GGR team are actively accumulating shares of RVS.V or RVREF and continue to hold a speculative long position in the company. 

Source:   http://www.riverstoneresources.com/s/NewsReleases.asp?ReportID=559075&_Type=News-Releases&_Title=Riverstone-Starts-Drilling-on-Liguidi-Permit     

Relative Strength In Gold Miners Favors Miners Over Gold

Posted: 27 Nov 2012 06:00 AM PST

By Brennan Basnicki:

Last week I wrote an article suggesting that portfolio allocation to gold miner (GDX and GDXJ) stocks was not an effective way to gain exposure to gold (GLD). The article illustrated how the correlation between miners and gold had recently approached zero.

Many people took this to be an outright bearish article on miners, and that was not the intention. I just wanted to highlight that the relationship had changed, and offered a couple reasons perhaps why the relationship had changed. Further, miners have significantly underperformed gold over the last two years, and until that trend showed signs of a change, I suggested one would do best to respect the trend and invest alongside of it.

Given all the comments made, I decided to explore the relationship further. Historical relationships don't last forever, and what is in focus today is often forgotten tomorrow. The


Complete Story »

James Turk - The LBMA Is Moving To Cover Up Silver Manipulation

Posted: 27 Nov 2012 05:31 AM PST

Today James Turk spoke with King World News about steps which are being taken by the LBMA and Western central planners to cover up the corruption and manipulation in the gold and silver markets. This is the first in a series of interviews with James Turk that will be released today which reveals what is going on behind the scenes of the increasingly desperate Western central bank gold and silver price suppression scheme.

More: http://kingworldnews.com/kingworldne...ipulation.html

CME Declares Force Majeure at NYC Gold Depository

Posted: 27 Nov 2012 05:26 AM PST

CME Group declared a force majeure at one of its New York precious metals depositories Monday, run by bullion dealer and major coin dealer Manfra, Tordella and Brooks (MTB), due to "operational limitations" posed by Hurricane Sandy.

CME declares force majeure at NY metals depository

Posted: 27 Nov 2012 05:08 AM PST

CME declares force majeure at NY metals depository

The group declared a force majeure at one of its New York precious metals depositories on Monday, due to operational limitations posed by Hurricane Sandy.

Author: Reuters
Posted: Tuesday , 27 Nov 2012

NEW YORK (Reuters) - CME Group declared a force majeure at one of its New York precious metals depositories on Monday, due to operational limitations posed by Hurricane Sandy.

CME said the depository run by Manfra, Tordella and Brooks (MTB), a major physical coin dealer, cannot move physical gold, platinum and palladium out of its New York facility.
The force majeure, which covers the exchange should delivery not occur due to circumstances beyond its control, takes effect immediately, CME said.

MTB held a total of 29,276 ounces of gold in its depository as of Friday, CME data showed. It is one of the five approved gold depositories and by far the smallest compared to the others run by JPMorgan, HSBC, Brink's and ScotiaMocatta.

MTB will make gold, platinum and palladium available at Brink's depository, CME said.
Current outstanding warrants will continue to be deliverable through all relevant delivery periods while the declaration of force majeure is in effect, CME added.

(Reporting By Frank Tang; editing by Gunna Dickson)

http://www.mineweb.com/mineweb/conte...3916&sn=Detail

Options Expiration 'Could See Gold Push to $1,800'

Posted: 27 Nov 2012 04:50 AM PST

The dollar gold price fell below $1,750 an ounce Tuesday morning, though it remained near to where it started the week, as stock markets recovered yesterday's losses following news of a deal on Greece's debt burden.

It’s the Season to Own Utility Stocks

Posted: 27 Nov 2012 04:32 AM PST

Chris Vermeulen www.TheGoldAndOilGuy.com

Over the past week I have been keeping my eye on several key sectors and stocks for potentially large end of year rallies to lock in more gains before 2013.

My recent calls have been RIMM (up 54%), AAPL (up 5%), FB (up 8%) so it's been a great month thus far. That being said there are three other plays that look amazing and one of them is the utilities sector.

Looking back 30 years clearly utilities have a tendency to rally going into year end. What makes this setup so exciting is that the Obama tax for 2013 has caused many investors to lock in capital gains along with dividend gains so the utility sector has recently been beaten.

I always like to cheer for the underdogs because they can make large moves quickly and this season its utility stocks.

30 Year Seasonality – Utilities Stocks

Utility Stocks Seasonality

Utility Sector ETFs:

In the graph below I show the main utility ETFs for trading. Simple analysis clearly shows the selling momentum is slowing and where price should go if it can breakout above the red dotted resistance line. Exchange traded funds XLU, FXU, IDU, and DBU are the funds I found to be setting up.

Utility Sector ETFs

Utilities Sector Trading Conclusion:

While I feel utilities are about start moving higher it is important to mention that the broad market is setting up for a 1-3 day pullback. If the stock market does pullback this week then we should see utilities pullback also. What I am looking for is a minor pullback in XLU with price holding up above $34 while the stock market pulls back.

If you would like to get my simple yet profitable ETF & Stock Trading Ideas then join my newsletter today: www.TheGoldAndOilGuy.com

Chris Vermeulen

Add to SocialTrade

]]>

Ted Butler: A Manipulation Time Line

Posted: 27 Nov 2012 03:29 AM PST

Author: 
Ed Steer

Yesterday in Gold and Silver

Ed_GSD
November 27, 2012 11:29am GMT

It was a pretty quiet day price wise all over Planet Earth on Monday.  Gold traded mostly within a five dollar price range.

However, gross volume was very heavy, which is no surprise as we head into the final few days of roll-overs out of the December contract.  Everybody with a December futures contract that isn't standing for physical delivery has to be out by the end of the trading day on Wednesday at the latest.

Gold closed at $1,749.40 spot...down $2.50 from Friday's close.  Once again there was no follow-through from Friday's big up day...and I'll have much more on this in 'The Wrap' further down.  Gross volume was 247,000 contracts, but once the roll-overs were subtracted out, the net volume was light at only 84,000 contracts or so.

It was almost the same story in silver, except there was somewhat more 'volatility in the silver price...and the attempted rally at the Comex open ran into the usual not-for-profit crooks.

Silver closed at $34.18 spot...up a whole nickel from Friday's close.  Gross volume was monstrous at 106,000 contracts, but netted out it was only around 26,500 contracts.

The dollar index did virtually nothing on Monday, although it began to weaken a bit starting at 3:00 p.m. in New York trading, where it fell 20 basis points down to the 80.05 mark...and then rallied a hair into the close.  The index finished at 80.13...down a mere 8 basis points from Friday.  Nothing to see here.

Here's the 2-day dollar index chart.  It includes the 6:00 p.m. Sunday night open in New York.

The gold stocks gapped down a bit at the open...hit their nadir around 10:30 a.m. in New York, which was gold's low price tick...and then rallied a bit from there.  But shortly before 2:00 p.m. a rally with some legs ensued...and most of the day's losses were eliminated by the 4:00 p.m. Eastern time equity market close.  The HUI finished down a tiny 0.17%.

The silver stocks didn't go quite as well as the gold stocks, even though the price finished in the black.  Nick Laird's Silver Sentiment Index closed down 0.82%.

(Click on image to enlarge)

As expected the CME Daily Delivery Report wasn't much, as the November delivery month is virtually over.  It showed that 9 gold and 7 silver contracts were posted for delivery tomorrow.

There were no reported changes in either GLD or SLV.

It was a different story over at the U.S. Mint yesterday.  They sold 8,500 ounces of gold eagles...500 one-ounce 24K gold buffaloes...and 400,000 silver eagles.

The Comex-approved depositories reported receiving 690,125 troy ounces of silver on Friday...and shipped 157,945 troy ounces out the door.  Virtually all of the action was at Scotia Mocatta...and the link to that activity is here.

Because of the U.S. Thanksgiving holiday on Thursday, the Commitment of Traders Report was delayed until yesterday...and I was shocked at what it showed.

In silver, the Commercial net short position increased by a very chunky 4,225 contracts...or 21.1 million ounces.  The Commercial net short position now sits at 275.9 million ounces. On a net basis, the 'big 4' short holders are short more than 44.0% of the entire Comex futures market in silver...263 million ounces worth, almost the size of the entire Commercial net short position.

Ted Butler says that JPMorgan Chase holds 34.0 percentage points of that total on its own...so it's a good bet that Scotiabank/Scotia Mocatta holds the lion's share of the remaining 10 percentage points.  It's my opinion that there are only two big shorts that matter...and these are them.

But, just to keep piling it on, the '5 through 8' big short holders are short another 8.9 percentage points.  However, in the grand scheme of things, the positions of the  '5 through 8' traders...plus the smallest two traders in the 'Big 4' category...are immaterial, as they can only possible hold a percentage point or two of the short position apiece.  On a net basis, the 'Big 8' are short 52.9% of the entire Comex silver market...and JPMorgan chase is short 34 percentage points of that amount all by itself.

In gold, the Commercial net short position increased by 11,269 contracts, or 1.13 million ounces.  The Commercial net short position in gold now sits at 23.61 million ounces.  The 'Big 4' are short 14.94 million ounces of gold, which represents 34.3% of the entire Comex futures market on a 'net' basis.  The '5 through 8' traders are short an additional 5.59 million ounces of gold, or 12.9% of the entire Comex futures market on a 'net' basis.  Adding this up, the 'Big 8' are short about 47.2% of the entire futures market in gold...and that's a minimum number.

Here are a few sentences I stole from silver analyst Ted Butler's short Monday commentary to his clients regarding yesterday's COT Report...

"By my calculations, JPMorgan is holding a net short position of 35,000 contracts in COMEX silver futures, one of their largest short positions ever, as of the latest COT. That's the equivalent of 175 million oz. Because there was also a large increase in spread positions in the Disaggregated COT report, JPM's market share is now up to 34% of the entire short side of the COMEX silver futures market. While I am stating this as factually as possible, it almost qualifies as being unbelievable."

Nothing free market about this.  If you want a visual and historic representation of the COT reports going back about 16 year...these linked interactive charts show the short and long term trends for all COT categories, which are visible at a glance.  For gold the link is here...and for silver the link is here.

Yesterday's COT Report snapshot of the 'big 4' and 'big 8' short-side traders comes in this excellent graph of "Days of World Production to Cover Comex Short Positions" as provided by Nick Laird.

(Click on image to enlarge)

It's my belief that almost the entire red bar in silver is made up of the short positions of JPMorgan and Scotiabank/Scotia Mocatta.  As I said before, the short positions of the other six traders in the '8 or less' category...are immaterial.

Reader E.W.F...who was kind enough to send out a full set of charts from that data contained in the Disaggregated COT Report...sent me this table of numbers, along with the following comments...

"The silver top 4 net short position hasn't been this large since September 28, 2010.  Silver open interest hasn't been this high since November 9, 2010.  The current silver COT structure is remarkably similar to the COT structure seen in late 2010 when the silver price started to spike."

Without doubt, we're probably beyond those 2010 numbers at this point already, as the deterioration on Friday was shocking...and I'll have more on that in 'The Wrap'.

Since it's my Tuesday column, I have more than the usual number of stories for you today...and I'll happily leave the final edit up to you.

It appears that Friday's price rally in all precious metals was met with massive short selling by JPMorgan Chase et al
Do gold manipulation deniers really know the secrets of central banking? Austrian Press Agency cites GATA in report on possible audit of Austria's gold. Need to arrest gold demand; imports widening trade deficit: RBI deputy governor.

Critical Reads

Retailers' Thanksgiving Deals Cut Black Friday Spending

Ed_GSD
November 27, 2012 11:29am GMT

Thanksgiving Day openings and midnight deals at retailers from Target Corp. to Wal-Mart Stores Inc. drew U.S. shoppers out earlier than ever, trimming spending on Black Friday.

Sales on the day after the Thanksgiving holiday in the U.S. fell 1.8 percent from last year to $11.2 billion, according to a report today from ShopperTrak, a Chicago-based researcher. That compares with a 6.6 percent gain in Black Friday sales in 2011. Foot traffic this year rose 3.5 percent 307.7 million store visits, ShopperTrak said.

Retailers have turned Black Friday, once a one-day event after Thanksgiving, into a week's worth of deals and discounts. With the earlier openings, online deals starting as far back as last weekend and new promotions stores are offering to win return visits, shopping malls were less hectic on Black Friday this year, said Ramesh Swamy, an analyst at Deloitte LLP.

And as Bill King said in yesterday's King Report..."If one were to adjust year-over-year Black Friday sales by population growth and inflation, the number would be much worse."

This Bloomberg story showed up on their website on Saturday afternoon...and I thank reader 'David in California' for finding our first story of the day.  The link is here.

What A Difference A Year Makes

Ed_GSD
November 27, 2012 11:29am GMT

As we approached the debt-ceiling debacle last year, there was much wailing and gnashing of teeth among talking heads and portfolio managers and indeed the latter actually started to put their money where there mouth was - i.e. they sold/reduced exposure to US equities. A year or so later and the fiscal cliff and debt-ceiling SNAFU is once again upon us but this time, while sentiment is just as negative, real speculative positioning is at multi-year record high longs.

It would seem to us that all those holding out for a hero in Congress and some compromise to provide a lift-a-thon in stocks are already all-in (as the two charts below indicate oh so clearly). One can only hope they are not disappointed as the 'money on the sidelines' appears to be more exposed than ever and unlike last year's massive net short positioning, there is no more squeeze ammunition left for the next leg.

This short Zero Hedge piece has two must-see graphs embedded in it...and I consider it a must read as well.  Marshall Angeles sent it to me on Sunday...and the link is here.

Congress Damns Corzine but Lets Him Off the Hook

Ed_GSD
November 27, 2012 11:29am GMT

Perhaps we should no longer be surprised by the arrogance of Wall Street executives. Still, the level of hubris and bullying displayed by Jon Corzine during his 19-month tenure as chairman and chief executive officer of MF Global Holdings Ltd. -- as described in a recent congressional report about the company's 2011 collapse -- stands out for sheer offensiveness.

The 97-page report prepared by the staff for Republicans on the House Financial Services Committee panel on oversight and investigation pulls no punches when it comes to blaming Corzine for the MF Global disaster, which wiped out thousands of jobs and billions of dollars of customers' and creditors' money. "Jon Corzine caused MF Global's bankruptcy and put customer funds at risk," the report concludes flatly.

"The goal here is not to be a prop trader," the report claims Corzine said. "I don't think that we will be in a risk taking position, substantial enough to have it be the kind of thing that the rating agencies would say 'holy cow, these guys got a different business strategy' than what we told them we had."

This is another Bloomberg story from Sunday afternoon...this one courtesy of Manitoba reader Ulrike Marx...and the link is here.

Mortgage Interest Deduction, Once a Sacred Cow, Is Under Scrutiny

Ed_GSD
November 27, 2012 11:29am GMT

A tax break that has long been untouchable could soon be in for some serious scrutiny.

Many home buyers deduct their mortgage interest when assessing their tax bill, a perk that has helped bolster the income of millions of families — and the broader housing market.

But as President Obama and Congress try to hash out a deal to reduce the budget deficit, the mortgage interest deduction will likely be part of the discussion.

Limits on a broad array of deductions could emerge in any budget deal. It is likely that any caps would be structured to aim at high-income households, and would diminish or end the mortgage tax break for many of those taxpayers.

This New York Times article showed up on their Internet site early yesterday afternoon...and I thank Phil Barlett for sending it.  The link is here.

Doug Noland: Following Weidmann, Lacker Takes a Stand

Ed_GSD
November 27, 2012 11:29am GMT

Courageously, Mr. Lacker comes with a quite sound proposal:  "If the Federal Reserve cannot limit credit policy of its own accord, legislation may be the best option. And the restraint of credit policy would not be complete unless limits on reserve bank lending are complemented by limits on the Fed's ability to buy private sector assets."

This is absolutely correct:  Some basic rules of the game would go a long way toward containing the ongoing damages associated with profligate discretionary monetary management.  This runaway experiment must be reined in; there has to be a return to trusted central banking principles.  The Fed should be limited to government debt purchases, and there must be clear limitations on the size of its balance sheet.  And I would argue that until there is a return to a sound monetary doctrine there will remain this pall of uncertainty overhanging the economy.

Interminable "fiscal cliff" and European infighting are not the only games in town.  I hope others will bravely support Mr. Lacker in what could prove a fascinating – and critically important - battle brewing at the Federal Reserve.

Here's Doug Noland's Credit Bubble Bulletin from last Friday...and what Doug has to say is always worth reading.  It was posted on the prudentbear.com Internet site on Friday evening...and the link is here.  I thank reader U.D. for sending it.

Britain Selects a Canadian To Lead the Bank of England

Ed_GSD
November 27, 2012 11:29am GMT

In a surprising departure from convention, the British government on Monday selected Mark J. Carney, the head of the Canadian central bank, to succeed Mervyn A. King as the next governor of the Bank of England.

The appointment ended months of jockeying by some of Britain's most prominent public officials. As a result of changes to take effect next year, the job will come with sharply enhanced powers.

The odds had been seen as heavily favoring the Bank of England's deputy governor, Paul Tucker. The decision to select a foreigner to lead the bank, Britain's most storied financial institution and the equivalent of the Federal Reserve in the United States, came as a shock when George Osborne, the chancellor of the Exchequer, broke the news during a session of Parliament.

I wouldn't read much into this.  At the moment, Canada is doing great, and a lot of the credit has been laid at the feet of Mr. Carney who is enjoying almost 'rock star' status in the world of central banking.  I'm sure he was chosen mainly because he didn't bring any baggage with him, but I'm sure his time spent at Goldman Sachs was a plus as well.  This story showed up on The New York Times Internet site yesterday...and it's Ulrike Marx's second offering in today's column.  The link is here.

Catalan separatists take qualified victory in elections

Ed_GSD
November 27, 2012 11:29am GMT

Catalan parties pushing for a referendum on breaking away from Spain won strong backing in an election Sunday, while voters punished the rich region's leader Artur Mas, forcing him to share power.

The result could set Catalonia up for a clash with Spain's central government, already riled by Mas's push for greater self-determination as Spain fights to avoid getting bailed out by its EU neighbours.

But it was unclear how Mas would move forward after he saw his support plunge in favour of rival parties that share his desire for some kind of referendum but not all his political objectives.

Mas's centre-right Convergence and Union alliance (CiU) won the vote, but its share of the parliamentary seats plunged to 50 from 62, while left-wing nationalists ERC surged to 21 seats from 10, official results showed.

This News Wires story showed up on the france24.com Internet site yesterday...and I thank Roy Stephens for bringing it to our attention.  The link is here.

Need to arrest gold demand; imports widening trade deficit: RBI deputy governor

Posted: 27 Nov 2012 03:29 AM PST

Need to arrest gold demand; imports widening trade deficit: RBI deputy governor

Reserve Bank Deputy Governor Subir Gokarn today said there is a need to "dematerialise" gold like any other financial product to reduce its physical imports, the rise of which has been blamed for the high current account deficit (CAD). It is feared to touch a record high this year.

"It (high gold imports) is creating some macroeconomic stresses and so the challenge is to find ways to replicate the financial characteristics of gold without necessarily causing physically importing," Mr Gokarn told the last day of the two-day annual Bancon here.

The current account deficit or CAD has been rising on the back of record trade deficits, which in October jumped to a 12-year high of $21 billion on the back of rising oil and gold imports.

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Lawrence Williams: Can we trust China’s gold reserve figures – or anyone else’s either?

Posted: 27 Nov 2012 03:29 AM PST

Lawrence Williams: Can we trust China's gold reserve figures – or anyone else's either?

According to a Reuters report, China's Ministry for Industry and Information Technology has put out a statement suggesting that the country's gold output will continue to rise over the next three years to reach between 420 and 450 tonnes per annum, thus comfortably retaining its position as the world's largest gold producer.  It also predicts Chinese consumption of some 1,000 tonnes of gold per annum by then.

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The Gold Market Through China's Eyes

Posted: 27 Nov 2012 03:29 AM PST

The Gold Market Through China's Eyes

Have you ever wondered what the typical Chinese gold investor thinks about our Western ideas of gold? We read month after month about demand hitting record after record in their country – how do they view our buying habits?

Since 2007, China's demand for gold has risen 27% per year. Its share of global demand doubled in the same time frame, from 10% to 21%. And this occurred while prices were rising.

Americans are buying precious metals, no doubt. You'll see in a news item below that gold and silver ETF holdings just hit record levels. The US Mint believes that 2012 volumes will surpass those of 2011.

But let's put the differences into perspective. This chart shows how much gold various countries are buying relative to their respective GDPs.

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South Africa’s gold industry on edge - Gold Fields

Posted: 27 Nov 2012 03:29 AM PST

South Africa's gold industry on edge - Gold Fields

South Africa's gold mining industry, one of the country's most important sectors, is on the brink and will collapse if no steps are taken to boost its productivity, the world's fourth-largest bullion producer Gold Fields said on Monday.

The mining industry in Africa's biggest economy, particularly its gold and platinum producers, have just emerged from one of the toughest periods in their history with mines ground to a halt by months of wildcat strikes.

"If the last five years' decline in production continues, there will be no industry in five years time," Gold Fields' Chief Financial Officer Paul Schmidt said as the company unveiled its third quarter earnings.

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Montana GOP Rep.: "Pay Me In Gold Before Dollars Have No Value"

Posted: 27 Nov 2012 03:29 AM PST

Montana GOP Rep.: "Pay Me In Gold Before Dollars Have No Value"

Jerry O'Neil, six-term GOP state representative in Montana, has asked to receive his salary (which at $10.33 per hour is around $1800 per month) in gold or silver. The long-standing legislator was driven to this decision by his constituents' concerns about the nation's massive debt-load and fears of our country's collapse as "only so many dollars can be printed before they have no value."

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$300,000 In Gold Dust Found In Sacramento Home During HVAC Installation

Posted: 27 Nov 2012 03:29 AM PST

$300,000 In Gold Dust Found In Sacramento Home During HVAC Installation

Sacramento homeowners called for what was going to be an expensive new heating and air system but ending up striking gold.

Workers installing the equipment found a secret gold stash hidden away in the house. Back in September, beneath the floor grill of an older home, Steve and his partner discovered 12 baby food jars filled to the brim with gold dust.

They pride on customer service at Clark & Rush, but this is one guarantee they say they can't make, finding gold on every house call. The total value of what they found was $300,000 worth of gold. The total cost of the HVAC installation was around $6,500.

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CME Declares Force Majeure at Manhattan Gold Depository

Posted: 27 Nov 2012 03:29 AM PST

CME Declares Force Majeure at Manhattan Gold Depository

CME Group Inc. on Monday said that Manfra, Tordella and Brookes Inc., one of the exchange's gold depositories, will not be able to delivery metal as the lower Manhattan company deals with "operational limitations" almost a month after the arrival of Hurricane Sandy.

MTB, one of five depositories licensed to deliver gold against CME's benchmark 100-troy ounce gold contract, held 29,276 troy ounces of gold and 33,000 troy ounces of palladium as of Nov. 23, according to data from CME subsidiary Comex.

In a notice to customers on Monday, CME declared force majeure, a contract clause that frees parties from liability due to an event outside of their control, for the facility.

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Seven King World News Blogs/Audio Interviews

Posted: 27 Nov 2012 03:29 AM PST

Dr. Marc Faber: 44 Charts That Show Why The World Is Doomed

Posted: 27 Nov 2012 03:29 AM PST

Dr. Marc Faber: 44 Charts That Show Why The World Is Doomed

In a new presentation given in Hong Kong to the London Bullion Market Association, Faber offers a thick stack of 44 charts that makes him very bearish on the global economy.  They include overviews of the emerging and evolving trends on debt, trade, stocks and commodities.

Faber points to the explosion of public and private debt and how they have been far outpacing GDP growth for the last 50 years. In this backdrop, the wealth gap between younger and older Americans have been widening.

Overseas, China has seen its economy boom on expansionary monetary policy, which has turned the world's second largest economy into a giant credit bubble.

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