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Thursday, February 7, 2013

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Turkey will not halt Iran gold exports despite sanctions pressure

Posted: 07 Feb 2013 02:46 PM PST

Economy Minister Zafer Caglayan says the country will not be swayed by Western sanctions pressure to halt gold exports to Iran.

Ian Gordon: Economic winter could thaw gold equities

Posted: 07 Feb 2013 12:33 PM PST

Ian Gordon has said it before: We're on the edge of an economic maelstrom that will breathe new life into the gold exploration industry.Gordon talks about what he forecasts as an unprecedented period of growth and investment in gold, which is just about to get underway as the market sinks.

Pitched Currency War & USDollar Rejection

Posted: 07 Feb 2013 12:17 PM PST

Friend of gold Jim Sinclair, and executive to a mining firm with interests in Tanzania, put it so well. He captures the theme of this article when he said, "It is the constant drop in the dollar's usage as a contract mechanism internationally. No one sees this but it is the Hammer of Thor on the head of the dollar." The rejection of the USDollar in global trade will mean the end of the abused privilege in a currency turned toxic. Its rejection is the marquee event in the financial world for 2013, following isolation. It is unstoppable and all-encompassing, certain to have geopolitical consequences, as it alters the economic and financial landscape in harsh ways much like a band of violent marauders brandishing machetes alter the neckline of their victims. See the Tonton Macoute in Haiti. The greenback is cornered; it is done!

 

The central bankers and sovereign wealth fund managers are running scared. The Official Monetary & Financial Institutions Forum (OMFIF) is a forum of central banks, sovereign funds, financial policy makers, and market participants. It recently issued a report on the global monetary system, emphasizing the possibility of a major breakdown in international monetary relations as a result of the currency wars, which hinder productivity. It accepts that the present system is collapsing. It argues a formal role for gold is required to play in international finance. But they turn to the despised corrupt savage callous Intl Monetary Fund, and its broken currency vehicle, the discredited discarded SDR basket. They will be swept aside despite eyes partly open.

 

The opponents to financial hegemony have spent the last four years in planning a new order that can viably sustain the global trade system without a USDollar at its central role. On one side, foreign nations must avoid the toxic effect of the asset bubble USTreasury Bond as the core to their banking systems. On the other side, foreign nations must react to the accelerating threat to their national economies from both a uniform cost inflation effect and a rising currency effect that punishes strength, success, and prudence. The Competing Currency War has reached a new elevated fever pitch, with the major central banks delivering powerful damage to each other while defending themselves. The unintended consequences have been a predictable unfolding of events to the sound money gold crowd, with years of warning and even a label given to the conflict. It comes as an unwelcome surprise to the mainstream sheeple crowd, still entangled in the paper wealth corner. The process continues, the pathogenesis relentless as paper securities erode in value. The world is slowly coming to the realization that only a Gold Standard can cure the world of its financial cancer from metastasized paper insecurities. The contact of Silver will cleanse the hand that has held paper since 1971, when the era of modern chronic unsolvable financial crisis was born. That is, unsolvable without a primary role for Gold itself, the despised stable metal. Gold is the ultimate currency.

 

SHOCK YEAR 2013

So the Jackass call is that 2013 will see the USDollar finally isolated and put in a position for rejection. It might not suffer a sudden death, but it will be corralled after being identified as the toxic agent flowing within the global financial arteries. However, the quarantine will be conducted in an extraordinarily clever fashion. Since the United States and United Kingdom, with its loyal court of followers in Western Europe, control the global banking system, the sovereign bond system, and the FOREX currency system, even the commodity markets including Gold & Silver, the solution had to be loaded with innovation if not guile. The alternative to the USDollar as a solution had to be formulated and planned as a counter-attack, but done so outside the oversized pockets of strength where the Anglo bankers ply their trade and controls. As many trade partners have been public about their objectives, when two parties come together to conduct trade, no rational reason can dictate that the USDollar should be used as a vehicle to settle trade, when both parties are located halfway across the globe. The New York and London bankster crowd cannot dictate Gold's new role, when their vaulted gold supplies are being vacated to points in Asia, when their vault contents are demanded in official accounts for return, when their past gold shipments have been contaminated with tungsten. These banksters are being outed as criminals.

 

The end to US & UK hegemony is coming. It will arrive like a grand lasso cast around the set of trade partners seeking a fair system. Their proffered solutions will be ignored, like the QE lunacy in the United States and the ESM lunacy in Europe, both discredited totally. The IMF will not play a role in the next chapter. The irony is thick and inescapable. If the Anglo bankers insist on NOT considering, using, and relying upon Gold as a currency of utmost validity, robustness, and strength, then the rest of the world will devise a system for trade settlement that will evolve toward gold itself. The settlement of trade will not therefore pass through either the banking system or the currency marts. The solution will come in global trade that no longer requires the USDollar, but rather a simpler system where value is perceived more clearly, where the two participants will transact as peers, where payments will not rely upon the big banks, where the ignored super currency Gold is the basis. The deceptions of paper-based IOUs will be averted. The corruption in the banker shell games will be cast aside. The USDollar will be isolated, ignored, shunned, then put to death by the Americans themselves during its uncontrollable fever.

 

THE KEY: NON-USDOLLAR TRADE

The grand hint to the end-around solution in search for a USDollar alternative has been in front of the nose for several years, dating back to the China-Brazil bilateral swap deal in 2005. Little attention has been given a long sequence of similar bilateral swap deals that have centered upon the Chinese Yuan for initiating and settling trade. Nation after nation have lined up with the Beijing leaders to conduct trade in something akin to a credit card account based in Yuan currency, which converges toward zero over time on balance. Trade is initiated by one side delivering goods. The swap facility is tapped. Trade goes in the other direction, and the swap facility is credited toward zero. Numerous nations have signed up with China on such bilateral swap facility deals that enable brisk trade, in essentially a barter framework. The word barter is never used, since it might upset the powerful banker groups that shuffle bonds and currencies like so much stained wampum and contaminated salt at the corrupted trading posts. With Russia, South Korea, Japan, Iran, India, and Australia onboard with Chinese Yuan swap deals, one must suspect that a critical mass of perhaps half of global trade is conducted outside the USDollar shadow. This is a growing critical mass that acts much like scattered pylons on which to place a new trading platform. The key is that the collection of bilateral trade conducted by China is no longer done in USDollars. The objections are openly stated, that nations do not find it obligatory to settle trade in a third-party currency like the USDollar, especially when the US central bank is flooding the system with USDollars of highly suspicious origin but with very certain negative ramifications on the value of nationally managed reserve systems. The other big more recent hint is that Turkey is serving as a test site for trade settlement in Gold. Ankara bazaars are providing Gold in giant quantities, used in satisfying trade payments. So far the sleep Anglo bankers consider it minor, and operating in the Iranian shadows. They are wrong.

 

An important dynamic must be made clear. In the past decades as nations engaged in trade, in particular with crude oil, the trade was settled in USDollars. Therefore nation after nation accumulated USTBonds in their surplus reserves account as part of banking systems. They followed the lead set forth by the Saudis as they managed the Petro-Dollar functions. The Saudis recycled their surplus funds into USTBonds, so as to keep the balance of FOREX currencies intact even as massive imbalances built up quickly over time. As a result, the entire world of major nations, the global producers and traders accumulated USTBonds within their banking systems. The norm became USTreasurys with which to build national banking systems. So the Saudi-led Petro-Dollar established global trade done in USDollar terms, even outside the energy market. In a sense, their reserves management as agreed upon between the USGovt and Saudi royals (King Fahd), induced the global trade participants to follow suit and create banking systems built upon USTBonds also. All that is changing, since the Chinese Yuan swap facilities have taken on critical mass globally. However, the final blow to the USDollar will come from standard non-energy trade being settled outside any US$-based terms. The practice is accelerating, initiated in Asia, but spreading westward fast, urged along with a giant push in response to the Iran trade sanctions. Every action brings about an equal and opposite reaction.

 

The crux of the non-US$ trade vehicle devised as a USDollar alternative will be the Gold Trade Note. It will enable peer-to-peer payments to be completed from direct account transfers independent of currency, and most importantly, not done through the narrow pipes and channels controlled by the bankers with their omnipresent SWIFT code system among the world of banks. The Gold Trade Note will act much like a Letter of Credit, serve as a short-term bill, and maybe even push aside the near 0% short-term USTreasury Bills that litter the banking landscape. Any bond or bill earning almost no interest is veritable clutter. The zero bound USTreasurys open the door in a big way for replacement by a better vehicle. The new trade notes will involve posted gold as collateral, whose entire system for trade usage will bear a massive gold core that also will include silver and platinum, maybe other precious metals. The idea is to avoid the FOREX systems, to avoid the USDollar, and to avoid the banks as much as possible in a peer-to-peer system that can be executed between parties holding Blackberry devices or simple PC to complete the payments on transactions. If Gold is ignored by the corrupt bankers, then Gold will be the center of the new trade system and the solution in providing a globally accepted USDollar alternative.

 

Do not be surprised to see the Chinese Yuan later as interchangeable with the Gold Trade Note. But first the Yuan must be convertible into the many major currencies actively traded in the world. Numerous reports have come in recent weeks that the Yuan currency will soon have a gold backing, yet unconfirmed. My expectation is for the Chinese Yuan eventually to be interchangeable with the Trade Note. That will signal its implicit gold backing. While many events and steps are not known, and many surprises will be thrust on stage, the guiding pathways are slowly coming to light.

 

CURRENCY WAR AMONG CENTRAL BANKS

The Competing Currency War has grown in intensity. The competitive devaluations of currencies is causing severe damage among the major players. National reserves are suffering loss, while growing in size to dangerous levels. Protection of export trade has become of paramount importance. Nations are speaking openly through their central banks about the distress and urgency of the worsening situation. Russia has directly identified the currency battles as war. Nations are acting in their best self-interest, and in the process defying other nations, rendering them harm. With Switzerland and Japan enduring the brunt of the currency wars, look for them to each arrive at the conclusion that a Gold Standard would eliminate many problems. They are important pivotal nations. Successful nations and safe haven nations are put at great risk, even punished by having their floating currency rise. Great distortions are occurring as the Euro is propped, the beneficiary of colossal USDollar swap facility influx in the $trillions. The nearly constant US DX currency index is a lie, a false soothing signal that all is well. In fact, the USDollar is seeing instability with several currencies within the index.

The list of nations undergoing active currency intervention is growing markedly. Currency manipulation actions are routine, each action inviting a reaction by other nations. It is not just Japan and the United States, the usual suspects. It is Luxembourg, Switzerland, South Korea, Sweden, Norway, and Brazil. Heck, even the venerable England has taken steps to create a Chinese Yuan swap facility. They do not wish to be left out when the Yuan becomes a more global currency, with full convertibility. London is aiding the path to a convertible Yuan. Who'd a thunk it? London wishes to remain a major trading center. Look for someday soon a Chinese Govt Bond auction denominated in Yuan, the offering managed by London banks. Such a development is not welcome news for New York, which must be seething with anger and flush with disgust. This is the more than a currency war, but rather a global currency tumult and transformation, with grand tectonic shifts, on the disruptive path to a return of the Gold Standard.

 

Some important events within the financial wars over control of money and determination of value is underway. Many details are analyzed in the January issue of the Gold & Currency Report for the Hat Trick Letter. Big disruptions are coming very soon to both the FOREX currency market and the Gold market. Gold price breakouts will occur in various currencies, but not in US$ terms, the defended bunker. The new dangerous phase of the competing currency war has the propped Euro keeping the US DX index up, since the Euro has an absurd overweight in the queer index (artifact of past era). The Gold price rise will come like a sudden burst of wind. The speculators who trade Gold based solely on the DXY index will not understand the processes going on behind the scenes. They will be greatly surprised and taken off guard by the poweful upward move in Gold when it arrives. Watch for the Swiss and Japan to knock on the door for entrance in the Eastern Alliance, which will produce the USDollar alternative. It requires a critical mass for success. The stress felt in these two nations will motivate their pursuit of the USDollar alternative solution. They are being seriously wounded by the fiat paper currency system with floating rates.

 

Russia spoke out viscerally on the growing global awareness of an open currency war. Events are not of a fresh war, but rather a climax. Russia's central bank head Alexei Ulyukayev seems only recently aware of the battles among central bankers that have raged for a few years. The climax could result in a Gold Standard implemented in place, with the Anglo-Americans deposed. The practice of competitive devaluation has turned routine. All actions taken by individual nations invite quick reactions by affected partners. Conversely, the successful nations do not tolerate punishment with a higher exchange rate. A return to gold in a central role would provide reward instead of punishment. This is the currency war entering the final phase, where the Gold Standard could potentially emerge as the global solution. The returned imposition of the standard would enable successful nations to garner more gold as reward (see Norway, Switzerland), and punish sluggish wayward parasitic sclerotic socialist nations which run chronic trade deficits by sending them to the Third World. Recall the shattered objective made in 2009 by central bankers. Their vacant call was reiterating just three months ago, to refrain from competitive devaluation of currencies. No nation refrained, as it is total empty rhetoric. When pressured and under attack, individual nations will act in their own domestic best interests, to defend their industries, to fight to survive.

 

The world has NEVER seen so much direct currency intervention and protective action taken by central banks. History is being made. The currency tremors augur some truly historical events, with the return of the Gold Standard coming, although by indirect means via trade settlement. By consequence the FOREX currencies and their crumbling bond foundation will be indirectly declared ruined, toxic, and unworthy of widespread global usage as a monetary platform. Some important events highlight the Competing Currency War clashes:

 

  • Brazilian Finance Minister Guido Mantega first dubbed a currency war in 2010 in open terms, engaging the richer nation. He must be credited with the initial challenges and confrontations of the major central bank powers.

  • Luxembourg Prime Minister Jean-Claude Juncker complained of a dangerously high Euro. Its 7% gain against the USDollar in the past six months poses a fresh threat to the EuroZone economy. The European Central Bank states that it is not prepared to favor a weaker currency.

  • Switzerland has been blocking the Franc appreciation against the Euro since September 2011. Their central bank balance sheet has gone over 70% of GDP, but will fail to achieve any success. Great losses await in the blowback.

  • The central bank of Norway (Norges Bank) has received pressures from the finance ministry, in reaction to a strong Krone currency. The ministry urges more accommodation, and not to continue conducting a tight fiscal policy. The Krone has been rising due to a responsible government, and long successful North Sea oil project with about $1.6 trillion held in sovereign wealth funds.

  • The central bank of Sweden wishes to execute a rate cut in order to avert a stronger Krona currency. The Riksbank head has argued for deeper rate cut than the 0.25 basis point enacted. They prefer the basic self mutilation method.

  • Japan has reignited new major battles, as newly elected Prime Minister Shinzo Abe urged a more aggressive central bank, turning it into more of a political arm. The result has been an 11% Yen decline since December against the USDollar. Their 22-year interventions are a total disaster, and example to observe. Expect Japan to join forces with the Chinese in common goals.

  • The Bank of Korea has formally stated an urgent response is needed to defend against the falling Japanese Yen. Concern is over the harmful impact to exports and investor confidence. Their finance ministry wishes to put forward an agenda item at the G-20 talks in Moscow, on adverse effects of monetary easing in the United States, Europe, and Japan. Expect South Korea to join forces with the Chinese, as they diversify out of USTBonds.

 

SWITZERLAND POISED FOR GRAND LOSSES

The official program launched by the Bank of Japan delivered some powerful blows to the Swiss bankers and their lunatic peg against the Euro currency. Defense of Japanese industry has translated into outsized losses for the Swiss central bank portfolio, simply put. Extreme risk continues to rise toward a break point in Switzerland. Their Euro-Franc peg cannot be held firm. As the Euro continues to crumble (regardless of exchange rate), investors are flocking to the Swiss hills. The Swiss National Bank cannot hold the 120 declared peg. Their short Franc position and long Euro position, with other major currency long positions from some diversification (like into the Japanese Yen), will assuredly break as each major nation manages according to their own national priorities. The urgent Euro defense has prompted other nations to take defensive action. The war is on. A new phase has begun, with damage done to other nations rising. The Swiss Natl Bank has converted itself to an ill-fated hedge fund in danger of massive losses. Its losses are mounting. Its reserves from Franc defense are in the 75% range of their national GDP, the size of their economy. The Euro-Franc peg is doomed to fail, with gigantic losses to come in the cascade of ruin. Note that the Japanese Yen has moved down hard in four months time, and continues down.

A look at a 50-year chart (shown in the January Hat Trick Letter paid reports) should cause alarm, since the trend over two generations appears to be in the early phase of an important reversal. The JapYen is falling rapidly by designed pressure from their central bank, which has been politicized radically in recent weeks. Massive losses are coming from the Swiss bets on the Yen, along with catastrophic losses from an explosive upward move in their own SwFranc currency. The focus of the Competing Currency War right here right now should be squarely on the Swiss and Japanese. They are at war with each other, blowing up the Swiss reserves. The Swiss thought they were acting prudently by diversifying out of the Euro and into the British Pound and Japanese Yen. The BPound is down from 163 on January 1st to 156 today, almost a 5% decline in merely five weeks. The JapYen is down strong, from 129 in late September to 107 today, falling with powerful momentum. The Asian currency is down a monstrous 17% in the last four months. Japan is trying to push down their currency in order to make cheaper their exports. On the other hand, England is just falling apart, in a nasty recession.

The Swiss National Bank went all in three times and counting in the last several months, with heavy commitments to defend against a fast rising Swiss Franc currency. The Swiss have a truly massive and deadly commitment, seen by the size of their central bank balance sheet. It is like a giant boil on the Swiss face. Details of the interventions are full of intrigue, if not highlights of the futility. Huge losses await the small nation dominated by its banks. The bankers have gone coo-coo, like their clocks. Compare. The USFed has a big balance sheet, equal in size to over 20% of the USEconomy size, as measured by GDP. The Euro Central Bank goes further, with a balance sheet of 30% of GDP for the EuroZone. The Swiss take it to a new level, two to three times larger. The balance sheet of the Swiss National Bank contain assets amounting to about 75% of the Swiss GDP. They have literally bet the bank on three separate occasions recently. The nation is small, but the carried risk is staggering, enough to collapse their financial system. It is already badly damaged from a) the loss of secret private accounts, b) the loss from underwriting mortgages in Eastern Europe, and c) the loss from US$-based toxic bonds. Next comes potentially catastrophic losses from currency regime defense, compounded by legal challenges on Allocated Gold Accounts with accompanying multi-$billion lawsuits kept quiet.

The big irony in the Jackass viewpoint is that the Swiss will become a key force as an important swing vote. The potential is there for a hidden role. They might join the global gold-backed currency movement that replaces the USDollar in trade settlement. This is the currency war entering the final phase, where the Gold Standard could potentially emerge as the global solution. Imagine Switzerland with its impressive flow of funds into the Swiss hills, seeking safe haven from the collapse of Europe. A Gold Standard would mean that gold bullion would follow the flow of funds, the exact opposite impact as the current situation for the historical land of banks. So Switzerland could serve as a big swing state in the financial sector, like Turkey could serve as a big swing state in the trade settlement sector.

 

G-20 FLASH POINT

Rumor is circulating in London that neither the United States nor the United Kingdom will attend the G-20 Meeting in Moscow. Refusal to attend by the Anglos would open a giant gate to coordinate plans by the leading Eastern nations (trade participants) on the new trade settlement system with attendant platforms. Rather than creating a new and better currency, they are more likely to establish a gold-backed trade settlement process that will render the USDollar obsolete. Failure to attend by the US-UK tagteam of financial fascists would ignite the Eastern-led consortium on motivation toward the launch of the new system in a more open public vocal manner with press conferences. The Third World awaits the nations that refuse to become part of a growing critical mass in global trade, which desires a more fair and equitable system of trade settlement. It is coming, but awaits a climax of collapse.

 

TAINTED GOLD CHART

The Jackass finds little value in the Gold chart, the object of criminal control. Honestly, rarely is the so-called official gold price checked for months. By happenstance, it flashes across the television screen when the bumblers on the financial news networks are silenced by my mute button. Their gold price is controlled within a boring false range of meaningless that does not attract my attention or interest. The actual Gold price is 10% higher than the posted COMEX corrupted price, in many parts of the world where it is actively traded in volume, with authentication and verified bars bearing certification. Much of the New York and London gold is either stolen or confiscated, their stated inventory as full of fiction as the economic reports. Moreover much of the exported Anglo gold has tungsten centers. Their gold bars are as imaginary and contaminated as their sovereign bonds and mortgage bonds. So the Jackass sticks with the gold and currency wars, the developments by the stubborn resistant East, and trends toward the sunset of the USDollar after it is cornered like a rat. Ignored are the marquee billboards with false prices from leveraged fraud, naked shorting (see the Big Four US Banks), theft of client accounts awaiting delivery (see MFGlobal), surrogate wars to confiscate foreign gold accounts (see Libya), and raids of the Gold ETFund often called the bullion central bank kitty. The Jackass refuses to permit syndicate whores and harlots to define virginity or purity, or to set the price of taking a lady out to dinner, a show, and whatever follows. The entire pack of Western bankers can go to hell, whose doorkeeper prince of darkness is their object of worship in rituals.

 

REQUIEM FOR THE NATION

A sweeping captivating question will dominate in 2013: What happened to the United States? The answer cannot be made simple. As preface, the key to comprehension must bring focus to extreme banker thefts in the multiple $trillions, which began in a virtual theft of the bulk of the national home equity in the mortgage bond fraud. The problem is far more pervasive, if any degree of depth is to be grasped. It was the refusal to liquidate the broken sacred banks steeped in criminal activity, the extreme corrosion to the economy from adopted sanctioned urgently requested hyper monetary inflation, the burdensome war costs hidden within the mammoth unfixable federal budget deficits, the compromised Congress whose constituents are lobbyists, the cancerous growth of the state which is realized in higher taxes, onerous regulations, an expansive welfare network, and a forced tiresome war on terrorism that conceals a broad confiscation of gold hoards during a global capture of the narcotics trade, upon which the New York banks are hopelessly dependent. A military element has been prevalent in the breakdown, an extension of the Fascist Business Model into the business sector. It saw impunity of big banks from prosecution, devotion to war, permission of narcotics by the security agencies, the obfuscation of liberty as it vanished, the perversion of patriotism (including honor guards at sporting events), the subjugation of the press, the salute to an aggressive national

Incredible analysis every disappointed gold stock owner needs to see

Posted: 07 Feb 2013 12:12 PM PST

From The TSI Trader:
 
Last month, when I sensed that gold bugs were about to lose their lunch over the price movement of the U.S. Dollar, I offered a post that should have relieved their anxiety a little. In hindsight, it appears my analysis was correct (fortunately).
 
The present anxiety seems focused on the HUI miners index and it's frightening under-performance of seemingly every asset class and market sector imaginable.
 
This post will make the case that the HUI is behaving exactly within the historical context of its bull market and should be relatively near its ultimate low both in terms of price and timing.
 
I will admit that the most recent 4 months, in particular, have indeed been agonizing. Painfully agonizing. But viewed in the context of similar HUI setups, such as occurred in January-March 2003, March-May 2005, September 2006, and July 2007, perhaps one can recognize our present situation as something we've not only seen before, but also have every sensible expectation for a bullish resolution.
 
To get to the specifics, let's look at... 
 
 
More on gold:
 
 
 

Gold ETFs in India touch 40 tonne (40,000 kilo)

Posted: 07 Feb 2013 12:11 PM PST

Continued investor demand and rising prices help ETF assets as well as reserves double from May 2011.

Gold and Silver both remain Rangebound

Posted: 07 Feb 2013 11:54 AM PST

Gold cannot seem to muster enough energy to break out from the top of the trading range near $1695 while silver seems to run into selling above $32.

Today was all about the selling in the Euro which tended to bring back some of the RISK OFF trades or at the very least, induced some profit taking in the RISK ON trades. Draghi did not offer much in the way of support for Euro bulls and after that big run up, they booked profits. That brought on some selling in both gold and silver, along with the commodity sector in general. Even crude oil was finally knocked lower for a change.

Mark Carney confirms that the 2% CPI ‘at all times’ target set by the government is now a complete joke

Posted: 07 Feb 2013 11:45 AM PST

Here is today's Treasury select committee hearing with Mark Carney presented in full: After a general love-in between the MPs and Carney (the new über-dove head of the BoE come summer) for the first...

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Game changer?

Posted: 07 Feb 2013 11:00 AM PST

Chinese gold imports nearly doubled in 2012. New ETF sets up blow-out 2013

I can remember back in 2004 or 05 when the first Gold ETF "GLD" came out and everyone got so excited and then a year or two later the same thing with SLV.  Everyone thought  "this is a game changer."  It can be debated whether it was or was not.  I personally believe that these two trusts have been used "against us" by shorting the very metal that was supposedly bought.  I believe that these were used as pressure relief valves where monies meant to purchase metal …didn't quite make it to the real thing and ended up being used to purchase some sort of newly created "paper instrument."  The "demand" in other words was diverted so as not to upset the limited supply.

China has recently announced their own version of a Gold ETF; THIS very well may be a game changer.  But why would this be any different from other ETF'?  Simply put, because I think that they will really and truly buy and store the physical metals like the Sprott trusts do.  Think about this for a moment, if some of the existing ETF's were really created as a pressure valve, there had to be "motive" behind it.  The "motive" being a way to divert demand into paper and slow the rate that real supply dwindles and the price goes up.  Remember, Gold is THE direct competitor of the Dollar which is obvious motive to want the price down and benign.

On the other hand, China clearly has aspirations of the Yuan becoming a major international currency and some day becoming a or THE reserve currency of the world.  Yes I know, they have been accumulating Gold fast and furiously and do not want a sky high price but they also know that there is only so much to be had.  Like any "operator," it is possible that their accumulation period is ending and now they are ready for the "markup."  How better to do this than to encourage their 1 billion+ population to begin buying (which they have already done to some extent).  Why not let their population "clean up" the supply?  The Chinese are VERY intelligent people and probably know better than us "bugs" what the real deal is in the gold and silver markets so this hypothesis is probably not far from the reality.

Another way to look at this is that China, no matter what "happy faces" their and our politicians put on, are our adversary.  They are our competitor in many ways and many different areas.  How better to "win a war" without ever firing a shot than bankrupting your competitor by "helping" their currency to implode?  One must also take into account the "timing" of this announcement, we are now 3 to 4 months into a phase where 90+% of the time Gold and Silver get smashed on the paper exchanges out of nowhere.  Not that the prices are really down over this period because they keep popping right back up but the trading has been different, VERY different.  Some say and I agree, the smell of desperation is in the air and we are approaching some sort of "event" in the near future.

The "event" very well may be sparked in my opinion by this new ETF and the demand that will be created.  If you ask me, this is on China's part, sorta blatant and in your face "middle finger" pointed directly at the West.  Time will tell and you will not have to wonder what is going on because the price will tell you.  The lack of supply will also tell you the same thing but once the supply starts to dry up the game will move very fast as human nature takes hold.  I am sure that you've seen photos and videos of "bank runs" in the past, this will be no different and just as rapid once it begins.

One last thought, please remember that the Chinese have spent the last 4-5 years scouring the globe (concentrating in Africa) for natural resources.  They have done all sorts of deals in many different resource areas, they have been "securing" their future for lack of better words.  They have been  buying up production and future production (in Dollars as a way to spend them) and now, THIS ETF may be their "starting gun."  This strategy has been played for hundreds if not 1,000′s of years and is not rocket science by any means.  It may seem like it because as I wrote the other day "we are Americans" and we've "been learned" that nothing bad can ever happen here.  It is nothing more than the Chinese siding with Mother Nature and the West trying to deny her.  Which one do you think will prevail, Mother Nature and logic or fantasy, propaganda and fallacy rocket science?

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Neil Barofsky: Geithner Doctrine Lives on in Libor Scandal

Posted: 07 Feb 2013 10:55 AM PST

By Neil Barofsky, the former special inspector-general of the troubled asset relief programme and is currently a senior fellow at NYU School of Law. He is the author of 'Bailout', released in paperback this week. Cross posted from the Financial Times with permission

Now that Tim Geithner has resigned as US Treasury secretary, it is time to survey the damage wrought from four years of his approach to the financial crisis. The "Geithner doctrine" made the preservation of the largest banks, no matter the consequences, a top priority of the US government. Aside from moral hazard, it has also meant the perversion of the US criminal justice system. The US faces a two-tiered system of justice that, if left unchecked by the incoming Treasury and regulatory teams, all but assures more excessive risk-taking, more crime and more crises.

The recent parade of banking scandals, such as the manipulation of Libor rates by Barclays, Royal Bank of Scotland and other major banks, can be traced back to the lax system of regulation before the financial crisis – and the weak response once disaster struck.

Take the response of the New York Federal Reserve to Barclays' admission in 2008 that it was submitting false Libor rates and was not alone in doing so. Mr Geithner's response was to in effect bury the tip. He sent a memo to the Bank of England suggesting some changes to the rate-setting process and then convened a meeting of regulators where he reportedly described only the risk but not the actual manipulation of the rate. He then put the government imprimatur on the rate via bailout programmes. His inaction helped permit a global crime to continue for another year.

When it was UBS's turn to settle its Libor charges, even though a significant amount of the illegal activity took place at the parent company level, only a Japanese subsidiary was required to take a plea. Eric Holder, US attorney-general, demonstrated his embrace of the Geithner doctrine (a phrase coined by blogger Yves Smith) in explaining the UBS decision. He said that a more aggressive stance against the parent company could have a negative "impact on the stability of the financial markets around the world".

This week we saw the latest instalment of the saga. In fining RBS £390m, the DoJ only indicted one of the bank's Asian subsidiaries, avoiding the more damaging result that would have stemmed from charging the parent company.

Instead of seeking deterrence and justice, the US government increasingly appears to have fully absorbed the Geithner doctrine into its charging decisions by seeking a result that has a minimal impact on the target bank but will generate the best-looking press release. Some banks today are still too big to fail – and they are still too big to jail.

The lack of robust enforcement is of course not limited to the Libor scandal. It was seen in the recent settlement talks with HSBC, when Treasury officials reportedly pressed the DoJ to consider the broad economic consequences that would follow an indictment. After hearing these arguments the DoJ chose not to criminally charge HSBC.

And, of course, it is seen in the stunning dearth of criminal prosecutions arising out of the crisis. This was all but preordained given who the government turned to when the crisis struck: the same captured regulators who had blindly advanced bankers' self-serving calls for a "light touch" before the crisis and who unsurprisingly embraced the Geithner doctrine afterwards. Having done so, of course, there would be no criminal prosecutions while the banks still teetered on the brink of collapse. The risk of causing them to fail, and thereby undoing all of the bailout efforts, was too high.

But that these arguments continue to resonate with officials in 2013 shows that the Geithner doctrine, perhaps justified by the conditions in 2008-09, has planted deep roots in our system of government.

This forbearance will have potentially devastating long-term effects, as each settlement on favourable terms reinforces the perception that, for a select group of executives and institutions, crime pays. It is only rational. They know that they will get to keep all of the ill-gotten profits if they go undetected, and on the small chance that they're caught, most probably only the shareholders will pay – and only a relatively minor fine at that. The lack of meaningful consequences for those committing these frauds encourages future fraudulent conduct. Ultimately, the financial crisis was a game of incentives gone wild, and the lack of accountability in the aftermath of the crisis has only reinforced those bad incentives.

Breaking those incentives requires ditching the Geithner doctrine, which has led to the banks becoming even larger and more systemically significant than they were before the crisis. As a result, the DoJ's fear of destabilising the global economy through aggressive prosecutions may indeed be well-founded. But that must not be the end of the story.

To reclaim our system of justice, the global threat posed by the failure of any of our largest financial institutions must be neutralised once and for all. They must be reduced in size, their safety nets must be dramatically constricted and their capital requirements enhanced far beyond the current standards. Then, and only then, can the same set of rules apply to all.

Economic winter could breathe new life into the gold - Gordon

Posted: 07 Feb 2013 10:30 AM PST

Ian Gordon talks about what he forecasts as an unprecedented period of growth and investment in gold as the market is about to sink. An interview with The Gold Report.

Jim Rogers: There Are No More Strong Currencies, Hang On To Your Silver!

Posted: 07 Feb 2013 09:44 AM PST

The Daily Ticker's Lauren Lyster interviewed commodities guru Jim Rogers Tuesday on the blistering pace of gold and silver coin sales to start 2013 by the US Mint.  Lyster began the interview by holding up a 2012 US Silver Eagle, and asking Rogers whether a USE is a collectors item, money, or simply a way [...]
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  3. Jim Rogers: "There's No Reason For The Government To Manipulate Gold Or Silver, I Don't Buy It"

I Wish I Were Strong Enough To Say No

Posted: 07 Feb 2013 09:20 AM PST

READ THE FULL NEWSLETTER

This is disturbing to me.  In the last year or so, six people I know, all of them in their 60s came to me looking to borrow money.  All of them, at one point or another, have earned a lot of money.  I am tempted to ask, "What the hell is going on?" but I know what is going on.  The middle class is being decimated.  The standard of living, for most people, is rapidly on the decline.  For those of you who want me to be more up beat, maybe you can step forward and loan these people some money?  If it is this way NOW, can you imagine how it will be when the $#%! hits the fan?  Those of you who are blessed to have money, you will be the ones that your friends and family come to for help.  What will you say?

Having been ahead of the curve, been smart enough to save and invest well can or will be a "curse," when those around you, those who you care for, come knocking on your door for a loan.  My advice – if you do give money to friends or family, do it with the expectation of never getting it back.  If you can't do that, don't get involved.  The minute you ask for your "loan" back, you will be the bad guy.  And once you start, you will be the "bank" or source of money that they will keep coming back to.

Tell em "I ain't got no cash, just gold and silver and I am not selling it now."  I wish I was strong enough to say that, but I'm a pushover and just wrote out the check(s).

The rise in the price of gold and silver are merely the "symptom" of things gone badly.  And they will get much, much worse.  Just because you avoided the storm doesn't mean you won't have problems.  The one I mention above, which is not really a problem, but it is a reality many of you will have to face.  As I do, even now.

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What changed in Swiss gold banking?

Posted: 07 Feb 2013 08:56 AM PST

Imagine you could sell someone something, but keep ownership of it, and then use it yourself. This is pretty much what big banks get away with in gold – or they did.

India's RBI gunning for gold imports

Posted: 07 Feb 2013 08:52 AM PST

In order to manage gold demand in India, the apex bank is to allow banks to buy back gold coins and impose export obligation on bulk gold importers.

Gold mostly unfazed over ECB rate decision

Posted: 07 Feb 2013 08:48 AM PST

The precious metals showed little reaction to the announcements from the European Central Bank and the Bank of England-both leaving their interest rates and monetary policies unchanged, as expected.

Gold & silver "trapped" in tight range, volatility near half-decade lows

Posted: 07 Feb 2013 08:22 AM PST

Daily swings in the silver price haven't been as small as this week since spring 2007. Volatility in the U.S. dollar gold price has only been lower than yesterday on 15 days since mid-2005.

Jim Willie: Fever Pitched Currency War & USDollar Rejection in 2013

Posted: 07 Feb 2013 08:04 AM PST

By Jim Willie The Competing Currency War threatens to disrupt international relations The year 2013 will be the year when the USDollar is isolated and set up for rejection A return to the Gold Standard is in the works. The … Continue reading →

Swiss banking and the lose-lose scenario of unallocated gold

Posted: 07 Feb 2013 08:01 AM PST

What the Swiss banks' move away from unallocated accounts says about gold, and about banking...

Mike Hampton: gold price at a long-term low

Posted: 07 Feb 2013 08:00 AM PST

Episode 96: GoldMoney's Dominic Frisby interviews Hong Kong-based private investor Michael Hampton. They discuss Michael's chart analysis of the gold price, the race between stocks and ...

This posting includes an audio/video/photo media file: Download Now

Gold price now bumping up against its 55 daily moving average – sixth time in past few weeks

Posted: 07 Feb 2013 07:59 AM PST

A couple of hours ago we saw gold sell-off perfectly to its short-term level of support. Now the gold price has promptly bounced off that level and turn higher. The rebound has been so impressive...

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Gold buyers' lack of enthusiasm hits Burma markets

Posted: 07 Feb 2013 07:56 AM PST

Burma gold prices averaged 762.750 kyats per tical since February, down from 767,500 Kyats per tical in January.

Greg Mannarino: Silver At the Edge of a Massive Breakout

Posted: 07 Feb 2013 07:30 AM PST

In his latest market update, Greg Mannarino states that silver is at the edge of a massive breakout, and that the metal remains the most undervalued asset in the history of the world- but not for long. Mannarino states that we are standing at the precipice of a major upwards move in silver, and that [...]
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Fear Index January 2013: fiat currency’s twilight

Posted: 07 Feb 2013 07:30 AM PST

US M3 ended 2012 at over $15 trillion, as we have been predicting since Operation Twist was launched. The US national debt stands at over $16.5 trillion, while the gold price ended the year at $1,660 ...

Gold sentiment poor on range bound trade and bearish bank predictions

Posted: 07 Feb 2013 07:10 AM PST

Sellers have also be emboldened by recent bold pronouncements of the end of gold's bull market — by many of the same banks who never predicted the bull market or advised their clients to own gold in the first place.

This is Important. 1 Day Left to Sign the Petition

Posted: 07 Feb 2013 06:58 AM PST

With Rand Paul introducing a new Audit the FED Bill and picking up where his father left off, it's time we ALL helped the cause.

The Audit the GOLD Petition has been languishing around 7,000 signers and ENDS in 1 day!

How about one FINAL push to get to the required 25,000?

Sign the Petition: Perform an assayed public audit of all the Treasury's claimed 8,100 tons of gold and net of swaps, loans & sales.

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Gold price right on short-term support level

Posted: 07 Feb 2013 06:57 AM PST

For the past couple of weeks we've been talking about an upward sloping level of support that began at the start of January. Today gold has slipped back to that upward support line. Gold $ (hourly): ...

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Bank of England opts for no fresh sedative as they admit CPI inflation is going higher and will remain above target for two more years

Posted: 07 Feb 2013 06:39 AM PST

How many times will the Beeb print headlines like this before it understands that the actions by the BoE are not a stimulus but rather a sedative: For those wishing to get up to speed on why when the...

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Raid! Silver Smashed Back to Bottom of Recent Trade Range

Posted: 07 Feb 2013 06:37 AM PST

Silver has spent the past 2-3 sessions consolidating around the critical resistance level of $31.80.   A clear break through $32 to the upside, and silver was set up to make a major move back to $35-$37.50. To no one's surprise, the cartel can read a chart as well as we can, and has just sent [...]
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Silver production gains in Peru, Gold dips

Posted: 07 Feb 2013 06:23 AM PST

For the January-December 2012 period the total silver production was 3,479 mt or a 1.8% increase from the same period a year earlier.

Gold Sentiment Poor Due To Range Bound Trade and Banks Bearish Predictions

Posted: 07 Feb 2013 06:23 AM PST

Gold is little changed today in pound, euro and dollar terms after the Bank of England and the ECB kept interest rates at record low levels. Ultra loose monetary policies continue.  The ECB kept interest rates at 0.75% and the BOE kept interest rates at 0.5% the lowest level since 1694. The BOE pledged to maintain [...]
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Stock market strength taking the shine off Gold

Posted: 07 Feb 2013 05:22 AM PST

Gold has failed to break through the $1700 an ounce barrier since falling through the level in December. Over the same period, most stock markets have rallied. The S&P 500 had its best January since 1997, touching a new five-year high, while the FTSE 100 had its best start to a year since 1989.

Two rival groups intense fight for Sudan Gold mines

Posted: 07 Feb 2013 03:46 AM PST

Thousands of gold miners have been working in Jebel Amir since last year, and the opposing Arab militias have been eager to seize control of the area so they can levy taxes on the miners.

Links 2/7/13

Posted: 07 Feb 2013 03:22 AM PST

Dear patient readers,

I think I have a technology curse. I had wanted to switch to a webhost who could provide some WordPress-related support (most blogs can't afford 24/7 software support so a 24/7 host that will do some WP troubleshooting is a partial solution to the problem). I thought I had one lined up and was ready to switch in November, when they disqualified themselves (a big communications screw-up and as Lambert points out, communications screw-ups are a symptom of other organizational failings).

I was so bold as to write yesterday that a move to a new host was imminent. Whoops! I had had three talks with the sales staff about features, support levels, performance issues, transfer procedures and timing, and service pricing. I was told the first two times that a particular package was clearly the one for me. In the third conversation, the sales person (a different one each call) waffled and said I might be on the edge of needing a more costly package. The problem is that the site didn't show the pricing for plans more expensive than the one we had been discussing, and troublingly, the sales rep couldn't tell me. He said someone would get back to me. More than 24 hours passes and no call. I call and get yet another rep, who says, "Yes, you need the more expensive plan". The price was double what we had been discussing.

I don't take well to bait and switch.

I know readers like to be helpful, but please DO NOT recommend a webhost unless you KNOW it had solid expertise in WP (as in it does WP-specific optimization and/or client handholding).

Does probability come from quantum physics R&D Magazine (furzy mouse)

Podcasting Community Faces Patent Troll Threat; EFF Wants to Help EFF (Philip Pilkington)

Fast-moving action on 787 in advance of NTSB briefing Thursday Leeham News

The Human Stew Chris Stringer, Project Syndicate

When the BMI is Not Enough Counterpunch. I sympathize up to a point but her fat and diet analysis is simplistic. Heretofore, poor people were small and scrawny. As we wrote:

Height is influenced by the quality of nutrition in childhood and as a result, in many societies, it has also been a class indicator. One example: Winston Churchill, who as a Liberal Party member and Home Secretary, was instrumental in the passage of minimum wages and the Liberal Reforms, which among other things, provided for free school meals for children and made it illegal to sell alcohol or tobacco to children (this in the 1906-1914 period). Churchill later said he could see the results of these programs. In the Great War, there was a visible difference between the puny, scrawny enlisted men, who came from the working classes, and the taller aristocratic officers. By World War II, you couldn't tell a man's class by his build.

Lighter Menus Appeal to Diners and Owners New York Times. IMHO, portion sizes are the reason Americans have gotten hefty. Pretty much anywhere else in the world they are 50% to 60% of normal portion sizes here. I often order appetizers as my main course to cope, which I know pisses off the restaurants, but they created this problem.

US must avoid shale boom turning to bust Financial Times. Dunno about "must avoid" part, but echoes a Dan Dicker post we featured a few days ago.

Documents: CEO Lupo directed illegal dump of brine Vindy (Lambert)

Commodity hedge funds lose 20% of assets Financial Times

Australia sport doping 'widespread' BBC

'It's just amazing how Libor fixing can make you that much money': Traders gleefully admitted rate fixing was 'cartel' Independent

Obama considering MIT physicist Moniz for energy secretary – sources Reuters (Lambert)

Congress to See Memo Backing Drone Attacks on Americans New York Times

NRA Fights Legislation That Would Ban Gun Sales To Those Currently On Killing Sprees YouTube

Why We Must Rescue the U.S. Postal Service From the Brink of Death Alternet. I hate it when the left is conned by the machinations of the right. The Postal Service is not broke. It has been subject to bizarre and deliberately punitive pension accounting to make it look broke and allow for delivery services to be completely in the hands of UPS and Fedex. Imagine what's they'd charge when price competition from the Postal Service is gone. The article does mention the accounting issue, but way too far along in the piece.

The Historical Failure of Black Leadership Pascal Robert

Evolving Views on Fiscal Multipliers Menzie Chinn

S&P Lawsuit Fails to Take On a Defective Business Model Bloomberg (furzy mouse)

S&P Lawsuit Portrays CDO Sellers as Duped Victims Jonathan Weil, Bloomberg (Richard Smith)

Rating agencies must beware of the law John Gapper

Geithner plans book on battling financial crisis Reuters. He'll get a million dollar advance, at least.

So God made a banker MarketWatch

E-Mails Imply JPMorgan Knew Some Mortgage Deals Were Bad New York Times (Robert S)

Housing Market Already Shows Signs of a New Bubble Diana Olick

'How a Nation Got Snookered by a Phony Narrative' Mark Thoma

Investing in a Low-Growth World Jeremy Grantham. The problem with listening to Grantham, as craazyman has more or less said, that the market can remain irrational longer than you can remain solvent.

The End of Low Hanging Fruit? Daron Acemoglu and James Robinson (Richard Smith via Mark Thoma)

401Ks are a disaster USA Today

Antidote du jour (Scott S):

Euphoria

Posted: 07 Feb 2013 03:17 AM PST

Euphoria

Presented with little comment aside from noting that the only time stocks have been this 'euphoric' was right before the collapse in 2000 and right before the collapse in 2008.

This very short Zero Hedge piece contains three charts that make it a must read...and it will take but a minute of your time as well.  This article is courtesy of Marshall Angeles...and the link is here.

India central bank considers more gold import curbs

Posted: 07 Feb 2013 03:17 AM PST

India central bank considers more gold import curbs

This Reuters story appears to be a report on the above mentioned report, but stripped down to its bare bones.  It's worth the read as well, because it's my opinion that this piece brings more clarity to the above 'executive summary'.

The story was filed from Mumbai early yesterday morning Eastern time...and I thank Ulrike Marx for sharing it with us.  The link is here.

Jim Rogers: Don’t Sell Your Gold and Silver Coins

Posted: 07 Feb 2013 03:17 AM PST

Jim Rogers: Don't Sell Your Gold and Silver Coins

Demand for gold and silver coins is raging, and given the weak outlook for paper currencies, investors should hold on to these coins, says star investor Jim Rogers, chairman of Rogers Holdings.

Gold coin sales hit a 19-month high last month, while silver eagle sales climbed to a record peak.

"You can't get [silver coins]. They sell out," Rogers tells Yahoo. "Several mints have run out of coins...because everybody's worried about the future of the world."

The long term looks bright for precious metals, he says. "There is no paper money in 2014 or 2015 that will be worth much of anything."

read more

Print Those Blues Away: Why Gold is Under Accumulation Globally

Posted: 07 Feb 2013 03:17 AM PST

¤ Yesterday in Gold and Silver

It was a nothing sort of day in gold yesterday.  After getting sold down about five bucks by 11:00 a.m. in London, a smallish rally developed that lasted until about twenty minutes after the Comex open in New York that took gold back into positive territory...and from there the price chopped sideways into the 5:15 p.m. Eastern time electronic close.

The high of the day...such as it was...came shortly after the equity markets opened in New York yesterday morning...and Kitco recorded that as $1,681.00 spot.  The low of the day...such as it was...was around the $1,668 spot mark...and occurred in late morning London trading.

Gold finished the Wednesday trading session at $1,677.30 spot...up $4.10 on the day.  Volume was light...around 106,000 contracts. 

It was pretty much the same story in silver...and the price path was very similar to gold's.  The only notable difference was that silver rallied from the 11:00 a.m. GMT London low, almost to the close of electronic trading in New York...and that silver's high tick of the day came about five minutes before the Comex close.

Silver's low tick was just under $31.60 spot...and the 1:25 p.m Eastern time high tick was reported by Kitco as $32.00 right on the button.

The silver price closed at $31.85 spot...up 3 cents.  I'm underwhelmed. Net volume was very light...around 25,000 contracts. 

Here's the Kitco platinum chart...and as you are probably more than aware, it is now outperforming gold...and is over fifty dollars an ounce higher than gold is at the moment.

The dollar index opened in the Far East at 79.54...and then rallied up to 79.80 by the 8:00 a.m. GMT London open.  From there it chopped around for the rest of the day, closing the Wednesday trading session at 79.74...up 20 basis points from Tuesday's close.

The gold stocks basically followed the gold price around yesterday...and the HUI finished up 0.63% on the day.

Most of the silver stocks finished in positive territory, including those ones that mattered...and Nick Laird's Silver Sentiment Index closed up 0.79%.  Nick is having some issues with his new Intraday Silver Sentiment Index, so until he's fixed that, the older version of the chart is the one that's posted below.

(Click on image to enlarge)

The CME's Daily Delivery Report showed that zero gold and 4 silver contracts were posted for delivery on Friday from within the Comex-approved depositories.

There were no reported changes in either GLD or SLV...and there was no sales report from the U.S. Mint, either.

Over at the Comex-approved depositories on Tuesday, they didn't reported receiving any silver, but they did ship 195,490 troy ounces of it out the door...and the link to that activity is here.

As promised yesterday, here are three charts from Nick Laird showing all the action in the Hong Kong/China Import/Export/Re-Export in gold bullion.

Imports in December rose to an all time high of 109.825 tonnes with cumulative imports since 2001 now reaching 1,352 tonnes.

(Click on image to enlarge)

Imports for the year of 2012 were also at an all time high of 572.575 tonnes.

(Click on image to enlarge)

Coupled with mine production, we get a potential 970 tonnes of gold finding it's way into their hands this year.  Cumulative gold - imports plus production - now reach 4,793 tonnes since 2001.

(Click on image to enlarge)

For those who think that gold no longer has any value as currency in the modern world, these charts should put an end to that type of thinking.

I have a rather large number of stories for you again today, so I hope you have the time to read the ones that are of interest.

There's an old trading adage that states that one should "never short a quiet market"
China tops world in gold production in 2012. India central bank considers more gold import curbs. Virginia coin moves closer to reality. Jim Rogers: Don't Sell Your Gold and Silver Coins. Platinum Surges 12% YTD – Supply Fall To 13 Year Low

¤ Critical Reads

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Broke U.S. Postal Service Cuts Saturday Delivery

The financially struggling U.S. Postal Service says it plans to stop delivering mail on Saturdays, but continue delivering packages six days a week.

In an announcement scheduled for later Wednesday, the service is expected to say the cut, beginning in August, would mean a cost saving of about $2 billion annually.

The move accentuates one of the agency's strong points — package delivery has increased by 14 percent since 2010. The delivery of letters and other mail has declined with the increasing use of email and other Internet use.

This short Zero Hedge piece is worth a minute of your time, which is all the time it will take to read it.  I thank West Virginia reader Elliot Simon for today's first story...and the link is here.

View full GSD edition

Tim Geithner Joins CFR As "Tireless And Creative Practitioner And Thinker"

Well that didn't take long. It appears spending time with the family is over-rated (or perhaps they couldn't stand him either) as Turbo Timmy has landed his first post-Treasury gig (Citi next?). The Council of Foreign Relations has graciously brought this "tireless and creative" thinker on board as a Distinguished Fellow. His role... "to strengthen their capacity to produce thoughtful analysis of issues at the intersection of economic, political, and strategic developments." We assume this is his gracious 'giving back' phase before six-months down the line slithering over to the big bucks at a bank when he suspects no one will be looking...

The New World Order crowd adds another sociopath to its list of undistinguished members.  This story is also from Zero Hedge...and also courtesy of Elliot Simon.  The link is here.

View full GSD edition

CBO: Social Security, Health Spending Headed for $3.2 Trillion a Year

U.S. spending on Social Security and healthcare will double to $3.2 trillion a year over the next decade, threatening a sharp rise in the national debt unless Congress acts to avoid the danger, congressional researchers warned on Tuesday.

A report from the nonpartisan Congressional Budget Office did not put forth a plan to resolve the long-term imbalance between revenues and spending on retirement and healthcare benefits. But it said that action taken now would help minimize the economic impact of whatever course lawmakers can agree on.

"Unless the laws governing these programs are changed – or the increased spending is accompanied by corresponding reductions in other spending, sufficiently higher tax revenues, or a combination of the two – debt will rise sharply relative to (the U.S. economy) after 2023," the CBO warned.

This story appeared on the moneynews.com Internet site late on Tuesday afternoon...and it's Elliot Simon's third offering in a row.  The link is here.

View full GSD edition

Euphoria

Presented with little comment aside from noting that the only time stocks have been this 'euphoric' was right before the collapse in 2000 and right before the collapse in 2008.

This very short Zero Hedge piece contains three charts that make it a must read...and it will take but a minute of your time as well.  This article is courtesy of Marshall Angeles...and the link is here.

View full GSD edition

A Massive Bearish Bet Against Banks Has Traders Buzzing

According to Barron's columnist Steven Sears, someone made a big bet against the financials ETF yesterday (ticker symbol XLF), and it has everybody buzzing.

The trader bought 100,000 put options on the ETF (a put option increases in value when the price of the underlying asset, in this case, the ETF, goes down).

To put that number in perspective, Sears writes, "Few investors ever trade more than 500 contracts, so a 100,000 order tends to stop traffic and prompt all sorts of speculation about what's motivating the trade." According to Sears, the trade "has sparked conversations across the market."

Well, you have to wonder if someone knows something that the rest of the word doesn't.  I suppose we'll find out soon enough.  This article was posted on the businessinsider.com Internet site early yesterday afternoon Eastern time...and I thank Roy Stephens for his first contribution in today's column.  The link is here.

View full GSD edition

Some Trader Has Made a Very Big Bet That Something Very Bad Will Happen Within the Next 60 Days

Stocks have been rallying relentlessly to post-crisis highs.

Meanwhile, the volatility index (aka the VIX, aka the "fear index") is near historic lows.

But according to UBS's Art Cashin, some options trader has made an enormous $11.25 million bet that the VIX will explode higher very soon...and a rally in the VIX is usually accompanied by a drop in the stock markets.

This short piece was posted on the businessinsider.com Internet site yesterday morning...and it's worth skimming.  I thank Scott Pluschau for sending it along...and the link is here.

View full GSD edition

S&P Lawsuit Portrays CDO Sellers as Duped Victims

Oh, the poor suckers at Citigroup Inc. and Bank of America Corp., fooled about the stench of their own garbage by those sneaky credit raters at Standard & Poor's.

The U.S. Justice Department made some peculiar allegations in its lawsuit this week against S&P and its parent, McGraw-Hill Cos. According to the government, Citigroup was defrauded by S&P credit ratings on subprime mortgage bonds that Citigroup itself created and sold. Bank of America, too, allegedly was defrauded by S&P in the same way.

If this doesn't make sense, that's the point. The notion is far-fetched. No wonder S&P wouldn't agree to a settlement and told the government to see it in court.

This op-ed piece by Bloomberg columnist Jonathan Weil appeared on their website yesterday morning...and I thank Manitoba reader Ulrike Marx for bringing it to our attention.  The link is here.

View full GSD edition

'Bailout': Neil Barofsky's Adventures in Groupthink City

Neil Barofsky isn't going to like this, but the first person I thought of when I read the former TARP Inspector General's book, Bailout, was G. Gordon Liddy. Not that he has anything in common politically with Nixon's fanatical arm-roasting hatchet man, but after reading Bailout I had the same thought I had after reading Liddy's memoir, Will – that every now and then, a born writer ends up in some other, far more interesting profession, and we don't find out about it until he or she is forced for some reason to write a book.

Bailout has its first paperback release this week, and Barofsky accordingly is making the media rounds (check out Comedy Central tomorrow), where he'll mainly be asked about the political revelations in the book. You know, the inside-baseball stories of how the officials who administered the TARP bailout fought transparency at every turn, failed to do due diligence on the health and viability of bailout recipients, seemed totally uninterested in creating safeguards against fraud, and generally speaking spent more time bitching about the media and plotting against the likes of Elizabeth Warren and, eventually, Barofsky himself than making sure the largest federal rescue in history wasn't a complete waste of money.

As the former Special Inspector General of the TARP, a key official who was present at the highest levels throughout most of the bailout period and saw from the inside how both the Bush and Obama administrations attacked the economic collapse, Barofsky does have that story to tell, and the book unsurprisingly is full of historically weighty scenes and factoids that will be culled by reporters like me for years to come.

This is one of the longest book reviews I've ever read...but it's also a must read...and I ain't joshin' you on this one.  This is the happiest I've ever seen Matt Taibbi...and for that reason alone, it's worth the trip.  I thank Ulrike Marx for bringing it to my attention...and now to yours.  It was posted on the rollingstone.com Internet site yesterday...and the link is here. [Note: No 'pithy prose' in this one! - Ed]

View full GSD edition

Gold,Platinum,Palladium steady in Asian trade

Posted: 07 Feb 2013 03:07 AM PST

Gold for immediate delivery was seen trading at $1677.54 an ounce at 12.00 noon Singapore time while US gold for April delivery was at $1678.42 an ounce on the comex division of nymex.

ECB Dashes Irish Hopes of Quick Decision on Bank Plan

Posted: 07 Feb 2013 02:42 AM PST

European Central Bank policy makers sought more time to weigh a proposal presented by Ireland yesterday to restructure the cost of bailing out former Anglo Irish Bank Corp., prolonging a saga that began four years ago with the near-collapse of the lender...

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