saveyourassetsfirst3 |
- Federal Reserve Balance Sheet - A Proxy for US Equity Markets
- One big reason stocks around the globe could be headed much higher
- These are the levels to watch in gold
- The Truth on Gold Stocks vs. Gold
- Mexico Mint issues new series of bimetallic coins
- James Rickards: World Currency System Moving Towards Catastrophe
- Gold And Silver Are A Buy! $1600 and $28 Targets?
- Chinese production of gold rises to 403 tonnes/3rd LTRO repayment only 5 million euros/Venezuela devalues its currency by 46%/USA trade deficit narrows to 38 billion dollars.
- Gold vending machine in Boca Raton may be first of many
- Russian Policy Study Group Notes GATA's Exposure of Gold Price Suppression
- Venezuela devalues currency by 32%
- The horse meat substitution scandal is as old as Roman coin clipping
- Uzbekistan produces 90 tons of Gold last year
- Dell: The Art Of The Steal
- US Dollar Triple Hammer Time
- Gold ends week with 2% loss, Silver 1.6%
- CME to cut Gold, Silver, Platinum margin
- Nothing At All, Then All at Once
- Naked Silver Shorts
- Is the Euro Crisis Over?
- The Gold Standard Before the Civil War
- Emerging Market Currencies: Best Way To Play QE3
- The Early Gold Wars
- Dividends paid in physical gold?
- Jim Willie: Fever Pitched Currency War & USDollar Rejection in 2013
- Shift to hard assets away from paper money has started says Ron Paul
- By the Numbers for the Week Ending February 8
- Currency Wars Revisited
- Venezuela Devalues Bolivar 46%!
- Cyber War Against Alternative Media Underway? Cyber Attacks Spread to KWN
| Federal Reserve Balance Sheet - A Proxy for US Equity Markets Posted: 09 Feb 2013 10:05 AM PST If there are still any skeptics left out there who DO NOT BELIEVE that the entire stock market rally from its low made back in late 2008, has been engineered by the Federal Reserve, then please examine the following chart I have constructed using the data from the Fed's own site which provides a weekly glimpse into their balance sheet. Note that I am only using the total of their Securities holdings and not the entirety of the data that goes into constructing the overall size of the balance sheet. In other words, I am excluding loans from the Discount Window, swaps and other assets that go into making up the entirety of their available credit. In other words, I am being "conservative". If you take those other factors into account, the size of the balance sheet of the Fed is already over $3 TRILLION!  Even at this, it still provides a very compelling picture of why US equities continue to plumb new highs nearly month after month in spite of the anemic at best growth in the underlying economy. I maintain that the Fed has engineered one of the most massive bouts of INFLATION in the STOCK MARKET since its inception a century ago. Can you see the connection between the overall size of the Fed's Balance Sheet and the level of the S&P 500? This is by design of course since in our new, modern age of ignorance, these monetary wizards believe that they can create lasting prosperity by forcing untold amounts of freshly minted liquidity into stocks jamming those prices higher and thereby influencing consumer sentiment. A rising stock market provides cover for all manner of other economic woes, and political woes, I might add. The low information citizen takes one look over at the DOW or the S&P 500 and then falsely assumes that all is well with the world and then goes about his or her business without delving any deeper into these matters. This is of course further propagated by the blind lemmings who constitute the majority of analysts out there on financial TV who breathlessly talk about the wonderful rally in stocks heralding the beginning of solid, sustained economy vitality. Idiots! (Sorry, I could not help myself on this one). The opposite is true when stock prices are collapsing. Consumers begin to move from concern, to worry, to fear and to outright panic and then most worrisome to the elites, anger as they look for scapegoats. As I have stated many times now on this site, if it was this easy to create prosperity, it would have been figured out a long, long time ago by previous generations, which unlike this current one, were actually capable of critical analysis. Let's call this current Federal Reserve strategy: "PROSPERITY IN A BOTTLE". It is akin to a cologne for men. Just splash some on and forego the shower for the time being as the aroma masks the smell from a day's perspiration. What the Fed has done is to cover up the stench from the debt overload and rampant speculation its policies have created in our financial system. The deeply-rooted structural issues have been left unblemished in their vigor. Do not forget this one thing - ultra low interest rates benefit TWO GROUPS at the EXPENSE OF SAVERS. FIRST - the borrower and SECOND - the large speculator/hedge fund which borrows money for basically no cost and then LEVERAGES that money in speculative bets. Where do you think all that liquidity that the Fed has shoved into the marketplace has gone???? the answer - into equities! Lastly, here is one more look at the level of the S&P 500 seen through the prism of gold. First look at the S&P in NOMINAL TERMS. Note that the Fed's machinations have jammed it to within a whisker's breadth of its all time CLOSING HIGH made back in late 2007 just before the bottom dropped out of the index and it lost 50% of its value over the next year and a half. "Wonderful, Superb, Splendid, Impressive" all are adjectives being used to describe the "recovery" in stock prices.  Now take a look at the same chart when the price level of the S&P 500 index is compared to the value of one ounce of gold. Note that "recovery" seen in the nominal index off the 2009 low doesn't seem like all that much now does it? Translation from all this - Fed induced RAMPANT INFLATION OF PAPER ASSETS; nothing more. Traders of course can go with the flow of money into equities as long as they do not mistake this equity rally as the herald of a new era of lasting prosperity. When the music finally does stop, and the players rush to find their chairs, many are going to be left standing looking for a place to sit and coming up empty.  |
| One big reason stocks around the globe could be headed much higher Posted: 09 Feb 2013 10:03 AM PST From Frank Holmes of U.S. Global Investors: If you've been a hibernating bear lately, you've missed a ton of positive news, as U.S. construction spending rose, ISM manufacturing data beat expectations, and the country added 157,000 jobs. In addition, the JP Morgan Global Purchasing Managers' Index rose to 51.5, staying above the expansion level for a second month in a row. The strengthening data, as well as improving investor sentiment, helped the Dow hit 14,000 for the first time since 2007. For the month of January, U.S. stocks experienced the best month in two decades. Per the Stock Traders' Almanac market indicator, the "January Barometer," the performance of the S&P 500 Index in the first month of the year dictates where stock prices will head for the year. Let's hope so. As Adam Shell from USA Today writes, "While there's no guarantee that what happens in the first month of a new year will continue for the remaining 11 months, history is on the side of investors." Shell asked for my thoughts on this trend and I told him that sentiment has improved in part because several uncertainties have been removed from the market... More on stocks: |
| These are the levels to watch in gold Posted: 09 Feb 2013 10:03 AM PST From Andrew Thrasher: Gold can be a fun commodity to keep an eye on, as it can have some pretty volatile moves intraday. The price action we have been seeing in gold recently is a great example of why it's important to be patient. I've looked at gold a few times over the last year, for example in July when it was breaking out of a pennant pattern to the upside, back in September when the shiny metal looked like it might be topping out, and most recently in early January when it appeared that gold was reaching an oversold level near the $1,640 area. But today what I'm seeing is the commodity is stuck between tight levels of resistance and support. Gold looks like it's in a quagmire... traders don't seem to have enough conviction to have any type of substantial move. On the upside we have... More on gold: |
| The Truth on Gold Stocks vs. Gold Posted: 09 Feb 2013 09:12 AM PST The gold and silver stocks as a group have certainly been a disaster over the past two years. Both GDX and GDXJ are down with GDXJ leading the spiral. Yet, the metals are actually higher. Gold is up quite a bit while Silver is up marginally. Because of the volatility in this sector we can certainly choose any period to emphasize a point. However, it is becoming clear that the mining equities are struggling to outperform the metals. In studying the history of this sector (both the stocks and the metals) I've learned two things that I will share with you today. First, the large-cap miners have no track record of consistently outperforming Gold and second, it is possible to routinely find companies which can outperform the metals. I credit the first point to Steve Saville, who was one of the first to note that the miners do not consistently outperform the metals. In fact, in secular bull markets the stocks consistently underperform Gold. Steve's chart below shows how the miners underperformed badly from 1974 to 1980. Recall that the Gold price was fixed until 1971. Thus, both the uptrend from 1964-1968 and the downtrend from 1968-1971 are exaggerated. It is simply a function of geology and numbers. Large companies have an extremely difficult time finding enough deposits and big enough deposits to not only replace reserves but to grow production. It's much easier for a company to grow from 50K oz Au production to 100K oz Au production than it is for a company to go from 2M oz Au production to 4M oz Au production. Throw in political risk, permitting delays, financing issues and execution issues and its understandable why the large companies underperform the metal. This being said, it's important to take all those XAU vs. Gold charts with a grain of salt. Over the long-term, Gold will continue to outperform and that chart will continue to make new lows. Moving along, it is important to examine the relative strength of various gold stocks in particular market cycles. Below we graph the HUI versus Gold. We highlighted the performance during cyclical bull markets. In all three examples we notice that the biggest gains came at the start of the cyclical bull market. In the last two, the bull market ended as the HUI/Gold ratio peaked slightly below its high for the cycle. This tells us that the stocks will strongly outperform at the start of the next cyclical bull but that outperformance will ultimately peak or fade.
Here are my conclusions on this small study. The large cap miners will continue to underperform Gold through the end of the bull market. However, they will outperform when the next cyclical bull begins and probably soon. However, they ultimately will underperform over the next five years. During a cyclical bull market a large group of junior producers can outperform Gold strongly. You only need to be able to pick the right large group. The better a stock picker one is, the more one can outperform. Clearly, if you are stock picking this sector you should never dabble in the large cap miners. If you want safety than go with bullion and try to find a mutual fund that has a track record of picking the right stocks. If you want to speculate than you need to train yourself to be an excellent stock picker or find someone who can help you learn. Interestingly, I believe the near-term outlook is pretty good and most stocks have a chance to outperform the metals into the spring. The caveat is we need to see a final breakdown first. GDX, the HUI and my junior index above are all consolidating which could precede a breakdown and the final low. Over the past 10 sessions, GDX has been locked into a range of $41.50 to $43.00. A downside break, in your humble author's opinion could lead to the final bottom which we wrote about last week. Continue to be patient and continue to have your favorite stocks in mind. If you'd be interested in professional guidance in uncovering the producers and explorers poised for big gains then we invite you to learn more about our service. Good Luck! Jordan Roy-Byrne, CMT |
| Mexico Mint issues new series of bimetallic coins Posted: 09 Feb 2013 07:56 AM PST These bimetallic coins feature a face value of 100 pesos and a sterling silver center surrounded by an aluminum and bronze alloy and are proof-like in nature. |
| James Rickards: World Currency System Moving Towards Catastrophe Posted: 09 Feb 2013 07:55 AM PST "The world currency system is riding down the road to catastrophe." Those were the words from James Rickards during a recent interview on Wall Street Journal, senior managing director of Tangent Capital Partners and author of the book Currency Wars: The Making of the Next Global Crises. "The world already has entered a currency war that began in 2010 on the heels of the Federal Reserve's massive easing program. Since then, plenty of nations have joined in, including Brazil, Switzerland and Japan." Japan has been devaluing significantly their Yen over the past two months as we wrote here. There is a new competitor in the room. The most recent news, as reported by Bloomberg, is that Venezuela just decided to weaken the exchange rate by 32 percent to 6.3 bolivars per dollar starting February 13th. The currency war has clearly and openly started. In order to exactly understand what is going on, we need to go back to an earlier interview Jim Rickards gave to Bloomberg. In it, he explained the following:
The quantity theory of money looks as follows: M x V = p x Y. It is an equation in which the monetary base times the velocity of money equals price inflation times real GDP. Central banks use this equation for their monetary policies. It is the reason why one of their focus points is to influence the psychology (mood) of people: if people "feel" that everything is going well, they will spend more, raising the velocity of money and resulting in a higher gross GDP. Given the fact that the economies are not really producing more, for sure not in the in US and Japan, it implies that the central bank efforts to create inflation could very well result in a much higher inflation rate than targeted. While aiming for 2%, the result could very fast be 6%. Furthermore, on Yahoo! Finance, in another interview, he referred on to a speech Ben Bernanke gave at the end of September in Tokyo on an IMF event. He warned the other countries by saying the following:
Those are pieces of information one needs in order to understand the current situation. The central banks of both the United States and Japan are trying to import inflation in order to get their economies growing through a weaker currency. They do so instead of trying to boost their exports. The result in the dollar and the yen are shown in the following chart, courtesy Wall Street Journal:
Jim Rickards says that the European Central Bank is actually doing the right thing: easing for liquidity reasons rather than to depress its currency. "The euro has risen to a 14-month high against the dollar as a result, and he thinks it can keep ascending." (source MoneyNews) Based on the dire state of the world currency system, it should be clear why Jim Rickards expects gold to trade in a range between $3,000 and $10,000. He adds to it: "We're not going to get there all at once." Indeed, based on the news out of Venezuela, it is obvious that lower dollar, higher gold could take some time. From the Venezuelan point of view, the holders of their currency are losing significant purchasing power while holders of gold are simply preserving it.
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| Gold And Silver Are A Buy! $1600 and $28 Targets? Posted: 09 Feb 2013 07:53 AM PST If Venezuela were any guide, we would have to say buy gold and silver, right here, right now! For those of you who hold Bernanke Bux, aka fiat paper, pay close attention. Those Venezuelan citizens who held paper Bolivars took a 46% hit on their purchasing power. Those citizens there who held gold and silver saw an equivalent 46% jump in their holdings. If you think it cannot happen here, you are wrong. It already has. Since the privately owned Federal Reserve took control over this nation's money supply in 1913, today's purchasing power of the fiat-issued Federal Reserve Note, [FRN], is 3 cents, and that would be 3 cents of post-1982 pennies because pennies prior to 1983 are copper content and now worth more than 3 cents, not to put too fine a point on it. Always remember, a FRN is NOT a "dollar,' despite the false labeling. Each one is a commercial debt instrument issued by the Federal Reserve, a central bank, one of many throughout the world, all controlled by New World Order confiscators, which includes confiscation of all freedom, [read the Patriot Act and National Defense Authorization Act, and we will not even go into the organic Constitutional Republic being defunct because of them]. Still, the likelihood of another devaluation of the FRN, but an "official" one, like what happened in Venezuela, as high as 50% would not be out of the realm of possibility. Anyone who still "values" the holding of valueless paper and has not purchased gold and silver in physical form, lives in denial and will "pay" dearly for that choice. Let us be clear, once more, [with apologies to the choir members], BUY physical gold and silver, now, at any price and at any time, and put it away…NOT in a bank or some financial institution; NOT in any paper form, ETF or any "certificate of ownership" form, which is just a piece of paper. If you do not hold it, you may never get to own it! Is that worth the risk? [Just ask Germany, unable to get its gold back from central banks in NY and London.] No honor among thieves, there. Here is one more fact for you to consider: $16, 483, 729, 858, 642. That is how many fiats are outstanding, a part of which the corporate federal government says is YOUR burden. [We warned you, FRNs are IOUs]. It is approximately the current cost of kicking the political can down the road in order to pay for all the banking failures, and government spending, the cost of funding the TSA to pat you down literally while politicians do it to you figuratively, and you can see how high those figures are. The examples are endless, and mindless. As for the futures…we start each week with new charts, expecting developing market activity will lead us in the right direction. Previously, we have maintained a bullish bias when reading the charts. Not so, for this week. [The long positions, acknowledged last week, were sold on the Wednesday rally, missing the break on Thursday and Friday.] One cannot remain bullish for the near term, for futures only, when the developing market activity tells a story of price weakness. The least amount of market knowledge arises when price is in the middle of a TR. Why? The middle of anything is at a 50% point, so the odds of the market going up are equal to the odds of the market going down, while still within a trading range. As you can see from the established channel, price could decline and not find support until the $1600 area, which is where the rally began, last August. We often say how markets are always testing support/resistance areas, and that includes previous breakout areas, too. As things stand, a further decline in the futures is not far-fetched, although why gold and silver would decline by any amount, given surrounding circumstances, is a mystery. Still, it speaks to the staying power of those in power who desire to keep PMs suppressed. It is still working.
While silver had been a bit stronger than gold, recently, gold held better on the late week decline than did silver. Seeing how gold has been virtually sideways since mid-December, and trading within the first three trading days of January, it can continue to meander for several more weeks to come. One red flag was the sharp volume increase on Thursday with a close off the lows. It is the market telling us that buyers were as active as sellers, and meeting the effort of sellers at the lower end. Friday's small range does nothing to clarify the picture. Buy the physical, keep the powder dry in futures.
The weekly chart is similar in silver, but we added an "axis line," one where it acts as support and alternating resistance, and that area is around $32. The labored rally from last week fizzled, and were price to decline, an obvious target is $28, also where the rally started in last August. This is should the December lows not hold as support.
Keeping it simple, we see lower highs and lower lows, the simplest definition of a down trending market. We had been watching the formation of a coiling wedge for the past several trading days, even "hoping" for an upside breakout, but so far, the opposite has developed. The increased volume on Thursday's decline looks more like a day that sellers were in control, in contrast to the same day for gold. Friday's attempt to rally failed, volume declined, and that says demand was weak. As an otherwise inside day, it is hard to draw any meaningful conclusion. Buy the physical, and the American Eagles are such beautiful coins, but avoid futures for the near term.
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| Posted: 09 Feb 2013 06:24 AM PST This posting includes an audio/video/photo media file: Download Now |
| Gold vending machine in Boca Raton may be first of many Posted: 09 Feb 2013 06:23 AM PST  Just outside of Burberry, Tory Burch, Stuart Weitzman and Banana Republic stores in the corridor next to the Brahman Motors Bentley display is a six-foot-tall golden box that dispenses 1 gram to 10 grams of gold. Meris Kott, managing director of PMX Gold Bullion, said the machine was placed at the mall Jan. 4 and the company has a year lease. The company used a German machine about two years ago for a trial run at Town Center. This time PMX Gold Bullion Sales, based in Boca Raton and a subsidiary of publicly listed PMX Communities Inc. (OTC BB: PMXO, 7 cents), had its own machine designed. Another machine will be placed in a Florida mall in the next few weeks, Kott said. Her goal is to have 10 to 12 machines placed in various malls by the end of June. |
| Russian Policy Study Group Notes GATA's Exposure of Gold Price Suppression Posted: 09 Feb 2013 06:23 AM PST ¤ Yesterday in Gold and SilverThe gold price did nothing yesterday...and the tiny rally that developed in New York trading after the London p.m. gold fix in, wasn't allowed to amount to much...and got sold off during the following few hours, before trading sideways into the close. Gold finished the Friday session at $1,667.20 spot...down $3.80 on the day. Volume was very light...around 94,000 contracts.
The silver price was more 'volatile'...but traded in exactly the same pattern as gold...with the price spike after the London p.m. gold fix being treated even more harshly than the sell-off that accompanied gold's rally at the same time. From there, silver traded sideways into the close. Silver finished the Friday session at $31.43 spot...down 3 cents from Thursday. Net volume was very light at around 27,000 contracts.
The dollar index opened at 80.24 in Far East trading on their Friday...and held more or less steady until 3:00 p.m. in Hong Kong...and then slide to its low of the day [79.95] at noon in London. Then the index rallied back to unchanged by 1:00 p.m. in New York before trading sideways into the close. The index closed almost where it started that day...80.23. Nothing to see here, folks...please move along.
The gold stocks pretty much followed the gold price action yesterday. They hit their high when gold hit its high...and then sold off when the gold price reversed itself. The HUI closed down 0.50%.
The silver stocks finished mostly in the green...and Nick Laird's Intraday Silver Sentiment Index...which has returned from the disabled list...closed up 0.35%.
(Click on image to enlarge) The regular Silver Sentiment Index is below...showing the longer-term trend.
(Click on image to enlarge) The CME's Daily Delivery Report showed that zero gold and 60 silver contracts were posted for delivery within the Comex-approved depositories on Tuesday. Jefferies was the short/issuer on all 60 contracts...and the 'usual suspects' were biggest long/stoppers. The link to yesterday's Issuers and Stoppers Report is here. After a deposit in GLD on Thursday, there was a withdrawal of 96,797 troy ounces on Friday. But the big surprise was SLV. When I typed this paragraph shortly before midnight Eastern time last night, the SLV website showed no change. Now that I'm editing this column at 5:40 a.m. Eastern time, I decided to check to see if the site had been updated...and it had. It showed that 1,547,142 troy ounces of silver had been deposited by an authorized participant. Why SLV is sometimes being updated around midnight Eastern time is a big mystery to me. I was hoping that the short positions in these two ETFs would have been updated on the shortsqueeze.com Internet site yesterday evening but, alas, that was not to be. There was a smallish sales report from the U.S. Mint. They sold 1,500 ounces of gold eagles...1,000 one-ounce 24K gold buffaloes...and a very decent 206,000 silver eagles. Month-to-date the mint has sold 34,500 ounces of gold eagles...1,000 one-ounce 24K gold buffaloes...and 979,500 silver eagles. Based on these numbers, the silver/gold sales ratio for February to date is just under 28 to 1. It was another action-packed day over at the Comex-approved depositories on Thursday. They reported receiving 1,202,121 troy ounces of silver...and shipped 227,050 troy ounces out the door. The link to that activity is here. The Commitment of Traders Report...for positions held at the close of Comex trading on Tuesday...showed that the Commercial net short positions in both metals increased during the reporting week. In silver, the Commercial net short position increased by 1,679 contracts...and now sits at 259.7 million ounces. The 'Big 4' traders in silver are short 265.1 million ounces...a bit over 100% of the above-mentioned Commercial net short position. The next '5 through 8' traders are short an additional 55.3 million ounces. As far as the concentration of these short positions is concerned, the 'Big 4' are short 52.4% of the entire Comex futures market in silver on a net basis. The '5 through 8' traders are short an additional 10.9 percentage points. So the 'Big 8' are short 63.3% of the entire Comex futures market on a net basis...and those are minimum percentages. Ted Butler pointed out that, according to his calculations, JPMorgan Chase is short 35,000 Comex silver contracts all by itself...and that calculates out to about 34.5% of the entire Comex silver market. One entity short that much of one commodity...what the #%&!$ is the CFTC waiting for? Then, to make matters worse...and this is my personal opinion...I think that the second big short in the silver market is the Bank of Nova Scotia, through their bullion division Scotia Mocatta...and they are short about 11 percent of the entire Comex silver market. Despite polite enquiries, I can't get them to admit to it...but they didn't say no...and I given them ample opportunity to do so. I'm also of the opinion that the number three silver short holder on the Comex is HSBC USA...but their position would be around 5% of the total Comex futures market in silver. Based on these educated assumptions, of the 41 traders on the short side of the Commercial category, three of them are short about 50% of the entire Comex silver market...and the short positions of the other thirty-eight traders in that category, are immaterial. In gold, the Commercial net short position increased by 7,510 contracts...and now sits at 174,600 contracts, or 17.46 million ounces. The 'Big 4' are short 10.51 million ounces of gold...and the '5 through 8' traders are short an additional 5.85 million ounces. So the 'Big 8' in total are short 16.36 million ounces of gold...93.7% of the Commercial net short position. As far as concentration goes, the 'Big 4' are short 29.6% of the entire Comex futures market in gold...and the '5 through 8' are short an additional 16.4% of the Comex futures market. In total, the 'Big 8' are short 46.0% of the entire Comex futures market in gold on a net basis. Here's Nick Laird's "Days to Cover Short Positions" in all world commodities.
(Click on image to enlarge) The CFTC also published the February Bank Participation Report...and the data contained in that is extracted from the above-mentioned Commitment of Traders Report. In silver, it showed that less than four [probably three] U.S. banks are net short 40,192 Comex silver contracts...about 7,900 contracts higher than January's BPR. And don't forget that Ted mentioned that JPMorgan Chase is short 35,000 Comex contracts...and it's my guess that HSBC USA is short about 5,000 Comex contracts...and the tiny balance of about 200 contracts would belong to Citi, I believe. The 14 non-U.S. banks are net short 15,370 Comex contracts, an increase of about 500 contracts from the January report. My estimation is that Scotia Bank holds about 11,000 of those 15,370 short contracts...so that leaves the remaining 13 non-U.S. banks holding about 4,370 Comex contracts short between them. These are immaterial positions when you divide them up more or less equally. [Note: If the Bank of Nova Scotia wishes to deny that they are the new "Non-U.S. Bank" mentioned on the Bank Participation Report home page...I'd be more than happy to print a retraction...and an apology.] In gold, 4 U.S. banks are net short 69,300 Comex contracts. This is a 13,000 contract decline [1.3 million ounces] since the January BPR...and three of those four U.S. banks just mentioned would be the 'Big 3' U.S. banks short the Comex silver market as well. There are 20 non-U.S. banks short 48,734 Comex contracts in gold...and that's an increase of about 2,900 contracts since the January BPR...or 290,000 ounces of gold. Just for fun, here's the Reader's Digest version of the Bank Participation Report for both platinum and palladium. In platinum, 17 banks are long 2,292 Comex contracts...and short 26,286 Comex contracts. In palladium, 17 banks are long 991 contracts and short 13,667 contracts. The lion's share of the short positions in both platinum and palladium are held by less than four U.S. Banks. And just as a matter of interest, there are 17 banks in total holding short positions in the Comex silver market as well. One has to wonder whether they are the same 17 banks in all three metals. Here are the Bank Participation Reports for all four precious metals in chart form. Note the monstrous short positions held by the 3 [or 4] U.S. Banks in all four metals....and note the appearance of Scotiabank in October on silver's chart. Charts #4 and #5 from each one are the most important...and the 'click to enlarge' feature is a must here.
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(Click on image to enlarge) I've cut the stories down to a bare minimum for a Saturday...and I hope you can find the time over what's left of your weekend to read the ones that interest you. The quick take-downs of both gold and silver after the London p.m. gold fix were duly noted. Gold vending machine in Boca Raton may be first of many. Venezuela devalues currency by 32%. John Williams: How to Survive the Illusion of Recovery. Doug Noland: New Bull or Bigger Ro, Ro? America's Baby Bust. ¤ Critical ReadsSubscribeBoeing New Aircraft Orders Implode From 183 to Just 2 in JanuaryAfter the now several week old exploding battery fiasco, Boeing is nowhere closer to resolving the recurring problem for its appropriately renamed Nightmareliner. But the worst for the company may be yet ahead: as the following chart from Stone McCarthy shows, January new aircraft orders collapsed from 183 in December to a meaningless 2 in January: a seasonally strong month, with some 150 orders a year ago, and more weakness to come as Boeing just warned its first Norwegian delivery due in April may be delayed. This story was posted on the zerohedge.com Internet site yesterday...and I thank "David in California" for sending it. There are a couple of charts that are worth looking at...and the link is here.  U.S. Economy likely grew in fourth quarter [on back of gold sales]The economy likely expanded slightly in the fourth quarter as higher exports and a slump in oil imports narrowed the trade gap, suggesting a surprise drop in economic output reported last week was overstated. The U.S. report showed the country's trade gap narrowed to $38.5 billion in December, which was a much smaller deficit than analysts polled by Reuters had expected. U.S. exports increased $8.6 billion in December, boosted by sales of industrial supplies, including a $1.2 billion rise of non-monetary gold. The above paragraph was buried close to the bottom in this Reuters story that was posted on the finance.yahoo.com Internet site yesterday. I thank "David in California" for bringing this very interesting news tidbit to our attention...and the link is here.  Justice Department, States Weigh Action Against Moody's, Sources Tell ReutersThe U.S. Justice Department and multiple states are discussing also suing Moody's Corp. for defrauding investors, according to people familiar with the matter, but any such move will likely wait until a similar lawsuit against rival Standard and Poor's is tested in the courts.  Why gasoline prices are headed even higherGasoline prices at the pump have climbed every day for the past 21 days — and they're not going to let up anytime soon. On Thursday, the average U.S. price for a gallon of regular gasoline stood at $3.555, making it the most expensive average ever for that day and the highest level since Oct. 26 of last year, according to AAA. The price has risen 26.3 cents, or about 8%, this year, steeper than the 6.2% increase for the same period in 2012 and 1.6% rise for the same period in 2011, according to the motorist and leisure travel group. And as the gasoline market set all sorts of milestones, analysts offered more reasons why prices are headed even higher over the next few months. This marketwatch.com story from early yesterday morning was sent to me by West Virginia reader Elliot Simon...and the link is here.  John Williams: How to Survive the Illusion of RecoveryThere is no economic recovery, and there are no signs that a recovery is coming, says Shadowstats.com author John Williams. In this Gold Report interview, he blames mal-adjusted inflation statistics for creating an alternate reality that overestimates economic activity in a way that is unsustainable. Williams warns that eventually the painful truth will be so difficult that even government manipulation won't be able to deny it and that is when hyperinflation will take its toll on those who have not taken his advice for preserving purchasing power and securing wealth. This longish interview was posted on theaureport.com Internet site yesterday...and it's well worth the read. The link is here.  Doug Noland: New Bull or Bigger Ro, Ro?The inevitable upshot to this unwieldy "risk on, risk off" and New Age Policy Asymmetry is unanchored global liquidity and general currency market instability. The Draghi and Bernanke Plans incited re-risking, re-leveraging and an absolute global market liquidity bonanza. Many now talk openly of "currency wars" – recalling the destabilizing "beggar t |
| Venezuela devalues currency by 32% Posted: 09 Feb 2013 06:23 AM PST  Venezuela devalued its bolivar currency to 6.3 per dollar from 4.3 per dollar, the finance minister said today, in a widely expected move to shore up government finances after blowout government spending last year. The measure will help ease a shortage of dollars that has crimped imports and left many supermarkets barren of staples such as flour or sugar. It is also seen pushing up consumer prices in the import-dependent OPEC nation that already has one of Latin America's highest inflation rates. Venezuela has maintained exchange controls on the bolivar for a decade under which importers and travelers must seek dollars through a state currency board, or buy them on an illegal black market where greenbacks fetch nearly four times the official rate. |
| The horse meat substitution scandal is as old as Roman coin clipping Posted: 09 Feb 2013 05:39 AM PST Silver Coin Clipping in the Digital Era |
| Uzbekistan produces 90 tons of Gold last year Posted: 09 Feb 2013 04:40 AM PST Explored and proven gold reserves in Uzbekistan are more than 2,500 tons. |
| Posted: 09 Feb 2013 04:21 AM PST By Conclusion first: I believe that Dell's (DELL) proposed go-private offer of $13.65 per share grossly undervalues the company and view this attempt to short-change public shareholders as an epic failure of fiduciary duties. In this article, I lay out in simple and clear terms why I hold this view and urge shareholders to vote against the deal. Introduction All casual financial observers should by now be aware of Dell's proposed go-private deal of $13.65 per share led by Michael Dell, the company's founder and CEO, and Silver Lake, a well-regarded private equity firm. The price of $13.65 per share represents a ~25% premium over the stock's close prior to the proposal. To uninterested observers or unsophisticated shareholders, this may appear as a windfall, a coup de grace to public shareholders after more than a decade of declining stock value. According to a recent Wall Street Journal article, "Interviews with Complete Story » |
| Posted: 09 Feb 2013 04:00 AM PST Submitted by Morris Hubbartt: If the implosion of Lehman could only get the dollar to 89.11, is there really any hope for the bulls now? I don't think there is. I've labeled the dollar chart the "Triple Hammer Chart", because I see 3 powerful chart patterns, and all of them are very bearish for the [...] |
| Gold ends week with 2% loss, Silver 1.6% Posted: 09 Feb 2013 03:47 AM PST Gold dropped 2 percent for the week while silver ended the week with a 1.6 percent loss. |
| CME to cut Gold, Silver, Platinum margin Posted: 09 Feb 2013 03:29 AM PST CME also cut the margins on the COMEX 5,000-ounce silver contract by around 14 percent, and those of the NYMEX 50-ounce platinum futures contract by about 13 percent. |
| Nothing At All, Then All at Once Posted: 09 Feb 2013 02:29 AM PST I've been reminded by a reader that it's my second anniversary at PoliticalMetals.com, a place for me to share what I've learnt regarding the true nature of the two historic monetary metals, gold and silver – that they are more political than precious. Time flies. Over the past two years, much has transpired in the [...]  This posting includes an audio/video/photo media file: Download Now |
| Posted: 09 Feb 2013 02:16 AM PST Bix Weir |
| Posted: 09 Feb 2013 12:18 AM PST By Robert Guttmann, Professor of Economics at Hofstra University and a visiting Professor at University of Paris, Nord. Cross posted from Triple Crisis A strange calm has settled over Europe. Following Mr. Draghi's July 2012 promise "to do whatever it takes" to save the euro, which the head of the European Central Bank followed shortly thereafter with a new program of potentially unlimited bond buying known as "outright monetary transactions," the market panic evaporated. Since then super-high bond yields have come down to more reasonable levels, allowing fiscally and financially stressed debtor countries in the euro-zone to (re)finance their public-sector borrowing needs a lot more easily than before. Even Greece has been able to borrow in the single-digits for the first time in three years. This calming of once-panicky debt markets has led to optimistic assessments that the worst of the crisis has passed. Draghi himself declared at the beginning of the new year that the euro-zone economy would start recovering during the second half of 2013. He talked of a "positive contagion" taking root whereby the mutually reinforcing combination of falling bond yields, rising stock markets and historically low volatility would set the positive market environment for a resumption of economic growth across the euro zone. Christine Lagarde, as the head of the IMF part of the "troika" (i.e. ECB, IMF, and European Commission) managing the euro-zone crisis, declared at the World Economic Forum in Davos a few weeks ago that collapse had been avoided, making 2013 a "make-or-break year." All this begs the obvious question whether this major shift in mood is justified and as such durable or just a temporary break before the next storm. The answer to this question is unclear, to say the least. It could go either way – the beginning of sustained recovery around the corner or imminent resumption of market panic provoking further stress in the euro-zone system. In favor of the now remarkably widespread optimism among European and non-European financial-market players is the prevailing sense that – painful as the process might have been – several of the debtor countries have made significant progress in their adjustment processes. Specifically, we can see that Ireland, Spain, Portugal or even Greece have been able to lower their current-account deficits substantially to the point where at least the first three of these may end up running current-account surpluses in 2013 – a very significant turnaround which may help their economies recover earlier than thought. More generally, those deficit countries in the periphery of the euro-zone have gone through an austerity-driven and recession-mediated "internal devaluation" process which in the absence of other adjustment options (via lower exchange- and/or interest rates) has improved their relative labor unit costs and so left them more competitive as a result. Further feeding positive market sentiment is the spreading sense that some key structural reforms needed for proper completion of the single-currency project are finally being moved to the front burner. This is especially true following the launch last September of the €500bn. European Stability Mechanism (ESM), the new permanent lender-of-last-resort mechanism for euro-zone members in crisis. In the meantime a majority of EU countries have ratified the so-called "fiscal pact" which gives the European Commission far more powers than before to monitor national budgets and impose tough deficit limits on member countries, thereby significantly curtailing their hitherto sacrosanct sovereignty over fiscal policy. A third major institutional reform, that of constructing a banking union, has also made recent progress with agreement in December 2012 to create a single banking supervisor under the auspices of the ECB. But all these tangible improvements may easily come to naught in which case renewed turmoil in the sovereign-bond markets will be just a matter of time. Most troubling in this context is the doom-loop dynamic of persistent fiscal austerity across the continent. To the extent that such deficit-cutting measures push an already shrinking domestic economy deeper into recession and thereby trigger automatic fiscal stabilizers, they may be self-defeating while at the same time depressing economic activity further. Whatever re-balancing adjustments have already taken hold, they may in the end be overpowered by the debt-deflation spiral which a continental multi-year commitment to tax hikes and savage spending cuts will inevitably bring about. Add to this growing political polarization and social unrest in the wake of deepening economic crisis, crystallized around double-digit unemployment and broadly falling living standards. Much of this translates into public rage against European integration, just when exactly that is needed to a greater degree than ever before. This dialectic centers above all on the euro's trade-adjusted exchange rate. To the extent that positive market sentiments drive up the euro against its key trading partners (already by over 10% just in the last couple of months), they will undermine the competitiveness of the euro-zone's economies which only reinforces recessionary pressures already in place and deepens tensions within the EU's adjustment processes – a dynamic that can be pushed to the breaking point of an acute banking crisis or major sovereign-debtor default. More generally, the recent improvements in market sentiment have once again proven that Europe's political leaders only act when under severe pressure to do so. The moment the situation relaxes, as it has in recent months, they go back to their old bickering and meandering ways, bringing reforms to a halt. But the euro-zone cannot afford this stop-go pattern of policy-making in the face of a systemic crisis. It will have to undertake far-reaching reform on several fronts beyond what Europe's leading politicians have been willing to entertain. If, for instance, you impose a constitutional balanced-budget requirement on nation-states within the union, then you will have to push harder for a new kind of fiscal federalism which gives the European Commission a bigger budget and deficit-spending capacity. The recent EC budget exercise has gone in the exactly opposite direction, locking in seven more years of fiscal austerity at the federal center of Europe. The banking union will have to be extended to include a continent-wide deposit-insurance scheme and resolution fund, both steps more complex and fraught with intra-EU conflicts than the recently launched EU-wide supervisor. Finally, introduction of mutually guaranteed and jointly issued Euro-bonds is the only way to repair the structurally damaged sovereign-debt market, expand the ESM's crisis-management capacity when needed, and anchor fiscal federalism – all crucial steps needed to overcome this structural crisis. Given the scope of reforms yet to be undertaken, continued deep recession, and prevailing asymmetries within the euro-zone between debtor and creditor countries, it may be too early to see the "end of the tunnel." Only time will tell! |
| The Gold Standard Before the Civil War Posted: 08 Feb 2013 11:30 PM PST Mises |
| Emerging Market Currencies: Best Way To Play QE3 Posted: 08 Feb 2013 10:57 PM PST By Though emerging markets (EM) have not been immune to the current crisis, their improvements in economic fundamentals have enabled them to weather the current tumult with far greater market confidence than in the past. Also, they remain well-positioned for further improvements and may benefit from an appreciation of their currencies, especially in an environment of increasing secular pressure on the U.S. dollar. Currency exposure also provides portfolio diversification benefits due to low correlations with other asset classes. Quantitative Easing to Continue into 2013:
Complete Story » |
| Posted: 08 Feb 2013 10:45 PM PST The Privateer |
| Dividends paid in physical gold? Posted: 08 Feb 2013 09:44 PM PST Finally an investment that pays returns in real money. Obviously other than physical gold and silver, which of course have always done that, but without the risk of going broke. From smh.com.au Gold miner Endeavour Mining Corp's (ASX: EVR) chief … Continue reading |
| Jim Willie: Fever Pitched Currency War & USDollar Rejection in 2013 Posted: 08 Feb 2013 07:54 PM PST By Jim Willie, GoldenJackass.com 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 key to the solution is a USDollar alternative, actually trade settlement outside the USD [...] |
| Shift to hard assets away from paper money has started says Ron Paul Posted: 08 Feb 2013 07:43 PM PST Former US Representative from Texas Ron Paul weighs in on the currency war and speaks to Bloomberg's Sarah Eisen. He thinks the shift away from paper money and into hard assets has already started with the housing recovery. But Ron Paul does not believe in going back to the gold standard but the crisis in paper money is already upon us… |
| By the Numbers for the Week Ending February 8 Posted: 08 Feb 2013 06:57 PM PST This week's closing table is just below. Vultures, (Got Gold Report Subscribers) please note that updates to our linked technical charts, including our comments about the COT reports and the week's technical changes, should be completed by the usual time on Sunday (by 18:00 ET). To subscribe to Got Gold Report please click on the "Subscribe to GGR" button at top right. Join us today. |
| Posted: 08 Feb 2013 01:30 PM PST Read the Thursday Afternoon Wrap-Up for 2/7/2013 and the Friday Morning Commentary for 2/7/2013 In last week's "THE FINAL CURRENCY WAR," I discussed how the parabolic increase in sovereign debt – coupled with collapsing Western economies – has catalyzed an "UNPRECEDENTED" level of Central bank MONEY PRINTING; or as they euphemistically term it, "quantitative easing." In layman's terms, the world's largest nations are BANKRUPT; and thus, monetizing not only their debt, but the lives of their similarly BANKRUPT municipalities and citizens. This RANT discussed the "nuts and bolts" of what Central banks are currently doing; but not the irrational mindset behind their lunacy. Sure, "kicking the can" is their modus operandi – as their very survival depends on it – assuming it works. However, the pervasive "mental dyslexia" they have spread throughout their PROPAGANDA is truly a sight to behold. Peter Schiff wrote the below article last week, which serves as the inspiration for this RANT topic – a MUST READ on the currency wars topic… The Biggest Loser – Peter Schiff Sometimes, additional commentary is necessary; but in this case, NONE is required. Schiff is DEAD ON regarding the lunacy of today's financial oligarchs; as well as why their "mad experiment" in GLOBAL FIAT CURRENCY will ultimately implode…
DENIAL is a very powerful emotion; but CANNOT prevent the inevitable! PROTECT YOURSELF, and do it NOW! Call Miles Franklin at 800-822-8080, and talk to one of our brokers. Through industry-leading customer service and competitive pricing, we aim to EARN your business. Similar Posts: |
| Venezuela Devalues Bolivar 46%! Posted: 08 Feb 2013 12:59 PM PST After Venezuela sent shockwaves throughout the gold market in the summer of 2011 by repatriating all 110 tons of their gold reserves from NY and London, Venezuela has just sent just as large of shockwaves throughout the escalating global currency wars, announcing a devaluation of the Bolivar by 46% Friday! With one simple statement, every [...] |
| Cyber War Against Alternative Media Underway? Cyber Attacks Spread to KWN Posted: 08 Feb 2013 10:30 AM PST Cyber malware attacks targeting alternative news sites such as SGTReport and BeforeItsNews have spread to KWN today, with multiple reports that visiting the KWN website has resulted in the user's system immediately receiving a trojan virus resulting in Blue Screen of Death. It appears that sites linking into KWN are also being targeted/ black flagged [...] |
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