saveyourassetsfirst3 |
- Take two for zinc-lead-silver project once backed by Hunt brothers
- Top 20 TSX mining shorts – Gold positions shrink
- Why Precious Metals ETFs Are Really Surging (And It's Not The Fed)
- NovaGold Resources' CEO Presents at Precious Metals Summit (Transcript)
- James Turk – Gold Will Finish 2013 At $1675 Or Better
- Gold, global financial markets stunned by Fed announcement
- SRSrocco: 500 Silver Eagles To Purchase A Home in the Future
- Platinum makes deep inroads into gold-dominated Indian market
- FOMC says ‘no,’ gold says ‘yes’
- Gold in India: Strong support zone reached, what’s next?
- QE unlimited sparks risk-on party as precious metals jump
- Chart of the Day: Cumulative Global Mintage of Gold Coins 1970-2012
- The bullish case for gold for the rest of the year is now beyond compelling
- Is Eric Sprott Selling His Massive Silver Positions? Sprott CEO Grilled by Marin Katusa
- Replacing Ben Bernanke at The Fed, Gold & Silver Future Reaction
- Want To Know What Happened Yesterday?
- No Fed tapering: The precious metals perspective
- Gold Surges 4.3% As $1 Trillion QE Per Annum, Debasement Continues
- Gold surges 4.3% as $1 trillion QE per annum, debasement continues
- Bernanke Surprise: Stronger Rupee to cap gains on India Gold prices
- Upcoming 3Q Mining Earnings Catastrophe
- Gold Surges 4.3% As $1 Trillion QE Per Annum, Debasement Continues
- QE Unlimited Sparks Risk-On Party as Dollar Sinks, Precious Metals Jump
- TD Bank: “We Don’t Have to Obey the Law” on Check Processing
- Links 9/19/13
- Obama supporters Sign Petition Banning Gold Coins & Confiscating Coins From Safe Boxes
- Who Leaked the FOMC Statement to Gold Traders
- Four King World News Blogs
- Who Leaked the FOMC Statement to Gold Traders?
- Canadian Billionaire Predicts the End of the Dollar as the Reserve Currency; Warns "It's Likely to Get Ugly"
- Cazenove's Robin Griffiths: Central banks lost their gold trying to suppress it
- Why Bernanke may have ended gold's bear market
- Satyajit Das: The Suzerainty of Central Bankers
- Gold could climb back to $1500, Silver to $26 as Fed taper threat goes
- Gold “Fierce” If Fed Surprises, Investment Banks Urge “Sell” as Traders “Spooked”
- Gold Rush Cometh In Japan - 1 Quadrillion Yen National Debt To Bankrupt
- Germanys Stolen Gold Reserves - Times are changing - the debts remain (Russian)
- Marc Faber says QE unlimited now ahead and that’s good for gold, oil and silver but not for US stocks
- Gold jumps $60 as Federal Reserve decides US economy now too weak to stop printing money
- Sept. 18 morning update
- Sprott: A ‘Taper’ in a Teapot
- Cazenoves Robin Griffiths: Central banks lost their gold trying to suppress it
- Junk Silver – Getting More Metal For The Money
- Today’s Fed Meeting – Stocks, Bonds & Gold Loved It. Dollar Hated It.
- Federal Reserve – No Taper!
- Senior Anglo Irish Bank official granted immunity from prosecution by Ireland’s DPP
- NO TAPER: Details on today's "unexpected" Federal Reserve decision
- The Greatest Debt Crisis The World Has Ever Seen Is Coming
- QE∞! No Fed Taper!
| Take two for zinc-lead-silver project once backed by Hunt brothers Posted: 19 Sep 2013 06:14 PM PDT Financing jumps to the fore as Canadian Zinc passes environmental scrutiny of regulators on the Prairie Creek project in Canada's north. |
| Top 20 TSX mining shorts – Gold positions shrink Posted: 19 Sep 2013 03:50 PM PDT Ahead of the Fed announcement - a quick if not everlasting dose of adrenaline for gold - gold shorts fell. |
| Why Precious Metals ETFs Are Really Surging (And It's Not The Fed) Posted: 19 Sep 2013 12:21 PM PDT Many commentators at some of the more popular web portals and news agencies have suggested that the surprise "non-taper" by the Fed is causing gold to surge. Granted, money poured into precious metals as soon as Wall Street got wind of the Fed's choice; that is, they're still going to buy $85 billion in bonds every month to depress longer-term interest rates. Yet the fact remains that the correlation between gold and ultra-accommodating monetary policy has been exceptionally weak for quite some time (see my August 2013 feature, "Is Gold Just Another Metals ETF?"). By way of review, the Fed doubled its bond buying experiment last September. Theoretically, record levels of electronic money printing should have devalued the dollar and pushed currency proxies like gold through the proverbial roof. However, SPDR Gold Trust (GLD), iShares Gold (IAU), ETFs Gold Trust (SGOL), and the spot price of the yellow |
| NovaGold Resources' CEO Presents at Precious Metals Summit (Transcript) Posted: 19 Sep 2013 12:03 PM PDT NovaGold Resources, Inc. (NG) Precious Metals Summit September 19, 2013 1:15 p.m. ET Executives Greg Lang - President & CEO Analysts Presentation Greg Lang [Call Starts Abruptly]… NOVAGOLD has two key assets, both of exceptional scale and quality and safe mining jurisdictions, the Donlin Gold project in Alaska and the Galore Creek project in British Columbia. A little bit about NOVAGOLD. We're 80% institutionally held. We've got some major shareholders that have been with the story a long time. And we've got great projects. Our balance sheet is strong. We're committed to delivering shareholder value. A little bit about where the company's come in the last few years. In less than two years, we completed the pre-feasibility study on Galore with our partner Teck. We completed the Donlin Gold final feasibility study with Barrick. We raised over $300 million in a bought financing, not quite two years ago. And we've |
| James Turk – Gold Will Finish 2013 At $1675 Or Better Posted: 19 Sep 2013 12:00 PM PDT
 James Turk remains extremely bullish on the yellow metal and for good reason. Turk believes gold will finish positive for the year and that this will be the 13th winner in a row. Perhaps he's a bit overly optimistic, but he's been right twelve years running and that's good enough for us. He's still seeing [...] The post James Turk – Gold Will Finish 2013 At $1675 Or Better appeared first on Silver Doctors. |
| Gold, global financial markets stunned by Fed announcement Posted: 19 Sep 2013 11:56 AM PDT The gold price climbed on news the US Federal Reserve will continue its quantitative easing programme with no changes. |
| SRSrocco: 500 Silver Eagles To Purchase A Home in the Future Posted: 19 Sep 2013 10:30 AM PDT
 In a new video, Mike Maloney explains how a person will be able to purchase a home for 500 ounces of silver or less in the future. I actually think silver will buy even more. From The SRSRocco Report: Mike believes this will occur due to home valuations falling considerably as they re-balance from the [...] The post SRSrocco: 500 Silver Eagles To Purchase A Home in the Future appeared first on Silver Doctors. |
| Platinum makes deep inroads into gold-dominated Indian market Posted: 19 Sep 2013 10:18 AM PDT According to government import figures, India consumed nearly 4 tonnes of platinum jewelry last year. This has made India the world's fourth largest consumer of platinum jewelry after China, Japan and the U.S. |
| FOMC says ‘no,’ gold says ‘yes’ Posted: 19 Sep 2013 10:13 AM PDT Both gold and silver's gains outpaced those of other markets. The 1% drop in the dollar went someway to underpinning the gold price. In a 9:1 vote the Committee refrained from tapering QE, citing tight fiscal policy and a rise in mortgage rates as its reasons for doing so. |
| Gold in India: Strong support zone reached, what’s next? Posted: 19 Sep 2013 09:55 AM PDT Due to the volatility in prices, physical demand has failed to pick up rapidly in key consumers India and China. Expectations that prices could fall further once the Fed announces a cut in stimulus have also restrained purchases. |
| QE unlimited sparks risk-on party as precious metals jump Posted: 19 Sep 2013 09:40 AM PDT World stock markets, foreign currencies and commodities extended yesterday's jump versus the U.S. dollar in Asia and London on Thursday morning, with gold regaining the $1,370 level. |
| Chart of the Day: Cumulative Global Mintage of Gold Coins 1970-2012 Posted: 19 Sep 2013 09:00 AM PDT
 Ever wondered exactly how many oz of investment gold has been minted and consumed by the public? Today’s Chart of the Day provides the answer, demonstrating the cumulative bullion gold mintage by the South African, Austrian, Canadian, US, Mexican, and Australian mints from 1970-2012. The 6 national mints have combined to produce over 110 million [...] The post Chart of the Day: Cumulative Global Mintage of Gold Coins 1970-2012 appeared first on Silver Doctors. |
| The bullish case for gold for the rest of the year is now beyond compelling Posted: 19 Sep 2013 08:06 AM PDT With Ben Bernanke essentially admitting to the world the he has got financial markets so hopelessly addicted to 'monetary-crack' (AKA: printed money), that he can't even reduce the money printing by... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] |
| Is Eric Sprott Selling His Massive Silver Positions? Sprott CEO Grilled by Marin Katusa Posted: 19 Sep 2013 08:05 AM PDT
 Is Eric Sprott selling out of his massive silver positions, exiting the market he's long evangelized? Casey Research's Marin Katusa sat down with Eric Sprott, chairman of the eponymous Sprott Inc. group of companies, to directly ask him some of the tough questions the blogs have been buzzing about. Eric Sprott’s full interview with Marin [...] The post Is Eric Sprott Selling His Massive Silver Positions? Sprott CEO Grilled by Marin Katusa appeared first on Silver Doctors. |
| Replacing Ben Bernanke at The Fed, Gold & Silver Future Reaction Posted: 19 Sep 2013 08:00 AM PDT
 In his latest interview, silver expert David Morgan discusses the replacement of Ben Bernanke as Fed Chairman, and how gold and silver are likely to react to The Bernank’s replacement. Morgan’s full interview is below: The post Replacing Ben Bernanke at The Fed, Gold & Silver Future Reaction appeared first on Silver Doctors. |
| Want To Know What Happened Yesterday? Posted: 19 Sep 2013 08:00 AM PDT Here is the best answer out there from Jim Sinclair:
Time to move onto the next diversions; the debt ceiling problem and who will replace Bernanke?
A quick summary of today's events: Gold’s best day since January 2009 5Y Treasury’s biggest yield drop since March 2009 USD’s 3rd worst day in a year Homebuilder's biggest rise since June 2012 New all-time highs for Dow and S&P All along Jim Sinclair maintained that the Fed can't cut back on QE. He coined the phrase, "QE to Infinity" and it looks like that's what we've got – until the dollar tanks. After the Fed's announcement today, the dollar fell one percent. That is an astounding drop. The Fed has shown itself to be an Emperor with no clothes. All they can do is jawbone and print money. Think about it – the Fed is implying that the economy needs a trillion dollars a year of new money creation to keep from tanking. This is what we have been writing for months now. We pointed out the obvious; something has to give, either the dollar or the economy. The Fed can't support both. Below is an article from Jim Sinclair:
This is similar to Lyndon Johnson's Guns and Butter – or today's equivalent, Obamacare, Welfare and the War on Terror. The result in the 1970s was crippling inflation and a rise in gold of over 24-fold and silver over $45 an ounce. Yes, history is repeating itself IN SPITE OF MASSIVE MANIPULATION of the precious metals market. It should be obvious that the favored banks (JPMorgan and Goldman Sachs and friends) had inside information and they knew what the Fed would announce, long before today. They engineered the big drop in gold and silver this month and went long as they led the mindless hedge funds to the (paper) slaughter. They should ALL go away! There are no good guys here, on either side of the trade. (See Zero Hedge articles, below)
And here is what Bill Murphy wrote below about the "inside information" at LeMetropole Café:
We are facing a shutdown of the government and a default without new funding by the end of the month. All the ducks are lining up in a row for a big, big move up in gold and silver. As was to be expected, business the last few weeks has been way, way down. People never buy at the bottom. They sell or step aside and wait. Things are about to get interesting as the moving average hedge funds and momentum funds start to unload their short positions. JPMorgan and Goldman Sachs will make hundreds of millions, and you, the retail buyer will sit around and wait for prices to go much higher before you decide it's finally safe to go back in the water. After a day like today, it should be obvious that this is not your best strategy. Enough of the bad news and it is very bad, even if you own a lot of gold and silver. This will not end well, but I have a cheer-you-up short video below for you today. Watch it! I promise you, it will make you smile and tug on your heart strings… A baby sea lion climbs on a boat and gets comfortable. Check out the following article below from King World News: Dave from Denver (and for me a reason why The Gold Cartel has been so manic about driving the price of gold down. This potential has to have them privately petrified)… This whole piece is pretty unnerving, but this part is terrifying (if you’re worried about systemic collapse):
Similar Posts: |
| No Fed tapering: The precious metals perspective Posted: 19 Sep 2013 07:59 AM PDT It was not too surprising that there is going to be no tapering for some very good reasons. It is hardly surprising that the recovery in gold and silver prices last night was dramatic, with gold moving up $70 and silver by $2 from intra-day lows. |
| Gold Surges 4.3% As $1 Trillion QE Per Annum, Debasement Continues Posted: 19 Sep 2013 07:53 AM PDT We remain confident in our long term price target, held since 2003, of $2,400/oz which is the real record high or inflation adjusted high from 1980. We believe gold should surpass the nominal high seen in August 2011, of $1,900/oz sometime in 2014 and will reevaluate our longer term price outlook then.
Today's AM fix was USD 1,363.50, EUR 1005.90 and GBP 848.15 per ounce. Yesterday's AM fix was USD 1,299.75, EUR 973.16 and GBP 813.97 per ounce. Gold climbed $56.40 or 4.3% yesterday, closing at $1,366.30/oz. Silver rose $1.37 or 7% to $23.09/oz. Platinum was up 3% to $1,460/oz, while palladium rose 1.7% to $715.75/oz. Gold had its biggest one day jump in four years surging 4.3% as the US Federal Reserve surprised many market participants by continuing its extraordinary debt monetisation programme at the massive $85 billion a month ($85,000,000,000 per month) or $1.02 trillion annualised.
This morning, gold spiked to $1,376/oz in early trading in London, prior to profit taking and sellers pushed gold a few dollars lower after yesterday's $53 surge. Zero Hedge noted that gold's price move higher commenced some 3 minutes prior to the FOMC minutes being released, suggesting that certain entities had advance knowledge of the no taper FOMC announcement. Gold and silver surged 4.3% and 7% respectively as investors are concerned that the Fed’s decision suggests that the U.S. economy is much weaker than believed and that continuing currency debasement will lead to inflation. Ben Bernanke, who will exit the Fed in the coming days, backed away from the guidance he gave in June and the Fed cut its growth forecast and confounded constant speculation that it would start to slow its third round of quantitative easing. Thus the speculation and erroneous predictions that gold would go lower due to tapering were proved badly wrong. From a timing perspective, the forthcoming appointment of a new Fed Chairmanship could not be worse.
Goldman Sachs did another flip flop yesterday. After being very loud in bearish calls in recent days that gold would go lower in the short term, Goldman said late yesterday that the Fed decision, combined with the upcoming debt ceiling debate, leaves risks for gold to move to the upside. Senior Republican politicians have hardened their stance over the U.S. budget and debt ceiling, increasing the chances of a crisis. The Federal Reserve decision to refrain from and put off indefinitely a QE taper is very bullish. The Fed is struggling to keep interest rates low for as long as possible in a desperate attempt to prolong a very fragile U.S. recovery or non recovery in our opinion. Money printing and debt monetisation on this scale has led to higher gold prices throughout history and will do so again. The Federal Reserve is effectively insolvent and investors and savers should prepare for falls in the U.S. dollar, a dollar crisis and an international monetary crisis.
Alan Greenspan, Former Chairman of the Fed, said in 2010 that gold is historically one of the rare media of exchange that doesn’t require any collateral or backing. To understand how the gold price is established and how best to prepare for the forthcoming falls in the U.S. dollar please download our Comprehensive Guide to the Gold Price. |
| Gold surges 4.3% as $1 trillion QE per annum, debasement continues Posted: 19 Sep 2013 07:42 AM PDT Gold had its biggest one day jump in four years surging 4.3% as the U.S. Federal Reserve surprised many market participants by continuing its extraordinary debt monetization program. |
| Bernanke Surprise: Stronger Rupee to cap gains on India Gold prices Posted: 19 Sep 2013 06:46 AM PDT India gold futures for October delivery has risen 1.46% to Rs 30427 per 10 grams after opening at 30204. Angel Commodities, a leading broking firm in India, in an analysis pointed out that while the US Fed has highlighted economic concerns, markets feel stimulus measures have become an integral part of the financial culture without which recovery is difficult. Meanwhile, markets are glued to the Reserve Bank of India (RBI) policy due for review on Friday. |
| Upcoming 3Q Mining Earnings Catastrophe Posted: 19 Sep 2013 06:43 AM PDT Hands down, my passion for protecting readers is my most valuable asset. Through thick and thin, I have been writing free missives for nearly a decade. Moreover, I "put my money where my mouth is"; as essentially my entire liquid net worth is in the form of PHYSICAL gold and silver – the bulk of it stored at Miles Franklin's Brink's vault in Montreal, Quebec. Having spent 16 years as a Wall Street trader and analyst, I left in 2005 forever; and subsequently, made it my life's goal to expose the fraud and conflict of interest I experienced first-hand. Sadly, what I witnessed then doesn't hold a candle to what is going on now; and frankly, the Wall Street I lived and breathed no longer exists. Research, investment banking, and sales trading are largely dinosaur businesses today; replaced by risk-free "profits" generated from derivatives creation, high frequency trading, government-supported carry trades, FASB-sanctioned accounting fraud, and – of course – the unlawful utilization of insider information. Fortunately, I picked up a thing or two in my 16 years on Wall Street; not to mention, five years working in investor relations for mining companies. As for my CFA designation, I challenge you to find one in a thousand investment professionals that survived the rigors of this extremely competitive test series. In other words, I have an above average knowledge of fundamental financial analysis – and four Institutional Investor "All-America Research Team" plaques to prove it. Regarding said hardware, I am proud to say my research in the oilfield service, equipment, and drilling sector from 1996-2005 proved invaluable to investors; as have my Precious Metals prognostications since 2002. Utilizing such skills, I recently predicted gold and silver production could decline by 15%-25% in the next three to five years. In fact, Eric Sprott just predicted a nearly 5% gold production decline in 2013 alone; which if so, would be shocking even to me – as gold was as high as $1,700/oz. in January. In other words, the industry retrenchment since April's "ALTERNATIVE CURRENCIES DESTRUCTION" has been so severe it is already yielding material production declines. Of course, NO ONE is more aware of how dire the mining industry's financial condition is than me; and thus, it really shouldn't surprise me that it couldn't handle such ridiculous prices for more than a few weeks. Likely, more than 25% of the entire junior mining industry has been bankrupted in the past 12 months; and if PM prices remain this low, I'd bet closer to three-quarters of it will be gone a year from now. Historically, juniors have made the bulk of new discoveries; and thus, the industry's capex lifeline has been slashed and burned. Cash balances are nearly ZERO, investment capital is NON-EXISTENT, and even M&A activity has DIED. As for the handful of PM producers, most are no longer profitable. Meanwhile, South African miners have been crippled by worker strikes and electricity shortages; while industry-wide, miners are dealing with a host of political, environmental, capex, opex, and taxation challenges that show no signs of abating. In a nutshell, a "perfect storm" of factors – pushing an ENTIRE INDUSTRY to the brink of bankruptcy. Fortunately, our "shadow world" of Precious Metals TRUTH includes a small group of talented analysts demonstrating the proof of such assertions; starting with none other than "ADMIRAL SPROTT himself. As to the numbers behind mining itself, NO ONE is more proficient than Steve St. Angelo of the SRS Rocco Report. Last year, he projected gold and "break-even" cost to be more than $1,300/oz.; and for silver, closer to $30/oz. And this year, he has been 100% vindicated; as thus, far miners have reported massive operating losses and more than $21 billion of write-offs – atop $50 billion of write-offs last year. Sadly, the worst is yet to come – as I expect the "upcoming 3Q mining earnings catastrophe" to make the 2Q horrors look like a "walk in the park." According to Steve St. Angelo, the top 12 primary silver miners generated a healthy profit margin in the first quarter – based on a realized silver price of nearly $30/oz. However, as his projected marginal cost of production of roughly $26/oz. was breached, second quarter earnings were a full-blown disaster. These 12 companies – which by far have the industry's most favorable cost structures – reported a cumulative $544 million of losses, including nearly $100 million from operations alone. The average realized price of $22.63/oz., was way too low to support viable mining operations – let alone, to sustain exploration budgets; which is why not only did the losses pile up, but development decisions were delayed and previously profitable mining operations mothballed. Heck, one of the aforementioned 12 miners – Pan American Silver – recently announced it would hedge a significant portion of future production; presumably, to protect itself from bankruptcy. Even more incredible – attesting to just how clueless mining executives are generally; it then turned tail and reversed the hedges when investors all but revolted! Ask yourself this; are these the type of people you want to trust with your hard-earned money? Thus far in the third quarter, average gold and silver prices have been $1,330/oz. and $21.45/oz., respectively – compared to $1,427/oz. and $23.35/oz., respectively, in the second quarter. In other words, average gold and silver prices – before the discounts miners endure throughout the supply chain – have sequentially declined 7%-8%. Consequently, not only will losses in an industry with extremely high degree of operating leverage be magnified, but the terrifying prospect of reserve and resource write-downs looms like Damocles' sword. Moreover, balance sheets of even the MAJORS could become endangered; particularly the world's largest gold miner, Barrick Gold. Despite how PROPAGANDA operations like the World Gold Council report industry fundamentals, we are already seeing significant supply constraints – atop soaring industry demand. I expect the third quarter 'mining earnings catastrophe' to highlight the widening gap between the REALITY of an industry on the verge of collapse, and the MIRAGE of the unsustainable PAPER prices orchestrated by the most aggressive Cartel naked shorting scheme yet. In other words, whether or not PM demand soars now or later on, prices simply cannot fall much further – lest PHYSICAL supply will implode, yielding widespread product shortages. Similar Posts: |
| Gold Surges 4.3% As $1 Trillion QE Per Annum, Debasement Continues Posted: 19 Sep 2013 06:02 AM PDT gold.ie |
| QE Unlimited Sparks Risk-On Party as Dollar Sinks, Precious Metals Jump Posted: 19 Sep 2013 06:00 AM PDT Bullion Vault |
| TD Bank: “We Don’t Have to Obey the Law” on Check Processing Posted: 19 Sep 2013 04:57 AM PDT I’m going to tell one on myself in the of exposing an abuse in retail banking that is likely news to you. It certainly stunned everyone that has heard my little tale so far. I’m hoping that readers who know of or have had similar experiences will pipe up in comments. My Check Misadventures My bank is TD Bank, which is now the 8th largest bank in the US.* Earlier this year, I mistakenly put a check to my cat sitter in the payment envelope for my health insurer, Cigna. Not only did Cigna process the check despite the amount being vastly smaller than the amount shown on the little form sent back with the payment (as in someone had to key in a clearly different amount, hence look at the face of the check) but my bank made payment to Cigna even though the check was made out to “Jeannie A”. The only way I figured out what had happened was by weird happenstance. Of course, Jeannie the cat sitter politely said she had not been paid. I was pretty sure I had paid her and the bank said the check to her had cleared, so I told her that and asked if she could have deposited it and forgot. She was not happy. I later got a bank statement that included an image of the processed check. I also got a monthly statement from Cigna asking me to pay a weird amount. Not trusting Cigna as far as I can throw them, I called the billing department to find out what was up. The rep was able to pull a scanned image of the check they had gotten from me and told me the amount and that it was made out to Jeannie A. I was stunned that that could have happened. Fast forward. Earlier this week, I made out some checks, including one drawn on my personal account to the IRS (made out to “United States Treasury”) to pay my Federal income taxes due. I also wrote a slightly bigger check to me from my business account. Later the same day, I realized I had put the check on my business account made out to Susan Webber in the envelope to the IRS. Now in theory, either the Department of the Treasury or my bank should see the error and not process the payment since the payee is Susan Webber, not United States Treasury. But based on what happened last time, I realized the payment could go sailing through again. So I went to my bank branch in person to have them explain why the last check to the wrong payee went through so I could make an informed decision as to what, if anything, to do. The branch staffer I spoke to first wasn’t sure and brought over the “Store Supervisor,” Hisabel Santiago. Ms. Santiago said that the Treasury processed thousands of checks so she was sure they’d present my check to the bank. She said the bank would then pay it because they processed checks from the Treasury in bulk. I said something like, “Wait a second, you are telling me that you don’t verify the information on the check to see if the payment should be made? How can that be right? That check isn’t made out to the Treasury. You aren’t allowed to do that.” She said, and this is an exact quote: “We don’t have to obey the law.” At least a half dozen customers were within earshot and started staring at us. I said, “That’s not correct. I know something about bank regulation. You aren’t permitted to pay out to the wrong payee.” She repeated “We don’t have to obey the law,” more loudly that the first time. She added that if the payment went to the wrong party, it was between the payee (I think she actually meant funds recipient) and the account holder, and I could take them to court. I said, “You are telling me even with forewarning that you are prepared to make payment to the wrong party.” She said I could pay $30 to stop the check, which at that point I had no interest in doing. I said, “I have a business and when I bring checks to the teller to deposit, if there’s a small discrepancy, they refuse to accept the check.” Ms. Santiago said that was different, it was a business account (which of course makes no sense, since the payment that mistakenly went to Treasury was also drawn on a business account). During that discussion, I felt I had entered into the Alice in Wonderland version of banking. So can banks just make it up as they go? There no chain of endorsements between the payee and the person depositing the check, yet the bank insists it’s kosher. If it really doesn’t matter who the check is made out to if it winds up in the hands of a bulk processor, does any paperwork generated by the consumer matter if the bank arbitrates based on what is cheapest and most convenient for it? Effectively, we have two legal regimes in operation: one for the bulk processing of checks (for big entities) where anything goes, and one for small fry who have to dot every i and cross every t. For anyone who followed our coverage of foreclosure abuses, you can see the same pattern: a “might makes right” attitude; the prioritization of operational efficiency over integrity of processes; and most important, an open admission of flagrant disregard for the rule of law. Yes, Virginia, This is a Big Problem Now my sending the wrong check in this case isn’t ultimately a problem (so please refrain from offering helpful ideas, I’ve already sorted this out with my accountant). But you can easily see from my two different screw-ups the sort of mischief it can cause. Remember, in most cases, people won’t realize the wrong party got the check until it is too late, like the first instance, with Jeannie and Cigna. So who gets hurt?
Is This Kosher? To get a sanity check, I spoke to Walker Todd. Todd worked for the New York Fed as an attorney and later the Cleveland Fed as assistant general counsel and research officer. He has since (among other things) taught law, history and economics at the graduate level, and is a research fellow at the American Institute for Economic Research. His initial reaction was to get exercised about the size of the stop payment fee. “A good rule, since TARP, would be that banks should accommodate their consumers to the same extent that the Fed accommodate the banks.” The Fed now engages in time-sensitive pricing, so if a bank puts through a stopped-check order at 9:45 AM, the Fed’s charge is much lower than at 3:45 PM (the banking day ends at 4 PM). He thought the cost to the banks of stopping a check is well under $5 and questioned the policy justification for allowing banks to charge such high amounts (stopped check charges used to be on the order of $10 to $15). I said I though the bigger issue was the consequences of the depositor’s money winding up in the hands of the wrong party, particularly if the check that went astray was large. Todd said that the banks had the right to reverse a payment made in error, but they weren’t usually willing to do that. I also contacted a law professor who is an expert in banking and the Uniform Commercial Code, who asked not to be quoted by name since he did not have a hard copy of the UCC with him to double check, and it has a lot of oddities hidden in is comments. His quick and dirty response:
Policy Issues I have a sneaking suspicion this sort of mistake happens more than people want to admit. But until my rash of goofs this year, I’d blithely assumed that a misdirected payment would not go through. In the 1990s, I had an account at US Trust, and I’d occasionally get calls as to whether to pay particular checks because they thought my signature didn’t look right. Thus not all that long ago, banks were monitoring check processing to make sure the payments made were valid. Of course, having the bank do what you assume would happen, that it won’t pay out on a check that gets in the hands of the wrong person, will mean you’ve got a missed payment somewhere, but you don’t have the additional complication of having to do forensics to figure out what went awry, unscramble financial eggs, and in a worst-case scenario, lose the money or have to engage in a pitched battle to get it back. If you’ve made or know someone who has made a mistake like this, please tell your story in comments, including the bank name and roughly when it happened. The reason for seeing if this is indeed a real problem is that in an odd bit of synchronicity, the Fed is soliciting input on how to improve the payments system, so comments on this post could help inform a submission to the Fed. In addition, it’s also curious that the CFPB seems to be missing in action. Richard Cordray showed in the subprime mess that he was not at all proactive, and it was only when he looked like he might look bad relative to other attorney generals in foreclosure-ridden states that he saddled up to take action. He looks again to be acting on the squeaking wheel principle as the head of the CFPB. So the onus is on you to help make noise! Cleveland Fed Payments System Consultation Paper Press Release ____ |
| Posted: 19 Sep 2013 03:59 AM PDT Does gold come from outer space? BBC. Not sure, but I bet goldbugs do. Google launches healthcare company Calico to extend life Los Angeles Times. Hahaha. It clearly has not occurred to the folks at Google that what passes for health care data is hopelessly corrupt (go read Ben Goldacre for details, particularly on anything related to drugs). Linus Torvalds Admits He’s Been Asked To Insert Backdoor Into Linux Slashdot Oil & Gas Exploration: Turning Middle Earth into Mordor OilPrice China’s second richest man Zong Qinghou injured in knife attack by unemployed labourer Daily Mail (Lambert) In China, 'nobody takes care of us' Washington Post Breaking news: 34 year old antifa dies after being stabbed by neonazis the unbalanced evolution of homo sapiens (no more banksters) Poll Suggests Happy People Mean Boring Politics Der Spiegel Egypt's crackdown on Morsi supporters called worse than Mubarak era McClatchy Egyptian forces clash with militants BBC Iran president rules out ever building nuclear bomb Guardian Syria:
Big Brother is Watching You Watch:
U.S. debt hike emerges as main battleground over Obamacare Reuters We Are Now Just Waiting for the Crisis to Ripen Jon Walker, Firedoglake Nameless And Shameless: Masked DEA Agents Raid Innocent Women, Refuse To Reveal Their Identities Huffington Post (Carol B) Federal Judge Throws Out Major Convictions of Former Police Officers Due To Prosecutorial Misconduct Jonathan Turley (Chuck L) To Taper or Not to Taper…
J.P. Morgan 'Whale' Fine Put at More Than $900 Million Wall Street Journal Women Waiting Tables Provide Most of Female Gains in U.S. Bloomberg The Kids Today Atrios WHY THE JPMORGAN SETTLEMENT FALLS SHORT New Yorker Death of an adjunct Pittsburgh Post-Gazette (Susie Madrak). If you have any connection to Duquesne, I encourage you to write the president and the board of overseers and tell them they should be ashamed of themselves. Antidote du jour:
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| Obama supporters Sign Petition Banning Gold Coins & Confiscating Coins From Safe Boxes Posted: 19 Sep 2013 03:00 AM PDT Charleston Voice |
| Who Leaked the FOMC Statement to Gold Traders Posted: 19 Sep 2013 02:21 AM PDT "I'd give a day's wages to know who did what in the gold and silver markets yesterday." ¤ Yesterday In Gold & SilverThe HFT sell off in gold in early Far East trading came to an end at 10 a.m. Hong Kong time. From there it rallied until shortly after the London open, before selling off gently until noon in New York. From that point it developed a positive bias that accelerated as the FOMC announcement approached. And then a minute or two before the actual announcement was made, the gold price blasted off, reaching an interim high about fifteen minutes later. From there it traded sideways for thirty minutes before heading higher once again. The price topped out shortly before 4 p.m. EDT, before trading sideways into the 5:15 p.m. electronic close. The high tick of the day was reported by Kitco as $1,368.70 spot. And the low December tick in Hong Kong was reported by the CME Group as $1,291.50. The gold price finished the Wednesday trading session at $1,365.30 spot, which was up $55.30 spot. This is the biggest one-day dollar price gain for gold that I can remember. Nick Laird sent me an e-mail just before I hit the send button on this column and said that his "End of Day" trading data shows that this was the fourth largest up-move in gold ever. Net volume was over the moon at 247,000 contracts. Not surprisingly, the silver chart looks almost identical to the gold chart, except that the sell offs and the rallies were more substantial on percent basis than in gold; especially the decline between 9 a.m. in London and noon in New York, and the big two hour rally after the FOMC news. Silver's low tick came shortly before noon EDT, and not at 10 a.m. in Hong Kong like gold. Silver also got sold down 30 cents off its 3:45 p.m. EDT time high as well, whereas gold only got sold down a couple of bucks. According to the settlements data on the CME's website, the highs and lows for silver in the December front month were $23.250 and $21.225 respectively. That's an intraday move of over two bucks [10 %] to the upside, another phenomenon I don't remember seeing before. Both platinum and palladium got sold down to their respective lows of the day at 10 a.m. in Hong Kong, just like gold and silver. After that they chopped gently higher and didn't react to the FOMC news at all. Then shortly before 4 p.m. in New York both metals went vertical for a few minutes, with palladium leading the way, as these events did not occur simultaneously. This had all the hallmarks of short covering rallies. Here are the charts. The dollar index closed on Tuesday afternoon at 81.15 and then rallied to its 81.22 "high" of the day shortly after 9:30 a.m. Hong Kong time on their Wednesday morning. From there it drifted gently lower until it reached the 81.00 mark at precisely 2 p.m. in New York. By 4:30 p.m. the index was down a hair over 90 basis points before recovering a tiny bit of that loss going into the close. The index finished the day at 80.27 which was down 88 basis points from Tuesday. I don't consider the rally in gold and silver to be related to what happened to the dollar index in any way, shape, or form. You can if you wish, dear reader, but if you do, please explain the sell offs in all four precious metals in Far East trading based on a less than 7 basis point rally in the dollar index. And as soon as you've done that, please explain why platinum and palladium prices didn't react until almost two hours after gold and silver blasted off. The gold stocks followed the gold price to the letter yesterday, andand the HUI finished up an eye-watering 9.58%. That's the biggest one-day percent move in that index I've ever seen. Double-digit gains were the order of the day for most silver stocks yesterday, especially the junior producers, andand all the constituent components of Nick Laird's Intraday Silver Sentiment Index didn't do badly either, as it finished up 9.68%. It appears that that nearly everything gold and silver equities lost during the month of September was recouped in one fell swoop yesterday. Let's hope this trend continues. The CME's Daily Delivery Report showed that zero gold and 47 silver contracts were posted for delivery within the Comex-approved depositories on Monday. The two biggest short/issuers were Jefferies [once again] and ABN Amro, with 22 and 21 contracts respectively. Canada's Bank of Nova Scotia was the long/stopper on 26 contracts, and JPMorgan Chase stopped 11 contracts in its client account. I've noted that JPMorgan has not been active in it's in-house [proprietary] trading account since last week sometime, and everything they've been involved in recently, even though it hasn't been large amounts, has been as the long/stopper for their clients. I don't know what it means, if anything, but I just thought I'd point it out. The link to yesterday's Issuers and Stoppers Report is here. There were no reported changes in GLD yesterday, and as of 10 p.m. EDT last evening, there were no reported changes in SLV, either. I will be more than interested in what deposits are [or are not] made in both GLD and SLV as a result of yesterday's price action. This is particularly true of SLV, as large quantities of the metal just aren't available, and it will be interesting to observe if the authorized participants [read JPMorgan Chase] short the shares in lieu of the real metal, which is what they've been forced to do in almost every big rally since shortly after the inception of SLV. Over at Switzerland's Zürcher Kantonalbank for the week ending on Friday, September 13, they reported that their gold ETF declined by 17,483 troy ounces, and their silver ETF showed a decrease of 377,514 troy ounces. There was no sales report from the U.S. Mint yesterday. Once again there were no significant changes in the gold stocks at the Comex-approved depositories on Tuesday. Like Monday, only a couple of kilo bars were moved, but this time they got shipped out from Brink's, Inc., and not in. Here's the link to that activity, or lack thereof. But, as Ted Butler has pointed out for a couple of years now, the real frantic action has been in silver, and Tuesday's warehouse activities were no exception. They reported receiving 1,355,985 troy ounces of the stuff, but only shipped out one good delivery bar that weighted 1,056 troy ounces. The link to that activity is here. Here's a chart that Nick Laird sent my way at midnight local time [MDT] here in Edmonton. As the chart title states, it consists of 17 global indices with a 41% weighting to the USA. As you can see, we are back to the old record highs of 2007. Are we going higher or lower from here? Place your bets. With all the news from yesterday, I have a decent number of stories for you today. ¤ Critical Reads In Surprise Move, Fed Decides to Maintain Pace of StimulusIt turns out that the Federal Reserve is not quite ready to let go of its extra efforts to help the economy grow. All summer, Federal Reserve officials said flattering things about the economy’s performance: how strong it looked, how well it was recovering, how eager they were to step back and watch it walk on its own. But, in a reversal that stunned economists and investors on Wall Street, the Fed said on Wednesday that it would postpone any retreat from its monetary stimulus campaign for at least another month and quite possibly until next year. The Fed’s chairman, Ben S. Bernanke, emphasized that economic conditions were improving. But he said that the Fed still feared a turn for the worse. A "turn for the worse" they say? That's being kind, as the moment they stop printing, or even slow down, Wall Street would implode, followed quickly by the banks. Then the rest of the world would follow in less than twenty-four hours. As Richard Russell said years ago..."It's print, or die"...and not a thing has changed except for the fact that the situation is infinitely worse since he coined that phrase. This news item was posted on The New York Times website yesterday afternoon...and I thank Roy Stephens for today's first story.  Ambrose Evans-Pritchard: Fed recoils from 1937 tightening error as jobs evaporateThe American economy has shed 347,000 jobs over the past two months, roughly comparable with the rate of loss seen during the Great Recession. It is remarkable that the US Federal Reserve should even have been thinking of phasing out life-support in such circumstances. The Fed's tough talk has already led to a 140 basis point rise in US 10-year Treasury yields, the benchmark price money for US mortgages and for the world (ex-China). It might as well have raised rates six times. The shock decision on Wednesday night to put off tapering bond purchases is a recognition of what should have been obvious. Rising mortgage costs and the "tightening of financial conditions" could slow growth, it said. Indeed. This longish commentary from Ambrose was posted on the telegraph.co.uk Internet site late yesterday evening BST...about two hours after the Fed announcement. I found it buried in a GATA release.  Five Years of Hard Work By the Federal ReserveThe only comment that comes with the must view chart are the words..."It's Working...". And when you click on the link you'll see what I mean. West Virginia reader Elliot Simon sent me this Zero Hedge 'story' very late last night.  Jim Rogers: Summers and Yellen 'Lapdogs for the Establishment' The withdrawal of Larry Summers from consideration for the Federal Reserve chairmanship carries no significance, says famed investor Jim Rogers, chairman of Rogers Holdings. "This is the first time in recorded history that every central bank — Japan, Europe, England and the U.S. — are all debasing their currencies. When this artificial sea of liquidity dries up, it's not going to be good for anything."  Roger Lowenstein: Obama Should Name Banker, Not Insider, to FedNow that Lawrence Summers has taken himself out of the running to become the next chairman of the Federal Reserve, President Barack Obama should look for a truly “post-crisis” candidate who can reassert the Fed’s independence and move away from the unusual policies of the last six years. During the credit crunch of 2007-2008 and its aftermath, it was proper and right that the Fed and the Treasury Department were joined at the hip: Both had an interest in easing the financial crisis, which took precedence over everything else. It was also proper for the Fed to aggressively lower interest rates -- a popular policy that the administration avidly supported. But the next chairman will have to decide when to trim the Fed’s portfolio, swollen with its extraordinary program of bond purchases. And it will have to raise short-term interest rates, which are currently near zero. It may be sooner, it may be later -- the moment will come. Money cannot be free forever. I don't know if Roger is floating a trial balloon here or not. I just hope he's isn't...and that nobody takes him seriously if he is. His commentary was posted on Bloomberg website very early yesterday morning Denver time. I thank Washington state reader S.A. for sending it our way. Wells Fargo Cutting 1,800 More Jobs in Mortgage BusinessWells Fargo, the biggest U.S. mortgage lender, is cutting about 1,800 jobs in its home-loan production business as an increase in mortgage rates curtails borrower refinancing demand. The cuts are in addition to 3,000 earlier this quarter, Tom Goyda, a spokesman for the San Francisco-based bank, said today in an interview. That included 2,300 announced Aug. 21 and smaller reductions prior to that, Goyda said. Wells Fargo is eliminating jobs as rising rates slow mortgage refinancings and new home purchases fail to make up for the decline. The bank may originate about $80 billion in home loans in the third quarter, a 29 percent drop from the three months that ended June 30, Chief Financial Officer Timothy Sloan said Sept. 9. This very brief news item appeared on the Bloomberg website late yesterday afternoon MDT...and my thanks go out to U.A.E. reader Laurent-Patrick Gally. White House Warns Agencies to Prepare for Possible Government Shutdown The Obama administration is telling federal agencies to prepare for a possible government shutdown. That's about all there is to this very tiny AP story that was picked up by the moneynews.com Internet site late yesterday morning...and I thank Elliot Simon for bringing it to our attention. CFTC Seeks Admission Of Market Manipulation From JPM; Jamie BalksThe Commodity Futures Trading Commission, pursuing a probe into last year's "London whale" trades even as other agencies near a settlement with J.P. Morgan Chase, is focusing on a giant trading position that enforcement officials believe distorted prices and misled investors, according to people familiar with the matter. ... The CFTC is likely to use new powers granted by the Dodd-Frank law that allow it to charge firms for recklessly manipulating markets, say people familiar with the agency's thinking. Previously, the agency had to prove that traders intended to manipulate prices in order to win a case. One of the sticking points in the CFTC discussions is over whether the bank or its traders manipulated the trades, according to a person familiar with the talks. J.P. Morgan is balking at any CFTC settlement that would require it to admit to manipulation, this person said. The above three paragraphs came from The Wall Street Journal story on this issue, but the rest of the story was posted on the Zero Hedge website yesterday. The first person through the door with this was reader M.A. It's definitely worth reading.  SWIFT Suspension? EU Parliament Furious about NSA Bank SpyingThe recent revelations regarding the degree to which the US intelligence agency NSA monitors bank data in the European Union has infuriated many in Europe. "Now that we know what we have long been suspecting, we have to protest loudly and clearly," Jan Philipp Albrecht, a legal expert for the Green Party in the European Parliament, told SPIEGEL ONLINE. He is demanding a suspension of the SWIFT agreement, which governs the transfer of some bank data from the EU to anti-terror authorities in the United States. On Monday, SPIEGEL reported that the NSA monitors a significant share of international money transfers, including bank and credit card transactions. The information comes from documents in the possession of whistle blower Edward Snowden that SPIEGEL has been able to see. "Follow the Money" is the name of the NSA branch that handles the surveillance. Information obtained by "Follow the Money" then flows into a financial database known as Tracfin. In 2011, Tracfin had 180 million data sets -- 84 percent of which are comprised of credit card data. But data from the SWIFT network, headquartered in Brussels, also ends up on Tracfin. SWIFT, which handles international transfers among thousands of banks, is identified by the NSA as a "target" according to the Snowden documents. They also show that the NSA monitors SWIFT on several different levels, with the NSA department for "tailored access operations" also being involved. Among other methods, the documents note that the NSA has the ability to read "SWIFT printer traffic from numerous banks." This short article, which is definitely worth reading, was posted on the German website spiegel.de very late on Wednesday morning Europe time...and I thank Roy Stephens for sending it. Posted: 19 Sep 2013 02:21 AM PDT  Four King World News Blogs 1. Robin Griffiths: "Historic Fed Decisions Impact on Gold and Major Markets". 2. Bill Fleckenstein: "There is Now a Danger That "All Hell is Going to Break Loose. 3. Michael Pento: "Historic Fed Failure Continues Destruction of the United States". 4. John Hathaway: "Fed Disaster to Destabilize Markets and Send Gold Soaring". [Although I post all of Eric King's interviews, I wish to go on the record as saying that I don't necessarily agree with everything that's said by some of his guests. - Ed] |
| Who Leaked the FOMC Statement to Gold Traders? Posted: 19 Sep 2013 02:21 AM PDT Who Leaked the FOMC Statement to Gold Traders? Beginning three minutes before the release of the FOMC Statement, gold spot and futures prices began to rise notably. Bonds did not. Stocks did not. FX did not. Around 4,300 contracts changed hands in the December Futures - massively more than average volume - before the statement came out and drove prices further up. In those three minutes Gold prices jumped $11...so the question is: lucky guess...or which big bullion bank got the nod? The two charts in this Zero Hedge piece from yesterday afternoon are a must to view...and I thank Casey Research's own John Grandits for bringing it to our attention. Washington state reader S.A. sent me the same story...along with the comment that he was watching his trading screens in real time as this event unfolded. |
| Posted: 19 Sep 2013 02:21 AM PDT Canadian Billionaire Predicts the End of the Dollar as the Reserve Currency; Warns "It's Likely to Get Ugly" Beginning with how Kissinger and Nixon enabled the USD as the world's de facto reserve currency through oil, Canadian Billionaire Ned Goodman [President and CEO of Dundee Corporation] explains in the brief but far-reaching clip how it is both inevitable (and rapidly approaching) that the rest of the world will turn its back on the dollar. With China and Russia (among many others that we have detailed in the past) agreeing on non-USD swap terms for energy, the cracks are starting to show and as Goodman details, "in the 1930s, everyone wanted USD (backed by silver)," but today, backed by nothing, "everyone wants to get rid of them." Buying hard assets is crucial (he has never been more bullish of gold) as we head into a period of stagflation or even high inflation; and as Goodman previously commented "the world is totally upside down right now - it's completely crazy," in fact, he adds, "I'm keen on anything that's going to live with higher inflationary numbers, because I can't see the world getting out of the problems that it's in." Mr. Goodman has it exactly right...and this absolute must read/watch commentary/video clip was posted on the Zero Hedge website very late Wednesday evening. Bill Busser was the first reader through the door with this in the wee hours of yesterday morning, for which I thank him. |
| Cazenove's Robin Griffiths: Central banks lost their gold trying to suppress it Posted: 19 Sep 2013 02:21 AM PDT  Cazenove's Robin Griffiths: Central banks lost their gold trying to suppress it Today we cordially welcome another member to the ranks of tin-foil hat wearers -- Robin Griffiths of Cazenove Capital Management in London, who, writing at King World News, acknowledges the Western central bank gold price suppression scheme. Griffiths writes of the gold market: "Central banks have been trying to disrupt the bull move but they have simply ended up with nothing in their vaults. They have lent out or sold so much of the precious metal that it would take seven years of production to rebuild their reserves to the levels they were at two years ago." This GATA release was posted on their Internet site yesterday. |
| Why Bernanke may have ended gold's bear market Posted: 19 Sep 2013 02:21 AM PDT  Why Bernanke may have ended gold's bear market When Ben Bernanke announced that the Federal Reserve would not reduce the pace of its $85 billion-per-month quantitative easing program, gold greeted the news with open arms. The yellow metal promptly added more than $50 after Wednesday's news to hit the highest level in a week. But Peter Boockvar says we've only seen the beginning of gold's response to the news. "The two-year bear market for gold is over, and the uptrend is going to resume," said Boockvar, chief market analyst at the Lindsey Group. "Gold is your defense against your policies of the Fed, and in my eyes, the Fed lost a lot of credibility today," Boockvar told CNBC.com. "Just when you thought the Fed was very dovish, they pull an even more dovish act, and many in the markets were blindsided." This commentary was posted the CNBC website late yesterday afternoon...and I thank Laurent-Patrick Gally for digging it up on our behalf...and for his last contribution to today's column. |
| Satyajit Das: The Suzerainty of Central Bankers Posted: 19 Sep 2013 01:53 AM PDT By Satyajit Das, a former banker and author of Extreme Money and Traders Guns & Money Benn Steil (2013) The Battle Of Bretton Woods: John Maynard Keynes, Harry Dexter White, And The Making of The New World Order; Princeton University Press Neil Irwin (2012) The Alchemists: Inside The Secret World Of Central Bankers; Headline Publishing Group Economist Brad DeLong observed in 2008: "It is either our curse or our blessing that we live in the Republic of the Central Banker". For more than a century, central bankers have played in important part in shaping economic life, influencing living standards, political and social issues. Predictably, authors and publishers (sensing human interest and hence monetary reward) have been drawn to the subject. The Battle of Bretton Woods and The Alchemists are additions to pop CB lit list. They build on the Liaquat Ahamed's Lords of Finance (a history of central bankers in and around the Great Depression) and David Wessel's In FED We Trust (documenting the US Fed's action during the 2007/ 2008 crisis), as well as other more technical histories of central banking. Much Ado About… The suzerainty of central banks is puzzling. First, there is constant debate about their role and specific objectives (growth, employment, inflation etc.). Second, their referential framework is a dismal science where conjectures and speculations rather than predictable relationships or hard and fast rules dominate. Third, their tools are limited. Fourth, they have a dubious track record. Fifth, they are unelected officials, exercising considerable power with limited accountability. Nothing illustrates these problems better then Federal Reserve Chairman Ben Bernanke's recent taper fiasco. Having announced the intention to 'taper', ultimately, a few weeks later, the proposal was shelved. The reasons given were concerns about the strength of the economic recovery and the impact of high rates on the ability of an over-indebted world to continue meet its obligations. All these factors were largely unchanged between the time of the original announcement and the repudiation. Bond yields rose sharply, resulting in higher mortgage rates with deleterious effect on the housing recovery and problems in emerging markets. The US dollar rose sharply and stocks sold off. Ultimately, most market prices, except interest rates, headed back to where they roughly started. Billions of dollars were gained and lost in the zero sum game of financial markets, which passes as economic activity in the modern era. One meaning of 'taper' is a thin wick used to light a fire. Whatever, the fed Chairman's intention, his proposal at least was true to that meaning of the term. Central bankers have also become celebrities, whose every word is parsed extensively. Following Chairman Bernanke's comments about paring back Fed purchases of government bonds, wordsmiths toiled over: 'taper tantrums', 'hike huffs', 'tapering taper talk', and finally 'putting out the taper' or 'taper tiger'. Thousands of hours of fruitless analysis and mindless financial TV were devoted to a close textual analysis. It was reminiscent of current Indian Central Bank Governor Raghuram Rajan's bon mot, rivalling former US Defence Secretary Donald Rumsfeld's ruminations about known unknowns: "Given that we gave it to you as a forecast, I can't forecast that we'll lower the forecast." Given these problems, it is surprising that central banks should be, excuse the pun, so central. The Hotel New Hampshire In The Battle of Bretton Woods, Council on Foreign Relations Fellow and Director of International Economics Benn Steil has crafted a fine history of the Bretton Woods meeting, at which the foundations of the post-war economic order were developed. In July 1944, over 700 politicians, economists and bankers from over 40 countries gathered for 3 weeks in Bretton Woods, New Hampshire at the Mount Washington Hotel, a ski resort. The dysfunctional group resembled nothing so much as the loopy and unlikely characters including Egg, Win, Iowa, Bitty Tuck, a Viennese Jew named Freud and Sorrow, a dog repeatedly restored through taxidermy, in John Irving's quirky coming of age novel Hotel New Hampshire. The pivotal figures were John Maynard Keynes, representing Britain, and Harry Dexter White, representing the U.S.A. Selected as one of Time Magazine's 100 most influential figures of the 20th century, John Maynard Keynes was the author of General Theory of Employment, Interest and Money and one of the fathers of modern macro-economics. Harry Dexter White, a descendant of Jewish Lithuanian Catholic immigrants, was an economist by training and a senior U.S. Treasury department official. White may have also been, according to evidence from FBI and Soviet archives, a Soviet spy. At Bretton Woods, White and sundry other U.S. Treasury officials may have passed confidential information about the negotiations to the Russians. Bretton Woods took place against the background of the brutal war that was still raging, the rise of fascism, and the economic experience of the Great Depression including the collapse of growth, employment, international trade and the rise of protectionism. The focus was on establishing free trade based on convertibility of currencies with stable exchange rates. In the past, this problem had been solved through the gold standard where the standard unit of currency is a fixed weight of gold. The gold standard was not considered feasible for the post-war economy. There was insufficient gold to meet the demands of growing international trade and investment. The communist Soviet Union, emerging as a rival to the U.S. in the post war order, also controlled a sizeable proportion of known gold reserves. Keynes' bold and imaginative solution was a world reserve currency (the "bancor") administered by a global central bank. White, representing the world's richest nation and then the biggest creditor, rejected the proposal: "We have been perfectly adamant on that point. We have taken the position of absolutely no." The meeting wanted the advantages of the gold standard without the disadvantages. Bretton Woods established a system of fixed exchange rates using the U.S. dollar as a reserve currency. Countries would establish parity of their national currencies in terms of gold (the "peg") and maintain exchange rates within plus or minus 1% of parity (the "band"). In practice, other countries would peg their currencies to the U.S. dollar as the principal 'reserve currency' and — once convertibility was restored — would buy and sell U.S. dollars to keep market exchange rates within plus or minus 1% of parity. The dollar, effectively, took over the role that gold had played in the international financial system under the gold standard. The dollar was to have a fixed relationship to gold ($35 an ounce). The U.S. government committed to fully convertibility. They would convert dollars into gold at that price. This was the gold standard once removed. The dollar was now "as good as gold". It was more attractive as dollars unlike gold earned interest. The U.S. dollar reigned as the world's currency until the early 1970s, when the Bretton Woods system ultimately failed. On August 15, 1971, President Richard Nixon unilaterally closed the gold window making the dollar inconvertible to gold directly, facilitating the move to the era of floating currencies with no link to dollars or gold. The Battle of Bretton Woods captures the essential sub-text – the rise and decline of empire. The agreement ensured that in the post-WW2 world the U.S. would be the undisputed pre-eminent economic and military great power, playing a leading role in global monetary affairs. Devastated by two World Wars, the British and the French were unable to compete and needed American money to rebuild their economies. As Winston Churchill, desperate to secure American support and frustrated by Roosevelt's evasiveness, asked: "What do you want me to do, stand up and beg like Fala (the US president's beloved Scottish terrier)?" The portrait of a much diminished Keynes, already fatally ill, is telling. Keynes' lacks understanding of Britain's poor bargaining position and his tactless verbal brilliance too clever by half for American tastes allows him to be sidelined. Mr.Steil describes Keynes as reduced to "the status of an articulate annoyance". Characterised by fine and entertaining writing, The Battle of Bretton Woods is economic and political history in engrossing detail. The Way We Were, The Way We Are… In The Alchemists, Neil Irwin, a reporter at the Washington Post, records the history of the present crisis to around late 2012. Mr. Irwin builds his narrative around Federal Reserve Chairman Ben Bernanke, Bank of England Governor Mervyn King and former European Central Bank President Jean-Claude Trichet. He describes the sequence of events and actions of the US, European and UK central banks to reduce interest rates to zero and initiate innovative policies, such as quantitative easing ("QE"), to ward of a major economic slowdown. Mr. Irwin's superficial effort, not assisted by a leaden style, is a passable chronology at best. The Alchemists resembles a data dump of his reporter's notebooks, characterised by frequent forced attempts at reportage colour – Mervyn King dog sledding, Chancellor Merkel and President Sarkozy walking along the beach at Deauville ("the most consequential stroll on a beach in history") etc. The book also feels oddly contrived – a furtive dash into the history of central banking (which is derivative), a dip into Congressional politics of bank regulation and a final sudden sashay into Chinese central banking (painfully second hand and misleading). The author assumes central bankers are the heroes of the tale, eschewing a more nuanced assessment of their actions and policies. Mr. Irwin's hagiographic tale of central banking evokes the moody anti-heroes of Marvell comics. His concern about the “unique burdens” on these learned men is cloying touching. The portrait of Federal Chairman Ben Bernanke seems more a case for beatification than analysis. Perhaps this is a reflection of being "embedded" where the price of a reporter insider's access is the inability to provide a truly honest perspective. While quick to praise central bankers as saviours, the author shows little curiosity about the causes of the crisis. There is little recognition of how central bank policies contributed to the problems in the first place. The analysis is all surface and economics-lite. Mr. Irwin seems in awe of the learned order of government bankers and economists who meet often, sharing "a closeness unheard-of elsewhere in international relations" Central bankers, at least the ones that Mr. Irwin has met, "speak the same language [and] understand more deeply than perhaps anyone else where other countries are coming from." The description is cringe making, more in tune with a Victorian secret society and one anticipates secret handshakes and pagan rituals. The reality couldn't be more different, even as portrayed in the text. Disagreements between the featured central banks as to the gravity of the crisis, the appropriate response, extent of intervention and the re-shaping of the global and economic system abounded and continue. The ruthless exercise of sovereignty, such as the QE programs which created the currency wars and set off bubbles in emerging markets, does not warrant mention. In fact, emerging markets do not rate anything other than cursory mention. The Alchemists largely ignores criticisms from some central bankers, including Paul Volcker, that the institutions have compromised their independence by politicising their action, perhaps irreparably. Equally, the book ignores criticism from liberal economists who argue that policies such as austerity have been hugely damaging. Mr. Irwin is unquestioning about the effectiveness of policies. American economic growth remains sluggish, well below trend with high unemployment and increasing inequality of wealth. Europe is moribund, stumbling through a sequence of financial crises with little signs of definitive resolution. Mr. Irwin's position, as best one can discern, is that if the central banks had not done what they did, things would be worse. While central-bank intervention may have kept the system going, an important concern, which Mr. Irwin chooses not to address, is that in doing so, they may have forestalled longer-lasting cures. Alchemy… The two books are inadvertently revealing about central banking and central bankers. First, the levels of economic thinking that drives decision making is crude, rarely rising above undergraduate level. Second, no particular brand of economics informed choices either at Bretton Woods or in the current crisis. The essence of every plan is to find something –anything- which might work or, at least, support the political case. Third, the dysfunctional nature of policy making is highlighted. Little of The Battle of Bretton Woods takes place at the conference itself, with most of decisions being before, with the major power –America- dictating terms while everything else is window dressing. Fourth, policy makers are poorly informed about what they have decided. At Bretton Woods, signatories did not know what they had agreed to. As Keynes was later to write: "We, all of us, had to sign, of course, before we had a chance of reading through a clean and consecutive copy of the document." Fifth, whilst economists and central bankers may disagree on many things, they agree that they know best. Keynes, White and their modern successors agree that they should direct and control the financial life of nations and central banking should “be regarded as a kind of beneficent technique of scientific control such as electricity or other branches of science are.” It is amusing just how wrong judgements can be. In 1945, Harry White assured the House Banking Committee: “There is no likelihood that . . . the United States will, at any time, be faced with the difficulty of buying and selling gold at a fixed price freely.” By the late 1960s, foreign governments owned dollars worth more than the American gold reserves. Henry Hazlitt, an editorial writer for the New York Times, criticised the Bretton Woods agreement in a series of editorials. He urged governments to balance budgets, remove impediments to free trade (quotas, exchange restrictions) and refrain from “currency and credit inflation.” Mr. Hazlitt also favoured the return to the gold standard, so that the currency is “redeemable in something that is itself fixed and definite.” Hazlitt argued that if one these principles were violated, it would make it difficult to meet the others. With no training in economics, Hazlitt concluded that the Bretton Woods plan would never last. History proved him correct. Like their predecessors, modern central bankers are assumed to be all powerful. Clever politicians, unwilling to make difficult choices, have abnegated responsibility for dealing with problems, delegating responsibilities. Mr. Irwin does not find this reliance on unelected technocrats troubling: “Democratic societies entrust central bankers with vast power because some things are so important yet so technically complex that we can’t really put them to a vote.” But history may show that the current crop of central bankers was also wrong, that their judgements and actions were incorrect. Central bankers may simply not have the tools and understanding of the unpredictable results of their policies to arrest the decline and promote the promised recovery. In the words of Sir Humphrey Appleby, the British civil service Mandarin in the comedy Yes, Minister, they may actually have: "Responsibility without power – the prerogative of the eunuch throughout the ages". As many reviewers have observed, alchemists in the end were unsuccessful in turning base metals into gold. In the modern era, central bankers may not be any more successful and they may be held accountable if their policies fail. |
| Gold could climb back to $1500, Silver to $26 as Fed taper threat goes Posted: 19 Sep 2013 12:56 AM PDT US Gold futures for December delivery shot up by $60 to $1360 an ounce while Silver futures for December delivery shot up to $23.015 levels. According to Sreekumar Raghavan, Chief Strategest at Commodity Online Group, who had earlier forecasted $1500 gold by December 2013, precious metals is at the beginning of the strong demand cycle from September to January and market had taken a beating on speculation that Fed may announce tapering measures |
| Gold “Fierce” If Fed Surprises, Investment Banks Urge “Sell” as Traders “Spooked” Posted: 18 Sep 2013 09:37 PM PDT The WHOLESALE price of gold fell below $1300 for the first time in 6 weeks Wednesday morning in Asia, as traders in all markets awaited today’s US Fed announcement on QE tapering. Regaining that level in London – a record high when first reached 3 years ago next week – gold still held 7% beneath the start of September. The US Dollar held flat meantime, as did US Treasury bonds. World stock markets ticked up with commodities. Silver rallied 20c from an overnight low at $21.37 per ounce. “Any surprise [on Fed tapering] could push gold prices fiercely in either direction,” says a commodity trading desk’s note. Longer-term, “Tapering really removes the upside case for gold,” reckons UBS commodity analyst Daniel Morgan in Sydney, speaking to Bloomberg. “I don’t see any big reasons to be bullish on gold in the short term.” Going further, analysts at Societe Generale today say that “Rate hikes will follow tapering, markets are too complacent,” in a new cross-asset strategy report. Recommending 7 key trades, “Switch out of emerging markets and associated commodities,” the French investment bank and London bullion market maker says. “Sell gold now,” SocGen’s report adds, pointing both to Fed tapering and “lower sovereign risk from the Eurozone.” Shorter-term ahead of today’s US Fed policy statement, “A large part of the market is already short in anticipation of [tapering], says David Govett at brokers Marex. “[So] if no taper is announced, gold will shoot straight back up as all the shorts run for cover,” Govett believes, forced to close their bearish bets at rising prices. Surveys and economists’ comments today put the consensus expectation for QE tapering at $10-15 billion, cut from the current level of $85bn per month. “If this [proves] the case gold is unlikely to come under further pressure,” writes Eugen Weinberg’s team at Commerzbank. “Of greater importance will be the way Bernanke steers the market’s expectations of future monetary policy measures [in his 14:30 ET press conference].” But “we tend to believe,” counters a note from London market-maker HSBC, “that the bulk of gold declines based on tapering are already largely factored into current prices.” After an initial knee-jerk drop, “[only] a heavier tapering program on a more limited timetable could lead to a second-round of sales,” its precious metals analysts say. UK policy makers at the Bank of England voted 9-0 this month to keep their quantitative easing unchanged, minutes from the Sept. meeting showed Wednesday morning. As recently as last month, some members of the committee had seen a “compelling” case for extending the current £375 billion in QE – now used to buy one-third of all UK government debt in issue. “As monetary conditions normalise,” reckons Kevin Gardiner, Barclays’ chief investment officer for Europe, “[gold] investment demand is expected to weakenwhile physical demand growth from India will likely remain soft.” World No.1 gold consumer India yesterday saw import duty on gold jewelry raised to 15%, giving domestic manufacturers a price advantage as gold bullion duty stayed at 10%. “[Such] bearish news articles doing the rounds have precious metal investors spooked,” says analyst Moudi Raad at refining and finance group MKS in Geneva. Looking at the broader natural resources market, however, “Commodities continue to provide diversification versus stocks and bonds,” says a new article from portfolio managers Nicholas Johnson and Greg Sharenow at Pimco, the $2 trillion California-based bond and asset management firm. “[Commodities] are also one of the most potent ways to hedge against unexpected changes in inflation.” Adrian Ash Gold price chart, no delay | Buy gold online Adrian Ash is head of research at BullionVault, the secure, low-cost gold and silver market for private investors online, where you can fully allocated bullion already vaulted in your choice of London, New York, Singapore, Toronto or Zurich for just 0.5% commission. (c) BullionVault 2013 Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it. |
| Gold Rush Cometh In Japan - 1 Quadrillion Yen National Debt To Bankrupt Posted: 18 Sep 2013 08:00 PM PDT gold.ie |
| Germanys Stolen Gold Reserves - Times are changing - the debts remain (Russian) Posted: 18 Sep 2013 07:00 PM PDT Charleston Voice |
| Posted: 18 Sep 2013 06:28 PM PDT As the Fed backed off from winding down QE today Bloomberg spoke to Marc Faber, publisher of the Gloom, Boom and Doom Report, about the market outlook now. He told Trish Regan, Adam Johnson and Matt Miller to expect ‘QE unlimited’ and that Janet Yellen would ‘make Mr. Bernanke look like a hawk.’ Faber also said, ‘When I look at the market action today, I would like to see the next few days, because it may be a one-day event. The markets are overbought. The Feds have already lost control of the bond market. The question is when will it lose control of the stock market.’ Faber on the reaction that there’s going to be no taper for now: ‘My view was that they would taper by about $10 billion to $15 billion, but I’m not surprised that they don’t do it for the simple reason that I think we are in QE unlimited. The people at the Fed are professors, academics. 'They never worked a single life in the business of ordinary people. And they don’t understand that if you print money, it benefits basically a handful of people maybe not even five per cent of the population, three per cent of the population. 'And when you look today at the market action, ok, stocks are up one per cent. Silver is up more than six per cent, gold up more than four per cent, copper 2.9 per cent, crude oil 2.68 per cent, and so forth. 'Crude oil, gasoline are things people need, ordinary people buy everyday. Thank you very much, the Fed boosts these items that people need to go to their work, to heat their homes, and so forth and at the same time, asset prices go up, but the majority of people do not own stocks. Only 11 per cent of Americans own directly shares.' On whether interest rates are held down when the Fed continues this type of policy: 'On September 14th, 2012, when the Fed announced QE3, that was then extended into QE4, and now basically QE unlimited, the bond markets had peaked out. 'Interest rates had bottomed out on July 25, 2012 — a year ago — at 1.43 per cent on the 10-year Treasury note. Mr. Bernanke said at that time at a press conference, the objective of the Fed is to lower interest rates. Since then, they have doubled. Thank you very much. Great success.' On what the endgame is: 'Well, the endgame is a total collapse, but from a higher diving board. The Fed will continue to print and if the stock market goes down 10 per cent, they will print even more. 'And they don’t know anything else to do. And quite frankly, they have boxed themselves into a corner where they are now kind of desperate.' On Janet Yellen: 'She will make Mr. Bernanke look like a hawk. She, in 2010, said if could vote for negative interest rates, in other words, you would have a deposit with the bank of $100,000 at the beginning of the year and at the end, you would only get $95,000 back, that she would be voting for that. 'And that basically her view will be to keep interest rates in real terms, in other words, inflation-adjusted. And don’t believe a minute the inflation figures published by the bureau of labor statistics. 'You live in New York. You should know very well how much costs of living are increasing every day. Now, the consequences of these monetary policies and artificially low interest rates is of course that the government becomes bigger and bigger and you have less and less freedom and you have people like Mr. De Blasio, who comes in and says let’s tax people who have high incomes more. 'And, of course, immediately, because in a democracy, there are more poor people than rich people, they all applaud and vote for him. That is the consequence.' On where he sees markets heading: 'When I look at the market action today, I would like to see the next few days, because it may be a one-day event. The markets are overbought. The Feds have already lost control of the bond market. 'The question is when will it lose control of the stock market. So, I’m a little bit apprehensive. I would like to wait a few days to see how the markets react after the initial reaction.' On whether the 10-year yield will float back up to where it was before 2pm today: 'I will confess to you, longer-term, I am of course, negative about government bonds and i think that yields will go up and that eventually there will be sovereign default. 'But in the last few days, when yields went to 2.9 per cent and three per cent on the 10-year for the first time in years i bought some treasuries because I have the view that they overshot and that they could ease down to around 2.2 per cent to 2.5 per cent because the economy is much weaker than people think…I think in the next three months or so.' On gold prices: 'I always buy gold and I own gold. I don’t even value it. I regard it as an insurance policy. I think responsible citizens should own gold, period.' |
| Gold jumps $60 as Federal Reserve decides US economy now too weak to stop printing money Posted: 18 Sep 2013 06:04 PM PDT The US Federal Reserve stunned financial markets yesterday by deciding not to begin to wind up its $85 billion a month money printing program QE3. The dollar lost one per cent against a basket of major currencies, bond yields fell and gold shot up $60. As ArabianMoney has been pointing out for the past week the US housing recovery has already been killed over the summer by the rise in interest rates that followed the merest hint of an end to QE3 back in May. The Fed is not blind, and it will know in advance some of the US economic data about to be published. It must be particularly awful. US housing dead The US housing recovery has not just stalled but gone back into reverse. Industrial orders will be falling because of the deteriorating global macroeconomic environment with Europe now in a deep recession, China also in recession whatever its inflated GDP numbers say and Japan poised to be the first to commit suicide by money printing. Something out there has scared the Fed into switching course. In every recent statement Ben Bernanke has indicated that the Fed will closely monitor economic data. This can be the only reason for its sudden policy reversal. What does this mean for financial markets? Short term this is a boost for emerging markets that have been hard hit by dollar tightening though this relief may only be temporary. It’s certainly great news for precious metals which will not now retest their lows and will be more in demand than ever as a hedge against the long term madness of printing money. Dollar negative The US dollar will most likely fall further. That’s an attempt to export the problems of the US economy abroad and it will not help the global economic recovery one iota. US stocks rose modestly on the news of the Fed’s decision to do nothing to change QE3. However, if the damage already done to the US economy by higher interest rates over the summer is as bad as we suspect then shares are simply far too highly valued for the profit outlook and they will fall and fall hard. Investment classes are going to a very dark place with only a few winners like oil, gold and silver as in the late 1970s in very similar circumstances. If you want to know more about how best to invest in this difficult environment then our sister publication the ArabianMoney investment newsletter has many actionable ideas that we cannot present on this free website (subscrbe here). |
| Posted: 18 Sep 2013 04:44 PM PDT The following is what I sent out to subscribers this morning. "The miners have refused to follow gold to new lows this morning. In my opinion this is a pretty good indication that the daily cycle low is imminent. Either on the FOMC announcement this afternoon or maybe tomorrow. If gold were to deliver a $40-$50 rally today that would be a strong sign that the bull is going to overwhelm the manipulation. We will have to wait and see what happens, but if it does surge hard on the FOMC statement back up to the $1350 resistance zone that would be an incredibly bullish start on day one of a new cycle. If that were to happen the odds would be good that gold would break through resistance and break the manipulation. Brave traders could re-enter LEAP's if this occurs this afternoon. I think this scenario requires gold to rally immediately upon the statement. No sell off and reversal. This needs to be a rocket launch right after the announcement. There needs to be no doubt the market is reversing 180 degrees." Gary       |
| Posted: 18 Sep 2013 04:23 PM PDT
 This week's meeting of the Federal Open Market Committee (FOMC) had traders, market commentators and investors almost in a frenzy as they tried to predict the outcome. This was the meeting where economists expected the Fed to announce the 'tapering' of its monthly purchases of $85 billion of Treasury securities and mortgage-backed bonds. According to [...] The post Sprott: A 'Taper' in a Teapot appeared first on Silver Doctors. |
| Cazenoves Robin Griffiths: Central banks lost their gold trying to suppress it Posted: 18 Sep 2013 04:02 PM PDT GATA |
| Junk Silver – Getting More Metal For The Money Posted: 18 Sep 2013 03:00 PM PDT
 Silver is the investment opportunity of a lifetime. And 90% Junk Silver is a very safe way to invest and hedge against inflation. The ultimate in liquidity and safest in case of barter. By Dr. Jeffrey Lewis, Silver Coin Investor: Previously circulated silver is another safe way to hold silver for the long run. This [...] The post Junk Silver – Getting More Metal For The Money appeared first on Silver Doctors. |
| Today’s Fed Meeting – Stocks, Bonds & Gold Loved It. Dollar Hated It. Posted: 18 Sep 2013 02:48 PM PDT That is basically what we got from the Fed today instead of the $10 billion cut in bond buying that the market had priced in. I mentioned yesterday that based on the very benign inflation environment, the Fed might just stand pat due to the recent lousy economic data. They did just that. Personally I think it was two factors which swayed them in this decision – more on that later. Stocks loved it, bonds loved it and gold loved it. The Dollar hated it. What else is new? It is perverse in the sense that interest rates on the long end of the curve had been steadily moving higher for about 3 months now based on the increasing expectations of a tapering move by the Fed. We have been paying close attention to the yield on the Ten Year Treasury and have noted that it just missed hitting the 3% level at the beginning of this month. Here is what I consider perverse about this… consider this… the Fed starts some hawkish talk and begins to prepare the markets for a slowdown in the rate of its bond buying program. The market reacts to this apparent change in policy by bidding up interest rates. This then results in mortgage rates moving higher. The Fed, obviously alarmed at what they believe will negatively impact the very fragile real estate market then backs away from any tapering plans whatsoever sending interest rates on the Ten Year back down to the 2.75% level where they are currently sitting as I type these comments. Where does this leave us? Quite frankly, in an enormous mess the way I see it. The Fed does not have the luxury of doing a surprise sneak-attack on the markets without preparing them for a tapering of the bond buying program. For the Fed to announce out of the clear blue sky, without the least bit of warning, that it was going to scale back its bond buying program, would send the stock market into convulsions and rattle the entire interest rate market as well as the currency markets. They therefore must prep the markets, plowing the ground and giving the markets time to come to terms with any change in monetary policy in order to avoid chaotic market reactions. Here is the catch however – in giving the markets time to prepare, the market response is to sell bonds along the long end of the yield curve thus resulting in rising long term rates. This negatively impacts the real estate market and borrowing in general as the rotten employment picture prevents many people from otherwise qualifying for loans that they might have previously been able to had rates remained at lower levels. Then the times comes for the Fed to make the actual announcement that they have spent so much effort prepping the markets for only to realize that these same markets have pre-empted any need for the Fed to act. The result? – the Fed does nothing whatsoever! In short, I can easily envision a scenario in which the Fed is completely trapped unable to do anything at all well into the foreseeable future. It is going to take STRUCTURAL REFORMS to improve the job market and as long as the current Administration is in power, I do not see that happening any time soon. Thus the status quo continues and goes on and on and on… In regards to gold, it is scooting higher as a large number of shorts were forced out with today’s surprise move by the Fed. It did take out that overhead resistance at $1330 which is a positive and is also now trading above $1350, another resistance level. There is $1360 which I am watching right above where it is currently trading to see how it handles that. Beyond that $1380 is the next target. The key to gold will be whether or not the speculative world believes that the continuation of the Fed’s QE4 policy unabated will generate any long-anticipated inflation. Obviously the bond market does not expect any or bonds would not be moving sharply higher. Thus far inflation has been tame. It is going to take a change in perceptions in that regard to bring in a brand new wave of hot fund money into gold as well as the rest of the commodity complex. The ironic thing about seeing crude oil and especially gasoline rallying sharply higher today is that rising energy prices, while inflationary in their own right, also have recently tended to be seen more as a brake or drag on economic activity and consumer spending and thus are seen as factors leading to a slowdown in growth rather than a catalyst for higher inflation. If specs begin piling into the energy markets based solely on the lack of tightening from the Fed, then these specs may short-circuit any hopes that the Fed has that its latest NON-MOVE will be stimulatory in nature. Herding cats will prove easier than herding these destructive hedge funds. Oh what a tangled web the Fed has created! (original source: Dan Norcini’s personal blog) |
| Posted: 18 Sep 2013 02:30 PM PDT MY GOD, I couldn't have gotten this more correct! While the ENTIRE WORLD expected a "taper," I screamed that they could NEVER stop printing money. Fiat currency regimes are Ponzi Schemes by nature; and thus, MUST grow exponentially larger to avoid instantaneous collapse. They ALL eventually implode; and the larger the bubble grows, the more spectacular the implosion. As this bubble has been blown worldwide – over a period of 42 years, it will be the most spectacular financial collapse in human history; and likely, the history of living beings in ALL galaxies. I GUARANTEE you, if the Voyager satellite patrols the universe for the next billion years, it will never find a financial folly this dramatic – nor an economic collapse on a par with what we will soon experience here. All along, I have been saying that rising interest rates will DESTROY everything in their path; as the "IRREVERSIBLE, GLOBAL DEBT ADDICTION" cannot absorb even the most miniscule rate increase; let alone, in a world in which the REAL economy is already at or near recession levels – and in some places, depressionary. For example, below is a chart of U.S. housing that starts back to the 1950s; and as you can see, this year's Fed-fostered "boom" barely got starts back to the pre-recession levels of the past seven decades. And now, it's already rolling over – with rates still near RECORD LOWS. What does this tell you of the state of the REAL economy; and what would happen if the Fed actually started to "taper" – let alone halt – Treasury monetization? And don't forget that such MONEY PRINTING may well backfire miserably no matter what the Fed does; because at some point, the "bond vigilantes" WILL take the Fed's $3.2 trillion portfolio to the woodshed. Will that time be now? I don't know, but I certainly wouldn't want to be caught without PHYSICAL gold and silver if it is!
Yes, the Fed not only decided to stand pat on QE4, but actually lowered its 2013 and 2014 economic outlook. Again, where's the ballyhooed, make believe "recovery?" As I have been screaming all along, there is no recovery – and NEVER will be until fiat currencies are collapsed; and a new, sound money system borne in its stead. I will have MUCH, MUCH more to speak of this subject tomorrow; as frankly, I do my best writing in the morning, and would like to give it a little thought before discussing the topic. Suffice to say, there will be no shortage of commentary about the Fed's HYPERINFLATIONARY decision; and aside from the newsletter, I will be taping a podcast tonight with Elijah Johnson and a Webinar with Turd Ferguson, which will be promptly posted as soon as they are published.Similar Posts: |
| Senior Anglo Irish Bank official granted immunity from prosecution by Ireland’s DPP Posted: 18 Sep 2013 02:18 PM PDT Stacy summary: Rat? Senior Anglo Irish Bank official granted immunity from prosecution by Ireland's DPP
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| NO TAPER: Details on today's "unexpected" Federal Reserve decision Posted: 18 Sep 2013 01:47 PM PDT From Bloomberg: The Federal Reserve unexpectedly refrained from reducing the $85 billion pace of monthly bond buying, saying it needs to see more signs of lasting improvement in the economy. "The Committee decided to await more evidence that progress will be sustained before adjusting the pace of its purchases," the Federal Open Market Committee said today at the conclusion of a two-day meeting in Washington. While "downside risks" to the outlook have diminished, "the tightening of financial conditions observed in recent months, if sustained, could slow the pace of improvement." Chairman Ben S. Bernanke and his policy-making colleagues held back from paring record accommodation as rising borrowing costs show signs of slowing the four-year expansion. Treasury yields have jumped since May, when Bernanke first outlined a possible timetable for a reduction in the asset purchases that have swelled the Fed's balance sheet to $3.66 trillion. Stocks and Treasuries soared after the statement. The Standard & Poor's 500 Index climbed 1 percent to an intraday record of 1,721.84 at 2:43 p.m. in New York. The yield on the 10-Year Treasury note dropped nine basis points to 2.76 percent. "Asset purchases are not on a preset course, and the committee's decisions about their pace will remain contingent on the committee's economic outlook as well as its assessment of the likely efficacy and costs of such purchases," according to the statement. Press Conference The Fed chairman has orchestrated the most aggressive easing in the Fed's 100-year history, pumping up the balance sheet from $869 billion in August 2007 and holding the main interest rate close to zero since December 2008. Bernanke will have an opportunity to explain the Fed's policy strategy at a 2:30 p.m. press conference in Washington. The central bank today left unchanged its guidance that it will probably hold its target interest rate near zero "at least as long as" unemployment exceeds 6.5 percent, so long as the outlook for inflation is no higher than 2.5 percent. Most Fed policy makers expect the first increase in the nation's benchmark lending rate to occur in 2015, according to projections released today. The federal funds rate target will be 2 percent at the end of 2016, according to the median of estimates by five governors on the Fed's board and 12 reserve bank presidents. That rate compares with their median estimate of 4 percent for where the rate should be at a time of full employment and stable prices. GDP Forecasts Fed officials' forecast U.S. gross domestic product to increase 2 percent to 2.3 percent this year, 2.9 percent to 3.1 percent in 2014, and 3 percent to 3.5 percent in 2015, according to the central tendency forecasts. In June, they had estimated 2.3 percent to 2.6 percent growth in 2013, 3 percent to 3.5 percent expansion in 2014 and 2.9 percent to 3.6 percent growth in 2015. The central tendency forecasts exclude the three highest and three lowest projections. "They feel the risks are too great to taper now, and the economy is not growing as fast as they had hoped," said John Silvia, chief economist at Wells Fargo Securities in Charlotte, North Carolina. "They are going to take a few more months and maybe start in December." The Fed said that inflation had been running below its longer run objective of 2 percent. The central bank's preferred gauge of inflation climbed 1.4 percent in the year through July. It has not breached 2 percent since March 2012. George Dissents Kansas City Fed President Esther George dissented for the sixth meeting in a row, repeating that the policy risks creating financial imbalances. Economists had forecast the FOMC would dial down monthly Treasury purchases by $5 billion, to $40 billion, while maintaining its buying of mortgage-backed securities at $40 billion, according to a Bloomberg News survey. The yield on the 10-year Treasury note has climbed almost 1 percentage point since Bernanke's comments in May, when he first outlined a timeline for tapering, with yields on Sept. 6 exceeding 3 percent on an intraday basis for the first time since July 2011. That compares with 1.61 percent on May 1, and a record-low 1.38 percent in July 2012. Mortgage Rates The average interest rate on a 30-year fixed home loan was 4.57 percent last week, compared with a record-low 3.31 percent in November 2012, according to Freddie Mac. The rate soared 35 percent in 10 weeks ended July 11, the most ever for a comparable period, the data show. The Fed's asset purchases have fueled gains in asset prices. The Standard & Poor's 500 Index has climbed more than 20 percent since Aug. 31, 2012, when Bernanke made the case for further monetary easing at the central bank's annual forum in Jackson Hole, Wyoming. Officials have also credited the program, which began last September, with reducing theunemployment rate, which is the lowest since December 2008. Officials have said that they would maintain bond purchases until the labor market has "improved substantially." At the same time, recent data on payrolls, housing and retail sales have lagged behind economists' forecasts. An increase in interest rates triggered by Bernanke's May 22 comments that the Fed may step down the pace of purchases in the "next few meetings" threatens to further slow growth. 'Uneven' Recovery "The economy is very uneven," said Lindsey Piegza, chief economist at Sterne, Agee & Leach Inc. in Chicago. "With every report you can find a silver lining and then find two reasons to suggest growth will falter," she said. "We're seeing this consistent juxtaposition of strength and weakness." Gross domestic product will probably grow at a 2 percent annualized pace in the third quarter after expanding at a 2.5 percent rate in the prior three months, according to the median estimate of economists surveyed by Bloomberg Sept. 6-11. More costly home loans threaten to restrain the housing revival that has been a mainstay of the expansion. A report today showed builders began work on fewer homes than forecast by economists in August. U.S. companies created 169,000 jobs last month, fewer than economists projected, and increases in the prior two months were revised down. The unemployment rate fell as workers left the labor force. August and July were the weakest back-to-back months for payroll gains in a year. Employment Growth Employment growth has nevertheless improved since the bond purchases began. The U.S. has added an average of 160,000 jobs over the past six months, compared with 97,000 originally reported for the half-year before the Fed decided to start the third round of purchases a year ago. Faster employment gains may be needed to spur the consumer spending that accounts for 70 percent of the economy. Retail sales last month rose less than forecast, with purchases climbing 0.2 percent, the smallest gain in four months, the Commerce Department reported last week. "The U.S. consumer is still very cautious," Julia Coronado, chief economist for North America at BNP Paribas SA in New York and a former Fed economist, said in a Bloomberg Television interview. "The labor market is OK, but it's not great, and wage growth is subdued, so it is not a very buoyant background for the U.S. consumer." Bright Spots Homebuilding and manufacturing remain bright spots for the economy. Companies such as Hovnanian Enterprises Inc. have said the recent rise in mortgage rates will temporarily restrain the housing recovery rather than end it. Homebuilder confidence held this month at the highest level in almost eight years, even as mortgage rates rose. The National Association of Home Builders/Wells Fargo confidence index registered 58 this month, matching August's revised reading as the strongest since November 2005. Such optimism has found fuel from a recovery in home prices that pushed up the S&P/Case-Shiller (SPCS20Y%) index of values in 20 cities by 12.1 percent in June from a year earlier. Factories turned out more cars, appliances and home furnishings in August, propelling the biggest increase in U.S. industrial production in six months. Output at factories, mines and utilities rose 0.4 percent after no change the prior month, the Fed reported this week. Auto Sales Cars and light trucks sold last month at the fastest annualized rate since 2007, according to researcher Autodata Corp. Sales at General Motors Co., Ford Motor Co. (F), Toyota Motor Corp. and Honda Motor Co. all exceeded analysts' estimates. Texas Instruments Inc., the largest maker of analog chips, is among companies with a brighter outlook as global markets stabilize. "Orders continue to be quite solid" this quarter, Chief Financial Officer Kevin March said at a Sept. 11 conference. "We continue to see strength in three of the four regions of the world," withAsia, Japan, and the Americas expanding, he said. Bernanke, whose term ends in January, has led the most aggressive easing campaign in the Fed's 100-year history as he sought to pull the nation out of the financial crisis and then to ensure that a recovery could be sustained and unemployment reduced. The 59-year-old former Princeton University professor pushed the benchmark interest rate close to zero in December 2008 and embarked on three rounds of large-scale asset purchases that have more than tripled the size of the Fed's balance sheet. Vice Chairman Janet Yellen, a supporter of Bernanke's policies, is the top candidate to succeed him after former Treasury Secretary Lawrence Summers withdrew from contention, according to people familiar with the process. To contact the reporters on this story: Joshua Zumbrun in Washington atjzumbrun@bloomberg.net; Jeff Kearns in Washington at jkearns3@bloomberg.net. To contact the editor responsible for this story: Chris Wellisz at cwellisz@bloomberg.net. More on the Fed: |
| The Greatest Debt Crisis The World Has Ever Seen Is Coming Posted: 18 Sep 2013 01:00 PM PDT
 The largest mountain of debt in the history of the world just continues to grow even larger, and everyone knows that this colossal debt spiral is not going to end well. But we all keep playing along because nobody wants the party to end. Right now, there is an unprecedented ocean of red ink covering [...] The post The Greatest Debt Crisis The World Has Ever Seen Is Coming appeared first on Silver Doctors. |
| Posted: 18 Sep 2013 12:02 PM PDT
 QE∞! No Fed Taper! Interest rates to remain at zero Gold & silver go vertical! Silver now up $2 off the days lows, gold up $50 and spiking! Full FOMC QE∞ statement below: San Francisco Mint Silver Eagles As Low As $3.29 Over Spot at SDBullion! Press Release Release Date: September 18, [...] The post QE∞! No Fed Taper! appeared first on Silver Doctors. |
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