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- Top 20 TSX Shorts - spiking short positions in a couple gold miners
- MMTC to open 10 new gold delivery depots to aid hamstrung exporters
- Striking SA gold miners resume work after accepting 8% increase
- Initial post-holiday gold and silver prices disappointing
- Gold marks 2 years from top with $30 jump on weak US data
- SA gold strikers settle for 8% wage increase - source
- Overall gold demand to increase as India comes back into play
- Jim Sinclair’s Get Out of the System Checklist
- Week In FX Americas - Token Taper On Offer
- Silver market outlook from Dr Jeffrey Lewis
- Why investors like silver more than gold
- Gold Price Peak, Two Years On
- News Update: Africa's NUM attacks rival union members, India Gold imports may pick up soon
- Let Freedom Reign By Withdrawing All Assets From the Global Banking Slavery System!
- The Poor Are Better Off Poor: Bloomberg
- Irreversible, Global Debt Addiction
- Jim Willie: Myths, Lies, Deceptions, & Millstones
- Poland Nationalizes Retirement Accounts!
- Jim Willie: Myths, Lies, Deceptions, & Millstones
- Precious metals shortage to support, once tapering shock talk wears off
- The Price of Gold Straddles Two Realities
- Gold price perfectly bounces of its 100 day moving average and back towards $1400
- Historic Event As Gold Slips Into Backwardation Once Again
- Silver Imports Double In India – Bullion Coin, Bar and ETF Demand Surging
- Gold Again Slips Into Backwardation
- Gold Price: If a resupply comes, we’ll win this battle
- Precious metals in a world that is flat, fungible and fiat
- Striking South African gold miners returning to work on 8% offer
- Gold Price in India: Golds Relationship with the Indian Rupee - Current Outlook
- NFP Misses Expectations, Gold & Silver Go Vertical
- How low can gold go?
- Will gold protect you from inflation?
- Silver imports double in India: Bullion coin, bar and ETF demand surging
- Silver Imports Double In India – Bullion Coin, Bar and ETF Demand Surging
- Silver Imports Double In India - Bullion Coin, Bar and ETF Demand Surging
- Four King World News Blogs/Audio Interviews
- Gold Imports to China From Hong Kong Climb on Physical Demand
- Unpacking India's new gold import restrictions
- Gold-rich temples refuse to unlock idle assets to help India's government bring down gold import
- Gold miners near Chicken, Alaska cry foul over 'heavy-handed' EPA raids
- Gold Imports to China From Hong Kong Climb on Physical Demand
- Peru is Dollar Counterfeiting Expert of the World
- David Dayen: BofA/Merrill Lynch Analyst Says QE and Housing Policy Boosting Inequality
- Wolf Richter – Bonds Bleed: Largest Bubble In History Unwinds, But The “Great Rotation” Into Stocks Is Deceptive Wall Street Hype
- Why financial newsletters are more popular than ever
- No Retest of June lows for Precious Metals
- G20 leaders sit down in St Petersburg like an old boys club and ignore Syria
- Hear how under orders there were 9,000 US gold mines shut down
- A Look at ISM, Prices & Gold vs Commodities
- Gold Breaks 9/2 Low; Focus is on 1345-1350
| Top 20 TSX Shorts - spiking short positions in a couple gold miners Posted: 06 Sep 2013 07:15 PM PDT Are growing short positions a reflection of a perceived top after a solid August run in gold shares? |
| MMTC to open 10 new gold delivery depots to aid hamstrung exporters Posted: 06 Sep 2013 06:52 PM PDT Jewellery exporters facing an acute shortage of gold because of India's many new import restrictions, will soon be able to source gold in small towns across India |
| Striking SA gold miners resume work after accepting 8% increase Posted: 06 Sep 2013 06:51 PM PDT The increase to 5,400 rand ($540) a month for entry-level pay is 33% below the 8,000 rand initially demanded by the National Union of Mineworkers |
| Initial post-holiday gold and silver prices disappointing Posted: 06 Sep 2013 04:33 PM PDT Gold and silver performance post the U.S. Labor Day holiday has been disappointing so far, but they still seem to be looking for consistent direction and economic warning signs suggest they should be doing better. |
| Gold marks 2 years from top with $30 jump on weak US data Posted: 06 Sep 2013 04:12 PM PDT The gold price jumped $33 from a new 10-session low in just 5 minutes on Friday, after data on US jobs came in weaker than expected. |
| SA gold strikers settle for 8% wage increase - source Posted: 06 Sep 2013 03:34 PM PDT The National Union of Mineworkers says workers have accepted an 8% increase in pay for entry-level employees. |
| Overall gold demand to increase as India comes back into play Posted: 06 Sep 2013 11:45 AM PDT A more stable exchange rate will also take the spotlight off gold imports there, says Julian Phillips. |
| Jim Sinclair’s Get Out of the System Checklist Posted: 06 Sep 2013 11:30 AM PDT For those who are unable to read the writing on the wall (on the heels of Poland nationalizing retirement accounts), Jim Sinclair has prepared a MUST READ GOTS (Get Out of the System!) checklist. Are you fully out of the system and ready for a bail-in collapse of the Western banking system? 2013 Gold Buffalo [...] The post Jim Sinclair’s Get Out of the System Checklist appeared first on Silver Doctors. |
| Week In FX Americas - Token Taper On Offer Posted: 06 Sep 2013 11:19 AM PDT Friday's miss on payrolls was not the worst of it. The nasty lower revisions for the headline job print in June and July (-74k) were not pretty. Initial reaction saw a deflated dollar, while emerging market currencies loved it – dollar BRL and MXN rallied +1%. In truth, this August payroll report is one of the outliers among recent data reports showing a clear strengthening of activity in the US. However, the details are worrying enough to make the Fed doves more cautious on how tapering will proceed. Analysts not that even if the staunchest of doves, Chicago Fed Evans, stating that he can "be persuaded" about tapering beginning then odd favor tapering happening later this month. The key to all of this will be the "size." A poll of Fixed Income dealers found expectations centered on a $15B reduction in liquidity per-month. What would probably be more realistic would |
| Silver market outlook from Dr Jeffrey Lewis Posted: 06 Sep 2013 11:17 AM PDT Bullish Scenarios for Silver Prices A number of bullish scenarios exist that could substantially increase the price of silver if they were to materialize. |
| Why investors like silver more than gold Posted: 06 Sep 2013 10:46 AM PDT Myra Saefong, SAN FRANCISCO (MarketWatch) — Investors have taken a big interest in silver lately and their infatuation looks set to continue this year, despite gold's advance.True, both metals haven't done very well most recently, posting losses in five out the last six sessions, but a big-picture view on prices and exchange-traded funds shows just how much silver's turning heads. In August, gold futures climbed more than 6% and since the end of June, they are up about 12%. Those figures pale in comparison to the 20% increase in silver futures for last month and quarter to date. Click to Play Focus on funds: Silver rising The economically sensitive metal headed higher, thanks in part to news from China. Also: Frontier markets are having a good year, and a new way to invest in hedge funds. Silver's also set for the first quarterly gain since the third quarter of last year. "Given the outperformance in silver over gold, we can assume that there are factors in play other than traditional safe-haven demand," said Tom Lydon, editor and publisher of ETFtrends.com. Silver exchange-traded funds were the best performing ETFs in August, Lydon said in a report this week, noting that they were bolstered by bargain-hunting speculators as well as by escalating geopolitical tensions surrounding Syria. The physical-silver-backed iShares Silver Trust SLV +2.68% saw net fund inflows of $88.2 million last month as of Aug. 30, according to IndexUniverse. That compares with gold-backed SPDR Gold Trust's GLD +1.35% fund outflows of $227 million as well as outflows of $15.9 billion among U.S. equity funds and $6.66 billion among U.S. fixed-income funds, IndexUniverse data show. "Psychologically, the slow money likely sees SLV as more attractive than GLD for the simple fact that it hasn't been talked about for the past half decade," said Adam Koos, president of Libertas Wealth Management Group. "People like new and exciting, and gold might be [psychologically] becoming old hat to some," he said. "It also goes without saying that the price per share is cheaper when buying SLV." Broad demand But demand for silver is broader than that. "For investors, silver is much more of an industrial material than gold and accordingly has potential double benefits from both industrial and investment demand," said Michael Haynes, chief executive officer at online precious-metals dealer APMEX Inc. The U.S. Mint said sales of its American Eagle silver bullion coins remain "brisk." They're up about 45% year to date, compared with the same period last year, according to spokesman Michael White. The Mint sold a total of nearly 39 million of those one-ounce coins in 2011, which was its record for a single calendar year. So far in 2013, the Mint accepted orders for more than 33 million coins. At the current demand pace, the Mint will set a new record for sales this year, White said. APMEX.com Silver's much more affordable than gold for individual investors, and their interest is in holding physical silver, according to Edmund Moy, chief strategist at gold-backed IRA provider Morgan Gold. Moy pointed out that while he was director of the U.S. Mint, from 2006 to early 2011, sales of the number of ounces of American Eagle silver bullion coins outpaced sales of American Eagle gold bullion coins. The ratio of silver ounces to gold ounces, based on U.S. Mint sales, has been roughly 48 to 1 this year, he said. In July, it was 87 to 1 and in August, it was 315 to 1. "When gold prices start to go beyond the reach of small investors, they resort to silver," Moy said. The silver market tends to be highly volatile and it is much smaller than the market for gold. "The higher volatility attracts momentum investors who favor [ETFs] to take advantage of the price without the burdens of holding the physical silver," said Moy. "That's the primary driver behind the growth of silver ETFs. With volatility, you have the potential for greater gains but also greater losses." Shares of the iShares Silver Trust have climbed about 18% for the quarter so far. Demand for silver also shows in the climb among total overall silver holdings in ETFs physically backed by the metal. "The notable elastic measurable demand increases have been reflected by new all-time highs in total ETF holdings," said Mike McGlone, director of research at ETF Securities U.S. He said total ETF silver holdings ended August at 645 million ounces, a record high and up from around 582 million ounces at the end of 2012. Global silver mine production totaled 787 million ounces in 2012, according to data from The Silver Institute. And "while silver prices can be more volatile, they are anchored around industrial use, which gives it some non-sentimental stability," said Moy. About half of all silver mined, compared with about 12% of all gold production, goes to industrial uses, he said. On that front, silver, which is a major component in the auto, chemical, electronics and solar industries, has been doing well. Auto producers are experiencing their best year since 2007, and the solar photovoltaic industry is "experiencing a boom," said ETFtrends.com's Lydon. And the "improving economy is also bolstering consumer spending and demand for everything including electronics." Outlook For now, silver prices are poised for a loss of roughly 23% for 2013, and they're set for a volatile final quarter of the year. "Gains for silver depend half on the economy because of its industrial uses and consumption, and half on gold prices as a little brother store of value," said Thomas Winmill, portfolio manager of the Midas FundMIDSX -2.92% . He expects silver to "outperform gold through the end of the year." Of course, silver will be moving based on much of the same factors that influence gold. Near term, silver's likely to see some "whipsaw action" based on daily talk of Federal Reserve stimulus tapering, the U.S. debt ceiling and Syria, according to Christopher Blasi, president of Neptune Global Holdings. He expects prices to end the year at around $25 an ounce. Silver futures settled Thursday at $23.26 an ounce. Beyond this year, Winmill expects silver to underperform gold in 2014. "Underperformance, we believe, will occur due to a leveling of gold prices, increased inventories of silver and a slowing global economy," said Winmill. Myra Saefong is a MarketWatch reporter based in San Francisco. Follow her on Twitter@MktwSaefong. September 6, 2013 (Source: Market Watch) http://www.marketwatch.com/story/why-investors-like-silver-more-than-gold-2013-09-06?pagenumber=2 |
| Posted: 06 Sep 2013 10:32 AM PDT Crisis has slipped back, for the rich West at least. So who needs insurance...? COTTON is it, for the second anniversary? Today marked two years since gold hit its all-time peak so far, writes Adrian Ash at BullionVault. Tuesday 6th Sept 2011 was wet and windy, both in London and gold. Late Asian trade had seen the wholesale gold price rise 1.4%, reaching $1921 per ounce. Prices then turned lower, and by the time New York opened the air was hissing out of gold futures. London's benchmark gold price fixed at $1895. That repeated the Monday's PM Fix and came just shy of Monday morning's record Fix of $1896.50. The gold price then dropped $300 within three weeks. It's since dropped $740 from 2011's peak to June 2013's low. Wet and windy indeed. Prices need money, however. And the Sterling gold price also hit record highs two years ago today. Peaking at £1194 in the spot market, gold was fixed at a record high of £1182.82 per ounce on 6th Sept 2011. But the peak gold price in both Euros and Swiss Francs didn't come for another 12 months. Japanese savers got their peak price in April 2013. The world's biggest buyers, Indian households, paid the very highest prices in history only last month. Because the Rupee has, yet again, become a miserable way of trying to store wealth. Might the Dollar, Sterling or Euro join the Rupee anytime soon? No one rings a bell at the top, nor the bottom. (Although we should have spotted the irony in gold's new fan on 7 September 2011.) So buying gold or silver is always a choice. Sometimes better, sometimes worse. But a private decision, freely made – and freely rejecting cash, stocks and bonds with a little or more of our savings. Added together, such private choices make a market. And that choice was the market's to make once again today, as the US jobs data was released for August. A strong number, and everyone thought the Federal Reserve would be sure to start cutting its quantitative easing at this month's policy vote. Weak growth, however, might keep Ben Bernanke's QE tapering in the bathroom cabinet, next to his beard trimmer, until October or perhaps year-end. Quite what the outcome means – being neither strong nor weak (if you discount the LA porn industry's brief shutdown) – we'll have to wait and see. Either way, less money printing equals lower gold, apparently, the obvious "vice versa" of what QE did for gold investing when it began in 2009. Quanticipation in gold certainly helped drive 2012's rally, alongside that peak in Eurozone stress. Then the mere thought of less QE did for gold prices this spring. It's hammered emerging-market economies, too. And fundamentally, gold and the rise of emerging Asia have been joined at the hip during the 21st century so far. Back here in the tired old West, meantime, the immediate panic over Syria has ebbed, even with the US and Russia going head-to-head over Assad's chemical weapons. That leaves pundits and analysts to claim gold's two-month rally is done. The longer-term bear market is back. Who are we to argue? There are plenty of bullish analysts besides, and it's important to see what the other side thinks. Precious metals are about insurance, however. And the sense of crisis has plainly receded since the financial meltdown peaked in 2011. But waiting for a crisis to make headlines is no way to buy insurance. And if not war today, with Obama and Putin squaring up at the G20 summit in St.Petersburg, there's still lots of good reason for a financial backstop. Central bankers are committed to creating inflation, in the hope of juicing up growth. The Western world's debt has yet to stop growing, even 5 years after the Lehmans' collapse. Asian standards of living continue to rise long term, leaving fewer resources for the rich world to squander. Gold and silver are a big part of that story. Because they're the first thing most Asian households will buy when allowed discretionary savings. But the picture is mixed short-term, of course. This week we heard that China's gold imports climbed yet again at last count. Indian households, in contrast, are locked out of the imports they would otherwise buy. Tight supplies in the domestic market have in fact prompted a wave of Indian selling, say jewelers. Amid India's financial crisis people need the money, because bank lending has dried up. The current high prices – due to the collapse of the Rupee – make this a good time to take profits on previous gold investing. Sell high, in short. For Indian households who need it, now is the time to cash in some of their golden insurance. |
| News Update: Africa's NUM attacks rival union members, India Gold imports may pick up soon Posted: 06 Sep 2013 10:18 AM PDT India gold imports are expected to pick up as Customs Department has issued clarifications regarding use of imported gold and how it will be calculated. Premiums over London gold prices have fall from a high of $35-40 per ounce a week earlier to $25-30 per ounce |
| Let Freedom Reign By Withdrawing All Assets From the Global Banking Slavery System! Posted: 06 Sep 2013 10:00 AM PDT Aeschylus stated, "In war, truth is the first casualty." The Third World War has clearly already begun, as it is a war being waged by the global shadow banking system against all of humanity. 2013 Gold Maples As Low As $36.99 Over Spot at SDBullion! From JS Kim, Smart Knowledge U: Just because the war [...] The post Let Freedom Reign By Withdrawing All Assets From the Global Banking Slavery System! appeared first on Silver Doctors. |
| The Poor Are Better Off Poor: Bloomberg Posted: 06 Sep 2013 09:49 AM PDT The realm of precious metals is a broad and diverse one. Indeed, for those who heed the propaganda of the mainstream media; nearly anything can "cause" the prices of gold and silver to go higher or lower (usually lower). For investors inside the sector; an important facet of precious metals is economic justice. In societies with "honest money", not only are workers able to keep their daily wage (rather than have it relentlessly clawed away from them by banker "inflation") but that wage tends to rise steadily with time – reflecting increasing overall prosperity. Conversely, the One Bank's dishonest world of fiat, paper currencies is an entirely opposite regime. Here workers see their wages directly stolen from them at an ever-increasing rate via the Banksters theft-by-currency dilution. The chart below illustrates this serial theft.
According to the Corporate Media and our lying governments; we live in a "low inflation" world (while a "food inflation crisis" ravages the planet). Believe that lie, and we get the blue line; pretending that wages have remained roughly flat over the past 40 years. Move to the Real World, however, and we see an entirely different reality (the green line). In the Real World; ever-increasing money-printing causes ever-increasing currency dilution (i.e. inflation). And when we discount wages with realistic inflation numbers to express wages in "real dollars"; we see the average wage of the U.S. worker plummeting by more than 50% -- all the way to Great Depression levels (and still falling). The Middle Class have become the Working Poor. But that still isn't good enough for the One Bank and its minions in the Corporate Media. Not only do they want to see these slave-wages continue falling lower and lower; they want to hear the Slaves say they like it this way. Hence the September 4th lecture to the Little People from Bloomberg, (maliciously) released right after Labour Day. The cynical title of this attack on all workers was Can We Pay A Minimum Wage Which Makes Everyone Rich? This sort of straw-man analysis is typical of these Corporate elitists as they "explain" why the Rich should (always) get richer and richer, and the Poor (i.e. everyone else) should (always) get poorer and poorer. |
| Irreversible, Global Debt Addiction Posted: 06 Sep 2013 08:45 AM PDT Sometimes I wish I were writing this newsletter in Asia; as in – China, India, or Japan. Actually, I was writing in China last month; but that doesn't count, as I was on vacation. Thus, what I'm actually saying is it would be nice to write to a nation that appreciated the historical context of my words; and one that understands I've been DEAD ON with my macroeconomic calls for as far back as I have been making them. That is, from the time I sold ALL my equities in April 2000 when the tech bubble started to burst; only to sit 100% in cash until moving my entire liquid net worth into PM miners in May 2002; and finally, to PHYSICAL gold and silver in May 2011. Sure, readers of the Miles Franklin Newsletter understand what David Schectman, Bill Holter and I are saying. However, our "shadow world" represents less than 1% of the ENTIRE WESTERN WORLD; and thus, everyone from "Joe Six-Pack" to the MSM ignore us completely. In the former's case, they are too busy struggling for survival to care about the esoteric world of economics; and as regards the latter, they are so ingrained in the environment of MONEY PRINTING, MARKET MANIPULATION, and PROPAGANDA – i.e., "1984 IN 2013" – they have lost all sense of reality. Sadly, greed, sloth, and the unwarranted sense of entitlement the world's "reserve currency" has given Americans their education system to become one of the worst in the "first world." Austrian economics are no longer even mentioned – let alone taught – as "Keynesians" have run roughshod over what was once the world's beacon of economic and social progress. Much of the MSM is now owned by the very people pushing the "serfdom society" that 40 years of fiat currency has engendered; and sadly, will continue doing so until its inevitable demise. If I were writing in the East, my following would be dramatically higher; and likely, I would be as renowned as "experts" like Paul Krugman are in the West. Moreover, if I were Media Director of an Eastern bullion dealer, business would be rocking and rolling. Asians have centuries of history with the virtues of REAL MONEY; and thus, properly utilize gold and silver as their primary means of preserving their savings. This is why Miles Franklin and other dealers are currently seeing very slow – albeit, late summer – business, while Eastern demand has set every imaginable record. However, this year's Cartel-orchestrated PAPER smash has caused worldwide PHYSICAL supplies to collapse – not to mention, the production outlook for years to come; and thus, Miles Franklin and its peers are on the cusp of an historic reversal of fortune – at least, from a business standpoint. You see, strong PM business comes with a steep price; as care of what I have written the past three days – in "THE MOST IMPORTANT ARTICLE I'VE EVER WRITTEN", the " FRAGILE FIVE," and "CHINA – COMPLETING THE FED’S INFLATION EXPORATION CIRCLE," – higher Asian PM demand has been accompanied by surging inflation and, in several high-profiles cases like India and Japan – collapsing currencies. To wit, Indians and Japanese holding gold and silver look at their computer screens and see Rupee Gold and Yen Gold just 5% from their respective ALL-TIME HIGHS; but at the same time, are experiencing extremely difficult living conditions amidst maniacal government policies on the verge of DESTROYING their nations. Conversely, "DOLLAR-PRICED GOLD" is 30% below its August 2011 high – when the U.S. national debt was roughly $3 TRILLION lower – causing American PM holders a great deal of consternation; particularly while enduring daily PROPAGANDA touting the "end of the PM bull." Remember, America's "reserve currency" status has temporarily enabled inflation to rise at lesser rates than in the East; and thus, its fiat Ponzi scheme has lasted longer than the rest. Not low inflation rates, mind you, but lesser rates that enable the public to continue boiling like lobsters in a pot – instead of openly revolting as they are in the East. Just ask the people of Egypt, Turkey, and soon-to-be India, Indonesia, and South Africa – among others. Not to mention, the so-called "Western" nations of Brazil, Argentina, and Venezuela. Remember, we don't buy gold and silver as investments to "make money on" – although price appreciation is certainly not a bad thing; but instead, to preserve the purchasing power of our savings over time, which gold and silver ALWAYS have. To wit, those in the aforementioned Eastern nations would gladly give back some of their recent PM "gains" in return for a lower cost of living, less draconian government, and reduced odds of widespread social unrest and/or civil war. Of that, I ASSURE you! Anyhow, the U.S. government remains hell-bent on plunging the world into WAR; and simultaneously, convincing the masses of a "SO-CALLED RECOVERY" incorporating manipulated "diffusion indices" amidst a "NEW EMPLOYMENT PARADIGM" of low-paying, part-time retail jobs. REAL data like durable goods and factory orders, imports/exports, freight traffic, and entitlement growth tell a different story; let alone, wages so low, tens of thousands of fast food workers are demanding twice their current "minimum wages." But according to the MSM, such data should be ignored; as so long as the "DOW JONES PROPAGANDA AVERAGE" keeps rising, "all's well." To hammer the latter point home, I'd guess the average employee in the fast food industry – you know, where the vast majority of new jobs are created – works 25-30 hours per week, at the minimum wage of $7.25/hour. Assuming 50 weeks of work and a 30% tax rate, such jobs yield annual take-home pay of just $6,300-$7,500. And for those "lucky" enough to hold two such jobs – enabling 50-60 hour work weeks in menial, difficult labor – they earn a whopping $12,600-$15,000 per year. Health insurance alone can cost that much these days; and JUST WAIT until Obamacare is fully enacted following the 2014 mid-term elections. And thus, tell me if you believe a real "recovery" is occurring! Anyhow, I digress; as the title of this article focuses specifically on DEBT – i.e., the fiat currency generated cancer causing ALL the world's economic problems. I can't help but laugh – and cry – when I see the unending focus on potential Fed "tapering" of its QE program; first, because tapering doesn't mean ending, but simply slowing it down; and second, because the ENTIRE WORLD knows the Fed is currently the ONLY meaningful buyer of Treasury bonds. The "BURSTING OF THE BIGGEST BUBBLE IN HISTORY" may well be occurring solely due to this factor – plus, knowledge that China and Japan have become aggressive sellers. Yet, the MSM desperately clings to hopes it is instead due to an "economic renaissance" causing rates to "normalize." Well normalize they certainly are, but NOT for any positive reasons, that's for darn sure. And just wait until the economic ramifications – worldwide – of higher rates start to affect the aforementioned "diffusion indices"; let alone, REAL economic data that was in free fall before rates started rising. To wit, each 1% increase in rates adds a whopping $170 billion to the U.S. annual budget deficit; let alone, tens of billions to the countless municipalities, corporations, and individuals that rely on rates tied to currently ALL-TIME LOW Treasury yields. And don't forget the catastrophic losses of the world's largest Treasury holders; China and Japan – holding $1.1 trillion each; and the Fed itself – thanks to QE4, holding more than $2 trillion of Treasuries and another $1+ trillion of mortgage bonds directly tied to them. Worse yet, the Fed has painted itself into a "DURATION TRAP" by purchasing longer-dated maturities over the past two years; and thus, could lose $1 TRILLION or more if rates continue to rise – which of course would need to be replenished with fresh MONEY PRINTING. As I watch the PPT keep the Dow flat for the second straight day; whilst the world's largest asset class – i.e., FIXED INCOME – implodes; I can't help wondering when the MSM will realize we are in the early stages of a global "IMPLOSION OF NET WORTH, AND RACE FOR CAPITAL PRESERVATION" that will ultimately end in re-monetization of the world's ONLY debt-free money; i.e., PHYSICAL gold and silver. But the "hits keep coming"; because as it turns out, the East is actually more leveraged AS A WHOLE than the West. Sure, outside of Japan, government "debt to GDP" ratios are lower (assuming, of course, they are truthful). However, as it turns out, the level of corporate leverage in the East is far higher than the West – outside the UK banking system, of course; and thus, overall exposure to higher rates is actually worse in the Eastern Hemisphere!
Combining government, municipal, corporate, and individual debt, the same result is viewed WORLDWIDE; as "Financial Debt/GDP" has become so gargantuan, it matters not which nations are "worse." Such debt ratios bring to mind LEHMAN BROTHERS and the Federal Reserve itself; not to mention, the fact that hundreds of trillions of lethal derivative instruments are carried "off balance sheet." As I watch the Yen, for instance, plunge this morning toward its recent, multi-year lows, I can't help wondering if "THE REAL YEN BOMB – STARTS NOW!"; that is, if its depreciation becomes so acute, Japan's long-time government supported bond market will finally "give up the ghost"; and thus, get swamped as the U.S. Treasury market is today. And if so, will the Japanese sell some or even all of their $1.1 trillion of Treasuries to fund what the JGB market no longer can?
Source: The Economist, Incrementum AG In other words, there are no "safe havens" amidst the "IRREVERSIBLE, GLOBAL DEBT ADDICTION" that will inevitably result in massive "cardiac arrest" for the entire worldwide banking system. That is, aside from the ONLY debt-free financial instruments the world has EVER known; and that it EVER will; i.e., PHYSICAL gold and silver. Rapidly rising rates are GUARANTEED to destroy everything in their path – from stocks, to bonds, real estate, and even sovereign governments; and only PMs will be immune, as the "last men standing." Thus, I welcome tomorrow's "NFP payroll report" (today when you read this); as the BLS may already be too late to stop the inevitable, global bond collapse – whether they choose to report a "better than expected" or "worse than expected" number.Similar Posts: |
| Jim Willie: Myths, Lies, Deceptions, & Millstones Posted: 06 Sep 2013 08:40 AM PDT
Click here for Jim Willie’s latest Hat Trick Letter: Myths, Lies, Deceptions, & Millstones: |
| Poland Nationalizes Retirement Accounts! Posted: 06 Sep 2013 08:29 AM PDT Reuters is reporting that Poland has just nationalized their retirement system via a pension fund “overhaul”, a move Poland claims will reduct is public debt by 8 pct of GDP thanks to the theft of their citizens retirement savings. The plan calls for private pension funds to be forceably converted to a state guaranteed system, [...] The post Poland Nationalizes Retirement Accounts! appeared first on Silver Doctors. |
| Jim Willie: Myths, Lies, Deceptions, & Millstones Posted: 06 Sep 2013 08:01 AM PDT The myth is that the Bail-in plans would recapitalize the big banks. The myth is that the ZIRP in place is stimulus to the USEconomy. The myth is that the QE programs are stimulus to the US financial system. The myth is that the US is still a beacon of freedom. The myth is that [...] The post Jim Willie: Myths, Lies, Deceptions, & Millstones appeared first on Silver Doctors. |
| Precious metals shortage to support, once tapering shock talk wears off Posted: 06 Sep 2013 07:53 AM PDT The Fed QE taper plans have dramatically impacted emerging market currencies causing crash in Indonesian, Mexican, Indian currency as hot money flows into dollar assets. |
| The Price of Gold Straddles Two Realities Posted: 06 Sep 2013 07:49 AM PDT One is paper and the other is physical. Wall Street is all about the paper reality and the mainstream press reports on the minute-by-minute price variation. Most people are influenced by the daily up and down moves, but they really have nothing to do with the big picture. For example, if you follow the charts, gold would retrace back to the $1367 level, a typical 38% Fibonacci support level. Is there any magic in this number? No, but a lot of the traders and hedge funds think there is, so it becomes a self-fulfilling prophecy. There is no guaranty that you will hit the number, penetrate it or bounce off of it, and you can't time it. Let's just say it's a number of "interests." Where did gold finish today? At $1367.70. As of 11:00 PM, gold is up $5.50 in the aftermarket. Let's see where gold finishes the week. Above $1367 would be comforting and above $1400 would be better yet. Another "target" for the funds is the 50-day moving average. No guaranty we get there, but it is closely watched by the hedge funds.
To me, the more important number now is the 200-day moving average at $1500. But it doesn't make a difference. The endgame has already been decided and you really should fight your urge to give the daily price any particular meaning. Gold is not about a Fibonacci number. It is not about Syria. It is not about whom the next Fed head will be. It is not about whether the Fed gently tapers or not. Gold is about very different things. Gold is about the US dollar's reserve currency and petro dollar status. Gold is about the physical demand from China.
For the last five months, China has imported, on average, a bit more than 100 tonnes of gold. Gold is about interest rates, which are now starting to rise. The reason they are rising is because foreigners are no longer interested in buying our Treasuries. The Federal Reserve is the Treasury's biggest customer and they create money out of thin air to make the purchases. Take a look at the following chart from Pimco…
And here is another beauty from Zero Hedge…
The dollar cannot survive this level of monetization! And should the Fed step aside? Interest rates will rise rapidly and sink the bond market, the stock market, the housing market and the economy. You all know this. It not only makes sense, it is absolutely a fact, a guaranty of what is to come. So what is the big deal about 38% or $1367? It is a big deal only if you trade gold. If you are a day trader in gold, you are foolish. Pick another commodity to trade, one that is not as heavily manipulated. If you understand gold's role as MONEY, and buy it and hold it, this is all nonsense. Still, it makes many of our readers nervous. Don't be. Look at the big picture and have a good night's sleep. Let's take a less-conventional view of why we are pushing for another war with Syria. Be sure and watch the following Zero Hedge video. Not everyone will agree with this, but you should think it through for yourself. As Judge Judy says, "If it makes sense it's probably true!"
But there is hope. Newsmax.com presented an article titled, Obama on Verge of Historic Rebuke on Syria. President Barack Obama appears to be dangerously close to what would be an historic rebuke at the hands of Congress, if the current whip-count projections on the authorization to attack Syria continue to hold. Pundits on both sides of the aisle say losing the high-stakes bid for congressional authorization would make Obama an instant lame duck, and might well endanger his entire second-term agenda. The resolution authorizing an attack on Syrian strongman Bashar Assad, as punishment for his use of chemical weapons against his own people, is still expected to pass the Democratic-controlled Senate. But the real question mark all along has been whether the administration could muster enough support to get the attack resolution through the House. And there, the situation for the administration appears to be growing dimmer by the hour. The likelihood of escalation is becoming more dangerous by the day. Below is an article from Newsmax:
In closing, here are a few words of wisdom from Richard Russell:
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| Gold price perfectly bounces of its 100 day moving average and back towards $1400 Posted: 06 Sep 2013 07:44 AM PDT When gold broke above its 100DMA on Friday 23rd August (and went on to close solidly above that average), we said that the 100DMA would now act as support on any significant pullback. And today that... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] |
| Historic Event As Gold Slips Into Backwardation Once Again Posted: 06 Sep 2013 07:42 AM PDT September 5, 2013: Today James Turk told King World News that we are witnessing truly historic events in the gold market as gold has once again slipped into backwardation. Turk spoke about the unprecedented nature of what is taking place in gold, as well as what investors should expect as a result of this latest historic development. Below is what Turk had to say in this KWN exclusive interview. Turk: "The big news here in London, Eric, is that gold slipped into backwardation once again. The previous backwardation ended here in London on Monday, when the US was closed for a holiday. It looked like a concerted effort by the central planners to put gold and dollar interest rates back into their normal relationship.... Continue reading the James Turk interview below... September 5, 2013 (Source: King World News) http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/9/5_Historic_Event_As_Gold_Slips_Into_Backwardation_Once_Again.html |
| Silver Imports Double In India – Bullion Coin, Bar and ETF Demand Surging Posted: 06 Sep 2013 07:20 AM PDT Import restrictions and the war on gold in India, once the largest buyer of gold soon to be surpassed by China, has led to a surge in Indian silver imports which have doubled. Thomson Reuters GFMS analyst Sudheesh Nambiath, estimates that India's total silver imports have more than doubled from last year, reaching nearly 3,000 [...] The post Silver Imports Double In India – Bullion Coin, Bar and ETF Demand Surging appeared first on Silver Doctors. |
| Gold Again Slips Into Backwardation Posted: 06 Sep 2013 06:45 AM PDT After leaving Wall Street in 2005, I spent five years in the mining industry; four as an Investor Relations officer, and one as an "IR" consultant to dozens of junior miners. Combined with the fact my portfolio consisted nearly entirely of junior miners between 2002 and 2011 – after which, I switched to 100% PHYSICAL gold and silver – I learned more about that godforsaken industry than 99% of the world's investors. I cannot begin to speak of the horrors I witnessed – in terms of management, operations, and of course, the stock market; and honestly, I do my best to block the entire experience out. Frankly, if I hadn't luckily bought my house at the top of the junior mining market in May 2007 – requiring me to sell shares to pay for it – I likely wouldn't be writing this article today. "Net net" – as they say – my conclusion when I sold my last mining share in the Spring of 2011 was perhaps the worst business on the planet; and given what the industry has since experienced – such as the current strike of two-thirds of the entire South African gold mining industry – if anything, I underestimated how bad things could get. This is why I now anticipate PM production to decline at least 15% over the next three to five years; and perhaps, more so if government policies become increasingly draconian. Yesterday, I spent time with the former CEO of a junior miner I worked for between 2008 and 2011. A geologist by trade, he is one of the most intelligent people I know – and a strong leader to boot. I have very fond memories of our time together; and frankly, of all the people I worked with there. However, it was a case study in how difficult the mining industry is; as, by no fault of his, the company is now on the verge of bankruptcy – after having raised more than $100 million at the aforementioned top – of the TSX-Venture stock exchange – in early 2007. The product was not a Precious Metal; but suffices to say, the subsequent 75% drop in its price made the company's primary project unprofitable – particularly as it was in a "THIRD WORLD" African country. Not to mention, its initial capex estimate of $130 million ballooned in less than four years to closer to $800 million. In chatting with him yesterday, it occurred to me that not only is the junior mining industry dying; but in fact, it's completely DEAD. Juniors have traditionally been the lifeblood of mineral exploration – particularly in the PM sector – but financing has been largely unavailable for years now. New projects are for the most part non-existent; and given the utter insolvency of the miners; exploding exploration and development costs, draconian government policies; and increasingly challenging logistics as the industry's "low hanging fruit" was long ago picked; it is difficult to imagine what could reverse what I expect to be an historic production decline. TRUST ME, if the industry's MAJORS are dramatically writing down assets – and in the case of Barrick Gold (i.e., "EVIL PERSONIFIED"), in such difficult financial straits, bankruptcy is not out of the question – the "juniors" are experiencing such issues a thousand-fold. Whether you want to invest in mining companies – major or junior – is entirely up to you. However, per what I personally experienced for a decade – and see worsening each day – I believe the PM mining industry is on the verge of a catastrophic production collapse. This is why I no longer invest in mining companies, but save PHYSICAL metal; as my goal is to PROTECT my net worth over time with REAL MONEY; not EXPOSE it to undue risk in an increasingly unstable, "marked for death" industry. And before I go – as this month's typically BOGUS, MISLEADING NFP jobs report is released, amidst a potentially historic G-20 meeting in Russia and a 10-year Treasury yield that ominously closed yesterday at 2.995%; some words of REALITY as the MSM's "recovery" PROPAGANDA reaches a fever pitch. I have long warned of the dangers of paying attention to "diffusion indices" like yesterday's "ISM Non-Manufacturing Index" – which somehow soared despite the simultaneous release of plunging factory orders data, whilst Mario Draghi downgraded his 2014 Euro Zone GDP estimate and – oh yeah – the Chinese government admitted one of its largest provinces "exaggerated" 2013 GDP by more than 150%. Back to the U.S.'s "NEW EMPLOYMENT PARADIGM," labor cost growth has been so weak recently, even head MSM lackey Yahoo! Finance's top story is titled "Looking for a raise? Good luck with that"; whilst Gallup data – contrary to all the "labor recovery" hype, depicts a MAJOR increase in unemployment during August – to levels last seen two years ago…
So as gold again slips into backwardation – per this MUST READ interview with James Turk – Historic Event as Gold Slips into Backwardation Once Again – let's head into the weekend with the sage words of Jim Sinclair – who speaks as much truth as TPTB espouses lies…
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| Gold Price: If a resupply comes, we’ll win this battle Posted: 06 Sep 2013 06:37 AM PDT The following is part-extracted from the September Atlas Pulse Gold Investor report – the report credited with calling the April gold price sell-off. The full 12 page report can be downloaded... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] |
| Precious metals in a world that is flat, fungible and fiat Posted: 06 Sep 2013 06:20 AM PDT Fiat currencies lack the hard collateral value of precious metals. Furthermore, the global financial system is quickly running out of collateral, hence signs of a growing gold shortage abound. |
| Striking South African gold miners returning to work on 8% offer Posted: 06 Sep 2013 06:11 AM PDT More than 60,000 South African gold miners began resuming work last night following a 48-hour strike as they accepted an improved, above-inflation pay offer from companies including AngloGold Ashanti Ltd. and Sibanye Gold Ltd. |
| Gold Price in India: Golds Relationship with the Indian Rupee - Current Outlook Posted: 06 Sep 2013 06:10 AM PDT SunshineProfits |
| NFP Misses Expectations, Gold & Silver Go Vertical Posted: 06 Sep 2013 05:43 AM PDT NFP misses expectations at + 169k Official Unemployment rate drops to 7.3% July revised down from +162 to + 104 Gold & silver going vertical- silver up nearly $1, gold up $30 Silver has gone vertical from $23 a little prior to 8am EST to a last of 23.81: Gold is again challenging the $1390 [...] The post NFP Misses Expectations, Gold & Silver Go Vertical appeared first on Silver Doctors. |
| Posted: 06 Sep 2013 05:35 AM PDT Investors still seem wary of gold's dramatic collapse in the first half of this year. The question has since become, how low should gold be priced in order to bring supply and demand into equilibrium? |
| Will gold protect you from inflation? Posted: 06 Sep 2013 05:33 AM PDT New research released this week questions the widely held believe that gold acts as a hedge against inflation. Co-authored by one of the world's leading academics on gold markets, the research leads to an interesting conclusion that 'highlights the monetary nature of gold as a commodity.' |
| Silver imports double in India: Bullion coin, bar and ETF demand surging Posted: 06 Sep 2013 05:30 AM PDT Import restrictions and the war on gold in India, once the largest buyer of gold soon to be surpassed by China, has led to a surge in Indian silver imports which have doubled. |
| Silver Imports Double In India – Bullion Coin, Bar and ETF Demand Surging Posted: 06 Sep 2013 04:06 AM PDT "Because of the restrictions on gold, traders shifted towards silver," Mr Nambiath told the Financial Times, adding that demand for silver jewellery was likely to rise 20% year-on-year and that manufacturers already had full order books through to December. Today's AM fix was USD 1,368.25, EUR 1,042.24 and GBP 877.87 per ounce. Gold fell $25.20 or 1.81% yesterday, closing at $1,368.70/oz. Silver slid $0.32 or 1.36%, closing at $23.21. Gold traded near its two week low in London, on track for its first consecutive weekly drop since July, as investors await the U.S. employment data (12:30GMT) that will foreshadow the U.S. Fed's imminent decision on tapering. Yesterday, The Bank of England and European Central Bank kept their policies unchanged. Last night, the Bank of Japan did the same in line with expectations. The G-20 meeting in St. Petersburg of political and finance ministers began yesterday and has already created clashes amongst superpowers regarding the U.S. military strikes planned against Syria.
U.S. Mint gold and silver eagles sales fell sharply in August but it is important to note that demand for the entire year is set to be close to or at a new record and the fall comes after the huge record demand seen in recent months. The U.S. Mint's sales of silver coins are heading for a record again this year, with sales of 33 million ounces (1,026 tonnes) to late August already matching the level of the whole of 2012. Many other mints including the Perth Mint, the Royal Canadian Mint and the Austrian Mint have also seen a fall in sales recently but are set for record or near record sales again this year. The Royal Canadian Mint has just this week reported a surge in revenue and profitability for the second quarter of 2013. Revenue increased by 93.8% to $1.05 billion, while profit increased 93.0% to $11.0 million. This represented the first time in the Mint’s history that quarterly revenue exceeded $1 billion. The strong results were driven by a sharp increase in bullion demand. "This unprecedented result was due to the soaring demand for the Mint's world-renowned gold and silver maple leaf bullion coins and sustained popularity of our expertly handcrafted numismatic products," said mint president and CEO, Ian E. Bennett. There was a 144% jump in gold maple leaf sales over the same period last year and a 60% surge in the the sale of Silver Maple Leaf coins to 6.4 million ounces from 4.0 million. Silver Maple sales look like they may reach 24 million oz in 2013 which will beat the sales of 18.1 million in 2012 and possibly the 23.1 million record seen in 2011. If one combines, Silver Maple and Silver Eagle sales, they look like they may be more than 68 million oz in 2013. This demand from retail and high net worth store of wealth buyers, from just two mints, represents more than 10% of total world silver production of 787 million ounces in 2012. Adding the sales of commemorative silver coins as well as sales from the other official mints, total figures for 2013 will more than likely top 2011′s total of 118.2 million oz (2013 World Silver Survey). Import restrictions and the war on gold in India, once the largest buyer of gold soon to be surpassed by China, has led to a surge in Indian silver imports which have doubled. Thomson Reuters GFMS analyst Sudheesh Nambiath, estimates that India's total silver imports have more than doubled from last year, reaching nearly 3,000 tonnes in the first half of 2013 compared with 1,900 tonnes in the whole of 2012, according to the Financial Times. EU trade data show silver exports to India from the UK – traditionally the country's top supplier – were 1,415 tonnes in the quarter to June, more than triple the previous year's level and the highest quarterly total since 2008. "Because of the restrictions on gold, traders shifted towards silver," Mr Nambiath told the Financial Times, adding that demand for silver jewellery was likely to rise 20% year-on-year and that manufacturers already had full order books through to December. There are also some positive signs from increasingly important China. Chinese investors demand for silver helped push prices to 31-year highs in 2011. Inventories of silver on the Shanghai Futures Exchange have fallen sharply, down 60% since mid-February. And silver trading volumes on the Shanghai Gold Exchange (SGE) in the first half of the year were 36% higher even than the first half of 2011. Another important bullish factor is investment demand in the western world which has remained robust. Silver ETF holdings have risen 6% since late 2012 from 0.608 billion ounces to 0.644 billion ounces today. Silver ETF holdings have held up extremely well relative to gold ETFs, as investors have increased purchases for the past two years. As silver plummeted in value, certain silver investors continued to accumulate on the dip . This is in marked contrast to the gold ETFs which have seen significant liquidations this year. SPDR Gold Holdings fell 0.2% to 919.23 metric tons yesterday meaning that holdings have dropped 32% this year according to the SPDR data. Overall gold ETFs have seen a 25% fall in holdings or a liquidation of some 680 tonnes – much of which has been gobbled up in Asia. "The smart money is getting in," one trading house executive told the Financial Times. "I think lower prices are really starting to have an effect on demand.
Silver Shorts Cover En Masses As Price Rebounds – (Bloomberg) Silver prices are down 21% in the same period, year to date despite robust demand for silver coins, bars and ETFs. Silver has recently begun to recover from very oversold levels and has already risen 30% from the low of $18.23/oz seen on June 28th. |
| Silver Imports Double In India - Bullion Coin, Bar and ETF Demand Surging Posted: 06 Sep 2013 04:01 AM PDT gold.ie |
| Four King World News Blogs/Audio Interviews Posted: 06 Sep 2013 02:21 AM PDT  Four King World News Blogs/Audio Interviews 1. John Ing: "Gold and Silver Pullback, Declining COMEX Inventories and Syria". 2. James Turk: "Historic Event As Gold Slips Into Backwardation Once Again". 3. Ron Rosen: "The Real Carnage the World Will Have to Face is Still to Come". 4. The audio interview is with Pierre Lassonde. |
| Gold Imports to China From Hong Kong Climb on Physical Demand Posted: 06 Sep 2013 02:21 AM PDT  Gold Imports to China From Hong Kong Climb on Physical Demand Gold shipments to China from Hong Kong increased in July as importers took advantage of local prices that were an average 2.1 percent higher than global markets and as mainland investors bought jewelry and coins. Net imports, after deducting flows from China into Hong Kong, were 113 metric tons, from 101 tons a month earlier, according to calculations by Bloomberg. Mainland buyers purchased 129 tons in July, including scrap, compared with 113 tons in June, data from the Hong Kong government showed today. Gold prices that advanced 18 percent from a 34-month low in June are attracting buyers in China, which is on track to overtake India as the world’s top bullion consumer this year. Premiums paid by jewelers on top of spot prices on the Shanghai Gold Exchange to take physical delivery of the metal were an average $27 an ounce in China during July, according to calculations by Bloomberg. This short Bloomberg story, filed from Beijing, was posted on their website in the wee hours of the morning Denver time...and it's a must read. I found it in a GATA release yesterday. |
| Unpacking India's new gold import restrictions Posted: 06 Sep 2013 02:21 AM PDT  Unpacking India's new gold import restrictions In a very useful note out this morning, UBS attempts to clarify the main points of the slew of new gold import regulations emanating from India. UBS says ,while these various new measures have resulted in a drying up of import activity in recent months but, while there seems little incentive for importers to bring new gold into the country when prices continue to flirt with fresh highs in rupee terms, it is expected that imports will pick up again as traders become more familiar with the measures and, importantly, the country enters the strongest seasonal period for gold demand. Based on a circular issued by the country's customs department yesterday, which is designed to answer many of the questions generated by the new measures, UBS has broken out a number of specific points of interest. I must admit that I really don't fully understand these 'new and improved' guidelines...and if your eyes start to glaze over while you're reading it, don't be overly concerned. This story was posted on the mineweb.com Internet site yesterday...and I thank Ulrike Marx for bringing it to our attention. |
| Gold-rich temples refuse to unlock idle assets to help India's government bring down gold import Posted: 06 Sep 2013 02:21 AM PDT  Gold-rich temples refuse to unlock idle assets to help India's government bring down gold import Some of India's richest temples such as Tirumala Tirupati, Sree Padmanabhaswamy, Shree Krishna temple of Guruvayur, Shree Siddhivinayak and Vaishnodevi are in no mood to part with their treasure to ease the supply crunch and control the outflow of dollars. |
| Gold miners near Chicken, Alaska cry foul over 'heavy-handed' EPA raids Posted: 06 Sep 2013 02:21 AM PDT  Gold miners near Chicken, Alaska cry foul over 'heavy-handed' EPA raids When agents with the Alaska Environmental Crimes Task Force surged out of the wilderness around the remote community of Chicken wearing body armor and jackets emblazoned with POLICE in big bold letters, local placer miners didn't quite know what to think. |
| Gold Imports to China From Hong Kong Climb on Physical Demand Posted: 06 Sep 2013 02:21 AM PDT "How bad a hit will silver and gold get at the 8:30 a.m. EDT jobs number release today?" ¤ Yesterday In Gold & SilverThe gold price did nothing in Far East trading until 1 p.m. in Hong Kong. Then, during the next hour, gold got sold down ten bucks. The subsequent rally lasted until the Comex open, and shortly after that the high-frequency traders did their thing. The bottom came at 10:45 a.m. EDT, and the smallish rally that began at that point got sold off starting shortly after 2 p.m. in electronic trading. Kitco recorded the low tick as $1,364.50 spot. Gold closed the Thursday session in New York at $1,367.70 spot, down $23.90 from Wednesday. Net volume was pretty decent, around 171,000 contracts. The silver price action was virtually the same, so I'll spare you the details. Silver closed yesterday at $23.205 spot, down 25.5 cents. Net volume was around 41,000 contracts. Platinum and palladium got sold down during the Comex trading session, but their losses on the day weren't too bad. Here are the charts. The dollar index closed at 82.16 in New York late on Wednesday afternoon. It rallied up to 82.39 by 8:30 a.m. BST in London on their Thursday morning, before rolling over and hitting its 82.13 low just minutes before the Comex open in New York. The index rallied strongly from there, hitting its high tick of 82.67 a few minutes after 10:30 a.m. EDT. After that the index traded ruler flat into the close, finishing the Thursday session at 82.63, up 47 basis points from Friday. It's my opinion that this manufactured dollar index rally was used to mask the bear raid on gold and silver that occurred at the same time, as the price declines during that time period were out of all proportion to the "rally" in the index. But if you feel otherwise, I certainly won't argue with you, as you're entitled to your opinion. The gold stocks gapped down a bit at the open, and never stopped falling until shortly before 3 p.m. EDT. After that they rallied a bit into the close. The HUI finished down 3.42%. The silver stocks got sold down pretty hard, especially some of the juniors, and Nick Laird's Intraday Silver Sentiment Index got smacked for 3.42% as well. (Click on image to enlarge) The CME's Daily Delivery Report showed that 19 gold and 60 silver contracts were posted for delivery within the Comex-approved depositories on Monday. In gold, JPMorgan was the issuer on 14 contract and Canada's Bank of Nova Scotia stopped 17 of those contracts. In silver, the big short/issuer was Jefferies with 56 contracts, and the two biggest long/stoppers were Canada's Bank of Nova Scotia with 31 contracts, and JPMorgan with 15 in its client account. The link to yesterday's Issuers and Stoppers Report is here. There were no reported changes in either GLD or SLV yesterday. Joshua Gibbons, the "Guru of the SLV Bar List," updated his website with the changes in SLV for the reporting week ending Wednesday, 04 September. Here, in part, is what he had to say: "Analysis of the 04 September 2013 bar list, and comparison to the previous week's list -- 1,988,213.5 troy oz. was removed (all from Brinks London) and 1,446,237.8 troy ounces was added (all to Brinks London), no bars had a serial number change." "There was also a withdrawal of 128,364.2 troy ounces that has not yet been reflected on the bar list, and that should appear on the next bar list (as it normally takes a day or two for the bar list to get updated)." He also reported that "03 September 2013: Another unusual Sunday update, removing 1.99M oz. This was around 1:30PM EDT. Very strange." Ted Butler mentioned that to me as well, and we were both quite amazed by that fact, as they mostly update their website late in the evening EDT, which is the wee hours of the morning in London, which is where the fund, and the vaults, are located. Why would they be open on that day, or at that time of day? The rest of what Joshua has to say is posted on his website linked here. His June 23 comments are worth reading as well, as it's similar to what happened on Sunday night. The U.S. Mint had a tiny sales report. They sold 1,000 one-ounce 24K gold buffaloes. Over at the Comex-approved depositories on Wednesday, there was no in/out activity in gold. But in silver they reported receiving 2,011 troy ounces, and shipped out 159,078 troy ounces. The link to that activity is here. The big news yesterday was that the Chinese imported 116.4 tonnes of gold through Hong Kong in July, and thanks to Nick Laird, here's the appropriate chart. (Click on image to enlarge) Just eye-balling the graph, I note that China has imported, on average, a bit more than 100 tonnes of gold for each of the last five months. There's also a Bloomberg story in the Critical Reads section about July's imports, and it's definitely worth reading. Here's another chart courtesy of Nick. This one shows the dollar value in gold eagles sales vs. the dollar value of silver eagles sold. As Nick pointed out, the dollar value of silver coins sold has exceeded the dollar value of gold coins sold for the last two months. (Click on image to enlarge) I have the usual number of stories today, and I hope you find some in here that interest you. ¤ Critical Reads JPMorgan subject of obstruction probe in energy caseU.S. authorities are conducting a criminal investigation into whether several employees of JPMorgan Chase & Co. tried to impede a regulatory investigation into alleged manipulation of power markets, according to multiple sources familiar with the matter. The probe, which is in its early stages, is being conducted by the Federal Bureau of Investigation and prosecutors in Manhattan U.S. Attorney Preet Bharara's office. It comes after a JPMorgan subsidiary agreed on July 30 to pay a $410 million penalty to settle a manipulation case brought by the Federal Energy Regulatory Commission. The sources said investigators aim to determine whether individuals at JPMorgan - including three Houston-based employees - gave regulators all the information they needed to investigate JPMorgan's power market deals in California and the Midwest. Deliberately withholding information from investigators or lying during interviews conducted as part of an investigation is considered obstruction of justice, a criminal offense. This Reuters piece was posted on their website at noon EDT on Wednesday...and I thank reader M.A. for today's first story.  Planned Layoff Surge May Reflect 'Widening Cracks' in EconomyThe number of planned layoffs at U.S. firms surged in August to their highest in half a year, with industrial goods manufacturers the hardest hit, a report on Thursday showed. Employers announced 50,462 layoffs last month, up 33.8 percent from 37,701 in July, according to the report from consultants Challenger, Gray & Christmas, Inc. The August job cuts were up 57 percent from the same time a year ago. This short story was posted on the moneynews.com Internet site early yesterday morning EDT...and I thank West Virginia reader Elliot Simon for sending it. Fed's Kocherlakota Says Economy Needs More AccommodationFederal Reserve Bank of Minneapolis President Narayana Kocherlakota, who has backed the Fed’s $85 billion in monthly bond buying, said the central bank’s outlook for inflation and unemployment calls for more accommodation. The Federal Open Market Committee’s “own forecasts suggest that it should be providing more stimulus to the economy, not less,” Kocherlakota said in a speech in La Crosse, Wisconsin. He doesn’t vote on monetary policy this year. “The Committee is failing to provide sufficient stimulus to the economy,” Kocherlakota said, citing the FOMC outlook for inflation and unemployment. FOMC participants in June predicted “that inflation will remain below 2 percent over the medium term and that unemployment will decline only gradually.” This is another story from Elliot Simon...and it was also posted on the moneynews.com Internet site early yesterday morning.  Peru is Dollar Counterfeiting Expert of the WorldThe police colonel was stunned by the skill of the 13-year-old arrested during a raid on counterfeiters in Lima's gritty outskirts, how he deftly slid the shiny plastic security strip through a bogus $100 banknote emblazoned with Benjamin Franklin's face. The boy demonstrated his technique for police after they arrested him on the street with a sack of $700,000 in false U.S. dollars and euros that he'd received from a co-conspirator and he led them to a squat house where he and others did detail work. With its meticulous criminal craftsmen, cheap labor and, by some accounts, less effective law enforcement, Peru has in the past two years overtaken Colombia as the No. 1 source of counterfeit U.S. dollars, says the U.S. Secret Service, protector of the world's most widely traded currency. This AP news item, filed from Lima, appeared on the huffingtonpost.com Internet site in the wee hours of yesterday morning...and it's the third offering in a row from Elliot Simon,  European Central Bank Chief Tamps Down OptimismThe president of the European Central Bank issued a sober assessment of the euro zone economy, saying on Thursday that he was “very, very cautious” about prospects for growth and acknowledging concern about shock waves from the civil war in Syria. “I can’t share the enthusiasm” about budding growth in the euro zone, Mario Draghi, the bank president, said at his monthly news conference. “These shoots are still very, very green.” The central bank kept its benchmark interest rate at a record low of 0.5 percent on Thursday, which had been expected after recent economic indicators showed the euro zone economy was beginning to recover, albeit weakly. But Mr. Draghi said the bank had not ruled out future rate cuts. “We certainly are alert to the geopolitical risks that may come from the Syrian situation,” he added. It's obvious that he read the Ambrose Evans-Pritchard story in The Telegraph on Wednesday evening that I posted in Thursday's column. This New York Times news item, filed from Frankfurt, was posted on their Internet yesterday sometime...and I thank Phil Barlett for bringing it to our attention. Poland starts expropriating private pension fund assetsPoland said on Wednesday it will transfer to the state many of the assets held by private pension funds, slashing public debt but putting in doubt the future of the multi-billion-euro funds, many of them foreign-owned. The changes went deeper than many in the market expected and could fuel investor concerns that the government is ditching some business-friendly policies to try to improve its flagging popularity with voters. The Polish pension funds' organisation said the changes may be unconstitutional because the government is taking private assets away from them without offering any compensation. This Reuters story, filed from Warsaw, was posted on their website very early on Wednesday afternoon EDT. I found it buried in a GATA release yesterday. The actual headline reads "Poland reduces public debt through pension funds overhaul". No matter how one describes it, it's still called theft.  Russia warns of nuclear disaster if Syria is hitA military strike on Syria could lead to a nuclear catastrophe if a missile were to hit a reactor containing radioactive uranium, a Russian Foreign Ministry spokesman warned. The remark comes as the US continues to push for a military strike on Syria. "If a warhead, by design or by chance, were to hit the Miniature Neutron Source Reactor (MNSR) near Damascus, the consequences could be catastrophic," Aleksandr Lukashevich said in a Wednesday statement. Russia’s Foreign Ministry urged the UN International Atomic Energy Agency (IAEA) to complete a risk evaluation as the US continues to seek support for military action. It asked the agency to “react swiftly” and carry out “an analysis of the risks linked to possible American strikes on the MNSR and other facilities in Syria.” This Russia Today article was posted on their website shortly after 4 p.m. EDT on Wednesday, or just after midnight Moscow time on Thursday morning. I thank reader M.A. for finding it...and it's worth skimming. 75,000 troops needed to secure chemical weapons if Damascus fallsThe potential of strategic U.S. strikes in Syria has sparked fears Damascus’ chemical weapons could fall into the wrong hands if the government is toppled. A recent congressional report says 75,000 troops would be needed to safeguard the WMD caches. The Congressional Research Center (CRS) report, issued just one day before the alleged August 21 chemical weapons attack in a Damascus suburb, was compiled with the aim of “responding to possible scenarios involving the use, change of hands, or loss of control of Syrian chemical weapons.” It states that Syria’s chemical weapon stockpiles, which a French intelligence report recently estimated at over 1,000 tons, have been secured by Syrian special forces. This article is also from the Russia Today website...and it was posted there mid-afternoon Moscow time yesterday. I thank Roy Stephens for his first contribution to today's column.  China Officially Backs Russia on Syria, Warns "Military Action Would Have Negative Impact on Global Economy" Until now China had kept a relatively low profile on the Syria issue, occasionally issuing veiled support for the Assad regime. That changed at today's G-20 meeting in Russia, when China's vice-finance minister Zhu Guangyao officially launched the Syrian axis of Russia and China, both of which now indirectly support the Assad regime, and oppose US-led military intervention.  Iranian Military Chief: 'We Will Support Syria To The End'Iran will support Syria "until the end" in the face of possible US-led military strikes, the chief of Iran's elite Quds Force unit was quoted Thursday by the media as saying. Iran is Syria's main regional ally and some analysts believe a wider goal of US President Barack Obama's determination to launch a strike against the Damascus regime is to blunt Tehran's growing regional influence and any consequent threat to Washington ally Israel. "The aim of the United States is not to protect human rights ... but to destroy the front of resistance (against Israel)," Quds Force commander Qassem Soleimani was quoted as saying. This AFP story was picked up by the businessinsider.com Internet site yesterday...and it's Roy Stephens second offering in today's column. Brutality of Syrian Rebels Posing Dilemma in WestThe Syrian rebels posed casually, standing over their prisoners with firearms pointed down at the shirtless and terrified men. The prisoners, seven in all, were captured Syrian soldiers. Five were trussed, their backs marked with red welts. They kept their faces pressed to the dirt as the rebels’ commander recited a bitter revolutionary verse. “For fifty years, they are companions to corruption,” he said. “We swear to the Lord of the Throne, that this is our oath: We will take revenge.” The moment the poem ended, th |
| Peru is Dollar Counterfeiting Expert of the World Posted: 06 Sep 2013 02:21 AM PDT Peru is Dollar Counterfeiting Expert of the World The police colonel was stunned by the skill of the 13-year-old arrested during a raid on counterfeiters in Lima's gritty outskirts, how he deftly slid the shiny plastic security strip through a bogus $100 banknote emblazoned with Benjamin Franklin's face. The boy demonstrated his technique for police after they arrested him on the street with a sack of $700,000 in false U.S. dollars and euros that he'd received from a co-conspirator and he led them to a squat house where he and others did detail work. With its meticulous criminal craftsmen, cheap labor and, by some accounts, less effective law enforcement, Peru has in the past two years overtaken Colombia as the No. 1 source of counterfeit U.S. dollars, says the U.S. Secret Service, protector of the world's most widely traded currency. This AP news item, filed from Lima, appeared on the huffingtonpost.com Internet site in the wee hours of yesterday morning...and it's the third offering in a row from Elliot Simon, |
| David Dayen: BofA/Merrill Lynch Analyst Says QE and Housing Policy Boosting Inequality Posted: 06 Sep 2013 01:00 AM PDT By David Dayen, a lapsed blogger, now a freelance writer based in Los Angeles, CA. Follow him on Twitter @ddayen Anyone surprised by the housing recovery is simply blind to the context that the Federal Reserve has administered a bazooka full of aid and comfort over the past few years. They bought up enough mortgage bonds to force interest rates to near-record lows, boosting the fortunes of asset holders. And in so doing they made housing an attractive investment product, bringing lots of Wall Street cash into the REO-to-rental play, at least for a short while. That predictably increased demand and put housing prices on their current trajectory. The promising winds could shift come autumn, however. Too much dumb money entered the investor purchase market, and the Fed is likely to decide to Septaper in a couple weeks. This has already impacted credit markets; 10-year Treasuries hit 3% briefly yesterday, and the 5% mortgage is likely not too far behind. Oddly enough, jumbo loans are actually now cheaper than conforming loans for the first time in anyone’s memory, partially because of banks wanting to hook rich homebuyers and partially because of the forced suicide of the GSEs (Matt Yglesias gets some of this wrong; the powers that be don’t want Fannie and Freddie to exist anymore, and they see increasing the g-fees as a means to that end). But we have to wonder just how bad this outcome is. Who has benefited and who has suffered from the policy decisions in housing and monetary policy over the past few years? According to a remarkable little report from mortgage-backed securities analysts at Bank of America Merrill Lynch, “the cost burdens are disproportionately impacting low-income groups and renters.” (You could probably have guessed that one yourself.) One important insight here is that “easy monetary policy,” as evidenced by QE, is correlated with the rise in income inequality over the past 35 years. The two periods over this time where inequality really shot up came right after recessions in 1991-93 and 2007-11. These two periods were characterized by aggressive monetary policy, including quantitative easing. Since the primary credit channel in the successive rounds of QE targeted assets for either the rich or near-rich, this stands to reason. But the primary focus of the paper is housing, and the centrality of it in Bernanke’s QE policy. He basically created the conditions for a rise in home prices, thinking that would have great positive effects for the economy. BofA/Merrill cites a Harvard State of the Nation Housing report to question that received wisdom. After all, rising home prices, more than anything, raises the cost of housing. And the key question, then, is “Cui bono”:
The analysts note that, even with mortgage rates plummeting from 7% to 4% from 2001 to 2011, 42 million households experienced moderate or severe housing costs. (And the whole thing doesn’t take into account negative equity.) And renters took the brunt of this stress in the later period; by 2011, an incredible 50% of all renters were burdened by high housing costs. “It is difficult to imagine this was the policy objective behind lowering mortgage rates,” the analysts write with a wink. But that’s what happened. A persistent foreclosure wave, tighter credit and increased rental demand led to higher rental prices and more stress on those at the lower end of the income scale. Meanwhile, those who could get credit were rewarded with cheap interest rates, while those who couldn’t ended up paying through the nose for rent. Returns on rental PROPERTY in 2011 were quite high, in the double-digits; rentiers benefited mightily from this squeeze. My understanding of the market is that this has moderated somewhat and rental price gains have slowed. But with wages stagnant, the rent still takes up an inordinate amount of the monthly budget. This massively impacts quality of life. According to the Harvard study, individuals in the bottom quartile of the income distribution with affordable places to live spend 19% of their monthly expenditures on housing; those with severe burdens spend up to 60%. This has an incredible domino effect on all other ordinary purchases, including food, health care, education and transportation. Leading to a pretty radical set of conclusions, considering they come from bank analysts:
In addition, if individuals have so little money leftover after shelling out for housing, inflation remains low from a supply/demand standpoint. “Perversely, the more the Fed boosts home prices through QE, and thereby increases housing cost burdens for lower income cohorts, it may well be further pressuring inflation lower,” the analysts write. Ultimately, these analysts are giving advice to institutional investors, and warning of the risk of an early exit for QE, though the way they get around to it is quite amazing. They conclude that Obama is concerned with inequality, and thus wants to install Summers at the Fed to curtail QE. This is silly for a couple reasons; by the time any replacement for Bernanke gets there, QE’s probably going to be over anyway. And as to Obama, I think this gets things backwards, especially if you look at his recent comments on housing policy. The President said in his Zillow chat that institutional investors scooping up distressed properties was “good business sense”; his sympathies obviously lie there, rather than with those stressed by the consequences of these actions. Similarly, there’s been all this talk about the future of housing finance, and far less about the future of those who have to live in that housing. It’s hard to escape the proposition that monetary policies which inflate asset prices and increase real-world costs, particularly at the low end of the spectrum, represent a feature, not a bug. |
| Posted: 06 Sep 2013 12:00 AM PDT By Wolf Richter, a San Francisco based executive, entrepreneur, start up specialist, and author, with extensive international work experience. Cross posted from Testosterone Pit. The bond-fund massacre has been spectacular. Prime example: antsy investors yanked $7.7 billion in August out of the largest bond fund in the world, Pimco's Total Return Fund. In July, they'd yanked out $7.5 billion, in June a record $14.5 billion. From May 1 through August 31, the fund's assets shriveled 14%, from $292 billion to $251 billion; $26 billion from outflows and $15 billion from the shrinking value of the bonds. The fund lost 5.5% during that period. By riding up the greatest bond bubble in the history of mankind, the fund has become known as a place where investors who don't mind smaller returns but shudder at the thought of losing some of their principal could park their money without having to worry about it – but now, they're worrying about it. September is shaping up to be even worse. Bonds are cratering and yields are spiking worldwide. In the US, the 10-year Treasury yield kissed the magic 3.0% late Thursday, at least briefly, for the first time since July 2011, up from a low of 2.75% at the beginning of the month. It will drag other bond yields, mortgage rates, and other consumer and corporate rates behind it. Pimco's fund wasn't alone: in total, $39.5 billion were yanked out of bond mutual funds in August, $21.1 billion in July, and a record of $69.1 billion in June. Emerging market funds, international bond funds… they've all gotten hit. The Great Rotation out of bonds into stocks? Alas, that concept is vacillating between pipedream and deceptive hype, proffered by Wall Street for its own benefit. In reality, it doesn't exist. As bond-fund investors are pulling up their stakes, the hapless funds have to sell bonds, but for each bond they sell, there has to be a buyer, and for each dollar a fund receives for its bonds, there has to be a buyer willing to surrender it. It's a zero-sum game. Um, plus the fees – because someone always makes money on Wall Street. So the total number of bonds out there is constantly increasing as government and corporations issue new bonds and roll over maturing bonds, instead of paying them off with cash they'd put aside for that purpose (a concept that has become a quaint joke). This flood of new bonds must find buyers. Central banks have stepped in, with the Fed currently buying $85 billion a month, the Bank of Japan buying a lot, along with other central banks. In the end, there must be a buyer for every bond. So there cannot be a rotation out of bonds. But there can be a rotation out of bond funds and into bonds pure and simple – and that is happening. It's a painful process. As bond funds are forced to unwind their holdings, others step in to buy these bonds, at an ever lower price. This causes further bleeding in bond funds, more antsy investors who are yanking out their money, more force selling by bond funds…. It's the unwinding of the "Wealth Effect" that the Greenspan Fed had pulled out of thin mountain air and incorporated into its unfounded belief system, and that the Bernanke Fed in its desperation elevated to a state religion, and a justification for printing $3 trillion, and that the Bank of Japan is now bandying about as part of its new religion. They claim that inflating the values of bonds, stocks, real estate, farmland, MBS, no matter what kind of asset, by hook or crook, including forcing down interest rates to near zero and printing truckloads of money, will create "wealth" out of nothing, and that people who are thus "wealthy" will spend some of that "wealth" and crank up the real economy. That religion hasn't worked very well in the US – where the Fed is blowing $3 trillion on it. If it works at all, it only works for a limited time. Some individual investors, the lucky ones, can pull out their money and consume their gains, but investors as a whole cannot; because for each investor wanting to dump some assets, there has to be another willing to buy them. But they feel wealthier as they see their balance sheets or 401(k)s swell up. And so they might dip into their cash accounts or borrow against their inflated assets to buy some baubles. Then the hangover sets in. Asset values cannot be inflated forever. Something has to give. Now bonds are sliding, taking down bond funds with them, and our antsy investors are dumping their shares, and bond funds are forced to sell more bonds just when other investors are reluctant to jump into the fray to buy them, and just when the Fed is contemplating pulling up its stakes too, and prices slide further. The giddy "wealth effect" that the Fed printed into existence evaporates, and people end up poorer, not only by the money that they thought they had and that they then spent, but also by the amount that their investments declined in value. It's not an uplifting process. This is the wealth effect in reverse – the essential consequence of any wealth effect – and the Fed has wisely shrouded itself in silence on the topic. "Bernanke's maniacal money printing after the Lehman event catalyzed a virtual stampede back into the very same risk-asset classes which had been reduced to smoldering ruins," David Stockman writes. It produced the craziest junk-bond binge of all times, allowing the mega-buyouts from before the crisis to survive and pay rich fees to the LBO lords. |
| Why financial newsletters are more popular than ever Posted: 05 Sep 2013 10:40 PM PDT While the global media giants are facing a sharp fall in revenues as the Internet turns news into a commodity where only one story is enough, and the need to repeat it in a thousand versions in different newspapers is unnecessary, there is still a demand for independent financial comment from local experts. News agencies like Bloomberg and Reuters have expanded their commentary sections to try to accommodate this phenomenon but they too are prone to institutional bias and the house line on major economic issues. Biased reporting It is very hard, for example, for Bloomberg to present stories that impact negatively on financial markets in an objective way. Their constituency is the Wall Street mainstream whose bullish bias is a well established fact. Increasingly therefore investors and fund managers are obliged to subscribe to financial newsletters to get a more rounded picture of the investment universe. Often these journals are horribly biased themselves and written by extreme individuals with personality disorders. However, the best are produced by sages with a unique world view based on long experience in their own field. Marc Faber, for instance, maybe a natural pessimist but he tempers that with wide ranging travels and an open mind. The Agora Financial stable is the largest publisher of US financial newsletters. Its most successful writer Chris Mayer is a level-headed, ex-investment banker whose also big on frequent flyer points. Why don’t these guys just write for the mainstream media and throw their hats in this ring too? Well they probably don’t want the editors to start hacking their copy and distorting their world view. Financial newsletters are a far more independent media, free from many of the constraints of the news desk. They also give the authors scope to indulge in lengthy analysis, freed from the short articles now demanded for the brain-dead generation of Internet surfers. The better authors probably also get much better paid as financial newsletters come at a price and some of the more successful ones, like Mr. Mayer’s and Dr. Marc Faber’s, command high prices and reach quite large circulations. No free lunches It’s a mistake to think this sort of information can be picked up for free on the Internet. You’ll certainly get it first by subscribing and that’s often critical in financial markets. ArabianMoney publishes the only independently written financial investment newsletter covering the Middle East from Dubai (subscribe here). It has subscriber-only information about buying local stocks and property as well as insights into global investments like gold and silver from an Arabian perspective. How many more readers will we pick up this autumn? Why not join this growing investment trend? |
| No Retest of June lows for Precious Metals Posted: 05 Sep 2013 10:08 PM PDT
Recently I've received some emails from those who are concerned about a retest of the June low in the precious metals complex. That prompted me to look at how rebounds develop from significant bottoms. In recent months we focused on historical bottoms in gold stocks and it helped us to pinpoint the best buying opportunities. In this editorial we broaden the scope and examine how certain bottoms play out and why they play out in a particular manner. The length and depth of the preceding bear market helps us to understand how the ensuing bull market evolves during its initial rebound. Below is a chart that shows the S&P 500, CCI (commodities) and Gold from 2007 through 2009. The S&P 500 declined for nearly 18 months without any major rallies. It was extremely oversold and enjoyed a V bottom. The March bottom was actually somewhat a retest of the November low though it did form a new low. Meanwhile, commodities were very oversold but for only a short period of time. Therefore, after the market bottomed it "based" for about four months before accelerating. (This is somewhat similar to what occurred following the 1987 stock market crash). Gold was oversold but only for a short period of time. Its bottom took a few weeks to form and then within a month had a retest.
Next, look at the 1974 bottom in the S&P 500. The market was cut in half over more than an 18-month period. It was very oversold and oversold for a long period of time. The retest occurred within two months of the bottom and then the rebound accelerated.
The chart below (from nowandfutures.com) plots Gold from today with Gold from 1975-1976. Back then Gold declined by nearly 45% and over an 18-month period. Gold was extremely oversold and oversold for an extended period of time. That could be why Gold didn't have a retest. This time around Gold was in a similar position. It declined over 35% over a 20-month period but has since rebounded over $200/oz. It's not a coincidence that the two rebounds occurred without a retest.
These studies provide great examples and a great education with regards to post-bottom price action. Here is our interpretation. If a market is extremely oversold and has declined for a long period of time then it is more likely to have a V-type bottom. If a retest doesn't occur (in this case) within two months then the bottom is most likely in. If a market is extremely oversold but has only declined for a short period of time (1987 crash, 2008 crash) then a base building process (or two steps forward, one step back) should be expected over the coming weeks. If a market is extremely oversold for an extended period of time then the selling has been exhausted, therefore leaving little resistance to the rebound. This explains the V bottom. Conversely, if a market hasn't been oversold for an extended period then there are still some sellers that come in after the bottom and slow down the rebound. It's been two months since the bottom in precious metals and the sector remains comfortably above its lows. Silver is still $5/oz above its lows while Gold is nearly $200/oz above its lows. It's too late to expect a retest of the lows. In fact, the miners already tested their lows in early August which was five weeks after the bottom. Given what we've studied, the severity of the 2011-2013 cyclical bear market, and the recent strong rebound, there is no compelling reason to expect a retest or any major decline. The chart below plots Gold as well as various miner ETFs with arrows emphasizing the 50-day moving averages.
Last week we wrote: The bottom line is the current correction or consolidation is quite healthy for the sector. Many stocks have made huge runs in a very short period of time and are set to digest those gains and correct short-term overbought conditions. Be patient over the coming days and weeks and use the 50-dma as a guide for support and potential lows. The above chart shows that gold and silver stocks of all stripes are quite close to testing the now upward sloping 50-day moving averages. We should see a test of that support over the next few days. Don't fret over recent weakness as its an opportunity. If you are kicking yourself for not buying the June or August lows, then you may get another chance very soon. If you'd be interested in our analysis on the companies poised to lead this new bull market, we invite you to learn more about our service.
Good Luck!
Jordan Roy-Byrne, CMT
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| G20 leaders sit down in St Petersburg like an old boys club and ignore Syria Posted: 05 Sep 2013 08:40 PM PDT Rather than collapse into protectionism the global community is more united than ever by the global economic crisis of the past five years. It’s remarkable to see the leaders of the top twenty nations all sit down for dinner last night at the Peterhof Palace in St Petersburg like an old boys club. Now admittedly President Obama turned up half an hour late, a personal tit-for-tat response to President Putin’s late arrival at their last meeting. A little petty perhaps but in another way very cool in the face of crises like Syria. Syrian crisis Yesterday the Christian village of Maaloula was shelled in Syria, formerly a peaceful example of religious coexistence that we visited almost three years ago in much happier times. Will the G20 sort this out? It looks unlikely. Mr. Putin would not even put Syria on the main agenda, saying instead it would focus on sustaining economic growth across the industrialised world. Still Syria will be the main topic of discussion outside the forum. The G20 are manifestly unable to agree on a response to an alleged gas attack. Did the Syrian regime really do this less than four miles from the Four Seasons hotel where the UN inspectors were staying at the time? Is a rain shower of a hundred of more cruise missiles an appropriate or effective response? Is that not just going to scare the civilian population even more? Will the military not have moved out of these targets by now? Does Syria not need a political rather than a military solution? Besides the G20 members are split internally as well as amongst themselves. The UK parliament rejected its own prime minister’s motion to take military action. And President Obama is now seeking approval from Congress. Still there is something very consoling about seeing the G20 leaders meeting in St. Petersburg. It’s that old thing about better jaw-jaw than war-war, although what is happening in Syria and Egypt right now show that the world is far from a perfect place. Not 1914 It could be much worse, however, if the G20 nations really were lining up on opposite sides for a major war. But this is not 1914 and the First World War. The world is not neatly divided into two, equally matched power blocs. Syria is not Serbia which Russia rushed to defend in 1914, triggering the rapid slide into Armageddon. Russia would not now jeopardize its really rather bright future for Syria. If only the top nations had all sat down to dinner in 1914 in St Petersburg then things could have been very different. Instead the French President Poincare cruised into the city on a warship to meet the Tsar and the die was cast for the most bloody war in history, aside from the next one. Russia in 1914 was the fastest growing economy in Europe and predicted to overtake the US by 1950. The lessons of history have been very painful. Thankfully the world is a now a better place for geopolitics. Perhaps it is also for the best if the problems of the Middle East are localized and not globalized and the G20 sticks to sorting out its own serious economic issues. |
| Hear how under orders there were 9,000 US gold mines shut down Posted: 05 Sep 2013 07:00 PM PDT Charleston Voice |
| A Look at ISM, Prices & Gold vs Commodities Posted: 05 Sep 2013 06:01 PM PDT Biwii |
| Gold Breaks 9/2 Low; Focus is on 1345-1350 Posted: 05 Sep 2013 04:30 PM PDT |
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