Friday, October 11, 2013

Gold World News Flash

Gold World News Flash


US Civil War is Coming, Mosanto’s Apocalyptic Bee Kill & Financial Collapse — Celente & Gucciardi

Posted: 10 Oct 2013 09:38 PM PDT

from RT, via SuperDocumentaryTV:

Here is What Happened Today As Gold Was Breaking $1,310

Posted: 10 Oct 2013 09:20 PM PDT

from KingWorldNews:

Up the stairs, down the elevator! Gold was moving higher following the US Jobless Claim number, and looked promising through $1,310 when a 600,000 oz sell order went through the Comex electronic system causing us to fall back through $1300 and see day traders long of gold, stop out of positions.

Such is the precious metals these days with inexplicable moves and individual orders causing havoc with the low volumes pervading the market. Interestingly, gold option volatility has crept higher this week, with one month now trading 23.5%. The curve is quite flat (one year 21%) so there does seem to be some conviction that a more interesting market is forthcoming. The PM Gold Fix commenced at $1,300, and found balance at $1,298.50 on 28,000 oz offered against 48,000 oz wanted.

Tim Gardiner continues @ KingWorldNews.com

What Investors Must Know If There Is A “Catastrophic Event”

Posted: 10 Oct 2013 09:01 PM PDT

On the heels of tremendous volatility in key global markets, today a 42-year market veteran warned King World News that there is something incredibly important which investors absolutely must be aware of in case there is a "catastrophic event." Hathaway, who is one of the most respected institutional minds in the world today when it comes to gold, and whose fund was awarded a coveted 5-star rating, also discussed what this means for major markets, including gold.

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

What are the Gold Shares Saying?

Posted: 10 Oct 2013 08:40 PM PDT

from Dan Norcini:

The HUI to gold ratio continues to plumb new lows over the last few months having already moved well below the spike bottom made back in late 2008 when the first news about Quantitative Easing hit the markets. The falling ratio is disturbing.

Either one of two things is going to happen – either gold shares are going to stage a rebound sooner rather than later or the price of gold is going to start moving lower at a faster rate than the shares. There always remains the possibility that both will rise higher in sync with the shares outperforming to the upside. That would restore the ratio but thus far the technical charts of the HUI index do not show any serious buying by anyone but the value crowd.

Read More @ TraderDanNorcini.Blogspot.com

Moscow exchange plans deliverable gold and silver trading

Posted: 10 Oct 2013 08:37 PM PDT

By Maria Levitov
Bloomberg News
Friday, October 11, 2013

OAO Moscow Exchange will introduce trading of gold and silver as early as this month as part of plans to make metals more accessible to smaller banks by reducing transaction costs.

The exchange will quote gold and silver in Russian rubles per gram, with minimum trades starting at 10 grams of gold and 100 grams of silver, the bourse's deputy chief executive officer, Andrey Shemetov, said in an e-mailed response to questions yesterday. Platinum and palladium contracts will start trading in the first half of 2014, he said. ...

The exchange will quote prices and enable traders to settle contracts via delivery to and from unallocated metals accounts at its National Clearing Center. Banks can deposit or withdraw precious metals in the form of physical bullion bars, and delivery and collection will occur at a nominated Moscow vault, the bourse said.

...For the full story:

http://www.bloomberg.com/news/2013-10-10/moscow-exchange-plans-gold-to-s...



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Jim Sinclair Plans Seminar in Washington on Oct. 19

Gold mining entrepreneur and gold advocate Jim Sinclair will hold a seminar with questions and answers on Saturday, October 19, at a hotel at the international airport for Washington, D.C. To register for the seminar and learn more about it, including the discounted rate available at the hotel, please visit Sinclair's Internet site, JSMineSet, here:

http://www.jsmineset.com/qa-session-tickets/



Join GATA here:

Louis Boulanger Now Seminar
Visitors Center, Holy Trinity Parnell
Auckland, New Zeland
Sunday, October 13, 2013

http://www.gata.org/files/GATAInNewZealand.pdf

Gold Investment Symposium 2013
Luna Park Conference Center, Sydney, Australia
Wednesday-Thursday, October 16-17, 2013

http://gold.symposium.net.au/

The Silver Summit
Davenport Hotel, Spokane, Washington
Thursday-Friday, October 24-25, 2013

http://www.cambridgehouse.com/event/silver-summit-2013

Mines and Money Australia
Melbourne Conference and Exhibition Centre
Tuesday, October 29-Friday, November 1, 2013

http://www.minesandmoney.com/

New Orleans Investment Conference
Sunday-Wednesday, November 10-13, 2013
Hilton New Orleans Riverside Hotel
New Orleans, Louisiana

https://jeffersoncompanies.com/landing/speakers?IDPromotion=613011610080...

* * *

Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006:

http://www.goldrush21.com/order.html

Or by purchasing a colorful GATA T-shirt:

http://gata.org/tshirts

Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009:

http://gata.org/node/wallstreetjournal

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

http://www.gata.org

To contribute to GATA, please visit:

http://www.gata.org/node/16



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How to profit with silver --
and which stocks to buy now

Future Money Trends is offering a special 16-page silver report with our forecast for 2013 that includes profiles of nine companies and technical analysis of their stock performance. Six of the companies have market capitalizations of less than $800 million and one company has a market cap of only $30 million. The most exciting of these companies will begin production in a few weeks and has a market cap of just $150 million.

Half of all proceeds from the sale of this report will be donated to the Gold Anti-Trust Action Committee to support its efforts exposing manipulation and fraud in the gold and silver markets.

To learn about this report, please visit:

http://www.futuremoneytrends.com/index.php?option=com_content&id=376&tmp...


European central bank gold sales lowest since 1999 accord

Posted: 10 Oct 2013 08:32 PM PDT

By Claudia Carpenter
Bloomberg News
Friday, October 11, 2013

European central banks sold 5.1 metric tons of gold in the fourth year of an accord that originated in 1999, the lowest on record, according to data from the World Gold Council.

Germany sold 5 tons and an unidentified bank disposed 0.1 ton in the year through Sept. 26, the cpuncil, a London-based producer-funded group, said in a report on its website. That's the lowest annual total since European central banks agreed to limit sales in September 1999. Germany's Bundesbank sells a small amount each year to mint coins.

...For the full story:

http://www.bloomberg.com/news/2013-10-10/european-central-bank-gold-sale...



ADVERTISEMENT

How to profit with silver --
and which stocks to buy now

Future Money Trends is offering a special 16-page silver report with our forecast for 2013 that includes profiles of nine companies and technical analysis of their stock performance. Six of the companies have market capitalizations of less than $800 million and one company has a market cap of only $30 million. The most exciting of these companies will begin production in a few weeks and has a market cap of just $150 million.

Half of all proceeds from the sale of this report will be donated to the Gold Anti-Trust Action Committee to support its efforts exposing manipulation and fraud in the gold and silver markets.

To learn about this report, please visit:

http://www.futuremoneytrends.com/index.php?option=com_content&id=376&tmp...



Join GATA here:

Louis Boulanger Now Seminar
Visitors Center, Holy Trinity Parnell
Auckland, New Zeland
Sunday, October 13, 2013

http://www.gata.org/files/GATAInNewZealand.pdf

Gold Investment Symposium 2013
Luna Park Conference Center, Sydney, Australia
Wednesday-Thursday, October 16-17, 2013

http://gold.symposium.net.au/

The Silver Summit
Davenport Hotel, Spokane, Washington
Thursday-Friday, October 24-25, 2013

http://www.cambridgehouse.com/event/silver-summit-2013

Mines and Money Australia
Melbourne Conference and Exhibition Centre
Tuesday, October 29-Friday, November 1, 2013

http://www.minesandmoney.com/

New Orleans Investment Conference
Sunday-Wednesday, November 10-13, 2013
Hilton New Orleans Riverside Hotel
New Orleans, Louisiana

https://jeffersoncompanies.com/landing/speakers?IDPromotion=613011610080...

* * *

Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006:

http://www.goldrush21.com/order.html

Or by purchasing a colorful GATA T-shirt:

http://gata.org/tshirts

Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009:

http://gata.org/node/wallstreetjournal

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

http://www.gata.org

To contribute to GATA, please visit:

http://www.gata.org/node/16



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GoldMoney was established in 2001 by James and Geoff Turk and is safeguarding more than $1.7 billion in metals and currencies. Buy gold, silver, platinum, and palladium from GoldMoney over the Internet and store them in vaults in Canada, Hong Kong, Singapore, Switzerland, and the United Kingdom, ­taking advantage of GoldMoney's low storage rates, among the most competitive in the industry. GoldMoney also offers delivery of 100-gram and 1-kilogram gold bars and 1-kilogram silver bars. To learn more, please visit:

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Precious Metals React As If Obama Was “Yellen” For Ron Paul to Run the FED

Posted: 10 Oct 2013 07:35 PM PDT

from SGT Report:

We’re told that Wall Street and the stock “market” will love Janet Yellen as she most assuredly will continue down Bernanke’s well worn path of print, print, printing.

So why are precious metals reacting as if the printing press is about to be turned off – as if Obama nominated Ron Paul to be the next FED Chairman?! Is it because it now appears likely that Congress will cave and raise the debt ceiling again? And that’s bad for precious metals HOW??

I guess this is what we get in the modern day land of Oz.

Oh well. As Bill Still and L. Frank Baum remind us, if you really want to see the men behind the curtain pulling the strings, just follow the yellow brick road.

SILVER: The Achilles’ Heel

Guest Post: The Possible Outcomes Of The Shutdown Theater

Posted: 10 Oct 2013 06:53 PM PDT

Submitted by Brandon Smith of Alt-Market blog,

Only a week ago, the consensus among most mainstream economic analysts and even some alternative analysts was that a government shutdown was not going to happen. The Republicans would fold in the shadow of President Barack Obama’s overwhelming drive for socialization, spending would continue to grow unabated, and the debt ceiling would be vaulted yet again to feed the bureaucratic machine with more fiat. Today, there is no consensus, very few people continue to be so blithely self-assured and even the mainstream is beginning to wonder if a much bigger game is afoot here.

As I discussed before the shutdown in a recent article, it is important to take all facets of this situation seriously, or risk being bitten by hidden dangers while entranced in one's own arrogant cynicism.

One rule I try to follow whenever possible is to always be open to possibilities beyond the expected and never assume that today’s dynamic will be the same as tomorrow’s dynamic. Even the Liberty Movement can at times be susceptible to group think.  In a world of staggering political and economic manipulation, one has to grasp hold of certain fundamental truths in order to survive. In my time working within the liberty movement and outside of the mainstream, these are a few of the cold, hard truths that have served me well.

It’s Always About Globalization

Every action the elites within our government take pushes the U.S. closer to globalism and away from sovereignty. We may not always see the bigger picture in the heat of the moment, but a look back tells us much. Seemingly simple changes in financial legislation render devastating fiscal shifts a decade later (as with the progressive erasure of Glass-Steagall). Shocking disaster events that appear random suddenly open doors for totalitarian legislation that had been prepared years in advance. Wars end with further calls for world “unification.” Nothing, and I mean nothing, happens within government that does not revolve around the desire of establishment oligarchy to achieve total global economic, political and social control.

The Bankers Did It

Central banks and international banks are the bedrock of globalization, and all greater political decisions eventually stand on this bedrock. One need only examine the cabinets of the past four U.S. Presidents; there you will find a regular carnival freak show of banking elites who would go on to revolve in and out of government and back into the international financial sector. Private central banks like the Federal Reserve dominate the very currency (and thus the economy) of most nations on the planet. Most wars and man-made disasters of the past several centuries have served only to further enrich and empower the merchant class, and the same holds true today. If you want to understand why a certain calamity has occurred, first look to who benefited most. Invariably, you will find the banker class smiling when all is said and done.

America’s Two-Party System Is Actually A One-Party System

If you do not yet understand that the elite of the Republican Party and the Democratic Party share the same foundational philosophy of globalism, then you will NEVER understand why our government does what it does. Public battles of words and legislation are nothing but rhetorical cinema. Ultimately, the goals of neocons and neolibs revolve around the centralization of power. All legislation is used either to further centralization or as a smokescreen to confuse the public while centralization is taking place. When has the leadership of either party, for instance, ever demanded a full audit of the Federal Reserve? When has the leadership of either party ever attempted to dismantle the Patriot Act or the despotic provisions of the National Defense Authorization Act or the President’s openly admitted assassination list? They may seem to disagree violently at times, but do not be fooled. The disagreement is likely just another means to gain more dominance.

The Goal Is To Destroy The American Economy

What you believe to be political blunders are often actually calculated and engineered events. What you believe to be chaotic disasters of coincidence are often actually deliberate acts of attrition warfare against the common people disguised as random catastrophe. Those you believe to be heroes are actually villains in friendly masks. Those you are told to be villains are actually good men and women who refused to be enslaved by the system. That which you see and hear is never exactly as it appears.

Nearly every concrete action our government and central bank have taken in the past several decades has led to the further erosion of the American economy. If this is all just the consequence of “stupidity” or “childish greed,” you would think our so-called leadership would have at least made a few good decisions by mistake; but they are incredibly adept at choosing all the wrong paths.

The reality is that collapses on the scale we are now witnessing in America rarely happen by accident.

The destruction of Glass-Steagall was a carefully crafted coup. The Federal Reserve deliberately and artificially lowered interest rates in order to allow banks to generate massive toxic debt through the derivatives markets. The Securities and Exchange Commission did little to nothing to stop the spread of cancerous mortgage instruments and ignored numerous calls for investigation. Ratings agencies like Moody’s and Fitch examined all of these toxic assets, knowing exactly what they were, and rated them AAA anyway. And banks like Goldman Sachs, knowing that the market was a sham, sold these bad assets around the world and then secretly bet AGAINST them later. Either this is economic warfare implemented with precision, or it’s all a string of coincidental blunders. I don’t believe in such coincidences.

America is being destroyed by design to make way for a new global system administered by the International Monetary Fund and the World Bank, as well as a new global currency tied to the IMF’s Special Drawing Rights.

If you are able to accept this, the confusion surrounding events like the government shutdown and debt ceiling debate withers, and everything becomes clear. With that clarity in mind, we can now examine the possible outcomes of the shutdown theater.

Republicans Surrender At The Last Minute

Of course, since both parties are essentially one party, the idea of “brinksmanship” on the part of either is absurd. The GOP will surrender, or “stand fast,” because its serves the interests of the globalist establishment. There is no political battle here, only the empty chest-beating of a staged wrestling match.

Bets on a last-minute Republican reversal were in the majority for the past week of the shutdown, but that is slowly changing — and for good reason. Obama has stated that the Affordable Care Act is off the table in negotiations, while Republicans like Ted Cruz and John Boehner are now stating with surprising candor that debt default is on the table if Obama refuses to compromise.

Gee, it would seem we are at an impasse.

In the meantime, the GOP is also moving to wrap the debt ceiling debate into the shutdown fight, making a “diplomatic compromise” even less likely to make sense to the public. (Those who argued that the shutdown and the debt ceiling were two entirely separate issued should accept this reality and move on.)

If I were writing this bit of fiction, I would say I was writing myself into a corner and that a last-minute Republican white flag would be illogical to my audience. That said, not all stories are well-written stories, so a Republican rollover remains an option for the time being. The primary reason I can see for the establishment to instruct the GOP to retreat would be to set the stage for a new stimulus event, like a war, which still leaves the U.S. dollar on track to lose its world reserve status — just not as fast a track.

Default Occurs By Winter

This plot twist makes far more sense to me given the way our story has progressed so far. Why? Because it provides perfect cover for an economic collapse that was going to occur anyway, except in this version the banking elite avoid all blame.

Just look at all the angry rhetoric being thrown around in the mainstream media; red team versus blue team has returned as the pervasive American sitcom.

Conservatives blame liberals and Obama. Liberals blame conservatives and the Tea Party. We’re all too happy to blame each other. Certainly, both elements of our government share responsibility for any debt default or subsequent collapse. But who started this avalanche to begin with? What about the Federal Reserve? What about Goldman Sachs, JPMorgan, Citigroup, etc.? What about the globalists?

Debt default is no small matter. Such a disaster would indeed fuel a flight from U.S. Treasuries by foreign investors and eventually lead to the complete abandonment of the greenback as the world reserve standard. Austerity measures would be implemented at break-neck speed. Cuts to entitlement programs, pensions, State funding, etc. will hit the American people like a freight train.

The way in which the MSM is already painting “Tea Party” conservative as saboteurs should a default occur is actually a very practical strategy. Not only do the elites get their economic collapse, but they manipulate the general public to believe that Constitutional conservatives, their mortal enemies, were the CAUSE of the pain, rather than the banks.

Order From Chaos

Should the establishment decide this is the moment to pull the plug on our financial structure, expect some rather insane-sounding solutions to be presented as rational alternatives. When Obama was asked by reporters if he considered the 14th Amendment as an option to end the debt ceiling debate, Obama did not rule out the idea.

This should raise some eyebrows. By the 14th Amendment I can only surmise that they mean Section 4, which states:

The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.

Some people, including CNBC’s Jim Cramer, think that this gives the President the power to raise the debt ceiling regardless of what Congress decides.

And Obama doesn’t appear to be dismissing the notion either. However, Section 5 of the 14th Amendment says:

The Congress shall have power to enforce, by appropriate legislation, the provisions of this article.

Nowhere in Section 5 does it say that the President has the power to enforce the provisions of the 14th Amendment, but this may not stop the White House from twisting the law to insinuate more expansive controls.

Beyond the 14th Amendment, there are numerous executive orders and continuity of government programs that the White House could cite as authority to implement national emergency standards. This would probably start as a kind of “soft” martial law, and then grow from there. Each action will be rationalized as necessary for the greater good of the country, but will serve only the interests of the establishment oligarchy.

On the Republican side, there is another disturbing development that may be presented as a solution in the face of crisis — namely, the idea of instituting a Constitutional convention.

A Constitutional convention is essentially a complete rewriting of the document (which they call "amending") in the name of rebooting a government that has strayed too far from the wishes of the people. The concept is being promoted avidly by certain neocon talking heads and scholars, even on the FOX News circuit.

It sounds very noble on the surface, and neocons use very pretty language to candy coat the idea for legitimate Constitutionalists; but it is truly the most foolish action our country could take, opening the door to a complete erasure of Bill of Rights protections while offering no assurances that any meaningful provisions will be respected or afforded by the Federal government.  The people are given the illusion of potential redress when in reality a Con-Con produces only more centralized theater for the masses. If the liberty movement is suckered into a Constitutional convention, we will have been lured into writing our own destruction.

Another scenario could involve the Federal Reserve moving to take what they often call "extraordinary measures".  The Fed, being a private bank, may use the shutdown as an opportunity to paint itself as an economic "hero" (as unbelievable as that may sound), by instituting stimulus measures to the Federal Government regardless of Congressional or presidential impasse.  Given enough public desperation in the midst of default, the Fed may attempt to assert unprecedented financial authority in the name of "saving the country from it's own government".  The bankers then establish their role as the wise saviors and high priests of the fiscal universe, and cement private dominance over American political decisions as "acceptable" in the minds of the citizenry.

The most dangerous solution that will inevitably be paraded for the public will be a petition for aid from the IMF. The IMF has a long history of loansharking to indebted nations and then subsuming them and their natural resources in the process. The ignorant illusion that the United States is the sole power behind the IMF will be exposed all too late when a defaulting American Treasury is told to collateralize infrastructure to pay off creditors, while the dollar is bled completely dry and absorbed by the IMF’s Special Drawing Rights basket currency.

Whether default occurs or is avoided, watch vigilantly over the next few weeks. Do not blink. Do not be conned, and do not let fear or bias blind you to the bigger picture. The shutdown could amount to nothing immediate, or it could amount to everything we have warned about for the past five years. I personally believe the month of October may be a major turning point in America’s history. Whether it be for good or ill depends on how mentally and physically prepared we are.

The Gold Price Lost $10.30 Today Closing at $1,296.90

Posted: 10 Oct 2013 05:10 PM PDT

Gold Price Close Today : 1296.90
Change : -10.30 or -0.79%

Silver Price Close Today : 21.895
Change : 0.005 or 0.02%

Gold Silver Ratio Today : 59.233
Change : -0.484 or -0.81%

Silver Gold Ratio Today : 0.01688
Change : 0.000137 or 0.82%

Platinum Price Close Today : 1386.00
Change : 3.00 or 0.22%

Palladium Price Close Today : 707.55
Change : 5.45 or 0.78%

S&P 500 : 1,692.56
Change : 36.16 or 2.18%

Dow In GOLD$ : $241.10
Change : $ 7.01 or 2.99%

Dow in GOLD oz : 11.663
Change : 0.339 or 2.99%

Dow in SILVER oz : 690.85
Change : 14.60 or 2.16%

Dow Industrial : 15,126.07
Change : 323.09 or 2.18%

US Dollar Index : 80.166
Change : 0.432 or 0.54%

Franklin is travelling this week, but he wanted y'all to receive today's prices, below.

God willing, he will return on Monday, 14 October 2013.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 2013, The Moneychanger. May not be republished in any form, including electronically, without our express permission. To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $3,130.00; silver's primary is up targeting 16:1 gold/silver ratio or $195.66; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold or 18 ounces of silver. or 18 ounces of silver. US $ and US$-denominated assets, primary trend down; real estate bubble has burst, primary trend down.

WARNING AND DISCLAIMER. Be advised and warned:

Do NOT use these commentaries to trade futures contracts. I don't intend them for that or write them with that short term trading outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures.

NOR do I recommend investing in gold or silver Exchange Trade Funds (ETFs). Those are NOT physical metal and I fear one day one or another may go up in smoke. Unless you can breathe smoke, stay away. Call me paranoid, but the surviving rabbit is wary of traps.

NOR do I recommend trading futures options or other leveraged paper gold and silver products. These are not for the inexperienced.

NOR do I recommend buying gold and silver on margin or with debt.

What DO I recommend? Physical gold and silver coins and bars in your own hands.

One final warning: NEVER insert a 747 Jumbo Jet up your nose.

The Gold Price Lost $10.30 Today Closing at $1,296.90

Posted: 10 Oct 2013 05:10 PM PDT

Gold Price Close Today : 1296.90
Change : -10.30 or -0.79%

Silver Price Close Today : 21.895
Change : 0.005 or 0.02%

Gold Silver Ratio Today : 59.233
Change : -0.484 or -0.81%

Silver Gold Ratio Today : 0.01688
Change : 0.000137 or 0.82%

Platinum Price Close Today : 1386.00
Change : 3.00 or 0.22%

Palladium Price Close Today : 707.55
Change : 5.45 or 0.78%

S&P 500 : 1,692.56
Change : 36.16 or 2.18%

Dow In GOLD$ : $241.10
Change : $ 7.01 or 2.99%

Dow in GOLD oz : 11.663
Change : 0.339 or 2.99%

Dow in SILVER oz : 690.85
Change : 14.60 or 2.16%

Dow Industrial : 15,126.07
Change : 323.09 or 2.18%

US Dollar Index : 80.166
Change : 0.432 or 0.54%

Franklin is travelling this week, but he wanted y'all to receive today's prices, below.

God willing, he will return on Monday, 14 October 2013.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 2013, The Moneychanger. May not be republished in any form, including electronically, without our express permission. To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $3,130.00; silver's primary is up targeting 16:1 gold/silver ratio or $195.66; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold or 18 ounces of silver. or 18 ounces of silver. US $ and US$-denominated assets, primary trend down; real estate bubble has burst, primary trend down.

WARNING AND DISCLAIMER. Be advised and warned:

Do NOT use these commentaries to trade futures contracts. I don't intend them for that or write them with that short term trading outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures.

NOR do I recommend investing in gold or silver Exchange Trade Funds (ETFs). Those are NOT physical metal and I fear one day one or another may go up in smoke. Unless you can breathe smoke, stay away. Call me paranoid, but the surviving rabbit is wary of traps.

NOR do I recommend trading futures options or other leveraged paper gold and silver products. These are not for the inexperienced.

NOR do I recommend buying gold and silver on margin or with debt.

What DO I recommend? Physical gold and silver coins and bars in your own hands.

One final warning: NEVER insert a 747 Jumbo Jet up your nose.

“The Bigger Picture For The West Is Very Grim Indeed”

Posted: 10 Oct 2013 03:57 PM PDT

With the stock market celebrating the nomination of new mega-money printing Fed Chair, today Canadian legend John Ing warned King World News that "the bigger picture for the West is very grim indeed." Ing, who has been in the business for 43 years, also told KWN "We are about to get a move in gold, and it will be quite dramatic."

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

What Ron Paul Told Me About the End of Dollar Hegemony

Posted: 10 Oct 2013 03:20 PM PDT

I spent the past weekend in Tucson for the Casey Research 2013 Summit, indeed a memorable and information-packed experience. It was truly a pleasure to meet with everyone who joined us. Read More...

What Ron Paul Told Me About the End of Dollar Hegemony

Posted: 10 Oct 2013 02:03 PM PDT

I spent the past weekend in Tucson for the Casey Research 2013 Summit, indeed a memorable and information-packed experience. It was truly a pleasure to meet with everyone who joined us.

Notably, it was extremely encouraging to meet so many intelligent people who had taken concrete steps to internationalize their savings and obtain a second passport—and thus reducing their exposure to whatever happens in their home countries.

Doug Casey kicked things off with a look at the striking parallels between the rise and fall of Rome and the rise and fall of the US.

In a way, Doug reminded me of the video below, which I stumbled across recently and which I highly recommend that you view. It shows, in a little over three minutes, how the borders of Europe have changed over the past 1,000 years.

It is an amazing and concise illustration of how, contrary to popular opinion, the borders of political entities are anything but permanent. In a historical perspective, nations and national boundaries tend to have as much permanence as a double cheeseburger placed in front of Chris Christie.

It is for this reason (and many others) that I believe you should internationalize various aspects of your life and not totally bind your future to any particular nation-state.

At the Summit I also had the chance to do something that I had wanted to do for a long time—sit down with Ron Paul for an informal (but in-depth) discussion on what I believe to be his most important speech.

It is a speech that many, even most libertarians, have never heard. This is because it occurred in 2006, before Ron had really broken through on the national level, and during an otherwise dull session of Congress.

The speech is titled “The End of Dollar Hegemony” and discussed the breakdown of the Bretton Woods system—which most people know about—and the de facto system that replaced it—which most people do not know about. This speech is an absolute must-view you can watch it or read a transcript of it.

The most important part of the speech is when Paul discusses the petrodollar system, a primary factor in maintaining the dollar’s role as the world’s premier currency after the breakdown of Bretton Woods.

“It all ended on August 15, 1971, when Nixon closed the gold window and refused to pay out any of our remaining 280 million ounces of gold. In essence, we declared our insolvency and everyone recognized some other monetary system had to be devised in order to bring stability to the markets.

Amazingly, a new system was devised which allowed the US to operate the printing presses for the world reserve currency with no restraints placed on it—not even a pretense of gold convertibility, none whatsoever! Though the new policy was even more deeply flawed, it nevertheless opened the door for dollar hegemony to spread.

Realizing the world was embarking on something new and mind-boggling, elite money managers, with especially strong support from US authorities, struck an agreement with OPEC to price oil in US dollars exclusively for all worldwide transactions. This gave the dollar a special place among world currencies and in essence “backed” the dollar with oil. In return, the US promised to protect the various oil-rich kingdoms in the Persian Gulf against threat of invasion or domestic coup. This arrangement helped ignite the radical Islamic movement (Al Qaeda) among those who resented our influence in the region. The arrangement gave the dollar artificial strength, with tremendous financial benefits for the United States. It allowed us to export our monetary inflation by buying oil and other goods at a great discount as dollar influence flourished.

This post-Bretton Woods system was much more fragile than the system that existed between 1945 and 1971. Though the dollar/oil arrangement was helpful, it was not nearly as stable as the pseudo-gold standard under Bretton Woods. It certainly was less stable than the gold standard of the late 19th century.

The agreement with OPEC in the 1970s to price oil in dollars has provided tremendous artificial strength to the dollar as the preeminent reserve currency. This has created a universal demand for the dollar, and soaks up the huge number of new dollars generated each year.

Using force to compel people to accept money without real value can only work in the short run. It ultimately leads to economic dislocation, both domestic and international, and always ends with a price to be paid.

The economic law that honest exchange demands only things of real value as currency cannot be repealed. The chaos that one day will ensue from our 35-year experiment with worldwide fiat money will require a return to money of real value. We will know that day is approaching when oil-producing countries demand gold, or its equivalent, for their oil rather than dollars or euros. The sooner the better.”

Ron Paul told me that although this speech is relatively unknown in the US, it was widely received around the world. As we discussed the implications of these issues, Paul said that the premise of this speech still applies today.

I believe that once the dollar loses its status as the world’s premier reserve, the US will start to implement the destructive measures we frequently discuss: capital controls, people controls, price controls, currency devaluations, confiscations, nationalizing pensions, etc.

Such things have happened recently in Poland, Cyprus, Iceland, Argentina, Zimbabwe, Venezuela, and a number of other countries.

Take a glance at history and you will quickly notice these measures are the norm when a government gets into serious fiscal trouble. Many nations have made the mistake of thinking they were somehow “exceptional” and that these kinds of things couldn’t happen to them.

There is no question the US is and will continue to be in serious fiscal trouble unless it implements drastic (and politically impossible) changes. The only saving grace for the US has been its ability to print the world’s reserve currency. But once that special privilege is lost, it will revert to the measures all other governments throughout history have taken.

You absolutely want to be internationalized before the US dollar loses its status as the world’s premier reserve currency. I truly believe the window opportunity to take protective action will slam shut at that time.

Internationalization is just one of several timely topics touched on by the experts who gathered at the 2013 Casey Summit, 3 Days with Casey. Unusually, most speakers stayed after their presentations to mingle with attendees and listen to others’ talks—which speaks volumes as to the quality of the conference. If you missed out—or even if you were fortunate enough to be in attendance for Ron Paul’s keynote address, plus presentations by Lacy Hunt, Catherine Austin Fitts, Chris Martenson, and many others, not to mention the Casey Brain Trust led by Doug Casey himself—you can still hear it all. Every presentation. Every breakout session. Every Q&A. All of it—including speakers’ visual aids, if used—will be available on the 2013 Summit Audio Collection.

That’s over 27 hours of insight, analysis, speculation, discussion, recommendations… and much more. And you can get a substantial discount by ordering today. Click here to learn more and reserve your CD or MP3 copy of the 2013 Summit Audio Collection.

By Nick Giambruno, Editor, International Man

A Corrupt System that Rewards Stupidity

Posted: 10 Oct 2013 01:22 PM PDT

For the greater part of human history, leaders who were in a position to exercise power were accountable for their actions. If they waged wars or had to defend their territories from invading hostile forces, they frequently lost their lives, territories, armies, power and crowns. I don't deny that some leaders were irresponsible, but in general, they were fully aware that they were responsible for their acts and, therefore, they acted responsibly.

The problem we are faced with today is that our political and (frequently) business leaders are not being held responsible for their actions. Thomas Sowell sums it up well:

…we have today a system where leaders are not only not punished for their failures, but are actually rewarded…

"It is hard to imagine a more stupid or more dangerous way of making decisions than by putting those decisions in the hands of people who pay no price for being wrong."

When political leaders or economic policymakers are seen to fail, the worst that will happen to them is that they won't be re-elected or reappointed. They then become a lobbyist or an adviser or consultant, and give speeches, earning in the process a high income on top of their pension.

Similarly, many corporate executives and fund managers who have no personal stake in the business that employs them will receive generous pensions even if they fail to do their job properly and are dismissed. (This doesn't apply to hedge fund managers, most of whose wealth is invested in their funds.) In other words, probably for the first time in history, we have today a system where leaders are not only not punished for their failures, but are actually rewarded…

Recently, Warren Buffett said that the Fed was the world's largest hedge fund. He is wrong. The world's largest hedge funds are owned by people who are risk takers with their own money, since they are usually the largest investors in their funds. The academics at the Fed are playing with other people's money.

However, if we consider that the Fed, led by its chairman, is the most powerful organization in the world — because by printing money, it can finance the government (fiscal deficits) and wars, manipulate the cost of money (interest rates), directly intervene in the economy by bailing out failing institutions (banks) or countries (Greece, etc.), intervene in the foreign exchange market and even influence elections — then the question arises whether it makes sense that so much power should be given to Fed members, who are "group thinking" academics and most of whom have never worked in the private sector. In my opinion, the enormous power of the "academic" Fed is a frightening thought. My friend Fred Sheehan recently quoted from Johann Peter Eckermann's conversation with Goethe, Feb. 1, 1827. We talked about the professors who, after they had found a better theory, still ignored it. From Eckermann and Goethe:

"'This is not to be wondered at,' said Goethe; 'such people continue in error because they are indebted to it for their existence. They would have to learn everything over again, and that would be very inconvenient.'

"'But,' said I, 'how can their experiments prove the truth when the basis for their evaluation is false?'

"'They do not prove the truth,' said Goethe, 'nor is such the intention; the only point with these professors is to prove their own opinion. On this account, they conceal all experiments that would reveal the truth and show their doctrine untenable. Then the scholars — what do they care for truth? They, like the rest, are perfectly satisfied if they can prate away empirically; that is the whole matter.'"

Fortunately, there is an institution that exercises control over the academics at the Fed; it is called the market economy. As I have just explained, the Fed is an immensely powerful organization, but over time, the market economy is a more powerful force that can outsmart the academics because it is adaptive and dynamic. Just consider the following. Since the implementation of QE1 at the end of 2008, money supply has exploded, but the "real" economy has hardly responded.

I know that the neo-Keynesians will argue that the Fed didn't expand its asset purchases sufficiently. But then, as I've mentioned before, Mr. Bernanke opined at a press conference held on Sept. 13, 2012:

"We do think that these policies [QE3] can bring interest rates down — not just Treasury rates, but a whole range of rates, including mortgage rates and rates for corporate bonds and other types of important interest rates."

And what has happened? Interest rates have increased. According to David Rosenberg, it is actually the fifth-worst sell-off in the 10-year Treasury note since the 1960s. Whereas we can all agree that many factors other than the Fed's policies have had an impact on the economy (regulation, Obamacare, etc.), it is crystal clear that the Fed's QE3 and QE4 policies have completely failed in their stated objectives. This is now an instance where the market economy has badly humbled the professors at the Fed.

When the Fed announced QE1 in late 2008, it was clear to me that monetary inflation would lead to some price increases somewhere in the system. My initial thought was that QE1 would boost gold and commodities (in December 2008, oil touched a low of $32 per barrel) as well as equities around the world, which were at the time extremely oversold. But it didn't cross my mind that money printing would most benefit gaming stocks and the high-end luxury sector of the economy (art, vintage cars, wines, high-end real estate, etc.).

But in hindsight, it is clear that monetary inflation doesn't flow equally into all sectors of the economy; in the current conditions, it has boosted the wealth and incomes of the most affluent people (unlike in the 1970s, when negative interest rates in real terms boosted wages and consumer prices).

According to the Pew Research Center:

"During the first two years of the nation's economic recovery, the mean net worth of households in the upper 7% of the wealth distribution rose by an estimated 28%, while the mean net worth of households in the lower 93% dropped by 4%. From 2009-11, the mean wealth of the 8 million households in the more affluent group rose to an estimated $3,173,895 from an estimated $2,476,244, while the mean wealth of the 111 million households in the less affluent group fell to an estimated $133,817 from an estimated $139,896."

The Pew Research Center further notes:

"The Census Bureau data also indicate that among less-affluent households, fewer directly owned stocks and mutual fund shares in 2011 (13%) than in 2009 (16%), meaning a smaller share enjoyed the fruits of the stock market rally. Likewise, fewer had individual retirement accounts (IRAs) or Keogh accounts (22% in 2011 versus 24% in 2009), and the same share had 401(k) or Thrift Savings Plan accounts (39% in both years).

"Among affluent households, there was also a decline in the share directly owning stock and mutual fund shares during this period (59% in 2011 versus 62% in 2009), but a slight increase in the share with IRAs or Keogh accounts (70% versus 68%) and a larger increase in the share with 401(k) or Thrift Savings Plan accounts (65% versus 61%)."

I should add that if we took just the richest 0.2% of all households in the world, their capital appreciation since 2009 would be far higher than the 28% wealth increase of households in the upper 7% of the wealth distribution (most likely in excess of 100%). During the press conference that followed the Fed's decision not to proceed with a "taper," Mr. Bernanke was asked why most Americans saw no income and wealth growth. The money counterfeiter responded that this was not the Fed's problem.

Clearly, it has never occurred to the professors at the Fed that Fed policies favor only large asset holders and, by creating bubbles, destroy the assets of the majority. Thus, two factors have benefited the gaming industry.

First, the Fed's monetary inflation has boosted the wealth of the world's most affluent people through rising asset prices and the U.S. current account deficit, which shifted money to Asia and to resource producers (mostly oil producers) because money printing boosted oil prices. Wealthy Asians, Russians and Middle Easterners have a higher gambling propensity than Westerners and make up a large share of high rollers.

Second, we had highly expansionary fiscal policies, which permitted entitlement programs to expand and ordinary people to gamble in casinos. Gambling in casinos and online has, of course, been encouraged by the public's loss of faith in the stock market, which they perceive to be rigged. Alan Newman, who writes the excellent Crosscurrents newsletter, recently commented that "the charade endures" and that "the markets are not fair. Equal treatment is a myth. While the SEC would insist that all investors are equal, it is patently clear some 'investors' are more equal than others."

Regards,

Marc Faber,
for The Daily Reckoning

Ed. Note: This essay was prominently featured in The Daily Reckoning email edition, which provides readers with no less than 3 chances to learn about specific profit opportunities every single day… and it is completely free! If you’re not yet receiving The Daily Reckoning email edition, you’re only getting half the story. Sign up for free, right here.

Gold Daily and Silver Weekly Charts - Cap and Slap in the After Hours Trade

Posted: 10 Oct 2013 01:13 PM PDT

Gold Daily and Silver Weekly Charts - Cap and Slap in the After Hours Trade

Posted: 10 Oct 2013 01:13 PM PDT

Here is What Happened Today As Gold Was Breaking $1,310

Posted: 10 Oct 2013 11:51 AM PDT

Just as gold was surging through the $1,310 level, something strange happened in the gold market. Today the CEO of a prominent mining company sent King World News the following note regarding exactly what caused gold the gold price to suddenly head lower.

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

U.S. Government Debt Is THE Biggest Ponzi Scheme In History

Posted: 10 Oct 2013 11:06 AM PDT


The Ponzi scheme generates returns for older investors by acquiring new investors. This scam actually yields the promised returns to earlier investors, as long as there are more new investors. These schemes usually collapse on themselves when the new investments stop.  -Investopedia
First, let me just say up front that anyone who is worried that the U.S. will default on its Treasury obligations because of this grand Vegas stage-show going in DC is a complete idiot.  To begin with, I fully expect Boehner to cave in and come to an agreement that at least temporarily lifts the debt ceiling so the Jack Lew and Obama continue spending our money at greater rate than the incoming revenues.  Second, for all you folks with your head in the sand about what has happened to our Constitution over the last 13 years, the Patriot Act/Homeland Security Acts give Obama the authority to unilaterally print the money needed to service the Government's Treasury Ponzi scheme.

The Treasury bond market is a Ponzi scheme because the amount of debt outstanding keep growing pretty much at an accelerating rate:

(Treasury Debt Outstanding)

The reason this is a true Ponzi is because at every Treasury auction, held twice a month, the Government issues enough debt to repay the existing debt that is maturing and issues even more debt in order to fund Government overspending.  That is a Ponzi scheme in its essence.  In fact, Putin was wrong, this is an exceptional country because nature of the U.S. Government  Treasury Debt Ponzi scheme is truly exceptional.

Now that I think about it, The United States' Treasury bond Ponzi scheme is not only the biggest in history but it's the greatest in terms ability to keep it going.  A typical Ponzi scheme, like Bernie Madoff's, requires new investors putting more money in to the scheme in order to payout the existing investors.  In contrast, if the Chinese and Japanese decide they'd rather not keep putting an increasing amount of money into financing our Governmental spending juggernaut, the Fed can just print money under the orders of the President to keep the gerbil going on the wheel, as it were.

Worried about the price of gold?  This chart below shows you why you don't have to worry long term:

This chart shows the "exceptional" correlation between the price of gold and the level of the debt limit ceiling going back to 2000, the genesis of the current bull market in gold.  The drop in price since September 2011 shows the "exceptional" degree of Government/Federal Reserve intervention in the gold market - conducted by the Exchange Stabilization Fund as authorized by law and executed by JP Morgan - in order to deflect concern/fear about the increasing level Government spending and debt and the exceptionally increasing level of international distrust of the U.S. dollar.

The problem with Government interference in markets is that over time there are natural laws of economics and mathematics that come into play and that can not be derailed.  The particular law of nature here is the "regression to the mean."  At some point, sooner rather than later, the price of gold will "regress" back up to its mean level of correlation of the imminently-to-raised Treasury debt limit ceiling.

U.S. Government Debt Is THE Biggest Ponzi Scheme In History

Posted: 10 Oct 2013 11:06 AM PDT


The Ponzi scheme generates returns for older investors by acquiring new investors. This scam actually yields the promised returns to earlier investors, as long as there are more new investors. These schemes usually collapse on themselves when the new investments stop.  -Investopedia
First, let me just say up front that anyone who is worried that the U.S. will default on its Treasury obligations because of this grand Vegas stage-show going in DC is a complete idiot.  To begin with, I fully expect Boehner to cave in and come to an agreement that at least temporarily lifts the debt ceiling so the Jack Lew and Obama continue spending our money at greater rate than the incoming revenues.  Second, for all you folks with your head in the sand about what has happened to our Constitution over the last 13 years, the Patriot Act/Homeland Security Acts give Obama the authority to unilaterally print the money needed to service the Government's Treasury Ponzi scheme.

The Treasury bond market is a Ponzi scheme because the amount of debt outstanding keep growing pretty much at an accelerating rate:

(Treasury Debt Outstanding)

The reason this is a true Ponzi is because at every Treasury auction, held twice a month, the Government issues enough debt to repay the existing debt that is maturing and issues even more debt in order to fund Government overspending.  That is a Ponzi scheme in its essence.  In fact, Putin was wrong, this is an exceptional country because nature of the U.S. Government  Treasury Debt Ponzi scheme is truly exceptional.

Now that I think about it, The United States' Treasury bond Ponzi scheme is not only the biggest in history but it's the greatest in terms ability to keep it going.  A typical Ponzi scheme, like Bernie Madoff's, requires new investors putting more money in to the scheme in order to payout the existing investors.  In contrast, if the Chinese and Japanese decide they'd rather not keep putting an increasing amount of money into financing our Governmental spending juggernaut, the Fed can just print money under the orders of the President to keep the gerbil going on the wheel, as it were.

Worried about the price of gold?  This chart below shows you why you don't have to worry long term:

This chart shows the "exceptional" correlation between the price of gold and the level of the debt limit ceiling going back to 2000, the genesis of the current bull market in gold.  The drop in price since September 2011 shows the "exceptional" degree of Government/Federal Reserve intervention in the gold market - conducted by the Exchange Stabilization Fund as authorized by law and executed by JP Morgan - in order to deflect concern/fear about the increasing level Government spending and debt and the exceptionally increasing level of international distrust of the U.S. dollar.

The problem with Government interference in markets is that over time there are natural laws of economics and mathematics that come into play and that can not be derailed.  The particular law of nature here is the "regression to the mean."  At some point, sooner rather than later, the price of gold will "regress" back up to its mean level of correlation of the imminently-to-raised Treasury debt limit ceiling.

A Pause, Not the End for Gold & Silver

Posted: 10 Oct 2013 10:16 AM PDT

Why the bull market in gold and silver is taking a break...
 
GREG McCOACH is an entrepreneur who has successfully started and run several businesses in the past 30 years.
 
For the last 14 years, he has been involved with the precious metals industry as a bullion dealer, investor and newsletter writer, also publishing Mining Speculator, and writing a weekly column for Gold World.
 
Here he tells The Gold Report why he things gold and silver prices are only taking a pause, not suffering the end of their long bull markets...
 
The Gold Report: You wrote recently, "The 2008 crisis will pale in comparison to what is now on the horizon." Given that the 2008 crisis nearly destroyed the world economy, how bad will the next crisis be?
 
Greg McCoach: The derivative issues were never fixed after the last crisis. In essence, the laws were changed so that the banks didn't have to keep derivative liabilities on their books. That way, bank stocks could soar again. But the banks have acted even more recklessly since 2008 and are now in bigger trouble. The recent White House meeting with all the big financial players should be a warning to investors that something big is about to hit. The media touted this as a meeting to discuss the debt ceiling, but I would say it was about the crisis that is about to envelope the big banks again. Barack Obama didn't run that meeting, JP Morgan Chase ran the meeting and told everyone what was coming. The banks don't have the capital to cover their interest rate derivative problems that are as big as the Pacific Ocean. I would tell investors to expect ten times worse conditions from what we saw in 2008.
 
TGR: I've read that even if only 4% of the derivatives held by the banks are at risk, and only 10% of that goes south, it would completely wipe out the net worth of the top five banks.
 
Greg McCoach: At this point, the acceleration of what I consider tyrannical measures on the part of the US government has reached such a degree it's obvious that something is coming. Why would it buy billions of rounds of hollow-point ammunition? Why is it buying millions of ready-to-eat meals? Why would it take all these extra security measures? Obviously, the US government knows more than the general public does and it reveals something is wrong and the government is worried about it.
 
TGR: We had this situation after the scandal with HSBC where the US Department of Justice admitted that criminal acts were probably committed, but prosecution would be unthinkable because the big banks cannot be allowed to fail.
 
Greg McCoach: Well, that pretty much tells the story right there. The bureaucrats, Rebooblicans and Dumocrats, as Jim Willie says, don't represent the people of America anymore. They represent themselves and their elitist banker puppeteers. They're trying to control the message and all the outcomes. It's a train wreck in process, but you have to tip your hat to them – they have been able to keep it together for so long. We could have experienced the end game at multiple occasions in the past 12 years, but it now seems to me that the limits of their good fortune are quickly coming to a close.
 
If you're just watching CNN and FOX News, you're oblivious to what's really going on. But if you're a thinking person, you should start getting together food storage and get your investments in line for the major problems ahead. I can't tell you when it's going to happen because I don't have a crystal ball, but it's not a matter of if this is going to happen; it's just a matter of when.
 
TGR: What will be the warning signs of the next crisis?
 
Greg McCoach: The warning signs are all around us right now and have been for the last six months. The big meeting at the White House with all the financial people I already mentioned was a huge sign. The erratic behavior lately of the US government with the Middle East, particularly Syria, is also a sign. In recent weeks we have heard about a worldwide currency reset that is to take place in the very near future. This is telling those who have ears to listen that the Keynesian fraud of creating monies out of this air has reached a limit so they need to reset.
 
All of this means that we'll wake up one morning and life will be very different. You'll see markets performing erratically. You'll see civil unrest. Most people think it will have something to do with another banking crisis, a derivatives situation. It could be a new war. I think things could happen quickly and take us down a very dark path. All we can do is prepare for ourselves and our families. You have got to own physical gold and silver that is in your possession.
 
TGR: The macroeconomic indicators suggest that the prices of gold and silver should be much higher than at present. Why do you think that 2013 looks to be the year that the bull markets in these metals ended?
 
Greg McCoach: I don't think the secular precious metals bull market has ended. I think we're just taking a pause. I liken this to the move that happened in the 1970s when we made the US Dollar the official reserve currency of the world, and people could again own physical gold and silver. The gold price went from $35 per ounce all the way up to $195 per ounce. Then it collapsed to $105 per ounce. A lot of people thought that was it for gold. But then it ran to $855 per ounce.
 
Since then, we've hit $1950 per ounce, which was then corrected back to the $1200-1,300 per ounce level. We've been bouncing around $1200-1400 per ounce, and I believe this is just setting us up for the foundation of the next big move in gold, which will take us to much, much higher levels. I'm thinking $3500-5000 per ounce. It will be associated with collapsing currencies, the devaluing Dollar, problems in the banking sector, etc.
 
TGR: What will be China's role in this?
 
Greg McCoach: China is the world's biggest producer of gold, and now it is becoming the biggest holder of gold. It is dumping US Treasury bills and buying anything it can get its hands on.
 
TGR: Is there no question in your mind that gold and silver are bargains now?
 
Greg McCoach: Absolutely. People should be lining up to buy on this dip. This is a great opportunity. Nothing has fundamentally changed. Has the government started to become fiscally responsible? I laughed out loud when I heard about this "taper" of quantitative easing. What a complete joke. This should show thinking people the gig is up for the financial fraud being perpetrated at the Federal Reserve.
 
TGR: Many people argue that interest rates can't go up because then the US won't be able to pay its debt, and the whole derivatives market will be threatened.
 
Greg McCoach: If interest rates go up they are damned. If interest rates go down they are damned. Either way the Fed is screwed because of the derivative situation with their largest banks. I would expect interest rates to move in the direction that allows their banks and the US government to survive the longest, but there is no way out of this that I can see.
 
TGR: What do you think of the argument made by the Gold Anti-Trust Action Committee that the big banks and the central bankers are suppressing the prices of gold and silver?
 
Greg McCoach: The government doesn't like rising gold and silver prices because it tells the public that something is wrong. Now, does the government come into our market and play games? Absolutely, but I don't really pay too much attention because, ultimately, I believe free markets will dictate the course of the metals prices. It's yet another sign on just how out of control the powers that be are when they seek to control the outcome of everything. They think they are God, but they're about to find out otherwise.
 
TGR: You wrote on Sept. 20, 2013 that you've lost confidence in "a recovery this fall in our overall junior mining stock market." If you are right, doesn't this mean that many juniors won't survive? And if this occurs, will it make the survivors stronger?
 
Greg McCoach: Absolutely. This is an unfortunate chain of events, but in many regards it needed to happen. There were just too many junior mining companies. There are only so many talented teams of professionals in the industry that know how to make the discoveries that can be developed into producing mines. When you look at the monies that have been raised in this sector in the last 5-10 years, we have very little to show for it. All the low hanging fruit has already been discovered.
 
So this "wipeout," as I'm referring to it, has been very difficult on investors, people employed by mining companies and newsletter writers like myself. I was hoping we would have a recovery this fall. The early signs in July and August seemed to indicate one because the strongest companies started to move and in many cases doubled from their lows in late June, early July. That is usually a sign that things are going to float again, but it all fell apart in September.
 
TGR: You have recommended that investors reduce their portfolios "to just a few of the highest quality stocks as we await the recovery." What are the criteria that determine the highest quality stocks?
 
Greg McCoach: Companies with plenty of cash on hand that don't need to raise money right now. It is almost impossible to raise money in this sector at this juncture. Look for companies that are producing from high-grade projects with low costs, companies that will make money even if gold and silver go down further from current levels.
 
Even with companies like these, there is always something making things more difficult. There are a lot of great companies I like in Mexico, where the politicians are trying to change the laws to charge more taxes. Politicians have an insatiable appetite for other people's money. It will affect companies in Mexico with low-grade projects to the point it may force them out of business.
 
TGR: When do you think the market will turn around?
 
Greg McCoach: Things are not going to get better at least until 2014, and in the meantime a lot of juniors hanging by their fingernails are going to go out of business. That will solidify the market for the survivors. Maybe that is as it should be. I do believe that monies we've lost in this sector in the last two years can quickly be made up if investors maintain a position, or build positions, during these low times in the highest quality companies. Because when the market does recover, it is going to be a screamer.
 
TGR: Many long-time investors in the junior space have been so battered over the last couple of years that they've given up. What is the best reason for people to stay invested in juniors?
 
Greg McCoach: I can't blame people for getting so frustrated. They've taken horrendous losses; we all have. Some of the sharpest people I know in this business have been hammered. And when you suffer a lot, you tend to say, "Hey, I don't want to do this anymore." Those who can gut it out, however, those who have the fortitude and the understanding have to dump the garbage. Just take the pain, and get it over with. Realign portfolios to the highest quality and build positions in companies that can make up for a lot of lost ground when the market recovers.
 
TGR: Greg, thank you for your time and your insights.

A Pause, Not the End for Gold & Silver

Posted: 10 Oct 2013 10:16 AM PDT

Why the bull market in gold and silver is taking a break...
 
GREG McCOACH is an entrepreneur who has successfully started and run several businesses in the past 30 years.
 
For the last 14 years, he has been involved with the precious metals industry as a bullion dealer, investor and newsletter writer, also publishing Mining Speculator, and writing a weekly column for Gold World.
 
Here he tells The Gold Report why he things gold and silver prices are only taking a pause, not suffering the end of their long bull markets...
 
The Gold Report: You wrote recently, "The 2008 crisis will pale in comparison to what is now on the horizon." Given that the 2008 crisis nearly destroyed the world economy, how bad will the next crisis be?
 
Greg McCoach: The derivative issues were never fixed after the last crisis. In essence, the laws were changed so that the banks didn't have to keep derivative liabilities on their books. That way, bank stocks could soar again. But the banks have acted even more recklessly since 2008 and are now in bigger trouble. The recent White House meeting with all the big financial players should be a warning to investors that something big is about to hit. The media touted this as a meeting to discuss the debt ceiling, but I would say it was about the crisis that is about to envelope the big banks again. Barack Obama didn't run that meeting, JP Morgan Chase ran the meeting and told everyone what was coming. The banks don't have the capital to cover their interest rate derivative problems that are as big as the Pacific Ocean. I would tell investors to expect ten times worse conditions from what we saw in 2008.
 
TGR: I've read that even if only 4% of the derivatives held by the banks are at risk, and only 10% of that goes south, it would completely wipe out the net worth of the top five banks.
 
Greg McCoach: At this point, the acceleration of what I consider tyrannical measures on the part of the US government has reached such a degree it's obvious that something is coming. Why would it buy billions of rounds of hollow-point ammunition? Why is it buying millions of ready-to-eat meals? Why would it take all these extra security measures? Obviously, the US government knows more than the general public does and it reveals something is wrong and the government is worried about it.
 
TGR: We had this situation after the scandal with HSBC where the US Department of Justice admitted that criminal acts were probably committed, but prosecution would be unthinkable because the big banks cannot be allowed to fail.
 
Greg McCoach: Well, that pretty much tells the story right there. The bureaucrats, Rebooblicans and Dumocrats, as Jim Willie says, don't represent the people of America anymore. They represent themselves and their elitist banker puppeteers. They're trying to control the message and all the outcomes. It's a train wreck in process, but you have to tip your hat to them – they have been able to keep it together for so long. We could have experienced the end game at multiple occasions in the past 12 years, but it now seems to me that the limits of their good fortune are quickly coming to a close.
 
If you're just watching CNN and FOX News, you're oblivious to what's really going on. But if you're a thinking person, you should start getting together food storage and get your investments in line for the major problems ahead. I can't tell you when it's going to happen because I don't have a crystal ball, but it's not a matter of if this is going to happen; it's just a matter of when.
 
TGR: What will be the warning signs of the next crisis?
 
Greg McCoach: The warning signs are all around us right now and have been for the last six months. The big meeting at the White House with all the financial people I already mentioned was a huge sign. The erratic behavior lately of the US government with the Middle East, particularly Syria, is also a sign. In recent weeks we have heard about a worldwide currency reset that is to take place in the very near future. This is telling those who have ears to listen that the Keynesian fraud of creating monies out of this air has reached a limit so they need to reset.
 
All of this means that we'll wake up one morning and life will be very different. You'll see markets performing erratically. You'll see civil unrest. Most people think it will have something to do with another banking crisis, a derivatives situation. It could be a new war. I think things could happen quickly and take us down a very dark path. All we can do is prepare for ourselves and our families. You have got to own physical gold and silver that is in your possession.
 
TGR: The macroeconomic indicators suggest that the prices of gold and silver should be much higher than at present. Why do you think that 2013 looks to be the year that the bull markets in these metals ended?
 
Greg McCoach: I don't think the secular precious metals bull market has ended. I think we're just taking a pause. I liken this to the move that happened in the 1970s when we made the US Dollar the official reserve currency of the world, and people could again own physical gold and silver. The gold price went from $35 per ounce all the way up to $195 per ounce. Then it collapsed to $105 per ounce. A lot of people thought that was it for gold. But then it ran to $855 per ounce.
 
Since then, we've hit $1950 per ounce, which was then corrected back to the $1200-1,300 per ounce level. We've been bouncing around $1200-1400 per ounce, and I believe this is just setting us up for the foundation of the next big move in gold, which will take us to much, much higher levels. I'm thinking $3500-5000 per ounce. It will be associated with collapsing currencies, the devaluing Dollar, problems in the banking sector, etc.
 
TGR: What will be China's role in this?
 
Greg McCoach: China is the world's biggest producer of gold, and now it is becoming the biggest holder of gold. It is dumping US Treasury bills and buying anything it can get its hands on.
 
TGR: Is there no question in your mind that gold and silver are bargains now?
 
Greg McCoach: Absolutely. People should be lining up to buy on this dip. This is a great opportunity. Nothing has fundamentally changed. Has the government started to become fiscally responsible? I laughed out loud when I heard about this "taper" of quantitative easing. What a complete joke. This should show thinking people the gig is up for the financial fraud being perpetrated at the Federal Reserve.
 
TGR: Many people argue that interest rates can't go up because then the US won't be able to pay its debt, and the whole derivatives market will be threatened.
 
Greg McCoach: If interest rates go up they are damned. If interest rates go down they are damned. Either way the Fed is screwed because of the derivative situation with their largest banks. I would expect interest rates to move in the direction that allows their banks and the US government to survive the longest, but there is no way out of this that I can see.
 
TGR: What do you think of the argument made by the Gold Anti-Trust Action Committee that the big banks and the central bankers are suppressing the prices of gold and silver?
 
Greg McCoach: The government doesn't like rising gold and silver prices because it tells the public that something is wrong. Now, does the government come into our market and play games? Absolutely, but I don't really pay too much attention because, ultimately, I believe free markets will dictate the course of the metals prices. It's yet another sign on just how out of control the powers that be are when they seek to control the outcome of everything. They think they are God, but they're about to find out otherwise.
 
TGR: You wrote on Sept. 20, 2013 that you've lost confidence in "a recovery this fall in our overall junior mining stock market." If you are right, doesn't this mean that many juniors won't survive? And if this occurs, will it make the survivors stronger?
 
Greg McCoach: Absolutely. This is an unfortunate chain of events, but in many regards it needed to happen. There were just too many junior mining companies. There are only so many talented teams of professionals in the industry that know how to make the discoveries that can be developed into producing mines. When you look at the monies that have been raised in this sector in the last 5-10 years, we have very little to show for it. All the low hanging fruit has already been discovered.
 
So this "wipeout," as I'm referring to it, has been very difficult on investors, people employed by mining companies and newsletter writers like myself. I was hoping we would have a recovery this fall. The early signs in July and August seemed to indicate one because the strongest companies started to move and in many cases doubled from their lows in late June, early July. That is usually a sign that things are going to float again, but it all fell apart in September.
 
TGR: You have recommended that investors reduce their portfolios "to just a few of the highest quality stocks as we await the recovery." What are the criteria that determine the highest quality stocks?
 
Greg McCoach: Companies with plenty of cash on hand that don't need to raise money right now. It is almost impossible to raise money in this sector at this juncture. Look for companies that are producing from high-grade projects with low costs, companies that will make money even if gold and silver go down further from current levels.
 
Even with companies like these, there is always something making things more difficult. There are a lot of great companies I like in Mexico, where the politicians are trying to change the laws to charge more taxes. Politicians have an insatiable appetite for other people's money. It will affect companies in Mexico with low-grade projects to the point it may force them out of business.
 
TGR: When do you think the market will turn around?
 
Greg McCoach: Things are not going to get better at least until 2014, and in the meantime a lot of juniors hanging by their fingernails are going to go out of business. That will solidify the market for the survivors. Maybe that is as it should be. I do believe that monies we've lost in this sector in the last two years can quickly be made up if investors maintain a position, or build positions, during these low times in the highest quality companies. Because when the market does recover, it is going to be a screamer.
 
TGR: Many long-time investors in the junior space have been so battered over the last couple of years that they've given up. What is the best reason for people to stay invested in juniors?
 
Greg McCoach: I can't blame people for getting so frustrated. They've taken horrendous losses; we all have. Some of the sharpest people I know in this business have been hammered. And when you suffer a lot, you tend to say, "Hey, I don't want to do this anymore." Those who can gut it out, however, those who have the fortitude and the understanding have to dump the garbage. Just take the pain, and get it over with. Realign portfolios to the highest quality and build positions in companies that can make up for a lot of lost ground when the market recovers.
 
TGR: Greg, thank you for your time and your insights.

The Calm Before the Gold and Silver Precious Metals Storm

Posted: 10 Oct 2013 09:42 AM PDT

The financial hurricane hit the world in 2008 destroying huge swaths of assets, real estate valuations, numerous banks and financial institutions.  As the storm cleared, the Fed and central banks stepped in by flooding the world with money to supposedly assist in dealing with the damage while providing special programs to rid the banks of debris and garbage clogging up their businesses. After trillions of dollars of so-called monetary assistance, the financial damage appears to be repaired giving the public a false sense of security that the storm has finally passed.  Unfortunately, the world has only dealt with the first part of the storm and is now sitting in the eye of the financial cyclone.

Feds Seek 600,000 Bitcoins in Digital Drug Bust

Posted: 10 Oct 2013 09:29 AM PDT

It was a wild ride last week in the world of the Deep Web, that section of the Internet that requires special tools to access. The feds took down the site called Silk Road and claim to have arrested its founder and administrator. The news streams were filled with lurid tales of derring-do in this world that seem to be drawn from a TV mini-series.

My first step was to see if I knew this fellow named Ross Ulbricht whom the feds unmasked as the Dread Pirate Roberts, the hero to cyberpunks everywhere. Sure enough, I found a correspondence from 2009 in which he spoke about a real-time experiment in market action. Thinking that he was talking about business cycles — this must have been on my mind — I said it sounds great.

In the meantime, it never occurred to me that I might actually have exchanged emails with the founder of the Silk Road. It has long been an eBay-style marketplace for illicit goods and services. Yes, narcotics are among them. It sounds scary, doesn't it? Yes, it does, until you actually visit the place, as I did only a few months ago.

Here you have many sellers of marijuana, cocaine, methamphetamine, and many psychedelics. There are customer reviews, solid product descriptions, lots of back and forths between users, a high level of quality control, and all the apparatus we've come to expect from regular Internet shopping.

None of these products appeal to me in the slightest. The drugs I like — caffeine and alcohol — you can buy at the grocery store. But you come to realize something important after browsing the Silk Road. Maybe it is obvious. Maybe you already know this. But it needs to be said: The desire on the part of a large swath of humanity to dope itself up with something cannot be suppressed, no matter how hard governments try.

Everyone has an interest in seeing peace and normalcy come to these markets. Silk Road was achieving exactly this…

Yes, many of these drugs are personally harmful. Some are not, and it is absurd that they are illegal at all. Regardless, none of them embody some kind of evil that can be or must be vanquished from the planet. At these markets, you find willing buyers and willing sellers, no different from any other sector of life. What makes this market different is that it is illegal, so, therefore, it is dangerous.

At one level, it is incredible and amazing that the Silk Road survived as long as it did — out there in plain view for anyone who downloaded the right browsing software. It was the most conspicuous sign on the planet of the impotence of government. Despite all the power, all the guns, all the courts and legal status, government couldn't get rid of the thing.

The tools of the Deep Web take some of the danger away, and that is all to the good.

So how did the feds finally catch up with the guy who ran the Silk Road? It wasn't through technological failure or compromise. Ulbricht, who allegedly ran the site, was just a bit too reckless in throwing around his name and clues to his identity. The investigator on the case traced him through various public postings, connected the dots, and even ran a little sting operation designed to ramp up the charges (an agent pretended to be a hit man for hire, and got himself hired!).

Who cheered the shutdown? Governments, sure. But there's another group out there who would be thrilled by the end of Silk Road. That would be the drug cartels. Just as Amazon meant competitive pressure on the big sellers and publishers, just as PayPal became a rival to the big money transfer companies, and just as online brokers have eaten into the market for large brokerage houses, so too did Silk Road begin to loosen the grip of the violent drug cartels.

In other words, this site was a threat to the powers that be both in government and in the drug business. Imagine bypassing the middleman and letting producers and consumers connect directly? No more dangerous alleyways. No more risky cash transfers. No more turf wars. The "turf" becomes digital, which is perhaps the best way to optimize search. Guns and bullets are replaced by user rankings and reviews.

So let's just grant that there will be no end to the demand for, and, therefore, the supply of, drugs. The government's war on drugs has actually intensified use and driven people to ever harder forms of drugs. Everyone has an interest in seeing peace and normalcy come to these markets. Silk Road was achieving exactly this, which is why many people think that the Dread Pirate Roberts (the nomenclature of Silk Road's owner) ought to get the Nobel Peace Prize.

And please, don't think for even one instant that this shutdown does anything to curb the progress of these Deep Web markets. At least three replacements for Silk Road popped up overnight. Users and suppliers are all busy making other plans. The next iteration won't make the same mistakes. Just as the Napster shutdown began the great era of file sharing, so too will the Silk Road shutdown mean a boom-time business in online drug hookups.

In the course of the seizure of the domain, the government also took all money that was in escrow within the system. The money, however, was denominated in the currency that the Silk Road accepted, which was Bitcoin. Suddenly, the government has found itself as a major holder of Bitcoin: all 27,000, which are easily visible on the blockchain. Now the government has a public address, to which many thousands have been sending Bitcoin along with choice words in the comment section of the transaction. You can enjoy a fun evening reading them all.

Interestingly, however, there are still another 600,000 Bitcoin (valued at around $80 million) that the feds can't seem to get. Most likely, that's because the key to Ulbricht's personal stash is in cold storage on the blockchain and can be accessed only through what's called a "brain wallet." That means that only Ross himself has the key to access it. What will they do to pry it out of him? To what lengths will they go? Waterboarding? Solitary confinement? Worse?

Many users of Silk Road have been looted for no reason. A peaceful marketplace has been shuttered.

Fascinating, isn't it? One year ago, governments were laughing at this digital currency. Most everyone was. People said it was a fake currency, an Internet scam, a money-crankish Ponzi scheme. How times change! Now the world ‘s largest government is crying out, desperately trying to grab these coins. They consider them valuable assets, which, at $140 a pop, they certainly are.

Until last week, there were plenty of people who claimed that the value of Bitcoin was entirely wrapped up with its use on the Silk Road. That's a testable proposition. The Road went down, and Bitcoin swooned for a few hours. But by the next day, the dollar exchange rate was actually higher than it was before the seizure. Now it is stabilized.

Therefore, there is another irony. Bitcoin is benefiting from this shutdown. What was marginal and odd only last week is now seen as robust and growing and probably the future of monetary economics. Where are the critics? As always, they have snuck away and have not admitted that, as always, technology has proven itself a superior guide to the future than intellectuals and governments.

Even so, the tragedy remains. Many users of Silk Road have been looted for no reason. A peaceful marketplace has been shuttered. A promising path to a future world without drug cartels has been blocked. But so long as government gets its Bitcoin, I gather the power elite don't really care.

Sincerely,

Jeffrey Tucker
for The Daily Reckoning

Ed. Note: As powerful as the U.S. government is (or thinks it is), entrepreneurs and innovators will continue to find a way to circumvent this perceived power. And there will always be opportunities to make money because of it. This concept is discussed regularly in Laissez Faire Today – a free email, designed specifically for free-thinking, liberty-loving individuals who want to know just how to get the government off their backs… and how to profit in the process. If that sounds like you, we suggest you give it a try. Sign up for FREE, right here.

Original article posted on Laissez Faire Today

Take Profits In These High Flying Sectors and Consider The Historically Undervalued Miners

Posted: 10 Oct 2013 09:21 AM PDT


U.S. stocks are rallying on hopes on some sort of deal coming out of Washington.  Just like we have witnessed over the past several years, lawmakers will come to some sort of last minute deal to kick the debt can down the road.  Over the next week look for some sort of move to avert a default.

The markets could rally short term on such a deal, but over the longer term the equity and housing markets appear to be ready for a major correction after rallying for two years.  We are witnessing bubbles in certain areas of the market which I encourage investors to steer clear from especially banks, housing, social media and biotech as these are very crowded trades filled with promoters, snake oil salesman, charlatans and day traders.

Overbought bubbles end up in devastating losses.  Stay away from high flying stocks and instead focus on value in the mining sector.  Meanwhile, the U.S. government has now been shut down for almost two weeks and may be on the verge of a credit downgrade.  The gridlock is over Obamacare which will cost the U.S another trillion dollars of debt over the next few years.  This will force Bernanke’s successor Yellen to continue monetizing the debt through quantitative easing which may be increased over the next few months as unemployment is rising to the highest levels in 2013.  

In my opinion, investors should steer clear of real estate as home sales fueled by record low interest rates and hedge funds could slow down.  Interest rates are beginning to rise rapidly despite $85 billion a month of QE.  Unless we see a significant increase of quantitative easing be prepared for a major exodus out of bond funds into real assets in the form of precious metals, commodities, energy and mining stocks.  For over two years, pundits in the media have claimed that the Fed will taper or exit from QE.  This has been wrong.  The Federal Reserve has only increased QE and may consider doing so shortly.

Stick to the beaten down sectors that have been correcting for more than two years and showing historical undervaluations.  Stay away from the overbought financials and housing stocks are in fact at a greater risk of correcting with rising interest rates.

Rising rate environments usually predicts higher commodity prices and inflation.   Historically, it is wise to position oneself into precious metals and commodities when interest and inflationary rate risk are great, yet the masses are still chasing the latest high flying biotech or social media stocks.  I think we could be on the bring of a major spike in interest rates that were manipulated lower for many years.  This could cause a correction in equities and bonds.  Investors may race into precious metals, commodities and mining stocks which are being completely ignored by the public.

A catalyst for this rotation could be caused by a large sovereign nation selling U.S. debt and not finding willing buyers.  We could see increased volatility in the foreign exchange markets, interest rates and commodities due to capital seeking inflationary havens.

The real estate and banking sectors could turn lower quickly with interest rate spikes forcing The Fed to stop all taper talk and possibly increase QE.  The housing numbers and high unemployment shows the economy is still on shaky legs.

Home sales are a huge part of this recent recovery in equities.  Yields are reaching two year highs and may soon start putting a damper on the sector.  QE is losing its effect on bond yields and we must all prepare for a major move in interest rates.

Be careful if you hold adjustable debt.  Stick to companies with no debt or at least paying down debt with positive cash flows and strong treasuries and shareholder base.

Remember the S&P 500 has made a 150%+ move since early 2009.  When stocks are high and commodities are cheap I favor mining equities as historically high commodity prices follow equity bubbles.  I believe we may be entering a very strong cycle for our wealth in the earth sectors as more savvy investors may capture profits in U.S. equities/housing and begin hedging against inflationary risks by buying mining equities and precious metals.

One excellent company which should be on everyone’s radar is Comstock Mining (LODE) who was recently invited to ring the opening bell on the New York Stock Exchange to commemorate one year of gold production in the historic Comstock Mining District.  I was invited to attend and you can see the opening video by clicking here…

Comstock Mining has the who’s who list of shareholders and mutual funds such as U.S. Global Investors, Gabelli Funds and Century Management.  Comstock Mining is well capitalized on the premier New York Stock Exchange and is increasing institutional support during a bear market in precious metals.  The company recently announced that they raised $8.6 million for expansion of production and shows that major capital is supporting this operation.

Comstock Mining is significantly outperforming the gold miners index reflecting its outperformance during a challenging precious metals market.  Look for support to hold near lows and an eventual reversal and breakout at $2.25 as it may be forming a bullish reverse head and shoulders pattern.

This outperformance during the hard times may forecast its emerging leadership in the gold mining sector as they may be able to sustain increasing production and resource growth with lower cash costs.  Smart investors may just be beginning to realize the potential and growth of this historic mining district which built The West.

Comstock Mining has delineated over 3 million ounces of gold and this is just from a tiny portion of the district.  There are very few companies like Comstock Mining (LODE) growing production, paying down debts and reducing cash costs in the entire industry.

In addition, Comstock Mining has great potential to grow to 40k gold ounces, on its path to 150k ounces with the addition of the Dayton Mine.  Not only should the company be able to produce a potential cash flow, but these funds could possibly sustain major resource growth without having to continue to dilute shareholders by relying solely on the capital markets.  There is great geological potential in this district and I would not be surprised over the next 3-5 years to see this resource expand exponentially both in size and grade.

Recent results show a major increase in production growth both in gold and silver.  The company believes the production figures will increase significantly in the near term.  I have been to the property and Comstock has great infrastructure with lower capital costs than many of the majors.  Cash flow and potential earnings over the next few quarters can possibly make the company self sustainable to drive further exploration and resource growth.

I visited the operation and met with the highly experienced technical team led by some of the mine builders who worked for the majors.  Watch my recent interview with Comstock Mining CEO Corrado De Gasperis where we discuss the opening bell at the NYSE and highly encouraging fundamentals by clicking here… or on the video below.

For more information on Comstock Mining (LODE) contact:

Kimberly Shipley, Manager of IR, 775-847-0545, shipley@comstockmining.com

Disclosure: Author is long Comstock Mining and the company is a sponsor on my website.
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The Daily Market Report

Posted: 10 Oct 2013 09:16 AM PDT

Gold Choppy As Congress Considers Punt


10-Oct (USAGOLD) — Gold has been choppy this morning, straddling the $1300 level. News that the GOP will proffer a six-week debt ceiling extension has led to optimism that the dreaded debt default will be forestalled at least for a little while.

Stocks seemingly love even the smallest of can-kicks, with the DJIA now up nearly 200 points. Signs of even a little bit of movement in the Washington logjam and surging stocks has diminished gold’s safe-haven appeal, leaving the yellow metal well contained within the recent range.

So the drop-dead date for the nation’s statutory borrowing authority becomes November 21, rather than the October 17 date established by Treasury Secretary Lew. Big whoop!

Lew, speaking before the Senate Finance Committee, worried that the additional borrowing costs associated with a failure to raise the debt ceiling could adversely impact Americans for “generations to come.” “If interest rates rose, it would have a real impact on American households. The stock market, including investments in retirement accounts, could tumble, and it could become more expensive for Americans to buy a car, own a home, and open a small business,” Lew said.

That all may be true, but the Treasury Secretary seems to have retreated somewhat from earlier warnings that failure to raise the debt ceiling would have catastrophic results. Perhaps this more measured tone is the result of relative calm displayed by Moody’s ratings service, which said:

"We believe the government would continue to pay interest and principal on its debt even in the event that the debt limit is not raised, leaving its creditworthiness intact," the memo says. "The debt limit restricts government expenditures to the amount of its incoming revenues; it does not prohibit the government from servicing its debt. There is no direct connection between the debt limit (actually the exhaustion of the Treasury's extraordinary measures to raise funds) and a default."

There are many conflicting signals at this point, but the bottom line is that short-term can-kicks are the only solutions being pitched right now that have a remote chance of finding support from the two deeply entrenched political parties. A six-week debt ceiling suspension, or a six-week CR for that matter, does absolutely nothing to solve our nations structural fiscal issues.

At best, each side lives to fight again another day…just a few short weeks down the road. As I’ve said before, that’s no way for the global economic superpower to be conducting its business.

Man Who Predicted Gold Takedown Says West Is In Danger

Posted: 10 Oct 2013 08:57 AM PDT

In the aftermath of the takedown in gold and silver, today the man who predicted this downside action ahead of time spoke with King World News about what investors should expect next. William Kaye, who is one of the savviest and most well-connected hedge fund managers in the world, also told KWN exactly why the plunge is being orchestrated and what will emerge from all of this. Kaye, who 25 years ago worked for Goldman Sachs in mergers and acquisitions, had this to say in his fascinating interview.

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

Safe Haven Demand Still In The Cards For Gold - "Tech Speaking" w/Jim Wyckoff

Posted: 10 Oct 2013 08:37 AM PDT

Kitco News speaks with Jim Wyckoff about the government shutdown, the upcoming FOMC meeting minutes release and gold prices on this edition of "Technically Speaking." According to Wyckoff, the...

[[ This is a content summary only. Visit http://goldbasics.blogspot.com or http://www.newsbooze.com or http://www.figanews.com for full links, other content, and more! ]]

Ron Paul - The End of U.S. Dollar Hegemony

Posted: 10 Oct 2013 08:34 AM PDT

By Nick Giambruno, Editor, International Man: I spent the past weekend in Tucson for the Casey Research 2013 Summit, indeed a memorable and information-packed experience. It was truly a pleasure to meet with everyone who joined us. Notably, it was extremely encouraging to meet so many intelligent people who had taken concrete steps to internationalize their savings and obtain a second passportâ€"and thus reducing their exposure to whatever happens in their home countries.

Gold: If Not Now, When?

Posted: 10 Oct 2013 08:14 AM PDT

Nichols on Gold

Gold Markets Are Not Efficient, Don't Reflect Fundamentals and Understate Market Value

Posted: 10 Oct 2013 07:42 AM PDT

It may be in the reader's mind that somehow all gold markets come together at some point and an exact representation of demand and supply is given by the gold price. The reality is that most markets are entirely separate from each other and reflect the buying and selling in that individual market only. These markets are only joined by the 'arbitrage' activity, usually only by the professionals in the market -- banks mainly -- who can both electronically and physically move gold from one market to another.

Gold Markets Are Not Efficient, Don't Reflect Fundamentals and Understate Gold's Market Value - Part III

Posted: 10 Oct 2013 06:43 AM PDT

Ninety-five percent of transactions in the futures and options markets are terminated before they reach the date on which gold has to be delivered. The purpose of this is not simply to make profits but to hedge a physical position. Read More...

China’s Hunger for Gold Triggers Speculation About Reserves

Posted: 10 Oct 2013 06:28 AM PDT

10-Oct (The Wall Street Journal) — China is on pace to consume a record amount of gold this year, which may be partly due to the central bank diversifying its foreign-exchange reserves, analysts say.

China imported around 861.40 metric tons of gold via Hong Kong in the first eight months of the year, more than double the 361.02 tons during the same period last year, new data from Hong Kong Census and Statistics Department showed. Imports from Hong Kong fell in August from the previous month but remained elevated, the data showed.

Gold prices hit a three-year low in June but have since rebounded.

Strong demand in China is driven largely by consumers, and jewelers are restocking following a spike in buying in April, when prices began tumbling. However, analysts say the People's Bank might also be taking advantage of the lower prices to bulk up its reserves.

…"My suspicion is that they [Chinese government] are increasing their gold holdings as part of their foreign reserves," said Joyce Liu, an investment analyst with Phillip Futures in Singapore.

…The World Gold Council has estimated that Chinese imports this year will top 1,000 tons–believed to be a record amount.

[source]

Why gold is set for a 20% rally

Posted: 10 Oct 2013 06:12 AM PDT


10-Oct (CNBC) — Amid uncertainty in the U.S. and risk aversion in global markets, gold’s performance as a traditional safe-haven has proved lackluster. Yet one strategist reckons the precious metal could rally as much as 20 percent in the next one to three months.

Sean Hyman, editor of the Ultimate Wealth Report, a financial newsletter, says the reason for the bullish call is partly based on a view that under Janet Yellen the Federal Reserve is likely to maintain its hefty monetary stimulus, fueling inflation and boosting demand for gold as an inflation hedge.

U.S. President Barack Obama on Wednesday nominated Yellen, the Fed’s Vice Chairman, to replace Ben Bernanke when he steps down as Fed chief in January.

“Gold is having a traditional pull-back and I think we will have another run up to the $1,500, $1,600 level in the next one or two or three months,” Hyman told CNBC Asia’s “Squawk Box” on Thursday.

[source]

Gold drops on stronger dollar, hopes of U.S. breakthrough

Posted: 10 Oct 2013 06:04 AM PDT

10-Oct (Reuters) — Gold fell to about $1,300 an ounce on Thursday as the dollar rebounded on signs that Washington is moving towards breaking a stalemate over debt and averting a U.S. default.

House Republican leaders will visit the White House on Thursday as efforts intensify to break the impasse that has left parts of the U.S. government shuttered for more than a week.

Both the Republican and Democratic parties earlier floated the possibility of a short-term increase in the country’s $16.7 trillion debt limit to avoid a default and allow time for broader negotiations on the budget.

“If there is some kind of risk aversion or uncertainty, you would expect gold to move higher, which has not been the case with the U.S. budget impasse unfolding,” ABN Amro analyst Georgette Boele said.

“Investors have continued to sell gold on rallies, and expectation the U.S. political deadlock will soon be behind us could result in further losses.”

[source]

Thursday Morning Links

Posted: 10 Oct 2013 05:46 AM PDT

MUST READS Ryan steps up to shape a deal – The Hill Obama's Chicken Little challenge – Politico Lew takes on debt limit ‘deniers’ – The Hill The Dollar and the Debt Ceiling – Project Syndicate No default? Accept that assumption at your own risk – Barron’s Ending the debt limit crisis: Dear Ben Bernanke – Reuters For Janet Yellen, quiet patience [...]

"Avoid Buying Gold" Say Analysts as US Moves 1 Week to Default, India's Import Rules "Work" to Crush Trade Deficit

Posted: 10 Oct 2013 05:26 AM PDT

GOLD BUYING in Asian and London wholesale trade was "quiet" said dealers Thursday morning, with prices again dipping below $1300 per ounce as politicians in Washington mulled a short-term fix to avoid the $17 trillion debt ceiling triggering a government default in one week's time.
 
Silver also eased back, trading below $22 per ounce, as world stock markets rose and major government bonds slipped, nudging 10-year US Treasury yields up to 2.70%.
 
"The inability [of gold prices] to retest recent highs of towards $1350 is a disappointment," says technical analysis from Scotia Mocatta in New York.
 
"The one-month trend line (now at 1324) should limit any tentative rebound with 1317 being an immediate resistance," reckons a chart comment from Societe Generale's technical team.
 
Gold buying in India – the world's former #1 consumer nation – has been so dented by the government's anti-import rules that the country's trade deficit shrank to a 30-month low in September, officials said yesterday.
 
"This is working out as the government intended," the Financial Express quotes commerce secretary S.R.Rao after India's monthly trade deficit came in below $6.8 billion for the first time since April 2011.
 
Instead of buying gold, many Indian households have turned to silver says the Economic Times, with silver imports already doubling 2012's full-year total over the Jan-Aug. period at 4,073 tonnes according to Thomson Reuters GFMS.
 
"The record high was 5,048 tonnes in 2008," says the paper.
 
Gold buying in central China's Hubei province has meantime risen 41% by value so far this year, the Xinhua agency reports, despite the sharply lower price compared with the first 8 months of 2012 totalling the equivalent of $1.3 billion.
 
Today the Bank of England followed the US Fed, European Central Bank and Bank of Japan in voting for no change to current policy, holding interest rates at record lows and maintaining its £375 billion ($600bn) quantitative easing gilt-buying scheme.
 
The Pound bounced 0.4 cents after the news from a new 3-week low of $1.5910. That helped prices for UK investors buying gold move above £815 per ounce.
 
The last time any member of the UK's Monetary Policy Committee voted to raise interest rates was July 2011.
 
Consumer price inflation in the UK has since averaged 3.2% per year, topping the Bank of England's 2.0% target in all 27 months.
 
"[US Fed] tapering has been postponed not canceled, and is expected by year end," wrote Morgan Stanley analysts earlier this week, adding that Washington's "political stalemate" over the debt ceiling will soon be resolved.
 
"Consequently, we see little immediate upside to the gold price either in the immediate future or next year."
 
"We recommend staying away from gold," said Morgan Stanley analyst Joel Crane overnight, repeating the investment bank's 2014 average forecast of $1313 per ounce.
 
Should the debt ceiling be hit without a resolution one week today, says investment bank and bullion market-maker HSBC in a note, "It is possible that investors move into Treasuries as a safe haven" instead of buying gold, "despite the possibility of US default."

Gold better at 1304.00 (+1.50). Silver 21.93 (+0.114). Dollar slips. Euro higher. Stocks called higher. US 10yr 2.70% (+4 bps).

Posted: 10 Oct 2013 05:06 AM PDT

Stay Away from Gold Says Morgan Stanley as India Doubles Silver Imports

Posted: 10 Oct 2013 04:29 AM PDT

WHOLESALE PRICES in Asia and London for physical gold slipped again Thursday morning, dipping back below $1300 per ounce as politicians in Washington mulled a short-term fix to avoid the $17 trillion debt ceiling triggering a government default in one week's time. Silver also eased back, trading below $22 per ounce, as world stock markets rose and major government bonds slipped, nudging 10-year US Treasury yields up to 2.70%.

Commodity price benchmarks are wrong as often as 27% of the time

Posted: 10 Oct 2013 02:56 AM PDT

By Lananh Nguyen and Isaac Arnsdorf
Bloomberg News
Wednesday, October 9, 2013

http://www.bloomberg.com/news/2013-10-08/commodity-prices-wrong-as-often...

Commodities traders who buy and sell as much as $5.67 trillion of raw materials a year say the benchmark prices for everything from oil to iron ore to gasoline are wrong as often as 27 percent of the time.

In a Bloomberg News survey conducted during the past eight weeks, 85 traders and analysts said they have little confidence in the assessed prices of crude, metals and iron ore. Regulators, including European Union Competition Commissioner Joaquin Almunia, may examine commodities markets, having already increased investigations of manipulation of benchmarks for interest rates, derivatives, foreign exchange and oil.

Five years after the global credit crisis prompted more regulation of banks, benchmark prices for hundreds of commodities are determined through surveys of anonymous traders who may have a stake in the outcome of the assessments. Unlike stock prices, available in real time at regulated exchanges for all investors to see, many raw materials that go into food, clothing and power are bought and sold in private.

... Dispatch continues below ...



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"There will be growing pressure for more regulation," David Wilson, director of metals research and strategy at Citigroup Inc. in London, said by phone Sept. 3. "Commodities markets have traditionally been a backwater that only specialists would have been involved with. Clearly these markets haven't changed with the times."

While prices for stocks, bonds, and currencies are set by actual trades on exchanges, benchmarks for coal, iron ore, fertilizer, gas and some metals are determined by journalists. They establish the prices by collating data on available bids, offers and trades as well as phone and e-mail surveys. Those assessments are often used to determine payments in long-term contracts between buyers and sellers.

Bloomberg surveyed analysts and traders of energy, metals, iron ore, carbon and power. They were granted anonymity so they would give their unguarded opinions to the question: "How many times out of 100 instances do you estimate the assessed benchmark price for the main commodity you trade is unrepresentative of the true level?"

The mean answer was 27 and the median was 20. Crude benchmarks were the least representative in markets where more than five respondents gave answers, followed by oil products, metals and iron ore. Agricultural commodities had the greatest accuracy, according to the survey. About 270 people were contacted. Most of those who declined to give answers said they couldn't quantify how frequently prices were inaccurate.

"The survey shows there is clearly a concern that others could be using these price-making mechanisms to bias the price up or down depending on their interests," Shaun Ledgerwood, a senior antitrust consultant at the Brattle Group who formerly worked at the U.S. Federal Energy Regulatory Commission, said by phone Sept. 30. "However, from the traders' perspective, no other mechanism provides as reliable a source of information."

The responses represent a fraction of the thousands of commodities and energy traders in the world. The 10 largest investment banks employ almost 2,300 people across trading, structuring, sales and research publishing, according to Coalition Development Ltd., a London-based research company.

The system of price benchmarks in the oil market "isn't broken," Ian Taylor, president and chief executive of Vitol Group, the world's largest independent oil trader, said in an interview at the Oil & Money conference in London Oct. 1. Some prices are hard to assess because there aren't enough trades, he said.

"We occasionally don't like the price quotations but we don't think it's fair to say you can't trust them," Taylor said. "There's a logical reason that they are what they are, and you can't say they're demonstrably wrong."

Published benchmarks provide more transparency than would exist without them, and there are no alternatives, Ehsan Ul-Haq, a senior market consultant at Walton-on-Thames, England-based KBC Energy Economics who has almost 20 years of experience in the oil industry, said by phone Oct. 1.

Assessments in spot markets contrast with exchange-listed futures ranging from crude oil to corn, which trade almost around the clock and are publicly disclosed. More than 2,000 commodity contracts trade on bourses worldwide, according to data compiled by Bloomberg based on listings by the CME Group Inc. and IntercontinentalExchange Inc.

Ensuring the accuracy of benchmarks has gained urgency as the global commodities market surged. World trade in agricultural, mining products and fuels swelled to $5.67 trillion in 2011 from $1.34 trillion a decade earlier, according to the World Trade Organization in Geneva.

The International Organization of Securities Commissions, the Madrid-based group representing regulators from more than 100 countries, set tougher guidelines for publishing benchmarks in a July 17 report, including making prices based on "observable" deals where possible.

Banks, traders and benchmark publishers could be fined for failing to follow rules aimed at reducing the potential for rate-rigging, according to EU rules proposed Sept. 18. While prices would have to be based on real transaction data, those underpinning the commodity markets may be allowed special treatment because of their "sector-specific characteristics," the plans show.

Regulators say they aren't convinced of the integrity of commodity assessments. The EU's probes will probably spread to raw materials, Almunia, a vice-president of the European Commission, said on the EU assembly's website May 28.

"We have started with the financial sector, now we are in the energy sector, and probably in the raw materials or in other cases we will need to pay attention also," he said.

Almunia's comments came after antitrust authorities opened a probe into manipulation of oil prices. EU investigators searched the offices of Platts, the unit of New York-based McGraw Hill Financial Inc. that assesses the price of Dated Brent, the benchmark for more than half of the world's crude. Authorities also raided BP Plc (BP/), Royal Dutch Shell Plc (RDSA) and Statoil ASA (STL), and sought information from Vitol Group, Gunvor Group Ltd. and Glencore Xstrata Plc. (GLEN)

Spokesmen for BP, Shell, Statoil, Gunvor and Glencore declined to comment, as did a spokeswoman for Vitol.

The Federal Trade Commission is investigating oil prices, mirroring Europe's inquiry, two people familiar with the matter said in June. The FTC is looking at the impact that possible manipulation of the benchmark could have on physical and derivative oil markets in the U.S., a person who asked not to be named because the matter is confidential said in July.

Regulators around the world have tried to make the financial system safer and more transparent in the five years since the collapse of Lehman Brothers Holdings Inc. As they examine markets that remain opaque, they uncovered attempts to rig the London interbank offered rate, or Libor, referenced in contracts valued at about $600 trillion. Royal Bank of Scotland Group Plc, UBS AG and Barclays Plc were fined a total of about $2.5 billion since June 2012.

Those probes are continuing. Last month, U.S. prosecutors charged three former ICAP Plc (IAP) employees with manipulating Libor, and the London-based interdealer broker was fined $88 million in a five-year international probe of rigging of benchmark interest rates.

Authorities are also investigating manipulation of ISDAfix, a benchmark in the $379 trillion market for interest-rate swaps. Almunia said Oct. 7 on the EU's website that he is examining possible irregularities in currency rates following a Swiss probe into whether banks colluded to manipulate the $5.3 trillion-a-day foreign exchange market.

Libor and ISDAfix are part of a suite of financial benchmarks that underpin about $1 quadrillion of assets and trades, almost 14 times global economic output in 2012.

Royal Bank of Scotland passed a currency trader's instant message records to U.K. regulators after concluding the communications may have been inappropriate, according to two people familiar with the matter. RBS uncovered the chats after opening an internal probe following a Bloomberg News report in June that traders at some of the world's biggest banks may have sought to manipulate benchmark foreign exchange rates.

RBS, Deutsche Bank and Citigroup are among firms reviewing e-mails, instant messages and phone records of their foreign-exchange employees for evidence of potential manipulation, according to three people with knowledge of those probes. Spokesmen at all the firms declined to comment.

Requiring that commodity-price benchmarks be set by observable deals may backfire should traders decide it's safer to avoid participating in assessments, said Clare Hatcher, a consultant at London-based law firm Clyde & Co.

Methods for pricing commodities evolved over as long as 130 years and gained acceptance in part by providing more information to the market than was previously available.

For crude oil and refined fuels, Platts publishes the names of companies, prices, delivery ports and other transaction details. It assesses prices through bids, offers and transactions made by phone, instant message or online during prescribed times, known as the market-on-close process, which subscribers to the service can see.

The process began in 1992 and is used for selected products, such as Dated Brent crude, that have industry-agreed specifications. More than 60 percent of the world's internationally traded crude oil was priced against Dated Brent as of May 2011, according to a report by Platts at the time.

Before market-related pricing systems were adopted in the late 1980s, oil prices were set by large multinational companies and later by the Organization of Petroleum Exporting Countries, according to the Oxford Institute for Energy Studies.

In other markets, such as coal and iron ore, transaction details are published when buyers and sellers agree to provide them. Platts reporters discuss bids, offers and deals with participants to determine daily prices. In the absence of verified deals, reporters use information such as bids and offers and related prices in other markets. Judgment is used to exclude data that don't follow Platts procedures or are considered out of line.

"In all of Platts' data-collection processes for its assessments, our aim is to bring transparency to price discovery by publishing as much detailed and meaningful information as possible," Kathleen Tanzy, a New York-based spokeswoman for the company, said in an e-mailed statement Oct. 4. "In our oil and oil products assessments, the degree of transparency our market-on-close price assessment process provides is unparalleled, identifying all data by company name."

Sugar, coffee and cocoa are determined in private negotiations, with prices set at a certain amount above or below exchange-traded futures. In these spot markets for prompt deliveries, reporters call traders and brokers and then publish the values in news articles.

In Platts's experience, there is always someone who doesn't agree with a price assessment, perhaps because the market moved against his or her position, Tanzy said. Platts assessments reflect market value as determined between buyer and seller in the open market and reported to Platts, she said in a previous e-mail.

Platts gave the EU a presentation outlining its market-on-close assessment, Tanzy said, declining to provide details of the meeting.

The company is an independent party with no financial stake in whether prices rise or fall, Jorge Montepeque, global director of market reporting, said in a July interview.

Argus Media Ltd., a competitor of Platts, hasn't been involved in the EU investigation and won't speculate about scrutiny of oil or other markets, Seana Lanigan, a spokeswoman for the London-based company , said in a July 26 e-mail. Argus is implementing the principles for oil-price reporting recommended by IOSCO, she said.

"In 40 years we've never had any serious complaints or legal action about our price assessments," Adrian Binks, chairman and chief executive of Argus, said by phone Oct. 4. An external review of Argus's process will be published in the next month, he said.

Bloomberg LP, the parent of Bloomberg News, competes with Platts, Argus and other assessment companies in providing market news and information.

Even for gold, with its pricing system that has lasted more than 90 years, it would be "naive to discount the possibility of price manipulation," said Mark O'Byrne, director at brokerage GoldCore Ltd. in Dublin. In the spot market, transactions between banks are reported by participants directly to news organizations. Prices used by mining companies for hedging are published by London Gold Market Fixing Ltd. Five banks carry out fixings every morning and afternoon to set benchmark prices.

The China Iron & Steel Association, representing iron-ore buyers from the world's largest importing nation, said in May it was skeptical about Platts prices because of the unknown size of the deal samples.

Metal Bulletin Ltd. will probably hire an outside auditor to review its process for pricing iron ore and steel, London-based Managing Director Raju Daswani said June 6. Published benchmarks provide more transparency than would exist without them, Daswani said by e-mail Oct. 4.

CRU Group, a competitor, said June 5 it hired a third party to review how it collects steel prices. The results will be published to data providers, Glenn Cooney, head of operations, said by e-mail Oct. 4.

"You can't regulate a handshake, a one-off contract between producers, shippers and consumers," Andrey Kryuchenkov, a London-based analyst at VTB Capital, a unit of Russia's second-largest lender, said in an e-mailed response to questions Sept. 4. "How do you define manipulation? When an Australian miner shakes a hand with a giant smelter in China and they agree on a term price?"

* * *

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Auckland, New Zeland
Sunday, October 13, 2013

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Wednesday-Thursday, October 16-17, 2013

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Thursday-Friday, October 24-25, 2013

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Sunday-Wednesday, November 10-13, 2013
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Gold Bullion Market's Big Issues

Posted: 10 Oct 2013 01:42 AM PDT

Price action isn't the big players' big concern in gold and silver right now... "FAITH and RELIGION," said Edel Tully of UBS, the Swiss investment and bullion bank. "Those were key themes," she said, summing up this year's LBMA conference last Tuesday evening.

The Bullion Markets Big Issues, Part I

Posted: 10 Oct 2013 01:33 AM PDT

Bullion Vault

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