Sunday, October 13, 2013

Gold World News Flash

Gold World News Flash


How Much Longer Will the Dollar Be the Reserve Currency?

Posted: 12 Oct 2013 11:30 PM PDT

by Patrick Barron, Mises:

We use the term "reserve currency" when referring to the common use of the dollar by other countries when settling their international trade accounts. For example, if Canada buys goods from China, it may pay China in US dollars rather than Canadian dollars, and vice versa. However, the foundation from which the term originated no longer exists, and today the dollar is called a "reserve currency" simply because foreign countries hold it in great quantity to facilitate trade.

The first reserve currency was the British pound sterling. Because the pound was "good as gold," many countries found it more convenient to hold pounds rather than gold itself during the age of the gold standard.

Read More @ Mises.ca

Gold Premiums in India Jump on Festive Demand, Supply Crunch

Posted: 12 Oct 2013 09:00 PM PDT

by Ed Steer, Casey Research:

Once again the gold price did nothing in Far East and early London trading. But as you are already keenly aware, that all changed about 20 minutes after the Comex open, as the not-for-profit sellers took out the bid stack, and the gold price cratered more than fifteen bucks in less than two minutes, tripping trading circuit breakers.

After that, the price traded more or less flat in a tight range until minutes after 2:30 p.m. EDT, when it rallied slowly but steadily into the close.

The CME recorded the high in the December contracts as $1,294.80, and the low was recorded as $1,259.60.

Gold closed at $1,273.20 spot, which was down $13.20 from its Thursday close. Gold volume, net of October and November, was pretty chunky at 196,000 contracts.

Read More @ CaseyResearch.com

Max Keiser interviews Real Asset Co.'s Jan Skoyles on gold

Posted: 12 Oct 2013 03:37 PM PDT

11:32a NZST Sunday, October 13, 2013

Dear Friend of GATA and Gold:

Max Keiser of the Russia Today network's "Keiser Report" program this week interviewed Jan Skoyles, market analyst for bullion broker The Real Asset Co. in London, about her recent report on China's gold market. The interview mentions gold market manipulation. The interview is 13 minutes long and begins at the 13:10 mark at YouTube here:

http://www.youtube.com/watch?v=lM6zk7t4Rl0&list=PLN65SX5Ra28xGnABjF6oPXb...

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.



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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

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* * *

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:

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Paper market's split from real metal reaches 'an extreme,' Maguire tells KWN

Posted: 12 Oct 2013 03:08 PM PDT

11:04a NZST Sunday, October 13, 2013

Dear Friend of GATA and Gold:

London metals trader Andrew Maguire tells King World News that last week's pounding of the gold futures market caused much real metal to move from West to East. "The divergence between the real market and the paper market has reached an extreme that I cannot believe can be maintained," Maguire says. "We are stretched beyond anything that's credible here." An excerpt from his interview is posted at the King World News blog here:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/10/12_M...

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.



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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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Gold, The Debt Ceiling, And The Fed

Posted: 12 Oct 2013 03:00 PM PDT

Submitted by Alasdair Macleod via GoldMoney.com,

We are now into a second week of a partial Federal Government shut-down, which is causing considerable concern, centred on the Government's ability to finance its debt and pay interest without a budget agreed for the new fiscal year. Should this continue into next week and beyond, the Fed will have to enter damage-limitation mode if the Treasury cannot issue any more bonds because of the separate problem of the debt ceiling.

Most likely, QE will have to be switched from financing the government to buying Treasuries already owned by the private sector. Any attempt to reduce the monthly addition of raw money will simply result in bond yields and then interest rates rising. And indeed, already this week we have seen yields on short-term T-bills rise in anticipation of a possible default. The market is naturally beginning to discount the possibility that the Fed may not be able to control the situation.

The T-bill issue is very serious, because they are the most liquid collateral for the $70 trillion shadow banking system. And without the liquidity they provide securities and derivative markets, we can say that Round Two of the banking crisis could make Lehman look like a picnic in the park.

This is the sort of event deflationists have long been expecting. According to their analysis there comes a point where debt liquidation is triggered and there is a dash for cash as assets collapse. But they reckon without allowing for the fact that deposits can only be encashed at the margin; otherwise they are merely transferred, and only destroyed when banks go under. This is the risk the Fed anticipates, and we can be certain it will move heaven and earth to avoid bank insolvencies.

Furthermore the deflationists do not have a satisfactory argument for the effect on currency exchange rates. Iceland went through a similar deflationary event to that risked in the US today when its banking system collapsed and the currency halved overnight. Today a dollar collapse on the back of a banking crisis would also disrupt all other fiat currencies, forcing central banks to coordinate intervention to conceal the currency effect. This leaves gold as the only true reflector of loss of confidence in the dollar and therefore all other fiat currencies.

Those worrying about deflation ignore the fact that it is the fiat currency that takes it on the chin while gold rises – every time without exception. This was even the experience of the 1930s, when Roosevelt suspended convertibility, increased the price of gold by 40% to $35 per ounce, and the banking crisis was contained.

Of course there is likely to be some short-term uncertainty; but against the Fiat Money Quantity (FMQ) gold is down 30% compared with the price pre-Lehman crisis. This is shown in the chart below.

 

With gold at an extreme low in valuation terms, current events, whichever way they go, seem unlikely to drive it much lower. A wise man perhaps should copy the Asians, who know a thing or two about paper currencies, and are buying gold in ever-increasing quantities.

Foodstamp Nation In Turmoil: EBT System Goes Dark, "Glitch" Blamed

Posted: 12 Oct 2013 02:03 PM PDT

In the past five years it has become apparent that America can survive a near-fatal financial system collapse, an economy teetering on the edge and kept ticking only thanks to the Fed's now perpetual QE, a collapsing standard of living for everyone but the wealthiest 0.1%, declining wages, zero interest rates, surging food, energy, rent, tuition and welfare costs, and pretty much everything else, as long as the welfare state keeps humming along. Any be welfare state we mostly mean providing the daily bread to the nearly 50 million Americans living in poverty and surviving only thanks to the only thing to have exploded to epic record highs under Obama (in addition to the Fed's balance sheet of course): foodstamp usage. However, the true stability of the US may be tested very soon following reports that due to a "possible computer glitch" the Electronic Benefits Transfer System, aka EBT, ala Foodstamps, is offline. Cue mass panic among the best-weaponized population in the world. Naturally, this latest fiasco involving a country that has grown accustomed to sucking on the government's teat was immediately blamed on a "glitch" - just like everything else that is slowly but surely breaking in the New Normal.

CBS reports:

Reports from around the country began pouring in around 9 a.m. on Saturday that customers' EBT cards were not working in stores. The glitch, however, did not appear to be part of the government shutdown. At 2 p.m., an EBT customer service representative told CBS Boston that the system was currently down for a computer system upgrade.

 

The representative said the glitch is affecting people nationwide. She could not say when officials expected the system to be restored.

 

People calling the customer service line were being told to call back later.

 

State officials said they were preparing a statement to further explain the issue.

 

The federal EBT website was unavailable due to the government shutdown.

AP adds:

People in Ohio, Michigan and several other states found themselves unable to use their food stamp debit cards on Saturday, after a routine check by vendor Xerox Corp. resulted in a system failure. Shoppers from Maine to Oklahoma had to abandon baskets of groceries because they couldn't access their benefits.

 

Ohio's cash and food assistance card payment systems went down at 11 a.m., said Benjamin Johnson, a spokesman for the Ohio Department of Job and Family Services. Ohio's cash system has been fixed, however its electronic benefits transfer card system is still down. All states that use Xerox systems are affected by the outage.

 

Xerox spokeswoman Karen Arena confirmed via email Saturday afternoon that some EBT systems are experiencing temporary connectivity issues. She said technical staff is addressing the issue and expects the system to be restored soon.

As a reminder, this is how many Americans and households were on foodstamps as of the most recent monthly update (hint: a record).

In short: panic, because while the Nasdaq may be down for 3 hours and only a few vacuum tubes would notice, take down EBT, and you will have a full-fledged revolution in no time.

And now, it's time for the sequel to @MrEBT's hit masterpiece: "My EBT... has been rejected."

 

Maguire - West Loses Staggering Amount Of Gold In Takedown

Posted: 12 Oct 2013 12:15 PM PDT

On the heels of Friday's plunge in the price of gold and silver, today London metals trader Andrew Maguire told King World News that the West lost a staggering amount of physical gold in the takedown. He also warned that the gold market is now "stretched beyond anything that's credible here." Below is the second in a series of powerful interviews with Maguire that will be released today.

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

They’re Coming For Your Savings

Posted: 12 Oct 2013 11:05 AM PDT

Another of history's many lessons is that governments under pressure become thieves. And today's governments are under a lot of pressure.

Before we look at the coming wave of asset confiscations, let's stroll through some notable episodes of the past, just to make the point that government theft of private wealth is actually pretty common.

• Ancient Rome had a rule called “proscription” that allowed the government to execute and then confiscate the assets of anyone found guilty of "crimes against the state." After the death of Julius Caesar in 44 BC, three men, Mark Anthony, Lepidus, and Ceasar's adopted son Octavian, formed a group they called the Second Triumvirate and divided the Empire between them. But two rivals, Brutus and Cassius, formed an army with which they planned to take the Empire for themselves. The Triumvirate needed money to fund an army of its own, and decided the best way to raise it was by kicking the proscription process into overdrive. They drew up a list of several hundred wealthy Romans, accused them of crimes, executed them and took their property.

• In the mid-1530s, English king Henry VIII was short of funds, so he seized the country's monasteries and claimed their property and income for the Crown. As historian G. J. Meyer tells it in The Tudors: The Complete Story of England’s Most Notorious Dynasty:

"By April fat trunks were being hauled into London filled with gold and silver plate, jewelry, and other treasures accumulated by the monasteries over the centuries. With them came money from the sale of church bells, lead stripped from the roofs of monastic buildings, and livestock, furnishings, and equipment. Some of the confiscated land was sold – enough to bring in £30,000 – and what was not sold generated tens of thousands of pounds in annual rents. The longer the confiscations continued, the smaller the possibility of their ever being reversed or even stopped from going further. The money was spent almost as quickly as it flooded in – so quickly that any attempt to restore the monasteries to what they had been before the suppression would have meant financial ruin for the Crown. Nor would those involved in the work of the suppression … ever be willing to part with what they were skimming off for themselves."

• Soon after the French Revolution in 1789, the new government confiscated lands and other property of the Catholic Church and used the proceeds to back a new form of paper currency called assignats. The resulting money printing binge quickly spun out of control, resulting in hyperinflation and the rise of Napoleon.

• During the US Civil War, Congress passed laws confiscating property used for “insurrectionary purposes” and of citizens generally engaged in rebellion.

• In 1933, in the depths of the Great Depression, president Franklin Roosevelt banned the private ownership of gold and ordered US citizens to turn in their gold. Those who did were paid in paper dollars at the then current rate of $20.67 per ounce. Once the confiscation was complete, the dollar was devalued to $35 per ounce of gold, effectively stealing 70 percent of the wealth of those who surrendered their gold.

• In 1942, after entering World War II, the US moved all Japanese citizens within its borders to concentration camps and sold off their property. The detainees were released in 1945, given $25 and a train ticket home – without being reimbursed for their losses.

Since the 2008 financial crisis, various kinds of capital controls and asset confiscations have become common. A few examples:

• Iceland required that firms seeking to invest abroad get permission from the central bank and that individual Icelanders get government authorization to buy foreign currency or travel overseas.

• Greece pulled funds directly from bank and brokerage accounts of suspected tax evaders, without prior notice or judicial due process.

• Argentina banned the purchase of U.S. dollars for personal savings and required banks to make loans in pesos at rates considerably below the true inflation rate.

• The US Fed proposed that money market funds be allowed to limit withdrawals of customer cash in times of market stress.

• Cyprus, a eurozone country, responded to a series of bank failures by confiscating 47.5% of domestic bank accounts over €100,000.

• Poland in September responded to a budgetary shortfall by confiscating the assets of the country’s private pension funds without offering any compensation.

• Spain was recently revealed to have looted its largest public pension fund, the Social Security Reserve Fund, by ordering it to use its cash to buy Spanish government bonds. Currently 90% percent of the €65 billion fund had been invested in Spanish sovereign paper, leaving the fund's beneficiaries dependent on future governments' ability to manage their finances.

Now for the big one, reported by Automatic Earth on Saturday October 12:

The IMF Proposes A 10% Supertax On All Eurozone Household Savings
This is a story that should raise an eyebrow or two on every single face in Europe, and beyond. I saw the first bits of it on a Belgian site named Express.be, whose writers in turn had stumbled upon an article in French newspaper Le Figaro, whose writer Jean-Pierre Robin had leafed through a brand new IMF report (yes, there are certain linguistic advantages in being Dutch, Canadian AND Québecois). In the report, the IMF talks about a proposal to tax everybody’s savings, in the Eurozone. Looks like they just need to figure out by how much.

The IMF, I’m following Mr. Robin here, addresses the issue of the sustainability of the debt levels of developed nations, Europe, US, Japan, which today are on average 110% of GDP, or 35% more than in 2007. Such debt levels are unprecedented, other than right after the world wars. So, the Fund reasons, it’s time for radical solutions.

The IMF refers to a few studies, like one from 1990 by Barry Eichengreen on historical precedents, one from April 2013 by Saxo Bank chief economist Steen Jakobsen, who saw a 10% general asset tax as needed to repair government debt levels, and one by German economist Stefan Bach, who concluded that if all Germans owning more than €250,000, representing €2.95 trillion in wealth, were “supertaxed” on their assets at a 3.4% rate, the government could collect €100 billion, or 4% of GDP.

French investor site monfinancier.com talks about people close to the Elysée government discussing how a 17% supertax on all French savings over €100,000 would clear all government debt. The site is not the only voice to mention that raising “normal” taxes on either individuals or corporations is no longer viable, since it would risk plunging various economies into recession or depression.

Here’s what the October 2013 IMF report, entitled Fiscal Monitor : Taxing Times, literally says on the topic, in the chapter called:

Taxing Our Way Out Of – Or Into? – Trouble
The sharp deterioration of the public finances in many countries has revived interest in a capital levy, a one-off tax on private wealth, as an exceptional measure to restore debt sustainability. (1) The appeal is that such a tax, if it is implemented before avoidance is possible, and there is a belief that it will never be repeated, does not distort behavior (and may be seen by some as fair).

There have been illustrious supporters, including Pigou, Ricardo, Schumpeter, and, until he changed his mind, Keynes. The conditions for success are strong, but also need to be weighed against the risks of the alternatives, which include repudiating public debt or inflating it away (these, in turn, are a particular form of wealth tax on bondholders that also falls on non-residents).

It should probably be obvious that there is one key sentence here, one which explains why the IMF is seriously considering the capital levy (supertax) option, even if it’s presented as hypothetical:

The appeal is that such a tax, if it is implemented before avoidance is possible, and there is a belief that it will never be repeated, does not distort behavior (and may be seen by some as fair).

It all hangs on the IMF’s notion – or hope – that it can be implemented by stealth, before people have the chance to put their money somewhere else (and let’s assume they’re not thinking of digging in backyards, and leave tax havens alone for now). Also, that after the initial blow, people will accept the tax because they are confident it’s a one-time only thing. And finally, that a sense of justice will prevail among a population, a substantial part of whom will have little, if anything, left to tax.

Some thoughts
Will more countries introduce capital controls or asset confiscations in the next few years? Duh, of course. Debt levels are unmanageable, so they have to be lowered. And there are only three ways to do it: deflationary collapse that wipes out the debt through default, inflation that wipes out the debt by destroying the world's major currencies, or stealing enough private sector wealth to reset the clock. Option one – depression – is political poison so will be avoided at all costs. Option two is being tried and is failing because the deflationary effect of trillions of dollars of bad debt more or less equals the inflationary impact of trillions of dollars of new currency.

That just leaves door number three, demonize the successful and take what they've accumulated. Recall from the historical list that opened this post that governments like to pick on members of society that 1) have lots of money and 2) have lot of enemies or can easily be framed for crimes. This time around it will be "the rich" who are living well at the expense of the rest of us. The trick will be do define "rich" down far enough to make possible the confiscation of middle-class IRAs and 401(K)s, since that's where the real money is.

Interesting that the build-up to asset confiscation is coinciding with a coordinated take-down of gold and silver, the two assets that will be hardest to steal when the time comes.

The Long Game Of Hiking The Debt Ceiling

Posted: 12 Oct 2013 10:43 AM PDT

Submitted by Lance Roberts of STA Wealth Management,

 

JAMES TURK ~ Goldseek Radio - Oct 10, 2013

Posted: 12 Oct 2013 10:11 AM PDT

GSR interviews JAMES TURK - Oct 10, 2013 James Turk is founder of GoldMoney.com, which operates the leading digital gold currency. He also publishes the Freemarket Gold & Money Report,...

[[ 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! ]]

Gold Market – The Week In Review

Posted: 12 Oct 2013 08:08 AM PDT

In his weekly market review, Frank Holmes of the USFund.com discusses the strength, weakness, opportunity and threat in the gold market. We highlight only the elements related to the physical gold market and the gold price (leaving out the pieces about the miners).

It was not a terrible for the yellow metal. Gold closed the week at $1,272.18 which is $38.62 per ounce lower (2.95%). The NYSE Arca Gold Miners Index went 4.5% lower.

Strengths

Recently there have been predictions that imports of gold into China would slow down and that current levels cannot be sustained. In August, import figures declined minimally for the prior month but still remained above the sizeable volume of 100 tons. China remains on track to comfortably exceed 1,000 tons of known net gold imports for the year. By "known" we mean those being imported legally through Hong Kong, the only entry point where volumes are reported. There are plenty of other major ports of entry for trade into China; not least Shanghai, where the Shanghai Gold Exchange and the Shanghai Futures Exchange have become the world's most active physical gold exchange markets, and the second most active gold futures market, in just a few short years. The amount of physical gold traded in Shanghai gets close to total global mine production at times.

This year central banks will add as much as 350 tons of gold, valued at about $15 billion, estimates the London-based World Gold Council. Similarly, European central banks sold 5.1 metric tons of gold this year, the lowest on record. But what about the U.S. Treasury? In a recent document, the Treasury admitted to considering a range of options with respect to how it would operate if the U.S. had exhausted its borrowing authority. In conclusion, the Treasury considered asset sales while it outright rejected the option of selling the nation's gold to meet payment obligations. The Treasury reasons that selling gold would undercut confidence in the U.S. both here and abroad, and would be destabilizing to the world financial system as well. In other words, according to the official position of the U.S. Treasury, the promises and commitments of the government, and its "full faith and credit," are actually worth less than gold.

Weaknesses

The National Bank Financial team of mining analysts expects that momentum for producers could remain subdued through year-end, as depressed gold prices could trigger another round of impairment charges in the third quarter. This is in addition to possible reserve write-downs at year end, and to significant revisions to 2014 mine plans as companies revisit cut-off grade strategies to navigate the current, low gold price environment. They go on to add that now that newest, capital-intensive projects have been shelved, the quality over quantity focus has extended decidedly to operating costs as companies adopt strategies to provide more breathing room and/or to restore more sustainable margins. This leads to the conclusion that there is potential for another round of corporate G&A cuts coming before year-end.

Opportunities

The nomination of Janet Yellen as the new Federal Reserve Chairmanship could mean more dovish Fed policy. Jim O'Neill, the retiring Goldman Sachs Asset Management Chairman who first coined the "BRIC" countries term, believes Yellen represents the dovish wing of Bernanke. In fact, he says she "out-doves" Bernanke. The implications for emerging markets are imminent according to O'Neill, given the more accommodative nature of the Fed under Yellen's leadership. A more accommodative Fed policy will likely be accompanied by a weakening dollar, which could bode well for gold prices going forward. With this in mind, consider Goldman Sachs' second-quarter regulatory disclosure, which showed the addition of a significant portion of gold to its holdings. However, the Bank's commodities research analysts issued a recommendation to sell gold into 2014. Upon such a statement by the analysts, Seeking Alpha's Real Estate contributor Dave Kranzler asked, "Which side of Goldman Sachs is right about gold? As an investor, do you follow the guy selling research or do you follow the money?"

The 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, Bloomberg reports. The exchange will set minimum trades starting at 10 grams of gold and 100 grams of silver, while platinum and palladium contracts will start trading in the first half of 2014. The Moscow Exchange is following the path of the Shanghai Gold Exchange by listing precious metals. It is doing so in order to add liquidity, broaden the range of instruments available for hedging, but also to increase the availability of precious metals to non-traditional market participants. We believe this market should be able to build on the experience of the Shanghai Exchange, and will offer a greater degree of actual physical trading volume, helping to increase the transparency of gold demand and supply factors.

Threats

The belief that the U.S. will extend the recovery soon after lawmakers resolve the stalemate, led Goldman Sachs' head of commodity strategy to recommend selling gold for the next twelve months, with a target price of $1,150 per ounce. However, as GoldCore director Mark O'Byrne reminds us, Goldman's reputation in forecasting gold prices is less than stellar. The bank, among much fanfare and media attention, recommended to its clients to sell gold into 2008 and named the recommendation as one of its top ten tips. Gold rose more than 12 percent from the time of that recommendation and into December 2008. The closing price for 2008 was nearly 20 percent higher than Goldman's price forecast, costing its clients and the public a lot of money. Perhaps that is why Kevin Norrish, head of commodity research at Barclays, issued a note of caution against selling gold despite any weakness.

The Reserve Bank of India (RBI) appears to be moving ahead with its plan to get current gold holders to place the metal on deposit for the bank, developed to reduce import demand. Under the program, gold owners would receive interest and have the security of a guarantee backed by the central bank, while the RBI would lend the gold to the jewelry manufacturing sector, thereby reducing demand for imports, says Credit Suisse. What is worrisome here is that at least one western bank is in talks with one of the leading jewelry federations about the creation of a similar deposit scheme. This type of mechanism could result in the creation of an unregulated paper gold trading market, subject to manipulation.

We recently learned that 95 percent of transactions in the futures and options markets are terminated before they reach the date on which gold has to be delivered. This means that only one out of every 20 transactions involves physical delivery, and 19 are simply paper gold trades. Our trading desk has observed some odd market activity that we have deemed the "gold flashing" trade, and appears biased toward the paper trading side. For instance, this past Wednesday morning, our traders witnessed a high frequency trader offer 47,000 contracts for sale for only one second, before cancelling 45,000 of them. Naturally, markets react negatively to sudden large offers, sending the markets into a downward spiral.

Gold and Silver - Western Bankers [Forced] Bowing To China

Posted: 12 Oct 2013 06:40 AM PDT

On Friday morning, gold trading was shut down for 10 seconds in a "stop logic" event, as the CME explains. In essence, when there is an overload of orders that cleans out stops, the market halts, [10 seconds???] "designed to prevent ... Read More...

This Past Week in Gold

Posted: 12 Oct 2013 06:36 AM PDT

Summary: Long term - on major sell signal since Mar 2012. Short term - on sell signals. Gold sector cycle - down as of 9/13. Read More...

How Much Longer Will the Dollar be the Reserve Currency?

Posted: 12 Oct 2013 03:59 AM PDT

Patrick Barron writes: We use the term “reserve currency” when referring to the common use of the dollar by other countries when settling their international trade accounts. For example, if Canada buys goods from China, it may pay China in US dollars rather than Canadian dollars, and vice versa. However, the foundation from which the term originated no longer exists, and today the dollar is called a “reserve currency” simply because foreign countries hold it in great quantity to facilitate trade.

Gold and Silver – Western Bankers [Forced] Bowing To China

Posted: 12 Oct 2013 03:27 AM PDT

On Friday morning, gold trading was shut down for 10 seconds in a "stop logic" event, as the CME explains. In essence, when there is an overload of orders that cleans out stops, the market halts, [10 seconds???] "designed to prevent exaggerated price movements." In a sorry-ass explanation that defies common sense, except to protect the criminal exchange behavior, we give this CME propaganda no further consideration.

Here it is in picture format on a 1 minute chart.

gold price intraday 11 october 2013 price

Who would do such a thing?

"Someone" sold 2 million oz of paper contracts at one time. There does not seem to be much interest by the exchange, and none by I-cannot-find-any-wrongdoing-Department- of-Justice-head-Eric Himpton Holder as to who was [ir]responsible for what would be considered an act of terrorism were it against the FX "dollar" or Fed-driven stock market.

Smart money does what it can to hide its accumulation, when in a buying campaign, or distribution when engaged in a selling campaign. Smart money would not do such a thing.

A prudent investor employs capital preservation tools and would not do such a thing.

The average trader is too poor to own 2,000,000 oz of gold so could not do such a thing. No liquidation margin call, here.

What about dumb money?

Who represents dumb money? Why central bankers, of course, and they are on a suicide mission to destroy the financial economy in order to save their fiat [out of]control.

Guess which country is the largest holder of toxic and worthless US Treasury Bonds?

China.

China is still pissed at the U S government for selling out China's gold, [on loan, but sold out from under them, anyway], back in the 1990s. As the holder of over a $trillion in US T-Bonds that are proving worthless, China is a Tiger getting rid of that paper.

This commentary is a partial answer to the manipulated raids in the gold market since last April. Those raids may be hurting the Precious Metals, [PM] game players, weakening their confidence and "disproving" gold's worth against a fiat currency, but they serve a greater purpose, as in Federal Reserve payback time to China.

Few will ever know the true picture, but here is a plausible scenario. It is a generally held view that central bankers have emptied their vaults of all their gold, and not just their own holdings. Through hypothecation, rehypothecation, and who knows what more, central bankers have also sold every other country's gold on loan. German gold: Kaput! Allocated gold from wealthy private holders: Gone! [No! You cannot see your gold that we hold for you in our bank.] [We stole it.] Where did it all go? Shipped East.

What about all that sovereign and private allocated gold that has numbers on each bar? So sorry. It was melted down, [accidents do happen], and remolded into bars and shipped to China. Why do you keep asking these unnecessary questions?

So why the manipulated gold raids?

It is a way to get the price of gold lower as a favor to the Chinese who are doing almost all of the buying to compensate for the worth less and less Treasury Bonds they are holding. If the central bank Fed does this for them, the Chinese will not dump all their holdings and cause the Western banking system to collapse. Instead, the greedy-but-dumb central bank Fed will cause the collapse of the US Federal Reserve Note, [also incorrectly called the "dollar," along with the rest of the US economy, but at a relatively slower pace.

Forget about all these stories of long lines to buy gold, record sales in coin purchases, a pittance in comparison to the thousands of tonnes Chine, Russia, and a few others are buying at lower and lower prices, courtesy of the deceiving Fed, caught with its goldenless pants down. The game is up, and the Fed has chosen a slower death dance by increased money printing and QE-ScrewYou4Ever antics to buy time.

What does this mean for you? Got gold? Got silver? If not, you got nothing.

All paper-dominated "things," for we cannot call them assets, except in the minds of the holders, have little to no intrinsic "value." Despite the detractors who always to say gold and silver are not forms of wealth, both PMs are immune from government fiat dictates. Gold and silver are the equivalent of a wooden stake to drive into the central banker's fiat heart, if they had one.

It is gold and silver that is the nemesis of all central bankers, for PMs would break the fiat paper back of their control. Why do you think the Federal Reserve was created 100 years ago by the New World Order? To get rid of the gold/silver specie backing of United States Notes and replaced with no-backing-whatsoever Federal Reserve Notes, as the means for stealing the entire wealth of the United States, forcing the country into bankruptcy in 1933, and turning the US into the Third World-rate country it has become.

Each and every week we advocate buying physical gold and silver, at any price. Just get it and hold it personally. Buying physical PMs is not an investment; they are necessary for your survival. Their ownership is the only way to avoid total bank/government control. The problem with land it that is not portable, and it can be more easily confiscated than gold and silver. They are the best means of preserving that which is yours. They are an insulation from bank bail-ins, [Why anyone still keeps money in any bank is a mystery.]

The gold and silver that you own and hold will escape the likely conversion of pension accounts, 401ks, etc, to be "taken," as in theft, by the government, for your own good, of course, and converted into [worthless] government bonds.

You have a choice: Do you want to have your life run by a private banking cartel, [which the foreign-owned Federal Reserve is], and in turn, federal government sponsored, [which is controlled by the foreign-owned Federal Reserve], or…

Do you want to control your own life and financial destiny? The choice is yours. Your self-liberation is simply choosing to buy and hold as much gold and silver as you can. You have no third-party counter-risk. There is no debasement – an ounce of gold or silver is the same as it was for the past 4,782 years. [Why always 5,000 years?]

You are an eye-witness to the Western banking cartel's self-destruction.

As always, we provide a chart or two that shows there is no panic that the decline in PMs has run it course and will run higher. One more thing: just as you see these waterfall drops in price, there will come a day when that effect will reverse, and those who waited "for the right time or a better price," will be left holding their worth-considerably-less fiats.

There is no evidence of a turnaround on the daily. Gold closed at a support level, labeled as "important," but it is what it is, and we get to deal with its breach or holding. For now, it is holding tenuously. That price is holding well above the lower reverse trend line is a plus.

Support is an area, and not just a single price, so as long as gold holds support +/- either way is all that matters. Volume increased on a wide range bar and lower close. Every part of that supports sellers in control. Results will confirm or reject that, next week, and by waiting for the market to make that determination, there is no reason to buy futures.

gold price daily 11 october 2013 price

Silver held above its last swing low where gold did not. The gap support remains intact, but not in gold. There is also a potential higher swing low. If it holds, and silver can rally above 22.50, the daily trend will turn back up from a key price level.

Keep buying as much physical as you can, and hold it personally. Plus, do not tell anyone.

silver price intraday 11 october 2013 price

Gold and Silver - Western Bankers [Forced] Bowing To China

Posted: 12 Oct 2013 03:25 AM PDT

On Friday morning, gold trading was shut down for 10 seconds in a "stop logic" event, as the CME explains. In essence, when there is an overload of orders that cleans out stops, the market halts, [10 seconds???] "designed to prevent exaggerated price movements." In a sorry-ass explanation that defies common sense, except to protect the criminal exchange behavior, we give this CME propaganda no further consideration.

Gold and America's Fake Debt Default

Posted: 12 Oct 2013 03:17 AM PDT

Gold just isn't working as advertised as Washington flirts with disaster... There's no denying that precious metals are falling even as the US debt-limit deadline draws so near, you can see that it's wearing a wig. In fact, the mere hint of a short-term fix to avoid default next Thursday knocked gold prices below $1300 this week, with a further plunge as US trade opened on Friday.

Who Wants to Be a Millionaire? Who Wouldn’t! Here’s How

Posted: 11 Oct 2013 01:43 PM PDT

So writes Gina Monaco (loop.ca) in edited excerpts from her original article* entitled Money lessons from the rich.

The following is presented by Lorimer Wilson, editor of www.FinancialArticleSummariesToday.com and www.munKNEE.com and the FREE Market Intelligence Report newsletter (sample here – register here). The excerpts may have been edited ([ ]), abridged (…) and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. This paragraph must be included in any article re-posting to avoid copyright infringement.

Monaco goes on to say in further edited excerpts:

In a study commissioned by BMO, almost half of Canada's millionaires are new immigrants or first generation Canadians and two-thirds of them were self-made, with only 20 per cent getting a part of their wealth from an inheritance. That gives the rest of us some hope.

1. Keep learning

Keep investing in your education, even if you have a degree. Read success books and attend motivational and other seminars to keep your momentum going. Try reading biographies of successful people – even millionaire Donald Trump! The more you read about the path to success of others, the more motivated you will be to pursue your own dreams.

2. Discipline yourself

Don't spend money on luxury items you can't afford. If you want to earn yourself into a millionaire then you need to live a disciplined life. Think Zen!

3. Follow your bliss

Do what you love and the money will follow. I know, it might sound corny, but if you're doing what you love, whether it's your job or hobby or side business, means you will stick it out during the ups and downs [and have a much greater chance of becoming a millionaire]. Again, think Zen!

4. Save, save, save

Did I mention save? To live within your means is the hardest thing to do in a society of instant gratification. You have to move beyond the paycheque to paycheque mentality. Millionaires pay themselves first.

5. Reduce personal debts

All debt is bad, but some debt is not as bad as others. Mortgages, business loans and student loans are not so bad but high-interest credit cards and lines of credit will stand in your way to becoming a millionaire. Pay them off.

6. Invest

Financial markets yield good returns whether you're a conservative or an aggressive investor. Long-term investing usually yields better returns and is less risky than short-term investing. Start with companies you know…. like banks, yeah banks!

7. Invest long-term money

Only invest what you can afford to lose. Don't use the money you need for your day-to-day living. How to free up cash? See items four and five – pay off debts and save. Don't incur debt by using your credit facilities to invest.

8. Own your home

A person's home is their castle – and it can be as valuable as one. Homes appreciate in value over time and are a good investment. According to MSN Money Central, 95 percent of all millionaires own a home.

9. Open a retirement savings account

As soon as possible – the earlier the better! Retirement accounts use compound interest, which means you continually earn interest on your interest. The earlier you start contributing to your retirement account, the more money you can accumulate because you have more time to take advantage of compound interest. [It makes becoming a millionaire that much easier.]

10. Don't put all your eggs in one basket

Millionaires believe in diversification, meaning multiple streams of income so read up and learn the many ways you can diversify your millionaire portfolio.

[Editor's Note: The author's views and conclusions in the above article are unaltered and no personal comments have been included to maintain the integrity of the original post. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.]

*http://www.theloop.ca/living/money/the-next-step/photo-gallery/-/p/6641/Money-lessons-from-the-rich/2545945 (© Bell Media 2013 All rights reserved)

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The post Who Wants to Be a Millionaire? Who Wouldn't! Here’s How appeared first on munKNEE dot.com.

Gold Stocks Have Never Been As Cheap as Right Now

Posted: 11 Oct 2013 10:12 AM PDT

Gold stocks continue to be universally despised, plagued by extreme bearishness.  This has hammered their stock prices to epically-undervalued levels that are truly fundamentally absurd.  This whole sector is now trading as if the gold price was less than a third of current levels!  This massive disconnect has created vast opportunities for brave contrarians who have forged the mettle to buy low when few others will. For literally thousands of years around the entire planet, gold has been an indispensable asset.  It has been Tolkien’s One Ring of money, ruling over all national currencies ever created.  It has been essential for wealth preservation and portfolio diversification, not to mention inflation protection and capital gains.  The natural human lust for gold has dramatically reshaped world history, there is simply nothing else like it.

U.S. Gold and Debt Ceiling - Here We Go Again

Posted: 11 Oct 2013 09:47 AM PDT

Since the U.S. shutdown began last week gold has been trading in a tight range between $1,277 and $1,330 per ounce. Although investors have believed that worries over the debt ceiling would be only short-lived, it seems that each day that passed without an agreement tested their nerves. On Thursday, President Barack Obama agreed to consider a proposal from Republican lawmakers to avert a historic debt default. U.S. House of Representatives Republicans plan to offer President Barack Obama a short-term increase in the federal debt limit if he agrees to negotiate with Republicans on matters, including funding to reopen the government.

Gold - The Situation Is Hopeless, But Not Serious

Posted: 11 Oct 2013 09:40 AM PDT

By Shannara Johnson, Chief Editor "After listening to some of this morning's speakers, I made sure to program the number of the suicide hotline into my cell phone," real estate expert Andy Miller joked at the beginning of his speech. And legendary natural-resource investor and chairman of Sprott US Holdings, Rick Rule, quipped, "It's amazingâ€"I actually get to be the positive guy here."

Gold Price Sinks 1.8% in 2 Minutes on U.S. Debt Deal Hope

Posted: 11 Oct 2013 09:24 AM PDT

WHOLESALE and futures prices for gold dumped 1.8% inside 2 minutes Friday lunchtime in London, extending the week's losses to $50 per ounce at a 3-month low of $1265. The move came on suddenly heavy volume in the gold futures market, which had previously been quiet after Thursday's fall through $1300.

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