Gold World News Flash |
- Selling Climax in Gold and Silver Stocks Is a Classic Buy Signal
- Indian Gold Premiums Soar On Lack Of Metal
- Mark Faber Fears “Stocks Could Be Dead Money For A While” But “Gold Has Bottomed”
- 12 Reasons Why Gold Will Rebound and Make New Highs in 2014
- How Gold ETF Demand Could Lift The Gold Price Dramatically Higher
- What Is The Timeframe For US Dollar Collapse? Mike Maloney
- Dr. Antal Fekete on Real Bills, Quantity of Money Theory and the New Austrian Economic Manifesto
- Should Oman drop the rial's peg to the dollar?
- Voice of Russia: The beginning of the end for the 'petrodollar'?
- If You Plant Ice, You're Gonna Harvest Wind
- Silver in a Deflationary Crash
- USDJPY Ignition Lifts S&P 500 Futures To All-Time-Record-Er High (For Now)
- Jim’s Mailbox
- US Collapse To Make Weimar Germany Look Like Child’s Play
- BIS sees risk of 1998-style Asian crisis as Chinese dollar debt soars
- How Gold ETF Demand Could Lift The Gold Price Dramatically Higher
- Marc Faber: “We Have A Lot Of Bearish Commentaries About Gold, But The Fact Is…It’s Bottoming-Out Here”
- Kerry Lutz Of The Financial Survival Network Interviews Me About Treasury Debt, Gold And The Housing Market
- Kerry Lutz Of The Financial Survival Network Interviews Me About Treasury Debt, Gold And The Housing Market
- Ron Paul: The Ideal Global Monetary System Is One Without Government
- Gold Investors Weekly Review – October 25th
- Gold: Update of the Long Term EWP
- Hyperinflation and Gold’s parabolic rise
- Screen-traded Fiat Gold Could Get Very Violent Wake-up Call
- Large Forex Speculators Cut US Dollar Bullish Bets to 7-month Low
| Selling Climax in Gold and Silver Stocks Is a Classic Buy Signal Posted: 28 Oct 2013 01:12 AM PDT The bear case for gold and silver stocks is well known and investors have reacted by dumping mining stocks indiscriminately. The staggering decline in gold and silver stocks over the past two years now exceeds the decline that occurred during the crash of 2008 when the financial system was at the brink of collapse. The [...] | |
| Indian Gold Premiums Soar On Lack Of Metal Posted: 28 Oct 2013 01:00 AM PDT by Allen Sykora, Kitco News:
The good news – at least strong demand from China is making up for some of the slack. Also, Indians still want gold, as reflected by soaring premiums; they just can't get it easily due to government restrictions, implying that the demand will still be there in future years when or if onerous rules are lifted or pared back. Gold historically has risen from late summer into year-end as demand for physical metal picks up ahead of a number of gift-giving holidays around the world. In particular, this includes the autumn festival season in India, with Diwali starting on Nov. 3. This year, however, gold is actually down from where it was as of the end of August. | |
| Mark Faber Fears “Stocks Could Be Dead Money For A While” But “Gold Has Bottomed” Posted: 28 Oct 2013 12:30 AM PDT from Zero Hedge:
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| 12 Reasons Why Gold Will Rebound and Make New Highs in 2014 Posted: 27 Oct 2013 11:30 PM PDT Gold Stock Bull | |
| How Gold ETF Demand Could Lift The Gold Price Dramatically Higher Posted: 27 Oct 2013 11:00 PM PDT by Taki, Gold Silver Worlds:
This sentiment is also reflected in the physical gold holdings of the GLD, the largest Western gold investment vehicle. As we noted earlier, in the first week of January 2013 the GLD was backed by 43,149,400.96 ounces of physical gold. Today, its holdings stand at 28,036,311.27 ounces, a decrease of 35% year-to-date. The following chart shows the correlation between the gold price and GLD gold holdings until this summer (courtesy of Zeal Research). | |
| What Is The Timeframe For US Dollar Collapse? Mike Maloney Posted: 27 Oct 2013 09:00 PM PDT from whygoldandsilver : | |
| Dr. Antal Fekete on Real Bills, Quantity of Money Theory and the New Austrian Economic Manifesto Posted: 27 Oct 2013 08:30 PM PDT by Anthony Wile, The Daily Bell:
Antal Fekete: I take strong exception to your using the language of ‘rising and falling gold price.’ It puts things standing on their head. It paints a will-o’-the-wisp picture of reality. The rising of the gold price in reality is the irreversible long-term decline in the value of the dollar; the falling of the gold price in reality is a temporary strengthening of the dollar for whatever, mostly irrelevant, reasons. There is absolutely no symmetry between the two events. | |
| Should Oman drop the rial's peg to the dollar? Posted: 27 Oct 2013 07:07 PM PDT By Saleh Al Shaibany http://www.timesofoman.com/News/Article-24535.aspx The rial's peg to the dollar was a sensible decision taken four decades ago as the United States was driving the global economy, but its floundering finances and internal political bickering are forcing the once-mighty nation to lose its grip on the treasury. Oman would not be the first nation in the Gulf Cooperation Council (GCC) if it were to drop the peg of its currency to the dollar. Kuwait did it in 2007 and so far remains the only country in the GCC to do so. Oman and its regional political allies pegged their currencies to the dollar to minimize foreign exchange volatility, encourage investments and international trade. True, the peg to the greenback made sense then because all regional countries exported oil and there was a great need to receive payments in the once most stable currency in the world. ... Dispatch continues below ... ADVERTISEMENT You Don't Have to Wait for Your Monetary Metal: Many investors lately report having to wait weeks and even months for delivery of their precious metal orders. All Pro Gold works with the largest wholesalers that have inventory "live" -- ready to go. All Pro Gold can ship these "live" gold and silver products as soon as payment funds clear. All Pro Gold can provide immediate delivery of 100-ounce Johnson Matthey silver bars, bags of 90 percent junk silver coins, and 1-ounce silver Austrian Philharmonics. All Pro Gold can deliver silver Canadian maple leafs with a two-day delay and 1-ounce U.S. silver eagles with a 15-day delay. Traditional 1-ounce gold bullion coins and mint-state generic gold double eagles are also available for immediate delivery. All Pro Gold has competitive pricing, and its proprietors, longtime GATA supporters Fred Goldstein and Tim Murphy, are glad to answer any questions or concerns of buyers about the acquisition of precious metals and numismatic coins. Learn more at www.allprogold.com or email info@allprogold.com or telephone All Pro Gold toll-free at 1-855-377-4653. Many critics say that sticking to the dollar peg is as good as devaluing the rial since the US currency is losing its strength consistently against major currencies of the world. Oman and its neighbors are big buyers of the dollar-dominated assets and the need to diversify Oman's portfolio away from the US currency is very pressing. But intense foreign trade competition from Asian countries, especially China, has changed everything for the United States. Because of that, the dollar peg is forcing Oman and the other four GCC states to import US monetary policies, something that has been contributing to chronic inflation for many years now as well as soaring property prices. The US government's shutdown this month should be another wake-up call for Oman to consider ending its reliance on the dollar. How could Oman continue to keep its faith in the dollar when the US government has no control over its own currency? Like Qatar, Bahrain, Saudi Arabia, and the United Arab Emirates, Oman is paranoid and reluctant about changing a system that once served its economy well. Many financial experts are now convinced that the dollar is no longer the force it once was and the probability that it may regain its former glory is very unlikely. Inflation in Oman would not get any better as the dollar keeps losing both its elasticity and global respect as the world's key currency. Another factor that makes sense for dropping the dollar is that Oman has already diverted away from the United States and is increasing turning toward the Asian countries as its major trading partners. Oman is exporting the bulk of its oil to the Far East, and China, the world's second richest country, is the biggest crude importer. The Sultanate has already asked to be ruled out from the planned single currency the GCC nations have been considering. The idea has not yet been implemented. The idea was to stabilize trade with international partners without having to worry about the volatility of the US currency. But Oman can follow the example of both Kuwait and Singapore, which are now pegging their currencies to an international basket. If Muscat follows suit, the rial would not suffer the fluctuations in value it now suffers under the greenback regime. It would make sense since its oil exports are well diversified among at least six countries which could be paying in their own currencies. But oil exporting to the Asian giants is not the only positive part. Oman, in the last 10 years, has been increasingly awarding major contracts to Japanese, Koreans, and Chinese companies in the petrochemical industries, making these countries its key trading partners. But any decision to de-peg the rial from the dollar depends heavily on Oman's foreign reserves. The Sultanate's state reserves are mostly tied in dollars, like the rest of the GCC countries. It would be very difficult for the country to diversify its portfolio away from the US currencies without hurting the economy. But the positive aspect is that the Sultanate can be least impacted in negative terms when it comes to diversifying its foreign reserves from the dollar since its major international partners are now Asian countries. The constructive side of trade with the Asian economic giants like China, Japan, Korea, and India is that these countries will be responsible for the inevitable fall of the United States as the biggest economy in the world. Join GATA here: Mines and Money Australia New Orleans Investment Conference 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: 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: To contribute to GATA, please visit: | |
| Voice of Russia: The beginning of the end for the 'petrodollar'? Posted: 27 Oct 2013 06:57 PM PDT By Valentin Mandrasescu http://voiceofrussia.com/2013_10_27/The-beginning-of-the-end-for-the-pet... The US dollar owes its privileged status in the global financial system to the Persian Gulf oil producers who sell their oil for dollars and then "recycle" the proceeds by buying US Treasury bonds. Economists coined a special term for the money involved in this scheme: "petrodollars." The latest developments in the Middle East signal that the era of "petrodollars" may be coming to an end. Numerous reports point out that Saudi Arabia has been one of the main forces pushing the US for a military intervention in Syria. Prince Bandar bin Sultan, the chief or Saudi intelligence, has offered to pay Washington for all expenses incurred during the intervention and some reports claim that he has threatened Vladimir Putin with terror attacks if Russia doesn't give up supporting Bashar al-Assad. After the plans for the intervention failed, the Saudis made considerable efforts to show Washington their anger and disappointment. ... Dispatch continues below ... ADVERTISEMENT Jim Sinclair Plans Seminar in Florida Gold mining entrepreneur and gold advocate Jim Sinclair plans to hold his next financial seminar in Kissimmee, Florida, near Orlando, on Saturday, November 2. Details can be found at his Internet site, JSMineSet, here: http://www.jsmineset.com/2013/10/22/florida-qa-session-announced/ The Daily Mail reports that "upset at President Barack Obama's policies on Iran and Syria, members of Saudi Arabia's ruling family are threatening a rift with the United States that could take the alliance between Washington and the kingdom to its lowest point in years. Saudi Arabia's intelligence chief is vowing that the kingdom will make a 'major shift' in relations with the United States to protest perceived American inaction over Syria's civil war as well as recent U.S. overtures to Iran, a source close to Saudi policy said on Tuesday." It is unlikely that diplomatic or political threats will impress or scare the Obama administration. However, the Saudis do have some economic leverage and some options to cripple the US finances. Fresh statements from the House of Saud indicate that the future of the "petrodollars" is uncertain. Reuters reports that "Saudi Arabia, the world's biggest oil exporter, ploughs much of its earnings back into U.S. assets. Most of the Saudi central bank's net foreign assets of $690 billion are thought to be denominated in dollars, much of them in U.S. Treasury bonds. All options are on the table now, and for sure there will be some impact," the Saudi source said." In theory, Saudi Arabia can crash the US bond market through a "fire sale" of its bond portfolio. The impact on the US economy will be devastating, but House of Saud will have to pay a steep price for the crash. The value of its currency reserves will be wiped out and its main military ally will turn hostile. It is unlikely that the Saudis will take such risks. A more likely scenario is that the Saudis will start a slow diversification of their currency reserves and will invest more in Chinese and European assets. Such a move will not produce an instant crash but will surely damage the dollar over the long term. If the "petrodollars" disappear from the world oil trade, the dollar is likely to lose its status of the world's main currency. Join GATA here: Mines and Money Australia New Orleans Investment Conference 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: 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: To contribute to GATA, please visit: | |
| If You Plant Ice, You're Gonna Harvest Wind Posted: 27 Oct 2013 06:25 PM PDT As you know, we all await the Fed word from on high this Wednesday. Will they or won't they? As always, the most important part of the equation will be the market reaction to whatever happens. Personally, regardless of nominal dollar tapering ... Read More... | |
| Silver in a Deflationary Crash Posted: 27 Oct 2013 06:00 PM PDT Jeffrey Lewis | |
| USDJPY Ignition Lifts S&P 500 Futures To All-Time-Record-Er High (For Now) Posted: 27 Oct 2013 05:32 PM PDT It seems 'someone' needed to run the S&P futures market back over Friday's highs just to flush the stops one more time. Thanks to some JPY-selling that momentum was ignited and S&P futures just made new all-time-highs... because, well why not. Soon after the stops were run in stocks, JPY started to revert and so are futures. Gold, oil, and treasuries are all unch for now as is EURUSD.
S&P futures were up over 5 points...
Chart: Bloomberg | |
| Posted: 27 Oct 2013 05:12 PM PDT Jim, I have worked in the gold and silver industry since 1983. I own a well-respected and successful precious metals firm. I am very well versed in most areas related to my industry. I have followed you for the last 11 years. I have an important question I would like you to address. So far,... Read more » The post Jim’s Mailbox appeared first on Jim Sinclair's Mineset. | |
| US Collapse To Make Weimar Germany Look Like Child’s Play Posted: 27 Oct 2013 03:25 PM PDT  On the heels of more wild trading action across the globe, today 40-year veteran, Robert Fitzwilson, warned KWN that "The Weimar experience will seem like child's play as the entire financial system for our global economy is deconstructed." He also discussed what this harsh reality means for investors and what they can do to protect themselves. Fitzwilson, who is founder of The Portola Group, put together he following tremendous piece below for KWN readers around the world.This posting includes an audio/video/photo media file: Download Now | |
| BIS sees risk of 1998-style Asian crisis as Chinese dollar debt soars Posted: 27 Oct 2013 02:30 PM PDT World's banking watchdog warns that foreign loans to China may be large enough to set off financial tremors in the West 
This posting includes an audio/video/photo media file: Download Now | |
| How Gold ETF Demand Could Lift The Gold Price Dramatically Higher Posted: 27 Oct 2013 11:01 AM PDT Market sentiment towards gold and silver remains negative. The latest daily Sentimentrader report makes this clear. Even with higher lows in the gold price since its lowest point early July and a $100 gold rally in the latest two weeks, the sentiment data remain in negative territory.
This sentiment is also reflected in the physical gold holdings of the GLD, the largest Western gold investment vehicle. As we noted earlier, in the first week of January 2013 the GLD was backed by 43,149,400.96 ounces of physical gold. Today, its holdings stand at 28,036,311.27 ounces, a decrease of 35% year-to-date. The following chart shows the correlation between the gold price and GLD gold holdings until this summer (courtesy of Zeal Research).
We noted earlier that the gold exodus in GLD is closely related to the massive gold inflows in China (but also the East in general). We also described how gold is moving in massive quantities through Switzerland where it is refined before sending it to China. Coincidentally, these trends tend to occur with negative gold forward lease rates (GOFO, gold forward rates). A negative GOFO rate implies that gold investors pay a higher gold price over the next three months than in the future. This "backwardation" is not common in precious metals. Although we had stated before that there is no gold (significant) backwardation based on the difference between gold spot and futures prices, it appears it is occuring now specifically in 400 oz good delivery London bullion bars. A recent FT.com article provides an interesting insight in the dynamics of the 400 oz bars market :
Most commentators focus on the gold exodus in GLD. Although that observation is correct, it is only half of the story. The missing part is that the gold is not gone; it merely moves from West to East. THAT is the key reason why a resumption of the gold bull market could result in violent price reactions to the upside. The physical gold could be gone once the Western demand returns. That will possibly become the inflection point where the physical market will take over control of the gold price. Physical gold owners will be the best positioned investors. Negative GOFO rates could be early signs of this process. | |
| Posted: 27 Oct 2013 10:27 AM PDT
In a recent interview, Marc Faber, publisher of The Gloom Boom & Doom report, shared some interesting commentary on gold and gold mining shares. Speaking first towards gold, Marc noted that, "We have a lot of bearish sentiment, [and] a lot of bearish commentaries about gold, but the fact is | |
| Posted: 27 Oct 2013 10:14 AM PDT I did an interview with Kerry Lutz and his Financial Survival Network's radio show last week. Kerry's mission is to educate his audience on the truth behind the hype and to understand what's really occurring in our system with the end goal of helping people financially survive what's coming. The show lasts about 20 minutes and I review the circumstances behind that massive spike in Treasury debt outstanding, the latest developments in the physical gold and silver market and the resumption of the bear market in the housing market. You can hear the interview here: Is The Housing Boomlet Over? Just like many articles, including some Wall Street firms, are now publishing hard data which shows that the stock market - by several metrics - is the most overvalued it's ever been in history - the housing market is currently significantly overvalued, with prices bid up by one-time factors that are disappearing. It's going to get very ugly out there over the next 12 months. | |
| Posted: 27 Oct 2013 10:14 AM PDT I did an interview with Kerry Lutz and his Financial Survival Network's radio show last week. Kerry's mission is to educate his audience on the truth behind the hype and to understand what's really occurring in our system with the end goal of helping people financially survive what's coming. The show lasts about 20 minutes and I review the circumstances behind that massive spike in Treasury debt outstanding, the latest developments in the physical gold and silver market and the resumption of the bear market in the housing market. You can hear the interview here: Is The Housing Boomlet Over? Just like many articles, including some Wall Street firms, are now publishing hard data which shows that the stock market - by several metrics - is the most overvalued it's ever been in history - the housing market is currently significantly overvalued, with prices bid up by one-time factors that are disappearing. It's going to get very ugly out there over the next 12 months. | |
| Ron Paul: The Ideal Global Monetary System Is One Without Government Posted: 27 Oct 2013 09:31 AM PDT The website Market Sanity published part of a conversation between Mike Maloney (founder of GoldSilver.com) and Ron Paul (former Senator and free market enthusiast) which appeared on the Hidden Secrets of Money. Ron Paul explains that the ideal global monetary system would be one in which the government would be out-of-the-way; markets should decide and apply the rules of 'no counterfeiting' to the people and to the government. He says:
Additionally, Ron Paul explains that, if the market was allowed to decide, it could also chose to use anything else, for instance a basket of commodities. It all boils down to measuring things in terms of a unit of account. The units of account that are currently on paper or credit card could equally be based on silver or gold. He says it would not be flawless because people have the tendency to break rules; it even happens with the government. The US, for instance, has the worldwide fiat currency for 40 years and it has been breaking rules during that whole period of time.
In other words, Ron Paul is propagating the idea to make fraud and theft illegal for everybody, including the financial sector (a sector which is enjoying a privilege in the current system). Suppose a gold standard was implemented and someone would emit gold certificates, that person should be punished, and it would be the minimal role of government. Today, however, the Constitution still says – even though they ignore it – that only gold and silver can be used as legal tender.
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| Gold Investors Weekly Review – October 25th Posted: 27 Oct 2013 08:20 AM PDT In his weekly market review, Frank Holmes of the USFunds.com nicely summarizes for gold investors this week’s strengths, weaknesses, opportunities and threats in the gold market. The price of the yellow metal recovered from past week's losses. Gold closed the week at $1,350.80 which is $34.55 per ounce higher (2.6%). The NYSE Arca Gold Miners Index went 7.94% higher. Gold Market StrengthsIndia’s third-largest gold fund has reopened to investors after disallowing buy-ins three months ago. Reliance Gold Savings Fund, which manages about $300 million, originally closed to support government efforts to curb bullion demand and control a rising trade deficit. “The economic conditions are getting better and the dollar has come down…,” said Sundeep Sikka, CEO of Reliance Capital Asset Management, justifying the re-launch. The rupee has appreciated 11 percent from its August lows, which could revive investment interest for physical gold and put pressure on supplies. According to the most recent data from the Indian market, current premiums for physical delivery are running at around 18 percent over the spot price of gold. The chart below shows that the premium has been steadily rising over the last two years, but it has accelerated since April of this year. According to Hebba Investments, a Seeking Alpha contributor, high premiums usually signify bottlenecks in the supply chain or a general shortage in the physical market; a shortage being extremely bullish for the gold market. In addition, Asian press is starting to pick up on this story and dealers are complaining that physical gold is in short supply. This is evident by people not willing to sell their old jewelry at these prices, according to a wholesaler in Kolkata.
Gold Market WeaknessesMineweb contributor Lawrence Williams reported on this month's unusual gold trades on the futures markets, which are now occurring almost daily. The chart below, by Reuters' Frank Tang, shows the number of contracts traded daily and the corresponding movement in the gold price. What are visible are massive trading volumes every day of over 5,000 contracts, all around the same time. On the first of October, as well as on October 10, there were massive trades of over 20,000 contracts. This amount represents well over 2 million ounces, or around $2.6 billion. It's safe to say nobody has that amount of physical gold, apart from the big central banks, so these trades are being done by entities trading gold they do not have in a manner designed primarily to trigger stop loss orders. However, someone with enormously deep pockets does have to be there in order to support these massive trades; the risks could be huge if the market turns against them. Obviously the "big bad banks" haven't learned anything in regards to the risk of failure due to this speculation. It's no wonder these trades took place while the regulators were on paid vacation, drawing unemployment benefits to boot!
Macquarie, in its U.S. Strategy research this week, stated that the most important insight coming out of the September payroll report was the continued deceleration in private sector labor demand. The reading came in at a soft 126,000 new jobs, while the three month average retreated back to pre-quantitative easing levels, and is more than 100,000 below the early 2013 levels that prompted the initial tapering signals from the Federal Reserve governors. The deceleration likely continued into October thanks to the government shutdown, making it difficult for the Federal Open Markets Committee (FOMC) to justify that there has been a substantial improvement in the labor market. Gold Market OpportunitiesGold is probably at a cyclical bottom, according to CPM Group. Bloomberg reports that CPM Group targets the gold price at $1,240 to $1,380 per ounce for the next few months. However, gold may trade in the $1,240 to $1,500 per ounce range for the "next couple of years," before prices rise sharply in the 2016 to 2023 period, says CPM Group. Inflation expectations are likely to be vindicated by this time as the Federal Reserve will remain on an accommodative policy stance longer than previously anticipated. Eric Sprott, Chairman and CEO of Sprott Asset Management, is under the opinion that the gold supply and demand statistics published regularly by the World Gold Council (WGC) are flawed, despite the fact these numbers are considered to be industry standards around the globe. Mineweb reports that Sprott has written an "open letter" to the WGC, putting forward his company's position in the gold supply and demand equation, drawing the conclusion that global gold demand exceeds available new supply by a substantial margin. Sprott argues that global demand totals 5,184 tons for this year, leaving gold supply short a massive 3,044 tons. Only a portion of this shortfall can be met through scrap sales and sales out of gold ETFs. It is no surprise to Sprott that the imbalance between supply and demand is not reflected in prices because available statistics misrepresent reality, mostly regarding demand from Asia.
Gold Market ThreatsJayant Bhandari, a former consultant to U.S. Global Investors who is knowledgeable on matters in India, wrote to us recently saying that he thinks gold will likely stay as the preferred way for Indians to save. However, with Indian currency falling about 12 percent this year, gold has become unaffordable for a portion of buyers. Going forward, the Indian rupee is likely to weaken up to 50 percent more as it is truly expensive for an economy at India’s stage of development, and the fact there is little hope for the economic growth rate to increase. Bhandari's comments coincide with recent reports by India's finance ministry, claiming there have been significant improvements to the nation's current account deficit. Nevertheless, this number fails to consider the growing unofficial imports of gold and the diversion of remittances escaping the tighter money flow conditions introduced recently. Therefore the projection of a lower current account deficit is a mere window-dressing exercise, highlighting that the government has not acted prudently to address economic headwinds, but instead has taken the easy way out of singling gold imports as a threat to the Indian economy. This year imports of silver into India have surged, perhaps as a substitute to buying the higher-priced gold bullion. Earlier this month, the Mexican Congress modified the tax reform proposal prepared by the Mexican Executive Branch, including a special mining fee of 7.5 percent of operating profits and an additional fee of 0.5 percent of gross earnings for gold, silver and platinum. In addition, Congress has proposed the elimination of accelerated depreciation for fixed assets and immediate deduction of pre-operative expenses. According to Macquarie analyst Michael Gray, the implications in the current lower-metal price environment are likely to further compress the profitability ratios of higher cash cost producers. Meanwhile, the elimination of the accelerated depreciation will limit the tax benefits upfront, which acts as a strong disincentive for exploration and mine development activities, but also sets a much higher feasibility threshold for assets, likely deterring M&A activity. | |
| Gold: Update of the Long Term EWP Posted: 27 Oct 2013 07:20 AM PDT Since this weekend I don't have anything new to add to what I have been discussing regarding SPX I think it is interesting to review the Gold EWP. Read More... | |
| Hyperinflation and Gold’s parabolic rise Posted: 27 Oct 2013 05:46 AM PDT There is a ridiculous amount of time spent on what the Fed will do or won’t do or analysing the latest economic figures. Very few people use their own brain to figure out the obvious. And the obvious is that debt which has been growing exponentially in the last 40 years, started its parabolic phase in 2006 when Bernanke became chairman of the Fed. So we don’t have to ask what central banks will do. Because it is guaranteed that they will soon start unlimited money printing to complete the debt parabola. That means we are now starting the hyperinflationary phase in the USA and many other countries. And this will all start in 2014. What will be the trigger? The answer is simple – the fall of the US dollar.
Hyperinflation is a currency event. It does not arise as a result of increase in demand but as the inevitable consequence of a collapsing currency. When a country for an extended period lives above its means and prints money which it can never pay back, the rest of the world will punish the country and its currency. It took the US over 200 years to reach a debt of US$8 trillion. Since Bernanke became chairman of the Fed in 2006, US debt has more than doubled to $17 trillion. That is an incredible ‘achievement’ and the beginning of the parabolic rise of US debt not by tens of trillions but by 100 of trillions of dollars. This is no different to the Weimar Republic or Zimbabwe and a completely natural consequence of what is happening now. The Euro which is a rubbish currency is up 8% against the dollar since July and over 65% since 2000. So even against another weak currency, the dollar is losing ground rapidly. And in real terms which of course is gold, the dollar has lost 98% since the creation of the Fed in 1913. So the dollar fall has started and will accelerate in the next few months as well as during 2014. In history there has never been a situation when most major economies are in the same dire situation. Japan is a basket case with 200% debt to GDP and a rapidly aging population. China has a major credit bubble. Most of Europe is badly indebted with high unemployment and a social structure which makes it very uncompetitive. So there is no nation which could save indebted governments worldwide. Add to that a banking system which is still full of toxic debt and highly leveraged and we have the perfect concoction for the end of a major economic cycle in the world.
For the few investors who are fortunate to have some savings to protect, physical gold (stored outside the banking system) will perfectly reflect the fall of the dollar and other currencies by rising parabolically in the next few years. In my King World News on 25 October, I covered some of the above topics plus other things. Link to: “Horrific Consequences For the US & For The World” Egon von Greyerz | |
| Screen-traded Fiat Gold Could Get Very Violent Wake-up Call Posted: 27 Oct 2013 02:47 AM PDT “This could turn into a very violent wake-up call for [screen-traded gold]. People talk about ‘fiat currencies’, but we also have ‘fiat gold.’ Volatility is too cheap right now.” — Gold refiner quoted by John Dizard in his Financial Times column this weekend | |
| Large Forex Speculators Cut US Dollar Bullish Bets to 7-month Low Posted: 27 Oct 2013 02:43 AM PDT CountingPips writes: The weekly Commitments of Traders (COT) report, not published for close to a month due to the partial US government shutdown, was released on Friday by the Commodity Futures Trading Commission (CFTC) and showed that large futures traders & speculators continued to decrease their bullish bets of the US dollar for a third week in a row on October 1st. Non-commercial large futures traders, including hedge funds and large International Monetary Market speculators, cut their overall US dollar long positions to a total of $692.8 million as of Tuesday October 1st. This was a decline of $-2.89 billion from the total long position of $3.58 billion that was registered on September 24th, according to data from Reuters that calculates this amount by the total of US dollar contracts against the combined contracts of the euro, British pound, Japanese yen, Australian dollar, Canadian dollar and the Swiss franc. |
“Since September 2011′s $1921 peak, gold has been in correction mode,” Mark Faber tells Barrons in this brief clip, but the overhwleminly bearish sentiment combined with the major accumulation (most notably by China) means “gold prices have probably bottomed,” and some gold mining stocks are well positioned. While 
Market sentiment towards gold and silver remains negative. The latest daily 
Daily Bell: Hello again. Let’s jump right in. The price of gold is still declining. Bring us up to date on the price action since we last spoke, please.
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