Gold World News Flash |
- FOMC Minutes Reveal Taper Likely In "Coming Months"
- The Greatest Opportunity in 30 Years
- Why the Volcker Rule Is Now 3x Longer
- Gold coins back on sale in India
- Will 2014 be the Year for Gold Bullion Investors?
- Silver Fundamentals from an Historian's Perspective
- The Daily Market Report: Gold Slides as Negative Rate Threat Undermines Euro, Lifts Dollar
- Ultimately Gold and Silver Will Be The Ultimate Currency Video
- China Imported An Additional 133 Tonnes Of Gold Directly in 2013
- When to Bug Out and When to Bug In – Prepper Recon on Midnight Patriot
- $1 million in gold found in airplane toilet
- Trust Your Instincts
- Collapsing Consciously
- $1 million gold stash found in airplane toilet
- The Cure for the Broken Monetary System
- Swiss govt. urges voters to reject ban on SNB gold sales
- Can’t-miss headlines – Copper at a low, palladium in a cross and more
- Euromax: low grade copper/gold but potential ‘cash cow’
- Gold coins back on sale in India
- Gold mine output set to reach record, disappointing bulls
- Gold bears return before Yellen signals more easing
- Gold Fields battens down the exploration hatches
- Historic Chaos, Crisis & The War Between Inflation & Deflation
- Is Silver Likely To Decline From Here?
- Government Economists: About as Useful as a Fork in a Sugar Bowl
- Silver Fundamentals – The Historian Perspective
- Gold-laden Indian brides defy prime minister as culture triumphs
- Gold pours into China to meet record demand
- Gold Prices Hit 5-Week Low on "Investor Disdain" as US Inflation Turns Negative, China Demand Surges
- Silver Fundamentals from an Historian’s Perspective
- Is Silver Likely to Decline from Here?
- Weak US Inflation Sees Gold at 5-Week Low on "Western Disdain", Chinese Imports Revised Higher
- Gold slides to one-month low ahead of Fed minutes
- BoE Survey Shows Growing Fears Of House Price Crash
- Gold lower at 1363.20 (-11.70). Silver 20.22 (-0.05). Dollar better. Euro lower. Stocks called better. US 10yr 2.74% (+3 bps).
- Heat, Light & Venezuela in London Gold Manipulation
- Heat, Light & Venezuela in London Gold Manipulation
- Heat, Light & Venezuela in London Gold Manipulation
- Jim Rogers Expects A Buying Opportunity In Gold And Silver
- Why did the gold price plunge $10 in 10 seconds?
- Gold's price fall seen prompting mines to produce more with high-grading
- China Imported An Additional 133 Tonnes Of Gold Directly in 2013
- Zero Hedge: Another gold slamdown looks like the work of the BIS
- Market Monitor – November 20th
- China's gold imports are likely far greater than reported from Hong Kong
- Collapsing Consciously
- Stefan Ioannou's Three Things to Look for in Three Base Metal Plays
- Stefan Ioannou's Three Things to Look for in Three Base Metal Plays
- Silver Fundamentals from an Historian’s Perspective
| FOMC Minutes Reveal Taper Likely In "Coming Months" Posted: 20 Nov 2013 11:03 AM PST With the schizophrenia that seems to have availed across the FOMC members (hawks are doves, doves are hawks, tapering is not tightening, etc.) it is not surprising that the minutes reflect some confusion:
So summing up - when we get to an unknown point in the future with an unknown state of parameters, we may do an unknown amount of tapering - maybe possibly. Pre-Minutes: SPX 1791, 10Y 2.75, EUR 1.3444, Gold $1262 | |
| The Greatest Opportunity in 30 Years Posted: 20 Nov 2013 10:52 AM PST It's October 27, 2008, and Silver Wheaton (SLW) just hit $3 per share. I buy 10,000 shares, more than I've ever devoted to any one stock. I sell half when it hits $33 per share and pocket $150,000 after a 1,000% gain. I pay off the mortgage, and my wife quits work—and I still have 5,000 shares… | |
| Why the Volcker Rule Is Now 3x Longer Posted: 20 Nov 2013 10:47 AM PST Shah Gilani writes: Let’s talk about the so-called Volcker Rule. When the Dodd-Frank Act was signed into law in 2010 – the bank-busting, save the system, “we’ll never again have a financial meltdown that could destroy the world” legislation – it was more of an outline. | |
| Gold coins back on sale in India Posted: 20 Nov 2013 10:45 AM PST by Shivom Seth, MineWeb.com:
Suspended since July, the sale of gold coins has kept customers away during the peak season of Dhanteras, the first day of Diwali, Navratri the nine day festival preceding Diwali and all through the festive season, said retailers. Bachhraj Bamalwa, director of Nemichand Bamalwa said demand for the coins had dropped drastically in the last four months, though some pockets continued to sell them despite a self-imposed ban. | |
| Will 2014 be the Year for Gold Bullion Investors? Posted: 20 Nov 2013 10:42 AM PST Sasha Cekerevac writes: Last week’s testimony by Janet Yellen, President Obama’s choice for the next head of the Federal Reserve, was quite interesting. What I also found fascinating was the reaction in various markets. Yellen was testifying in front of the Senate Banking Committee, and when asked about the possible formation of bubbles as a result of the Federal Reserve’s quantitative easing program, she stated point-blank, “By and large, I would say that I don’t see evidence at this point in major sectors of asset price misalignments.” (Source: Bloomberg, November 15, 2013.) | |
| Silver Fundamentals from an Historian's Perspective Posted: 20 Nov 2013 10:01 AM PST Ryan Jordan, Ph.D. is a professional historian, author and college professor. He is the author of "Silver - The Peoples Metal" which I highly recommend. He sees silver fundamentals from the perspective of a historian and ... Read More... | |
| The Daily Market Report: Gold Slides as Negative Rate Threat Undermines Euro, Lifts Dollar Posted: 20 Nov 2013 09:52 AM PST
It would seem that the ECB’s recent cut of the refi rate to a record low 0.25% was simply not enough to pull the rug out from under the euro. If taking the deposit rate negative doesn’t have a lasting effect, the ECB may have to find a way to engage in QE if they truly want to be engaged in the global currency war. While U.S. retail sales were modestly better than expected today, there is nothing fundamentally pushing the dollar higher. This is simply a case of euro weakness. The other U.S. data point today was October CPI, which came in weaker than expected at -0.1%. This is just the latest in a series of indications that disinflationary pressures are building. As the Fed fears deflation above all else, it is extremely unlikely that the central bank will commence tapering while such pressures are apparent. Nonetheless, the market will be scouring every line of the FOMC minutes later today for any hint about taper timing. Demand for physical gold remains robust in China as a Reuters article posted this morning confirms. Even India is finding a way to get gold, despite the government’s best efforts to squelch demand, even if that means smuggling the precious metal in an airplane lavatory! For those of you fighting your instincts and holding off on a gold purchase because of the high-flying stock market, I encourage your to read Jonathan Kosares’ excellent piece on that topic. Jonathan points out that gold hasn’t been this attractively priced relative to stocks since January 2008. And we all know what happened to both markets around that time! Get your hedge on! | |
| Ultimately Gold and Silver Will Be The Ultimate Currency Video Posted: 20 Nov 2013 09:48 AM PST In his latest interview, David Morgan from The Morgan Report gives his view on the gold and silver outlook for 2014, how the dollar is steadily losing trust, why mainstream loves to talk down gold, and whether this is a good time to accumulate physical precious metals. | |
| China Imported An Additional 133 Tonnes Of Gold Directly in 2013 Posted: 20 Nov 2013 09:45 AM PST from Gold Silver Worlds:
Today's news from Reuters shows that things are even more "complicated." Over the course of this year, China would have imported an additional 133 tonnes directly, i.e. not through Hong Kong. This figure is a calculation by Reuters based on top 20 gold exporters in the world. | |
| When to Bug Out and When to Bug In – Prepper Recon on Midnight Patriot Posted: 20 Nov 2013 09:15 AM PST from PrepperReconon:
Don't miss another episode of the Prepper Recon Podcast. Subscribe to us on Stitcher or iTunes to get a new episode every week. Check out my new dystopian fiction novel, American Exit Strategy, Book One of the Economic Collapse Chronicles. Liberty minded individuals and those who believe in the Constitution will find this near future dystopian novel to be right up their alley. Those who are looking to be more informed about the potential threats to America's financial stability will learn what to watch for and how to prepare themselves for an economic collapse. Click Here to Listen | |
| $1 million in gold found in airplane toilet Posted: 20 Nov 2013 09:08 AM PST 20-Nov (MarketWatch) — Aircraft cleaners in India reportedly found 24 gold bars worth at least $1 million in the toilet compartment of a plane. The stash was found on a Jet Airways plane at Kolkata (Calcutta) airport Tuesday, Sky News reported. [source] | |
| Posted: 20 Nov 2013 09:05 AM PST Does the stock market’s relentless push higher seem unbelievable? Special Report by Jonathan Kosares “Like the nearly religious belief in the technology bubble, the dot-com boom, the housing bubble, and countless other bubbles across history, people are going to believe what they believe here until reality catches up in the most unpleasant way. The resilience of the market late in a bubble is part of the reason investors keep holding and hoping all the way down. In this market cycle, as in all market cycles, few investors will be able to unload their holdings to the last of the greater fools just after the market's peak”. – John P. Hussman, Ph.D, Hussman Funds Over the past month or so, we have received an inordinate number of calls from clients saying some version of 'this doesn't feel right.' Stocks charge higher almost daily, yet consumer confidence is at its lowest level in nine months, Morgan Stanley is predicting the worst holiday shopping season since 2008 (source), GDP growth remains anemic and unemployment stubbornly high. The foundation upon which rising stocks is dependent — a healthy, strong economy — has been thrown out the window as the Fed's commitment to QE has displaced rational, fundamentals’ driven analysis. So it is no wonder you might feel a little queasy. And digging deeper, there are a number of 'coincidences' that suggest such feelings might not be too far off the mark.
Consider this: The Dow Jones Industrial Average has closed above its 200-day moving average (red line in graph above) for 24 consecutive months, dating back to November of 2011(annotated). The most recent period of sustained growth above the 200-day moving average occurred between October, 2005 – November, 2007 – a 25-month period (annotated). No one needs to be reminded of what happened to stocks in 2008. Another interesting parallel deals with the percentage extension above the 200-day moving average. The DJIA, by and large, trades in a narrow range within 5% of its 200-day moving average. Deviations outside of this 5% range are typically followed by corrections. Most recently, in April, 2011, the DJIA closed 12.4% above its 200-day moving average. By September it had shed nearly 2000 points, declining from 12810.50 to 10913.4. Today, the DJIA is trading just shy of 7% over its 200-day moving average – not as high in percentage terms as it was in April 2011, but interestingly enough, almost identical to its magnitude in November 2007. Ben Inker of GMO released some interesting analysis regarding stocks in the firm’s quarterly letter this past month. GMO has a reputation for impartiality, never being too bullish or too bearish, while controlling over $100 billion in assets for pension funds, endowments and accredited investors. In his report Inker writes: Ultimately concluding: 'But enough about the details. The basic point for us remains the same – the U.S. stock market is trading at levels that do not seem capable of supporting the type of returns that investors have gotten used to receiving from equities. Our additional work does nothing but confirm our prior beliefs about the current attractiveness – or rather lack of attractiveness – of the U.S. stock market.' Inker is not alone. While the bullish roar still drowns out the naysayers, this kind of analysis is popping up more and more frequently. So what about gold? Gold has been holding steady ever since its large drops back in April and June. With stocks performing so well, a lot of the attention gold had seen as it accelerated to $1900 in September 2011 has, for the time being, faded away. We have all heard the investment maxims: "Buy low, sell high. Don't chase markets and, most of all always hedge your bets." The only challenge is following that advice without being able to predict the future. All told, there is no way to know if stocks will push higher or sell-off, just as much as there is no way to know if gold has bottomed. But what we do know is that gold looks like a good value relative to stocks. Ironically enough, it is at its best relative value to stocks since…wait for it… January 2008 (see chart below) – two months after the DJIA reversed course after 25 months above its 200-day moving average.
Copyright © 2013 theChartStore.com In short, the parallels between the current environment in stocks and the one in late 2007 are considerable. Even the 'gut feeling' my clients refer to today reminds me of conversations I had with clients back then. While I can't say that I realistically think another 2008-style collapse is around the corner, I simultaneously can't rule out the possibility. It seems the Fed is willing to throw any amount of money at the problem, and such circumstances may be sufficient in preventing such profound decimations of wealth as we saw then. But the old saying, "This can't go on forever" seems more apt than ever. It could start as small as 'window dressing' into the end of this year, gain steam with another debt debate this January, and reach a full-fledged outbreak if fractures in our recovery illuminate the reality that Fed intervention has had little to no meaningful impact on the actual economy. With such a realization, even expansions in QE may not be enough to save the stock market. I'll conclude with two parting thoughts: 1. It is better to be a little too early than even a moment too late. Most investors believe that they will always be able to liquidate their positions – to get out in time. In a market panic, desperate sellers will quickly outnumber willing buyers and liquidity can effectively disappear. 2. You'd be hard pressed to find a single investor who didn't wish they had divested from stocks in favor of gold the last time the investment landscape looks like it does today – November 2007 – January 2008. ____________ If you are looking for a gold-based analysis of the financial markets and economy, we invite you to subscribe to our FREE newsletter – USAGOLD’s Review & Outlook, edited by Michael J. Kosares, the author of the preceding post, the founder of USAGOLD and the author of “The ABCs of Gold Investing: How To Protect And Build Your Wealth With Gold.” You can opt out any time and we won’t deluge you with junk e-mails. Jonathan Kosares graduated cum laude from the University of Notre Dame with a dual major in Finance and Computer Applications. He has been with USAGOLD since 2002, and currently holds the position of Executive Vice President of Sales and Marketing. He is the moderator of the USAGOLD RoundTable series, has authored numerous articles on the gold market and manages client activity for the high net worth division as well as the USAGOLD Trading and Storage Program. USAGOLD Review & Outlook is the contemporary, web-based version of our client letter, which traces its beginnings to the early 1990s under the News & Views banner. Its principle objectives have always been to keep our clients informed of important developments in the gold market; condense the available gold-based news and opinion into a brief, readable digest; and counter the traditional anti-gold bias in the mainstream media. That formula has won it a five-figure subscription base (and growing). In addition to our regular newsletters, we occasionally publish in-depth special reports that focus on events and developments of interest to gold owners. Valued for its insight, accuracy and reliability, this pubilcation is linked and reprinted regularly by a large number of websites both in the United States and around the globe. It also enjoys the goodwill of countless websites, individuals and organizations who contribute regularly to its content. To this group, we owe a deep debt of gratitude. Disclaimer – Opinions expressed on the USAGOLD.com website do not constitute an offer to buy or sell, or the solicitation of an offer to buy or sell any precious metals product, nor should they be viewed in any way as investment advice or advice to buy, sell or hold. USAGOLD, Inc. recommends the purchase of physical precious metals for asset preservation purposes, not speculation. Utilization of these opinions for speculative purposes is neither suggested nor advised. Commentary is strictly for educational purposes, and as such USAGOLD does not warrant or guarantee the the accuracy, timeliness or completeness of the information found here. | |
| Posted: 20 Nov 2013 09:00 AM PST By Dmitry Orlov, The Burning Platform:
The reason Diamond avoids it is obvious: collapse is an unacceptable topic of discussion if it relates to us. It is perfectly fine to talk about past collapses, and perhaps even muse about future collapses, provided they happen to someone else. That's because we are exceptional and will go on forever. Here's a memorable example: I once gave a talk for the Long Now Foundation in San Francisco, and during the Q&A afterwards someone asked me about Russia's demographic crisis. Stewart Brand, who was reading off the questions from cards, chimed in to say that it looks like the Russians will be extinct in just a couple of generations (they aren't). So, Stewart, in how many generations are Americans going to be extinct? I need a number; what's the Long Now Foundation's estimate on that? Crickets… | |
| $1 million gold stash found in airplane toilet Posted: 20 Nov 2013 08:58 AM PST The 24 gold bars were found by cleaners on an airliner in India 
This posting includes an audio/video/photo media file: Download Now | |
| The Cure for the Broken Monetary System Posted: 20 Nov 2013 08:56 AM PST Before the housing market collapsed and the government pumped billions into the economy to save it, there was a programmer named Satoshi Nakamoto. And without much fanfare, he created an idea that’s in the process of changing the world. His idea was Bitcoin. Some background information is in order before I go any further. Think back to 2008. Real estate was in a free fall, and the devastation was most intensely felt by the largest banks and investment firms holding mostly worthless assets in the form of mortgage-backed securities. The lame-duck Bush administration was frantically lobbying to spend $800 billion to bail out the banks. Government cannot control Bitcoin any more than they can control algebra. It exists and it is not going away. To achieve this implausible goal, the Bush administration, along with its counterpart in the U.K., had to whip up a kind of hysteria. Administration officials warned of a melting financial world. Banks would die, ATMs would run out of money, goods would not ship, the monetary system would break down, and the U.S. was going the way of Iceland, which, at the time, ran out of purchasable groceries. Was it true? I never believed it. I had seen this kind of government-induced frenzy before, which the establishment was pushing through things like Homeland Security, or NAFTA, or other huge and decisive bills that met with massive public opposition. The establishment has to create an environment of fear in order to get the bill through Congress. Looking back at those days, it seems obvious now that this was a turning point in history, a time in which it became very clear to some very smart people in the world that the government’s system of financial and monetary management was broken. If an entire system could be brought down by declining house prices, is it really robust enough to support global economic growth into the future. Back to the faceless programmer, Satoshi Nakamoto. Around the same time, he was putting the finishing touches on his newly proposed currency, Bitcoin. It would be created entirely out of code. It would have all the main features that we know good money has. It would be divisible, portable, durable, uniform in quality, and scarce. He chose the model of open source code: everyone could see exactly how it is made. It would live on a ledger in the Internet cloud, and the ledger would keep strict controls on creation of new units and the ownership of existing units. There was just one problem: His newly created Bitcoin had no value whatsoever. Nakamoto knew that if it were ever to have value, it couldn’t be imparted by the programmers. It had to come from the market itself. The proposed product appeared that January, as the new administration was taking office. You could think of this as an act of secession, a final declaration of no confidence in the existing system. For the next eight months, it was nothing but a curiosity. A techy dream that never reached beyond the dark part of the Internet and the tiny group of genius-geeks who follow things like it. But in October 2009, something amazing happened. Bitcoin obtained a price on the market. It began to trade at about 2/10 of a penny. In other words, one U.S. cent would get you 5 Bitcoins. How could this happen? Two crucial points help explain what happened. First, it had proven itself to be very useful and functional. It was portable. The system was stable. The ledger in the sky called the “blockchain” worked exactly as Satoshi expected that it would. Second, Bitcoin was scarce. Only a certain number could be created in any period of time, and the way they were created was through the hard work of computers themselves. This feature of scarcity and resource use led the market to value them. But of course, that was all 4½ years ago. Today, Bitcoin is roaring. In the last several weeks, it has moved exponentially from $250 to peak at $900, before a huge selloff hit it again and it settled in the $700 range. But one thing many people have noticed about the latest rally. It is not following the same pattern as in the past. Each time, there seems to be a settling back to reality (whatever that is!), something stops it, and buyers step in to dominate the market. There are a number of salient factors driving this. The myth that Bitcoin is valuable only for purchases of drugs online has been shattered. The “Amazon for narcotics” was shut down by the feds just a few weeks ago and the exchange rate of Bitcoin to the dollar did not collapse. In fact, after about 48 hours, the price had actually risen in value. Also, China has entered the market in a huge way. Some people believe that one-third of current trading activity is coming from China, where the government has shown itself to have a very laissez faire attitude when it comes to the currency. The congressional hearings held on Capitol Hill featured a line of administration officials warning that they are on the job to make sure that Bitcoin is not ever used for nefarious purposes. But can these government regulators really fulfill their promises? Bitcoin lives on a distributed network that cannot be taken down. The transactions are pseudonymous. That means you can track ownership numbers, but you can’t necessarily connect those numbers to particular people. It is not a perfect system for preserving anonymity, but it comes closer than anything that exists. Government cannot control Bitcoin any more than they can control algebra. It exists and it is not going away. It will live forever outside the control of any state. Satoshi proposed his system as a possible new standard for money in the Internet age. It was a wild dream and speculation. But these are times in which dreams come true. The current monetary system has been nationalized for 100 years, and it is broken down. By their own words, the world’s central bankers and presidents have said the system is unstable and needs constant bailing out. That’s not what you want to hear from the people in charge. Satoshi saw that it was time for something new. The market apparently agrees. Now, no matter what government does, it can’t help but inadvertently promote the use of this new medium of exchange. It has a life of its own. Bureaucrats can complain, threaten, pronounce, and warn. But in the end, Bitcoin just doesn’t care. Sincerely, Jeffrey Tucker Ed. Note: There’s no denying it… Bitcoin has had quite a run this year. Whether it represents the “future of money” remains to be seen. But while so many people remain perplexed by this cyber-crypto currency, the readers of Laissez Faire Today are way ahead of the curve. They’ve been clued into this, and many other stories, for a heck of a lot longer than the general public. So if you want access to the most exciting and controversial topics no one is talking about, you owe it to yourself check out Laissez Faire Tooday, for free, right here. Original article posted on Laissez Faire Today | |
| Swiss govt. urges voters to reject ban on SNB gold sales Posted: 20 Nov 2013 08:26 AM PST The Swiss government is urging voters to reject a popular initiative to ban the Swiss National Bank from selling any of its gold reserves. | |
| Can’t-miss headlines – Copper at a low, palladium in a cross and more Posted: 20 Nov 2013 08:25 AM PST While copper hits a three-month low, Gold Fields manages to claw its way back into profit and analysts point to a "golden cross" for palladium. | |
| Euromax: low grade copper/gold but potential ‘cash cow’ Posted: 20 Nov 2013 08:25 AM PST Junior European mine explorer/developer, Euromax, run by former European Goldfields executives has high hopes for its Ilovitza copper/gold porphyry in Macedonia. | |
| Gold coins back on sale in India Posted: 20 Nov 2013 08:25 AM PST Smarting at the huge loss in sales, retailers across India are offering smaller denomination gold coins. | |
| Gold mine output set to reach record, disappointing bulls Posted: 20 Nov 2013 08:25 AM PST This record production is disappointing gold bulls who are impatiently waiting for production cuts following this year’s 24% plunge in prices. | |
| Gold bears return before Yellen signals more easing Posted: 20 Nov 2013 08:25 AM PST Gold rallied as Janet Yellen said on November 14 she's ready to back stimulus until she sees robust economic growth. | |
| Gold Fields battens down the exploration hatches Posted: 20 Nov 2013 08:25 AM PST Returning to a profit for the three months to September, the group remains firmly in cost reduction mode. | |
| Historic Chaos, Crisis & The War Between Inflation & Deflation Posted: 20 Nov 2013 08:20 AM PST  With the US dollar surging, and continued pressure on gold and silver, today a man out of Europe who has been extremely accurate with his calls on the gold market sent King World News a powerful commentary discussing the ongoing war that is raging between inflation and deflation. KWN was given exclusive distribution rights to the outstanding piece below by Ronald-Peter Stoferle of Incrementum AG out of Lichtenstein.This posting includes an audio/video/photo media file: Download Now | |
| Is Silver Likely To Decline From Here? Posted: 20 Nov 2013 07:58 AM PST In today's commentary, we examine long- and short-term charts of silver to find out what the current outlook for the white metal is. We will start with the analysis of silver from the long-term perspective ... Read More... | |
| Government Economists: About as Useful as a Fork in a Sugar Bowl Posted: 20 Nov 2013 07:58 AM PST Humans tend to believe what they're told by authority figures. Even in the face of contradictory evidence. The Milgram Experiment taught us this in 1963. Posing as scientists, researchers instructed volunteers to inflict painful electric shocks on what they thought were other innocent volunteers, as a penalty for answering questions incorrectly. The shockers couldn't see the people they were shocking, but could hear their reactions: terrible cries of pain, pounding on the wall, pleas to stop, and eventually, ominous silence. Of course, it was all a ruse, but the shockers didn't know that. They thought they were effectively torturing the victims. Yet most shockers ignored the victims' agonized pleas to stop, opting instead to obey the "scientist's" commands to continue. Why? Because the "scientist" was an expert. He was wearing a white lab coat, so he must know best. We treat economists similarly today, deferring to their expertise in economic matters, even when common sense suggests they are wrong. Paul Krugman says an alien invasion would cure our economic ills by forcing us to spend money to defend against their attack. If a stranger on the bus said that, you might direct him to the nearest mental facility. But Krugman? He has a framed MIT doctorate gracing his office wall, so he must know what he's talking about. Here's a dirty little secret: Economists—particularly government and other mainstream ones—stink at their jobs. They're awful at forecasting the future. History shows that not only are economists incapable of forecasting recessions, they usually can't even recognize that we're in a recession once it's already started. If you were as bad at your job as the average economist is at his, you wouldn't have a job. Management would fire you, assuming they could do so before your horrendous decisions brought down the entire company. With that background, I'm excited to share with you an excerpt from John Mauldin's fantastic new book, Code Red. As you might've guessed, the premise of the passage you'll read below is that mainstream economists have a horrific track record, a claim the book backs up with impressive stats. For investors, relying on mainstream economists' forecasts is a sure path to subpar returns. But Code Red is about so much more. I plowed through it this over the weekend, and if I had to describe it in one word, it would be "satisfying." John Mauldin and his co-author Jonathan Tepper beautifully explain how seemingly unrelated pieces of the global economy fit together, how we've arrived at our near zero-interest rate world, and which countries are closest to crisis. What seems absurdly complex before reading the book becomes crystal clear afterward. Code Red also contains plenty of real-world investment advice. While authors John & Jon first lay the groundwork by discussing economic theory, the latter section of the book focuses on how to invest in our world of interest rate suppression, money printing, and pallid economic growth. Here are a couple of the chapter titles, to give you an idea of the topics Code Red covers:
With that, I'll leave you to explore the excerpt for yourself. If you like what you read, you can purchase a copy of Code Red for 28% off the regular price by clicking here. Enjoy. Dan Steinhart | |
| Silver Fundamentals – The Historian Perspective Posted: 20 Nov 2013 07:56 AM PST Ryan Jordan, Ph.D. is a professional historian, author and college professor. He is the author of "Silver – The Peoples Metal" which I highly recommend. Mr Ryan Jordan sees silver fundamentals from the perspective of a historian. Besides, he looks at it as an astute observer of present conditions. In his analysis, he takes the following area’s into account:
Before looking into the details of his work, we summarize the conclusions of his analysis. His work is not about moment moving averages, technical analysis, relative strength indicators, partial differential equations, Federal Reserve economic models. By contrast, he provides only a perspective as an historian:
His recent work offers more detailed thoughts about silver. Below are several quotes and thoughts from his research. 1) Demand for silver is strongFrom his article: Silver Demand As Guide for Silver's Next Price Move "The US Mint confirmed a record year for sales of silver coins– and we still have six weeks in the year to go. Yes, the roughly 40 million ounces of silver only accounts for maybe 5% of overall demand, but it also represents a huge increase from a decade ago when it comes to investor interest in physical metal. In fact, globally, silver investment demand is up essentially from ZERO just 10 short years ago (take some time to allow that to sink in when thinking about the change in investor sentiment toward precious metals in recent years.) And demand for silver isn't just an American phenomenon. Last month, somewhat surprising news came out of India of a roughly 130 million ounces of silver imported into that country in just the first six months of the year. This was in response to the shutdown of gold imports into that country." 2) Inflation will be increasingly importantAs long as the world monetary systems are run by central banks, particularly the Federal Reserve, we can expect inflation in the money supply, debt, and consumer prices. The weakness in gold and silver since 2011 is, in our opinion, a temporary correction in the four decade uptrend for debt, spending, and gold and silver prices. "Gold and Silver: The Big Picture" "Another long term, fundamental factor in the rise of gold and silver comes from the belief of central planners that inflation is nonexistent currently and actually needs to increase. This is the view held by many among western central bankers, and is part of the reason why FED bond purchases will not decline much from the nearly 1 trillion a year mark, as made clear this week by the US central bank. FOMC statements released Wednesday continue to affirm that the deflationary threats from the 2008 crisis remain. The ultra-loose stance of the world's largest central bank should be of concern to anyone who wonders if inflation might one day get out of hand. And in India, known as one of the world's leading gold markets, inflation is already making its presence felt. The Indian central bank continues to raise interest rates while attempting to curtail demand for gold among Indian citizens. Many observers note the similarity to policies once adopted by the US government in the late 1960s and 1970s, and how those policies failed to dampen demand for gold as both inflation and interest rates rose strongly. My question for any gold or silver bear is this: if gold and silver went up nearly 7 times over the last 10 years with no meaningful inflation in western nations, how much more will the metals go up when inflation is officially recognized as a problem by those in charge?" 3) Precious metals have been largely ignored for over 30 yearsYes, they are occasionally mentioned in the mainstream media and on financial television, but the media's primary focus is on stocks and bonds – paper promises and paper debt – not on something real like a gold bar or a stack of silver coins. Dr. Jordan thinks that gold and silver will become an increasingly important part of more investment plans and that this transition will accelerate. "Precious Metals: The Emerging Asset Class" "Over the past year, the cult of equities has made a return, as indices roar to all-time highs, and as many look to cash in on new IPOs like they did in the last tech boom 15 years ago." "But I'd like to make some historical comparisons between the two periods, to explain how even with stocks catching all the attention, this hardly means that gold and silver will continue to be left out in the cold. Here are three main reasons why I do not believe gold, silver, PGMs, or mining shares will behave as they did in the 1980s and 90s: 1) Just last month, President Obama actually made reference to the reserve status of the U.S. dollar as being in jeopardy based on current dysfunctional behavior in Washington, D.C. I don't ever recall Presidents Reagan through Clinton saying something similar– and for good reason. To take the case of President Reagan's first term in office, the US Dollar rallied something like 50% at one point. While I don't expect the dollar to crash anytime soon, too many players globally are looking to diversify away from the greenback for the dollar to re-enter a secular bull market. A big question mark remains over the US dollar's reserve status and this represents one of the most powerful reasons to continue to own precious metals– or even to acquire more. 2) The challenges facing mining companies these past couple of years signals a downshift in global gold and silver production. This decline won't happen immediately, since it takes a while to shudder mine projects – but ore grades can only decline so much before it becomes uneconomical to attempt to increase overall mine output. This reality stands in marked contrast to the 1980s and 1990s, where mine output for both metals made significant increases during those decades. Supply constraints – especially if they are coupled with new industrial demand for the white precious metals – will eventually lead to higher prices. 3) The growth in the global middle class outside of the West is a trend that began 20 years ago, but the trend has accelerated in recent years. Many commentators believe that the shift in wealth from west to east will mean that upwards of 50% of new entrants to the global middle class in future years will come from areas outside the U.S. and Western Europe. As has been seen all year, buyers in Asia and the Middle East possess an attachment to physical gold- ranging from the person buying jewelry to the central banker buying bullion bars– that is hard to break. Oftentimes these attachments speak to the cultural memory of volatile local currencies or political malfeasance in these nations. Overall there remain some big differences between today and 20 or 30 years ago when it comes to precious metals. While faith in central planners and their ability to levitate equity markets is strong among some, there are others like myself who do feel that 2008 mattered–and not in a good way. Zero percent interest rates, a stagnant economy for upwards of 80% of people in the U.S. and Western Europe, continued discussion of unsustainable debt levels, and the existence of a black hole of derivatives and other "off balance sheet" financial sleights of hand are just a few issues facing investors currently. It may be hard to believe it now, but I don't think the precious metals will remain under-owned forever." 4) The conventional investment perspective is not the only valid one"Don't Drink Too Deeply From the Well of Conventional Thought" "The inability of people to see the world for what it is was quite apparent with the nonsensical discussion of Fed tapering over the last several months. Many in positions of power sought to convince the unwashed that somehow these extreme monetary measures can be undone, or taken back. And many still believe them. As part of this naivety we then get people believing that entire asset classes, like gold, silver and mining shares are only for crazy people- that genuine tangible asset investing need not play any role in a given portfolio. My only advice for people is to please be very careful about drinking too deeply from the well of conventional thought. It is not that the world is going to end, but by the same token the days of 4 or 5% economic growth coupled with a strong and growing middle class are gone for a long time. This new reality requires a new attitude towards investing. Don't let the recent weakness in the precious metals sector mislead you." GE Christenson | The Deviant Investor | |
| Gold-laden Indian brides defy prime minister as culture triumphs Posted: 20 Nov 2013 07:53 AM PST As the sound of traditional drums, trumpets and cymbals ushers Amrita Mannil into the wedding hall, she's adorned by four finely crafted necklaces, rings, 16 bangles, a glistening belt, dangling chandelier earrings and a stone-encrusted headpiece to match the silk borders of her dress. She's wearing about 800 grams (1.8 pounds) of gold. Amid the music and the chanted prayers, a gold chain is placed around her neck as the 25-year-old advertising executive marries Vimal Mohan in a traditional Hindu ceremony attended by 500 friends and relatives in Kozhikode, about 112 miles from the city of Kochi in Kerala. "Gold is an asset the girl carries," 28-year-old Namitha Shyam, the bride's older sister, said after last month's ceremony. "The values, status and wealth of the family is represented by the gold the girl wears as she gets married. The more gold you wear, the more pride you have in your family." …"In the long term, the fundamentals of gold demand are still intact," said Haresh Soni, chairman of the All India Gems & Jewellery Trade Federation, which represents 300,000 jewelers and bullion dealers. "For Indians, gold buying is not just a cultural or traditional compulsion but also acts as social security. From birth to death, gold is involved in all aspects of our life and used in our prayers and rituals." …There are about 5 million weddings in India every year, said Prithviraj Kothari, managing director of Riddhisiddhi Bullions and a director with the Bombay Bullion Association. The average purchase is 200 grams (7.05 ounces) , he said. [source] | |
| Gold pours into China to meet record demand Posted: 20 Nov 2013 07:19 AM PST 20-Nov (Reuters) — China, set to pass India this year as the world’s top gold consumer, has imported nearly a fifth more bullion than data from its traditional conduit Hong Kong shows as it brings in the metal via other routes. Gold shipped from Hong Kong to the mainland, used as a proxy for Chinese demand as bullion imports are a state secret, nearly tripled to 855 tonnes in the year to September. But a surge in China’s gold purchases as prices slumped by a quarter this year has also seen at least 133 tonnes shipped directly, according to Reuters calculations based on data from Global Trade Information Services (GTIS). That figure could be even higher as it does not include central bank purchases. [source] PG View: And the Chinese say xiè xie (thank you) to the paper gold market of the west for the low price! Note that the earlier Reuters piece cites weak physical demand as part of the reason gold is lower today. There’s noting weak about physical demand in China these days. | |
| Gold Prices Hit 5-Week Low on "Investor Disdain" as US Inflation Turns Negative, China Demand Surges Posted: 20 Nov 2013 07:13 AM PST GOLD PRICES fell to new 5-week lows Wednesday lunchtime in London, dropping below $1257 for a 2.5% loss so far this week after new data showed US consumer prices falling last month from September. Year-on-year, inflation in the US CPI fell to 1.0%, its lowest level since the deflation of 2009. US stock markets rose after the news, while European equities cut earlier losses. Silver tracked gold prices lower, falling to a 15-week low at $20.14 per ounce in wholesale London trade. "[Gold prices are] attempting to find a floor amid weak physical demand and investor disdain," says a note from Robin Bhar at SocGen. "With speculators remaining net short," says a commodities note from ANZ Bank, looking at the bearish bets of hedge funds and other non-industry players, "a short-covering rally could see gold prices spike higher. "We expect gold prices to see solid resistance around the $1290-95 area." "A slip through the six-month support line at $1265.02 will confirm our bearish outlook," says Commerzbank's technical analyst Axel Rudoplh. Ahead of today's weak US inflation data, "The [US Fed] remains committed to maintaining highly accommodative policies for as long as they are needed," said current chair Ben Bernanke in a speech late Tuesday. Looking ahead to Wednesday's later release of notes from the latest US Federal Reserve meeting, "Dovish minutes may result in some short-covering of gold," agrees Standard Bank's commodity team in London. "[But] we doubt a rally would last, especially in the current absence of strong physical demand for gold from Asia." China's imports of gold bullion through Hong Kong have tripled in 2013 to 855 tonnes, says a report today from Reuters. Other import routes, which aren't officially reported, could have added a further 133 tonnes, says the newswire, citing data from Global Trade Information Services (GTIS). Gold dealers in former world No.1 consumer India are meantime starting to sell gold coins once again, says MineWeb, after the industry's self-imposed ban of the summer, intended to show solidarity with the government's anti-gold import drive, aimed at reducing the country's large trade deficit. With some 45,000 members, the All India Gem & Jewellery Trade Federation has now "advised our members to sell gold coins," says chairman Haresh Soni. High prices and lack of supplies meant that, during last month's Diwali festival, people made offerings of dry fruits, instead of the more traditional gold coins, says Bachhraj Bamalwa, director of dealers Nemichand Bamalwa. "What has worsened matters is the rampant smuggling, which is driving prices lower and getting customers flocking to the grey market," he's quoted by MineWeb. Meantime in London, Bloomberg reported UK regulators are reviewing key gold benchmarks set by trade flowing through the center of the world's wholesale market. Refusing to say which benchmarks are being reviewed, an unnamed source told the newswire that the FCA's interest is only preliminary, "and hasn't risen to the level of a formal investigation." | |
| Silver Fundamentals from an Historian’s Perspective Posted: 20 Nov 2013 07:00 AM PST Ryan Jordan, Ph.D. is a professional historian, author and college professor. He is the author of "Silver – The Peoples Metal" which I highly recommend. He sees silver fundamentals from the perspective of a historian and as an astute observer of present conditions. He studies the drivers of the silver market, supply, demand, mining, inflation, investment sentiment, central bank bond monetization policies, and politics. | |
| Is Silver Likely to Decline from Here? Posted: 20 Nov 2013 06:51 AM PST Looking at the chart of silver from today's point of view, we see that at the end of the previous week, the white metal (similarly to gold) moved higher after Federal Reserve Chair Nominee Janet Yellen told that monetary stimulus tools shouldn't be removed too soon. If you recall, several days ago we wrote that gold could move higher but that that would just be a counter trend move and would likely be followed by further declines. | |
| Weak US Inflation Sees Gold at 5-Week Low on "Western Disdain", Chinese Imports Revised Higher Posted: 20 Nov 2013 06:31 AM PST WHOLESALE gold fell to new 5-week lows Wednesday lunchtime in London, dropping below $1257 for a 2.5% loss so far this week after new data showed US consumer prices falling last month from September. Year-on-year, inflation in the US CPI fell to 1.0%, its lowest level since the deflation of 2009. US stock markets rose after the news, while European equities cut earlier losses. Silver tracked gold lower, falling to a 15-week low at $20.14 per ounce in wholesale London trade. | |
| Gold slides to one-month low ahead of Fed minutes Posted: 20 Nov 2013 06:23 AM PST 20-Nov (Reuters) – Gold fell 1 percent on Wednesday as investors awaited the release of minutes of the Federal Reserve’s last policy meeting later in the day, hoping for clues on when it will trim its monetary stimulus programme. Persistent weakness in physical demand meant the metal failed to benefit from a dovish tone to Fed officials’ comments on Tuesday, traders said. In a speech that echoed comments by his nominated successor, Janet Yellen, Fed chairman Ben Bernanke said that while the economy had made significant progress, it was still far from where officials wanted it to be. In recent years ultra-loose monetary policy has been a key factor driving gold prices higher as it keeps interest rates nailed down while stoking inflation fears. [source] PG View: The Fed has been pretty effective at sowing just enough doubt to keep markets off-guard, but be assured that ultra-loose monetary policy is here to stay for years to come. | |
| BoE Survey Shows Growing Fears Of House Price Crash Posted: 20 Nov 2013 06:04 AM PST Gold in sterling terms is testing strong support at the £775/oz level. A breach of this level could lead to gold testing the next level of support at £740/oz and below that at £700/oz which was resistance in 2009 (see 5 year chart below). Gold was trading in a tight range until it suffered another very sharp concentrated sell off at 1126 GMT which led to prices falling from $1,272/oz to $1,259/50 in seconds. The selling was so furious and concentrated that it led the CME to stop trading for a significant twenty seconds. Some entity appeared determined to get the gold price lower and they succeeded - for now. | |
| Posted: 20 Nov 2013 05:49 AM PST | |
| Heat, Light & Venezuela in London Gold Manipulation Posted: 20 Nov 2013 05:42 AM PST No-news flash! Regulator the FCA is looking at London gold prices. News-sites are chasing "manipulation" traffic... MORE heat than light in a story from Bloomberg overnight, writes Adrian Ash at BullionVault. Certain parts of the London gold market are being "reviewed" by the UK's financial regulator, the Financial Conduct Authority. Because London trade sets the world's gold benchmarks for price (notably the London Fix) as well as lending rates (known as GOFO). And where there are benchmarks, regulators must now follow. It's not an "investigation" however. So the source won't give their name, nor anything else, let alone a blunt accusation of "manipulation". Which doesn't make them much of a "source". Nor is any of this news. Reuters had a better report 3 weeks ago about how the London gold trading industry, heart of the world's wholesale bullion trade, is addressing the rising temperature of regulatory interest. And at last month's London Bullion Market Association shindig in Rome, we in fact got this short presentation straight from the horse's mouth, plus this interview (via our friends at Kitco) with the FCA's Don Groves during a conference coffee break. So what's the likely impact of whatever is, or isn't, now under review? In London's wholesale gold market, GOFO is the lending rate (in fact, it's the interest rate which current owners will pay a borrower to take their gold away). Rather than being directly visible to the world at large, it is reported by the banks to trade association the LBMA, in much the same way individual banks' Libor interest rates (the interbank interest rates which banks charge each other to borrow) are reported to the British Bankers Association, which then produces a single Libor figure for the cash lending market as a whole. So with GOFO, there's lots of scope for the regulator, the FCA, to ask questions. Because like Libor, the reported GOFO rate is used in other, off-the-shelf products more widely available to market participants. The value will be very much smaller than the value of business done with reference to interbank cash rates. Not least thanks to the collapse in gold lending and swapping, starting in 2003, brought about by the long bull market in prices. But you can smell the story here, if not the facts. Manipulation of Libor has, to date, led to fines worth some $5 billion. The gold and silver prices Fixes, in contrast, are a market price set by client business through the 5 member banks of the London Gold Fixing Ltd, as we explained in this article earlier this year. Or alternatively, market participants can deal "spot". Although commonly cited, this doesn't in fact exist as a single, firm price. Instead, it represents the average mid-price of the 11 bullion market-making banks' firm bid/ask quotes, plus the quotes from all the hundreds of other gold and silver dealing banks, brokerages and trading houses centered in London. You can see this average tracked on BullionVault's reference gold price chart here. As regards prices on BullionVault's order board, where consumers (like you and me) can trade wholesale gold and silver for instant settlement, they're freely quoted and set by our users in open competition. No other retail investment service lets you set your own bid/ask prices as you choose with any market depth or liquidity. None also lets you trade at the Daily Price, if you so wish, as achieved by the London Fixes. Again, the Fix offers a separate route to price discovery. To learn more about that global benchmark, please see the Fixing Limited's own site. Meantime, and away from news-sites chasing Google hits for "London gold manipulation", there's much more important events for gold happening in Venezuela. Because the socialist paradise, of all places, is having to pawn its gold reserves to raise cash, according to local press. And it's using investment bank Goldman Sachs of all people to do it! El Banco Central de Venezuela is said to have entered into a "gold swap" agreement with Goldmans for some 45 tonnes of its 367-tonne gold reserves. Part of the 14th largest national hoard in the world is apparently being swapped for cash (which will then be swapped back, sometime in the future) because the country's foreign-exchange reserves have run down to a 10-year low, with only enough money left to fund 10 days of imports, according to a local economist. Why the cash crunch? Because El Banco is desperately selling foreign currency, and buying its own money back, trying to defend the Venezuelan Bolivar Fuerte's value against the US Dollar on the FX markets. The central bank slashed the VEF's official peg to the imperialist greenback by one third at the start of this year. But the black market price (ie, the only market price, where private individuals buy and sell away from the politicos' diktat) puts the devaluation nearer 90%. So after making such a fuss about "taking its gold home from London" under the late Hugo Chavez, the Central Bank of Venezuela is now turning back to the London gold market to mobilize the value of its reserves. London regulator the FCA is part of the Bank of England. Maybe Venezuela will email the Market Abuse team about the swap rate it got in that deal with Goldmans, you might ask. But that was, by all accounts, a direct deal between two consenting parties. Enquiring minds might further wonder who's playing the end-borrower of those 45 tonnes of gold apparently swapped out by El Banco. With gold prices falling so hard in 2013, many smaller mining companies have reportedly been looking to sell gold now, borrowing it with a view to repaying that bullion debt with forward mine production in the future. And with gold prices down so hard after emerging-market economies started to build their reserves during the metal's unstoppable 12-year rise, many more of those central banks might also be looking to "mobilize" their holdings, getting a rate of return via the gold lending market in London. | |
| Heat, Light & Venezuela in London Gold Manipulation Posted: 20 Nov 2013 05:42 AM PST No-news flash! Regulator the FCA is looking at London gold prices. News-sites are chasing "manipulation" traffic... MORE heat than light in a story from Bloomberg overnight, writes Adrian Ash at BullionVault. Certain parts of the London gold market are being "reviewed" by the UK's financial regulator, the Financial Conduct Authority. Because London trade sets the world's gold benchmarks for price (notably the London Fix) as well as lending rates (known as GOFO). And where there are benchmarks, regulators must now follow. It's not an "investigation" however. So the source won't give their name, nor anything else, let alone a blunt accusation of "manipulation". Which doesn't make them much of a "source". Nor is any of this news. Reuters had a better report 3 weeks ago about how the London gold trading industry, heart of the world's wholesale bullion trade, is addressing the rising temperature of regulatory interest. And at last month's London Bullion Market Association shindig in Rome, we in fact got this short presentation straight from the horse's mouth, plus this interview (via our friends at Kitco) with the FCA's Don Groves during a conference coffee break. So what's the likely impact of whatever is, or isn't, now under review? In London's wholesale gold market, GOFO is the lending rate (in fact, it's the interest rate which current owners will pay a borrower to take their gold away). Rather than being directly visible to the world at large, it is reported by the banks to trade association the LBMA, in much the same way individual banks' Libor interest rates (the interbank interest rates which banks charge each other to borrow) are reported to the British Bankers Association, which then produces a single Libor figure for the cash lending market as a whole. So with GOFO, there's lots of scope for the regulator, the FCA, to ask questions. Because like Libor, the reported GOFO rate is used in other, off-the-shelf products more widely available to market participants. The value will be very much smaller than the value of business done with reference to interbank cash rates. Not least thanks to the collapse in gold lending and swapping, starting in 2003, brought about by the long bull market in prices. But you can smell the story here, if not the facts. Manipulation of Libor has, to date, led to fines worth some $5 billion. The gold and silver prices Fixes, in contrast, are a market price set by client business through the 5 member banks of the London Gold Fixing Ltd, as we explained in this article earlier this year. Or alternatively, market participants can deal "spot". Although commonly cited, this doesn't in fact exist as a single, firm price. Instead, it represents the average mid-price of the 11 bullion market-making banks' firm bid/ask quotes, plus the quotes from all the hundreds of other gold and silver dealing banks, brokerages and trading houses centered in London. You can see this average tracked on BullionVault's reference gold price chart here. As regards prices on BullionVault's order board, where consumers (like you and me) can trade wholesale gold and silver for instant settlement, they're freely quoted and set by our users in open competition. No other retail investment service lets you set your own bid/ask prices as you choose with any market depth or liquidity. None also lets you trade at the Daily Price, if you so wish, as achieved by the London Fixes. Again, the Fix offers a separate route to price discovery. To learn more about that global benchmark, please see the Fixing Limited's own site. Meantime, and away from news-sites chasing Google hits for "London gold manipulation", there's much more important events for gold happening in Venezuela. Because the socialist paradise, of all places, is having to pawn its gold reserves to raise cash, according to local press. And it's using investment bank Goldman Sachs of all people to do it! El Banco Central de Venezuela is said to have entered into a "gold swap" agreement with Goldmans for some 45 tonnes of its 367-tonne gold reserves. Part of the 14th largest national hoard in the world is apparently being swapped for cash (which will then be swapped back, sometime in the future) because the country's foreign-exchange reserves have run down to a 10-year low, with only enough money left to fund 10 days of imports, according to a local economist. Why the cash crunch? Because El Banco is desperately selling foreign currency, and buying its own money back, trying to defend the Venezuelan Bolivar Fuerte's value against the US Dollar on the FX markets. The central bank slashed the VEF's official peg to the imperialist greenback by one third at the start of this year. But the black market price (ie, the only market price, where private individuals buy and sell away from the politicos' diktat) puts the devaluation nearer 90%. So after making such a fuss about "taking its gold home from London" under the late Hugo Chavez, the Central Bank of Venezuela is now turning back to the London gold market to mobilize the value of its reserves. London regulator the FCA is part of the Bank of England. Maybe Venezuela will email the Market Abuse team about the swap rate it got in that deal with Goldmans, you might ask. But that was, by all accounts, a direct deal between two consenting parties. Enquiring minds might further wonder who's playing the end-borrower of those 45 tonnes of gold apparently swapped out by El Banco. With gold prices falling so hard in 2013, many smaller mining companies have reportedly been looking to sell gold now, borrowing it with a view to repaying that bullion debt with forward mine production in the future. And with gold prices down so hard after emerging-market economies started to build their reserves during the metal's unstoppable 12-year rise, many more of those central banks might also be looking to "mobilize" their holdings, getting a rate of return via the gold lending market in London. | |
| Heat, Light & Venezuela in London Gold Manipulation Posted: 20 Nov 2013 05:42 AM PST No-news flash! Regulator the FCA is looking at London gold prices. News-sites are chasing "manipulation" traffic... MORE heat than light in a story from Bloomberg overnight, writes Adrian Ash at BullionVault. Certain parts of the London gold market are being "reviewed" by the UK's financial regulator, the Financial Conduct Authority. Because London trade sets the world's gold benchmarks for price (notably the London Fix) as well as lending rates (known as GOFO). And where there are benchmarks, regulators must now follow. It's not an "investigation" however. So the source won't give their name, nor anything else, let alone a blunt accusation of "manipulation". Which doesn't make them much of a "source". Nor is any of this news. Reuters had a better report 3 weeks ago about how the London gold trading industry, heart of the world's wholesale bullion trade, is addressing the rising temperature of regulatory interest. And at last month's London Bullion Market Association shindig in Rome, we in fact got this short presentation straight from the horse's mouth, plus this interview (via our friends at Kitco) with the FCA's Don Groves during a conference coffee break. So what's the likely impact of whatever is, or isn't, now under review? In London's wholesale gold market, GOFO is the lending rate (in fact, it's the interest rate which current owners will pay a borrower to take their gold away). Rather than being directly visible to the world at large, it is reported by the banks to trade association the LBMA, in much the same way individual banks' Libor interest rates (the interbank interest rates which banks charge each other to borrow) are reported to the British Bankers Association, which then produces a single Libor figure for the cash lending market as a whole. So with GOFO, there's lots of scope for the regulator, the FCA, to ask questions. Because like Libor, the reported GOFO rate is used in other, off-the-shelf products more widely available to market participants. The value will be very much smaller than the value of business done with reference to interbank cash rates. Not least thanks to the collapse in gold lending and swapping, starting in 2003, brought about by the long bull market in prices. But you can smell the story here, if not the facts. Manipulation of Libor has, to date, led to fines worth some $5 billion. The gold and silver prices Fixes, in contrast, are a market price set by client business through the 5 member banks of the London Gold Fixing Ltd, as we explained in this article earlier this year. Or alternatively, market participants can deal "spot". Although commonly cited, this doesn't in fact exist as a single, firm price. Instead, it represents the average mid-price of the 11 bullion market-making banks' firm bid/ask quotes, plus the quotes from all the hundreds of other gold and silver dealing banks, brokerages and trading houses centered in London. You can see this average tracked on BullionVault's reference gold price chart here. As regards prices on BullionVault's order board, where consumers (like you and me) can trade wholesale gold and silver for instant settlement, they're freely quoted and set by our users in open competition. No other retail investment service lets you set your own bid/ask prices as you choose with any market depth or liquidity. None also lets you trade at the Daily Price, if you so wish, as achieved by the London Fixes. Again, the Fix offers a separate route to price discovery. To learn more about that global benchmark, please see the Fixing Limited's own site. Meantime, and away from news-sites chasing Google hits for "London gold manipulation", there's much more important events for gold happening in Venezuela. Because the socialist paradise, of all places, is having to pawn its gold reserves to raise cash, according to local press. And it's using investment bank Goldman Sachs of all people to do it! El Banco Central de Venezuela is said to have entered into a "gold swap" agreement with Goldmans for some 45 tonnes of its 367-tonne gold reserves. Part of the 14th largest national hoard in the world is apparently being swapped for cash (which will then be swapped back, sometime in the future) because the country's foreign-exchange reserves have run down to a 10-year low, with only enough money left to fund 10 days of imports, according to a local economist. Why the cash crunch? Because El Banco is desperately selling foreign currency, and buying its own money back, trying to defend the Venezuelan Bolivar Fuerte's value against the US Dollar on the FX markets. The central bank slashed the VEF's official peg to the imperialist greenback by one third at the start of this year. But the black market price (ie, the only market price, where private individuals buy and sell away from the politicos' diktat) puts the devaluation nearer 90%. So after making such a fuss about "taking its gold home from London" under the late Hugo Chavez, the Central Bank of Venezuela is now turning back to the London gold market to mobilize the value of its reserves. London regulator the FCA is part of the Bank of England. Maybe Venezuela will email the Market Abuse team about the swap rate it got in that deal with Goldmans, you might ask. But that was, by all accounts, a direct deal between two consenting parties. Enquiring minds might further wonder who's playing the end-borrower of those 45 tonnes of gold apparently swapped out by El Banco. With gold prices falling so hard in 2013, many smaller mining companies have reportedly been looking to sell gold now, borrowing it with a view to repaying that bullion debt with forward mine production in the future. And with gold prices down so hard after emerging-market economies started to build their reserves during the metal's unstoppable 12-year rise, many more of those central banks might also be looking to "mobilize" their holdings, getting a rate of return via the gold lending market in London. | |
| Jim Rogers Expects A Buying Opportunity In Gold And Silver Posted: 20 Nov 2013 05:38 AM PST This is an interview with Jim Rogers, conducted by Birch Gold Group. The topics that are covered range from monetary policy, the stock market frenzy, currency wars and precious metals. Jim Rogers his observations and predictions about how the currency war will unfold:
Jim Rogers about whether Larry Summers could have stopped Quantitative Easing:
Which signs would reveal a collapse would be approaching:
Jim Rogers said in an interview in Barrons that he is holding gold right now and expects maybe a buying opportunity to come up. Is that still the case?
Jim Rogers about silver’s prospects:
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| Why did the gold price plunge $10 in 10 seconds? Posted: 20 Nov 2013 05:35 AM PST Sudden drop in the precious metal on the day it emerges the UK regulator is investigating alleged rigging of the price raises questions about the market 
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| Gold's price fall seen prompting mines to produce more with high-grading Posted: 20 Nov 2013 05:22 AM PST Gold Mine Output Set to Reach Record, Disappoint Bulls By Jan Harvey and Clara Ferreira-Marques LONDON -- Output from the world's gold mines is set to hit record highs this year, disappointing bulls who are impatiently waiting for production cuts following this year's 24 percent plunge in prices. Some gold miners have felt the squeeze of lower prices this year, and a number, including Canada's Kinross and Russia's Polymetal, suspended marginal mines and projects after a dramatic first-half price drop. But as prices fall, others are actually increasing output to maintain revenue and profit levels. In some cases, they are targeting higher-grade ore to keep marginal mines operating and generating cash, at the expense of future production. ... ... For the full story: http://www.reuters.com/article/2013/11/20/gold-mine-output-idUSL5N0J44T7... ADVERTISEMENT Buy metals at GoldMoney and enjoy international storage 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: http://www.goldmoney.com/?gmrefcode=gata Join GATA here: Vancouver Resource Investment Conference http://www.cambridgehouse.com/event/vancouver-resource-investment-confer... * * * 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: ADVERTISEMENT How to profit with silver -- 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... | |
| China Imported An Additional 133 Tonnes Of Gold Directly in 2013 Posted: 20 Nov 2013 05:14 AM PST In early November we reported that China's net gold imports from Hong Kong totalled 854.2 tonnes between January and September 2013. More or less at the same period of time, based on the latest official gold market data, we concluded that the Chinese gold figures are merely reflecting part of reality, as explained in “World Gold Council Reports Significant Error In China's Gold Holdings.” Today’s news from Reuters shows that things are even more “complicated.” Over the course of this year, China would have imported an additional 133 tonnes directly, i.e. not through Hong Kong. This figure is a calculation by Reuters based on top 20 gold exporters in the world. From Reuters:
Moreover, the same article says that the calculcation probably understates the total direct imports as Britain and Switzerland do not provide complete details.
In addition, the 133 tonnes do not include the gold that was purchased by China’s central bank. The official reserves of the country have not been updated in the last 4 years (approximately). There are estimate that the real Chinese gold reserves are closer to 4,000 tonnes. | |
| Zero Hedge: Another gold slamdown looks like the work of the BIS Posted: 20 Nov 2013 05:13 AM PST Furious Gold Slamdown Leads To Yet Another 20-Second Gold Market Halt By "Tyler Durden" What do the following dates have in common: September 12, October 11, and now, November 20? These are all days in which there was a forced gold slamdown so furious that it triggered a "stop logic" event on the Chicago Mercantile Exchange resulting in a trading halt of the precious commodity. In today's case gold trading was halted for a whopping 20 seconds as the market tried to "reliquify" itself following what was a clear attempt to reprice the gold (and silver) complex lower. Needless to say, there was absolutely no news once again to drive the move. Ironically, this comes just as the London regulator is launching an investigation into London gold benchmark manipulation. We are, however, confident that all these glaringly obvious manipulative events that take places just around the London AM fix will be routinely ignored. After all, it is perfectly normal for someone to dump 1,500 GC contracts in one trade and suck up all the liquidity from the market with zero regard slippage costs, or getting the best execution price possible. Well, it's normal if that someone is the Bank of International Settlements. ... For the full commentary: http://www.zerohedge.com/news/2013-11-20/furious-gold-slamdown-leads-thi... ADVERTISEMENT Jim Sinclair Plans Seminar in Boston on Dec. 7 Gold advocate and mining entrepreneur Jim Sinclair will hold his next seminar from 1 to 5 p.m. on Saturday, December 7, in the Boston suburb of Cambridge, Mass., at the Boston Marriott Cambridge at 50 Broadway in Cambridge. The admission fee will be $50. Details are posted at Sinclair's Internet site, JSMineSet, here: http://www.jsmineset.com/2013/11/14/boston-qa-session-announced/ Join GATA here: Vancouver Resource Investment Conference http://www.cambridgehouse.com/event/vancouver-resource-investment-confer... * * * 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: | |
| Market Monitor – November 20th Posted: 20 Nov 2013 04:34 AM PST Top Market Stories For November 20th, 2013: The Money Bubble Gets Its Grand Rationalization - John Rubino Gold no "slam-dunk sell" in China as aunties pounce – Mineweb The Lost World of the Barbarous Relic - GoldSeek Dressed to the Nines with Gold - 321 Gold Gold benchmark price review launched: report – CNBC Jim Rogers: “Own Gold” [...] | |
| China's gold imports are likely far greater than reported from Hong Kong Posted: 20 Nov 2013 04:23 AM PST Gold Pours into China to Meet Record Demand, Bypasses Hong Kong By A. Ananthalakshmi SINGAPORE -- China, set to pass India this year as the world's top gold consumer, has imported nearly a fifth more bullion than data from its traditional conduit Hong Kong shows as it brings in the metal via other routes. Gold shipped from Hong Kong to the mainland, used as a proxy for Chinese demand as bullion imports are a state secret, nearly tripled to 855 tonnes in the year to September. But a surge in China's gold purchases as prices slumped by a quarter this year has also seen at least 133 tonnes shipped directly, according to Reuters calculations based on data from Global Trade Information Services. That figure could be even higher as it does not include central bank purchases. ... ... For the complete story: http://in.reuters.com/article/2013/11/20/china-gold-imports-idINL4N0J410... ADVERTISEMENT How to profit with silver -- 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: Vancouver Resource Investment Conference http://www.cambridgehouse.com/event/vancouver-resource-investment-confer... * * * 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: ADVERTISEMENT Buy metals at GoldMoney and enjoy international storage 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: http://www.goldmoney.com/?gmrefcode=gata | |
| Posted: 20 Nov 2013 04:08 AM PST By Dmitry Orlov http://cluborlov.blogspot.com/ Carolyn Baker’s CollapsingConsciously: Transformative Truths for Turbulent Times is perhaps the most approachable book on collapse you are likely to find. Compared to Jarred Diamond’s Collapse, which weighs in at just over 600 pages, Baker’s is well under 200. And yet in these few pages Baker manages to tackle a topic […] | |
| Stefan Ioannou's Three Things to Look for in Three Base Metal Plays Posted: 20 Nov 2013 12:00 AM PST The fundamentals tell Stefan Ioannou, mining analyst with Haywood Securities, that the outlook is good for copper and zinc in the midterm, while for nickel, stronger-for-longer is the watchword. In this interview with The Gold Report, he warns that nickel's price is unlikely to cycle up before 2017. For all three metals, producers are the safest bet, but some splashy exploration plays could have the biggest payoff. | |
| Stefan Ioannou's Three Things to Look for in Three Base Metal Plays Posted: 20 Nov 2013 12:00 AM PST The fundamentals tell Stefan Ioannou, mining analyst with Haywood Securities, that the outlook is good for copper and zinc in the midterm, while for nickel, stronger-for-longer is the watchword. In this interview with The Gold Report, he warns that nickel's price is unlikely to cycle up before 2017. For all three metals, producers are the safest bet, but some splashy exploration plays could have the biggest payoff. | |
| Silver Fundamentals from an Historian’s Perspective Posted: 19 Nov 2013 11:05 PM PST Read the Latest News About: Gold Silver Economy Central Banking Ryan Jordan, Ph.D., is a professional historian, author, and... {This is a content summary only. Click on the blog title to continue reading this post, share your comments, browse the website, and more!} |
While India’s government dithers over whether or not to change its recently implemented 20:80 policy on gold imports that has made supply of gold through banks and nominated agencies extremely difficult in the country and has given a major fillip to smugglers, bullion houses across the country are putting small denomination gold coins back on the shelves.
In early November we reported that 
This special edition broadcast is from last week's show on The Midnight Patriot. I am now a regular contributor every Thursday on 
Carolyn Baker's 
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