Thursday, November 21, 2013

Gold World News Flash

Gold World News Flash


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:

  • *FOMC SAW `SEVERAL SIGNIFICANT RISKS' REMAINING FOR ECONOMY
  • *FED TAPER LIKELY IN COMING MONTHS ON BETTER DATA, MINUTES SHOW
  • *METLIFE FOUNDATION, SESAME WORKSHOP PARTNER TO PROVIDE FINL
  • *FOMC SAW DOWNSIDE RISKS TO ECONOMY, LABOR MARKET `DIMINISHED'
  • *FOMC SAW CONSUMER SENTIMENT REMAINING `UNUSUALLY LOW'
  • *FOMC SAW RECOVERY IN HOUSING AS HAVING `SLOWED SOMEWHAT'

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:

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.

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.

Read More @ MineWeb.com

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


20-Nov (USAGOLD) — Gold fell to new four-week lows as heightened speculation about a negative deposit rate on funds parked at the ECB undermined the euro, driving it the single currency to a two-month low against the dollar. The corresponding rise in the greenback, weighed on the yellow metal.

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:

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.

Read More @ GoldSilverWorlds.com

When to Bug Out and When to Bug In – Prepper Recon on Midnight Patriot

Posted: 20 Nov 2013 09:15 AM PST

from PrepperReconon:

This special edition broadcast is from last week's show on The Midnight Patriot. I am now a regular contributor every Thursday on The Midnight Patriot. You can listen live to The Midnight Patriot every Monday through Friday evening from 10 pm EST to whenever, usually around 12:00 or 1:00 am. On this episode, we talked about bugging out vs bugging in.  We also discussed a few recent news articles that suggest the US economy may be reaching the end of the line.

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.
God bless and happy prepping!

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]

Trust Your Instincts

Posted: 20 Nov 2013 09:05 AM PST

Does the stock market’s relentless push higher seem unbelievable?
Now might be the time to listen to your intuition…

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:

'Combining the current P/E of over 19 for the S&P 500 and a return on sales about 42% over the historical average, we would get an estimate that the S&P 500 is approximately 75% overvalued.'

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 newsletterUSAGOLD’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.

Collapsing Consciously

Posted: 20 Nov 2013 09:00 AM PST

By Dmitry Orlov, The Burning Platform:

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 which Diamond studiously avoids: Whatever shall we do about the fact that collapse is happening all around us right now?

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…

Read More @ TheBurningPlatform.com

$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
for The Daily Reckoning

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.

Read more….

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.

Read more….

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.

Read more….

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.

Read more….

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.

Read more….

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.

Read more….

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.

Read more….

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:

  • 20th Century Currency Wars—The Barbarous Relic and Bretton Woods
  • A World of Financial Repression
  • Easy Money Will Lead to Bubbles, and How to Profit From Them
  • How to Protect Yourself Against Inflation
  • A Look at Commodities, Gold, and Other Real Assets

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
Managing Editor of The Casey Report


An Excerpt from Code Red: Chapter 6 - Economists Are Clueless

By John Mauldin & Jonathan Tepper

In November of 2008, as stock markets crashed around the world, the Queen of England visited the London School of Economics to open the New Academic Building. While she was there, she listened in on academic lectures. The Queen, who studiously avoids controversy and almost never lets people know what she's thinking, finally asked a simple question about the financial crisis, "How come nobody could foresee it?" No one could answer her.

If you suspected that mainstream economists are useless at the job of seeing a crisis in advance, you would be right. Dozens of studies show that economists are completely incapable of forecasting recessions. But forget forecasting. What's worse is that they fail miserably even at understanding where the economy is today. In one of the broadest studies of whether economists could predict recessions and financial crises, Prakash Loungani of the International Monetary Fund wrote very starkly, "The record of failure to predict recessions is virtually unblemished." This was true not only for official organizations like the IMF, the World Bank, or government agencies but for private forecasters as well. They're all terrible. Loungani concluded that the "inability to predict recessions is a ubiquitous feature of growth forecasts." Most economists were not even able to recognize recessions once they had already started.

In plain English, economists don't have a clue about the future.

If you think the Fed or government agencies know what is going on with the economy, you're mistaken. Government economists are about as useful as a fork in a sugar bowl. Their mistakes and failures are so spectacular you couldn't make them up if you tried. Yet now, in a Code Red world, we trust the same bankers to know where the economy is, where it is going, and how to manage monetary policy.

Central banks say that they will know when the time is right to end Code Red policies and when to shrink the bloated monetary base. But how will they know, given their record at forecasting? The Federal Reserve not only failed to predict the recessions of 1990, 2001, and 2007, it didn't even recognize them after they had already begun. Financial crises frequently happen because central banks cut interest rates too late and hike rates too soon.

Trusting central bankers now is a big bet that (1) they'll know what to do and (2) they'll know the right time to do it. Sadly, they generally don't have a clue about what is going on.

Unfortunately, the problem is not that economists are simply mediocre at what they do. The problem is that they're really, really bad. And they're so bad that their ineptitude cannot even be a matter of chance. As the statistician Nate Silver pointed out in his book The Signal and the Noise:

Indeed, economists have for a long time been much too confident in their ability to predict the direction of the economy. If economists' forecasts were as accurate as they claimed, we'd expect the actual value for GDP to fall within their prediction interval nine times out of ten, or all but about twice in eighteen years.

In fact, the actual value for GDP fell outside the economists' prediction interval six times in eighteen years, or fully one-third of the time. Another study, which ran these numbers back to the beginning of the Survey of Professional Forecasters in 1968, found even worse results: the actual figure for GDP fell outside the prediction interval almost half the time. There is almost no chance that economists have simply been unlucky; they fundamentally overstate the reliability of their predictions.

So it gets worse. Economists are not only generally wrong, they're extremely confident in their bad forecasts.

If economists were merely wrong at betting on horse races, their failure would be harmlessly amusing. But central bankers have the power to create money, change interest rates, and affect our lives in every way—and they don't have a clue.

Despite their cluelessness, there's no overestimating the hubris of central bankers. On 60 Minutes in December 2010, Scott Pelley interviewed Chairman Ben Bernanke and asked him whether he would be able to do the right thing at the right time. The exchange was startling:

Pelley: Can you act quickly enough to prevent inflation from getting out of control?

Bernanke: We could raise interest rates in 15 minutes if we have to. So, there really is no problem with raising rates, tightening monetary policy, slowing the economy, reducing inflation, at the appropriate time. Now, that time is not now.

Pelley: You have what degree of confidence in your ability to control this?

Bernanke: One hundred percent.

There you have it. Bernanke was not 95% confident, he was not 99% confident—no, he had zero doubts about his ability to know what is going on in the economy and what to do about it. We would love to have that kind of certainty about anything in life.

We're not picking just on Bernanke; we're picking on all central bankers who think they're infallible. The Bank of England has had by far the largest QE program relative to the size of its economy (though the Bank of Japan is about to show it a thing or two). It has also had the worst forecasting track record of any bank, and the worst record on inflation. Sir Mervyn King, the head of the Bank of England, was asked if it would be difficult to withdraw QE. He very confidently replied, "I have absolutely no doubt that when the time comes for us to reduce the size of our balance sheet that we'll find that a whole lot easier than we did when expanding it." (Are central bankers just naturally more arrogant than regular human beings, or are they smoking some powerful stuff at their meetings?)

Let's see whether this sort of absolute certainty is at all warranted.

In his book Future Babble, Dan Gardner wrote that economists are treated with the reverence the ancient Greeks accorded the Oracle of Delphi. But unlike the vague pronouncements from Delphi, economists' predictions can be checked against the future, and as Gardner says, "Anyone who does that will quickly conclude that economists make lousy soothsayers."

(As an aside, we suspect that economists may be the modern-day functional equivalent of tribal shamans. Instead of peering at the intestines of sheep to forecast the future, we look at data through the lenses of models we create, built with all our inherent biases, and then confidently predict the future or try to guide government policy in one direction or another, generally along paths that fit the favor depending on whether we are telling our fellow tribe members and leaders and potential leaders what they want to hear. It may be that economics is more like religion and less like science than most of us want to admit.)

The nearsightedness of economists is nothing new. In 1994 Paul Ormerod wrote a book called The Death of Economics. He pointed to economists' failure to forecast the Japanese recession after their bubble burst in 1989 or to foresee the collapse of the European Exchange Rate Mechanism in 1992. Ormerod was scathing in his assessment of economists: "The ability of orthodox economics to understand the workings of the economy at the overall level is manifestly weak (some would say it was entirely non-existent)."

When people think of economic forecasts, they almost always think of recessions, while economists think of forecasting growth rates or interest rates. But the average person in the street only wants to know, "Will we be in a recession soon?"—and if the economy is already in a recession, he or she wants to know, "When will it end?" The reason most working Americans care is that they know recessions mean job cuts and firings.

Figure 6.1 Recessions lead to falls in GDP and spikes in the unemployment rate

Source: Variant Perception, Bloomberg

Unfortunately, economists are of no use to the man or woman in the street. If you look at the history of the last three recessions in the United States, you will see that the inability of economists and central bankers to understand the state of the economy was so bad that you might be tempted to say they couldn't find their derrieres with both hands.

Figure 6.2 Economists have never predicted a recession correctly

Source: Societe Generale Equity Research

Let's remind ourselves what a recession is and how economists decide that one has started. A recession is a downturn in economic activity. Normally, a recession means unemployment goes up, GDP contracts, stock prices fall, and the economy weakens. The lofty body that decides when a recession has started or ended is the Business Cycle Dating Committee of the National Bureau of Economic Research. It is packed with eminent economists and other extremely smart people. Unfortunately, their pronouncements are completely unusable in real time. Their dating of recessions is authoritative and more or less accurate, but this exercise in hindsight comes together long after a recession has started or ended.

To give you an idea just how late recessions are officially called, let's look at the past three. The NBER dated the 1990-91 recession as beginning in August 1990 and ending in March 1991. It announced these facts in April 1991, by which time the recession was already over and the economy was growing again. The NBER was no faster catching up with the recession that followed the dotcom bust. It wasn't until June 2003 that the NBER pinpointed the 2001 recession—a full 28 months after the recession ended. The NBER didn't date the recession that started in December 2007 until exactly one year later. By that time, Lehman had gone bust, and the world was engulfed in the biggest financial cataclysm since the Great Depression.

The Federal Reserve and private economists also missed the onset of the last three recessions—even after they had started. Let's look quickly at each one.

Starting with the 1990-91 recession, let's see what the head of the Federal Reserve—the man who is charged with running American monetary policy—was saying at the time. That recession started in August 1990, but one month before it began Alan Greenspan said, "In the very near term there's little evidence that I can see to suggest the economy is tilting over [into recession]." The following month—the month the recession actually started—he continued on the same theme: "... those who argue that we are already in a recession I think are reasonably certain to be wrong." He was just as clueless two months later in October 1990, when he persisted, "... the economy has not yet slipped into recession." It was only near the end of the recession that Greenspan came around to accepting and acknowledging that it had begun.

The Federal Reserve did no better in the dotcom bust. Let's look at the facts. The recession started in March 2001. The tech heavy NASDAQ Index had already fallen 50% in a full-scale bust. Even so, Chairman Greenspan declared before the Economic Club of New York on May 24, 2001, "Moreover, with all our concerns about the next several quarters, there is still, in my judgment, ample evidence that we are experiencing only a pause in the investment in a broad set of innovations that has elevated the underlying growth rate in productivity to a level significantly above that of the two decades preceding 1995."

Charles Morris, a retired banker and financial writer, looked at a decade's worth of forecasts by the geniuses at the White House's Council of Economic Advisors. In 2000, the council raised their growth estimates just in time for the dot-com bust and the recession of 2001-02. In a survey conducted in March 2001, 95% of American economists said there would not be a recession. The recession had already started that March, and the signs of contraction were evident. Industrial production had already been contracting for five months.

You would have thought that their failure to forecast two recessions in a row might have sharpened the wits of the Federal Reserve, the Council of Economic Advisers, and private economists. Maybe they would have tried to improve their methods or figured out why they had failed so miserably. You would be wrong. Because along came the Great Recession, and—once again—they completely missed the boat.

Let's look at what the Fed was doing as the world was about to go up in flames in 2008. Recently, complete minutes of the Fed's October 2007 meeting were released. Keep in mind that the recession started two months later, in December 2007. The minutes make for depressing reading. The word recession does not appear once in the entire transcript.

It gets worse. The month the recession started, the Federal Reserve was all optimistic laughter. Dr. David Stockton, the Federal Reserve chief economist, presented his view to Chairman Bernanke and the meeting of the Federal Open Market Committee on December 11, 2007.

When you read the following quote and choke on your breakfast or lunch, remember that at the time the Fed was already providing ample liquidity to the shadow banking system after dozens of subprime lenders had gone bust in the spring, the British bank Northern Rock had been nationalized and spooked the European banking system, dozens of money market funds had been shut due to toxic assets, credit spreads were widening, stock prices had started to fall, and almost all the classic signs of a recession were evident. These included an inverted yield curve, which had received the casual attention of New York Fed economists even as it screamed recession. (John had pointed to it numerous times in Thoughts from the Frontline.)

Read these words of the Fed's chief economist and weep. You can't make this stuff up.

Overall, our forecast could admittedly be read as still painting a pretty benign picture: Despite all the financial turmoil, the economy avoids recession and, even with steeply higher prices for food and energy and a lower exchange value of the dollar, we achieve some modest edging-off of inflation. So I tried not to take it personally when I received a notice the other day that the Board had approved more frequent drug-testing for certain members of the senior staff, myself included. [Laughter] I can assure you, however, that the staff is not going to fall back on the increasingly popular celebrity excuse that we were under the influence of mind-altering chemicals and thus should not be held responsible for this forecast. No, we came up with this projection unimpaired and on nothing stronger than many late nights of diet Pepsi and vending-machine Twinkies.

We do not want to pick on Dr. Stockton unnecessarily, as all other government economists were equally awful. The President's Council of Economic Advisers' 2008 forecast saw positive growth for the first half of the year and foresaw a strong recovery in the second half.

Unfortunately, private-sector economists didn't do much better. With very few exceptions, they failed to foresee the financial and economic meltdown of 2008. Economists polled in the Survey of Professional Forecasters also failed to see a recession developing. They forecasted a slightly below-average rate of 2.4 percent for 2008, and they thought there was almost no chance of a recession as severe as the one that actually unfolded. In December 2007, a Businessweek survey showed that every single one of 54 economists predicted the U.S. economy would avoid a recession in 2008. The experts were unanimous that unemployment wouldn't be a problem, leading to the consensus conclusion that 2008 would be a good year.

As Nate Silver has pointed out, the worst thing about the bad predictions isn't that they were awful; it's that the economists in question were so confident in them:

This was a very bad forecast: GDP actually shrank by 3.3% once the financial crisis hit. What may be worse is that the economists were extremely confident in their bad pre

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:

  • drivers of the silver market
  • supply and demand forces
  • mining
  • inflation
  • investment sentiment
  • central bank monetary policies (in particular, bond monetization policies)
  • politics.

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:

  • Demand for silver is strong in the United States, India and China.
  • Central banks are printing currency and attempting to create inflation.
  • The reserve status of the dollar is weakening.  Many countries are bypassing the dollar in their international trade.
  • Mining companies will have reduced output because their revenues have declined while expenses have increased.  Hence the supply of silver and gold will remain relatively flat while demand is increasing.
  • The global middle class will demand more gold and silver for savings.  Americans may not understand gold and silver but over 2,000,000,000 Chinese and Indians do, and that demand for actual physical metals will grow.
  • The cult of equities is flying high but it may not last.  There is room for a shift from equities and bonds to precious metals.  Even a small shift in demand away from stocks and bonds could cause the relatively tiny gold and silver markets to rise to new highs.
  • Fundamentally and historically speaking, there are many reasons to own gold and silver.

His recent work offers more detailed thoughts about silver. Below are several quotes and thoughts from his research.

1)   Demand for silver is strong

From 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 important

As 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 years

Yes, 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.

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).

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:

Well, the first thing you need to know is that nobody ever wins a trade war, a currency war, which is just another kind of trade war. Everybody loses in the end, some may temporarily come out ahead but it's temporary if nothing else. As you have pointed out, the cost of living of many people is going up, and it certainly is, my gosh, in Japan you have a currency that's down 25% in a year. Well I assure you the Japanese are feeling that because everything that Japan imports has gone up fairly substantially AND even the things that they don't import are up because the Japanese manufacturers and the Japanese producers can raise prices because they don't have to worry about competing with the foreigners any more.

So we're all losing in currency wars. How long can it go on? Well, it can go on as long as politicians can continue to print money. The problem is, of course, eventually the markets will just say, "We're not going to play this game anymore" and we'll have a serious collapse. You and I can print money all day long, but at some point, you, I and everybody else is going to say, "Wait a minute, guys, this money is getting worse and worse and more and more worthless, so why don't we stop playing this game?" I wish the politicians were smart enough at some point to say, "We've got to stop this, this is going to be bad."

But unfortunately they never have, and probably never will. Mr. Bernanke is certainly not going to stop it, because he doesn't want to go down in history as causing the collapse. Mrs. Yellen, when she comes in, she's not going to stop it, first of all she doesn't believe in stopping it, she thinks printing money is good. And she knows – I hope she's smart enough to know – that if she stops, oh my gosh, it's going to collapse. So she's not going to stop. Nobody wants to go down as causing the collapse of the world. So I'm afraid this is going to go on until the market eventually says to them, "Okay, enough is enough," we have a big collapse and then they're all thrown out and we can start over.

Jim Rogers about whether Larry Summers could have stopped Quantitative Easing:

Well, first of all it's irrelevant because he's not going to be Federal Reserve Chairman. Second, even if he started, you know, if somebody came in and said, "Okay, we've got a terrible problem, we've made horrible mistakes, now let's change things." And even if everybody in the world said, "You know, he's right, we've got to do something" and they started, well, within a few months or a year or two, the pain would be pretty horrible and then everybody's going to say, "Well we didn't know the pain was going to be this bad, this is not what we signed up for." And then the guy would either be thrown out or assassinated or who knows what!

At first they say "It's fine, we want to do it", but once the pain comes, the pain is going to get pretty serious. We had Mr. Volcker who came in, was told "stop the madness" back in the 1970s and he did. Well, Jimmy Carter got thrown out, because he was who had told him to do that, because the pain was so bad. Reagan of course thought it was wonderful, that pain was taking place because that got him elected. And it was help to clean up the problems. That's what happens, you cause the pain and they throw you out.

Which signs would reveal a collapse would be approaching:

Well, I wish I was that smart or it was that easy. Back in the late 1970s, Mr. Volcker was told and he came in and said: "I am going to kill inflation because Mr. Carter has told me to." And Mr. Carter was very clear that he had to stop inflation. I doubt if we'll have that kind of scenario again but we would think, we would hope, that the Federal Reserve will announce, you know, that they publish their numbers so we can all see what's happening. At the moment they are buying a trillion dollars a year – that's a trillion with a "T" – of assets. Eventually we will see that they stop that if they do or slow it down.

What will probably happen is that they will slow it down at first to see what happens, and if things aren't too bad at first – and they probably won't be too bad at first – well what is likely to happen is they will slow it down, things will drop, and then they will rally and the Federal Reserve will say "Hey, this is not so bad, we can do it." And they'll cut some more. Things will drop again and then rally, because it will take a while for people to really believe how bad it can get, or will get. And so eventually they will try to cut [QE], it will finally cause the collapse, at that point we will have a big change, because they will throw them out, whether it's the politicians or the central bankers or whoever … will continue because they like it, they got the job because of the collapse and then we'll finally start over. But it may be really painful in the meantime.

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?

Yes, I've owned gold for many years, I've never sold any gold and I can't imagine I ever will sell gold in my life because it is somewhat of an insurance policy. I hope that my daughters own my gold someday, I mean I owned gold, I've never sold any gold and if gold comes down and I expect it to go down, doesn't mean it will, I'll buy more. I'm certainly not going to sell.

Everybody should own some precious metals as an insurance policy. So if they don't have any right now, I would urge them to go buy something, buy themselves a gold coin if nothing else, and see that it's not going to hurt. It won't hurt you to buy the first gold coin, the first silver coin, and from that you start accumulating as your own situation dictates.

First, do your homework, don't buy gold because you heard me say it or even because you hear you say it. But if people don't own they should start after they have done their homework. And then they will probably, if they do their homework, most people will then realize, "Oh my gosh, I better have insurance, and gold and silver may get me through serious problems ahead."

Jim Rogers about silver’s prospects:

Well, silver is historically down 60% from its all-time highs, so yes, I would prefer silver at the moment because gold is down only what, 30 or 40% from its all-time highs.

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
Reuters
Wednesday, November 20, 2013

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...



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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:

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Vancouver Resource Investment Conference
Vancouver Convention Centre West
Sunday-Monday, January 19-20, 2014
Vancouver, British Columbia, Canada

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

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

Or by purchasing a colorful GATA T-shirt:

http://gata.org/tshirts

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

http://gata.org/node/wallstreetjournal

Help keep GATA going

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

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To contribute to GATA, please visit:

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



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

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

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

To learn about this report, please visit:

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


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:

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.

“This year, we have seen quite considerable flows coming directly to Shanghai. More gold will come into Shanghai over the next two years,” said Cameron Alexander, manager of Asian precious metals demand with metals consultancy GFMS, which is owned by Thomson 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 the last few months we have seen a significant rise in gold travelling into both Hong Kong and China from all over the world,” said a source at a top logistics firm that has shipped into Shanghai.

Exports from Switzerland – home to the world’s biggest gold refineries – are also being shipped directly to Shanghai, he said.

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"
ZeroHedge.com
Wednesday, November 20, 2013

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...



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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
Vancouver Convention Centre West
Sunday-Monday, January 19-20, 2014
Vancouver, British Columbia, Canada

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* * *

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

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

Or by purchasing a colorful GATA T-shirt:

http://gata.org/tshirts

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

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Help keep GATA going

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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
Reuters
Wednesday, November 20, 2013

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...



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

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

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

To learn about this report, please visit:

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



Join GATA here:

Vancouver Resource Investment Conference
Vancouver Convention Centre West
Sunday-Monday, January 19-20, 2014
Vancouver, British Columbia, Canada

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:

http://gata.org/tshirts

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

http://gata.org/node/wallstreetjournal

Help keep GATA going

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

http://www.gata.org

To contribute to GATA, please visit:

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



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Buy metals at GoldMoney and enjoy international storage

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Collapsing Consciously

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...

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