Wednesday, November 27, 2013

Gold World News Flash

Gold World News Flash


Is This Digital “Gold Bullion” Investment Worth the Risk?

Posted: 26 Nov 2013 09:00 PM PST

by Sasha Cekerevac, Investment Contrarians:

There has been a lot of coverage over the phenomenon that is Bitcoin.

I'm sure many of you are asking yourselves, is this online currency for real? What does it really say about our financial system?

But for those who are unaware, Bitcoin is essentially an online currency that is completely decentralized. Simply put, it is the exact opposite of the U.S. dollar, which is managed by the Federal Reserve.

Read More @ InvestmentContrarians.com

German market regulator confirms review of gold and silver pricing

Posted: 26 Nov 2013 07:50 PM PST

Will the market regulators ever put a question to their own central banks? Not likely.

* * *

U.K., German Regulators Scrutinize Gold, Silver Pricing

By Francesca Freeman and Madeleine Nissen
The Wall Street Journal
Tuesday, November 26, 2013

The price-setting processes for gold and silver in the spot market are the latest to come under review from global regulators, with authorities in Europe investigating the mechanisms for both precious metals.

In the U.K., the Financial Conduct Authority is reviewing how the gold price is set, said a person familiar with the investigation, who added that it is at an early stage.

In Germany, the Federal Financial Supervisory Authority, or BaFin, is looking into the rate-setting processes for gold and silver, according to a representative at the regulator.

The probe into precious metals markets adds to a long list of global investigations into the possible manipulation of some financial markets. Authorities are also examining the price-setting mechanisms for oil, currencies and interest rates. ...

... For the complete story:

http://online.wsj.com/news/articles/SB1000142405270230446560457922224407...



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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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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...


Continued Weakness Across the Mining Sector

Posted: 26 Nov 2013 07:20 PM PST

from Dan Norcini:

While gold is experiencing a bit of a bounce over at the Comex, the mining shares continue their disappearing act as the selling is just relentless. What concerns me is the technical posture of this index. It is running out of time for the month of November to improve the deterioration showing up on the intermediate and long term charts.

The index is currently sitting near its session low of 203.04. As things stand at this moment, it is on track for the WORST WEEKLY CLOSE since November 2008. That is FIVE YEARS. As painful as it is for me to say this, another way of stating this is that the index has surrendered every single bit of its gains it made over the last 5 years. We are now talking about the potential for the index, IF IT BREACHES 200, to move to levels last seen at the very inception of the first QE program. Five years of wasted opportunity cost

Read More @ TraderDanNorcini.Blogspot.com

The Punch Line: The Complete Macroeconomic Summary And All The Chart To Go With It

Posted: 26 Nov 2013 06:29 PM PST

From Abe Gulkowitz' The Punch Line

Meager Growth but the Market Roars…

An interim deal on Iran's nuclear program pushed oil prices lower and sent global equities higher as investors' risk appetite rose on an easing of some Middle East tensions. As we close in to year-end and the start of a new year, one finds little evidence of serious inflationary concerns. Indeed, the opposite is feared.

Major economies face debilitating deflation pressures. In Europe, for example, the latest annual inflation statistics fell in twenty-three Member States, remained stable in one and rose in only four. The HSBC/Markit Flash China PMI came in at 50.4 in November, marking a two-month low and missing expectations. The survey still indicated that the Chinese economy is expanding but it also raised fears that growth may be tailing off in the fourth quarter. China will be lucky if it manages to hit its official target of 7.5% growth in 2013, a far cry from the double-digit rates that the country had come to expect in the 2000s.

Growth in India (around 5%), Brazil and Russia (around 2.5%) is barely half what it was at the height of the boom. In Europe, the Markit Flash Eurozone PMI fell from 51.9 to 51.5, the lowest reading for three months. The French index was particularly weak – the PMI was at its lowest level since June. Germany continued to improve but the rest of the eurozone seems to be languishing. Questions abound whether the EU risks following the path carved by the sluggish Japan in the 1990s. Yet financial assets point to a worrisome asset inflation environment. Many have written off the likelihood that the Federal Reserve would begin QE tapering this year.

As stocks hit new records and small investors—finally—return to the market, some analysts are getting worried. Risk assets have rallied to previous bubble conditions. Powered by unprecedented refinancing and recap activity, 2013 is now the most productive year ever for new-issue leveraged loans, for example. This has been great for corporations as financing and refinancing has put them on a stronger footing. Where M&A activity still lags the highs of the last boom, issuers have jumped into the opportunistic pool with both feet. And why not? Secondary prices are high and new-issue clearing yields remain low. Yet very inadequate movement has been evidenced on the hiring front.

And after all the improvement in ebitda, where do we go from here? Forward guidance will clearly be harder. One might argue that we are back in a Goldilocks fantasy world, where the economy is not so strong (as to cause inflation and trigger serious monetary tightening) or so weak (as to cause recession and a collapse in profits) but "just right". Yet, it seems unlikely that issuers with weaker credit quality could find it so easy to sell debt without the excess liquidity created by the Fed and other central banks.

Weaning everyone off the "liquidity fix" may be tough!

The full Punchline including 17 pages of off the charts that's fit to print below (pdf)

Arab gold being reprocessed for Chinese standard, Macleod tells Keiser

Posted: 26 Nov 2013 06:29 PM PST

9:22p ET Tuesday, November 26, 2013

Dear Friend of GATA and Gold:

Arab investors are having their gold reprocessed by Swiss refineries from London standards to the higher purity of Chinese standards, GoldMoney research director Alasdair Macleod told Max Keiser on yesterday's "Keiser Report" program on the Russia Today television network. The trend, Macleod said, implies a shift of Middle Eastern economic and political ties from West to East.

Macleod and Keiser also remark that while gold market rigging by central banks is still not widely understood and accepted, it is just part of the fully understood and accepted rigging done by central banks in the interest rate and currency markets.

Macleod appears at the 15:23 mark in the video of the program at the Russia Today archive here:

http://rt.com/shows/keiser-report/episode-528-max-keiser-270/

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



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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

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

Silver & Gold: When Money Is Corrupted — The Hidden Secrets Of Money, Part 5

Posted: 26 Nov 2013 06:15 PM PST

from whygoldandsilver:

Welcome to the 5th episode of Michael Maloney’s Hidden Secrets Of Money. In this instalment, we travel to Berlin and Frankfurt, where we were able to film the money museum inside the Bundesbank…one of the world’s largest Central Banks.

The Top Ten Market Mysteries

Posted: 26 Nov 2013 06:04 PM PST

To paraphrase Mark Twain, "It isn't the stuff you don't know that will kill you – it's the stuff you're sure about but is totally wrong that will do you real harm."  As a corollary to this fateful phrase, Convergx's Nick Colas has collected a list of market "knowledge" that is questionable at best and harmful at worst.

Via ConvergEx's Nick Colas,
 
For years I had a pet theory about how your abilities improve over time in any given vocation.  My thought was that every year you work, you learn one critical aspect of the job. Over the first few years, the percentage improvement in your knowledge is quite impressive: 50% in the second year, 33% in the third, and so on as you pick up new and important insights.  And while years 15-20 might offer up slower growth, you also have less competition from your more junior peers.  They've figured out fewer points, after all.

A few examples of these critical lessons from my 20+ years analyzing stocks, markets, and the economy on both the buy side and sell side:

Rule #1: The marginal buyer and seller set prices for everything.  You may have point of view on value, but the actors setting the price don't care about your opinion.  Seriously – they don't.

 

Rule #2: If you don't know what to do or say, don't do or say anything.  Boredom is investor's greatest enemy.  Thrashing around is for mosh pits and three year olds.

 

Rule #3: If you can't explain your competitive advantage in three sentences, you don't have one.  That's true for analysts, portfolio managers, company executives, startup companies, writers, etc.

 

Rule #4: It is OK to be wrong.  Just don't lie to yourself or anyone else about being wrong.

The second part of my imaginary rule set was that there were 20 questions that mattered to any job, so two decades of experience should get you to the end of the journey.  I can tell you that, with 22 years in the business of analyzing financial assets, this part is wrong.  And in keeping with Rule #4, I am fessing up.  The true count is probably more like 100, which is why only vampires have a shot of figuring everything out. Zombies would have a shot, too, if it weren't for the whole mindless existence thing.

To be fair, part of the problem of harvesting those elusive 20 – 100 points from the sea of capital markets aphorisms and rules is that there are so many false leads.  At first they look useful, but like a poorly made tool they eventually shatter under heavy use.  Since I am prone to list-making, I have also kept a short collection of these false gods.

The balance of this report is a Top 10 list of those as well as a brief assessment of where and why they go off the rails. I use questions rather than statement to lead off each point.  After all, these are points that seem right but are – ultimately – misunderstood.

#1 – Why the fixation on price earnings multiples?  Say a stock trades for 10 times projected earnings.  Does that make it a better investment than one trading for 20 or 100 times?  The short answer is no.  Valuation is a three dimensional chess game of the returns a business can generate, its competitive position, and its growth prospects.  No matter how much you try to stuff the duffle bag that is P/E analysis with those bulky items, you simply aren't going to get them all in.

 

#2 – Why do technical analysts use an arithmetic price axes instead of log scales?  Don't get me wrong – I love good technicians. They are the shamans and storytellers of the capital markets, drawing pictures and relating price levels to events in the past. But look at the average technician's work and you'll see that all the price charts treat the move from $10 to $20 the same way as $90 to $100.  One is a double; the other is only an 11% move.  That could all be solved with a logarithmic scale for the Y-axis, but very few people do it that way.

 

#3 – Why do investors care about the price at which a company buys back its stock?  It isn't the Chief Financial Officer's job to figure out if his/her stock is over or undervalued.  That's for investors to do; it's pretty much the job description, actually.  Stock buybacks return money to shareholders rather than allowing the company to reinvest it in the business.  That's it.  Now, if a company is going to blow a quarter, maybe the CFO should lighten up the repo and buy lower.  Fair enough.  But CFOs aren't stock pickers.  So if the market tumbles and company with a repurchase plan in place happens to buy higher than current prices, don't complain.  Stock picking is your job.

 

#4 – Why does the negative case for an investment always sound smarter than the positive one?  Remember that over the long term (really, really long term, anyway), most equities rise in value.  Short sellers therefore typically have to do more work to find the right ideas.  Their rap is, therefore, generally stronger than the "Sit tight, be right" crowd.  I think, however, that humans are generally wired to be scared by a negative story and it therefore holds our attention better.  It's not always right, but our innate biases make us remember it.

 

#5 – Why is there a Nobel Prize in Economics?  There are only five "Real" Nobels, instituted by the old man himself: Peace, Chemistry, Physics, Medicine/Physiology, and Literature.  Alfred Nobel invented dynamite, among his +300 patents, and these prizes were essentially a way of being remembered for something other than arms dealing and the industrializing of human misery.  Unlike these awards, which started in 1901, the Economics "Nobel" is a newcomer, with the first prize given in 1969 by Swedish Central Bank.  Putting the social science of economics on par with either the hard sciences or human ideals such as peace or literature seems odd, at best.  At worst, it imbues the discipline with a notional precision that it can never attain.  If you need any further proof, consider this year's award to Gene Fama and Robert Shiller.  One believes markets are efficient, one doesn't.  Its sort of like the committee  is saying "You figure it out…"

 

#6 – Why is investor and social attention negatively correlated with stock market direction?  When the global equity markers were imploding in 2008-2009, cable business news channels enjoyed relatively high ratings.  Now that the U.S. equity market is hitting new highs, no one but Wall Street seems to tune in.  We're used to equating social attention with value (the valuation of social media stocks is a great example), but with the stock market, the opposite is true.

 

#7 – What ever happened to "Growth" and "value" investing?  When I started in the business, mutual fund and other institutional managers differentiated themselves by these monikers.  The hedge funds came along, with much broader mandates.   After that, passive management with low fees and transparent trading through exchange traded funds became popular.  Managers still use the terms, to be sure, but the delineation is nowhere near as rigid as it used to be.  Most investors just want to find stocks that go up.

 

#8 – Why does it take capital markets so long to embrace technological change in its own back yard?  Over the last 20 years, equity trading has moved from three exchanges to scores of virtual venues.  You can see the same process occurring throughout modern society.  Online shopping supplants old brick and mortar retailers.  Mobile apps replace singles bars.  You can play scrabble with a friend in another country on your smartphone.  Yet, somehow, the clever people in capital markets seem shocked that their jobs are subject to the same technological advances.  There's no going back to the old days…  Sorry.

 

#9 – Why does anyone doubt the value of gold?  Humans have valued gold for 5,000 years. Some of the first money – coins minted in ancient Anatolia – was minted with the stuff.  The world functioned on a gold standard of sorts until 1971.  I think the reason some people dislike gold as an investment is because it reminds them that humans are the same across space and time.  We like to think we are "Better" than the ancient Romans with their gladiatorial spectacle and will never again need a portable method of transferring wealth like the European refugees of the 1940s and 1950s.  Gold was the fiscal anchor of the former and the salvation of the latter.  Are we so different?  Let's see how the next 100 years turn out.

 

#10 – Why do humans always fight the last battle rather than focus on future challenges?  Put another way, would it be so bad if we banished the word "Bubble" from our collective consciousness for the next decade?  Humans are prone to herd behavior – we like the security of crowds.  If our ancestors had been rugged individualists they would have never made it out of Africa.  And if any of them were, they certainly succumbed to the local fauna. And their genes died with them.  Bubbles are as much a part of human behavior as breathing, and it will always be thus.  At the same time, not everything that rises quickly in value is a bubble.  Using that rubric and hearkening back to other asset price collapses is lazy, at best. 

Now - watch CNBC for an hour and check off how many of these 'red flags' you hear...

GLD's gold holdings fall due to metal redemptions, Kaye says

Posted: 26 Nov 2013 05:07 PM PST

8:05p ET Tuesday, November 26, 2013

Dear Friend of GATA and Gold:

Continuing his interview today with King World News, Hong Kong fund manager William Kaye says the reported gold holdings of the exchange-traded fund GLD are diminishing because large shareholders are converting their shares into metal for withdrawal:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/11/26_S...

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



ADVERTISEMENT

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

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

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

To learn about this report, please visit:

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



Join GATA here:

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



ADVERTISEMENT

Buy metals at GoldMoney and enjoy international storage

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

http://www.goldmoney.com/?gmrefcode=gata


A Rollercoaster Ride for Gold Investors

Posted: 26 Nov 2013 05:00 PM PST

Nichols on Gold

Guest Post: 3 Myth's About Rising Interest Rates

Posted: 26 Nov 2013 04:44 PM PST

Submitted by Lance Roberts of STA Wealth Management,

The Gold Price Rose 20 Cents Today Closing at $1,241.40

Posted: 26 Nov 2013 04:27 PM PST

Gold Price Close Today : 1241.40
Change : 0.20 or 0.02%

Silver Price Close Today : 19.848
Change : -0.034 or -0.17%

Gold Silver Ratio Today : 62.545
Change : 0.117 or 0.19%

Silver Gold Ratio Today : 0.01599
Change : -0.000030 or -0.19%

Platinum Price Close Today : 1370.40
Change : -5.60 or -0.41%

Palladium Price Close Today : 716.20
Change : -3.70 or -0.51%

S&P 500 : 1,802.75
Change : 0.27 or 0.01%

Dow In GOLD$ : $267.64
Change : $ -0.04 or -0.01%

Dow in GOLD oz : 12.947
Change : -0.002 or -0.01%

Dow in SILVER oz : 809.79
Change : 1.40 or 0.17%

Dow Industrial : 16,072.80
Change : 0.26 or 0.00%

US Dollar Index : 80.630
Change : -0.214 or -0.26%

The GOLD PRICE gapped up above $1,250 late yesterday and silver followed suit with a run to 2025c. Well, my, that attracted big time sellers, so about the time markets opened in the US they started piling on. I reckon they saw that both silver and gold prices had yesterday posted the first half of a key reversal, so they had to make sure neither one closed higher today. The SILVER PRICE ranged from 2029c to 1981c, but closed down 3.4 cents at 1984.8 cents. Gold price rose -- get this -- twenty cents to $1,241.40, after a high at $1,257.80 and a low of $1,239.20.

MACD is negative, RSI is oversold, rate of change is negative. Mercy, we'd have to order sunshine from Sears and Roebuck just to get a ray of light in here. We are sailing between Scylla and Carybdis from now to the end of December's first week -- a dangerous passage that could bring new lows. Frankly, that would be a relief.

So y'all have to decide what to believe in: Fiat money and its snake oil promoters like Greenspan (remember him? Never could parse a single sentence he mumbled), Bernanke, and now Big Janet who'll all lie quicker than a minnow can swim across a dipper, or gold and silver, still valuable after, oh, six millennia?

Shucks, don't ask me! I'm just a natural born durned fool from Tennessee, dumber than a central banker.

Then you come to markets today, and they're crazier still. By not enough to mention today -- 0.26 point -- the Dow Jones Industrial Average made a new high at 16,072.80. S&P500 rose 0.27 to 1,802.75.

I know the cheerleaders all filled the streets for this occasion, but double tops make me nervous for any market, let alone as overdue for a correction as stocks are.

And today the Nasdaq Comp finally climbed above 4000 to 4,017.75. High in 2000 was 5,048.62, so some folks are still waiting to get even.

Both the Dow in Gold and Dow in Silver rose today, and both of 'em are more overbought than orange glitter lipstick at a teenie-bopper convention. DiG closed 12.95 oz (G$267.70 gold dollars), up 0.76% (against the June high at 12.514 oz). DiS added 1.92% to end the day at 811.55. June high was 816.77 oz.

Until these two indicators turn down again, silver and gold will not get any relief. Probably they will reverse about the same day stocks reverse downward and silver and gold turn around upward. Meanwhile we just sit and stew -- with a smile, cause we know how it will turn out.

Like the 3 Stooges, the US DOLLAR INDEX loves to poke its friends in the eye. After that sharp ally from 79.06 in late October to 81.58 in early November, it looked ready to rally. Whoops, it's back down at 80.63 and looking sick as a dog puking peach pits. MACD gave a sell signal today. On a 5 day chart 80.60 looks like a cliff edge the dollar just hadn't ought to fall over.

Meanwhile the suave Euro, which like a bankrupt and shabby Count manages to put up a good outward show in spite of inward emptiness, rose 0.41% to $1.3575. Closed over the 50 day moving average today ($1.3560). Maybe the euro will run for the sky. All this leaves me asking myself what the market knows about the dollar that makes it so nervous.

Yen also rose 0.37% to 97.76 cents per 100 yen. Given its fall of the last five days, no, make that the last month, nothing there suggests a turnaround yet.

If you have some sad friend or relative you want to cheer up at Christmastime, get yourself right now to www.dogwoodmudhole.com and order a copy of my new book, At Home In Dogwood Mudhole Volume 2. You'll laugh, you'll cry, you'll wonder how people who could do such crazy and insanely dangerous things aren't ten feet underground yet. Not convinced? Go read the sample chapter, "Home Alone Milking." If it doesn't make you laugh, don't tell anybody, cause it means your sense of humor has been surgically removed.

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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

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

WARNING AND DISCLAIMER. Be advised and warned:

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

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

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

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

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

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

The Gold Price Rose 20 Cents Today Closing at $1,241.40

Posted: 26 Nov 2013 04:27 PM PST

Gold Price Close Today : 1241.40
Change : 0.20 or 0.02%

Silver Price Close Today : 19.848
Change : -0.034 or -0.17%

Gold Silver Ratio Today : 62.545
Change : 0.117 or 0.19%

Silver Gold Ratio Today : 0.01599
Change : -0.000030 or -0.19%

Platinum Price Close Today : 1370.40
Change : -5.60 or -0.41%

Palladium Price Close Today : 716.20
Change : -3.70 or -0.51%

S&P 500 : 1,802.75
Change : 0.27 or 0.01%

Dow In GOLD$ : $267.64
Change : $ -0.04 or -0.01%

Dow in GOLD oz : 12.947
Change : -0.002 or -0.01%

Dow in SILVER oz : 809.79
Change : 1.40 or 0.17%

Dow Industrial : 16,072.80
Change : 0.26 or 0.00%

US Dollar Index : 80.630
Change : -0.214 or -0.26%

The GOLD PRICE gapped up above $1,250 late yesterday and silver followed suit with a run to 2025c. Well, my, that attracted big time sellers, so about the time markets opened in the US they started piling on. I reckon they saw that both silver and gold prices had yesterday posted the first half of a key reversal, so they had to make sure neither one closed higher today. The SILVER PRICE ranged from 2029c to 1981c, but closed down 3.4 cents at 1984.8 cents. Gold price rose -- get this -- twenty cents to $1,241.40, after a high at $1,257.80 and a low of $1,239.20.

MACD is negative, RSI is oversold, rate of change is negative. Mercy, we'd have to order sunshine from Sears and Roebuck just to get a ray of light in here. We are sailing between Scylla and Carybdis from now to the end of December's first week -- a dangerous passage that could bring new lows. Frankly, that would be a relief.

So y'all have to decide what to believe in: Fiat money and its snake oil promoters like Greenspan (remember him? Never could parse a single sentence he mumbled), Bernanke, and now Big Janet who'll all lie quicker than a minnow can swim across a dipper, or gold and silver, still valuable after, oh, six millennia?

Shucks, don't ask me! I'm just a natural born durned fool from Tennessee, dumber than a central banker.

Then you come to markets today, and they're crazier still. By not enough to mention today -- 0.26 point -- the Dow Jones Industrial Average made a new high at 16,072.80. S&P500 rose 0.27 to 1,802.75.

I know the cheerleaders all filled the streets for this occasion, but double tops make me nervous for any market, let alone as overdue for a correction as stocks are.

And today the Nasdaq Comp finally climbed above 4000 to 4,017.75. High in 2000 was 5,048.62, so some folks are still waiting to get even.

Both the Dow in Gold and Dow in Silver rose today, and both of 'em are more overbought than orange glitter lipstick at a teenie-bopper convention. DiG closed 12.95 oz (G$267.70 gold dollars), up 0.76% (against the June high at 12.514 oz). DiS added 1.92% to end the day at 811.55. June high was 816.77 oz.

Until these two indicators turn down again, silver and gold will not get any relief. Probably they will reverse about the same day stocks reverse downward and silver and gold turn around upward. Meanwhile we just sit and stew -- with a smile, cause we know how it will turn out.

Like the 3 Stooges, the US DOLLAR INDEX loves to poke its friends in the eye. After that sharp ally from 79.06 in late October to 81.58 in early November, it looked ready to rally. Whoops, it's back down at 80.63 and looking sick as a dog puking peach pits. MACD gave a sell signal today. On a 5 day chart 80.60 looks like a cliff edge the dollar just hadn't ought to fall over.

Meanwhile the suave Euro, which like a bankrupt and shabby Count manages to put up a good outward show in spite of inward emptiness, rose 0.41% to $1.3575. Closed over the 50 day moving average today ($1.3560). Maybe the euro will run for the sky. All this leaves me asking myself what the market knows about the dollar that makes it so nervous.

Yen also rose 0.37% to 97.76 cents per 100 yen. Given its fall of the last five days, no, make that the last month, nothing there suggests a turnaround yet.

If you have some sad friend or relative you want to cheer up at Christmastime, get yourself right now to www.dogwoodmudhole.com and order a copy of my new book, At Home In Dogwood Mudhole Volume 2. You'll laugh, you'll cry, you'll wonder how people who could do such crazy and insanely dangerous things aren't ten feet underground yet. Not convinced? Go read the sample chapter, "Home Alone Milking." If it doesn't make you laugh, don't tell anybody, cause it means your sense of humor has been surgically removed.

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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

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

WARNING AND DISCLAIMER. Be advised and warned:

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

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

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

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

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

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

Record Number of French Corporate Bankruptcies; Socialist Theory vs. Practice; What Went Wrong?

Posted: 26 Nov 2013 04:07 PM PST

The number of French business bankruptcies hit a record in the third quarter of 2013 and the yearly total is on a pace that will come close to the total reached in the dark days of the great financial collapse in 2009. Read More...

BUY, BUY, BUY

Posted: 26 Nov 2013 03:37 PM PST

The buy signal for gold triggered today. Every down day should be bought from here on. This almost certainly takes $1000 off the table.

I will elaborate in tonight's report.

Stunning Bullion Bank Moves As LBMA & Comex Implode

Posted: 26 Nov 2013 02:36 PM PST

Today the man who predicted the recent takedown in the gold market ahead of time alerted King World News to stunning bullion bank moves as the LBMA and Comex move closer to imploding. William Kaye, who 25 years ago worked for Goldman Sachs in mergers and acquisitions, also gave KWN more incredible insight into the war in gold which is now raging. Below is what Kaye had to say in part II of his powerful and timely interview.

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

Silver May Lead Gold To Lower Lows

Posted: 26 Nov 2013 02:28 PM PST

Although the price for silver is typically more volatile than for gold, technical analysis of the former can sometimes be predictive for the latter. We are likely to see that phenomenon again in coming months as both metals try to ... Read More...

Gold Daily and Silver Weekly Charts - Sitting On Top of the World

Posted: 26 Nov 2013 01:28 PM PST

Gold Daily and Silver Weekly Charts - Sitting On Top of the World

Posted: 26 Nov 2013 01:28 PM PST

Randgold CEO: I'm Not A Gold Bull - MMIC13 San Francisco

Posted: 26 Nov 2013 12:48 PM PST

Kitco News' Daniela Cambone sat with Mark Bristow, CEO of Randgold Resources, to talk about the mining industry and metals prices. "It is a tough time relatively speaking but something that we've...

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

Here’s The Truth Governments Don’t Want The Public To See

Posted: 26 Nov 2013 12:38 PM PST

With global stock markets continuing to surge, 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 the disturbing truth about the information governments don't want the public to see. 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

The Daily Market Report: Solid Physical Buying Seen on Price Dips

Posted: 26 Nov 2013 11:16 AM PST


26-Nov (USAGOLD) — Gold is back on the defensive after rebounding smartly from 20-week lows on Monday. Some decent housing data nudged tapering expectations higher, but another drop in consumer confidence provided an offset. Trading remains thin do to the holiday shortened week.

Housing permits rose 6.2% in October and the Case-Shiller home price index for 20-cities rose 0.7% in September. However, consumer confidence missed expectations and notched a seven month low of 70.4 in November. That’s a pretty distressing read with the all-important Christmas shopping season ‘officially’ commencing on Friday.

Market emphasis remains on anticipated Fed moves to scale back accommodations, even as other central banks seem to be focusing on further easing amid heightened disinflationary pressures. That reality, along with an economy that continues to struggle makes the Fed taper rather unlikely in my opinion. Additionally, there is another debt ceiling debate looming and the Fed will get a new chairperson early in the new year.

With the low end of gold’s range still well protected, pull-backs in the price seem to provide excellent buying opportunities. Interest in physical gold has been very strong so far this week.

The Mythical Merits of Paper Money

Posted: 26 Nov 2013 11:15 AM PST

One economic myth is that paper money is wealth. The proponents of big government oppose honest money for a very specific reason. Inflation, the creation of new money, is used to finance government programs not generally endorsed by the producing members of society. It is a deceptive tool whereby a "tax" is levied without the people as a whole being aware of it. Since the recipients of the newly created money, as well as the politicians, whose only concern is the next election, benefit from this practice, it's in their interest to perpetuate it.

For this reason, misconceptions are promulgated about the "merits" of paper money and the "demerits" of gold. Some of the myths are promoted deliberately, but many times they are a result of convenient rationalizations and ignorance.

Paper money managers and proponents of government intervention believe that money itself — especially if created out of thin air — is wealth. A close corollary of this myth — which they also believe — is that money supply growth is required for economic growth.

Paper money is not wealth. Wealth comes from production. There's no other way to create it. Capital comes from production in excess of consumption. This excess is either reinvested, saved, or loaned to others to be used to further produce and invest. Duplicating paper money units creates no wealth whatsoever, it distorts the economy, and it steals wealth from savers. It acts as capital in the early stages of inflation only because it staels real wealth from those who hold dollars or have loaned them to someone.

Instead of economic growth being dependent on money growth as the paper money advocates claim, great economic harm comes from central banks creating new money out of thin air. This leads to the sort of economic stagnation and economic decline that we are experiencing today. Inflation — increasing the supply of paper money — is the cause of malinvestment and the business cycle, and literally destroys the capital needed for economic growth and stability. The formation of capital through savings is discouraged or eliminated by a paper money system. Instead of paper money producing economic growth, it accomplished the opposite. If money growth were necessary for economic growth, the 1970's would have been a great decade. During this period of time the Federal Reserve nearly tripled the total money supply but the economy grew only 37 percent.

Although the supply under a gold standard would in all probability increase at the rate of two to three percent per year, this growth is not a requirement for gold to function as a sound currency. This natural or market increase in the money supply easily accommodates population growth and economic growth as long as prices are freely adjusting.

If population or economic growth presents a need for "more" purchasing media, prices merely adjust downward if the money supply is not growing. In the latter part of the nineteenth century this occurred. Wholesale prices dropped 47 percent from 1879 to 1900 and economic growth averaged nearly four percent per year. Obviously, although prices were decreasing, there was no depression. While an increase in the supply of money is never needed to produce economic growth, under a gold standard there might be honest money growth (i.e. not money created out of thin air by the politicians and bankers for the benefit of special interests) and this would serve to smooth out price adjustments.

The myth that paper money is wealth has another corollary: the myth that there's "not enough gold" for reestablishing a gold standard. But this is merely a device used by paper money advocates to confuse the uninformed, and should carry no weight in the debate of gold versus paper. Hans Sennholz explains this clearly in his essay "No Shortage of Gold":

On the other hand, if the supply of goods increases while that of money remains unchanged, a tendency toward enhancement of the purchasing power of money results. This fact is probably the most popular reason advanced today for policies of monetary expansion. "Our expanding national economy," economic and monetary authorities proclaim, "requires an ever-growing supply of money and credit in order to assure economic stability."

No one can seriously maintain that present expansionary policies have brought about economic stability. During the last forty years of almost continuous monetary expansion, whatever else it may have achieved, did not facilitate economic stability. Rather it gave our age it's economic characteristic — unprecedented instability.

Ludwig von Mises, in his book A Critique of Interventionism (1929), clearly denounces the belief that government can create wealth by printing paper money. He explains:

By its very nature, a government decree that "it be" cannot create anything that has not been created before. Only the naive inflationists could believe that government can create anything; its orders cannot even evict anything from the world of reality, but they can evict from the world of the permissible. Government cannot make man richer, but it can make man poorer.

This is a powerful political and economic message, and yet it seems that so few understand it. Unfortunately, the poorer the people get, the moe economic problems we have, the more inflation we endure, and the higher the interest rates go, since more people demand government intervention. This trend has to be changed if we expect to preserve our freedoms and our standard of living.

Fact: Paper money is not wealth, it steals wealth.

A second myth is that "easy" money causes low interest rates. This myth is based on the erroneous assumption, itself a myth about government, that government officials — the Federal Reserve Board, the Congress, or the Treasury — can actually set interest rates. In reality the market determined interest rates. Governments can dictate rates, but if these rates are contrary to the market, government will not achieve the intended goal. For instance, if a usury law establishes a ten percent interest rate and the market rate if fifteen percent, no funds will be available except those allocated through government force and the creation of new money.

One reason this myth is so persistent is that in the early stages of inflation, an "easy" monetary policy temporarily lowers interest rates below market levels. Before the people are aware of the depreciation of their currency and do not yet anticipate higher prices, the law of supply and demand serves to lower "cost" of money and interest rates fall. But when the people become aware of the depreciation of the dollar's value and anticipate future loss of purchasing power, this prompts higher interest rates due to inflationary expectations.

This expectation of future inflation and higher risk is determined subjectively by all borrowers and lenders and not by an objective calculation of money supply increases. These increases in the money supply certainly are important and contribute to the setting of the interest rates, but they are not the entire story. Interest rates vary from day to day, week to week, and year to year. There is no close correlation between money supply figures and interest rates.

Crises and panics can occur for political as well as financial reasons; and interest rates can be pushed higher than monetarist theory says they "should be." In the early stage of inflation, rates may be lower than they "should be," and in the latter stages frequently are higher than they "should be," if by "should be" one means commensurate with money supply growth. Nevertheless, wrong ideas die slowly. "Easy" money, that is, inflation of the paper money supply, is still thought of as an absolute method by which the monetary authorities can achieve low interest rates.

This is not to say the Federal Reserve is helpless in manipulating interest rates. If it alters the discount rate and injects new money into the market, the immediate reaction can be that of lowering rates. But a gold-backed dollar, even if only partially backed, is a different sort, and at the time of the '30s and the '40s rates were at historic lows.

If the demand for lower interest rates is great enough and not accompanied by a call for sound currency — gold — the politicians will be "forced" to accommodate the demand by means of massive inflation of the money supply with strict credit controls and credit allocation. This would solve nothing, would serve to worsen economic conditions, and real interest rates in the markets would eventually soar. There is no substitute for sound money, and the sooner we realize this the better.

"Easy" money causes hard times.

Regards,

Ron Paul
for The Daily Reckoning

Excerpted with permission from Dr. Paul's FREE Foundation work

Ed. Note: People blindly trust that “easy money” will bring about growth. They assume that those in power know what they’re doing and that, in the end, the U.S. is simply far to great to fall into the traps that have snared so many other countries throughout history. Of course, you know better. But this is only half the story. The other half is detailed every day in The Daily Reckoning email edition. To get the full analysis, sign up for the FREE Daily Reckoning email edition, right here.

Tapering and the Coming Fiscal Mess

Posted: 26 Nov 2013 11:00 AM PST

Nichols on Gold

Gold suppression just increases offtake of metal, Kaye tells KWN

Posted: 26 Nov 2013 10:50 AM PST

1:45p ET Tuesday, November 26, 2013

Dear Friend of GATA and Gold:

Hong Kong fund manager William Kaye tells King World News today that the gold cartel's pushing down the price of paper gold only increases the offtake of real metal. Kaye also notes the seemingly strange interest in December 2015 gold options priced at $3,000. An excerpt from the interview is posted at the King World News blog here:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/11/26_A...

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



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Gold Bulls Get Another Shock

Posted: 26 Nov 2013 10:40 AM PST

Gold bulls got another shock last week (assuming they're still watching the 'golden anchor'). Gold has breached the neckline of a head-and-shoulders pattern which has been five months in the making. On the chart below, readers can see the left shoulder in July, the head in August, and the right shoulder in October.

Gold Brief Pause or Final Bottom

Posted: 26 Nov 2013 10:26 AM PST

Something may have changed today in the gold market. For one I think gold probably formed a minor daily cycle bottom today. But what I'm really talking about is the complete recovery from another middle of the night attack. For most of the last year these late night attacks have worked wonders for sending gold crashing through technical levels and triggering stops. Today however it simply didn't work for the first time.

Gold Bulls Get Another Shock

Posted: 26 Nov 2013 10:09 AM PST

Gold bulls got another shock last week (assuming they're still watching the 'golden anchor'). Gold has breached the neckline of a head-and-shoulders pattern which has been five months in the making. Read More...

Gold: Brief Pause, or Final Bottom?

Posted: 26 Nov 2013 09:57 AM PST

Something may have changed yesterday in the gold market. For one I think gold probably formed a minor daily cycle bottom. But what I'm really talking about is the complete recovery from another middle of the night attack. Read More...

The Only Way to Get U.S. Health Care Off Life Support

Posted: 26 Nov 2013 09:35 AM PST

A president stands disgraced. Congress is scattering. Bureaucrats are baffled. Pundits are reaching. Industry is scared. Politicians are scrambling to do something, anything, to make it better. One political party is in meltdown and the other loving every minute of it, hoping to ride the calamity to electoral gains.

The so-called Patient Protection and Affordable Care Act — the showpiece of democratic welfarism in the 21st century — has made history as the largest, fastest failure in the history of state-provided welfare programs.

It turns out that you can’t just pass a law that causes everyone to get all the health care he or she desires at extremely low cost. Nor can government create a market-like environment out of a nonmarket good or service and expect it to achieve efficiency, productivity, and customer satisfaction.

A government-run website is the digital-age equivalent of the failure of government to run factories and farms in the 1920s and 1930s.

Maybe this seems rather obvious to you. If so, you know more about economic reality than the many thousands of certified experts who worked for many years in and out of government to create the perfect storm that Obamacare has become.

Like many people, I had a passing interest in the debate over Obamacare for several years, fully expecting bad things to happen, but unable to predict the extent of the damage. There have always been two mitigating factors to consider: First, the existing system was badly in need of reform before Obamacare, and it was simply not the case that a beautiful, market-based system was being threatened by a socialist takeover.

Second, Obamacare in no way represented some unprecedented threat. Both parties had been making a mess of the whole system for decades, at both the federal and state levels.

After all, we’ve had 100 years of intervention in the medical market, beginning with the regulation of medical schools that had already cartelized the system. The whole panoply of interventions needs to be uprooted to allow a viable system to emerge, but absolutely no one in Washington dares to speak this way.

In addition, all the nonnegotiable talk about “health insurance” is fundamentally flawed. Insurance pertains to risks of events that are not brought about through human volition, which is to say they are unexpected. That’s why real insurance is able to make money. If you bring about the insured-against “risk” through your own choice — you set your house on fire — that’s insurance fraud. There are unexpected events in the area of health, but most fall under the category of catastrophic.

In a real market, we would probably see medical care work much like veterinary care today — mercifully free of too much government involvement — for which you pay per service. Prices are clearly posted. Consumers pay the full cost of noncatastrophes. And there is healthy competition among providers who are trying to treat you best at the lowest price. Indeed, the restoration of the price system is the central requirement of any sane reform.

In a free market for health care, one can easily imagine subscription services emerging — think of Spotify, Netflix, or Amazon Prime for health services — but they would unlikely have anything to do with employment. The whole link between your job and your health care — and the third-party payment system through huge and cartelized institutions — came about because of wartime price controls. It’s completely arbitrary and massively distorting.

A purely market-based medical system in the 21st century might offer some wonderful surprises. The prices would continually fall, and perhaps be free for routine care, just as so many services on the Internet are free. Even now, even with all the absurdities and bloat and interventions, private-sector insurers operating in the nonprofit space are able to offer a form of mutual aid for a quarter of the price of the big players in the insurance market (see, for example, Samaritan Ministries).

Given all of this, Obamacare was just another step in the wrong direction — albeit a big one — not unlike that which had occurred once every five years for the last 50 or so. It was hard to tell just how bad the effects would be. Everything we know about government and economics suggested that this plan would not end well. But not even the biggest skeptic could have fully prepared for the calamity that ensued in the weeks after the program was finally put in place.

What does failure mean? The most obvious evidence was the exploding HealthCare.gov website that in the first day of operation managed to enroll only six people in the program. Looking through the notes from the war room, one observes all the troubles that every highly ambitious and poorly constructed website has: tangled databases, bad connections, leaky memory explosion, mixed-up authentication rules, and about a thousand other things.

Will it be fixed? Possibly. But at what price? To prepare the site, the feds have already spent some $600 million and deployed a dud. More than twice that sum will be spent on repair, but with what results? If the site follows the usual government pattern, it will work only as long as it is frozen in time. It can’t adapt to change and will become antiquated in only a few years, and will thereby require other massive infusions to keep up.

A government-run website is the digital-age equivalent of the failure of government to run factories and farms in the 1920s and 1930s. Under socialism, it was true that with enough force and money, even Soviets could produce trucks, grain, and bombs. But every economic decision involving physical resources and time requires trade-offs: If you do this, you are not doing that. The real question is: At what cost? Lenin made some progress in electrification even while major parts of the newly socialized Russia were experiencing famine.

Likewise, HealthCare.gov has become a costly symbol of a wider system failure.

The website can and probably will be fixed — but will the program itself achieve its aims? The ACA promised to retain existing health insurance coverage and then expand it. Upon implementation, the ACA immediately and dramatically reduced coverage by forcing many individually provided health care plans to be dropped. Otherwise, most are experiencing sticker shock.

…the requirement that insurers take no account of pre-existing conditions…is a bit like requiring that auto insurers cover drunk drivers who are training for NASCAR.

In many cases, mandated coverage of new ailments made continued service economically unfeasible. In other cases, existing plans were suddenly outside the law. For example, the government said that plans must cover outpatient care, emergency room visits, lab tests, hospitalization, maternity, preventative services, pediatric services, prescription drugs, and much more. If a plan didn’t, it was essentially declared illegal and had to be canceled.

In other words, the companies who dropped millions from the rolls were merely complying with the law. They were obeying government diktat. That few people expected this outcome reveals the true nature of government planning. Two lessons emerge from the mess: Planners cannot account for all contingencies, and/or they must lie to get what they want.

Then came the doubling — in some cases tripling — of premiums of many individual plans because of the requirement that insurers take no account of pre-existing conditions, which is a bit like requiring that auto insurers cover drunk drivers who are training for NASCAR.

It is very easy after the fact to look at any government failure and point to all the reasons why the failures should have been anticipated and, thereby, prevented. But remember that this is knowledge gained after the fact. Before the trial, there are a million possible contingencies, and it is not possible for anyone to prepare for them all. That’s why markets specialize in embedding trial and error as a feature of the system. A market system learns over time, copying success and avoiding failure. Governments are terrible at this. They build, release, and forget about it — with very little ongoing adaptation.

After the disaster took place, some politicians immediately responded by saying: Make it illegal to stop dropping coverage. This response piles error on error. It amounts to a form of nationalization of already cartelized companies — another step away from the market and toward fully socialized health care. Of course, those who’ve always called for a single-payer system won’t mind — even as it will turn U.S. health care into a Brezhnevian bread line.

Politicians from the other side proposed that the law be changed to say that whatever plans existed before the calamity should just be made legal again. That sounds fine but for one thing: This proposition only increases the uncertainty of what legislation permits or disallows. Insurers are there to make money, and they do this through long-term customer relationships. Endless legislative jockeying does not inspire the confidence needed to make business work.

The system was broken before, and now it is broken beyond repair. Daily, we read reports of doctors, consumers, and institutions just bailing out completely. Businesses that take people abroad for high-quality, low-cost health care are suddenly booming. It seems that everyone is looking for a way out of the official system. This is the only promising development to emerge from the great health care disaster of 2013. If a new and independent sector emerges despite every attempt by government to stop it, the irony is that there will be a good basis for optimism about the future.

Government can’t and won’t fix health care. Only the private sector can do that. The full solution, then, will require complete secession from every plan put out by every politician, every political party, and every national commission of experts purporting to know better than the people who make up the market order.

Jeffrey Tucker
for The Daily Reckoning

Ed. Note: Like it or not, the government will likely refuse to see the writing on the wall for Obamacare, regardless of how disastrous the policy proves to be. It’s just one more reason to know how to best protect your own wealth and personal freedom. And those issues are at the heart of the Laissez Faire Today email edition. If you want to read the world’s best collection of writings on liberty and freedom – and get regular opportunities to learn for yourself to to protect them – you owe it to yourself to sign up for FREE, right here.

Original article posted on Laissez Faire Today

Absolutely Astonishing Developments In The War On Gold

Posted: 26 Nov 2013 09:31 AM PST

Today the man who predicted the recent takedown in the gold market ahead of time spoke with King World News about some absolutely astonishing developments in the war on gold. William Kaye, who 25 years ago worked for Goldman Sachs in mergers and acquisitions, also spoke a wild card for the gold market which could prove to be incredibly bullish. Below is what Kaye had to say in part I of his powerful and timely interview.

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

Gold Prices Lose "Short-Covering Rally" as China Demand Recovers, Vietnam Announces Bargain-Buying Plan

Posted: 26 Nov 2013 08:51 AM PST

GOLD PRICES reversed an overnight rally to 4-session highs in London trade Tuesday, dropping back to last week's closing level  of $1243 
 
"Gold's rally over the past 24 hours," said a note from bullion and investment bank Standard Bank earlier, "we ascribe to small-scale short-covering" by bearish traders closing their positions.
 
"We still expect selling into rallies to be the main strategy."
 
Last week's 4-month lows in gold prices, says German refining group Heraeus, "led to a strong increase in demand" for investment gold bars.
 
"Private investors appear to have considered prices below $1250 a good buy-opportunity and reacted consequently."
 
Overnight Tuesday, "Purchases of physical gold in Asia," says the commodities team at Germany's Commerzbank, "China in particular, may well also have helped prices recover.
 
"Demand for gold is likewise high in India, though only little gold is being imported due to the restrictions imposed by the country's government and central bank."
 
"Evidences of renewed demand," agrees a separate note from a London trading desk, "is emerging from [emerging-market] countries, Turkey and India mostly.
 
"[But] it is clearly not enough to counter the cyclical bear momemtum in gold prices that is currently building around the Fed, the taper and debt-ceiling."
 
The State Bank of Vietnam, "foresee[ing] a downward trend in the gold price in the next six months or one year," is planning to buy gold for its foreign currency reserves, according to Vietnam.Net.
 
"It is still not clear about the timing, but we have got ready," says director of the Foreign Exchange Department, Nguyen Quang Huy, at the central bank – currently not holding any sizeable gold reserves according to IMF data, and unlikely to try buying gold directly from private citizens rather than dealers, according to local analysts.
 
China's top jewelry retailer, Chow Tai Fook, meantime reported better-than-forecast 6-month profits today, nearly doubling net income from March-Sept. 2012.
 
Shares in the world's largest jewelry stock by market cap have slipped 1.1% so far in 2013, the newswire notes, compared with a 4.5% gain in Hong Kong's broader Hang Seng index and a 26% drop in gold prices.

The Iranian Deal: What the Big Six Really Have to Gain

Posted: 26 Nov 2013 08:16 AM PST

Over the weekend, the world changed.

Officials from Iran made a deal with six countries (the US, Russia, China, England, France, and Germany)—in exchange for suspending the world's sanctions on Iran, Iran will curb its nuclear weapons program.

Though it's only a six-month interim agreement for now, it's an important first step toward bringing Iran economically closer to the rest of the world.

This is, by any standards, a historic deal (or a historic mistake, according to Iran's archenemy Israel): the United States and Iran haven't had diplomatic relations since 1979.

This is like Wile E. Coyote suddenly signing a peace treaty with the Road Runner.

But the more important question is "Why?" Why did Iran suddenly have this change of heart after pounding the table and claiming that enriching uranium is an inalienable Iranian right?

Is it really as the media portrays? Did the tough American and European sanctions placed upon Iran finally bring the country's leadership to its senses?

As much as President Obama would like you to believe that, we think the answer is far more complicated.

All of these countries have some sort of agenda that they are pushing—and this deal is going to give them exactly what they want. And if you think that this is about "Middle East stability" and "world peace," there is a bridge I would like to sell you.

There is only one thing on the minds of these countries: oil.

Hitting the Jackpot

It is pretty easy to understand why the Chinese are interested: with the one-child policy being relaxed and a constantly growing population, there is no doubt that they're looking all around the globe for secure energy supplies. Given that Iran has one of the world's largest reserves of both oil and gas, it's the perfect location for China to be drilling.

When Iran begins to open up to the world, the Chinese petroleum companies will salivate at the opportunity to unlock some of the largest hydrocarbon fields in the world. While it is true that they'll have to compete with companies around the world, the Chinese are known for their deep pockets and willingness to acquire energy reserves regardless of the cost.

What does Europe get?

If Iran is able to start selling oil on the global market again, Europe gets something crucially important: a source of non-Russian oil.

Russia currently has a stranglehold on European oil and gas supplies (something that we have written much about over the past few years). Though Europe is ramping up its own domestic production, a phenomenon we call the "European Energy Renaissance," it cannot happen overnight. In the meantime, Europe depends on imported oil and gas… and believe it or not, Iran provides a better alternative to the heavy hand of Putin.

Because Iran just wants money for its product, but Putin wants control—both political as well as economic.

The Americans also got something great from the discussions: the continuation of the petrodollar. With a détente around the corner, America can monitor Iran's activities and quietly make sure that the sale of this oil will be denominated in US dollars. The fact that Iran has constantly tried to shift away from the US dollar for petroleum trades has always been a thorn in the side of the US government. By "working closer" with Iran, America will in fact be able to better keep tabs.

But the biggest winners of the day may have been the Russians and the Iranians—because they can now get access to the biggest prize of all.

There's no doubt that Russia and Iran are close: due to the sanctions, much of Iran's military is Russian-built, and there is a great deal of cooperation between the two countries on the oil and gas front.

If Iran does indeed open up its oil and gas fields and invites the multinationals in, it means that the country will have access to the multinationals' technology—the technology to unlock not only the vast conventional potential that Iran already has… but also the unconventional oil and gas that could dwarf Iran's current reserves.

We are talking about access to not just billions, but even trillions of barrels of oil.

"Open Sesame"—Unlocking Ali Baba's Treasure

America, rather than Russia, leads the world in unconventional oil and gas production. But more importantly, they lead the world in the technology it takes to unlock the complicated geology that lies beneath the Earth's surface.

The ability to extract vast quantities of oil means energy independence or, in the case of Iran, even more oil and gas available for exports and to fill the country's coffers.

So by inviting "the Great Satan" inside its borders, Iran will be able to acquire this valuable technology and begin to apply it.

And once everything has been built, it would only take a flick of a pen to evict the American companies.

The Russians would also be able to take this technology and apply it within their own borders… so that they can begin expanding their hydrocarbon empire beyond the boundaries of Europe.

It is clear the biggest loser in this negotiation is Israel. There is nothing they can do but stand by and watch. But Israel won't show its cards until the six-month treaty expires.

The key to how this plays out for the US is how Iran acts the day after the six-month treaty is over. Will Iran continue under the same terms? If not, will Israel tolerate it?

So How Can We Profit?

By investing not in the companies that will be physically producing oil within Iran's borders, but in the ones that will provide all the necessary services… the picks and shovels of the business, so to speak.

And we already know the ones that the big multinational companies like Shell and Exxon will turn to.

Want to find out which ones? Read all about it in the December issue of Casey Energy Dividends. Sign up now for a risk-free trial and begin profiting from the biggest diplomatic agreement in the past decade.


Additional Links and Reads

U.S., Japan slam China's 'destabilizing' move on East China Sea airspace [Yahoo]

Japan formally annexed these islands in 1895; however, it wasn't until 1969 that enormous oil and gas potential was identified. Not long after, both China and Taiwan formally declared ownership of the islands, drawing upon the deep history both countries have in the area. Now that offshore oil is more economically viable, we expect the East China and South China Sea to be the stage for considerable turmoil in the future.

China and Pakistan signed MoUs for cooperation in energy sector [Steelguru]

Coal is definitely the forgotten commodity, especially with the rise of cheap natural gas. However, many emerging economies still depend on coal because the infrastructure is already in place. We believe the demand for coal will rise again, especially in China and India, as the global economy begins picking up again.

Goldman to sell uranium trading desk as Fed review looms [Reuters]

While this may just seem like a response to the increase in government scrutiny over physical commodity trading, this can also be taken as a sign that uranium is nearing a bottom. The lack of volatility in uranium price has really hurt trading, but people have to realize the majority of uranium is traded by long-term contracts.

Oxford Club Wealth Survival Summit—"Tax-Slashing Secrets to Outsmart Big Government"

With tax season coming up fast, we wanted to let you know that the folks from the Oxford Club are hosting a free online video event on how to shield your hard-earned money from Washington's money grubbers. Six economic, tax, and investment experts—including our own Dennis Miller, editor of Miller's Money Forever—will lay out different (and perfectly legal) ways to reduce what you owe to the taxman.

The event will take place on Tuesday, December 3, at 2 PM Eastern. Even if you don't have time to watch then, we recommend registering so you can get the video recording after the event has aired. Click here to sign up.

Gold Prices Steady After Monday’s Drop to 20-Month Low

Posted: 26 Nov 2013 08:07 AM PST

26-Nov (The Wall Street Journal) — Gold futures tread water in early trading Tuesday after a see-saw session the day before, even as a new research note from UBS UBSN.VX -0.06% lowered price targets and offered little support for the metal in the near-term.

Trading was light, with the contract for December delivery up $3.10, or 0.3%, to $1,244.30 a troy ounce on the Comex metals exchange.

…Analysts said gold’s gains Tuesday were likely driven by low trading volumes ahead of the Thanksgiving holiday in the U.S. “I saw nothing fundamental to create the move, so I suspect it was an oversold bounce in a thin market,” Peter Hug, global trading director for Kitco Metals, said in a note.

[source]

Don’t Be Beguiled Into Thinking Owning Gold Is A Waste Of Time

Posted: 26 Nov 2013 07:47 AM PST

Gold prices fell the most in more than two months last week mainly due to renewed speculation over the timing of the US Federal Reserve's (FED) tapering of its monetary stimulus programme.

After breaking below certain key support levels, the price of spot gold ended the week with a 3.5% drop to end the week at $1243.70 per ounce. After dropping below $1300 an ounce, the selling accelerated on Thursday taking gold through the support level at $1,250, which many analysts saw as important for the market to hold. While prices have managed to hold above $1240 an ounce, traders are eying this level as a break below could signal more technical selling with some analysts even suggesting a dip to the $1,220s as possible as bearish technical charts and little positive news is available to offset the price-negative sentiment in gold.

Interestingly, gold trading on Comex was interrupted twice last Wednesday, according to Nanex, which provides exchange data and summarizes high frequency trading activity.

Nanex reported that about 1,500 gold futures contracts traded in one second at 6:26:40 a.m. Eastern time on Wednesday, triggering a $10 drop in prices and a 20 second trading halt.

Damon Leavell, a spokesman for the exchange said trading was halted for about 20 seconds at 6:26:41 a.m., New York time. The December contract fell about $11 in less than a minute before trading was suspended.

Then, immediately after the release of the Fed minutes, came another burst of selling which led to gold futures being suspended for another 20 seconds. The second bout of concentrated selling is believed to have been even more than 1,500 contracts. Each contract is worth 100 ounces so 1,500 contracts is worth nearly $200 million.

Shortly after 1 am Eastern Standard time on Monday, someone tried to dump 1500 gold contracts into an entirely illiquid gold futures market. The 150,000 ounce notional sell order ($184.5 million), sent the price down $10 instantaneously and tripped the exchange’s circuit breakers and halted the market’s trading for 20 seconds (once again). This is now the fourth time this has happened in the past 3 months, and this time on no news whatsoever.

It is becoming increasingly obvious that someone out there is trying to suppress the price of gold and this is happening far too often to be a mere coincidence. The market was halted on similar drops on April 20, 2013, September 12, 2013, October 11, 2013 and November 20, 2013.11.26

This repeated action suggests that someone out there is determined to undermine the confidence of potential gold investors.

Since the end of October, traders have dominated the gold market, betting on the possibility that the Fed will soon reduce bond purchases even though Janet Yellen said last week that she would continue with the bank's ultra-easy monetary policy until officials were confident a durable economic recovery was in place that could sustain job creation.

While the tapering of the Feds stimulus is mere conjecture, it has nevertheless created a bearish sentiment amongst traders who have used the futures market of Comex to sell massive amounts of gold contracts causing prices to fall by around $100 an ounce in the last three weeks.

As far as I am concerned, this frequent irregular action is part of a strategy of central bankers and Western politicians to beguile individuals into investing in equities and bonds or simply get further into debt. The major central banks, the US Fed, ECB, BoJ, and BoE are all engaged in monetary expansionary programmes renamed quantitative easing. In simple terms, they are printing more and more money. At the same time they have dropped interest rates to almost zero. So, individuals who have saved are getting nothing on their savings while at the same time the purchasing power of their money is becoming less each month.  It is a dilemma for pensioners because the money they are receiving in interest payments is not enough to get by. And, for those hard working individuals who like to save, having money in a deposit account is hardly a proposition. So, in order to find a higher return, they are being persuaded to invest in equities.

While investing in equities is not a bad thing at all, the current scenario is anything but healthy. Prices of global equities are being artificially propped up by the policies of these central banks and have nothing to do with stellar economic growth.

As the prices of stocks continue to rise, individuals are being persuaded to buy these to keep prices moving upwards. Alternatively, they are being induced to use the low levels of interest to buy homes and cars and thus get themselves further indebted to banks.

In the UK total personal debt has reached record highs – 1.4 trillion pounds.

According to a report by the Centre for Social Justice (CSJ) an average household debt of 54,000 pounds is now almost twice the level of a decade ago. Indebted households in the poorest 10% of the country have average debts more than four times their annual income.

According to the report, entitled 'Maxed Out', over 130,000 people declare bankruptcy or some other form of insolvency each year in the UK. More than 8 million households have no savings at all, affecting about 50 percent of low-income households. Consumer debt has trebled since 1993, reaching nearly 160 billion pounds in 2013.

“Years of increased borrowing, rising living costs and struggling to save has forced many families into a debt trap that is proving very difficult to escape,” director of the CSJ, Christian Guy, explained, warning that problem debt can have a “corrosive impact on people and families,” affecting their mental health, relationships and wellbeing.

An estimated 1.1 million people over 50 years old are in problem debt.

The study, led by former Labour Party politician and Pensions Minister Chris Pond, said that problem debt carries a major human cost.

"With falling real incomes and increasing costs of basic essentials, many – especially the most vulnerable – are sliding further into problem debt. The costs to those affected, in stress and mental disorders, relationship breakdown and hardship is immense. But so too is the cost to the nation, measured in lost employment and productivity and in an increased burden on public services."

With the rising costs of domestic energy and other major household bills, more households might be pushed into problem debt, the study warns. In 2012 an estimated 1.85 million households were three months in arrears on at least one household bill or payment.

“The 25 percent increase in the cost of living over the past five years combined with job insecurity and low savings mean that many households have been pushed over the edge,”
 the study says.

“Those on a low income are not victims of a housing bubble or an international banking crash, but of a financial system that is rigged against them.”

While, banks and governments can borrow at low interest rates, risk free because if they fail, they will get bailed out, savers are being penalised and duped into thinking that they must invest their money into equities, bonds or homes.

This is a bubble about to burst. It may not be now, but it may be next year or even the year after. However, once it does burst, these people will lose fortunes.

Whether you believe that gold prices are manipulated, or not, is your decision. But, let me remind you that most of the most highly respected and well–known banks in the world have all been found guilty of manipulating Libor, energy, and currencies. They were also found guilty of lying to their own clients about buying useless mortgage back securities and other assets. And, while these banks have had to pay billions in fines for their actions, not one single banker or government official has been prosecuted.

When it comes to gold, Bloomberg recently reported that the U.K. Financial Conduct Authority is reviewing gold benchmarks as part of its wider probe of how global rates are set. Evidently, the FCA review is preliminary and hasn't risen to the level of a formal investigation.

One of the key benchmarks is the London gold fixing, a measure of the spot price for physical gold that is set twice daily by five banks. Regulators around the world are examining alleged abuses of a number of financial benchmarks by companies that play a central role in setting them. Inquiries were triggered after it emerged the London interbank offered rate, or Libor, the benchmark interest rate for more than $360 trillion of securities worldwide, was being manipulated.

The London fix, the benchmark rate used by mining companies, jewellers and central banks to buy, sell and value the metal, is published twice daily after a telephone call involving Barclays Plc., Deutsche Bank, Bank of Nova Scotia, HSBC Holdings Plc., and Societe General.

Even though prices may change immediately after the fix, it has been a tradition that dates back to 1919.

The U.K. Financial Conduct Authority is scrutinizing how prices are set in the $20 trillion gold market, according to a person with knowledge of the review who asked not to be identified because the matter isn't public.

The process, during which gold is bought and sold, can take from a few minutes to more than an hour. The participants also can trade the metal and its derivatives on the spot market and exchanges during the calls. Just after the fixing begins, trading erupts in gold derivatives, according to research published in September. Four traders interviewed by Bloomberg News said that's because dealers and their clients are using information from the talks to bet on the outcome.

According to the London Bullion Market Association, London is the largest centre for gold trading in the world. Around $33 billion changed hands there each day in 2012, exceeding the $29 billion of futures traded on Comex, data compiled by Bloomberg show.

The FCA review is preliminary and not a formal investigation, another person said. The people wouldn't say what's being looked at or if regulators suspect wrongdoing. Regulators are looking into how benchmarks are set and governed across the financial system after five firms including Barclays and Royal Bank of Scotland Group Plc were fined a combined $3.7 billion for rigging the London interbank offered rate, or Libor.

Investigators from Switzerland to Hong Kong are probing currency markets after Bloomberg News reported in June that traders communicated with each other and timed trades to influence foreign-exchange benchmarks and maximize profits.

If gold prices continue to slide, it is essential that you are not beguiled into thinking that you own a barbaric relic. There is enormous value to owning gold. And while it may not be apparent now, things are bound to change in the very near future. The Chinese have already figured this out and that is why they are buying as much gold as possible.

They are also making currency deals with many of their counter parties so that they do not have to trade through dollars. Recently, China announced that they will be invoicing their oil imports in renminbi in yet another major step to avoid using the US dollar as the world's reserve currency. This means that China will have bilateral trading arrangements with Russia and the other major countries, such as Iran, that provide energy to China.

And, as Western central banks, and their agent bullion banks persist in suppressing the price of gold with their paper contracts, Asian countries will continue to take the physical gold.

Don't be fooled. Continue to add gold to your investment portfolios.

Technical picture

gold price 25 november 2013 investing

The recent fall in gold prices has broken various support levels, indicating a possibility of further downside action and sideways consolidation. 

 

About the authorDavid Levenstein is a leading expert on investing in precious metals . Although he began trading silver through the LME in 1980, over the years he has dealt with gold, silver, platinum and palladium. He has traded and invested in bullion, bullion coins, mining shares, exchange traded funds, as well as futures for his personal account as well as for clients.  For more information go to  www.lakeshoretrading.co.za

India urges exports to temper gold imports

Posted: 26 Nov 2013 07:30 AM PST

Acceding to the fact that restricting gold imports has impacted the jewellery trade, India’s Finance Minister termed the under-utilisation of gold jewellery capacity an intended consequence.

Read more….

London gold fixing under investigation

Posted: 26 Nov 2013 07:30 AM PST

Now it is the turn of the London gold fixing to come under the scrutiny of the regulators to see if there is a degree of 'insider trading' involved.

Read more….

Best gold issues may start to melt up rather than down – Rule

Posted: 26 Nov 2013 07:30 AM PST

Now that the overgrown forest of TSX precious metals explorers has been pruned, a few outstanding companies can finally bloom and thrive to the benefit of today's investor.

Read more….

It takes courage, but now is the time to buy gold stocks – Adrian Day

Posted: 26 Nov 2013 07:30 AM PST

Asset manager Adrian Day says both major and junior gold stocks are at their cheapest prices in years and represent ‘stunning buys’.

Read more….

Gold Fix Shocker! Price Set by Buyers & Sellers!

Posted: 26 Nov 2013 06:39 AM PST

Outside of a Communist utopia, price is not an abstraction. Nor is the London Gold Fix...
 
YET MORE FUSS today over the London Fix, the snapshot which the world uses as its benchmark for gold and silver prices on a daily basis, writes Adrian Ash at BullionVault.
 
It's not a complicated process, as the member banks of the London Fixing Ltd explain here. As the spot price of gold or silver is constantly moving up and down, a small number of bullion-trading banks offers to take orders for a set time of day, known as the Fix, from their clients. The aim is to find the single price which maximises the volume of trade at that point, by meeting as much supply and demand as possible.
 
With the participant banks referring to their client orderbook, getting near and then reaching this single clearing price can take a few seconds or several hours (as it did on Black Monday in 1987). Also note that, thanks to modern conference-call technology, the banks' clients can now listen in and change their orders as the Fix is in progress. And all the while, both they and the participant banks can also continue to trade on the spot, futures or ETF markets whilst the Fixing is in conference, too.
 
Now, Bloomberg have picked up an academic paper from September. It finds that trading activity in gold futures and exchange-traded funds (ETFs) seems to "know" the Fix price in advance, before it is announced, signalling whereabouts it will finish. 
 
Oh horror! This must be a very bad thing. Because the markets should of course react to the London Fix after it is announced, not predict where it will be. Or so the world now thinks when it sees the word "benchmark".
 
But this gets everything the wrong way round. Because the Fix (which has happened pretty much every day since at least 1907, with a formal statement of the price announced daily since 1919) is achieved by genuine buying and selling. It is reached as a result of trading activity (ie, it is a price), including that very same trading activity which the academics took so much trouble to analyze across the related derivatives markets. 
 
So the apparent "leaks" are in fact flowing the other way. It is the buying and selling in spot physical, futures and ETFs which determines where the Fix is set. Not the other way round. 
 
Still, no matter. The Fix is now set for close inspection. No doubt big changes will follow as the bull market in regulation rolls on after the global financial crisis, trying to . This is sad. Because outside of a Communist utopia, price is not an abstract perfection. It is the result of hundreds, thousands or millions of purchase and sale decisions. And each participant has a vested interest. Buyers want lower prices. Sellers want more. Where they meet, that's where the price is. 
 
Which is what happens at the London Fixes. 
 
Knowing that, please read the abstract from the research paper in question.
"We find significantly elevated levels of trade volume and price volatility immediately following the fixing's start, well before the conclusion of the fixing and the publication of its results. Similarly, we find statistically significant return advantages in the 4 minutes following the start of the fixing for informed traders. We find no significant impacts or returns following the publication of the fixing results. Trades in the opening minutes of the fixing are significantly predictive of the price direction of the fixings, in some cases exceeding 90%. Combined, these findings support the following conclusions: that the London PM gold price fixing does have material impact on the exchange traded gold instruments, information from the fixing is leaking into markets prior the fixing results being published, and there exist economic returns for trading on these information leaks."
There is, frankly, no news here. Still, it's good for the bullion banks, and all market participants who can reference or trade at that daily price, to have the Fix validated like this. The London Gold Fix is a process of price discovery. The final number announced is a result of activity, not front-running.
 
A market benchmark doing it's job in short.
 

Gold Fix Shocker! Price Set by Buyers & Sellers!

Posted: 26 Nov 2013 06:39 AM PST

Outside of a Communist utopia, price is not an abstraction. Nor is the London Gold Fix...
 
YET MORE FUSS today over the London Fix, the snapshot which the world uses as its benchmark for gold and silver prices on a daily basis, writes Adrian Ash at BullionVault.
 
It's not a complicated process, as the member banks of the London Fixing Ltd explain here. As the spot price of gold or silver is constantly moving up and down, a small number of bullion-trading banks offers to take orders for a set time of day, known as the Fix, from their clients. The aim is to find the single price which maximises the volume of trade at that point, by meeting as much supply and demand as possible.
 
With the participant banks referring to their client orderbook, getting near and then reaching this single clearing price can take a few seconds or several hours (as it did on Black Monday in 1987). Also note that, thanks to modern conference-call technology, the banks' clients can now listen in and change their orders as the Fix is in progress. And all the while, both they and the participant banks can also continue to trade on the spot, futures or ETF markets whilst the Fixing is in conference, too.
 
Now, Bloomberg have picked up an academic paper from September. It finds that trading activity in gold futures and exchange-traded funds (ETFs) seems to "know" the Fix price in advance, before it is announced, signalling whereabouts it will finish. 
 
Oh horror! This must be a very bad thing. Because the markets should of course react to the London Fix after it is announced, not predict where it will be. Or so the world now thinks when it sees the word "benchmark".
 
But this gets everything the wrong way round. Because the Fix (which has happened pretty much every day since at least 1907, with a formal statement of the price announced daily since 1919) is achieved by genuine buying and selling. It is reached as a result of trading activity (ie, it is a price), including that very same trading activity which the academics took so much trouble to analyze across the related derivatives markets. 
 
So the apparent "leaks" are in fact flowing the other way. It is the buying and selling in spot physical, futures and ETFs which determines where the Fix is set. Not the other way round. 
 
Still, no matter. The Fix is now set for close inspection. No doubt big changes will follow as the bull market in regulation rolls on after the global financial crisis, trying to . This is sad. Because outside of a Communist utopia, price is not an abstract perfection. It is the result of hundreds, thousands or millions of purchase and sale decisions. And each participant has a vested interest. Buyers want lower prices. Sellers want more. Where they meet, that's where the price is. 
 
Which is what happens at the London Fixes. 
 
Knowing that, please read the abstract from the research paper in question.
"We find significantly elevated levels of trade volume and price volatility immediately following the fixing's start, well before the conclusion of the fixing and the publication of its results. Similarly, we find statistically significant return advantages in the 4 minutes following the start of the fixing for informed traders. We find no significant impacts or returns following the publication of the fixing results. Trades in the opening minutes of the fixing are significantly predictive of the price direction of the fixings, in some cases exceeding 90%. Combined, these findings support the following conclusions: that the London PM gold price fixing does have material impact on the exchange traded gold instruments, information from the fixing is leaking into markets prior the fixing results being published, and there exist economic returns for trading on these information leaks."
There is, frankly, no news here. Still, it's good for the bullion banks, and all market participants who can reference or trade at that daily price, to have the Fix validated like this. The London Gold Fix is a process of price discovery. The final number announced is a result of activity, not front-running.
 
A market benchmark doing it's job in short.
 

Gold Fix Shocker! Price Set by Buyers & Sellers!

Posted: 26 Nov 2013 06:39 AM PST

Outside of a Communist utopia, price is not an abstraction. Nor is the London Gold Fix...
 
YET MORE FUSS today over the London Fix, the snapshot which the world uses as its benchmark for gold and silver prices on a daily basis, writes Adrian Ash at BullionVault.
 
It's not a complicated process, as the member banks of the London Fixing Ltd explain here. As the spot price of gold or silver is constantly moving up and down, a small number of bullion-trading banks offers to take orders for a set time of day, known as the Fix, from their clients. The aim is to find the single price which maximises the volume of trade at that point, by meeting as much supply and demand as possible.
 
With the participant banks referring to their client orderbook, getting near and then reaching this single clearing price can take a few seconds or several hours (as it did on Black Monday in 1987). Also note that, thanks to modern conference-call technology, the banks' clients can now listen in and change their orders as the Fix is in progress. And all the while, both they and the participant banks can also continue to trade on the spot, futures or ETF markets whilst the Fixing is in conference, too.
 
Now, Bloomberg have picked up an academic paper from September. It finds that trading activity in gold futures and exchange-traded funds (ETFs) seems to "know" the Fix price in advance, before it is announced, signalling whereabouts it will finish. 
 
Oh horror! This must be a very bad thing. Because the markets should of course react to the London Fix after it is announced, not predict where it will be. Or so the world now thinks when it sees the word "benchmark".
 
But this gets everything the wrong way round. Because the Fix (which has happened pretty much every day since at least 1907, with a formal statement of the price announced daily since 1919) is achieved by genuine buying and selling. It is reached as a result of trading activity (ie, it is a price), including that very same trading activity which the academics took so much trouble to analyze across the related derivatives markets. 
 
So the apparent "leaks" are in fact flowing the other way. It is the buying and selling in spot physical, futures and ETFs which determines where the Fix is set. Not the other way round. 
 
Still, no matter. The Fix is now set for close inspection. No doubt big changes will follow as the bull market in regulation rolls on after the global financial crisis, trying to . This is sad. Because outside of a Communist utopia, price is not an abstract perfection. It is the result of hundreds, thousands or millions of purchase and sale decisions. And each participant has a vested interest. Buyers want lower prices. Sellers want more. Where they meet, that's where the price is. 
 
Which is what happens at the London Fixes. 
 
Knowing that, please read the abstract from the research paper in question.
"We find significantly elevated levels of trade volume and price volatility immediately following the fixing's start, well before the conclusion of the fixing and the publication of its results. Similarly, we find statistically significant return advantages in the 4 minutes following the start of the fixing for informed traders. We find no significant impacts or returns following the publication of the fixing results. Trades in the opening minutes of the fixing are significantly predictive of the price direction of the fixings, in some cases exceeding 90%. Combined, these findings support the following conclusions: that the London PM gold price fixing does have material impact on the exchange traded gold instruments, information from the fixing is leaking into markets prior the fixing results being published, and there exist economic returns for trading on these information leaks."
There is, frankly, no news here. Still, it's good for the bullion banks, and all market participants who can reference or trade at that daily price, to have the Fix validated like this. The London Gold Fix is a process of price discovery. The final number announced is a result of activity, not front-running.
 
A market benchmark doing it's job in short.
 

Gold: Challenging Its Declining Channel

Posted: 26 Nov 2013 06:27 AM PST

Gold is challenging its declining channel. The hourly resistance at 1251 has been broken. Monitor the other horizontal resistance at 1269 (19/11/2013 low). An initial support now lies at 1226 (25/11/2013 low). Read More...

In The Future, You May Have To Pay The Bank To Hold Your Money

Posted: 26 Nov 2013 06:18 AM PST

25-Nov (BusinessInsider) — The economy is stuck in a weak recovery and unemployment remains high, but the Federal Reserve long ago exhausted the normal tool it uses to spur economic growth.

Now, it is considering a policy change that could lead banks to charge depositors negative interest rates.

…In recent weeks, economist have discussed the idea of how to implement a negative interest rate while preventing people from hoarding paper currency. Economist Miles Kimball has discussed creating an electronic currency and having an exchange rate between it and dollar bills. Others have discussed going cashless and eliminating paper currency altogether.

[source]

PG View: If the banks are going to charge you to store your money, you should consider storing some of your wealth in gold.

THE NEXT CRISES

Posted: 26 Nov 2013 06:01 AM PST

I see many analysts lately wondering what the next catalyst will be to send gold higher. Isn't it obvious?

Without fail throughout history, every crisis eventually occurs in markets where excesses developed. From 1990 to 2000 the misallocation was in the tech sector. We all know how that bubble ended.

In order to halt the tech bubble implosion and economic recession, the Fed cut rates to 1% and held them there long enough to create a bubble in real estate and the credit markets. Not surprisingly this is where the next crisis hit.

Panicking at the 2009 bottom the Fed again resorted to the only game plan they know and begin printing money at absolutely mind-boggling rates. This has continued nonstop ever sense and along the way virtually every other major economy in the world jumped on the printing train.

Isn't it obvious where the excess is? It's in the currency markets. And just like every other time in history when the crisis hits it's going to hit where the excesses occurred. The next crisis is going to be in the currency markets.

It began last year with the Japanese yen.

The next in the line to get in trouble will be the US dollar at its three year cycle low, due in the fall next year.

After that I expect rolling currency crises as one after another of the major global currencies begin to collapse under the strain of insane Keynesian monetary policy.

At the moment it seems to be fashionable to use the commodity markets has an indication that deflation is taking hold in the world. Nothing could be further from the truth. As a matter of fact we have massive inflation right now. It's just that it is being stored in the stock market, bond market, and to some extent in the echo bubble in real estate. Once the inevitable currency crises began, inflation will start to drain out of stocks and bonds and into the commodity markets.

Let's face it, it's obvious where the next crisis is going to occur, and currency crises are not deflationary. They are massively inflationary.


A 50-Year Lesson on Hard Money

Posted: 26 Nov 2013 06:00 AM PST

I never met President John F. Kennedy. I was all of 5 years old when the man was elected U.S. president in 1960. I was eight years old when he died in 1963, 50 years ago.

I saw President Kennedy one time. It was 1962, I believe. I was about 7 years old. Kennedy was in Pittsburgh for a political event. He was scheduled to fly out of Greater Pittsburgh Airport (which was not “International” back then) on a Sunday morning.

Here's what happened that day – plus, a 50-year lesson on hard money…

With the recent 50th anniversary of the death of President Kennedy, it strikes me that JFK was the last "hard money" president.

Bright and early, my parents packed me and my three sisters into the family station wagon — a powder-blue Pontiac, with tail fins. We went out to watch the presidential motorcade. “You’ll remember this for the rest of your life,” said my late-deceased mother. Yep. Still do.

Old “Greater Pitt” was an elegant, elaborate, art deco-style place. The main entrance to the terminal was constructed out of polished gray granite and brushed aluminum. A long driveway led up to the front facade. For about 200 yards, the center median of the road was covered by flower beds. There were wide sidewalks too, which was odd considering that pretty much everyone drove to the airport — then as now.

My dad knew a federal judge who was somehow connected with the U.S. Secret Service. By prior arrangement, the King family had a more or less “reserved” spot right along the presidential path of intended movement. We arrived early and took up position along the road, near the terminal.

We stood around in the warm sun and waited. My mother and father chatted with Secret Service guys and cops from various jurisdictions. It struck me that so-called “law enforcement” guys often have ringside seats to big events.

As we waited, my sisters and I milled about smartly. We were intimidated by so many big people carrying large pistols. We waited some more, and it further struck me that these kind of “drive by” presidential events happen at their own pace.

Eventually, we heard a buzz. There was low-level cheering and applause from the distant crowd. I strained to look down the road, past the flowers. Police radios crackled nearby. Secret Service guys and state troopers started acting jumpy, looking around at the crowd with their heads on that proverbial swivel. There was lots of “cop face” on display.

Then I saw it — the presidential motorcade. In the lead was a vanguard of motorcycle police officers from the City of Pittsburgh, County of Allegheny and Pennsylvania State Police. The riders were in dress uniform, all spit and polish. The bikes were hospital clean, with mirror-like leather seats and glistening chrome and brass. The engines roared like thunder. On the rear of each motorcycle was a small American flag mounted on a staff, with red, white and blue flapping in the breeze.

Behind the motorcycles was an open car full of more cops and a gaggle of local dignitaries, grinning from ear to ear. Then came the presidential limo, with JFK (but no wife Jacqueline) in the wide-open back seat. Then another open car full of cops and smiling digs. Then more cops on motorcycles. Lots of guns and horsepower.

President Kennedy was sitting up high in the limo. He was boosted up on some sort of raised seat or cushion, evidently. Kennedy looked tanned and healthy. He was beaming. He sat there looking around at the crowd as the limo drove slowly. He smiled, and waved at people.

I suppose I could say that Kennedy looked right at me and smiled. He looked at a lot of people and smiled, of course. In my case, I happened to be standing at the curb when the presidential car drove by. I was maybe 15 feet away from Kennedy, with nobody between him and me.

Today, we can only speculate on the kind of country that might have been had JFK not been assassinated. Of course, it’s the same thing with what might have happened post-Lincoln, post-Garfield or post-McKinley, too. Killing a president — as with regicide since time immemorial — bends the arc of history in ways we can scarcely begin to comprehend. We know what happened, after a historical fashion. Or do we?

A presidential life cut short — and with it, the heart of a political administration — makes for all manner of counterfactual speculation in a “what if” sort of way.

Indeed, as the superb instructors at the Naval War College used to emphasize, sometimes you cannot truly understand what happened with a historical event unless you take the facts and dissect what did NOT happen. (For example, “what if” Japanese carriers had been able to launch more fighters as air cover during the Battle of Midway?)

There’s history and there’s karma, too. Not long before he died, President Kennedy approved the assassination of President Diem of South Vietnam. Not long after the JFK assassination, President Johnson escalated the Vietnam War.

As the 1960s wore on, the country’s Roosevelt-era New Deal morphed into the Johnson-era Great Society. Paying for all of this, plus that distant Vietnam War, began to wreck the value of the dollar.

By 1967, the U.S. government was frantically pulling silver out of circulation in coinage. Then in 1971, President Nixon took the U.S. off the gold standard. By 1973, oil prices quadrupled, and by 1979 they quadrupled again. What saved the U.S. economy was an international agreement for oil to be priced in dollars. (That deal is wearing thin, by the way.)

It’s not an overstatement to say that post-JFK, from the mid-1960s to today, our economy has been a credit casino based on Federal Reserve Notes and the government’s promise to tax people in the future to pay for overspending now.

With the recent 50th anniversary of the death of President Kennedy, it strikes me that JFK was the last “hard money” president. Certainly, Kennedy’s was the last administration in which the American people used silver coins for the duration and carried silver certificates (remember those?) in their wallets.

Consider silver coins. Back in Kennedy’s day, a 25 cent “silver” quarter (actually, 90% silver and 10% copper alloy) was worth… well, 25 cents. Today, just based on melt value of metal, an old silver quarter is worth about $3.60 — meaning the current value is about 14.4 times the original value. Or look at it this way — we’ve seen a 93% erosion in the purchasing value of an “old” silver-based dollar versus a new one over the past 50 years.

Or look at the price of gold. In Kennedy’s day, the monetary value of gold was $32 per ounce. Today, it’s about $1,250 — depending on the day, of course. It’s a diminishment of value by a factor of nearly 40, respecting the dollar versus gold. That’s over a 97% decline in 50 years.

Or oil? Back in the early 1960s, a barrel of crude went for $2 or so. Today it’s north of $108 (Brent quote). It’s a change by a factor of 54 — a decline of 98.2% in dollar purchasing power for oil.

Looking back, we may or may not know the truth — and the whole truth — about what happened with JFK long ago. But we can clearly see what has happened with the value of the dollar over 50 years. Its value has plummeted.

Looking ahead, we still may never know what happened with JFK. People have died off. Evidence has gone missing. The “conspiracy” industry has picked up a bad reputation, which is probably what the conspirators always wished would happen.

But also looking ahead, I foresee more and more inflation and further declines in the value of the dollar. I see no coming correction for government overspending and no way for the future economy ever to repay the debts of the past — absent another 97% or so reduction in the value of the dollar.

That's why we keep looking for ideas to help preserve your wealth and keep you ahead of the inflation curve. Some periods in the market are better than others, but we’re always looking for new ideas in things that will hold their value over time.

That’s all for now. Thanks for reading.

Byron W. King
for The Daily Reckoning

P.S. Are you ready for the kicker? Over the past 50 years the U.S. dollar has lost "most" of its purchasing power, no matter which way you look at it. Over that same timeframe, however, one government sector has seen a predictable, and potentially profitable, ramp-up. I recently gave readers of the Daily Resource Hunter email edition an opportunity to discover this sector for themselves – including one incredible profit opportunity. If you didn’t get it, you missed out on something big. Don’t let that happen again. Sign up for the FREE Daily Resource Hunter email edition, right here.

Original article posted on Daily Resource Hunter

Gold lower at 1246.67 (-5.90). Silver 20.01 (-0.21). Dollar easier. Euro up. Stocks called better. US 10yr 2.71% (-2 bps).

Posted: 26 Nov 2013 05:28 AM PST

Gold: If Not Now, When?

Posted: 26 Nov 2013 05:00 AM PST

Nichols on Gold

Gold Bullion ETF and Fund Drain - Comex Registered Stocks at 69 to 1

Posted: 26 Nov 2013 04:15 AM PST

This chart shows the amount of gold that has been taken out of the vaults of various funds and ETFs since the beginning of this year. The number in black is the total number of tonnes that have been removed from their vaults, presumably to be sold off into the market, most likely heading for points East.

The (Mis)Calculation Of Chinese Gold Demand

Posted: 26 Nov 2013 01:47 AM PST

We wrote recently in World Gold Council Reports Significant Error In China's Gold Holdings that the official gold demand figures out of China are significantly incorrect.

Official gold demand figures are mostly provided by the World Gold Council and Thompson-Reuters GFMS. However, when comparing those figures with gold export statistics by Hong Kong, Turkey, the Shanghai Exchange, etc, it appears there are significant differences.

Alasdair Macleod went deeper in the matter and published an interesting calculation. He wrote:

Recently Eric Sprott wrote an open letter to the World Gold Council laying out that the Chinese gold import statistics show higher figures than the ones from the World Gold Council itself.

It seems that Sprott and the WGC are trying to do two different things. Sprott is interested in how much gold is actually taken into a country net of exports, irrespective of its use category, taking the view that there can be no more accurate estimate of overall gold demand, irrespective of how it is used. The WGC is trying to identify how much gold is used for specific purposes, which given the opaqueness of the market means they will never track all of it down. Crudely put it is top-down versus bottom-up.

To see how different the results can be let’s look at the solid figures for China and Hong Kong for the first nine months of 2013 which are set out in the table below, before comparing the result with that of the WGC.

chinese gold demand calculation november2013 physical market

All these are published figures which we can assume to be accurate. Mainland China does not release import/export statistics for gold but we know what has been physically delivered through the Shanghai Gold Exchange, the monopoly physical market, and we know what Hong Kong imports exports and re-exports.

We can also be reasonably certain that these figures exclude off-market government transactions, such as direct purchases from the mines of all China’s gold production, given that Chinese-refined bars are never seen in circulation.

Exports from Hong Kong refer to gold processed into a materially different form from that imported, typically jewellery; so exported to the Mainland they are additional to SGE deliveries. Re-exports refers to imports re-exported with no material processing, and therefore can be assumed to be bullion trans-shipped and destined for the SGE, ignoring for simplicity’s sake that some may have bypassed the SGE and been sent directly to private buyers. Exports and re-exports to the rest of the world obviously must be deducted.

These data show the gap: Hong Kong export statistics show 2,130.7 tonnes gold imports for private usage in the first nine months of this year (2,841 tonnes annualised) vs the official World Gold Council data of 818.6 tonnes for the same period (1,091.5 annualised).

According to Alasdair Macleod, it appears that the WGC’s figures substantially understate the true position. Furthermore, any analysis of gold demand will fail to account for the increase in gold ownership not constrained by national boundaries….

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