Tuesday, November 5, 2013

Gold World News Flash

Gold World News Flash


PA Food Bank Head Warns Demand Cannot be Met

Posted: 04 Nov 2013 09:40 PM PST

by Paul Joseph Watson, InfoWars:

The head of the Pennsylvania's largest food bank has warned that demand for groceries following a $5 billion dollar cut in the food stamp program cannot be met.

Joe Arthur of the Central Pennsylvania Food Bank "says the donor network for the food banks is already stretched too thin to quickly expand," according to an Associated Press report.

From November 1st, $5 billion was wiped off the Supplemental Nutrition Assistance Program (SNAP) as a result of a planned stimulus withdrawal. Almost 50 million Americans who are supported by the program face an average loss of $36 dollars a month, which is a significant amount for those living near the poverty line.

Read More @ InfoWars.com

Gold vs. Wall Street Program Traders

Posted: 04 Nov 2013 09:35 PM PST

Gold ran into trouble last week after an encounter with its important 150-day (30-week) moving average. The 150-day MA, which is an important psychological resistance barrier that is programmed into many Wall Street trading algorithms, was touched by gold a few days ago and was unable to overcome it. I've long maintained that the 150-day moving average is a psychologically significant benchmark for the gold ETF, both as a line of support and resistance. GLD's performance in recent days has confirmed this observation.

China – Gold – Financial Capital of the World

Posted: 04 Nov 2013 08:40 PM PST

from Armstrong Economics:

QUESTION: Martin…in your previous work, I had noticed that China was due to become the world's new hegemon by 2015.75. Several sources that I follow, one included below, indicates China's voracious appetite for metal, something the west seems willing to accommodate at this point. It seems the lower the price goes, the more China is willing to buy. To assume the mantle of world hegemon, it makes sense that they are able to fulfill the "he who has the gold makes the rules" axiom, and at some point, they would become the gold market, much like London has been the hub for years. With reference to your recent position on the gold market and where it is likely to go, as your work suggests, it would seem foolish for the Chinese to do what they are doing. Can you comment on this please?

Read More @ ArmstrongEconomics.org

Gold’s Role in a Portfolio

Posted: 04 Nov 2013 08:20 PM PST

by David Schectman, MilesFranklin.com:

Last week I talked with a man I know who reads our newsletter. He bought most of his gold in the early 2000s when gold was in the $300/oz. range. "Gold has been a terrible investment," he said. "Think of all the interest I could have made on the money I spent on gold."

"Gold isn't an investment, it's an insurance policy," I said, "You may need it some day."

He replied, "I don't need it for insurance. I'll never have to sell it. I'll leave it for my kids."

I said, "Will you change your mind when gold is $3,000 or $5,000 an ounce? You bought it at $300 and it's up three to four times. That certainly beats any interest you would have earned over the last decade."

Read More @ MilesFranklin.com

Tracing The Great Chinese Gold Rush

Posted: 04 Nov 2013 07:16 PM PST

As we recently noted, China is taking over the world on gold bar at a time. This growing world super-power has, it would appear (by words and deeds) grown tired of being on the receiving end of the USDollar and Fed money printing. The Real Asset Company illustrates how, in the space of a few decades, China has opened up her huge gold market which is now hungrily devouring the world's physical gold.

 

 

(click image for large legible version)

David Morgan Interview - Silver Summit Oct 2013 - Spokane

Posted: 04 Nov 2013 07:16 PM PST

David Morgan and Vanessa Collette
In our mail bag this morning is this interview with David Morgan at the Cambridge House Silver Summit by Vanessa Collette, bought to us by First Majectic Silver Corporation.

Silver expert David Morgan from the Morgan Report chats

That’s a Lot of Silver…

Posted: 04 Nov 2013 07:01 PM PST

The Indian government has restricted the importation of gold. So Indians have switched to silver:

Starved of gold, Indians may import record volumes of silver

(Reuters) – Indian silver imports are on pace to hit a record high this year as the wedding and festival season drives up buying of the precious metal instead of the traditional gold, made scarcer and dearer by official measures aimed at cutting the trade gap.

Higher silver demand in the world’s biggest buyer may help support prices, which have fallen almost 30 percent this year on the international market and are on track for their biggest annual drop in almost three decades.

The increase in buying is unlikely to spark a fresh policy response from authorities, as in the case of gold, since the value of silver that is imported is far lower than that of gold and therefore not critical to the trade balance.

“There has been a massive improvement in silver imports and we will continue to see more. Investors are taking advantage of lower prices and the lack of restrictions on silver imports as of now,” said Harmesh Arora, director with the Bombay Bullion Association.

According to the GFMS metals consultancy, India imported 4,073 tonnes of silver from January to August, more than double the 1,921 tonnes in the whole of 2012, when a jump in prices in the peak season hurt demand. The record high was 5,048 tonnes in 2008.

India, also the world’s biggest buyer of gold, has raised the import duty on bullion three times this year, taking it to 10 percent, and in July the government told importers that a fifth of their purchases would have to be turned around for export, leaving only 80 percent for domestic use.

SECOND CHOICE
The import duty on silver was also raised to 10 percent in August from 6 percent, but prices remain far apart: gold is about 60 times more expensive than silver in dollar terms.

Gold has a special place in Indian culture, bought as a hedge against inflation and traditionally used for gifts at weddings and festivals. Silver does not enjoy the same status.

The value of silver imports in 2012 was $1.8 billion, whereas gold imports cost $52 billion. Even record shipments of silver are therefore unlikely to put any strain on the trade deficit, in contrast to the impact of gold, which is India’s second-biggest import item after oil.

For now, much of the silver flooding in is finding its way to rural areas, where industry officials expect a surge in disposable incomes after a bountiful monsoon boosted agricultural harvests.

Some thoughts
Here's a chart showing Indian silver imports since 2008. Note how they plunged in 2012, which might have had a bit to do with silver falling by over half from its $50 high.

Indian silver

There are about 32,000 ounces in a ton, so 6,000 tons is nearly 200 million ounces. The total annual supply of silver is a billion ounces (750 million ounces from mines, 250 million from recycling). So 200 million ounces is 20% of total global supply – a lot of silver for just one country.

According to the Silver Institute, industrial users (including jewelry makers) absorb about 850 million ounces of silver each year, which leaves 150 million ounces for investors. But by importing 132 million more ounces this year than last, India is taking almost all of that surplus for itself, leaving the rest of the world's silver bugs to scramble for what little is left.

Also interesting is the fact that silver is so cheap that a doubling of imports has a negligible impact on India's balance of trade and therefore probably won't attract the ire of regulators. So from a policy standpoint, restricting gold imports is working and will likely continue. That means the current level of silver demand might be sustained. Wonder where all the extra silver will come from?

The Massive Drawdown of Gold From the West Continues - Silver Comparison - the Abyss

Posted: 04 Nov 2013 05:26 PM PST

The Massive Drawdown of Gold From the West Continues - Silver Comparison - the Abyss

Posted: 04 Nov 2013 05:26 PM PST

Greek Companies Unable To Pay Taxes Explode From 182K To Over Half A Million In One Month

Posted: 04 Nov 2013 05:20 PM PST

The US bug, whereby the worse the economy, the higher the stock market and bond prices must have shifted to Greece, because while the Greek stock market was the best performing "asset" class in October, and Greek bond yields are plunging just because the greater fool stock posse has now moved to the insolvent nation if only for a few months, the economic reality just gets worse by the minute. Case in point - Greek corporations, or what's left of them, and what Greece needs more than anything - taxes. Kathimerini reports, in what is now nail overkill on the Greek economic coffin, that "hundreds of thousands of enterprises are unable to fulfill their tax obligations, according to the data published on Monday by the Finance Ministry. Within just one month, from the end of August to end-September, the number of corporations that have fallen behind on their taxes soared from 182,785 to 526,477." No, you read that right: the number of companies that went in arrears on their tax obligations has tripled to over one million in one month. The same month in which the Grecovery was rumored to be in full swing and when John Paulson was buying every Greek stock he could find.

It's a crazy pills world as Kathimerini reports.

According to a senior ministry official, most of those 343,692 additional enterprises that failed to meet their obligations have entered special payment programs in the hope of settling their debts in 12 installments. The total amount that corporations owe to the state comes to 39.3 billion euros, but only 647.69 million euros of that has been arranged for payment.

There was a silver lining: with virtually nobody working officially, as unknown amounts have shifted to the gray economy, the taxpayer debt have plunged. Why? Simply because if one doesn't officially make money, a luxury corporations can't afford, one doesn't officially have to pay any taxes, hence no taxpayer debts.

Surprisingly, the opposite trend is apparent in taxpayer debts, as debtors numbered 2.8 million at the end of August, a figure which fell to 2.59 million at end-September. In total, they owe 22.6 billion euros.

 

A ministry source pointed to the improvement in debt collection, as total receipts in the year to end-September amounted to 2.13 billion euros, up by 35 percent year-on-year.

 

September revenues grew by 37.2 percent from September 2012, which the general secretary for public revenues, Haris Theoharis, attributes to "the high level of collection of past years' debts."

Good luck collecting in current year debts when the unemployment hits fresh record highs, and thus the base of taxpaying individuals craters.

As for corporations, our best advice is for Greece to tax the bankruptcy process. That's the only way the dying country can possibly collect any "owed" funds from what is left of the country's once thriving businesses.

But at least the Greek economic skeleton still has its precious euro.

Meanwhile, elsewhere in the same basket case country...

Three police officers were injured on Monday as a group of protesters smashed into a courthouse in the city of Iraklio on Crete where the trial of 92 farmers arrested in 2009 was under way.

 

The three officers suffered scrapes and cuts from falling glass when a group of farmers smashed through the courthouse's main door at around 3 p.m. demanding that their colleagues be acquitted of all charges.

 

The 92 farmers standing trial are accused of obstructing public transportation, among other charges, after staging a blockade of Iraklio Airport in January 2009.

Will Indians keep buying gold?

Posted: 04 Nov 2013 05:07 PM PST

8p ET Monday, November 4, 2013

Dear Friend of GATA and Gold:

Premiums on gold in India will decline over time as smuggling the monetary metal past the government's heavy-handed import restrictions is institutionalized, according to an Indian analyst interviewed by Sprott Asset Management's Henry Bonner. Bonner's commentary is headlined "Will Indians Keep Buying Gold?" and it's posted at the Sprott Internet site here:

http://sprottgroup.com/thoughts/articles/will-indians-keep-buying-gold/

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



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Why Is An Epidemic Of Thievery Sweeping America?

Posted: 04 Nov 2013 05:05 PM PST

Submitted by Michael Snyder of The Economic Collapse blog,

Desperate people do desperate things, and it appears that Americans are rapidly becoming a lot more desperate.  An epidemic of thievery is sweeping across America, and authorities are not quite sure what to make of it. 

Down in Texas, cattle thieves can get up to $1,500 per head of cattle, and cattle rustling was up nearly 40 percent last year.  As you will read about below, cargo hijacking is becoming much more sophisticated, and it is being estimated that losses from cargo thefts will total about $216 million this year alone.  And for some reason, Tide laundry detergent has become a very hot commodity among common criminals all across America.  In fact, it is being reported that some grocery stores are "losing $10,000 to $15,000 a month" as a result of Tide thefts. 

So why is all of this happening?  Well, as I have written about previously, crime is on the rise in the United States, and poverty is absolutely exploding.  In fact, according to the latest numbers from the U.S. Census Bureau, 49.2 percent of all Americans are receiving benefits from at least one government program each month.  Over the past five years, we have seen an unprecedented rise in the number of people that cannot take care of themselves without help from the government.  Millions upon millions of Americans that have been forced into poverty are becoming increasingly angry, frustrated and desperate.  And what we are watching right now is only just the beginning - all of this is going to get a whole lot worse.

When people think of the "social decay" that is happening to America, most of the time Texas and Oklahoma would not be the first places that come to mind.  But according to NPR, there was nearly a 40 percent rise in the theft of cows and horses down in that area of the country last year...

Ranchers saw a sharp jump in cattle rustling last year in Texas and Oklahoma. Over 10,000 cows and horses were reported missing or stolen. That’s an almost 40 percent increase from the year before. It’s a trend that’s surprised some in law enforcement.

And this is happening even though the penalties for cattle rustling have gotten much stronger...

Penalties against rustlers were toughened by Texas lawmakers in 2009. Now, the crime could put you in prison for up to 10 years. But ironically more and more cattle have gone missing or stolen since that law was passed.

Another trend that is baffling law enforcement authorities is the huge wave of cargo hijackings that they have been seeing.  According to a recent CBS News article, cargo thefts are becoming a lot more elaborate these days...

To steal huge shipments of valuable cargo, thieves are turning to a deceptively simple tactic: They pose as truckers, load the freight onto their own tractor-trailers and drive away with it.

 

It’s an increasingly common form of commercial identity theft that has allowed con men to make off each year with millions of dollars in merchandise, often food and beverages. And experts say the practice is growing so rapidly that it will soon become the most common way to steal freight.

You may not think that stealing truckloads of walnuts or cheese is a big deal, but the truth is that the dollar values of some of these thefts are absolutely staggering...

News reports from across the country recount just a few of the thefts: 80,000 pounds of walnuts worth $300,000 in California, $200,000 of Muenster cheese in Wisconsin, rib-eye steaks valued at $82,000 in Texas, $25,000 pounds of king crab worth $400,000 in California.

And this is not just happening in a few isolated locations.  We are literally seeing an epidemic of cargo theft that stretches from coast to coast...

Although cargo thieves prey on companies across the nation, the hot spots are places with shipping ports or rail hubs. California leads the nation. Large numbers of thefts have also been reported in Texas, Florida, New Jersey, Michigan, Illinois, Georgia, Pennsylvania and Tennessee.

Perhaps most fascinating of all is the wave of Tide thefts that is sweeping the nation.  The following is an excerpt from a New York Magazine article from earlier this year...

The call that came in from a local Safeway one day in March 2011 was unlike any the Organized Retail Crime Unit of the Prince George’s County Police Department had fielded before. The grocery store, located in suburban Bowie, Maryland, had been robbed repeatedly. But in every incident the only products taken were bottles—many, many bottles—of the liquid laundry detergent Tide. “They were losing $10,000 to $15,000 a month, with people just taking it off the shelves,” recalls Sergeant Aubrey Thompson, who heads the team. When Thompson and his officers arrived to investigate, they stumbled onto another apparent Tide theft in progress and busted two men who’d piled 100 or so of the bright-orange jugs into their Honda. The next day, Thompson returned to the store’s parking lot to tape a television interview about the crimes. A different robber took advantage of the distraction to make off with twenty more bottles.

So why are criminals so interested in Tide detergent?

Well, apparently it is heavily used as currency in the drug trade...

Southern California authorities say it’s a dirty business and a bizarre trend – drug users trading Tide detergent for crack.

 

The Riverside Press-Enterprise says it’s a nationwide problem – people are stealing the popular but expensive detergent and trading it for marijuana and crack cocaine.

 

San Bernardino police Sgt. Travis Walker says detectives raiding dope houses in recent years were puzzled when they found lots of Tide. Turns out it wasn’t being used to make drugs but to buy them.

We live at a time when an increasing number of Americans will do just about anything for money.

Down in Florida, one mother was so desperate for money that she was actually prostituting her three teenage daughters.  Two of them were under the age of 18...

A St. Cloud mother was picked up Thursday on charges of serving as her three teenage daughters' madam in a West U.S. Highway 192 prostitution ring, according to the Osceola County Sheriff's Office.

 

At 2:30 p.m., Paula Howard flagged down an undercover detective acting as a "John" in front of a bus stop and arranged for him to have sex with one of her girls, ages 16, 17, and 18, an arrest record states.

 

The daughter agreed to perform the act for $20 and hopped into the car, telling the detective, "Oh yea. That's my family, but don't even worry about it. They know what I do," the report states.

But haven't you heard?

Everything is just fine in America.  Barack Obama and the mainstream media keep telling us that over and over, so it must be true.

Right?

I think that we got a glimpse into the true condition of America last month when a "technical glitch" caused the system that processes food stamp card payments to malfunction for a couple of hours.  A Time Magazine article described what happened at one Wal-Mart in Louisiana...

Customers cleared shelves and police were called in to control crowds taking advantage of suddenly unlimited spending allowed on their Electronic Benefits Transfer cards, which are issued to recipients of government food stamps. Spending limits on the cards were reportedly disabled for about two hours.

 

When a store in Springhill, La., announced over the loudspeaker that the glitch was fixed, shoppers simply abandoned loaded carts, according to Springhill Police Chief Will Lynd.

And similar "mini-riots" happened in a bunch of other locations as well.

For example, customers at one Wal-Mart in Mississippi just started taking groceries out of the store that they hadn't paid for when their food stamp cards were not accepted...

Customers staged a disturbance then walked out of a Mississippi Walmart store with groceries that hadn’t been paid for Saturday night after a computer glitch left them unable to use their food stamp cards.

 

People in 17 states found themselves unable to buy groceries with their Supplemental Nutrition Assistance Program cards after a routine check by vendor Xerox Corp. resulted in a temporary system failure.

 

Shortly after the mini-riot, managers decided to temporarily close the store, citing customer safety.

Keep in mind that all of this was caused by a "technical glitch" that only lasted for a few hours.

What would happen if there was a problem that lasted for much longer?

That is a sobering thing to think about.

And as I wrote about recently, all 47 million Americans on food stamps just had their benefits reduced on November 1st.  This is causing food banks all across the country to brace for a huge influx of needy people...

Food banks across the country, stretched thin in the aftermath of the recession, are bracing for more people coming through their doors in the wake of cuts to the federal food stamp program.

 

Food stamp benefits to 47 million Americans were cut starting Friday as a temporary boost to the federal program comes to an end without new funding from a deadlocked Congress.

 

Under the program, known formally as the Supplemental Nutrition and Assistance Program, or SNAP, a family of four that gets $668 per month in benefits will find that amount cut by $36.

In fact, the president of the Food Bank for New York City says that members of her organization "are panicking"...

As president of the Food Bank for New York City, Margaret Purvis expects those cuts will draw even more people to organizations that already provide 400,000 meals a day to hungry city folks.

 

"Our members are panicking," she said as time wound down before the benefit decreases go into effect. "We're telling everyone to make sure that you are prepared for longer lines."

Purvis also told Salon.com that "when people cannot afford to eat food" it has the potential to start "riots"...

“If you look across the world, riots always begin typically the same way: when people cannot afford to eat food,” Margarette Purvis, the president and CEO of the Food Bank for New York City, told Salon Monday. Purvis said that the looming cut would mean about 76 million meals “that will no longer be on the plates of the poorest families” in NYC alone – a figure that outstrips the total number of meals distributed each year by the Food Bank for New York City, the largest food bank in the country. “There will be an immediate impact,” she said.

So will we see riots as a result of these food stamp cuts?

No, I do not believe that we will see riots yet.

But the volcano of anger, frustration and desperation that is simmering just below the surface of this country continues to get hotter.

Someday it will explode.

What will you do when that happens?

Silver and Gold Prices Gainsaid Each Other with the Gold Price Rising to $1,314.60

Posted: 04 Nov 2013 04:34 PM PST

Gold Price Close Today : 1314.60
Change : 1.50 or 0.11%

Silver Price Close Today : 21.678
Change : -0.126 or -0.58%

Gold Silver Ratio Today : 60.642
Change : 0.419 or 0.70%

Silver Gold Ratio Today : 0.01649
Change : -0.000115 or -0.69%

Platinum Price Close Today : 1453.90
Change : 18.00 or 1.25%

Palladium Price Close Today : 748.95
Change : 2.45 or 0.33%

S&P 500 : 1,767.93
Change : 6.29 or 0.36%

Dow In GOLD$ : $245.92
Change : $ 0.09 or 0.04%

Dow in GOLD oz : 11.896
Change : 0.004 or 0.04%

Dow in SILVER oz : 721.43
Change : 5.25 or 0.73%

Dow Industrial : 15,639.12
Change : 23.57 or 0.15%

US Dollar Index : 80.574
Change : -0.148 or -0.18%

Silver and GOLD PRICES gainsaid each other today. The gold price rose $1.50 to $1,314.60 while silver lost 12.6 cents and ended at 2167.8c.

Let's review the facts, since they never lie -- you can't always parse what they're saying, but they never lie.

The SILVER PRICE bottomed at 1817c on 27 June, traded as high as 2512 cents (end August) and sank back to a mid-October low at 2050c. That uptrend remains intact, and today the line hits about 2100c under the silver market.

Relative Strength Indicator is pointing down, MACD just rolled over downside. Rate of change also turned down today, after rising since Mid-October.

But the silver price has drawn a line in the sand, today's low at 2158c. Draw a line from the 2050 October low to that and you have and uptrend. If it breaks that 2060cent mark, it will sink toward 2100c. However, it if holds here silver will be turning in the teeth of all pessimism.

GOLD PRICES are much the same, with an uptrend line from the June low at $1,179,.40 to the October low at $1,250. Today that uptrend offers support about $1,260. Friday's low was lower than today's, so there's also an uptrend from mid-October until now. Close below $1,312 tomorrow violates that support.

Here's a little clue as to why and how so much industry -- and industrial jobs -- have been exported from the USA.

In Bangladesh, the worlds second largest clothing exporter, garment workers have been striking because an April collapse of one garment factory killed more than 1,100 garment workers. A new government wage board has proposed wages be raised 77% to 5,300 taka ($68 or 78 taka=US$1) monthly, but factory bosses are holding out for 4200 taka ($54).

If 5300 taka is a 77% rise, then the minimum wage now is about 3,000 taka ($54)/month, then the workers would be making about 22-1/3 cents an hour if they work (ha-ha) a 40 hour week. (3000/4.33 weeks/40/78)

Now maybe some of y'all can explain how US garment factories paying $10 an hour plus a social security, insurance, tax-tax-tax load of say, 35%, above the hourly wage or $13.50 net cost per hour, can compete with a factory paying 22.3 cents an hour. Whoops -- they can't.

Average monthly wage for Bangladeshi workers is about half that of its rivals Vietnam and Cambodia, and about one-fourth that of top exporter China.

But after all, price is the only thing that counts when you buy clothes, right? And people wonder why these folks vote communist!

Today's markets were subdued. Stocks rose a little, gold rose barely, US Dollar index gave back some of its preposterous gains from last week. Stock market smugness remains at all time highs, as does margin debt, P/Es, and dividend yields. It is scenario written by Daffy Duck, or maybe the Three Stooges. If Moe were around today, they'd make HIM the head of the federal reserve.

Stocks barely moved today. Dow rose 23.57 (0.15%) to 15,63910 while the S&P500 rose 0.36% (6.29) to 1,767.93. S&P500 and other indices remain in a "thrown over" condition above their top channel lines.

That might not mean much to y'all unless you know that when a market has been rising a long, long time the "throw-over" or trading above its upper trend line generally sounds a honking big alarm that the rise is over. Generally. Usually. Normally.

Dow in gold and silver rose again today and is starting to bother me just a little. Dow in gold today closed 11.90 oz, up 0.23% and Dow in silver closed 722.53 oz, up 1.15%. Compare these against the June highs at 12.514 oz and 816.77 oz. Trend still down, but both indicators stand above their 20 day moving averages, pointing momentum up.

US Dollar index broke a six day winning streak today by giving up 14.8 basis points (0.19%) to 80.574. Since it is close to its 50 dma (80.66), odds say it has turned up and will rally toward 81 (where it failed today) toward its 200 DMA at 81.77. Y'all tell me why it's rallying -- beats me. However, I am reporting to you what it is doing technically. Fundamentally, the US dollar has less value than all that gravel and fish dung at the bottom of your fish tank.

Euro looks even sicker than the US dollar. Lo! How is the mighty euro fallen, from $1.3825 a few days ago, gapping down twice, to close today at $1.3514. Sitting above its $1.3494 50 day moving average. Euro was also enjoying a big, long (since mid-September) throw-over, but has now come back to the channel line. Drops could be dramatic from here, since the 200 DMA stands at $1.3229.

Yen didn't wiggle today. Closed 101.43 cents/Y100, and going nowhere but sideways. It's in a crab race with the US dollar.

Ominously for the dollar, that upside breakout of the 10 year treasury yield that took place in June and relented in September has now lifted its head again. Yes, the higher interest rate will attract buyers, but it will also cost the US treasury dearly AND it violates the Fed's Zero Interest Rate Policy. In other words, it squeezes the fed and suggests bond buyers aren't so sure the dollar is worth what they presently must pay for it.

Just a little bird-chirp in the wind, but worth hearkening to. A friend today whom I know to be a successful trader told me he bought more metals because today marked a 60 year anniversary of 1953 lows. Maybe he knows something I don't know.

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.

Silver and Gold Prices Gainsaid Each Other with the Gold Price Rising to $1,314.60

Posted: 04 Nov 2013 04:34 PM PST

Gold Price Close Today : 1314.60
Change : 1.50 or 0.11%

Silver Price Close Today : 21.678
Change : -0.126 or -0.58%

Gold Silver Ratio Today : 60.642
Change : 0.419 or 0.70%

Silver Gold Ratio Today : 0.01649
Change : -0.000115 or -0.69%

Platinum Price Close Today : 1453.90
Change : 18.00 or 1.25%

Palladium Price Close Today : 748.95
Change : 2.45 or 0.33%

S&P 500 : 1,767.93
Change : 6.29 or 0.36%

Dow In GOLD$ : $245.92
Change : $ 0.09 or 0.04%

Dow in GOLD oz : 11.896
Change : 0.004 or 0.04%

Dow in SILVER oz : 721.43
Change : 5.25 or 0.73%

Dow Industrial : 15,639.12
Change : 23.57 or 0.15%

US Dollar Index : 80.574
Change : -0.148 or -0.18%

Silver and GOLD PRICES gainsaid each other today. The gold price rose $1.50 to $1,314.60 while silver lost 12.6 cents and ended at 2167.8c.

Let's review the facts, since they never lie -- you can't always parse what they're saying, but they never lie.

The SILVER PRICE bottomed at 1817c on 27 June, traded as high as 2512 cents (end August) and sank back to a mid-October low at 2050c. That uptrend remains intact, and today the line hits about 2100c under the silver market.

Relative Strength Indicator is pointing down, MACD just rolled over downside. Rate of change also turned down today, after rising since Mid-October.

But the silver price has drawn a line in the sand, today's low at 2158c. Draw a line from the 2050 October low to that and you have and uptrend. If it breaks that 2060cent mark, it will sink toward 2100c. However, it if holds here silver will be turning in the teeth of all pessimism.

GOLD PRICES are much the same, with an uptrend line from the June low at $1,179,.40 to the October low at $1,250. Today that uptrend offers support about $1,260. Friday's low was lower than today's, so there's also an uptrend from mid-October until now. Close below $1,312 tomorrow violates that support.

Here's a little clue as to why and how so much industry -- and industrial jobs -- have been exported from the USA.

In Bangladesh, the worlds second largest clothing exporter, garment workers have been striking because an April collapse of one garment factory killed more than 1,100 garment workers. A new government wage board has proposed wages be raised 77% to 5,300 taka ($68 or 78 taka=US$1) monthly, but factory bosses are holding out for 4200 taka ($54).

If 5300 taka is a 77% rise, then the minimum wage now is about 3,000 taka ($54)/month, then the workers would be making about 22-1/3 cents an hour if they work (ha-ha) a 40 hour week. (3000/4.33 weeks/40/78)

Now maybe some of y'all can explain how US garment factories paying $10 an hour plus a social security, insurance, tax-tax-tax load of say, 35%, above the hourly wage or $13.50 net cost per hour, can compete with a factory paying 22.3 cents an hour. Whoops -- they can't.

Average monthly wage for Bangladeshi workers is about half that of its rivals Vietnam and Cambodia, and about one-fourth that of top exporter China.

But after all, price is the only thing that counts when you buy clothes, right? And people wonder why these folks vote communist!

Today's markets were subdued. Stocks rose a little, gold rose barely, US Dollar index gave back some of its preposterous gains from last week. Stock market smugness remains at all time highs, as does margin debt, P/Es, and dividend yields. It is scenario written by Daffy Duck, or maybe the Three Stooges. If Moe were around today, they'd make HIM the head of the federal reserve.

Stocks barely moved today. Dow rose 23.57 (0.15%) to 15,63910 while the S&P500 rose 0.36% (6.29) to 1,767.93. S&P500 and other indices remain in a "thrown over" condition above their top channel lines.

That might not mean much to y'all unless you know that when a market has been rising a long, long time the "throw-over" or trading above its upper trend line generally sounds a honking big alarm that the rise is over. Generally. Usually. Normally.

Dow in gold and silver rose again today and is starting to bother me just a little. Dow in gold today closed 11.90 oz, up 0.23% and Dow in silver closed 722.53 oz, up 1.15%. Compare these against the June highs at 12.514 oz and 816.77 oz. Trend still down, but both indicators stand above their 20 day moving averages, pointing momentum up.

US Dollar index broke a six day winning streak today by giving up 14.8 basis points (0.19%) to 80.574. Since it is close to its 50 dma (80.66), odds say it has turned up and will rally toward 81 (where it failed today) toward its 200 DMA at 81.77. Y'all tell me why it's rallying -- beats me. However, I am reporting to you what it is doing technically. Fundamentally, the US dollar has less value than all that gravel and fish dung at the bottom of your fish tank.

Euro looks even sicker than the US dollar. Lo! How is the mighty euro fallen, from $1.3825 a few days ago, gapping down twice, to close today at $1.3514. Sitting above its $1.3494 50 day moving average. Euro was also enjoying a big, long (since mid-September) throw-over, but has now come back to the channel line. Drops could be dramatic from here, since the 200 DMA stands at $1.3229.

Yen didn't wiggle today. Closed 101.43 cents/Y100, and going nowhere but sideways. It's in a crab race with the US dollar.

Ominously for the dollar, that upside breakout of the 10 year treasury yield that took place in June and relented in September has now lifted its head again. Yes, the higher interest rate will attract buyers, but it will also cost the US treasury dearly AND it violates the Fed's Zero Interest Rate Policy. In other words, it squeezes the fed and suggests bond buyers aren't so sure the dollar is worth what they presently must pay for it.

Just a little bird-chirp in the wind, but worth hearkening to. A friend today whom I know to be a successful trader told me he bought more metals because today marked a 60 year anniversary of 1953 lows. Maybe he knows something I don't know.

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.

US Dollar Appears To Be Fundamentally Weak

Posted: 04 Nov 2013 04:19 PM PST

The WGC published its latest report on gold and currencies. Based on the main premise that gold is playing an important role as a monetary asset, it reiterates its value as a fundamental store of wealth. The interesting chapter in the report is related to the evolving relationship between gold and the dollar. From “Trends into the future: gold's potential role in the monetary system and its evolving relationship with the dollar” (page 28), it appears that allocations of US dollars continue to fall, a trend that started in 2012. What’s more, plotted against several economic dimensions, the dollar appears to be fundamentally weak. Are these the first cracks of the end of the dollar hegemony? Only time will tell, but the data are supporting the evidence.

From the report (source):

The state of the US dollar

The purchasing power of US investors has eroded over the past four decades. In fact, they lost almost 80% of their purchasing power to inflation and another 30% to a protracted devaluation of the US dollar.7 And while the US dollar will continue to be one of the most (if not the most) relevant currencies, many economists expect the US dollar to be challenged in the longer term by EM currencies. Market consensus forecasts indicate US-dollar depreciation against 14 out of the 27 major currencies including the Chinese yuan, Australian dollar, Mexican peso, Singapore dollar and Korean won by 2016.

More importantly, these bearish views are firmly supported by weak fundamentals. Traditional currency drivers indicate a bleak outlook for the US dollar (Chart 8). Relative GDP growth, current account deficits and short- and long-term interest rates suggest that the dollar is poised for a decline. The relatively lower US inflation rate is the only factor that appears to be in favour of dollar strength.

These trends are likely to continue as deficit spending continues in the face of a low-rate, low-growth environment. While technical factors, including momentum and investment flows, drive the US dollar in the short term,10 fundamental factors have more influence over the long run. In light of these developments, reserve asset managers have decreased their US dollar allocation considerably, from 63% in 1999 to 53% in 2012.

US allocations portfolios fallen Q2 2013 money currency

The emergence of other currencies

The unprecedented growth of emerging markets, coupled with the decline in the US dollar over the past decade, has led many policy makers to consider whether EM currencies should play an increasing role in the global monetary system. In its paper, Gold, the renminbi and the multi-currency reserve system, the Official Monetary and Financial Institutions Forum (OMFIF) observed that the ongoing internationalisation of the renminbi will add an additional currency to the reserve system. As emerging markets continue to capture an increasing share of global trade, their currencies will likely acquire a bigger share of reserve portfolios. Over the past 15 years, the growth of emerging nations' international trade activity has translated into an increased use and liquidity in their currency (Chart 9a and 9b).

The trend of internationalisation has also been seen in the gold market. With investment gold increasingly flowing towards the East, emerging markets are likely to overtake developed markets in their gold ownership in the not too distant future. Recent trends indicate that an increased proportion of gold demand is coming from developing economies and that trading hubs in Shanghai, Hong Kong, Singapore, Mumbai and Istanbul are drawing liquidity away from the traditional US dollar-dependent New York and London markets. For example, the Shanghai Gold Exchange has grown tremendously since its founding in 2002, expanding its trading volume at a 24% CAGR and increasing delivery volume at 38% CAGR in the past five years. As this trend develops, the direction and fluctuations of the Chinese yuan will likely have a material influence on gold prices in years to come.

 emerging markets spot volume 2013 money currency

Gold’s role as a fiat currency hedge

As the world moves towards a multi-currency reserve system, gold will play an important role as a foundation asset that diversifies risk. As more currencies are included in the reserve system, gold's relationship with other currencies will likely evolve. It is likely that gold will retain its generally negative relationship with the US dollar, but it will also serve as a hedge against all fiat currencies.11 Gold will retain its quality of being a hard asset without being anyone's liability, and it will remain a buffer against geopolitical uncertainty.

I Would Like To See No Reason To Own Gold

Posted: 04 Nov 2013 02:49 PM PST

Interviewed by FutureMoneyTrends (click for the free newsletter service), Jay Taylor covers several topics related to the gold market. He reiterates the benefits of owning gold in a paper based money system, he gives an interesting view on “gold manipulation,” he explains the sentiment of gold investors, and gives his thoughts on the correction.

How to survive and thrive in the greatest wealth transfer and extreme market manipulation:

You have to recognize that there is manipulation going on and try to understand what it is and then act accordingly. The masses of people are content to take at face value what they are told by the mainstream media and what people really have to understand is that the manipulation is systemic. It is the fiat currency itself is a manipulative tool that allows those to control fiat money to reallocate wealth from those that produce it. [...] So just by being in the system and holding dollars you are being taken advantage of.

You need to get as much as possible outside the system. And the one way to reduce the systemic risk is to trade those fiat dollars, which are really worthless, they have nothing of intrinsic value, they are really just a con game, and they need to exchange those dollars for gold and silver, real estate, I would say diamonds, I would say other things that are of tangible value. That no matter what the currency does, you still have possession and ownership of those assets. Diversify your assets to the extent you're able to.

What to think of the manipulation of the gold price:

I don't necessarily subscribe to everybody that is trading for JP Morgan or Goldman Sachs or these big bullion banks are necessarily knowingly manipulating the gold market. I don’t think so at all. I think they’re all acting in what they see as their own best interest. But the best interest of Wall Street is not to have people opt out of currency and go in to gold. They wouldn’t have any sales left, they wouldn’t be able to sell any stocks or bonds or derivative products of anything else if people just went back to owning the physical metal. So Wall Street has a vested interest, Washington as much as Wall Street has a vested interest in keeping people conned into owning paper assets. So I think there is very little doubt in my mind. For example, somebody pointed out that when JP Morgan, which is by far the predominant player in the futures markets for gold and silver, that when JP Morgan, when they are taking delivery, or when they are delivering gold, when it’s a delivery month for them, you’ll see the gold price go down very dramatically. Probably so that they can go out and secure gold at lower prices.

[...]
I think that there are people who are just simply acting on their own behalf, as they see it in their own best interest, with little concern or knowledge about the system and the bigger impact. I think it’s mostly through the futures markets that they are manipulating things. I think there’s a lot of con artistry, I think there's a lot of propaganda that comes out of the major media. The financial times being one, but all major media, you always have the people that are talking down gold because it's like everything else. They want to talk their book so that they can con people into doing what makes them money.
Whether gold investors are getting tapped out after a two year gold and silver correction:
I think there’s a hardcore of believers in gold that understand what I’m talking about, that are long term holders of gold and they're taking advantage of these lower prices to add to their positions. Certainly if you go to Asia and other countries around the world that aren’t so conned by their governments into believing that fiat currency is a wonderful thing. They’re buying gold, they’re taking advantage of this. The people that drove the gold price up to 1900+ were not necessarily the hardcore gold bugs.
I can tell you that when I first started my radio show in March of 2009, that was pretty much at the bottom of the Lehman Brothers debacle. There was a lot of willingness, a lot more then from people who had never really considered gold to become interested in investing in gold and thinking about doing that because they were really honestly starting to see what a lot of us were talking about for many years, and that is that the system is sick and that the policy makers didn’t have all the answers.
Thoughts on whether the gold correction is over:

The chances are probably 90% that we’ve seen the lows. I wouldn’t rule out though, if you look at the charts it would seem as though we could go down to a little about 1000 potentially and if we did it would be akin in percentage losses to what was experienced in the last great gold bull market in the '70s, when we went from about 200 to 100 and then up to about 850. I don’t think we’re going to go down there, but if we do that would be another great buying opportunity. No doubt it would shake even a lot of good solid gold bugs out; scare them out.

I would like to see an end of the bull market in gold, honestly I really would. I would like to see no reason to own gold. Then we could get on to doing things that are really useful for other human beings instead of taking capital and digging holes in the ground and taking gold out and putting it in a vault. We could be doing things that might actually create wealth and do things that are really good for people.

The markets are demanding and people like me who understand how sick the fiat currency system is, the global economy is, as a result of this manipulation of markets for so many decades; realize that we can’t run away from gold now. We have to own it because it is going to be the store of wealth. And I don’t know but I think we’re close to the end.

Robert McHugh, he’s an avid Elliot Wave analyst who is on my radio show, believes we could be six months or so away from a major next leg up. But he believes the next leg up will be the fifth wave in an Elliot Wave bull market here for gold. But we will see, that will be by far the biggest move upwards in gold that we will kick out the old highs by a large margin.

Go to JayTaylorMedia.com and MiningStocks.com to learn more about the work of Jay Taylor.

American Silver Eagle Coin Sales On Verge of Record Shattering Year

Posted: 04 Nov 2013 02:28 PM PST

The American public's love affair with the U.S. Mint American Eagle silver bullion coin continues unabated.   Ever since the financial meltdown of 2008 there has been an explosion in demand for the silver coins.  Average yearly sales of the silver bullion coins have increased by almost 500% since 2008 and sales for 2013 are on [...]

U.S. Mint Gold Coin Sales Soar 273% in October

Posted: 04 Nov 2013 01:51 PM PST

Although sales totals vary from month to month, annual sales of the U.S. Mint American Eagle gold bullion coins are running at triple the levels prior to 2008 when the wheels came off the world financial system and central banks began an orgy of money printing. From 2000 to 2007 the average yearly purchases of [...]

Gold market manipulation cited in Future Money Trends interview of Jay Taylor

Posted: 04 Nov 2013 01:45 PM PST

4:45p ET Monday, November 4, 2013

Dear Friend of GATA and Gold:

Dan Ameduri of Future Money Trends today interviews financial letter writer Jay Taylor about the gold market and its manipulation. The interview is 18 minutes long and audio as well as a transcript are posted at the Future Money Trends Internet site here:

http://www.futuremoneytrends.com/index.php/interviews/549-we-are-close-t...

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



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Jim Sinclair Plans Seminar in Florida

Gold mining entrepreneur and gold advocate Jim Sinclair plans to hold his next financial seminar in Kissimmee, Florida, near Orlando, on Saturday, November 2. Details can be found at his Internet site, JSMineSet, here:

http://www.jsmineset.com/2013/10/22/florida-qa-session-announced/



Join GATA here:

New Orleans Investment Conference
Sunday-Wednesday, November 10-13, 2013
Hilton New Orleans Riverside Hotel
New Orleans, Louisiana

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* * *

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

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

Or by purchasing a colorful GATA T-shirt:

http://gata.org/tshirts

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

http://gata.org/node/wallstreetjournal

Help keep GATA going

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

http://www.gata.org

To contribute to GATA, please visit:

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

Gold Daily and Silver Weekly Charts - Ship of Fools

Posted: 04 Nov 2013 01:25 PM PST

Gold Daily and Silver Weekly Charts - Ship of Fools

Posted: 04 Nov 2013 01:25 PM PST

QE will increase but rates will rise anyway, Turk says

Posted: 04 Nov 2013 12:47 PM PST

3:45p ET Monday, November 4, 2013

Dear Friend of GATA and Gold:

The Federal Reserve will be increasing its bond monetization, not "tapering" it, GoldMoney founder James Turk predicts to King World News today. But interest rates are likely to rise anyway, Turk adds, as there will continue to be more general selling of government bonds than buying by the Fed.

"It is extremely critical that investors understand that they should absolutely not be holding dollars or Treasury paper," Turk says. "They are incredibly overvalued and therefore they will be the ultimate losers here. Physical gold and silver are the place to be, and can continue to be picked up at prices that reflect severe undervaluation."

An excerpt from the interview is posted at the King World News blog here:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/11/4_Wo...

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



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

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

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

To learn about this report, please visit:

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



Join GATA here:

New Orleans Investment Conference
Sunday-Wednesday, November 10-13, 2013
Hilton New Orleans Riverside Hotel
New Orleans, Louisiana

https://jeffersoncompanies.com/landing/speakers?IDPromotion=613011610080...

* * *

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

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

Or by purchasing a colorful GATA T-shirt:

http://gata.org/tshirts

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

http://gata.org/node/wallstreetjournal

Help keep GATA going

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

http://www.gata.org

To contribute to GATA, please visit:

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



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

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The Mogambo Guru’s Lifetime Income Equation

Posted: 04 Nov 2013 12:29 PM PST

My mood is dark. I see, as usual, enemies everywhere, but have started filling my days, not with installing more defensive armaments in the Super Duper Mogambo Bunker (SDMB), but with making lists of all the people whom I blame for something, starting with the worst offender of them all, the absolutely satanic Alan Greenspan.

It was Greenspan who was the horrid chairman of the Federal Reserve who started the ridiculous Keynesian insanity of creating all the mountains of cash and credit that allowed the bank bubble, the dot-com bubble, the housing bubble, the stock market bubble, the bond market bubble, the size-of-government bubble, the national debt bubble, and the staggering, incalculable derivatives bubble, to probably name but a few.

On and on, the lengthy list of the damnably blameworthy continues, page after page, purple with rage, most recently including Jerry something-or-other, whom I had almost forgotten about. He was the kid who leapt up to catch the booming bomber I hit in a baseball game at recess in the fourth grade, which would have been a nice, long, juicy home run for me.

"Now hear this! You and monetary policy in this country will now be ruled by me! Gold shall be money again, just like the Constitution requires!"

I'd have been a hero to the lovely Suzanne, who was watching my every move and thinking to herself "Oh, wonderful Mogambo! My hero! I will be your devoted girlfriend until high school, when you will get a cool car and drive me around, and kiss me all the time, and we will live happily ever after!"

Instead, thanks to Jerry just wildly throwing his arms up in a panicked lunge of doofus desperation, like some disjointed scarecrow, the ball miraculously landing right in his stupid glove, I am out. Out! Just another loser! Loser! Loser!

And then, in the depths of my despair, to my horror, I saw my darling Suzanne turn up her pretty little nose in disgust, and leave without saying a word, which was (now that I think about it) the pivotal moment in my life that pretty much defined my relationships with women from then on.

Thus Jerry, having ruined my whole love life with his stupid lucky catch, is on the list. Oh, yeah. He's on the list.

Despite my foul mood, I laughed out loud at the cover of Barron's magazine. It concedes that over the next 20 years, the economy will slow, although they do not continue, perhaps in smaller print, to reveal the Ugly, Ugly Fact (UUF) that things always slow down before they stop, start rolling back down the hill, and after a short period gathering speed and highly-erratic behavior careening all over the road, soon crash over a cliff in a raging fireball, killing everybody in sight.

You can relax, however, because that's just the theory. Just a theory!

In practice, however, things never actually stop, because, at this late stage of disintegration, things tend to go from horrifically bad to tragically worse so quickly that things usually plunge randomly over cliffs in raging fireballs, killing everybody in sight, before they ever, you know, actually stop.

Now, you would think that this "Ending in raging fireballs and killing everybody in sight" theory, which is my latest Profound Mogambo Insight (PMI) about the stupidity of Keynesian economic theory, would be worth a Nobel Prize or two, or maybe just a couple of millions of that luscious prize money, which would come in real handy right now.

But nooOOOooo!

In fact, NOJMR satirically posted the headline "Mogambo denied the Nobel Prize again" at his MogamboGuru.com website, which is pretty funny, especially since I have not done anything noteworthy, nor prize-worthy, in my whole worthless life, according to all my teachers, schoolmates, family, so-called friends, neighbors, co-workers, supervisors, bosses and shareholders, and did I mention wife and kids?

Nevertheless, I would like to end that distasteful phase of my life by proposing my Mogambo Lifetime Income Hypothesis (MLIH), which postulates that, in the aggregate, people can never spend more in their lifetimes than their lifetime income.

The proof is made by example: If you earned $10 million over your lifetime, but you spent $11 million, at the settlement of your estate, you would owe $1 million to someone who is now not going to be paid, and thus whose lifetime income will have been reduced by that $1 million.

I even came up with a clever equation, to appeal to the Keynesians (who love this kind of thing):

I = E.

I assume you are impressed with the breathtaking elegance and cosmic simplicity of this profound mathematical identity, and are chanting "More! More Wisdom Of The Mogambo (WOTM)! Give him the damned Nobel Prize and the money, and then get on to more WOTM!"

Okay! Here's my latest hot-stuff idea. How about tongs as an underdeveloped resource? I mean, tongs are not just for turning burgers on a grill! Imagine you are slouching comfortably on the couch, and some idiot put the remote control on the coffee table. Would you rather huff and puff to heave your ponderous bulk up (oof!) into a sitting position so you can lean over (oof, again!) and get it, or merely whip out a pair of tongs and get it with no muss, no fuss?

Or, imagine if you had a pair of tongs when attacked by a guy with a gun who is robbing you because his little bit of currency is not enough to pay the increasing costs of energy, food and shelter necessary to support his family, which is because the evil Federal Reserve created so much currency and credit that the dollar's buying power went down and down because of the continual over-creation of currency and credit, which is experienced by people as "things always costing more and more dollars," but he doesn't have more dollars. A desperate man, but with tongs, you could use them to reach out and snatch that gun away, and smack him upside the head (bap!) with it!

Or how about a pair of tongs that was big enough that you could reach into a window at the Federal Reserve and pluck that pinhead Bernanke up and out of his seat, and deposit him in the dumpster out back where he and his laughably asinine Keynesian policies belong, whereupon you could run inside, leap in to his recently-vacated seat, and take over!

Grab the phone! Dial everybody up, and say, "Now hear this! You and monetary policy in this country will now be ruled by me! Gold shall be money again, just like the Constitution requires! Gold is not currently money because the horrid Supreme Court has infamously ruled that money does NOT have to be only of silver and gold, like the Constitution clearly says, and money can be anything a government official or a banker says it is, contrary to what the Constitution says."

And if anybody objects to your bloodless coup to stop the mindless insanity of continuously increasing the money supply which causes inflation in prices, you could use tongs to pluck them out, too!

So, are you probably starting to think to yourself "Hey! This idiot's right about the importance of tongs! Perhaps I should send him all my money to invest in his new hit comic book, titled 'Mogambo, Man of Tongs!', which he will sell to Stan Lee at Marvel comics for a billion dollars, and we'll all be rich, and have all the tongs we want!"

I know you are, by this time, on your feet with rejoicing, happily chanting with so many others, "More! More! More Wisdom Of The Mogambo (WOTM) to enlighten us and show us how to make a lot of money by betting against the stupidity of Keynesian economic policy!"

Flattered by such adoration, quickly relent, and say, "Okay! Saving the best for last, I offer this final Sublime Pearl Of Mogambo Wisdom (SPOMW), which is to buy gold and silver bullion with every dollar you can get your hands on. Buy gold and silver, I say with a haughty-yet-sneering arrogance born of the certainty of 2,500 years of experience!

Buy gold and silver, no matter how much your ungrateful families whine about how they are sick of subsisting on silage-grade gruel ("Buy it by the ton and save!"), and how they complain about needing expensive vegetables, and expensive fruits, and expensive proteins, and prohibitively expensive medicines, and bandages, and expensive medical and dental care, and all of that other expensive crap that greatly interferes with your Mission From Mogambo (MFM) to acquire as much gold and silver as possible."

And if you find some tongs made out of gold or silver, so much the better! Whee!

Regards,

The Mogambo Guru
for The Daily Reckoning

Ed. Note: After disappearing for more than two years, the Mogambo Guru has resurfaced, angrier and more vitriolic than ever. No one knows where he’s been, but whatever he witnessed on his trek was terrible enough to prompt his reemergence in The Daily Reckoning email edition. He’ll be making more appearances as the weeks go by. So to make sure you get your fill of Sublime Mogambo Wisdom (SMW), be sure to sign up for The Daily Reckoning, for FREE, right here.

Strong euro poses risk to recovery, Fabrizio Saccomanni warns

Posted: 04 Nov 2013 12:12 PM PST

04-Nov (Financial Times) — Italy's finance minister has warned of the risks of a strengthening euro to Europe's fragile recovery, urging the European Central Bank to ease monetary policy to help the continent's small and medium enterprises.

The comments by Fabrizio Saccomanni come less than two weeks after the euro hit a two-year high against the dollar. The single currency has pared back some of its gains, but remains more than 2 per cent higher than at the beginning of the year.

This week, the ECB's board will gather in Frankfurt but analysts do not expect any change in the policy rate, which has been stuck at 0.5 per cent, a record low, since last May.

"The euro is now the strongest currency in the world, vis a vis the dollar the renminbi, the [British] pound, the Swiss franc," Mr Saccomanni told the Financial Times.

[source]

PG View: In a world embroiled in an ongoing currency war, it’s almost amusing how a currency setting a new high for the year can set off a panic among policymakers. To offer a measure of perspective: When EUR-USD set a nearly two-year high of 1.3832 last month, it was still nearly 16% off the cycle high set in July of 2008 at 1.6038.

Gold vs. Wall Street's Program Traders

Posted: 04 Nov 2013 10:53 AM PST

Gold ran into trouble last week after an encounter with its important 150-day (30-week) moving average. The 150-day MA, which is an important psychological resistance barrier that is programmed into many Wall Street trading ... Read More...

Disappearance of Western central bank gold becomes clear, Embry says

Posted: 04 Nov 2013 10:48 AM PST

1:45p ET Monday, November 4, 2013

Dear Friend of GATA and Gold:

Sprott Asset Management's John Embry today tells King World News that the disappearance of Western central bank gold reserves through leasing is becoming clearer but that central bank propaganda about Western economies has reached totalitarian levels. An excerpt from the interview is posted at the King World News blog here:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/11/4_Na...

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



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A Drone of Their Own: US Eyes China’s Drone Program

Posted: 04 Nov 2013 10:30 AM PST

Do you recall last month when Islamic terrorists took over a mall in Nairobi, Kenya? They shot the place up and killed 67 innocent people — butchering innumerable unfortunate souls among them. Then the Islamists held their ground and fought off the Kenyan army for several days. In the end, fighting set the mall on fire and the whole place burned down.

You had better believe that governments and security agencies across the world took notice of what happened in Kenya. It’s bad enough that passing through airports has become an anti-terror drill. But if daily activities like going to a mall are now fatal, then the modern world is paddling pretty near the edge of the waterfall. Society could collapse in a hurry.

Thus, it’s no surprise that just last week we have word that two of the top Islamist terror guys from the Nairobi attack met their fate in the course of a drone strike in Somalia. There’s no “official” U.S. confirmation on the details, but evidently, the terrorists’ Suzuki SUV had an encounter with a Hellfire missile. Kaboom.

Chinese leadership is on a crash program to catch up with the rest of the world in terms of military capability.

Now consider what happens as this kind of military technology spreads out across the world. And consider the moneymaking opportunities that savvy investors have in terms of this new domain of warfare.

Imagine a remote region of central Asia. In a small village, Islamist militants are hard at work preparing an improvised explosive device (IED) based on a surprisingly sophisticated design. The perps are more or less relaxed, because they know that the nearest threat to their efforts is hundreds of miles away — at a Chinese army base. It’s way too far to be of any real concern to these bomb builders.

Their plan is simple: In a week, their IED will be placed next to a Chinese government building and detonated remotely. The target is the regional governor and his entourage, including several high-ranking officials on a show-and-tell tour in the countryside. It’s a major target, and the groundwork for the attack has been all but laid.

But then, without warning, the rude house that serves as the terrorists’ base of operations explodes — BOOM! — and the plot vaporizes with them. Villagers hear the explosion and see the fireball rising. Neighbors pour in from the fields to see what just happened. They look up into the sky, but nobody can see or hear the small black dot nearly 15,000 feet up. It’s the platform from whence came the missile that just streaked straight into the terrorists’ lair.

But if the locals could discern that black dot, they’d see a red star on a red bar painted on the side of a drone — an unmanned aerial vehicle. But after a few minutes, it doesn’t matter anymore, because the aircraft has turned and begun to fly back to the Aksu Wensu air base, located in the Lanzhou Military Region of China.

Actually, this scenario isn’t quite as far-fetched or as science fiction as you might think. China has the drone.

No, China hasn’t used its drones for assassination attempts — yet, as far as we know — but it looks like China is headed in that direction.

According to analysts who follow such things, China probably has the world’s second-largest fleet of military drones, numbering in the thousands. In fact, China’s drone fleet is second only to that of the U.S., which has at least 7,000 drones in military service.

A recent report published by the Department of Defense’s Defense Science Board (DSB) noted that “in a worrisome trend, China has ramped up research in recent years faster than any other country.”

And the Chinese are doing drones more cheaply than U.S. defense contractors could ever hope. For example, the General Atomics MQ-9 Reaper, the U.S. military’s main hunter-killer drone, costs about $17 million today, and that’s a price based on economies gained from late-stage production.

By comparison, China’s “Wing Loong” drone — suspected of being a copy of the Reaper, and it certainly looks like one — costs the equivalent of about US$1 million.

Now, it’s not the airframe or conventional propeller engines that account for the bulk the of Reaper’s price tag. Instead, it’s the cutting-edge electronics and optics onboard. And while it’s unlikely that China’s drones are as electronically sophisticated as ours (we can only hope), are they really 17 times less effective?!

As Soviet Marshal Joseph Stalin supposedly once noted, “Quantity has a quality all its own.”

The Chinese are certainly keen students of military technology. There are many reasons for this, but one main driver is a collective Chinese recognition of how far the nation fell behind the rest of the world during the Cultural Revolution of the 1960s. In fact, I recall a senior U.S. military officer relating a story about an official tour of China in the early 1980s. The Chinese still included horse-cavalry units in orders of battle planning. But not anymore.

Today, Chinese leadership is on a crash program to catch up with the rest of the world in terms of military capability. They want the best, and they’ll go to any ends to get it and figure out how to make it work.

The move toward drone warfare is part of China’s larger strategy to project power over the international waters to its east and south and over its small, weaker neighbors to the north and west. (Of course, one very underpopulated area north of China is Siberia — part of Russia.)

Consider just one recent Chinese military exploit involving drones. Last month, on Sept. 9, a Chinese drone penetrated Japanese airspace near Okinawa for the first time. Japanese defense forces noted the intrusion and scrambled jets. The Chinese drone was escorted out of the area by Japanese air force F-15s.

Then in response to the Chinese intrusion, in late October, the Japanese prime minister gave the Japanese military permission to engage and destroy future drone incursions. Looking ahead, this kind of cat-and-mouse drone game between Japan and China could be a flashpoint in the ongoing territorial tensions between the two countries.

Of interest as well, in early October of this year, the U.S. and Japan renewed a mutual defense treaty and included new terms involving drones. Specially, the U.S. military will begin flying long-range drones — like Global Hawk — over the disputed Senkaku Islands in spring of 2014.

So looking ahead, what would happen if U.S. and Chinese drones met in the skies over the East China Sea?

According to current U.S. doctrine, American drones are not intended (nor designed, truth be told) to enter into contested or hostile air space. In essence, U.S. drones are not meant to fight aircraft to aircraft in any conflict with China or anyone else.

So far, China’s drones apparently mimic American designs. Thus, the odds are even. Then again, countries can do things with drones they wouldn’t do with manned aircraft. And with technological breakthroughs, advances are occurring with stunning speed. Needless to say, China’s acquisition of drones on a massive scale is a major boost to its military and overall governmental capabilities, one to which the rest of the world will have to adapt.

Regards,

Byron King
for The Daily Reckoning

Ed. Note: Regardless of how you feel about it, the U.S. is not going to slow down military spending. Especially as China ramps up the production of its drone program. That means a few companies will benefit greatly from U.S. government contracts. And it also means a few savvy investors stand to make some tremendous gains in the process. In today’s Tomorrow in Review email edition, Byron gave readers a chance to discover this profit potential first hand, with access to a special video telling them just what to do. If you didn’t get it, you missed out. But not to worry… Byron will be back with a similar offer. Sign up for free, right here, and keep an eye on your email.

Fate of Dollar is the Fate of U.S. Power-Dr. Paul Craig Roberts

Posted: 04 Nov 2013 10:13 AM PST

By Greg Hunter's USAWatchdog.com Dear CIGAs, Former Assistant Treasury Secretary Dr. Paul Craig Roberts says, "The fate of the dollar is the fate of United States Power."  Dr. Roberts goes on to say, "The whole question of the dollar's longevity depends on the willingness of other countries to continue holding dollars and dollar denominated assets... Read more »

The post Fate of Dollar is the Fate of U.S. Power-Dr. Paul Craig Roberts appeared first on Jim Sinclair's Mineset.

The Daily Market Report: Gold Rebounds From Two-Week Low

Posted: 04 Nov 2013 09:39 AM PST


04-Nov (USAGOLD) — Gold is slightly better amid speculation about ECB easing and Fed tapering. The ECB (and BoE) will announce policy on Thursday.

While some think the ECB will cut the refi rate by 25 bps this week on growing signs of disinflation, such a cut seems more likely at the December 5 policy announcement. As for the Fed, it strikes me as rather unlikely that they would start tightening as the ECB moves to loosen.

Nonetheless, the ECB easing scenario, along with the lingering Fed taper expectations has weighed on the euro and boosted the dollar. Recent dollar strength has put gold under pressure.

St. Louis Fed President James Bullard said today that there is no hurry to start removing accommodations with inflation still well below target. He called the current pace of asset purchases “torrid” Bullard went on to say that he would like to exit QE, but he’d like to meet the Fed’s goals of full employment and stable prices as well.

Bullard suggested there was room for further expansion of the Fed’s nearly $4 trillion balance sheet. He found justification in the fact that the central banks of Japan, Europe and the UK had balance sheets bigger than ours, relative to GDP, and hadn’t imploded yet. I suspect that, like me, you find little assurance there.

If the ECB does cut rates this week, it will be just the latest in a long string of confirmations, that the age of easy money is here to stay. Easy money and the expansion of central bank balance sheets will continue to provide underpinnings for the gold market.

Honest Politicians… And Other Oxymorons

Posted: 04 Nov 2013 09:39 AM PST

Can we at least agree that the American people deserve the truth? That governing ourselves requires getting accurate information from the people we elect? That their function is to represent us? And that they have no right to lie or mislead?

Opposing mendacity ought to be a no-brainer.

What I see instead is a mainstreaming of the notion that it isn’t a big deal for a political candidate, an elected official, or an appointee to lie or deliberately mislead.

People in government mislead us so reliably that presuming the truth of their statements would be folly.

President Obama knew that his rhetoric about the Affordable Care Act was misleading and that many people who bought insurance on the individual market would be forced to get new policies when Obamacare made their policies illegal. The Chicago Tribune’s Clarence Page thinks that Obama knowingly lied, but he isn’t that upset about it, because “that’s one of those political lies, you know.”

Director of National Intelligence James Clapper lied to Congress about NSA surveillance while under oath. He was not forced to resign his post, let alone prosecuted, and in some circles more ire has been aimed at the man questioning him.

Dick Cheney remains widely respected among Republicans despite repeatedly deceiving Americans about the threat Saddam Hussein’s Iraq posed to the United States. In interviews, mainstream media figures continue to give his words the same presumption of truth extended to people who’ve never misled as he did.

Bill Clinton lied under oath and in a finger-wagging statement to the American people. He is, nevertheless, one of the most trusted political figures in the United States today.

There are important ways in which every lie or misleading statement is not equal. If we look at the consequences of every Bush administration misdirection prior to the Iraq War — a multitrillion-dollar conflict that killed 5,000 Americans and tens of thousands of Iraqis — their deceit was orders of magnitude more damaging than, say, Clinton and his allies subverting a sexual-misconduct lawsuit while under oath.

But there is one way in which all lies government officials tell are alike: To different degrees, they all subvert self-government by depriving Americans of accurate information as we make political judgments. They all diminish an almost depleted store of trust that’s needed for functional governance.

Mendacity doesn’t imply the rightness of any particular response to it. I wouldn’t have supported impeaching Dick Cheney because of his statements on Iraq (his role in torture is another question), nor do I think the Clinton impeachment was prudent, though I’m glad he was stripped of his ability to practice law after he left the White House. I’d like to see Clapper fired and prosecuted for perjury. Other people have reached different judgments on all of these questions. Maybe they’re right.

What I worry about are the world-weary pundits and partisan apologists who can’t even be bothered to condemn Obama-era falsehoods, deceitful Cheneyesque fear-mongering, or Clintonian parsing with any vigor or consistency. The biggest predictor of whether someone even complains about untruths is whether the deceit in question advances or impedes an end they favor. Getting upset in principle at lies told by political allies is a rarity. Almost no one regards proven liars as having shamed or discredited themselves. The attitude is, “It’s all in the game.”

But necessity hasn’t actually forced this posture upon us. People in government mislead us so reliably that presuming the truth of their statements would be folly. Dogs steal food reliably too. We still summon our angry voice, retrieve ill-gotten gains, and put the dogs in the corner. If we stopped, if the cost of bad behavior decreased or disappeared, transgressions would only get more frequent and brazen.

Journalists in particular are supposed to be champions of the truth. Our job is bringing it to the public. People in power who lie ought to be our sworn enemies, and we should resist at every opportunity a norm in which official lies are normalized.

That doesn’t mean that all lies shouldn’t be reported on as if they are equally important.

But neither should politicians be absolved so long as they’re perceived as being less untruthful than a predecessor or someone from another party. The ideal of full truthfulness is unattainable. It is still worth pursuing and retaining as a standard.

History ought to remember Bill Clinton, in part, as a liar.

History ought to remember the role Bush-era deception played in Iraq, torture, warrantless spying, and other policies besides. And if journalists belatedly pursue the most prudent course, tomorrow’s historians will remember the moment in 2013 when the media began to rebel against the egregiously misleading statements of the Obama era.

Our ability to govern ourselves is undermined when Clapper lies about surveillance, when Gen. Keith Alexander misleads about NSA activities abroad, when Obama misleads in the course of defending his health care proposal, and when Sen. Dianne Feinstein suggests absurdly low-ball estimates of innocents killed in drone strikes. There are many more examples of objectionable lies, untruths, and propaganda efforts, but aren’t the ones listed enough to raise general alarm?

Earlier this year, former Rep. Anthony Weiner, who resigned his seat in a sexting scandal, got caught in a lie about when his behavior stopped. The political press and the public hounded him relentlessly for his deceit. Every statement he made was parsed, journalists treated him as though he’d forfeited the presumption that anything he said was true, and he wound up as thoroughly disgraced as he had during the original crotch-shot news cycle.

Wouldn’t America be better off if the fervor for truth and shaming of liars that characterizes our sex scandals were applied to surveillance, torture, kids killed by drones, landmark legislation affecting a fifth of the economy, and matters of similar importance? It wouldn’t keep politicians honest. But it would keep them more honest.

Conor Friedersdorf
for The Daily Reckoning

Ed. Note: Politicians lie. That’s just what they do. And trying to keep them honest will be difficult, if not downright impossible. But that doesn’t matter… If you have all the facts and stay informed, you can cut through the political B.S. and protect yourself. That’s what the Laissez Faire Today email edition does for its nearly 100,000 readers every day. They’re staying ahead of the curve, and so should you. Sign up for FREE, right here, and find out what all the hype is about.

Original article posted on Laissez Faire Today

"Token demand" for new Hindu year leaves gold waiting on US data

Posted: 04 Nov 2013 08:25 AM PST

Despite the festival season in India, “support from this was missing” for gold in October, says, says the weekly note from Germany's Heraeus.

Read more….

Can’t miss headlines: Gold eyes $1,300, Jaguar dilution looks massive & more

Posted: 04 Nov 2013 08:25 AM PST

Gold steadies in the $1,310s in the past 24 hours while copper flirts with $3.30/pound. Las Bambas potential buyer list grows and Jaguar Mining’s massive dilution.

Read more….

Gold eases on talk ECB may loosen monetary policy

Posted: 04 Nov 2013 08:25 AM PST

Gold prices eased on Monday on talk that the European Central Bank may loosen monetary policy this week.

Read more….

Jim Sinclair’s $50,000 gold call – let’s hope it doesn’t happen

Posted: 04 Nov 2013 08:25 AM PST

Jim Sinclair who has a tremendous following within the gold investment community, has predicted in an interview that gold will reach $50,000, but this envisages currency collapse and hyperinflation.

Read more….

China is Buying Up the World – Big Time! Take a Look

Posted: 04 Nov 2013 08:24 AM PST

 China is buying up the world – big time! Take a look. It’s all shown here in one map.ch-lgflag

So writes Tyler Falk (smartplanet.com) in edited excerpts from his original article* entitled China's massive foreign investment, in one map. Hat tip to SeniorD

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

Falk’s article contains the following:

Living in the United States, the scale of foreign investment by Chinese companies isn't so obvious. Much of the $57.8 billion of Chinese investment in the U.S. since 2005 has been in the finance sector. There's also a fascinating interactive map with detailed information on Chinese investment for every country where it has investments over $100 million.

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

*http://www.smartplanet.com/blog/bulletin/chinas-massive-foreign-investment-in-one-map

Related Articles:

1. China Converting U.S. Dollar Debt Holdings Into Gold At Accelerating Rate

China, Russia and other nations are exiting their dollar-denominated holdings in favor of gold. This action should put pressure on the dollar and U.S. treasuries, pushing not only central banks, but mainstream investors towards the safety of precious metals and other tangible assets that cannot be defaulted on. There will be a rush out of dollars and into assets with no counter-party risk, it is just a matter of how soon it happens. Read More »

2. Noonan: Is Gold's Decline Being Caused By Fed Payback Time to China?

The manipulated raids in the gold market since last April may be hurting the Precious Metals game players, weakening their confidence and "disproving" gold's worth against a fiat currency, but they serve a greater purpose, as in Federal Reserve payback time to China. Here’s why. Read More »

3. Continuing U.S. Dollar Strength Depends on Asia's Self-interests Continuing – Here's Why

In an odd twist of fate the future of the U.S. dollar is in the hands of Asian governments [and particularly China and Japan. Let's hope they continue to put their own interests first.] Here's why. Read More »

4. Russia & China Have Power to Collapse U.S. Economy! Is Hoarding of Gold Their First Step In Doing So?

Most Americans simply don’t understand that Russia and China have the power to collapse the U.S. economy by going to a gold for oil system.  All they have to do is pull the trigger. Let me explain. Words: 1515 Read More »

5. Now You, Too, Can Predict When China Will Overtake America Using This Cool Interactive Tool

America’s GDP is still roughly twice as big as China’s (using market exchange rates). To predict when the gap might be closed, The Economist has updated its interactive chart below with the latest GDP numbers. This  allows you to plug in your own assumptions about real GDP growth in China and America, inflation rates and the Yuan’s exchange rate against the dollar. [Plugging in our assumptive] numbers China will overtake America in 2018. [Share your prediction in the "Comments" section at the bottom of the page.] Read More »

6.  China's Foreign Investment Spending ($443 Billion) by Country

The Heritage Foundation just put out a report full of charts and infographics highlighting "key economic and political indicators for Asia." Here is one to watch – China's foreign investment spending in other countries. Take a look!

7. Internet Censorship: Which of Your Favorite Sites Are Being Blocked in China? Check it Out Here

Many internet sites are censored (i.e. access is blocked) in mainland China and I have often wondered if munKNEE.com was one of them let alone all those other much more provocative sites out there. If you are curious as to whether or not any of the sites you visit are, in fact, censored in mainland China then check out the following site where you can find out immediately. Words: 1382

 

The post China is Buying Up the World – Big Time! Take a Look appeared first on munKNEE dot.com.

Jim Rickards’ Newest Book: The Death Of Money

Posted: 04 Nov 2013 08:16 AM PST

Jim Rickards has been one of our loyal guests. We had summarized a while ago 10 Currency War Insights From Jim Rickards and we explained how the World Currency System Is Moving Towards Catastrophe. Our latest articles have focused on how The Ongoing Depression Could Force A Return To The Gold Standard  and  how the Most Likely Outcome Is Still A Monetary Collapse.

Courtesy of Trumanfactor.com, the world now gets a first insight in the sequel to “Currency Wars”, the first book by Jim Rickards. The new book will be out in April 2013 and is titled “The Death of Money, The Coming Collapse of the International Monetary System (preorder on Amazon). The book confirms the predictions made in Currency Wars and goes deeper in the matter by explaing how the international monetary system might collapse and how the new monetary system could look like.

While Currency Wars "looked at global macroeconomics through the lens for foreign exchange rates including periods when exchange rates were pegged to gold and the more recent floating exchange rate period,"Rickards explains, "The Death of Money looks at the global macro economy more broadly considering not just exchange rates and the dollar, but also fiscal policy and the need for structural change in the U.S., China, Japan and Europe." In addition, Rickards elaborates,"Currency Wars made extensive use of history to develop its main themes about the dollar and gold, The Death of Money relies less on history and more on dynamic analysis."

Jim Rickards clearly does not agree with the good news show from economic pundits and central policy makers. Although some tend to believe that easing monetary policies are working well, Rickards sees a storm coming. We are in the calm before the storm right now.

Rickards expects the Federal Reserve policies aimed at importing inflation into the United States "to offset the deflation that had arisen because of the ongoing depression and deleveraging" to continue well into 2015 and perhaps beyond. He also points to other developments that are aligning in favor of the increasingly demise of confidence in the dollar as the world's reserve currency: "U.S. fiscal policy, stockpiling of gold by Russia and China, money printing by Japan and the UK, and the rise of regional groups such as the BRICS."

According to Rickards, the inexorable character of the next global financial storm is essentially due to the fact that "the world is facing structural problems, but is trying to address them with cyclical solutions. A structural problem can only be solved with structural solutions including changes in fiscal policy, labor policy, regulation and the creation of a positive business climate. Monetary solutions of the kind being pursued are not an answer to the structural problems we face. Meanwhile, monetary solutions threaten to undermine confidence in paper money. The combination of unaddressed structural problems and reckless monetary policy will ultimately produce either extreme deflation, borderline hyperinflation, stagflation or a collapse of confidence in the dollar."

Surprisingly, according to Rickards the euro is the strongest major currency in the world. He expects it to become even stronger. Yet some analysts today warn of the euro's increased appreciation as a dangerous centripetal force to the euro zone's integrity. Why does Rickards see the opposite?

"Most analysts do not understand the dynamics driving the Euro. They mistakenly assume that if growth is weak, unemployment is high and banks are insolvent that the currency must we weak also. This is not true. The strength of a currency is not driven by the current state of the economy. It is driven by interest rates and capital flows. Right now, Europe has high interest rates compared to the U.S. and Japan and it is receiving huge capital inflows from China."

Germany, in particular, appears to benefit most from the euro so it has a large stake in defending the European Monetary Union. With the Euro, German exports to its European trading partners are protected from devaluations. Germany will do whatever it takes to defend the Euro. Based on that insight, Rickards does not expect countries to leave the Euro, he even expects new members every year. "

Rickards takes the European story even one step further. Spain, with increased poverty levels, close to 100% debt to GDP ratio, and massive unemployment, appears to be turning in a growth story:

"The difficulties Spain has faced for the past five years are part of a necessary structural adjustment to allow Spain to compete more effectively. Most of this adjustment is now complete and Spain is poised for good growth in the years ahead. Unit labor costs have declined more than 20% since 2008, which makes Spanish labor more competitive with the rest of the world. Unemployment is difficult, but it gives Spain a huge pool of untapped labor that is now available as new capital enters the country. Increased labor force participation from among the unemployed will allow the Spanish economy to grow much faster than its overall demographics would suggest. The Euro has given Spain a strong currency, which is extremely attractive to foreign investors. Ford and Peugeot have recently announced major new investments in Spain and more should be expected. Chinese capital is also eager to invest in Spanish infrastructure. Spain has successfully made structural adjustments and put its major problems behind it, unlike the United States where the structural problems have not been addressed and painful economic adjustments are yet to come."

The most concerning part of the currency war is not Europe, but rather the United States. In particular, the future stability of the dollar is the biggest threat the world is facing.

Agencies such as the Defense Department and the intelligence community are concerned about the future stability of the dollar, but the U.S. Treasury is far less concerned. This has created some tension between those who see the danger and cannot do much about it, and those who can affect dollar policy but do not see the danger."

"The point of no return may already have passed, but the consequences have not yet played out."

"The Fed has painted itself into a corner. If they withdraw policy and reduce asset purchases, the economy will go into a recession with deflationary consequences. If the Fed does not withdraw policy, they will eventually undermine confidence in the dollar. Both outcomes are bad, but there are no good choices. This is the fruit of fifteen years of market manipulation by the Fed beginning with the Russian – LTCM crisis in 1998. The Fed will cause either deflation or inflation, but it cannot produce stable real economic growth."

Rickards believes it is a matter of time until the dollar collapses. In his opinion, this epic event would lead to a reset in the world's monetary system. Gold would regain its historic role as the standard unit of value. “What happens after the end of fiat money would then depend on how each country is positioned in terms of its gold reserves.”

The Biggest Fear in Retirement, and the Golden Solution

Posted: 04 Nov 2013 07:39 AM PST

Dear Reader,

Greetings from Puerto Rico. For once, I’m not kicking rocks, but checking out what our International Man has identified as potentially the best alternative to expatriation for US taxpayers looking to legally reduce one's tax obligations.

So, I'm hard at work, but I confess I brought my wife, and we have managed to go diving—if folks are going to consider moving to a US territory off the beaten path, there have to be some good perks to make the stay pleasant, and not just economic.

More on this via our International Man service.

But speaking of other Casey services, one fact about readers of our metals publications is that many of them are seniors or people close to retirement age. Such people often wonder about the appropriateness of the kind of strategies and investments we recommend in BIG GOLD, Casey International Speculator and Casey Investment Alert. It's a fair line of inquiry, so we've brought our best expert in to answer some questions.

I hope you find our interview with Dennis Miller as entertaining as it is insightful and useful.

Sincerely,

Louis James
Senior Metals Investment Strategist
Casey Research

Rock & Stock Stats
Last
One Month Ago
One Year Ago
Gold 1,315.80 1,286.10 1,715.50
Silver 21.87 21.18 32.25
Copper 3.28 3.27 3.55
Oil 94.61 102.04 87.09
Gold Producers (GDX) 24.08 24.41 52.01
Gold Junior Stocks (GDXJ) 36.40 39.46 96.12
Silver Stocks (SIL) 12.50 12.92 25.25
TSX (Toronto Stock Exchange) 13.327.46 12,847.44 12,499.76
TSX Venture 955.33 942.04 1,321.29

The Biggest Fear in Retirement, and the Golden Solution

Jeff Clark, Senior Precious Metals Analyst

An interview with Dennis Miller of Miller's Money Forever, by Jeff Clark

We get a lot of questions from readers about what role precious metals should play in retirement planning, so we figured, who better to ask than our own Dennis Miller, editor of Miller's Money Forever. In the following interview, Dennis talks about how to categorize investments, why he likes Roth conversions, the greatest danger many seniors will face from Obamacare—and how he recommends protecting against it.

Jeff Clark: You're our in-house retirement expert, Dennis, so let me ask… what place do precious metals have in your retirement portfolio?

Dennis Miller: A critical place. But first, let me address how we categorize our investments…

In our Miller's Money portfolio, we start with what we refer to as "core holdings." These are the assets you want to own should our worst fears come true. Many investors are concerned about government debt levels and money printing, and your core holdings are designed to help you weather any coming storm, whether it be inflation, economic collapse, or something unforeseen.

Think of your core holdings as insurance. These are assets you want to hold on to and not trade—we'll only "cash in" if a worst-case scenario comes to pass. And as you know, gold and silver are ideal for this type of insurance. They're recognized throughout the world and, if held in physical form, have the added benefit of being outside the financial system.

Jeff: No argument here. How much do you recommend in core holdings?

Dennis: We recommend core holdings comprise at least 10% of a portfolio. For those nearing retirement, I would recommend you be positioned at 10% by the time you stop working full time.

We trade time for money in our younger years—but retirement is the opposite; we trade money for time. Our focus changes from working and accumulating wealth to retirement and maintaining that wealth and making it last so we can enjoy the rest of our life.

Jeff: What investments are in your core holdings?

Dennis: I start with the basics. Should we see high inflation or even hyperinflation, you will need immediate access to the type of assets that will still function when no one wants paper money. I start with junk silver because it is a smaller denomination and more practical on a day-to-day basis. Silver bullion coins are also good for this purpose. You may not want to cash in a one-ounce gold coin for groceries, though we include gold, of course.

It can also include farm land, foreign currencies, and other investments; however, metals should be a significant part. Their portability and worldwide recognition provide advantages few other assets can.

Jeff: I know many gas stations in the 1970s accepted junk silver and silver bullion coins.

Dennis: That's right.

Jeff: What's the other category?

Dennis: Our second group of investments is for the explicit purpose of selling for a profit. This can be ETFs, stocks, stock funds, etc., that you believe will appreciate. Those should be evaluated just like any other investment opportunity.

Jeff: Is gold and silver in this group?

Dennis: Yes, I include precious metals in this "for-profit" group, too, because they offer profit opportunities. You may find times where they've had a big run-up and you want to sell some of your position to take a profit. I cashed out some gold investments with some nice gains in the past and plan to do so again—but these are not my core holdings, they're in my "investment" category.

This is why when people ask what percentage of their portfolio should be in precious metals, I feel it is the wrong question. It really should be how much of your portfolio is in core holdings and how much is invested for the purpose of selling down the road at a profit. Mentally, and sometimes physically, you need to keep them separate.

Jeff: That makes sense. Are both of these groups in your retirement portfolio, or how do you divide the assets between a taxable brokerage account and a non-taxable one?

Dennis: There are a couple parts to that answer. First, by the time most people retire, they generally have some assets that are tax deferred, such as a 401(k) or IRA, and others that are taxable. Our strategy is to use the taxable accounts and let the tax deferred accounts grow. Then we draw from these accounts as sparingly as possible.

However, tax deferred should not be confused with non-taxable. Somewhere in the process, buying out your business partner (i.e., the government) and moving your money into a Roth IRA makes a lot of sense.

This is one area where my retirement experience comes into play. There are lot of retirement experts that recommend keeping your money in your 401(k) and traditional IRA as long as possible, and they'll run the numbers to make their point. However, they don't account for the likelihood that our tax structure will change, a rather shortsighted and risky assumption. If taxes rise as I suspect, their models become much less accurate and you'll end up with much less money to spend.

When you move money from a traditional IRA into a Roth, the distribution is taxable. However, you do not have to move all of it in a single year. By converting a little each year, you keep your overall taxes down because you're not moving up to the higher brackets so quickly.

Jeff: Do you have a strategy for which investments to convert first?

Dennis: Good question, and yes, I would move the holdings that are temporarily in a downturn first, because when you take them out of the tax deferred account, they're taxed on the current market value. With metals and particularly metals stocks being in a holding pattern, this is an important consideration—if you wait a couple years until they appreciate more, you'll pay more not just in taxable gains but probably a higher tax rate on those gains.

Once your assets are in a Roth, it is truly a non-taxable account, with the added benefit of not having to take out a required minimum distribution as you get older. Personally, I own a lot of my gold stocks in our Roth accounts, patiently waiting for that market to turn around, as we know it will. If I were making the transition from a 401(k) or traditional IRA to a Roth, I would move most of my metals sooner rather than later. Then when the turnaround comes, our gains are truly tax-free.

Along these lines, the Hard Assets Alliance has an excellent program for a precious metals IRA, one of the best I've ever seen. 

Jeff: I like your plan, Dennis. But do you worry about the government confiscating our retirement accounts, or a portion of them?

Dennis: We've all read the reports concerning those issues. The most frequent angle is not confiscation in the traditional sense, but the idea that they'll force us to keep a certain percentage of our retirement portfolio in "safe" government Treasuries—for our own good, of course.

Can you imagine what would happen if they tried that—even a mere 10%? Think of the sell orders that would hit the stock market from investors liquidating equity positions to replace them with government IOUs. It would clobber the stock market. And a lot of folks with Roth IRAs would just take their money out as opposed to holding worthless government paper.

Jeff: What about international storage of precious metals in a retirement account?

Dennis: I am now a strong advocate of making sure you have plenty of money offshore. There are some aspects of Obamacare, for example, that the public is unaware of and could be detrimental to not just investors, but to anyone who has a pressing medical need.

Jeff: How so?

Dennis: At our recent Casey Summit, one of the speakers was Dr. Elizabeth Lee Vliet, an MD and health reform activist. Dr. Vliet agrees on what many have said about surviving the new healthcare law: she believes seniors will be hit the hardest and in many cases denied care.

A recent article in Money Morning quoted Betsy McCaughey, former lieutenant governor of New York and author of the recent book, Beating Obamacare—Your Handbook for Surviving the New Health Care Law. She says, "Hip and knee replacements and cataract surgery will be especially hard to get from Medicare in the months ahead." She warns seniors to get those types of procedures done now before Obamacare goes into effect January 1.

That may not even be the worst part. There are concerns that once care is denied by the government, absent a couple very minor exceptions, the doctor won't be allowed to provide that service, even if you can pay for it out of your own pocket.

While the full impact of the Affordable Care Act is not yet known, I think these are valid concerns. I understand that these are strong statements, and some people claim they're not true, but by the time we find out, it might be too late.

Jeff: If it is true, how could it impact one's retirement planning?

Dennis: It would mean that a lot of Americans would have to go offshore for treatment that's been denied or delayed. Which means you would not only need the money to do so, but would have to have some of it already outside the country.

Jeff: I think I know why…

Dennis: A day may be coming where it could be very difficult to get funds transferred from your domestic bank account to a medical facility in another country. At the least, there will be severe restrictions in doing so, but I think the more likely scenario is some form of capital controls, where it will be illegal to transfer any funds outside the US.

Jeff: I agree.

Dennis: And what if you don't have any assets stored outside your country? You're stuck—you may not be able to get that procedure.

While we don't know for sure how it will shake out yet, imagine this possible scenario: you need a medical procedure to improve your quality of life or maybe even extend your life, but it's been denied by Obamacare. You have the funds to pay for it, but the doctor is not authorized to perform it. You find a state-of-the-art facility in a nearby country that will perform the procedure for you, with no waiting list and probably at a lower cost—but when you attempt to wire funds to the medical facility, it's denied by the US government.

Pity the poor person who might need a hip replacement, sitting in the waiting room of an offshore hospital and not being able to get the treatment because he can't get money out of the country.

Jeff: Very scary, Dennis.

Dennis: The bottom line is that while our fears may not come to pass, we still need to take steps to ensure against these possibilities. There are lots of good reasons why prudent investors should hold some of their assets offshore—the fact that we're even discussing the possibility of currency controls and how they relate to healthcare just reinforces the point that it's not something to put off.

This is why I believe placing some assets offshore could be the most important healthcare decision a person can make. We all believe in internationalizing our assets, and now I feel an even greater sense of urgency.

And this is where precious metals make perfect sense. You can easily and cheaply store gold and silver internationally and sell them in an emergency if you need to. That's exactly what I'm doing.

Offshore precious metals storage isn't a benign investment, either. My wife and I recently went to Panama and spent some time with the president of the world-class Johns Hopkins facility there. If I needed a procedure done outside the US, I wouldn't hesitate to use this facility. But think about this: the currency in Panama is US dollars, so if our dollar experiences high inflation, the cost of care in Panama will rise. But by having metals stored offshore, we can mitigate that loss in buying power.

One of the keys to enjoying retirement is good health—who wants to spend the last decade of their life popping pills while in constant pain, when you have the ability to live a much higher quality of life? I don't.

Jeff: Good point. More capital controls are almost certainly coming.

Dennis: I spoke with Nick Giambruno of International Man, who went to Cyprus with Doug Casey and investigated what happened when they instituted currency controls earlier this year. Basically, on a Friday night, after all the banks were closed, they shut down the entire banking system and had currency-sniffing dogs at every point of entry. No money was allowed to be taken out of the country.

And you probably heard that the International Monetary Fund recommended just two weeks ago that a "capital levy" be placed on citizens with a "positive net wealth." The part in the article that really bothered me was this: "Democrats and Republicans … are entertaining closed-door schemes designed to, once again, relieve Americans of their property."

Jeff: As a retirement specialist, what do you recommend?

Dennis: It is better to be safe than sorry. We don't know for certain that currency controls are coming, but as a retirement planner, I have to ask your readers, will you be prepared if they do?

Keep in mind that offshore health care is generally less expensive than in the US. The quality in many places is every bit as good, and wait times will almost certainly be less than what will soon be the reality here. Medical tourism is a booming industry for these very reasons.

The bottom line for me is that internationalization of a portion of our assets is vital. And like I said, precious metals are the best place to start. Offshore storage has the added advantage of inflation protection—should our dollar become worthless, our gold and silver holdings will appreciate accordingly. I think this is now a crucial part of retirement planning.

I can tell you that my wife and I have a good part of our nest egg offshore. In fact, I used to view the offshore choice as a risky one—now I see not having assets offshore as a much greater risk. I encourage all who will listen to diversify internationally—and soon.

Jeff: I appreciate your candor, Dennis. I've been able to spend some time getting to know you since you started work at Casey Research, and I know you are very sincere and only want to help your readers.

Dennis: Thank you, Jeff. If I can help one person avoid a catastrophe, it will be worth it. If something drastic happens like what occurred in Cyprus, I suppose some might thank me for warning them. I obviously would prefer the situation not deteriorate to that level, but I think we would all sleep better knowing we're prepared for the worst-case scenario.

Jeff: Do you cover things like this in Miller's Money Forever?

Dennis: Our mission is to show people how to build their nest egg and then make it last so they can sleep well at night and not have to worry about money. Our portfolio is doing very well—but a retirement portfolio is much more than just owning a few stocks that are perfor

How Much More Gold Can They Drain From GLD Before It Loses All Credibility?

Posted: 04 Nov 2013 07:31 AM PST

                                                    
And thus I clothe my naked villainy
With odd old ends stol'n out of holy writ;
And seem a saint, when most I play the devil
           - Shakespeare, "Richard III"

We have witnessed a stunning drain of gold from the GLD ETF trust.  Through last Friday, an incredible 479 tonnes - more than 35% - of GLD's gold has been removed and has disappeared, most likely to Asia - in the space of about 10 months.  The biggest chunk of that 479 tonnes was removed shortly after Germany's Bundesbank issued it's feeble and hopeless request to the U.S. that the Federal Reserve start shipping back some portion of the 1500 tonnes of gold that is supposedly being "safe-kept" on behalf of Germany by the Fed in its vault in New York City.   Gold luck, Angela...

I have looked at GLD suspiciously ever since James Turk issued the first analysis of GLD's prospectus back in 2004.  Those of us who are familiar with securities laws and investor "safe guards" supposedly enforced by the SEC were absolutely shocked that the SEC approved the GLD prospectus as it was filed because of the egregious lack of GLD sponsor and custodian legal accountability standards typically required by the SEC for publicly traded securities.

Given this fact, I believed at the time that GLD was a scheme devised to suck  in retail and institutional cash that might otherwise flow in massive quantities into actual physical gold that would be safe-kept in private vaults in this country.  Although GLD has a mechanism to enable investors with a minimum of 100,000 shares to convert those shares into gold that would be delivered to the investor, the procedure is exceedingly cumbersome and expensive and there's a mechanism embedded in the language of the prospectus that enables the trustee of GLD to deny such requests.

But I also knew - through GATA's invaluable research - that there would eventually be a shortage of physical gold that would be available to allow the western Central Banks and bullion banks to maintain their oppressive and incessant manipulation of the paper gold market for the purposes of maintaining a cap on the price of gold, for the purposes of defending the credibility of the U.S. dollar.  I figured that at some point the gold in GLD would used for this purpose once the Central Bank stocks of gold were largely if not fully depleted.  In this context, please recall that about three years, the ECB system, which had been selling 400 tonnes per year on average, pretty much stopped selling any gold.  That's sign-post #1 that I was right.

Then along comes the Bundesbank in early 2013, with a request that the Fed start shipping Germany's gold held in in New York back to Germany.  That's when all hell broke loose:

(Please note:  graph is from my esteemed colleague, "Jesse," of Jesse's Cafe Americain.  Solid circle edits are mine to enhance visual readability of the chart.  Jesse's original post can be read here: Collapse in GLD gold holdings).

There's something really wrong with that picture because the intuitive response from the market by Germany's request of the Fed should have been a quickly rising price of gold.  But as you we all know, the Fed defaulted on the request - for all intents and purposes - and that's when the massive drain of gold from GLD commenced. 

The truth is that my original hunch was correct.  100% correct.  The gold in the GLD trust is being used to satisfy the enormous physical delivery demands from China and the other big gold buying countries because the western Central Banks have run out of gold to deliver.  That is an unmistakable fact. Reports and data ad nauseum have been published in the last six months describing and verifying the voluminous, unprecedented amount of gold bars that have been moved - literally physical transferred - from the Comex in NY and  the LBMA and Bank of England vaults in London to Switzerland and then on to Hong Kong, where it flows to its ultimate destinations in China.  Anyone who would deny that this is the case has a blatant and catastrophic disregard for the truth as supported by provable facts.

So the question is, how much longer can the depletion of gold from GLD continue before this scheme falls apart?  Let me first say that it is likely that the U.S Government's "Waterloo" in this situation will be the gross miscalculation - when GLD was originally devised - of the growth and size of China's appetite for physical gold for which actual physical delivery is demanded.

With that in mind, my best guess is that if the gold in GLD were to be depleted by another 35% from here, the largest remaining shareholders of GLD would likely start exercising their legally ambiguous "right" to convert their shares into physical gold and have that gold delivered out of JPM's custodial vault and into their possession.

Think about the Hobson's Choice faced by the sponsor, trustee and custodian of GLD:  if they don't honor shareholder conversion requests to convert and deliver gold, it will send the "default" signal to the world that indeed GLD is a fraud, that GATA has been right along.  The price of gold will literally go straight up, "bid without"  - meaning huge bids will appear at much higher levels and there won't be any offers.  The other side of this "choice" is that it is likely that the physical gold - at that point in time - to honor such requests is actually not available in JPM's vault to be delivered and the trustee will attempt to settle in cash.  Gold goes bid without.

At this point there's really no telling just how much longer GLD can be drained of gold before the western Central Bank/BIS fiat paper gold system inevitably collapses, but with each passing day of increasing awareness and understanding of what is happening with the world's physical gold vs.the derivative paper claims on that gold, and with each additional day the LMBA GOFO rate is negative, the time to collapse is quickly shrinking.  I do believe that, in what ironically was devised as a "fool-proof" tool manufactured to allow the west to "manage" the physical gold vs. paper problem for a long time, will likely be the Icarus wings of the U.S. Government's fiat money scheme.

Note:  I am in the processing of revising and updating my original analysis of the GLD trust and why the shares in ETF are fraudulent - stay tuned...


Weekend Report...The US Dollar and Oil...The Inflation / Deflation Battle Rages On

Posted: 04 Nov 2013 06:12 AM PST

There were some interesting developments this week that I would like to focus on in the Weekend Report. The most important thing to happen was the rebound in the US dollar that was very impressive. Is the bottom in or is this just ... Read More...

Gold Gains From a Two-Week Low in New York; Platinum Increases

Posted: 04 Nov 2013 05:51 AM PST

04-Nov (Bloomberg) — Gold gained from a two-week low in New York as investors weighed speculation lower prices may spur demand against a strengthened dollar. Platinum rose as a South African labor union began a strike at Northam Platinum Ltd.

…"Physical demand in China and India appears to have fallen from the incredibly strong levels seen recently," analysts at Dublin-based brokerage GoldCore Ltd. wrote today in a report. Gold's price drop last week may "present a buying opportunity as we enter a seasonal sweet spot for gold."

[source]

PG View: November has historically been a very good month for gold.

Gold firms as investors await ECB, Fed policy moves

Posted: 04 Nov 2013 05:48 AM PST

04-Nov (Reuters) — Gold edged higher on Monday as the dollar retreated but stayed under pressure from talk the European Central Bank may loosen monetary policy and speculation the Federal Reserve may scale back U.S. stimulus later this year.

The euro earlier hit a six-week low as investors sold the single currency on mounting speculation that the ECB may loosen policy in the near term, though it recovered after business surveys showed euro zone manufacturing accelerated in October.

That helped push the dollar down 0.2 percent against a basket of currencies, though it was underpinned by upbeat U.S. manufacturing data that supported a view the Fed might scale back its bond-buying in December, rather than March as many in the market have been expecting.

“The (U.S.) central bank is keeping markets guessing. Now December is back on the agenda,” Societe Generale analyst Robin Bhar said. “I think it’s unlikely, but the Fed statement and thinking suggests they haven’t completely ruled that one out. That’s really impacting the market, as well as the turnaround in the euro/dollar.”

[source]

PG View: It strikes me as very unlikely that the Fed would tighten policy as the ECB loosens further.

Gold better at 1318.70 (+3.50 ). Silver 21.81 (-0.01). Dollar easier. Euro higher. Stocks called higher. US 10yr 2.61% (-2 bps).

Posted: 04 Nov 2013 05:42 AM PST

Can VIX Substitute Gold?

Posted: 04 Nov 2013 05:19 AM PST

We've read a very interesting essay on gold, VIX (the volatility index) and the safe haven status entitled Forget gold, the VIX is the new safe haven and we would like to share our thoughts about it. Read More...

Gold Prices Look to US Jobs Data After Diwali Demand "Goes Missing" in India

Posted: 04 Nov 2013 04:42 AM PST

GOLD PRICES held tight around last week's finish of $1317 per ounce in London trade Monday morning, as European shares rose with government bonds.
 
Silver also held flat near $21.90 per ounce, more than 5% below last Wednesday's 5-week high.
 
Commodities edged down as the Euro ticked higher from a 6-week low to the Dollar.
 
"Gold prices could claw back some gains," says the weekly note from Japanese conglomerate Mitsubishi, "as bargain-hunters re-enter the market and if the Dollar weakens on poorer than expected US economic data."
 
This week brings October's official US jobs data on Friday.
 
Analysts expect the smallest net addition to Non-Farm Payrolls since January at 130,000.
 
If weak US data mean quantitative easing "continues at the current rate for longer than expected," says Robin Bhar at French investment and bullion bank Societe Generale, "then...further declines in the gold price may be delayed."
 
But SocGen's commodity team "still expect gold to fall towards $1100 next year" however.
 
Shorter term, "a batch of gold selling – likely from the [mining] community – scared all the small bidders [last week]," says one London trading desk.
 
"Gold miners are clearly looking at securing some of their future bullion sales."
 
Output from No.1 gold mining nation China will hit a record of 430 tonnes in 2013, according to China Gold Group Corp.
 
Consumers will meantime buy some 1,000 tonnes, reckons vice-general manager Du Haiqing, speaking at an industry conference in Tianjin.
 
Likely to overtake India as the world's No.1 buyers, China's "consumption will gradually cool down" starting 2014, says Du, "as consumers become more rational."
 
Meantime in India, and "despite the festival season of Dhanteras and Diwali," says the weekly note from German-based refining giant Heraeus, "support from this was missing" for gold prices in October.
 
"Demand was being met by recycled metal as well as via illegal channels."
 
"Physical demand continues to be lackluster," says Swiss refiner MKS in a note quoted by Bloomberg today.
 
"[Indian] jewelry stockists and retail investors [only] made token purchases of gold," MoneyControl says of the Diwali festival "to mark the beginning of the new Hindu Samvat year 2070."
 
Gold prices over the last 12 months "offered negative returns [to Indian buyers] for the first time in fifteen Samvat years," notes the Business Standard.
 
Western investment demand meantime saw net outflows of 6 tonnes last week from the giant SPDR Gold Trust (ticker: GLD), taking the quantity of gold needed to back the world's one-time largest exchange traded fund to a new 57-month low of 866 tonnes.
 
But whilst big-money mandates and institutional investors remain shy, total gold coin sales by the US Mint so far in 2013 have already overtaken full-year 2012, according to data on its website.
 
Sales of American Eagle and Buffalo gold coins stood at 993,500 ounces by end-Oct., says the Mint. That contrasts with total 2012 sales of 885,000 ounces.
 
Silver coin sales from the US Mint meantime stand "near a new annual record" notes one retail dealer, after strong October sales to distributors took 2013's running total to 39.175 million ounces, just shy of 2011's record 39.869 million.
 
"We remain bullish gold," says a Singapore dealing desk today. But gold prices "might be further tested before investors regain faith in the yellow precious metal," it adds, putting nearby support at $1300 per ounce.
 
Rising Spanish bond prices meantime pushed Madrid's borrowing costs down to the lowest level in more than 3 years.
 
The US Dollar edged back from multi-week highs to the Euro and Sterling after new data showed the Eurozone's manufacturing sector expanding as forecast and the UK's construction sector surging at the fastest pace since spring 2007.
 
The Pound rallied from a 2-week low of $1.5900 on the news, edging gold prices for UK investors down to £822 per ounce.

Coming Clean, Dr. Joseph Farrell – Covert Wars & The Mysterious Strength of the US Dollar

Posted: 04 Nov 2013 04:00 AM PST

“We already have the means to travel among the stars, but these technologies are locked up in black projects and it would take an act of God to ever get them out to benefit humanity…. Anything you can imagine, we already know how to do.” ~ Ben Rich, former head of the Lockheed [...]

"Token Demand" for New Hindu Year Leaves Gold Waiting on US Data

Posted: 04 Nov 2013 03:58 AM PST

WHOLESALE trade in London left the price of gold sitting at last week's finish of $1317 per ounce Monday morning, as European shares rose with government bond prices but commodities slipped. Silver also held flat, trading near $21.90 per ounce – more than 5% below last Wednesday's 5-week high. The Euro ticked higher from a 6-week low to the Dollar.

US Dollar and Crude Oil…The Inflation / Deflation Battle Rages On

Posted: 04 Nov 2013 03:31 AM PST

There were some interesting developments this week that I would like to focus on in the Weekend Report. The most important thing to happen was the rebound in the US dollar that was very impressive. Is the bottom in or is this just a short covering rally that will peter out when it's finished? Oil continues to fall at a rapid rate which could be signaling another deflationary event maybe on the horizon. There are still a lot of crosscurrents out there but if we can get a good read on the US dollar and Oil that should help us understand what is likely to take place over the intermediate term.

Gold price in a range of currencies since December 1978 XLS version

Posted: 04 Nov 2013 01:52 AM PST

Excel file of gold price charts and data - Updated weekly in 19 curriences: US dollar, Euro, Japanese yen, Pound sterling, Canadian dollar, Swiss franc, Indian rupee, Chinese renmimbi, Turkish lira, Saudi riyal, Indonesian rupiah, UAE dirham, Thai baht, Vietnamese dong, Egyptian pound, Korean won, Russian ruble, South African rand, Australian dollar

The Visual Capitalist's Guide to Precious Metals Stock Picking

Posted: 04 Nov 2013 12:00 AM PST

With over 1,700 precious metals mining companies listed on the Toronto exchanges, separating the wheat from the chaff is no easy task. Visual Capitalist has developed Tickerscores, an empirical approach to scoring gold explorers, developers and producers. In this interview with The Gold Report, Jeff Desjardins, president of Visual Capitalist, and Rob Fuhrman, lead analyst, walk readers through their methodology and reveal which companies in Canada, Mexico and the U.S. measure up as high-potential investments.

The Visual Capitalist's Guide to Precious Metals Stock Picking

Posted: 04 Nov 2013 12:00 AM PST

With over 1,700 precious metals mining companies listed on the Toronto exchanges, separating the wheat from the chaff is no easy task. Visual Capitalist has developed Tickerscores, an empirical approach to scoring gold explorers, developers and producers. In this interview with The Gold Report, Jeff Desjardins, president of Visual Capitalist, and Rob Fuhrman, lead analyst, walk readers through their methodology and reveal which companies in Canada, Mexico and the U.S. measure up as high-potential investments.

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