Monday, December 2, 2013

Gold World News Flash

Gold World News Flash


GoldSeek Radio – Peter Schiff & Harry S Dent Jr

Posted: 02 Dec 2013 12:30 AM PST

Those environmental and human costs are central banking’s, not gold’s

Posted: 02 Dec 2013 12:00 AM PST

by Chris Powell, GATA:

Dear Friend of GATA and Gold:

How studiously Western journalists strive to miss the crucial point about gold.

One of them, Matthew Hart, who is touring news media outlets to promote his new book about the monetary metal, whose excerption in Vanity Fair magazine was brought to your attention a couple of weeks ago –

http://www.gata.org/node/13233

– went on National Public Radio in the United States for five minutes yesterday and lamented the extreme human and environmental costs of getting the metal out of the ground. Audio and a transcript of the interview are posted at NPR’s Internet site here:

Read More @ Gata.com

Supply and Demand 1 December

Posted: 01 Dec 2013 10:00 PM PST

Let's consider speculation and arbitrage, and look at what it really means when the cobasis is deeply negative, in that light. This is the case in silver.

Per the definition of cobasis = Spot(bid) – Future(ask), it means either that physical metal is being dumped on the bid, pressing it down, or that people are aggressively buying futures, thus lifting the ask in that market.

The price of silver has been falling all year, with a sharp correction in the first three weeks of August. The cobasis has been low and/or falling most of that time (though it has come up a little in the past few weeks). We suspect that both market actions are occurring in silver right now. That is, at times silver metal is being dumped in quantity in the spot market, and at other times paper silver is being bought aggressively in the futures market.

Who might be selling physical silver? The data does not tell us, but looking around at the world economy, we can guess that smaller inventories may be needed at manufacturers of electronics. People may be bringing their metal to "cash4gold" companies to get dollar cash to pay their bills. For whatever reason, in the world of the physical stuff supply is coming to market. In contrast, the demand for the paper stuff—futures—is still strong at the moment.

Readers may have a different experience—we would love to hear about it—but we see continued optimism in comments on investor sites, Facebook groups, etc. Surely, "the bottom is in" and as the prices of the metals takes off once again, silver will rise faster than gold.

As we have written before, analysis of the open interest in COMEX futures is not so simple, but in the context of the present discussion it is interesting to take a look at the open interest for both monetary metals.

            The Open Interest of Gold and Silver

Open Interest in Gold and Silver

 

The graph supports our theory that leveraged speculators (which comprise a large percentage of the change in open interest) have gotten much more excited about silver since July. By contrast, the graph suggests that they are less exuberant about gold.

Thus we have a much higher cobasis in gold at this point. The question is: will demand for silver turn around first, or will leveraged speculators capitulate first?

We would not bet our money that it will be the former.

This week was punctuated by the major American holiday, Thanksgiving. Volumes were lighter than normal and liquidity less. We take with a grain of salt both the price moves and the basis moves. The prices ended up slightly on the week.

Here is the graph of the metals' prices.

            The Prices of Gold and Silver

Prices

 

We are interested in the changing equilibrium created when some market participants are accumulating hoards and others are dishoarding. Of course, what makes it exciting is that speculators can (temporarily) exaggerate or fight against the trend. The speculators are often acting on rumors, technical analysis, or partial data about flows into or out of one corner of the market. That kind of information can't tell them whether the globe, on net, hoarding or dishoarding.

One could point out that gold does not, on net, go into or out of anything. Yes, that is true. But it can come out of hoards and into carry trades. That is what we study. The gold basis tells us about this dynamic.

Conventional techniques for analyzing supply and demand are inapplicable to gold and silver, because the monetary metals have such high inventories. In normal commodities, inventories divided by annual production can be measured in months. The world just does not keep much inventory in wheat or oil.

With gold and silver, stocks to flows is measured in decades. Every ounce of those massive stockpiles is potential supply. Everyone on the planet is potential demand. At the right price. Looking at incremental changes in mine output or electronic manufacturing is not helpful to predict the future prices of the metals. For an introduction and guide to our concepts and theory, click here.

Here is a graph of the ratio of the gold price to the silver price. This shows how many ounces of silver one needs, to buy an ounce of gold. There was a small gain in the ratio this week. 

            The Ratio of the Gold Price to the Silver Price

Gold to Silver Ratio

 

For each metal, we will look at a graph of the basis and cobasis overlaid with the price of the dollar in terms of the respective metal. It will make it easier to provide terse commentary. The dollar will be represented in green, the basis in blue and cobasis in red.

Here is the gold graph. The February cobasis flirted with backwardation this week.

            The Gold Basis and Cobasis and the Dollar Price

Gold

 

The rising cobasis, now in backwardation, combined with a basically flat price of the dollar—just under 25mg—means that some selling of gold futures is balanced by buying of gold metal. There is nothing extreme in this graph, and as we noted above, volume and liquidity were not normal this week, especially the latter part of the week.

Now let's look at silver.

The Silver Basis and Cobasis and the Dollar Price

Silver

 

We see a sharp rise in the cobasis, though it's impossible to tell if this is just the poor liquidity or if this is the start of a major move (the move is not pronounced in farther-out futures). This bears monitoring in the coming week.

 

© 2013 Monetary Metals

Evidence of the Police State? Mobile Camera Watchtowers Now on City Streets

Posted: 01 Dec 2013 09:30 PM PST

from Trillion Dollar Silver:

This Netvision mobile camera watchtower was in the parking lot of the Buffalo Wild Wings.. This was in downtown Richmond, Virginia, on a Saturday night. It seems they are using drunken party goers to test the limits of the Police State.

UK Royal Mint Working On Plans To Issue Gold-Backed Physical Bitcoins

Posted: 01 Dec 2013 09:21 PM PST

from Zero Hedge:

The implicit, and ever more explicit, institutional acceptance of the dominant cryptocurrency Bitcoin (we say dominant because as we pointed out last week, there has been an unprecedented spike of digital currencies one can pick and choose from) continues when following the surge in vendors willing to transact in BTC over Thanksgiving, the latest news comes from the birthplace of the modern central bank, the UK, where we learn that none other than the UK Royal Mint has been working on plans since this summer to issue physical Bitcoins in collaboration with the Channel Island of Alderney. But where the story gets downright surreal is that as the FT reports, the same symbolic Bitcoin token issued by the Royal Mint “would have a gold content – a figure of £500-worth has been proposed – so that holders could conceivably melt and sell the metal if the exchange value of the currency were to collapse.” In brief: a perfect, and utterly incomprehensible, fusion of (opposing) hard, soft and digital currencies all rolled into one…

Read More @ ZeroHedge.com

Incredible Minutes from a 1974 Henry Kissinger Staff Meeting on Gold

Posted: 01 Dec 2013 09:00 PM PST

by Michael Krieger, Liberty Blitzkrieg:

The following excerpts are from a transcript of a 1974 meeting held by the then Secretary of State Henry Kissinger and his staff. This particular meeting was held on April 25, and focused on an European Commission Proposal to revalue their gold assets. What follows is an incredible insight into the minds of powerful American leaders scheming to maintain power and show other nations their place. What is most significant is how clearly they understood that demonetizing gold was a critical strategy to maintaining a dominant power position in the world.

So to those who continue to say that "gold doesn't matter" because it hasn't been used as an official asset in the monetary system for decades, I say give me a break. In fact, the reality of gold having been largely demonetized makes it an even greater threat going forward if the U.S. does not have all the gold it claims to, and other nations have more than they admit to.

Read More @ LibertyBlitzkrieg.com

BLACK THURSDAY & BLACK FRIDAY 2013: MORE MADNESS

Posted: 01 Dec 2013 08:35 PM PST

With extremely long lines at local stores on Black Thursday despite freezing temperatures, many Americans seem absolutely oblivious to the economic implosion that’s fast approaching.

Even more startling, many Americans do not seem to care that the Republic itself which has guaranteed their right to be uniformed and unengaged, is collapsing around them.

Shot just miles from my home, the line outside the local Target store was filled with hundreds of people who have probably never heard of Gerald Celente, Andy Hoffman, Michael Snyder or Peter Schiff. And most of them are completely unprepared for the end of the US Dollar paradigm which has made their complacency possible.

Indeed, the more things get worse for the average American, the more things seem to stay the same.

The Aden Sisters on Gold, Commodities and Near-Term Market Prospects

Posted: 01 Dec 2013 08:30 PM PST

by Anthony Wile, The Daily Bell:

Daily Bell: Hello, there. We spoke some two years ago. Since then, gold’s gone down a lot. Did your portfolios suffer?

Pamela and Mary Anne Aden: Hello. Thank you. It’s great to be with you again. Our positions are down but we’ve been buying since 2002 and the price is still much higher.

Daily Bell: You didn’t see gold and silver in a bubble last time we spoke. Any follow-up thoughts?

Read More @ TheDailyBell.com

MUST LISTEN: On the Cusp of HISTORIC COMEX EVENTS — Turd Ferguson & Silver Doc Roundtable

Posted: 01 Dec 2013 08:18 PM PST

DON’T MISS THIS ONE: “We are on the cusp of something historic happening on the Comex,” says TF Metals Report’s Turd Ferguson.

In this roundtable discussion which also includes the Doc from Silver Doctors, we examine the strange recent purchase of gold contracts with a $3,000 strike price in 2015. We cover the PROVEN Gold and Silver manipulation with the London fix, we chat about the new gold-backed crypto-currency known as e-gold, and we finish with the gripping story of the very real drain of PHYSICAL from the Comex.

According to Turd, ‘We know that for the first time anyone can remember, the US banks are net long Comex gold futures, US banks meaning JP Morgan. And net long to the point of having CORNERED the paper gold market in New York because the position is so large. I’m talking the extent of 20% of open interest. And now we’re heading into the December delivery period…”

The Central Planners Most Terrifying Nightmare

Posted: 01 Dec 2013 07:30 PM PST

from KingWorldNews:

The two charts below dramatically illustrate the concepts about which we and others have been writing. The first is the inflation rate from 1958 until 1981 in the United States. Several historical moments are clearly visible. The first is the effect of the so-called "Guns and Butter" policy associated with the Johnson Administration. There was not enough money to fund the "Great Society" and the Vietnam War. So many key events occurred in that time frame.

Among them were the Coinage Act whereby the 90% silver coins were replaced with the metallic sandwiches that we have today. Second, Medicare was greatly expanded generating trillions of dollars of obligations for future taxpayers. Third, Social Security was placed "on-budget". A commission said that the projected deficit for 1968 was $2.1 billion, $4.3 billion or $8.1 billion depending upon the method chosen for calculation. The goal was to provide a "unified version" that would eliminate the lack of clarity.

Robert Fitzwilson continues @ KingWorldNews.com

Silver Update: Silver And Wrath

Posted: 01 Dec 2013 07:09 PM PST

from BrotherJohnF:

This was privately released to ‘members’ on 11/26/13.

Central Banker Admits Faith In "Monetary Policy 'Safeguard'" Leads To "Even Less Stable World"

Posted: 01 Dec 2013 06:22 PM PST

While the idea of the interventionist suppression of short-term 'normal' volatility leading to extreme volatility scenarios is not new, hearing it explained so transparently by a current (and practicing) central banker is still somewhat shocking. As Buba's Jens Weidmann recent speech at Harvard attests, "The idea of monetary policy safeguarding stability on multiple fronts is alluring. But by giving in to that allure, we would likely end up in a world even less stable than before."

 

Excerpts from Jens Weidmann - Europe's Monetary Union

Harvard, 11/25/13 (Full speech here)

In the eyes of many politicians, economists, at least if they are central bankers, cannot have enough arms now - arms with which they are to pull all the levers to simultaneously deliver price stability, lower unemployment, supervise banks, deal with sovereign credit troubles, shape the yield curve, resolve balance sheet problems, and manage exchange rates.

 

It is probably safe to say that this change in attitude is not just due to a sudden surge in the popularity of economists and central bankers. Rather, it reflects the widespread view that central banking has come to be the only game in town. And quite a few economists seem to agree with this notion.

 

To some, the notion that the primary goal of central banks is to keep prices stable has become old-fashioned. Against the backdrop of the financial crisis, they argue that financial stability has become just as important, if not more so, than price stability.

 

...

 

By tearing down the walls between monetary, fiscal and financial policy, the freedom of central banks to achieve different ends will diminish rather than flourish. Put in economic terms: Monetary policy runs the risk of becoming subject to financial and fiscal dominance.

 

Let me explain these mechanisms a bit more in detail, starting with financial dominance.

 

The financial crisis has provided a vivid example of how financial instability can force the hand of monetary policy. When the burst of an asset bubble threatens a collapse of the financial system, the meltdown will in all likelihood have severe consequences for the real economy, with corresponding downside risks to price stability.

 

In that case, monetary policy is forced to mop up the damage after a bubble has burst. And, confronted with a financial system that is still in a fragile state, monetary policy might be reluctant to embrace policies that could aggravate financial instability.

 

...

 

Public debt and inflation are related on account of monetary policy's power to accommodate high levels of public debt. Thus, the higher public debt becomes, the greater the pressure that might be applied to monetary policy to respond accordingly.

 

Suddenly it might be fiscal policy that calls the shots - monetary policy no longer follows the objective of price stability but rather the concerns of fiscal policy. A state of fiscal dominance has been reached.

 

Technically, fiscal dominance refers to a regime where monetary policy ensures the solvency of the government. Practically, this could take the form of central banks buying government debt or keeping interest rates low for a longer period of time than it would be necessary to ensure price stability. Then, traditional roles are reversed: monetary policy stabilises real government debt while inflation is determined by the needs of fiscal policy.

 

...

 

A lender-of-last-resort role would violate this principle of self-responsibility - in that same way as Eurobonds in this setting are at odds with it. Therefore, it would aggravate, rather than alleviate, the problems besetting the euro area.

 

...

 

The idea of monetary policy safeguarding stability on multiple fronts is alluring. But by giving in to that allure, we would likely end up in a world even less stable than before. This holds true especially for the euro area, where a Eurosystem acting as a lender-of-last-resort role for governments would upend the delicate institutional balance.

 

To disentangle the euro area's fiscal and financial conundrums, we should practice the art of separation - especially with regard to the sovereign-bank doom loop. Or let me put it this way: Rather than for monetary policy to waltz with fiscal and financial policy, we need to erect walls between banks and sovereigns.

 

Of course, Taleb's somewhat seminal piece on vol suppression remains a concerning glimpse of the inevitable.

ForeignAffairs

Barrick's Thornton said to seek China deal to rebuild gold miner

Posted: 01 Dec 2013 04:56 PM PST

By Liezel Hill and Matthew Campbell
Bloomberg News
Sunday, December 1, 2013

http://www.bloomberg.com/news/2013-12-01/barrick-s-thornton-said-to-seek...

Peter Munk built Barrick Gold Corp. into the world's largest gold producer by expanding into Africa and South America. Now former Goldman Sachs Group Inc. President John Thornton is betting on China to help revive the beleaguered company's fortunes.

At a Dec. 4 board meeting, Thornton will be confirmed as Barrick's next chairman, succeeding Munk, 86, who plans to retire at the Toronto-based company's next annual shareholders meeting after three decades, according to people familiar with the situation.

Thornton, 59, currently co-chairman, already helps to oversee long-term corporate strategy. As part of that remit, he's trying to establish partnerships with Chinese companies that may include investment in Barrick and future mining projects, said the people, who asked not to be identified discussing a private matter. China Investment Corp., the country's largest sovereign wealth fund, is among potential partners Barrick has met with, the people said.

... Dispatch continues below ...



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Jim Sinclair Plans Seminar in Boston on Dec. 7

Gold advocate and mining entrepreneur Jim Sinclair will hold his next seminar from 1 to 5 p.m. on Saturday, December 7, in the Boston suburb of Cambridge, Mass., at the Boston Marriott Cambridge at 50 Broadway in Cambridge. The admission fee will be $50. Details are posted at Sinclair's Internet site, JSMineSet, here:

http://www.jsmineset.com/2013/11/14/boston-qa-session-announced/



The leadership change at Barrick comes at the end of a difficult year for the company. It has lost 41 percent of its market value in 2013 while debt levels have soared after a slump in gold prices, rising operating expenses and a cost blowout at an $8.5 billion mining project in the Andes.

"Barrick needs to do whatever it can to get its debt paid down," said Rick de los Reyes, who manages about $1.1 billion at T. Rowe Price Group Inc. in Baltimore. "That balance sheet is going to be a really big problem."

Barrick has already taken steps this year to cut costs and improve its balance sheet. It raised $3 billion in a share sale last month, using some of the proceeds to repurchase bonds. Jamie Sokalsky, who started as chief executive officer in June 2012, has sold less-profitable gold mines and the company's energy arm and put other operations under review.

"They have way too many assets and many of them are legacy assets," Adam Graf, an analyst at Cowen Securities LLC in New York, said in an interview. "They should dispose of those assets and redeploy that capital."

With Thornton as chairman, there may be more changes ahead. A Wall Street banker without a mining background, he was behind the decision last year to bring in management consultant McKinsey & Co. to help evaluate Barrick's strategy, according to the people familiar with the situation. While he sees Barrick's top priority as remaining the leading gold producer, he's open to a rethink of the entire business, which may involve acquiring mining assets in other commodities, such as copper, they said.

Thornton's outside perspective may prove to be an advantage, said Don Reed, the CEO of Franklin Templeton Investments Corp., where he helps manage assets including Barrick shares.

"You don't always have to have tremendous experience at a given company to lead it," Reed said in an interview.

Thornton sees Barrick gaining an advantage by forming relationships with Chinese companies that can provide capital, engineering expertise and political influence, according to the people. He plans to use his connections to help seal a series of modest deals that may lead to a formalized partnership agreement, they said.

Barrick plans to issue an update after the Dec. 4 board meeting, said Andy Lloyd, a company spokesman.

Thornton spent 23 years at Goldman and was seen as a top contender to succeed Henry Paulson as CEO in the early 2000s, according to "Money and Power: How Goldman Sachs Came to Rule the World" (2011) by William D. Cohan. He departed in 2003 when it became clear Lloyd Blankfein would take the reins, according to the book.

After Goldman he headed to China, helping to start up a business leadership program at Beijing's Tsinghua University. He sits on the board of China Unicom (Hong Kong) Ltd., the country's second-largest mobile phone carrier, and is a member of China Investment Corp.'s international advisory board. He's also chairman of the board of trustees of the Brookings Institution, where he helped establish the John L. Thornton China Center.

That Chinese experience will be valuable at Barrick, said De los Reyes at T. Rowe Price. The country's economic expansion has made it the largest buyer of commodities from copper to iron ore. China overtook India this year to become the biggest consumer of gold.

Still, gold has slumped 25 percent in 2013 and is heading for its first annual decline in 13 years amid concerns about low inflation and the U.S. Federal Reserve curtailing debt purchases.

Despite that, Barrick is still Canada's most valuable mining company. It has remained independent while peers Inco Ltd. and Falconbridge Ltd. were taken over by foreign acquirers in the past seven years.

Barrick is also far from the only gold miner to struggle with lower metal prices. The world's largest gold producers have taken at least $26 billion of writedowns this year while also cutting spending and firing workers amid rising costs.

"That's not a recipe anyone envies," Templeton's Reed said.

Barrick currently operates two copper mines. One of them, Lumwana in Zambia, has disappointed. The mine was acquired when Barrick bought Equinox Minerals Ltd. in 2011 for C$7.3 billion ($6.9 billion). Barrick's results for the fourth quarter of 2012 included a $3 billion writedown on Lumwana after production costs were higher than expected.

Barrick had another setback in February when talks to sell its African Barrick Gold Plc (ABG) unit to state-owned China National Gold Group Corp. broke down.

The process foundered as the gold price declined, according to the people familiar with the situation. The experience was frustrating for China Gold. Dealing with Barrick was "like asking a tiger for its own skin," Tong Junhu, the general manager at the company's overseas division, said in an interview last month.

Barrick is still open to selling African Barrick, according to the people familiar with the situation. Barrick has already sold three Australian mines this year. The company and Goldcorp Inc., a Canadian rival, are trying to divest their jointly owned Marigold mine in Nevada, two people with knowledge of the efforts said Nov. 14.

Munk, a Hungarian immigrant who escaped the Nazis as a teenager, founded Barrick Resource Corp. as an oil and gas company before shifting to gold in 1983 with his first mine. Barrick has made at least 31 acquisitions since 1994, according to data compiled by Bloomberg. It became the industry leader when it bought Placer Dome Inc. in 2006 for about $10.2 billion including net debt, a record for a gold takeover.

"The ultimate goal is, in my case, to be the biggest," Munk said at a May 2011 conference organized by Bloomberg in Toronto. "Why would you be happy with halfway?"

That drive for scale spurred the decision to develop Pascua-Lama, a gold project 4,500 meters (14,700 feet) above sea level on the Argentina-Chile border. The estimated construction cost was $3 billion when development was approved in 2009. Barrick announced the suspension of construction work in October this year following cost overruns and an environmental dispute. By then the price tag had more than doubled.

Thornton joined Barrick as a director in February last year and was appointed as co-chairman in June of 2012. His $17 million compensation package proved to be controversial. An $11.9 million signing bonus was described by Canada's six largest pension fund managers in April as a "troubling precedent."

At Barrick's annual shareholders meeting that month, a non-binding resolution on executive pay had 85 percent of votes cast against it. Defending his co-chairman, Munk told the meeting that Thornton had useful contacts in China and that Barrick needed him to secure access to governments and protect against resource nationalism, the "ultimate threat to the very lifeline of the mining industry."

Pay hasn't been the only focus of investors' ire toward Barrick. Ontario Teachers Pension Plan said in October at least two-thirds of the miner's board should be independent. Howard Beck, a lawyer, and former Canadian Prime Minister Brian Mulroney have been directors for 18 years, while Munk's son, Anthony, has been on the board since 1996.

Barrick said in a Nov. 8 filing it's considering changes to executive pay and a "rejuvenation" of the board.

"I'd hope that where all this is going to come out is with a better governance process at Barrick, more independent directors, much more attention to having reasonable levels of compensation," said Michael Sabia, the CEO of Caisse de Depot et Placement du Quebec, Canada's second-largest public pension fund.

* * *

Join GATA here:

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

http://www.cambridgehouse.com/event/vancouver-resource-investment-confer...

* * *

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

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

Or by purchasing a colorful GATA T-shirt:

http://gata.org/tshirts

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

http://gata.org/node/wallstreetjournal

Help keep GATA going

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

http://www.gata.org

To contribute to GATA, please visit:

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

UK Royal Mint Working On Plans To Issue Gold-Backed Physical Bitcoins

Posted: 01 Dec 2013 04:38 PM PST

The implicit, and ever more explicit, institutional acceptance of the dominant cryptocurrency Bitcoin (we say dominant because as we pointed out last week, there has been an unprecedented spike of digital currencies one can pick and choose from) continues when following the surge in vendors willing to transact in BTC over Thanksgiving, the latest news comes from the birthplace of the modern central bank, the UK, where we learn that none other than the UK Royal Mint has been working on plans since this summer to issue physical Bitcoins in collaboration with the Channel Island of Alderney.

But where the story gets downright surreal is that as the FT reports, the same symbolic Bitcoin token issued by the Royal Mint "would have a gold content – a figure of £500-worth has been proposed – so that holders could conceivably melt and sell the metal if the exchange value of the currency were to collapse." In brief: a perfect, and utterly incomprehensible, fusion of (opposing) hard, soft and digital currencies all rolled into one...

From the FT:

The tiny Channel Island of Alderney is launching an audacious bid to become the first jurisdiction to mint physical Bitcoins, amid a global race to capitalise on the booming virtual currency.

 

The three-mile long British crown dependency has been working on plans to issue physical Bitcoins in partnership with the UK's Royal Mint since the summer, according to documents seen by the Financial Times.

 

It wants to launch itself as the first international centre for Bitcoin transactions by setting up a cluster of services that are compliant with anti-money laundering rules, including exchanges, payment services and a Bitcoin storage vault.

So, convert a digital currency into fiat, issue plastic (or some other material) tokens (appropriately covered in some goldish color) representing "value" because suddenly the currency (supposedly) has the blessing of central banks, and then store them in some basement? Brilliant.

Just how is the UK Royal Mint involved?

The special Bitcoin would be part of the Royal Mint's commemorative collection, which includes limited edition coins and stamps that are normally bought by collectors. It would have a gold content – a figure of £500-worth has been proposed – so that holders could conceivably melt and sell the metal if the exchange value of the currency were to collapse.

Wait, what: gold-backed Bitcoins? If so, that would be truly revolutionary because for the first time a Treasury (and by implication, a central bank) is effectively hinting that not only are they willing to fiat-ize Bitcoin, but also have the symbolic BTC token (after all Bitcoin is a digital currency by definition) serve as a commodity trap. Because once enough gold-backed physical Bitcoins are locked up in some basement in the UK, who has the master key? That's a rhetorical question by the way.

Naturally, the UK Mint is not quite eager to disclose full details while the plan is still being finalized:

David Janczewski, head of new business at the Royal Mint confirmed it had been approached by the finance minister of Alderney to "explore the possibility of manufacturing a physical commemorative coin with a Bitcoin theme".

 

"Discussions have not progressed further and at this stage it remains nothing more than a concept," he added.

 

But the controversy around Bitcoin has made the Alderney plan a sensitive subject. The Treasury, which owns the Royal Mint, declined to comment on the plans. George Osborne, the British chancellor, also holds the title of Master of the Mint.

Since there is understandably much confusion over what the minting process of a physical gold-backed token representing a digital currency, with the backing of an entity that does the bidding of an issuer that only believes in fiat currencies, here is the FT with the blow by blow.

An independent company will provide the Bitcoins. If the price plunged, neither Alderney nor the Royal Mint would lose anything.

 

The company would put the Bitcoins in an escrow account at an agreed price.

 

Meanwhile, the Royal Mint would take customers' orders for its minted Bitcoins and receive money from those coin sales.

 

The virtual Bitcoins backing the physical coins would be held in digital storage facilities by Alderney.

 

The Mint would issue the commemorative Bitcoin, paying for the value of the gold content itself. Alderney would receive royalties from sales of the coins.

 

Coins could be redeemed for sterling at any point in Alderney for the price of a Bitcoin on that day.

All we can do at this point is sit back in wonder and amusement as we hit the pinnacle of monetary confusion, whereby the UK Royal Mint, willing to take full advantage of retail confusion, will mix hard, soft and digital currency, and produce a product... that is locked away on an island that belongs to the UK.

And all we can say is "brilliant", because if there is a better plan to meld the sentiment of both hard and digital-currency (and hence, anti-fiat) advocates, and to redirect it in a "fiat" pathway, we have yet to hear it.

Kitco News interviews GATA Chairman Murphy at San Francisco conference

Posted: 01 Dec 2013 03:57 PM PST

7p ET Sunday, December 1, 2013

Dear Friend of GATA and Gold:

Daniela Cambone of Kitco News interviewed GATA Chairman Bill Murphy at the Metals and Minerals Investment Conference in San Francisco this week, covering the prospects for gold and silver amid continuing price suppression. The interview is a little more than 3 minutes long and can be watched at the Kitco Internet site here:

http://www.kitco.com/news/video/show/Metals--Minerals-2013/493/2013-11-2...

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



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Join GATA here:

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

http://www.cambridgehouse.com/event/vancouver-resource-investment-confer...

* * *

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

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

Or by purchasing a colorful GATA T-shirt:

http://gata.org/tshirts

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

http://gata.org/node/wallstreetjournal

Help keep GATA going

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

http://www.gata.org

To contribute to GATA, please visit:

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



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Four Arabian Gulf countries said planning common currency

Posted: 01 Dec 2013 03:43 PM PST

Four GCC Countries to Announce Common Currency by End of December

From Gulf News
Dubai, United Arab Emirates
Sunday, December 1, 2013

http://gulfnews.com/business/economy/four-gcc-countries-to-announce-comm...

Four Gulf Cooperation Council countries will announce the introduction of a common currency by the end of December, a Bahraini daily reported on Sunday.

The common currency to be announced by Bahrain, Kuwait, Qatar, and Saudi Arabia will be pegged to the dollar, a source told the Akhbar Al Khaleej newspaper.

"The decision to peg the Gulf currency to the dollar is political and is not related to the economy," the source said.

"From an economic point of view, it would have been better to peg the new currency to a basket of currencies because the volume of trade of the Gulf states with the countries of the European Union is much larger than that of their commerce with the United States. Gulf exports of oil to the European Union are estimated to constitute about 70 per cent of European imports," the source said.

... Dispatch continues below ...



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and which stocks to buy now

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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:

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The daily did not identify the sources but said it was close to Gulf decision-making circles.

Oman and the UAE, the other two members of the six-country Gulf council set up in 1981, are not likely to join the common currency in the near future, the source added, without divulging the reasons for the same.

"I do not see any need for a common Gulf currency if it is not sovereign. Even though the GCC states have huge financial reserves, their currencies are not listed on the world's reserve currency list because they are not producing states," the source said.

The GCC countries have been discussing a currency union similar to the Eurozone for more than 15 years.

Several economists in the Gulf have been calling for dropping the GCC countries' long-entrenched peg to the dollar and consider moving to a more flexible exchange rate that will help them better face highly possible inflation risks and economic crises.

In September an official of the European Central Bank said that the GCC should not introduce a common currency before its members have a clear common objective.

Yves Mersch, an executive board member of the ECB, reportedly said at a global financial summit that no union of states would be ready for a common currency if there was no political consensus.

* * *

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* * *

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Russian government radio cites GATA in report on gold market manipulation

Posted: 01 Dec 2013 03:21 PM PST

Germany's Regulators Investigate Manipulation in the Gold Market

By Valentin Mandrasescu
Voice of Russia, Moscow
(Russian Government Radio)
Friday, November 29, 2013

http://voiceofrussia.com/news/2013_11_29/Germanys-regulators-investigate...

German financial regulator BaFin has started an official investigation of suspected manipulation of benchmark gold and silver prices set by a number of international banks.

The information regarding the investigation was reported by the Wall Street Journal Deutschland. WSJ journalists got an official confirmation from a BaFin spokesman: "Apart from Libor and Euribor, BaFin is also looking into other benchmark setting procedures at individual banks such as for gold and silver prices."

During the last year, the biggest global banks have been found guilty of rigging benchmark lending rates and manipulating the world's interest rates derivatives market, which involves trading in contracts that have a total notional value of tens of trillions of dollars.

... Dispatch continues below...



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Buy metals at GoldMoney and enjoy international storage

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

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It is not surprising that after finding out that banks rig Libor benchmark rates, Euribor benchmark rates, settlement values for currencies, and a number of reference prices in the energy sector, regulators suspect that the banks may manipulate the gold and silver markets.

The BaFin spokesman mentioned that the German regulator is not alone in its suspicions and that there are similar investigations taking place in the United Kingdom and the United States, without providing further details.

During the last several years, a number of non-government organizations and market participants have come up with allegations that the big investment banks are actively manipulating the benchmark rates for gold and silver. So far these allegations haven't been proven in court, but it should be taken into account that none of the whistleblowers, NGOs, or market participants have the legal and administrative resources of state regulators like BaFin, the U.S. Securities and Exchange, Commission, or the United Kingdom's Financial Conduct Authority.

NGOs like the Gold Anti-Trust Action Committee have repeatedly tried to make regulators investigate the gold markets but they had no success until the Libor scandal broke out.

Investigations that revealed the massive manipulations and cartel-like schemes in the interest rate and currency markets have followed a similar course. They started with allegations coming from outside observers, and then whistleblowers from the banks helped the investigators prove that the banks were involved in massive market manipulations.

* * *
Join GATA here:

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

http://www.cambridgehouse.com/event/vancouver-resource-investment-confer...

* * *

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

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

Or by purchasing a colorful GATA T-shirt:

http://gata.org/tshirts

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

http://gata.org/node/wallstreetjournal

Help keep GATA going

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

http://www.gata.org

To contribute to GATA, please visit:

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



ADVERTISEMENT

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...


Why It's Going To Be A Whole Lot Worse Than In The 1930s

Posted: 01 Dec 2013 02:33 PM PST

As Mike Maloney forecast in the mid-2000s, the roller-coaster ride continues in world markets and economies. His - so far - spot on projection that "first the threat of deflation (1), followed by a helicopter drop (2), followed by big reflation (3), followed by a real deflation (4), and then followed by hyperinflation (5)," appears to be rotating from stage 3 to stage 4 (as we noted here). However, as Maloney explains in this brief clip, while we have seen great deflations before, in the '30s one-third of the monetary base was backed by gold, now we virtually nothing as "people do not understand the scale of the emergency that's going on right now."

 

Five brief minutes on a Sunday... watch!

 

Currency Suicide: Japan Experiencing The Ugly Effects Of Its Own Policy

Posted: 01 Dec 2013 10:53 AM PST

Exactly a year ago, Japan announced its monstrous monetary stimulus, beating even Helicopter Bernanke who had just started its fourth round of QE. The Japanese government was fed up with deflation and decided to stimulate their economy with massive liquidity (QE).The Nikkei index started an historic rally with a gain of 50% in less than half a year (see barchart on the chart below). The value of the Yen dropped like a stone (see black line on the chart below). The aim of a weaker Yen was to stimulate exports. So it should have been a win-win-win situation, at least on paper.

Japanese yen vs NIKKEI 2013 money currency

We are lied to told every day again that weak currencies are a good thing as they stimulate export and increase the economic output (rising GDP). While that could be true, there are a lot of conditions and consequences that are associated with it. One condition, for instance, is that all other countries should keep the value of their currency flat, which is obviously not the case in Currency War III.

Patrick Barron explains how mainstream economists believe that currency devaluation exports unemployment to its trading partners, apart from enhancing sales from exports. “They call for their own countries to engage in reciprocal measures. Recently Martin Wolfe (Financial Times in London) and Paul Krugman (New York Times in the US) both accuse their countries' trading partners of engaging in this "beggar-thy-neighbor" policy and recommend that England and the US respectively enter this so-called "currency war" with full monetary ammunition to further weaken the pound and the dollar.” This is no currency war, this is currency suicide. Source: Mises.org.

One of the consequences of Japan’s currency debasement is now starting to show its ugly head. The cheaper Yen may be intended to stimulate exports but it simultaneously makes imports more expensive.

From Japan Times:

Japan is likely to post a record trade deficit in fiscal 2013 because the weaker yen and soaring demand for energy have driven up the cost of importing fossil fuels, according to a projection by a trade business group.

The deficit is expected to expand to ¥12.1 trillion during the year through next March, much worse than the ¥8.18 trillion in fiscal 2012 and the largest since comparable data became available in fiscal 1979, the Japan Foreign Trade Council Inc. said Thursday.

The economy will log a trade deficit for the third straight year, according to the organization, which is composed of companies involved in international trade activities.

Exports in fiscal 2013 are forecast to rise 9.8 percent from the previous year to ¥70.18 trillion, sustained by the yen's fall, while imports are expected to climb 14.1 percent to ¥82.28 trillion, JFTC said.

A sliding yen usually supports exports by making Japanese products cheaper abroad and boosts the value of overseas revenues in yen terms, but it also increases import prices. Japan depends on imports for more than 90 percent of its energy needs.

Unfortunately, the economy is not as simple as central planners pretend it to be, at least not in the 21st century. The globally interconnected world, the huge volumes of derivatives (currently tenfold the global GDP), the increasingly complex financial world, the easy money policies from competing regions … all play an almost unpredictable role. We have not seen to date a model from the academicians at the central banks taking those variables into account.

Speculative effect

The consequence in the real world of the weaker Yen is not only limited to more expensive imports. Another ugly effect is that the speculative effect kicks in, accelerating the “unintended consequences.” As the Yen got back into is declining trend, hedge funds took notice of this and are now betting on a continuing decline. As Zerohedge notes: “While ‘economists’ are less convinced that the JPY will weaken further, and even the Japanese officials somewhat jawboning the currency’s stability now, futures traders have pushed ‘net shorts’ (i.e. bets against the JPY) to their highest since July 2007. Between the possibility of a Fed taper (stronger USD) and fading economic gains (more BoJ QQE), it would appear that Japan’s $70bn per month buying program is not going to shrink anytime soon. While the world has grown accustomed in recent months to ‘hating’ gold – despite the ECB and BoJ rumors of more money-printing and an inevitable un-taper by the Fed – for now, the ‘dislike’ of the JPY has exploded.”

Precious metals investors and enthusiasts all know what can happen when hedge funds go excessively short.

japanese yen vs gold short positions november 2013 money currency

 

The sentiment indicators provide a confirmation of the weak Yen. As the latest Sentimentrader report shows, the Yen carries the most negative sentiment of the major currencies.

currencies sentiment november 2013 money currency

Precious metals sentiment is not much better, but that is not surprising, at least not in the worst year for the metals since four decades.

metals sentiment november 2013 money currency

Key takeaways

What is the key take-away from this evolution? We see several conclusions and learnings:

  1. Currency wars are here to stay. As Rickards has noted, currency wars are like real wars; there is not a continuing war all the time but there are different battles over time. Prepare for more to come, even more importantly, expect much worse in the current decade.
  2. Do not rely on the narrative of governments. They have their own interest and they will only tell you half the truth. Currency devaluations have a very damaging effect. They are simply one of the many monetary tools of central banks hoping to solve a structural problem. Our structural problems are so big that a normalization of economic conditions will come with a lot of pain and “unintended” consequences.
  3. Gold’s key benefit, i.e. the ultimate monetary insurance policy, remains intact. The currency war seems under control. As the sentiment figures show, the dollar is still the best of all bad currencies. When the dollar starts sliding, gold owners will have the best protection. It could still take several years before that happens, as the strength of the petrodollar hegemony should not be underestimated. It is better to be prepared in advance.

Be prepared. The fundamental outlook is NOT one of an economic recovery.

Noonan on Fiat Currencies, Bitcoins, Gold & Silver

Posted: 01 Dec 2013 09:36 AM PST

Given the gross manipulation of both gold and silver, once this artificial reversebuy-gold bubble bursts, the results will be equally distorted to the upside.  Where not too long ago, one often heard $5,000 to $10,000 the ounce for gold, the numbers have accelerated to as high as $50,000 and $500 the ounce for gold and silver, respectively.

The above are edited excerpts from the original article* by Michael Noonan (edgetraderplus.com) from his original article* entitled Gold And Silver – Reverse Bubble. Huge Rally When Broken. Note Bitcoin Results. 

[The following is presented by Lorimer Wilson, editor of www.FinancialArticleSummariesToday.com and www.munKNEE.com and the FREE Market Intelligence Report newsletter (sample hereregister here). The excerpts 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.]

Noonan goes on to say in further edited excerpts:

If anyone wants a glimpse into what the future holds for gold and silver, just look at how Bitcoin has rallied to $1,200+!!!  Not even two weeks ago, it traded at $460, and now, it is almost worth the same as an ounce of gold…It clearly shows the appetite for an uncontrolled (by central banks and governments) alternative to any fiat currency.  The world is finally waking up to the central banker's huge fiat Ponzi scheme.

Bitcoin is a digital currency, aka a crypto-currency,  that has no intrinsic value.  For now, it is an anonymous e-currency taking the world by storm.   What seems to be the strongest point for acquiring Bitcoin is that it is continually going up in value, and it is momentum, not fundamentals, that keeps carrying the day. [The aforementioned being said,] it runs the risk of becoming a Tulipcoin.

Putting aside whether the novelty of Bitcoin can survive any number of stress tests, which it has not yet had to do, any way possible for operating outside of the existing central banking cartel's fiat scheme has enormous appeal.  We do not see Bitcoin going up in value so much as the fiats are eroding in confidence.  Where it used to take $400 in fiat Federal Reserve Notes, (FRN) to buy a Bitcoin, it now takes over $1,200 FRNs to buy the same coin.  This exposes the downside to fiats.

This is the good news for gold and silver holders.  Once the suppressive manipulation bubble bursts for gold and silver, the number of fiats it takes to buy an ounce of gold…or silver…will rise in value, as in true measured value.  Bitcoin is the precursor for how reality will immediately set in and catapult precious metals that will likely leave Bitcoin in the dust.

As to why the Western central bankers continue to successfully manipulate/suppress gold and silver is open to debate.  In large, central bankers set and control currencies world-wide, and most people are oblivious to the insidious nature of fractional reserve banking and the corrupt criminal enterprises that run them.  They do it because they operate with impunity and get away with it.

China is becoming an unexpected center stage protagonist for ridding the world of the fiat "dollar," once and for all.  It has become their mission, one in which they will not fail….China will become the wake-up that will show the world how America is, and has been for a few decades, a Third World country living off the fumes of a once thriving nation….

There has not been any notable change in the charts since last week. [Go here to take a look with a full explanation of the situation or here* for a brief update.] Price could still go marginally lower and not break the previous zones of support.  In any down trend, sellers have proven themselves.  The onus is on buyers to demonstrate the ability to effect change.  For now, there is no evidence that buyers are stepping in and taking over. [As such,] the ongoing "fate" of precious metals remains in the central bankers pockets.

The dramatic rise in Bitcoin is the best reminder for all those buying and holding physical gold and silver, for whatever length of time and at whatever price, better days are assured. It is just a matter of time.

[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://edgetraderplus.com/market-commentaries/gold-and-silver-reverse-bubble-huge-rally-when-broken-note-bitcoin-results

Selection of Previous Noonan Articles:

1. Noonan: Charts Say NO End In Sight for Decline In Gold & Silver Prices

3 Comments

No matter what the latest "news" development is for PMs that paints a rosy picture, those in the fundamentalist camp are looking through rose-colored glasses to expect change in the near future. The charts for gold & silver continue to tell a more accurate story that belie all known fundamentals, and the charts shown here depict a market in decline with no apparent end in sight. Read More »

2. Noonan on Gold & Silver: "When Fundamentals Fail, Charts Prevail" & This Is What They're Conveying

1 Comment

171686-gold-silver-bars

Fundamentals are relative, charts are absolute. They accurately reflect all that is going on, regardless of reasoning/motivation and…right now, the charts are letting us know that higher PM prices are unlikely to occur anytime soon. Barring some kind of "overnight surprise" that will shock the markets, odds favor lower prices over higher prices unless and until demand shows up in chart activity. Read More »

3.  Noonan: When Will Silver Rise to Higher Values? Here's the Answer

1 Comment

Silver-Bars

It takes time to turn a market around, and silver is in that process. There is no degree of certainty that a bottom has been reached, but there exist at least a probability the recent lows may hold. Whether the lows hold or not, one cannot lose sight of why accumulating silver has been so important. When price finally accelerates higher, the trying of one's patience will quickly be forgotten and all will be well. Read More » 

4. Noonan: Charts are Infallible! Here's Why & What They're Saying About Gold & Silver

Leave a comment

gold-silver

Some of the finest and most highly regarded minds in the world of PMs have been saying gold and silver are going higher…[but] the charts have "said" otherwise, and that has been the correct read…The fundamentals may be as bullish as can be [but] the charts are sending a different message.  Read More »

5. Noonan: Gold & Silver Could Move Sideways for Another 1-2 Years – Here's Why

Using past history of how price responds, it is likely that gold, and silver, could move sideways for another year or two.  While this flies in the face of so many current, supposedly "expert", opinions [mine is not based on opinion but, rather, is strictly based on the facts as conveyed by the charts. Take a look and you will see that too!] Read More »

6. Noonan: These Charts Clearly Show What's Happening With Gold & Silver – Take a Look

Below is a perfect example of how the charts timed the movement in the price of gold and silver over the past week. Yes, you CAN time the market as this article clearly demonstrates! When the market "talks," we listen.] Read More »

 

The window of opportunity to buy physical gold and silver continues to narrow.  Like the housing market top was known to be coming, when it came, those who waited too long regretted it.  When the bottom for the physical PMs is known as a certainty, those who waited for a "better price" may also regret that decision.  It is all about choice. Read More »

 

In an election, it does not matter if voter turnout is high or low, the outcome is determined by the actual votes cast.  The same holds true for the markets.  Only those who make an actual buy or sell decision determine the outcome of the market trend. The market "voters" turn up in charts, recorded in the price range, close, and volume. Collectively, a "story" unfolds, and it usually is an accurate one as it does not include any opinions. Opinions do not matter. Articles written about fundamentals, pundit declarations, etc., all fall under the category of opinions. The market is the best source for information, and that is a fact. Read More »

 

…Fiats have an unbroken track record of failing throughout all of history. Gold also has an unbroken track record of being a store of value for over 5,000 years.  Yes, there have been hiccups along the way, and we are in one now.  It is what it is, but what it is is also an incredible buying opportunity at "fire sale" prices….[That being said,]  a look at the charts of the paper-tracked PM market [beg the question]  … "Where's the beef?"  Where is the substance of anything?  We see none in the charts. Take a look. Words: 610; Charts :4 Read More »

 

Technical analysis is a measure different from fundamental analysis…and we qualifying our approach with a specialized subset of technical analysis.  How so? We read price and volume behavior, over time, in the form of developing market activity. It is what one sees on a chart, price ranges, close locations, volume, time factor[s], but no more. Below are charts that suggest that the weakness in silver may be coming to an end, sooner now rather than later, but that for now, it is what it is – and what is, is reality. Read More »

 

Those environmental and human costs are central banking's, not gold's

Posted: 01 Dec 2013 09:34 AM PST

12:33p ET Sunday, December 1, 2013

Dear Friend of GATA and Gold:

How studiously Western journalists strive to miss the crucial point about gold.

One of them, Matthew Hart, who is touring news media outlets to promote his new book about the monetary metal, whose excerption in Vanity Fair magazine was brought to your attention a couple of weeks ago --

http://www.gata.org/node/13233

-- went on National Public Radio in the United States for five minutes yesterday and lamented the extreme human and environmental costs of getting the metal out of the ground. Audio and a transcript of the interview are posted at NPR's Internet site here:

http://www.npr.org/2013/11/30/247915978/gold-ponders-the-glittering-meta...

NPR's interviewer, Scott Simon, eagerly suggested that the metal isn't worth the trouble: "Hearing what it takes to get gold out of the ground might make people look down at, let's say, a gold wedding band on their finger and wonder if it's really worth it."

Yes, Mr. Simon, let's stop mining gold and continue to allow central banks to set the value of all capital, labor, goods, and services in the world -- and not only to set those values but to set them surreptitiously and undemocratically.

Of course NPR won't be doing a segment about the cost of central banking any time soon.

Yes, the cost of gold extraction is huge, both the environmental cost and the human cost, and those costs are not adequately covered by the market price of the metal itself. But that's not the fault of gold or the miners or the terminally obtuse mining industry but the fault of government policy to suppress the gold price and thereby preclude gold's use as a currency competing with government currencies, policy long documented by GATA here:

http://www.gata.org/taxonomy/term/21

A free-market price for gold would more than cover the environmental and human costs of getting it out of the ground. Those environmental and human costs are actually not the costs of gold mining but the costs of central banking.

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



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Jim Sinclair Plans Seminar in Boston on Dec. 7

Gold advocate and mining entrepreneur Jim Sinclair will hold his next seminar from 1 to 5 p.m. on Saturday, December 7, in the Boston suburb of Cambridge, Mass., at the Boston Marriott Cambridge at 50 Broadway in Cambridge. The admission fee will be $50. Details are posted at Sinclair's Internet site, JSMineSet, here:

http://www.jsmineset.com/2013/11/14/boston-qa-session-announced/



Join GATA here:

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

http://www.cambridgehouse.com/event/vancouver-resource-investment-confer...

* * *

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

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

Or by purchasing a colorful GATA T-shirt:

http://gata.org/tshirts

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

http://gata.org/node/wallstreetjournal

Help keep GATA going

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

http://www.gata.org

To contribute to GATA, please visit:

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

Morgan manipulates gold market, maybe China does too, Casey's Bud Conrad says

Posted: 01 Dec 2013 09:06 AM PST

12:04p ET Sunday, December 1, 2013

Dear Friend of GATA and Gold:

Maintaining grossly disproportionate positions in the gold futures market, JPMorganChase is manipulating the market and governments may be part of the manipulation, Casey Research's chief economist, Bud Conrad, tells Dan Ameduri of Future Money Trends in an interview done a few days ago at the Metals and Minerals Investment Conference in San Francisco and posted today. Conrad adds that a country that is accumulating gold -- presumably China -- might want to smash the futures price down to facilitate its acquisition of real metal, as by liquidation of shares in the gold exchange-traded fund GLD, a speculation recently offered by Eric Sprott of Sprott Asset Management in Toronto and William Kaye of Pacific Group in Hong Kong.

Conrad's interview with Ameduri is 11 minutes long and it's posted at Future Money Trends here:

http://futuremoneytrends.com/blog/?p=13729

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:

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

http://www.cambridgehouse.com/event/vancouver-resource-investment-confer...

* * *

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

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

Or by purchasing a colorful GATA T-shirt:

http://gata.org/tshirts

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

http://gata.org/node/wallstreetjournal

Help keep GATA going

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

http://www.gata.org

To contribute to GATA, please visit:

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



ADVERTISEMENT

Buy metals at GoldMoney and enjoy international storage

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

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China is fully aware of gold price suppression and planning to overthrow it

Posted: 01 Dec 2013 08:29 AM PST

11:36a ET Sunday, December 1, 2013

Dear Friend of GATA and Gold:

Back in October gold researcher Koos Jansen and Jan Skoyles of The Real Asset Co. in London called attention to commentary by Zhang Jie, deputy editor of the Chinese publication Global Finance and a consultant to the China Gold Association, which cited the Federal Reserve's manipulation of the gold market to protect the U.S. dollar's standing as the world reserve currency.

Jansen has obtained a much better English translation of this Chinese commentary, and it includes this observation about gold leasing by Western central banks: "Through continuous gold leasing the gold in the market can be circulated and produce derivatives, creating more and more paper gold. This is very significant for the United States. Gold leasing is a major tool for the Federal Reserve and other central banks in the West to secretly control and regulate the gold market, creating gold credit derivatives and global credit conflict."

... Dispatch continues below ...



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The new translation, headlined "Gold Leasing Is a Tool for the Global Credit Game," is posted at Jansen's Internet site, In Gold We Trust, here:

http://www.ingoldwetrust.ch/gold-leasing-is-a-tool-for-the-global-credit...

Jansen also has posted two other Chinese commentaries demonstrating that China sees gold as the center of its own and the world's monetary system.

One commentary is by Sun Zhaoxue, president of China National Gold Corp., the country's biggest mining company, who writes:

"Gold now suffers from a 'smokescreen' designed by the United States, which stores 74 percent of global official gold reserves, to put down other currencies and maintain U.S. dollar hegemony. Going to the source, the rise of the U.S. dollar and British pound and later the euro from a single-country currency to a global or regional currency was supported by their huge gold reserves.

"Especially noteworthy is that in the course of this international financial crisis, the United States shows a huge financial deficit but it did not sell any of its gold reserves to reduce debt. Instead it turned on the printer, massively increasing the U.S. dollar supply, making the wealth of those countries and regions with foreign reserves mainly denominated in U.S. dollars quickly diminish, in effect automatically reducing its own debt."

Sun's commentary, written in 2012, is headlined "Building a Strong Economic and Financial Security Barrier for China" and it's posted at In Gold We Trust here:

http://www.ingoldwetrust.ch/building-a-strong-economic-and-financial-sec...

The other Chinese commentary posted by Jansen was written this year for the Agricultural Bank of China by Liu Zhongbo, notes the attempt of the German Bundesbank to repatriate its gold from the Federal Reserve Bank of New York and the increase of gold reserves by other central banks, and concludes: "Because gold has capabilities to absorb external economic shocks, growth of its use in the international monetary system will be imminent." That commentary is headlined "ABC Bank: Run on the Fed Highlights the Importance of Gold Reserves" and can be found at In Gold We Trust here:

http://www.ingoldwetrust.ch/abc-bank-run-on-the-fed-highlights-the-impor...

As GATA often has noted, Western gold price suppression has been cited in reports by Chinese news organizations and these reports even have been conveyed to the U.S. State Department in Washington by the U.S. embassy in Beijing:

http://www.gata.org/node/10380

http://www.gata.org/node/10416

That is, China knows all about Western gold price suppression and the U.S. government knows that China knows.

Indeed, while financial authorities and mainstream financial journalists in the West just scoff at complaints of gold price suppression when they even deign to take notice of them, China understands gold price suppression to be the primary objective of Western central banking and is designing its own policies to overthrow it.

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

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Relax! Take Stock Market Bubble Warnings With a Grain of Salt – Here’s Why

Posted: 01 Dec 2013 08:10 AM PST

Bubble predictions are headline-grabbing claims attract reader/viewership andbubbles push more than a few worried individuals to act but, like all forecasts, these bubble warnings should be taken with a grain of salt. [Here's why.]

So says Eric D. Nelson, CFA (servowealth.com) in edited excerpts from his original article* entitled Talk of a Stock Market Bubble is Baloney.

[The following is presented by Lorimer Wilson, editor of www.FinancialArticleSummariesToday.com and www.munKNEE.com and the FREE Market Intelligence Report newsletter (sample here – register here). The excerpts 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.] 

Nelson goes on to say in further edited excerpts:

In case you haven't noticed, there has been a surge in market forecasts lately claiming that the recent run up in prices has resulted in a stock "bubble". There is no universal definition of what actually constitutes a bubble, so we'll settle for the vague description of "a condition where market participants drive stock prices well above their value in relation to some system of stock valuation." The fear of a bubble, of course, is that when the euphoria ends, prices will fall to more pedestrian levels resulting in a significant loss for existing investors who don't bail out first.

Pundits have all sorts of valuation metrics they use to compare stock prices to historical trends—from simple one-year price/earnings multiples to "smoothed" ten-year earnings averages relative to price. But none of them provide much accuracy in terms of signaling the precise time to enter and exit the market. The best we can say about them is when valuations are relatively high, future returns may be a bit lower than average and vice versa.

Probably the best method of "bubble detection", to the extent such a thing is even possible, is to simply observe an investment's recent past performance history to measure how far in excess of the long-term average it has been. For example:

  • Gold experienced a ten-year run starting in 1971 where it returned almost 32% per year.
  • US small cap stocks earned 27% per year for the decade ending in 1984.
  • Japanese stocks produced over 28% per year returns in the 1980s.

All of these results were well above long-term expectations and unsustainable, as each market eventually "reverted to the mean." Have we reached this point again?

Table 1 below looks at three different investment portfolios: a traditional US total stock index, followed by two more diversified asset class mixes—an all-stock allocation ("Equity") and a balanced stock and bond combination ("Balanced").

For the recent ten-year period, investment returns have been healthy despite the debilitating setback in 2008. The US Total Stock Index earned almost 8% per year. This is far from an alarming rise in prices, as the average over the previous 75 years was 1.7% higher, at +9.6% per year. So far, so good. If lower-than-average returns have created a market bubble, that would certainly be the first time.

How about for more diversified asset class portfolios? They've certainly done better than a simple total stock index, but this has always been the case.

In the recent period, the "Equity Asset Class Mix" earned a +10.3% annual return and the "Balanced Asset Class Mix" earned +8.7% per year but these results were both 1.6% per year lower than their long-term historical average using US-only indexes due to availability. What hasn't changed in either period is the spread of outperformance for the asset class mixes relative to the total stock index—about +2.4% in each period for the equity version, and +0.8% in each period for the balanced version. Of the two, arguably the more impressive result is the balanced mix. Despite its lower level of outperformance, it achieved this feat with about 40% less risk than the US Total Stock Index in each period.

Warren Buffet once said something to the effect that forecasts say more about the person making them than the actual claim itself, and that certainly holds true for bubble predictions. These are headline-grabbing claims that are sure to attract reader/viewership and more than a few worried individuals who will be pushed to act but, like all forecasts, these bubble warnings should be taken with a grain of salt.

We have yet to develop a sure-fire method for predicting when the stock market will take a tumble and, even in cases where extreme and seemingly-excessive price increases do occur, they can continue for much longer than anyone would assume, rendering early action more costly than no action.

In just the last two decades, for example, we've seen Nobel Prize-winner Professor Robert Shiller predict both the tech stock and real estate bubbles. Unfortunately, his first warnings were about five years early in each case, and we watched both those markets appreciate another 100% (in the case of the S&P 500 and REIT index) prior to eventually falling. In neither case did subsequent declines come close to retesting the market levels seen when his prognostications were first made.

Conclusion

As for the current state of the global equity markets, things appear to be pretty normal. Recent returns (last 10 years) have been about what we'd expect and within a small margin of error around the longer-term historical perspective. More diversified asset class portfolios have produced a sizable advantage over traditional total stock indexes, or produced similar returns with significantly less risk, but this too is par for the course. So simply put—talk of a stock market bubble is baloney….

[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://servowealth.com/resources/articles/talk-stock-market-bubble-baloney (Copyright © Servō Wealth Management)

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1. Grantham: No Market Bubble for a While – But It's Coming!

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2. Taking the Temperature of the U.S. Stock Markets: What's Hot, What's Not

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3.  Stock Market Bubble & Coming Recession? These Charts Say Otherwise

The real value of the stock market is positively correlated, over time, with the amount of freight hauled by the nation's trucks (in other words, the physical size of the economy has a lot to do with the real, inflation-adjusted value of the economy) and the latest numbers (see chart) strongly suggest that we are not in a stock market bubble. Read More »

4. The Stock Market: There's NOTHING to Be Bearish About – Take a Look

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There's nothing to be bearish about regarding the stock market these days. I've reviewed my 9 point "Bear  Market Checklist" of indicators and it is a perfect 0-for-9. Not even one indicator on the list is even close to flashing a warning sign so pop a pill  and relax. There's no immediate danger threatening stocks. Read More »

5. Pop a Pill & Relax ! There's NO Immediate Danger Threatening Stocks

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6. Latest Action Suggests Stock Market Beginning a New Long-term Bull Market – Here's Why

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7. Sorry Bears – The Facts Show That the U.S. Recovery Is Legit – Here's Why

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8. Correlation of Margin Debt to GDP Suggests Stock Market Has More Room to Run

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9. Stocks Should Have a Record-Breaking Year According to These 7 Bullish Fundamentals

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10. Stocks Are NOT In Another Bubble – Here's Why

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The Coordinated Effort To Suppress The Gold Price

Posted: 01 Dec 2013 07:13 AM PST

In this two part interview, financial journalist Lars Schall looks at some specific topcis from Dimitri Speck’s book “The Gold Cartel.” The book appeared in November of this year in English and is available at MacMillan and Amazon. "The Gold Cartel is a brisk, articulate and convincing read. Even so, it remains extremely sound. A miracle!" – Professor Heinz Christian Hafke, former German Bundesbank Director.

The major topic of the book is about the suppression of the gold price. Based on the research of Dimitri Speck, three distinct phases are visible.

Phase 1 ranges from 1993 to 1996. Central banks have kept the gold price below $400 by leasing gold from central banks to bullion banks. The result is that gold reached the market, having the same effect as gold selling in the market.

Phase 2 started in 1996 and lasted till 2001. In that period, the interest was mainly for bullion banks to benefit from falling gold prices

Phase 3 started in May 2001 and goes on till today. One of the drivers was Greenspan who decided that he could not keep the gold price at that low level, but, simultaneously, the gold price rise should be controlled. That is also what happened since then by central banks through COMEX price manipulation and “price shocks” mainly during the London PM fixing.

The following chart shows the reduced amount of lending of gold since 2001, an important driver of the gold price since 2001.

gold market lending 2001 2013 price

 

Motives

There are two motives to manipulate the gold price, according to Dimitri Speck. The first one is to reduce inflation expectations. In 1993, during an FOMC meeting, Alan Greenspan revealed his thoughts by saying that “gold is a thermometer,” an indicator of danger of inflation. A rise in the price of gold would change the psychology of market participants. At that specific time (1993), an increase of interest rates would hurt the economy so a suppressed gold price was a psychological measure to lower inflation expectations.

The other motive is to lower long term yields of bonds by stimulating the demand for bonds. The rationale is that if gold does not rise, bonds would be favoured.

Other motives include a desire for a strong dollar, apart from an interest of central banks and the banking industry to keep the faith in their services.

The close of the “gold window”

1971 is mostly associated with the end of Bretton Woods, or the end of the gold standard and the start of pure credit money. Dimitri Speck notes that the gold standard only existed within the central banking system; normal citizens could not convert their dollars in gold.

In reality, however, the gold window closed already in 1967. The US was running deficits in the 60ies (because of wars). At the same time, several exporting countries (including Japan and Germany) had the choice to get paid in dollars or in gold. In 1967, the German Bundesbank confirmed by means of was later called the “blessing letter” that they would continue to accept dollars instead of gold. That was not only a blessing to the US, but also to the credit money system. The letter stated that if every central bank would apply their choice, the world could run endless deficits.

Gold’s outlook

The reason why the long term outlook for gold is positive is based on our financial system. The stability of the system is at risk. Debt has exploded in the last decades. Gold is the direct competitor of debt. Savers are already losing money in real terms. That is the reason why gold should rise long term. Gold owners will stabilize the purchasing power of its owner in real terms.

Gold has a double face. Apart from the protection against negative real rates, it also offers protection against bank or government defaults. There is no credit money risk associated with gold in case a bank or government would go bankrupt; by contrast, gold offers protection. With the debt crisis raging across the world, this lack of government and banking counterparty risk should not be underestimated.

In terms of the “end game,” Dimitri Speck says that the debt decrease is by default deflationary. He sees three possible scenarios playing out:

  1. Although not very likely, there is a chance that governments will aim for asset price deflation for some years possible, comparable to what has happened in Japan in the last two decades. That is unlikely because of several reasons, both political and fiscal.
  2. Another potential scenario, also unlikely, is one of high taxes, negative real rates, financial repression, like in Britain after World War II. The freedom of people would be considerably deprived, which makes it unlikely from a political point of view.
  3. The most likely scenario is one comparable to the current Japan: suppress deflation, stimulate slight inflation while avoiding strong inflation. In this scenario, Dimitri Speck believes that the velocity of money will increase, savers will gradually step out of the banking system, and inflation will occur both in asset and consumer prices. Gold is the best hedge in such a scenario.

 

 

Dimitri Speck is a quantitative asset manager, trading system developer and gold market analyst from Munich, Germany. He specializes in pattern recognition of charts. As part of this activity he came across an anomaly in the gold price, and he was ultimately able to demonstrate systematic interventions in the gold market since August 1993. Speck is also a consultant to the US-based Gold Anti-Trust Action Committee, GATA.

Speck is responsible for the Stay-C commodity fund that won the Hedge Fund Journal's award as best European commodity fund. His two investment funds, a stock fund and a commodity fund, have considerably outperformed the market since its inception. Moreover, he is the founder and editor of the website "Seasonal Charts", where accurate daily seasonal charts are illustrated. He is a well-known expert on precious metals investment analysis, and he has been interviewed for a number of investment letters and websites and has spoken at industry events on the topic.

GOLD Technical Analysis Charts

Posted: 01 Dec 2013 07:12 AM PST

Thomas Clayton writes: I have adjusted the variable parameters to titrate to the best signal .. Cross of stochastic rsi below 0.8 or above 0.2 and, slow stochastics 80 & 20,  macd line cross works well on this daily chart. Price outside of bollinger band top or below.. Liquidate long or short positions repectively.

Comex Registered Gold Inventory Levels Leveraged At 65 Potential Claims Per Ounce

Posted: 01 Dec 2013 04:00 AM PST

"A new tyranny is thus born, invisible and often virtual, which unilaterally and relentlessly imposes its own laws and rules." Jorge Mario Bergoglio, Francis I Here are the latest inventory figures of registered (deliverable) gold in Comex approved warehouses. I am not sure approved can really apply, given the distancing that the Comex recently instituted in the disclaimer on their inventory report.

The witching hour

Posted: 01 Dec 2013 02:51 AM PST

“We are on the eve of a deflationary shock which will likely reduce equity valuations from very high to very low levels. This research seeks to provide investors with some lead indicators as to when the current disinflationary forces erupt into a destructive deflation. Each investor must decide for themselves just how close to midnight they want to leave this particular party. The advice of Solid Ground is leave now as it is increasingly likely that one event will be the catalyst to very rapidly change inflationary into deflationary expectations. Indeed, when key prices are already falling across the globe, one should expect one key major credit event to occur.

Three times since 1997 inflation has fallen below 1% with very negative impacts for equity investors. On all three occasions an existing low level of inflation was forced lower by dramatic events: the bankruptcy of Russia and collapse of LTCM in 1998; the terrorist attacks of 11 September 2001; and the bankruptcy of Lehman Brothers in September 2008. While nobody would attribute the 11 September atrocity with extant global deflationary forces, the other two episodes can clearly be associated with such forces. So perhaps it is global deflationary forces creating a bankruptcy event, somewhere in the world, that is the catalyst for a sudden change in inflationary expectations in the developed world. It can all happen very quickly; and it is dangerous to stay at an equity party driven by disinflation when it can spill so rapidly into deflation.”

– Ron Napier, CLSA Asia-Pacific Markets

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