Tuesday, December 3, 2013

Gold World News Flash

Gold World News Flash


Tekoa Da Silva: Bankers Buy Gold And Own It

Posted: 03 Dec 2013 12:30 AM PST

The Most Remarkable News In The Gold & Silver Markets

Posted: 02 Dec 2013 11:39 PM PST

Today KWN is putting out a special piece discussing one of the most remarkable news items in the gold and silver markets. This is something that the big bullion banks follow closely, as well as big money and even a few professionals. This will give KWN readers around the world a bit of a snapshot of what they look at.

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

“Something” Must Happen

Posted: 02 Dec 2013 10:00 PM PST

by Bill Holter, MilesFranklin.com:

December has arrived and with it the spectacle of COMEX delivering on contracts. Gold went to first notice day on Friday with 1,020,000 ounces of gold standing for delivery. This is in contrast to the registered inventory holding only 590,000 ounces available for delivery. How will these 1 million ounces of gold be delivered? It is hard to tell but suffice it to say that 400,000+ ounces need to be delivered in to make up the deficit. Last year if I recall, 1 million ounces were delivered in for December as it also had a large amount standing for delivery.

That was last year, this is this year. The difference being that China had not already "Hooverized" the planet by picking up all of the gold that they could. Yes they did have a big appetite but that has grown further this year. We also had not seen any plundering of GLD for 500 tons and LBMA had not yet seen 1,300 tons vanish from their coffers.

Read More @ MilesFranklin.com

Gold May Lose Another $100: Miranda Gold CEO

Posted: 02 Dec 2013 09:40 PM PST

from KitcoNews:

Thailand Police & Military Step Aside As Anti-Government Protesters Reach PM's Office; Declare Victory

Posted: 02 Dec 2013 08:56 PM PST

As the "peoples' coup" in Thailand gets the blessing of the country's Military leader (who stated he would not intervene), the police have also undertaken an unexpected reversal of strategy by removing barriers from the heavily fortified police and government buildings. The government no longer wants to confront the protesters in the 3rd of fighting with 3 dead and at least 230 injured. As AP reports, the protesters have made no attempts (yet) to enter Government House but are milling around the entrance. The government has 'asked' people to stay inside and police helicopters are reportedly dropping leaflets warning demonstrators to move out of the rally sites (on grounds of insurrection and possibel death penalty). The anti-government protesters have declared "victory" as the police state "there will be no tear gas today."

 

The protests come as "the people" rise up against "the elites" - a familar story (via The Economist):

The “people’s coup”, declared by Suthep Thaugsuban, a former deputy prime minister from the opposition Democrat party, states that "Thailand ruled by the Shinawatras is intolerable, and therefore the clan, including Miss Yingluck, Mr Thaksin and the rest, must be removed from power and replaced by a “perfectly democratic People’s Council."

 

Alt-Thai News Network sums up the people's view of the current leader:

In a particularly cogent op-ed titled, "Yingluck can't duck responsibility for protest fatalities," former editor Veera Prateepchaikul sums up perfectly the state of illegitimacy within which the current regime in Thailand resides.

 

He begins by describing Yingluck Shinawatra, current prime minister and sister of deposed US-backed dictator Thaksin Shinawatra, as aloft and absent. During the rare occasion she does attend any sort of government function, she appears lost and confused, and often bluntly states she does not know the answers to questions any other national leader would be embarrassed not to answer. This illustrates her role as placeholder for her brother, not the "democratically elected leader" she is portrayed as being by the Western media.

and while we have seen this kind of unrest before, this time is different (via The Economist):

For as long as Thais can recall, their governments have built up their majorities in the provinces. The same governments have been unmade rather handily in the capital, to the perennial relief of the Bangkok elite who enjoy ties with the royal palace. The notion that power has shifted permanently from the centre to the provinces—where the Shinawatras have their base—seems to be unacceptable to many of the old guard. The elite are used to thinking that power can always be clawed back in Bangkok.

As the last few days have been bloody and violent as this amazing drone clip shows:

 

 

Thailand's Military appear to implicitly bless the coup...

Thailand’s armed forces will “stand from afar and monitor” anti-govt protests, Army chief Prayuth Chan-Ocha tells reporters, adding that political problems should “be solved by politics.”

Which has lead to this...

A collapse in Thai Consumer Confidence

 

and this... (via Alt-Thai News Network)

Anti-regime protesters, outnumbering police at two locations in Bangkok, Police Head Quarters and Government House, are poised to take over and occupy both locations peacefully as they have other government sites throughout the city.

 

However, the regime has dropped leaflets over the protesters claiming that the anti-regime protests constitute "insurrection" (which carries a maximum penalty of death), that the leaders are to be arrested, and protesters are to return home.

And the following...

 

@W7VOA

However, we would be surprised if the regime just allowed itself to be overthrown:

Richard Russell - Gold Smash & Danger For A Major Market

Posted: 02 Dec 2013 08:52 PM PST

With continued chaos around the world and uncertainty in global markets, today KWN is publishing a powerful piece that was written by a 60-year market veteran.  The Godfather of newsletter writers, Richard Russell, discussed the continued smash in gold, as well as the short selling of gold by the bears.  Russell went on to mention the action stocks, the US dollar, danger for a major market, and he included 3 fantastic charts.

Richard Russell:  “The inflationists and gold-haters have been able to drive gold down to a new low

Ron Paul Rages "'Easy' Money Causes Hard Times"

Posted: 02 Dec 2013 07:35 PM PST

Submitted by Ron Paul via The Daily Reckoning blog,

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

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

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

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

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

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

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

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

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

 

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

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

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

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

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

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

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

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

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

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

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

"Easy" money causes hard times.

CIA Bitcoin CONSPIRACY, SILVER TO BREAK THE ECONOMY – Andy Hoffman & Chris Duane

Posted: 02 Dec 2013 07:05 PM PST

The silence of the blockheads -- maybe soon to be dead silence

Posted: 02 Dec 2013 06:31 PM PST

9:49p ET Monday, December 2, 2013

Dear Friend of GATA and Gold:

Noting that the price of gold is starting to fall below the cost of production, Zero Hedge observes tonight: "Not even Bernanke, Yellen, or all the paper gold exchange-traded funds in the world will be able to do much to suppress gold prices from reaching their fair value when gold production hits a standstill and when demand, especially by China, is still in the hundreds of tons each year."

The Zero Hedge commentary speculates about the gradual shutdown, company by company, of the gold mining industry as production costs cannot be recovered. It's headlined "Gold Drops Below Cash Cost, Approaches Marginal Production Costs" and it's posted here:

http://www.zerohedge.com/news/2013-12-02/gold-tumbles-towards-marginal-p...

Of course there's no telling when enough of the world outside of a few central banks will wise up to paper gold and when the central banks that have been leasing and swapping their metal surreptitiously for price suppression will run out of metal they're prepared to lose, just as the central banks operating the London Gold Pool reached that threshold in March 1968. The next moment of transition might be many years away, or it could come tomorrow. (Most likely it will be a Sunday night U.S. Eastern time, which is when such things are usually sprung on the world by its unelected rulers.)

What may be most remarkable about the present is the silence of the gold mining industry and its supposed representative, the World Gold Council -- silence that, as the Zero Hedge commentary suggests, soon may be dead silence.

The proof of surreptitious intervention against gold by central banks has reached towering proportions --

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

-- and the destruction of the gold mining industry's capital has become catastrophic:

http://tinyurl.com/q2dwryf

But on the whole the industry is dumber than the rocks it mines, just as the entire gold sector -- including mining company investors and adherents of free and transparent markets in the monetary metals -- has been demoralized into silence as well.

Financially pressed is one thing; demoralized is something else. GATA is financially pressed too; it runs on donations that have shrunk to almost nothing with the gold sector's decline, and so GATA's operations likely will be sharply curtailed in the new year. But GATA will keep the flag flying as long as the electric and Internet service bills can be paid out of the pockets of its officers. If you're still invested in mining companies and have not contacted them about GATA's work, what's your excuse? Is the end of the gold mining industry really a prerequisite for the liberation of the price of its product?

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



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What Is The ACTUAL Risk for Pacific Coast Residents from Fukushima Radiation?

Posted: 02 Dec 2013 04:51 PM PST

“[The Odds of] Longer Term Chronic Effects, Cancer Or Genetic Effects … Cannot Be Said To Be Zero”

It is very difficult to obtain accurate information on the dangers from Fukushima radiation to residents of the West Coast of North America and Hawaii.

On the one hand, there is fear-mongering and “we’re all going to die” type hysteria.

On the one hand, there is a tendency for governments to cover up the truth to avoid panic and deflect blame for bad policy. Japan is poised to pass a bill which would outlaw most reporting on Fukushima.   And the U.S. government is not even monitoring radiation levels in the waters off the U.S. coast.  As the Cape Cod Times reports:

With the first plume of water carrying radionuclides from Fukushima due to hit the U.S. West Coast any day now, [the senior scientist at the Woods Hole Oceanographic Institution, Ken Buesseler's]  latest project is to convince the federal government to monitor radiation levels in the sea water.

 

“We don’t have a U.S. agency responsible for radiation in the ocean,” Buesseler said. “It’s really bizarre.”

 

***

 

He spent this past week in Washington, D.C., meeting with representatives of the Nuclear Regulatory Commission and the Department of Energy, asking them to come up with some sort of plan to keep tabs on levels of radionuclides in the ocean.

 

Buesseler also talked with U.S. Sen. Edward Markey, D-Mass., who agreed the federal government has a role in making sure the oceans are healthy and safe.

 

But Markey said in an email that an increased federal role is not likely [because of budget cuts].

Indeed, Dr. Buesseler points out the circular reasoning which the government is using (at 10:00):

I completely agree that no radiation has been seen in the regards that we’re not really testing for it [laughter] in any organized way … We have very few data; it’s not really being organized. The government says we don’t really need to do that because we’re predicting very low levels. On the other hand, you could argue I’d very much like to see study on our side of the ocean just to confirm these values and build some confidence with the public that’s been concerned about this. They’re right to be concerned — as scientists we’re telling them they shouldn’t be, but it’d be nice to have a few more data points to fill that gap … I’ve been told that there’s very little testing going on.

People are certainly concerned.  As the Wall Street Journal notes:

Water containing radioactive materials has been leaking from storage tanks and drains at the plant into groundwater and the nearby ocean, raising concerns across the world that currents might spread radioactivity to faraway places.

But people don’t know where to get accurate information on the risks involved.

This essay provides reliable information on what is really going on … based upon the known science.   It’s divided into 3 sections:

I.     Is Low-Level Radiation Dangerous … Or Harmless?

II.   How Much Radiation Will We Be Exposed To?

III. How Can We Protect Ourselves from Radiation?

I. Is Low-Level Radiation Dangerous … Or Harmless?

You may have heard different claims about whether low-level radiation is dangerous … or harmless.

Fox News reports:

Doug Dasher, who [teaches] radioecology at the University of Alaska Fairbanks, said it remains possible that there will be minor effects for people on the U.S. West Coast, despite the low test results.

 

“No acute effects resulting in mortality or damage to organs … would be expected,” he told FoxNews.com. But he added that more subtle effects might occur.

 

“Longer term chronic effects, cancer or genetic effects… odds are statistically low, if the concentrations in the models remain within the projections, [but] cannot be said to be zero.”

What is Dasher saying?  That even low levels of radiation from Fukushima can increase the risk of cancer and other diseases.

A major 2012 scientific study proves that low-level radiation can cause huge health problems. Science Daily reports:

Even the very lowest levels of radiation are harmful to life, scientists have concluded in the Cambridge Philosophical Society’s journal Biological Reviews. Reporting the results of a wide-ranging analysis of 46 peer-reviewed studies published over the past 40 years, researchers from the University of South Carolina and the University of Paris-Sud found that variation in low-level, natural background radiation was found to have small, but highly statistically significant, negative effects on DNA as well as several measures of health.

 

The review is a meta-analysis of studies of locations around the globe …. “Pooling across multiple studies, in multiple areas, and in a rigorous statistical manner provides a tool to really get at these questions about low-level radiation.”

 

Mousseau and co-author Anders Møller of the University of Paris-Sud combed the scientific literature, examining more than 5,000 papers involving natural background radiation that were narrowed to 46 for quantitative comparison. The selected studies all examined both a control group and a more highly irradiated population and quantified the size of the radiation levels for each. Each paper also reported test statistics that allowed direct comparison between the studies.

 

The organisms studied included plants and animals, but had a large preponderance of human subjects. Each study examined one or more possible effects of radiation, such as DNA damage measured in the lab, prevalence of a disease such as Down’s Syndrome, or the sex ratio produced in offspring. For each effect, a statistical algorithm was used to generate a single value, the effect size, which could be compared across all the studies.

 

The scientists reported significant negative effects in a range of categories, including immunology, physiology, mutation and disease occurrence. The frequency of negative effects was beyond that of random chance.

 

***

 

“When you do the meta-analysis, you do see significant negative effects.”

 

“It also provides evidence that there is no threshold below which there are no effects of radiation,” he added. “A theory that has been batted around a lot over the last couple of decades is the idea that is there a threshold of exposure below which there are no negative consequences. These data provide fairly strong evidence that there is no threshold — radiation effects are measurable as far down as you can go, given the statistical power you have at hand.”

 

Mousseau hopes their results, which are consistent with the “linear-no-threshold” model for radiation effects, will better inform the debate about exposure risks. “With the levels of contamination that we have seen as a result of nuclear power plants, especially in the past, and even as a result of Chernobyl and Fukushima and related accidents, there’s an attempt in the industry to downplay the doses that the populations are getting, because maybe it’s only one or two times beyond what is thought to be the natural background level,” he said. “But they’re assuming the natural background levels are fine.”

 

“And the truth is, if we see effects at these low levels, then we have to be thinking differently about how we develop regulations for exposures, and especially intentional exposures to populations, like the emissions from nuclear power plants, medical procedures, and even some x-ray machines at airports.”

Physicians for Social Responsibility notes:

According to the National Academy of Sciences, there are no safe doses of radiation. Decades of research show clearly that any dose of radiation increases an individual’s risk for the development of cancer.

 

“There is no safe level of radionuclide exposure, whether from food, water or other sources. Period,” said Jeff Patterson, DO, immediate past president of Physicians for Social Responsibility. “Exposure to radionuclides, such as iodine-131 and cesium-137, increases the incidence of cancer. For this reason, every effort must be taken to minimize the radionuclide content in food and water.”

 

“Consuming food containing radionuclides is particularly dangerous. If an individual ingests or inhales a radioactive particle, it continues to irradiate the body as long as it remains radioactive and stays in the body,”said Alan H. Lockwood, MD, a member of the Board of Physicians for Social Responsibility.

 

***

 

Radiation can be concentrated many times in the food chain and any consumption adds to the cumulative risk of cancer and other diseases.

John LaForge writes:

The National Council on Radiation Protection says, “… every increment of radiation exposure produces an incremen­tal increase in the risk of cancer.” The Environmental Protection Agency says, “… any exposure to radiation poses some risk, i.e. there is no level below which we can say an exposure poses no risk.” The Department of Energy says about “low levels of radiation” that “… the major effect is a very slight increase in cancer risk.” The Nuclear Regulatory Commission says, “any amount of radiation may pose some risk for causing cancer … any increase in dose, no matter how small, results in an incremental increase in risk.” The National Academy of Sciences, in its “Biological Effects of Ionizing Radiation VII,” says, “… it is unlikely that a threshold exists for the induction of cancers ….”

Japan Times reports:

Protracted exposure to low-level radiation is associated with a significant increase in the risk of leukemia, according to a long-term study published Thursday in a U.S. research journal.

 

The study released in the monthly Environmental Health Perspectives was based on a 20-year survey of around 110,000 workers who engaged in cleanup work related to the Chernobyl nuclear plant disaster in 1986.

 

Scientists from the University of California, San Francisco, the U.S. National Cancer Institute and the National Research Center for Radiation Medicine in Ukraine were among those who participated in the research.

Indeed, the overwhelming consensus among radiation experts is that repeated exposure to low doses of radiation can cause cancer, genetic mutations, heart disease, stroke and other serious illness (and see this.) If a government agency says anything else, it’s likely for political reasons.

The top U.S. government radiation experts – like Karl Morgan, John Goffman and Arthur Tamplin – and scientific luminaries such as Ernest Sternglass and Alice Stewart, concluded that low level radiation can cause serious health effects.

A military briefing written by the U.S. Army for commanders in Iraq states:

Hazards from low level radiation are long-term, not acute effects… Every exposure increases risk of cancer.

(Military briefings for commanders often contain less propaganda than literature aimed at civilians, as the commanders have to know the basic facts to be able to assess risk to their soldiers.)

The briefing states that doses are cumulative, citing the following military studies and reports:

  • ACE Directive 80-63, ACE Policy for Defensive Measures against Low Level Radiological Hazards during Military Operations, 2 AUG 96
  • AR 11-9, The Army Radiation Program, 28 MAY 99
  • FM 4-02.283, Treatment of Nuclear and Radiological Casualties, 20 DEC 01
  • JP 3-11, Joint Doctrine for Operations in NBC Environments, 11 JUL 00
  • NATO STANAG 2473, Command Guidance on Low Level Radiation Exposure in Military Operations, 3 MAY 00
  • USACHPPM TG 244, The NBC Battle Book, AUG 02

Many studies have shown that repeated exposures to low levels of ionizing radiation from CT scans and x-rays can cause cancer. See this, this, this. this, this, this, this, this, this and this.

Research from the University of Iowa concluded:

Cumulative radon exposure is a significant risk factor for lung cancer in women.

And see these studies on the health effects cumulative doses of radioactive cesium.

As the European Committee on Radiation Risk notes:

Cumulative impacts of chronic irradiation in low doses are … important for the comprehension, assessment and prognosis of the late effects of irradiation on human beings ….

And see this.

The New York Times’ Matthew Wald reported last year:

The Bulletin of the Atomic Scientists[’] May-June issue carries seven articles and an editorial on the subject of low-dose radiation, a problem that has thus far defied scientific consensus but has assumed renewed importance since the meltdown of the Fukushima Daiichi reactors in Japan in March 2011.

 

***

 

This month a guest editor, Jan Beyea [who received a PhD in nuclear physics from Columbia and has served on a number of committees at the National Research Council of the National Academies of Science] and worked on epidemiological studies at Three Mile Island, takes a hard look at the power industry.

 

The bulletin’s Web site is generally subscription-only, but this issue can be read at no charge.

 

Dr. Beyea challenges a concept adopted by American safety regulators about small doses of radiation. The prevailing theory is that the relationship between dose and effect is linear – that is, that if a big dose is bad for you, half that dose is half that bad, and a quarter of that dose is one-quarter as bad, and a millionth of that dose is one-millionth as bad, with no level being harmless.

 

The idea is known as the “linear no-threshold hypothesis,’’ and while most scientists say there is no way to measure its validity at the lower end, applying it constitutes a conservative approach to public safety.

 

Some radiation professionals disagree, arguing that there is no reason to protect against supposed effects that cannot be measured. But Dr. Beyea contends that small doses could actually be disproportionately worse.

 

Radiation experts have formed a consensus that if a given dose of radiation delivered over a short period poses a given hazard, that hazard will be smaller if the dose is spread out. To use an imprecise analogy, if swallowing an entire bottle of aspirin at one sitting could kill you, consuming it over a few days might merely make you sick.

 

Richard Russell - Gold Smash & Danger For A Major Market

Posted: 02 Dec 2013 04:07 PM PST

With continued chaos around the world and uncertainty in global markets, today KWN is publishing a powerful piece that was written by a 60-year market veteran. The Godfather of newsletter writers, Richard Russell, discussed the continued smash in gold, as well as the short selling of gold by the bears. Russell went on to mention the action stocks, the US dollar, danger for a major market, and he included 3 fantastic charts.

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

The Gold Price Dove $28.30 or 2.3% Closing at $1,222.30

Posted: 02 Dec 2013 04:04 PM PST

Gold Price Close Today : 1222.30
Change : -28.30 or -2.26%

Silver Price Close Today : 19.233
Change : -0.748 or -3.74%

Gold Silver Ratio Today : 63.552
Change : 0.963 or 1.54%

Silver Gold Ratio Today : 0.01574
Change : -0.000242 or -1.51%

Platinum Price Close Today : 1345.90
Change : -22.00 or -1.61%

Palladium Price Close Today : 712.40
Change : -5.60 or -0.78%

S&P 500 : 1,800.90
Change : -4.91 or -0.27%

Dow In GOLD$ : $270.74
Change : $ 4.84 or 1.82%

Dow in GOLD oz : 13.097
Change : 0.234 or 1.82%

Dow in SILVER oz : 832.36
Change : 27.27 or 3.39%

Dow Industrial : 16,008.77
Change : -77.64 or -0.48%

US Dollar Index : 80.889
Change : 0.336 or 0.42%

Silver and GOLD PRICES storm-tossed and tumbled today. The Gold price dove $28.30 (2.3%) and landed with a thud at $1,222.30. In the aftermarket it traded as low as $1,218.60, but since has climbed to $1,221. Silver slid 74.8 cents (3.7%) to close Comex at 1923.3 cents, but in the aftermarket kept sliding to 1907.5. Edged back up to 1915c.

Both silver and GOLD PRICES keep bouncing along the bottom of their Bollinger bands. Those show the upper and lower limits of "normal" price movements, based on the standard deviation of prices over the last 20 days. Idea is that about 95% of the expected readings will fall within that band, so when they fall outside that band, an extreme has been reached and suggests a reversal. For instance, last June gold and silver punched through their lower BB on the very day of the low. Both silver and gold are oversold, but "oversold" can persist quite some time.

Sometime soon here the gold and SILVER PRICE ought to bottom. Today might mark the first day of a waterfall lasting several days, or it cold turn around immediately, if only for a short bounce. Trying to call a low in a selling mania is like trying to call a top in a buying mania. Neither occupation promises a secure future. But sellers keep hitting silver and gold with less and less effect. Those holders who could be shaken out have mostly been shaken out. At some point any market runs out of sellers.

That point is fast approaching.

Remember, you have Important People on gold and silver's side: the Federal Reserve and all the rest of the world's central banks. Just wait for reality to catch up with their printing presses.

I read something today that freezes my blood, in Fred Hickey's Hi Tech letter. "The Fed has now accumulated $2.2 trillion of treasury securities and more than $1.4 trillion of mortgage backed securities, and its balance sheet is nearly $3.9 trillion, FIVE times the level in late 2008, when it began QE1. . . . The Fed now owns nearly half of all treasuries maturing between ten and fifteen years."

So the Fed has engineered a bubble in US treasuries, lowering interest rates nearly to zero so it made no sense for investors to buy anything but "risk-free" treasuries, except it turns out the Fed owns a vast amount of those treasuries. When interest rates rise, their value declines.

But that's peanuts and peanut shells, not the big issue. Bernanke has backed the Fed into a very narrow corner. They can't sell without precipitating a colossal deflation. But even if they could sell, who would buy all those treasuries, especially in a falling market?

The answer comes back: "Nobody." The bond bubble will deflate very quickly -- think "Pin-prick." And once those interest rates start rising, banks will begin pulling those reserves out of the Federal Reserves' hands, where they have been sequestered and "sterilized," say, Oh, roughly $2.5 trillion. And that $2.5 trillion, when the banks loan it into the money supply, will increase, Oh, say, ten-fold.

Blood in the streets inflation does not begin to describe the catastrophe Bernanke has made possible. Better pray it doesn't come.

Okay, I just report this stuff. Friday the Dow made a new intraday high for the move (16,174.51) yet closed the day lower. Today it dropped again and closed lower again. That describes a completed key reversal. The S&P500 completed the selfsame pattern. That foretells lower prices, immediately.

All stock indices closed lower today. Dow dropped 77.64 (-0.48%) at 16,008.77. S&P stumbled 4.91 (-0.27%) at 1,800.90. Breaking those round numbers 16,000 and 1,800 tomorrow will panic the lemmings.

But what do I know? I'm just a natural born fool from Tennessee, and I climb trees in my bare feet to get a better grip on the trunk.

Dow in Gold kept on rising today since gold fell more than stocks. Ended the day at 13.10 oz, up 1.92% (G$270.80). Between the June peak at 12.514 (G$258.67) and 15.722 oz (G$325) lies a swamp of resistance. Stocks will have to begin falling faster than gold to turn the DiG around.

Dow in Silver hit 82994 oz, up 3.19%. Both the DiS and DiG are severely overbought. Next big move is will be gravity-directed.

Bad economic stats in Europe today sent the euro down, which, being translated, means "sent the dollar up." Dollar might also have benefitted from stocks' trouble. Anyway, the dollar gained 27 basis points (0.34%) to 80.93. This brought the dollar back from the brink of the well, and it closed over its 20 DMA (80.88), but barely. Nearly reached the upper boundary trading channel boundary. It must break through that merely to have the chance to rally, and could just as easily break down. Tomorrow may tell.

Yen extended its Niagara begun in November. Lost another 0.5% today to 97.15 cents/Y100. Becoming right oversold, but how can you reliably apply charts to currencies, which are routinely manipulated by central banks? Only as a general guideline, and watching to see if the central banks are losing control.

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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

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

WARNING AND DISCLAIMER. Be advised and warned:

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

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

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

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

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

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

The Gold Price Dove $28.30 or 2.3% Closing at $1,222.30

Posted: 02 Dec 2013 04:04 PM PST

Gold Price Close Today : 1222.30
Change : -28.30 or -2.26%

Silver Price Close Today : 19.233
Change : -0.748 or -3.74%

Gold Silver Ratio Today : 63.552
Change : 0.963 or 1.54%

Silver Gold Ratio Today : 0.01574
Change : -0.000242 or -1.51%

Platinum Price Close Today : 1345.90
Change : -22.00 or -1.61%

Palladium Price Close Today : 712.40
Change : -5.60 or -0.78%

S&P 500 : 1,800.90
Change : -4.91 or -0.27%

Dow In GOLD$ : $270.74
Change : $ 4.84 or 1.82%

Dow in GOLD oz : 13.097
Change : 0.234 or 1.82%

Dow in SILVER oz : 832.36
Change : 27.27 or 3.39%

Dow Industrial : 16,008.77
Change : -77.64 or -0.48%

US Dollar Index : 80.889
Change : 0.336 or 0.42%

Silver and GOLD PRICES storm-tossed and tumbled today. The Gold price dove $28.30 (2.3%) and landed with a thud at $1,222.30. In the aftermarket it traded as low as $1,218.60, but since has climbed to $1,221. Silver slid 74.8 cents (3.7%) to close Comex at 1923.3 cents, but in the aftermarket kept sliding to 1907.5. Edged back up to 1915c.

Both silver and GOLD PRICES keep bouncing along the bottom of their Bollinger bands. Those show the upper and lower limits of "normal" price movements, based on the standard deviation of prices over the last 20 days. Idea is that about 95% of the expected readings will fall within that band, so when they fall outside that band, an extreme has been reached and suggests a reversal. For instance, last June gold and silver punched through their lower BB on the very day of the low. Both silver and gold are oversold, but "oversold" can persist quite some time.

Sometime soon here the gold and SILVER PRICE ought to bottom. Today might mark the first day of a waterfall lasting several days, or it cold turn around immediately, if only for a short bounce. Trying to call a low in a selling mania is like trying to call a top in a buying mania. Neither occupation promises a secure future. But sellers keep hitting silver and gold with less and less effect. Those holders who could be shaken out have mostly been shaken out. At some point any market runs out of sellers.

That point is fast approaching.

Remember, you have Important People on gold and silver's side: the Federal Reserve and all the rest of the world's central banks. Just wait for reality to catch up with their printing presses.

I read something today that freezes my blood, in Fred Hickey's Hi Tech letter. "The Fed has now accumulated $2.2 trillion of treasury securities and more than $1.4 trillion of mortgage backed securities, and its balance sheet is nearly $3.9 trillion, FIVE times the level in late 2008, when it began QE1. . . . The Fed now owns nearly half of all treasuries maturing between ten and fifteen years."

So the Fed has engineered a bubble in US treasuries, lowering interest rates nearly to zero so it made no sense for investors to buy anything but "risk-free" treasuries, except it turns out the Fed owns a vast amount of those treasuries. When interest rates rise, their value declines.

But that's peanuts and peanut shells, not the big issue. Bernanke has backed the Fed into a very narrow corner. They can't sell without precipitating a colossal deflation. But even if they could sell, who would buy all those treasuries, especially in a falling market?

The answer comes back: "Nobody." The bond bubble will deflate very quickly -- think "Pin-prick." And once those interest rates start rising, banks will begin pulling those reserves out of the Federal Reserves' hands, where they have been sequestered and "sterilized," say, Oh, roughly $2.5 trillion. And that $2.5 trillion, when the banks loan it into the money supply, will increase, Oh, say, ten-fold.

Blood in the streets inflation does not begin to describe the catastrophe Bernanke has made possible. Better pray it doesn't come.

Okay, I just report this stuff. Friday the Dow made a new intraday high for the move (16,174.51) yet closed the day lower. Today it dropped again and closed lower again. That describes a completed key reversal. The S&P500 completed the selfsame pattern. That foretells lower prices, immediately.

All stock indices closed lower today. Dow dropped 77.64 (-0.48%) at 16,008.77. S&P stumbled 4.91 (-0.27%) at 1,800.90. Breaking those round numbers 16,000 and 1,800 tomorrow will panic the lemmings.

But what do I know? I'm just a natural born fool from Tennessee, and I climb trees in my bare feet to get a better grip on the trunk.

Dow in Gold kept on rising today since gold fell more than stocks. Ended the day at 13.10 oz, up 1.92% (G$270.80). Between the June peak at 12.514 (G$258.67) and 15.722 oz (G$325) lies a swamp of resistance. Stocks will have to begin falling faster than gold to turn the DiG around.

Dow in Silver hit 82994 oz, up 3.19%. Both the DiS and DiG are severely overbought. Next big move is will be gravity-directed.

Bad economic stats in Europe today sent the euro down, which, being translated, means "sent the dollar up." Dollar might also have benefitted from stocks' trouble. Anyway, the dollar gained 27 basis points (0.34%) to 80.93. This brought the dollar back from the brink of the well, and it closed over its 20 DMA (80.88), but barely. Nearly reached the upper boundary trading channel boundary. It must break through that merely to have the chance to rally, and could just as easily break down. Tomorrow may tell.

Yen extended its Niagara begun in November. Lost another 0.5% today to 97.15 cents/Y100. Becoming right oversold, but how can you reliably apply charts to currencies, which are routinely manipulated by central banks? Only as a general guideline, and watching to see if the central banks are losing control.

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.

Gold And Silver Approaching Critical Price Points

Posted: 02 Dec 2013 02:58 PM PST

Gold was down today $28 and closed the COMEX session at $1222.05, which is a loss of 2.30% on the day. Silver went $0.77 lower and closed at $19,21, a decline of 3.87%.  In euro terms, gold closed the trading session at €902.82 and silver at €14.18.

The short term trend is clearly down, both in gold and silver. The hourly chart tells a clear story.

gold price hourly chart 2 december 2013 price

 

silver price hourly chart 2 december 2013 price

The short term trend is confirming the longer term downtrend. The daily chart shows an almost perfect trendline since November 2012. Apart from the trendline, the daily chart reveals two other important things.

First, both gold and silver are about to retest their June lows. Needless to say those price points are of major importance. In case they would hold with a vengeance on high volume, it could turn out to be bullish for the metals. However, if support would fail, the odds favour a break through.

A second important element on the daily charts are the Commitment of Traders positions (lower part of the charts). The extreme market situation of June is back: commercial hedgers are holding historically low net short positions. Extreme positions of that “informed money” category usually point to a reversal, although timing is unpredictable. Back in June, when the metals reached their lowest price points, the COT positions were very similar as today. The third chart shows that situation in more detail.

gold price daily chart 2 december 2013 price

silver price daily chart 2 december 2013 price

This chart, courtesy of Sentimentrader.com, shows the positions of the commercials (green line) and large/small speculators (blue/red line). Notice the similarity with the situation in June of this year.

COT gold silver 2 december 2013 price

Regulators may enact Volcker Rule next week -- and delay its implementation

Posted: 02 Dec 2013 02:54 PM PST

Volcker Rule Said Set for Dec. 10 Approval by U.S. Agencies

By Jesse Hamilton
Bloomberg News
Tuesday, December 3, 2013

http://www.bloomberg.com/news/2013-12-02/volcker-rule-said-set-for-dec-1...

WASHINGTON -- At least three U.S. regulators will meet on Dec. 10 to adopt the final version of the Volcker Rule banning banks from making speculative bets with their own money, according to three people familiar with the planning.

The Federal Reserve, Office of the Comptroller of the Currency, and Federal Deposit Insurance Corp. are scheduling meetings to act on the rule on that date, said the people, who requested anonymity because the schedule hasn't been announced.

Two other agencies that need to approve the rule -- the Commodity Futures Trading Commission and the Securities and Exchange Commission -- are trying to arrange Dec. 10 votes as well, three other people familiar with that effort said. The agencies are not required to approve the rule at the same time.

... Dispatch continues below ...



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The agencies' approval would be the final stage in the process of adopting the Volcker rule, a centerpiece of the 2010 Dodd-Frank Act designed to prevent a repeat of the 2008 global credit crisis. The final version is also expected to extend the rule's compliance dates, which was sought by Wall Street banks and trade groups.

CFTC Chairman Gary Gensler raised objections that a recent draft of the rule wasn't strong enough, according to three people familiar with the negotiations. If the regulators resolve such issues by next week, the rule would be on track to meet a self-imposed year-end deadline.

The rule, named for former Federal Reserve Chairman Paul Volcker, who championed it as an adviser to President Barack Obama, is aimed at preventing banks with insured deposits and access to discount borrowing from engaging in speculative trading that could threaten their stability.

Banks currently have until July 21 to implement the Volcker rule, even though regulators are behind the schedule outlined by Dodd-Frank. Industry representatives have been assured by regulators that that deadline will probably be extended, according to three people involved in the discussions.

In a letter sent to regulators last week, the U.S. Chamber of Commerce said the rule should be reproposed because "many fundamental issues" have emerged since the comment period closed. Specifically, the chamber said there had been reports of changes to the proposal's hedging provision after JPMorgan Chase & Co.'s $6.2 billion trading loss.

* * *

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

Buy Junior Companies At These Giveaway Prices: Korelin - MMIC13 San Francisco

Posted: 02 Dec 2013 02:42 PM PST

Kitco News' Daniela Cambone sits with Al Korelin to discuss current gold prices and the mining industry. Korelin says no one knows what is happening in the markets now but he thinks the US...

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

Gold smashdowns create more demand than shake metal loose: Turk

Posted: 02 Dec 2013 02:21 PM PST

5:20p ET Monday, December 3, 2013

Dear Friend of GATA and Gold:

Attempts by central banks and bullion banks to gain access to gold by driving the price down are counterproductive, GoldMoney founder and GATA consultant James Turk tells King World News today, because the discount on the gold price is creating more demand for metal than metal is being pulled into the market. An excerpt from Turk's interview is posted at the King World News blog here:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/12/2_Me...

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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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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Ron Paul’s Timeless “Gold, Peace and Prosperity”

Posted: 02 Dec 2013 01:35 PM PST

New addition to the Gilded Opinion Library -

With the Federal Reserve unapologetically running the money printing press at full tilt, we thought it a good time to reprint this important introduction to the dangers of currency debasement. Ron Paul’s Gold, Peace and Prosperity is as timely now as it was when it was first written in 1981. Throughout his distinguished political career as a Congressman from Texas and presidential candidate (1988, 2012), Dr. Paul has consistently made the case for gold both as backing for the currency and as a portfolio hedge/safe haven for American citizens. In keeping with these views, he was instrumental in the introduction of the American Eagle gold and silver coin series in the 1980s. His now famous Congressional exchanges with former Fed chairman Alan Greenspan beginning in the late 1990s mostly centering on the nature of central banking and the role of gold are highly recommended.

http://www.usagold.com/gildedopinion/goldpeaceprosperity.html

Current Euro Cycle Unlikely To Move Higher

Posted: 02 Dec 2013 01:28 PM PST

With the Euro, it appears that price just tested the prior high for the current Cycle.  Already on Day 10, the current Euro Cycle should not have the legs to move higher – it's due to move into an Investor Cycle Low, and IC moves are dominant.  To accommodate the move into an ICL, a Left Translated Daily Cycle is necessary, so the down move should continue beginning early next week.

Euro Daily 23 november 2013 money currency

It is possible that the Dollar is ready to fall again, and that the Euro's recent 2 week drop formed an ICL. But this scenario is unlikely; there is no sign of the sentiment drop necessary to support a Euro Investor Cycle Low.  So after a 16 week advance, chances remain high that the Euro has another drop directly ahead.

Euro Sentiment 23 November money currency

From a macro perspective, there is far too much noise from the world's central banks to glean any real direction. trans money currency The ECB has been fairly vocal and dovish of late, finally realizing that sitting idle while the US, UK, and Japanese central banks talk about increasing liquidity is pushing the Euro higher and making their exports more expensive.  A higher Euro makes it very difficult for the Europeans to export their way out of a continent-wide recession, and so has a deflationary impact on Europe.

Since it's extremely unlikely the Euro is in Week 3 of a new Investor Cycle, our expectations must be for the Euro to fall immediately from this point. The Daily Cycle does not support further upside here, as a Left Translated DC is necessary for a drop into a mild Euro ICL.

Euro Weekly November 2013 money currency

Related Posts:

Euro's New High Negates H&S Pattern

Equities Appear To Have Put In A ST-Bottom

Blow Off Top Could Be In The Cards

 

This is an excerpt from this week's premium update from the The Financial Tap, which is dedicated to helping people learn to grow into successful investors by providing cycle research on multiple markets delivered twice weekly. For more up to date commentary subscribe. Now offering monthly & quarterly subscriptions with 30 day refund available if not 100% satisfied.

Why Bitcoin is Not a Threat to the U.S. Dollar

Posted: 02 Dec 2013 01:25 PM PST

The best place to park some cash in the last five years was in Bitcoin, the digital currency.

Bill Bonner wrote recently in a note to members of his family office (of which I am one):

"The value of [Bitcoin], per unit, has gone from under 10 cents when it emerged, in 2008, to $754 at this writing. If you'd put in $10,000 a few years ago, your stake would be worth over $75 million today."

There's nothing that has come close to that.

Which inspires the thoughts that follow. Below are some speculations about the nature of money, Bitcoin, the U.S. dollar and the wealth-generating power of a simple coffee can.

I don't know that anyone turned 10 cents into $75 million, but there are a lot of great stories out there about people reaping big gains with Bitcoin. I like the one about the guy from Oslo who bought $27 worth of Bitcoin — and then forgot about it. Four years later, he remembered, and found out his account was worth $1 million.

This story illustrates the power of what I call the coffee can idea.

The premise of the coffee can portfolio, you may remember, is to take a select group of stocks and forget about them. Figuratively speaking, you put them in your coffee can. Open 10 years later and see what you have.

Coffee CanWhat's in your coffee can?

The theory is you'll be richer for your negligence, which protects you against your impatient and impulsive self. There is no way our man holds onto his Bitcoin if he's paying attention. He talks himself out of his gains long before they hit $1 million. But he coffee-canned it, and made a handsome pile.

That's the power of the coffee can concept.

Anyway, the guy wound up cashing in his Bitcoin once he found out his stash was worth a million bucks. He used one-fifth of that stash to buy an apartment in an expensive part of Oslo. Nicely turned.

Predictably, mind-boggling returns in Bitcoin have led to the creation of lots of new digital currencies: Peercoin, Namecoin, WorldCoin, Gridcoin, FireFlyCoin, Zeuscoin, HoboNickels and more. According to The Wall Street Journal, there are more than 80 such variants.

And why not? It's of a piece with speculative mood of the times. Frankly, I don't know what to make of it all.

I know a lot of people frame Bitcoin as some sort of free-market competitor to the U.S. dollar — or to any state-backed currency. On one level, this is obviously true. Bitcoin is an option of something you can hold instead of dollars, at least for a time. It's a competitor to the dollar in the same sense as an ounce of a gold, a share of stock, a barrel of oil or a piece of real estate.

But Bitcoin isn't a threat to the U.S. dollar as a currency — at least for the American taxpaying population — unless one thing happens: The government accepts it for the payment of taxes.

I know that's about as likely as snow in Miami.

But it's useful to think about because it gets to a question of why we accept paper dollars at all. Why does the U.S. dollar have any value at all?

US Dollar
Why does this have any value at all?

There are many theories on the nature of money. I have become enamored lately with the ideas of a little-known writer named Alfred Mitchell-Innes. He wrote a pair of essays in 1913 and 1914 that explored the history and nature of money.

The essays got quite a bit of attention in their day, even drawing the review of John Maynard Keynes. But economics went in another direction, and Mitchell-Innes got lost in the mists until a recent revival by a fringy group of economists and anthropologists.

The full story, as interesting as it is, would take us too far afield. Mitchell-Innes, though, made one point in these essays that is a timeless observation relevant here. He wrote, "Government money is required everywhere for the discharge of taxes or other obligations to the government."

It's pretty simple. If he's right, then acceptance of the dollar depends on the ability of the U.S. government to collect taxes. And the U.S. is very good at collecting taxes, which any number of otherwise hard-to-bring-down criminals have found out. (They got Al Capone on tax evasion, don't forget.)

Al CaponeAl Capone found out why everyone accepts U.S. dollars

So the U.S. levies taxes on the U.S. population, and when combined with its fearsome tax-gathering goons and prisons, it instantly turns everyone in dollar-seekers to settle those obligations. I think people tend to forget this elemental truth, especially when they start talking about Bitcoin.

It's been true since the time of kings and explains why all kinds of odd things have been money at some point. Randall Wray, who seems like a bit of a nut, sums it up nicely in a book about the work of Mitchell-Innes (Credit and State Theories of Money):

"Why would the population accept otherwise 'worthless' sticks, clay, base metal, leather or paper? Because the state agreed to accept the same 'worthless' items in payment of obligations to the state."

This doesn't mean Bitcoin can't grow in value or settle transactions among individuals. Of course it can. And it doesn't mean the dollar can't lose value over time. Of course it does.

The dollar, despite its ability to settle up with Uncle Sam, isn't an investment. It's really a token, a way of keeping score. It's something to tally up credits and debits. This is an idea Mitchell-Innes understood.

And Bill Bonner, to bring the thing 'round to where I began, also knows this: "Money is just a placeholder," he wrote. "It has no value in itself. It just signals your position relative to everyone else… It doesn't really matter what you use as money. But some things work better than others."

As for Bitcoin, your guess is as good as mine what happens. (I don't own any.) As for the U.S. dollar, until the facts discussed above change, we're stuck with the U.S. dollar. But I wouldn't put it in your coffee can.

Regards,

Chris Mayer
for The Daily Reckoning

P.S. What would I put in your coffee can? That's too long of a discussion for here… but I will say that my coffee can strategy is the surest and laziest way to grow rich. I'm talking about specific stocks that you can tuck away for 10 years and wind up with 20 times your money. I gave readers of today’s Daily Reckoning  email edition a chance to discover them first hand. If you didn’t get it, you may have missed out. To make sure you never miss another opportunity like this one, sign up for the FREE Daily Reckoning email edition, right here.

Time for Goldbugs to Admit Defeat?

Posted: 02 Dec 2013 01:19 PM PST

After a 12-year run, it looks like gold’s wave has truly crested, and many bears are arguing that it’s all downhill from here. A quick glance at a long-term gold price chart can certainly seem to confirm this impression.

Gold Price Trend Downwards 2013 price

Gold’s price has fallen by more than a third since its 2011 high. The downturn exceeds the 2008 waterfall selloff. Many technical analysts are saying that the “damage” on the charts is too great for gold to recover. The rout is so bad, even hardened goldbugs have grown quiet lately.

Is it time for gold investors to admit defeat?

Well, if it were true that “damage” on a chart such as we’ve seen signals the end of a bull market, perhaps it might be. But is it so? Or is this just a correction?

One of the greatest bull markets in modern times was the Nasdaq in the 1990s. The Nasdaq composite rose a whopping 1,150% over the span of a decade. But did you know it had a major correction in the middle of that run? The same is true of oil’s big surge in the mid-2000s. Consider this chart of the big corrections oil and the Nasdaq experienced:

Selloffs In Bull Markets 2013 price

After seeing prices crash in both the Nasdaq and oil, most investors assumed those bull markets were over—but they weren’t. Here’s the subsequent rise in each after prices bottomed:

Selloffs Massive Gains 2013 price

The Nasdaq and oil did recover from their large corrections—despite all the technical “damage” many pointed to as proof that those bull markets were over. Investors who sold their positions during the downdrafts missed out on some fantastic profits.

Given that all the reasons gold rose from 2001 to 2011 are still in force, I am convinced gold’s current correction is the setup for a second big surge—and, ultimately, a true gold mania of historic proportions.

Just because gold doesn’t seem to be reacting to Fed money-printing at the moment doesn’t mean it won’t. Sooner or later, reality trumps fantasy. Reason says that you can’t quintuple your balance sheet in five years and expect no repercussions. The Fed keeps hinting it will taper its money printing, but it still has not. We’ve had QE1, QE2, Operation Twist, and now QE3… none of them has worked, and the new Fed chair wants to print even more money.

It’s pure fantasy to believe there will be no consequences to these actions—and the reality is that whatever else happens, gold will react positively.

Should gold investors admit defeat? I say it’s reckless central bankers who should declare defeat.

A gold recovery is inevitable. Prepare accordingly. Try BIG GOLD risk-free for 3 months to access our GLD put strategy, frequent bullion discounts, and the producers that will respond the strongest once the recovery takes hold. 100% satisfaction, or your money back—click here to get started.

Gold Daily and Silver Weekly Charts - Lions, and Tigers, and Bears, Oh My!

Posted: 02 Dec 2013 01:17 PM PST

Gold Daily and Silver Weekly Charts - Lions, and Tigers, and Bears, Oh My!

Posted: 02 Dec 2013 01:17 PM PST

Ron Paul’s Timeless Gold, Peace and Prosperity

Posted: 02 Dec 2013 01:14 PM PST

New addition to the Gilded Opinion Library -

With the Federal Reserve unapologetically running the money printing press at full tilt, we thought it a good time to reprint this important introduction to the dangers of currency debasement. Ron Paul’s Gold, Peace and Prosperity is as timely now as it was when it was first written in 1981. Throughout his distinguished political career as a Congressman from Texas and presidential candidate (1988, 2012), Dr. Paul has consistently made the case for gold both as backing for the currency and as a portfolio hedge/safe haven for American citizens. In keeping with these views, he was instrumental in the introduction of the American Eagle gold and silver coin series in the 1980s. His now famous Congressional exchanges with former Fed chairman Alan Greenspan beginning in the late 1990s mostly centering on the nature of central banking and the role of gold are highly recommended.

http://www.usagold.com/gildedopinion/goldpeaceprosperity.html

Metals War Rages & Today’s Plunge In Gold & Silver

Posted: 02 Dec 2013 12:45 PM PST

On the heels of another smash in gold and silver, today a man who has been trading major markets for over four decades spoke with King World News about the the ongoing war in the metals markets and today's plunge in gold and silver. Below is what James Turk had to say in his powerful interview.

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

Gold Market Secretly Decoupling

Posted: 02 Dec 2013 12:22 PM PST

With virtually all "transparency" removed from our hopelessly corrupt bullion markets; it becomes increasingly difficult to glean any indications of what is transpiring from a Big Picture perspective. We know that a supply-deficit continues to exist, due to the rampant demand created by these fraudulent, give-away prices for gold and silver – but we don't really know how large that deficit is.

We know that supply is declining, but we certainly can't trust the numbers from either the World Gold Council or the Silver Institute as to the precise quantum. Indeed, in the case of the silver market; we're told that supply magically equals demand every year – and thus any "supply deficit" at all is impossible in this mystical realm.

Of course more sophisticated readers know that these industry "fronts" are nothing more than puppet-enclaves of the banking cabal, yet more tentacles of the One Bank. The World Gold Council, in particular, is blatantly slavish in its servitude of the bankers, from publishing banker "policy papers" on what they should be allowed to do with the peoples' gold (if it still exists), to prostituting itself for the bankers in India, where they tried to dupe Indian gold-buyers into buying the One Bank's fraudulent paper-called-gold products.

We know that bullion inventories are declining, but we have no concrete data at all on what amount of stockpiles are available to replenish inventories, when they go to zero. Is it enough to satisfy demand for two more weeks, or two more years?

We do, however, have anecdotal evidence of the enormous efforts made by the One Bank to destroy gold-demand, and thus reduce the gold-deficit. This alone is proof that we are in the midst of a genuine "inventory crisis", and the collapse of Comex gold inventories (in particular) is not merely another paper façade.

Here the targets of the One Bank have been in Asia, where buying "gold and silver" means only buying real, physical metal. Thus Asian bullion-demand cannot be diluted by doing what is done in the West: selling Chumps paper, but calling it "gold" or "silver". Instead the bankers operate by pressuring governments into attacking their own, domestic markets.

The first target was Vietnam. Indeed, ever more extreme restrictions on gold imports into Vietnam going all the way back to 2008 have created an acute gold-shortage and price-decoupling in that nation. Vietnamese people pay the highest prices in the world for gold, assuming they don't venture into the thriving blackmarket – an inevitable consequence of severe import restrictions on any good.

The One Bank's next Asian target was India, traditionally the world's largest gold market, and (until recently) by far the world's largest importer of gold. Here the banksters' efforts have been chronicled in several previous commentaries. When their less-drastic measures were totally ineffective; the One Bank opted for brute-force: a complete ban on all gold imports.

Skeptical readers may be asking themselves how a banking cabal – even one the size of the One Bank, which controls 40% of the global economy – can "pressure" governments into doing whatever it wants them to do. Those readers would clearly not have read my past commentaries on the "economic terrorism" from Wall Street which brought the governments of Europe to their knees (and destroyed the economy of Greece, entirely).

Primarily through the fraudulent manipulation of the credit-default swap market; the One Bank can literally manipulate interest rates on the debt of any nation to any number it desires. With all these Western governments already on the verge of default due to absurd/extreme accumulations of debt; this power amounts to an absolute economic choke-hold over those governments.

Garbage Into Gold: The Untold Energy Revolution

Posted: 02 Dec 2013 12:17 PM PST

There should be no surprise that landfills are being drilled to install pipes to collect methane (natural gas) from the decay of trash. And it should come as no surprise that a similar collection process is occurring in municipal wastewater treatment plants by placing domes over aeration tanks to capture methane produced by anaerobic bacteria that help consume the waste. But methane is laden with carbon. It’s not as bad as gasoline, but it still adds a lot of carbon dioxide to the atmosphere.

Now comes a clever professor at the University of California’s Santa Cruz campus, and his group of affable graduate students, to design and build a machine that converts human waste directly into cheap clean energy — something that’s close to the chemical version of a perpetual motion machine.

Photo by Song Yang/UC Santa Cruz

The device is a unique and nanotechnology-tweaked combination of two unusual fuel cells that have never been combined before. One is called a microbial fuel cell (MFC). That’s most of what you see in the photo above. It’s a two-chambered device (thus the two bottles) with a cathode and an anode and a cation exchange membrane in between.

The left side of the cell is filled with water and the right side with sewage. It turns out that wastewater contains special bugs — called electrogenic bacteria — that eat hydrocarbons and carbohydrates in the sewage and produce excess electrons in the process.

“Wastewater has a complex community of bacteria. Only one or two produce electrons,” says Yat Li, associate professor of chemistry at the Santa Cruz campus. “When they produce these electrons, they need to get rid of them. We help them do that.” The resulting MFC he and his graduate students designed is essentially a wet battery.

Behind the microbial fuel cell in the photo above is a photoelectrochemical cell (PEC) filled with water that sucks up the electricity from the MFC and off-gasses hydrogen by passing a current through the water, a process known as electrolysis.

And that’s the trick of it.

Electrolysis is a great way to produce carbon-free hydrogen for fuel. When you burn hydrogen in a stove or auto engine, for example, the only byproduct is water vapor — no carbon dioxide. But electrolysis takes a hefty input of electricity, so making hydrogen that way is normally expensive and inefficient.

“Our approach is to use sunlight to power the process,” as well as those electron-making bacteria in the MFC, says Li. His PEC creates electricity by using nanotechnologies to make large-surface-area electrodes that are photo-reactive. “You could call it artificial photosynthesis.”

The process is incredibly synergistic because both a microbial fuel cell and a photoelectrochemical cell normally need a jump-start of electricity to begin working. But in Li’s machine, both the MFC and the PEC can jump-start each other. Both can work as a battery for the other. And both are capable of producing hydrogen gas. It’s kind of like a “push me-pull you” of energy.

The only thing that needs to be added from time to time is sewage. And there’s a bonus — the wastewater becomes cleaner in the process. There’s also no loss or gain of electrons in the circuit — the electricity flows from the anode in the MFC to the platinum electrode in the PEC and across to the titanium dioxide electrode in the PEC to the carbon cathode in the MFC and then back to the anode in the MFC — a continuous electrical circuit.

Next, Li and his crew, working with Lawrence Livermore National Laboratory — and its wastewater — will scale up this 100 ml lab project to a 40-liter bottle. “One of the questions we have to address is whether this scales up linearly,” Li says. “Do we have to change the electrodes or the membrane? The surface area of the electrodes, which we can magnify with nanotechnologies, is very important to making this scale up.”

Entrepreneurs and venture capitalists take note: The technology is certain to get the attention of a number of companies trying to get cheap fuel from landfills and wastewater, but so far the process is not licensed.

We will be watching for those developments.

In the meantime, to see a delightful video from Dr. Li about how an MFC works, simply click on this link.

Regards,

Stephen Petranek
for The Daily Reckoning

Ed. Note: The "garbage into gold" idea has been tried time and time again, but never in the way Stephen described above. That’s why he's tracking it for readers as it becomes more investable in the future.

Many of the best tech ideas fail, not because they are bad ideas. But because of one thing…

Timing. That’s why — if you want to stay ahead of the curve and on top of the market — with the chance to learn about real actionable ways to make money from tech, every day, sign up for the FREE Tomorrow in Review email edition, right here.

A Glimpse into the Coming Collapse

Posted: 02 Dec 2013 11:59 AM PST

By Jeff Thomas / December 2, 2013 Beginning in 1999, we predicted a systemic economic collapse that would take place in the First World and would impact all other economies. We began to list some of the “dominoes” that would fall as the collapse evolved and described that the “Great Unravelling,” as we termed it, […]

In The News Today

Posted: 02 Dec 2013 11:50 AM PST

Jim Sinclair’s Commentary A picture of our first Advisory Board meeting. Jim Sinclair’s Commentary A picture from our Dubai Q&A meeting. Jim Sinclair’s Commentary A new gold convertible currency. It will be interesting if this one get off the ground of gold phobic regulators. Alderney looks to cash in on virtual Bitcoins with Royal Mint... Read more »

The post In The News Today appeared first on Jim Sinclair's Mineset.

Von Greyerz and Embry interviewed at KWN

Posted: 02 Dec 2013 10:48 AM PST

1:45p ET Monday, December 2, 2013

Dear Friend of GATA and Gold:

Swiss gold fund manager Egon von Greyerz tells King World News that China has blown just as much a credit bubble as the West has:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/12/2_Ge...

And Sprott Asset Management's John Embry tells KWN says that at some point the world will notice that claims to gold are far greater than the real metal available:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/12/1_Th...

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



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The Daily Market Report: Gold Dips Continue to Attract Buying Interest

Posted: 02 Dec 2013 09:50 AM PST


02-Dec (USAGOLD) — Gold fell to a five-month low in early New York trading, weighed by firmness in the dollar and some better than expected U.S. economic data. The data in particular is keeping the market worried about possible Fed tapering.

The dollar index jumped to a five-day high as the euro failed to sustain recent tests above 1.3600 versus the greenback. A better than expected U.S. ISM manufacturing print for November, along with a construction spending beat for October added to persistent concerns that the Fed will start scaling back accommodations sooner rather than later.

The ebb and flow of taper expectations are also causing some nervousness in the stock market. I had the pleasure of sharing Thanksgiving dinner with a gentleman who runs a good size equity based hedge fund. Not surprisingly, the conversation turned to the sustainability of the recent run in stocks. He acknowledged to me that he’s very worried because "everyone knows the market is running on nothing but adrenaline" at this point.

When the adrenaline wears off, either because the Fed stops the flow, or because investors want to get out before it does, there could be a major correction in stocks. Certainly tocks are extremely overbought from a technical perspective. But as overextended as stocks are to the upside, gold is that overextended on the downside. If you haven’t done so already, I encourage you to read Jonathan Koasares’ excellent bit of analysis entitled Trust Your Instincts.

We here at USAGOLD continue to see very strong interest from physical buyers on dips. Many of them specifically cite their worries about the stock market as the reason for their desire to add gold to their holdings. It’s never a bad idea to lock in some of your stock market profits and buy a non-correlated asset as a hedge. Gold fits that bill nicely.

Get Ready For A Worldwide Depression & Historic Social Unrest

Posted: 02 Dec 2013 09:11 AM PST

With gold and silver being smashed once again, today a man who has been involved in the financial markets for 50 years, and whose business partner is billionaire Eric Sprott, warned King World News that investors need to prepare for an epic worldwide depression and unprecedented social unrest. He also discussed gold and silver. Below is what John Embry had to say in this powerful and timely interview.

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

The Fed Must Inflate

Posted: 02 Dec 2013 09:06 AM PST

The Fed is busy doing everything in its considerable power to get credit (that is, debt) growing again so that we can get back to what it considers to be "normal."

But the problem is that the recent past was not normal. You may have already seen this next chart. It shows total debt in the U.S. as a percent of GDP:

mart1

Source: Hoisington Investment Management Company

Somewhere right around 1980, things really changed, and debt began climbing far faster than GDP. And that, right there, is the long and the short of why any attempt to continue the behavior that got us to this point is certain to fail.

It is simply not possible to grow your debts faster than your income forever. However, that's been the practice since 1980, and current politicians and Federal Reserve officials developed their opinions about "how the world works" during the 33-year period between 1980 and 2013.

Put bluntly, they want to get us back on that same track, and as soon as possible. The reason? Because every major power center, be that in D.C. or on Wall Street, tuned their thinking, systems, and sense of entitlement, during that period. And, frankly, a huge number of financial firms and political careers will melt away if and when that credit expansion finally stops. And stop it will; that's just a mathematical certainty.

Total Credit Market Debt (TCMD) is a measure of all the various forms of debt in the U.S. That includes corporate, state, federal, and household borrowing. So student loans are in there, as are auto loans, mortgages, and municipal and federal debt. It's pretty much everything debt-related. What it does not include, though, are any unfunded obligations, entitlements, or other types of liabilities. So the Social Security shortfalls are not in there, nor are the underfunded pensions at the state or corporate levels. TCMD is just debt, plain and simple.

As you can see in this next chart, since 1970, TCMD has been growing almost exponentially.

mart2

Source: Mises.org

That tiny little wiggle happened in 2008-2009, and it apparently nearly brought down the entire global financial system. That little deviation was practically too much all on its own for the markets to handle.

Now debts are climbing again at a quite nice pace. That's mainly due to the Fed monetizing U.S. federal debt just to keep things patched together. As an aside, based on this chart, we'd expect the Fed to not end their QE efforts until and unless households and corporations once more engage in robust borrowing. The system apparently needs borrowing to keep growing exponentially, or it risks collapse.

One could ask why credit can't just keep growing. But there are many reasons to believe that the future will not resemble the past. Let's start in 1980, when credit growth really took off. This period also happens to be the happy time that the Fed is trying (desperately) to recreate. Between 1980 and 2013, total credit grew by an astonishing 8 percent per year, compounded. I say "astonishing" because anything growing by 8 percent per year will fully double every 9 years. So let's run the math experiment and ask what will happen if the Fed is successful and total credit grows for the next 30 years at exactly the same rate it did over the prior 30. That's all. This is nothing fancy, and it is simply the same rate of growth that everybody got accustomed to while they were figuring out "how the world works."

What happens to the current $57 trillion in TCMD as it advances by 8 percent per year for 30 years? It mushrooms into a silly number: $573 trillion. That is, an 8 percent growth paradigm gives us a 10-fold increase in total credit in just 30 years:

mart3

Source: Mises.org

For perspective, the GDP of the entire globe was just $85 trillion in 2012. Even if we advance global GDP by some hefty number, like 4 percent per year for the next 30 years, under an 8 percent growth regime, U.S. credit would be twice as large as global GDP in 2043.

If that comparison didn't do it for you, then just ask yourself: Why, exactly, would U.S. corporations, households, and government borrow more than $500 trillion over the next 30 years?

The total mortgage market is currently $10 trillion, so might the plan include developing an additional 50 more U.S. residential real estate markets?

So perhaps the situation moderates a bit, and instead of growing at 8 percent, credit market debt grows at just half that rate. So what happens if credit just grows by 4 percent per year? That gets us to $185 trillion, or another $128 trillion higher than today — a more than 3x increase. Again: for what will we borrow (only) $128 trillion for, over the next 30 years?

When I run these numbers, I am entirely confident that the rate of growth in debt between 1980 and 2013 will not be recreated between 2013 and 2043. But, I've been assuming that dollars remain valuable. If dollars were to lose 90 percent or more of their value (say, perhaps due to our central bank creating too many of them), then it's entirely possible to achieve any sorts of fantastical numbers one wishes to see.

For the Fed to achieve anything even close to the historical rate of credit growth, the dollar will have to lose a lot of value. This may in fact be the Fed's grand plan, and it's entirely about keeping the financial system primed with sufficient new credit to prevent it from imploding.

Chris Martenson

For The Daily Reckoning

Note: This originally appeared at Mises.org

P.S. The Federal Reserve’s unprecedented credit creation is eating away at your savings every single day. The Daily Reckoning email edition is designed to help you protect your wealth with our best tips and strategies for shrewd investors. Subscribe today by clicking here.

Time for Goldbugs to Admit Defeat?

Posted: 02 Dec 2013 08:52 AM PST

Dear Reader,

We've focused a great deal on gold over the years, and we've taken a lot of heat in the last two, during which the price of gold has dropped by a third. Are we fanatics refusing to face reality, or are we doing the right thing, staying the course through thick and thin?

BIG GOLD's Jeff Clark has a well-reasoned answer for us below. I hope all our readers take his message to heart.

Sincerely,

Louis James
Senior Metals Investment Strategist
Casey Research

Rock & Stock Stats
Last
One Month Ago
One Year Ago
Gold 1,252.10 1,345.50 1,729.50
Silver 20.03 22.49 34.35
Copper 3.19 3.28 3.59
Oil 92.72 98.20 88.07
Gold Producers (GDX) 22.28 25.78 48.04
Gold Junior Stocks (GDXJ) 32.50 39.26 87.60
Silver Stocks (SIL) 11.65 13.32 23.03
TSX (Toronto Stock Exchange) 13.395.40 13,440.61 12,202.85
TSX Venture 934.89 968.44 1,218.38

Time for Goldbugs to Admit Defeat?

Jeff Clark, Senior Precious Metals Analyst

After a 12-year run, it looks like gold's wave has truly crested, and many bears are arguing that it's all downhill from here. A quick glance at a long-term gold price chart can certainly seem to confirm this impression.

Gold's price has fallen by more than a third since its 2011 high. The downturn exceeds the 2008 waterfall selloff. Many technical analysts are saying that the "damage" on the charts is too great for gold to recover. The rout is so bad, even hardened goldbugs have grown quiet lately.

Is it time for gold investors to admit defeat?

Well, if it were true that "damage" on a chart such as we've seen signals the end of a bull market, perhaps it might be. But is it so? Or is this just a correction?

One of the greatest bull markets in modern times was the Nasdaq in the 1990s. The Nasdaq composite rose a whopping 1,150% over the span of a decade. But did you know it had a major correction in the middle of that run? The same is true of oil's big surge in the mid-2000s. Consider this chart of the big corrections oil and the Nasdaq experienced:

After seeing prices crash in both the Nasdaq and oil, most investors assumed those bull markets were over—but they weren't. Here's the subsequent rise in each after prices bottomed:

The Nasdaq and oil did recover from their large corrections—despite all the technical "damage" many pointed to as proof that those bull markets were over. Investors who sold their positions during the downdrafts missed out on some fantastic profits.

Given that all the reasons gold rose from 2001 to 2011 are still in force, I am convinced gold's current correction is the setup for a second big surge—and, ultimately, a true gold mania of historic proportions.

Just because gold doesn't seem to be reacting to Fed money-printing at the moment doesn't mean it won't. Sooner or later, reality trumps fantasy. Reason says that you can't quintuple your balance sheet in five years and expect no repercussions. The Fed keeps hinting it will taper its money printing, but it still has not. We've had QE1, QE2, Operation Twist, and now QE3… none of them has worked, and the new Fed chair wants to print even more money.

It's pure fantasy to believe there will be no consequences to these actions—and the reality is that whatever else happens, gold will react positively.

Should gold investors admit defeat? I say it's reckless central bankers who should declare defeat.

A gold recovery is inevitable. Prepare accordingly. Try BIG GOLD risk-free for 3 months to access our GLD put strategy, frequent bullion discounts, and the producers that will respond the strongest once the recovery takes hold. 100% satisfaction, or your money back—click here to get started.


Gold and Silver HEADLINES

October Chinese Gold Imports from HK Massive 131 Tonnes (Mineweb)

The latest figures show that net Chinese gold imports through Hong Kong accelerated in October to 131.2 tonnes (4.2 million ounces), making it the seventh month this year China has imported over 100 tonnes (3.2 million ounces) of gold and the sixth in a row. Total YTD imports now stand at 967 tonnes (31.0 million ounces).

Though there are no data for November available yet, it's certain that Chinese imports have reached the 1,000-tonne (32.1 million ounces) figure, forecasted by both the WGC and GFMS earlier this year. It's now estimated imports through Hong Kong this year will be more like 1,200 tonnes (38.5 million ounces).

Hong Kong is not the only route for gold imports, as Shanghai is another big source. Some analysts estimate that gold imports from all sources, combined with domestic gold production of 420-430 tonnes (13.5-13.8 million ounces), will be in the range of 2,400-2,500 tonnes (77.1-80.3 million ounces). This is over 80% of the latest estimates of world new gold output this year of 2,900 tonnes (93.2 million ounces).

Investor Confidence Returning to the Mining Industry (Mining.com)

One of the most trusted indicators of the global exploration sector's overall health—SNL Metals Economics Group's Pipeline Activity Index (PAI)—sits at a historical low, where it's been for the past six months.

The number of significant drill results has remained flat for much of 2013, and only a limited number of sufficiently capitalized junior companies continue advancing their top projects. SNL Metals Economics Group anticipates the level of drilling activity in 2014 could be the lowest in years, considering the large numbers of juniors that will begin next year with no funding and little available risk capital.

The good news is that there is sound evidence to assume the current below-average levels likely mean global drilling activities and resource announcements have hit rock bottom. The bad news is that it's hard to predict when it will rebound.

Australia's Mining Boom Is Over (Mining.com)

Investment in Australia's mining industry has declined in the last six months (through October), suggest new figures from the Bureau of Resources and Energy Economics (BREE). Compared with the prior six months, the number of "committed stage" projects (i.e., projects that have completed all permitting procedures and are either under construction or about to begin construction) dropped by 10 and the value of these projects has fallen by 10% to a combined value of A$240 billion.

Researchers name two key drivers behind the decline. During the period, there was a record for the value of projects moving into the "completion" phase of about $30 billion. And the country recorded the lowest value of new projects being sanctioned in the past decade: $1.7 billion.

Over the past decade, Australia's mining sector has enjoyed a massive influx of investment that's made the country host to several "mega mining" projects, those valued in excess of $5 billion. But now the country is in transition from the investment phase to the production phase.

"The economic benefits of the production phase may not be as large as the investment phase per year, but they are expected to last for considerably longer." However, with current commodity prices, "the industry is 'unlikely' to see a rebound to the very high price levels observed during the peak of the latest cycle."

So much for Australia's great mining tax fiasco.


This Week in International Speculator and BIG GOLD—Key Updates for Subscribers

International Speculator

  • One of our junior explorers has just raised more funds, without excessive shareholder dilution. Given how much gold this company has delivered for the money put into the ground, we're sure it will continue adding value.
  • One of our gold producers has built a new mine, not only on budget, but ahead of schedule. Shares are on sale.

BIG GOLD

Gold Bugs Index (HUI): Buy, Hold or Sell?

Posted: 02 Dec 2013 07:21 AM PST

Right now, gold stocks are like a rubber band that's being stretched to an extreme. As all rubber bands do, it will snap back. And not just that; based on how extreme the undervaluation has become, they're bound to be among the most ... Read More...

I Sleep Better With Gold Holdings Than Equities: Merk

Posted: 02 Dec 2013 06:34 AM PST

27-Nov (KitcoNews) — Axel Merk sits with Kitco News during the Metals & Minerals Conference to talk about his gold holdings and why he is now “spooked” by equities. “The reason I am spooked is because of complacency in the market. When volatility goes down and prices go up, you have money chasing equities that shouldn’t be there,” Merk says. “At the same time, you have people who don’t like gold right now and I love that.” Merk says gold is not as expensive as it once was and he sleeps a lot more comfortably with his gold holdings than his equity ones. “Now gold is much more volatile and that means there’s much more complacency in the S&P than there is in gold,” Merk says. “That’s a good thing just on a technical basis,” he adds. “Gold ultimately will do well when we get economic growth because then it will become apparent that we cannot afford positive real rates,” Merk says.

[source]

PG View: I shared Thanksgiving dinner with the head of an equities based hedge fund and we had an interesting conversation about both gold and stocks. His algorithms still has the fund long shares, but he acknowledged that “everyone knows the market is running on nothing but adrenaline” and is vulnerable to a big correction. He is taking appropriate defensive measures. Perhaps you would sleep better if you did as well…

Arab gold

Posted: 02 Dec 2013 05:56 AM PST

by Alasdair Macleod
02-Dec (Finance&Economics) — Ron Paul, the (retired) Republican Senator concluded a speech before Congress in 2006 thus:

“The chaos that one day will ensue from our 35-year experiment with worldwide fiat money will require a return to money of real value. We will know that day is approaching when oil-producing countries demand gold, or its equivalent, for their oil rather than dollars or euros.”

To most people even today this is probably a pie-in-the-sky comment, but they would be wrong not to consider it more seriously in the light of subsequent events.

The possibility of the demise of the petrodollar is increasing quite rapidly for two reasons. Firstly, US oil consumption has fallen from 38% of the World's total in 1965 to less than 20% today, while Asia/Pacific consumption has increased threefold to over 33%. Furthermore due to shale oil production US oil imports are expected to reduce further in the coming years, perhaps eliminating her oil deficit entirely, negating the need for petrodollars. This leaves the Arab nations with a stack of useless dollars.

…the unexpected catalyst for monetary chaos may well be the actions of the Middle-Eastern potentates who cornered the gold market thirty years ago.

[source]

Gold hits 1-week low on dollar, focus stays on US data

Posted: 02 Dec 2013 05:52 AM PST

02-Dec (Reuters) — Gold touched a one-week low on Monday as the dollar rose and investors awaited a series of U.S. data later in the week for clues on when the Federal Reserve will begin withdrawing its monetary stimulus.

Data this week including nonfarm payrolls, third-quarter GDP and manufacturing PMI may provide more insight into the strength of the world’s biggest economy.

“We are starting the week and month on a weak footing, carrying on a little bit of the themes that we left last week … the focus is back on the U.S. data, with the non-farm payrolls on Friday,” Saxo Bank senior manager Ole Hansen said.

Gold investors have been concerned that strong recovery could prompt the Fed to begin cutting back its $85 billion in monthly bond purchases, which would further hurt non-interest-bearing assets such as bullion.

[source]

Alasdair Macleod: Arab gold

Posted: 02 Dec 2013 05:38 AM PST

8:38a ET Monday, December 2, 2013

Dear Friend of GATA and Gold:

Economist and former banker Alasdair Macleod writes today that Middle Eastern oil exporters are likely to turn away from the U.S. dollar and toward Europe and Asia as the United States reduces its purchases of oil from abroad. Whether those oil exporters put more of their foreign exchange surpluses into gold, Macleod writes, may have as much impact on the gold and currency markets as what China does. His commentary is headlined "Arab Gold" and it's posted at his Internet site, Finance and Economics, here:

http://www.financeandeconomics.org/arab-gold/

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



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Monetary Metals Supply and Demand Report: 1 Dec, 2013

Posted: 02 Dec 2013 05:36 AM 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. Read More...

Gold Price "Under Pressure" as Market Looks to US Jobs Data, Coin Buyers "Wait for New Drop"

Posted: 02 Dec 2013 05:29 AM PST

GOLD PRICE gains of 1.1% from Friday were erased in Asian and London trade Monday morning, with the metal trading back below $1240 per ounce as world stock markets also slipped with commodities.
 
Silver tracked the gold price lower, falling from $20 per ounce at the start of Asian dealing to hit near 1-week lows $19.63.
 
The rising Pound meantime, touching its highest level since Sept.2011 after stronger-than-forecast UK house price and manufacturing data, pushed the gold price in Sterling down to new 3-year lows beneath £755 per ounce.
 
"We are looking for a push toward the [Dollar] range lows near $1180," says London market-maker Barclays in a note, pointing to the 3-year low in the gold price hit at end-June.
 
"It would take a break back above former range lows in the 1520 area to suggest any kind of a base developing...If equity markets remain firm and if prices breach $1200, the weakness is likely to be exacerbated."
 
"Many countries stock exchanges," Germany's Der Spiegel quotes economist and financial historian Robert Shiller, "are at a high level, and prices have risen sharply in some property markets.
 
"I am most worried about the boom in the US stock market...because our economy is still weak and vulnerable."
 
But looking ahead to Friday's US jobs data in the monthly Non-Farm Payrolls report, "as long as US economic data shows improvement, the probability of sooner-than-later tapering becomes more real," says chief investment strategist Wang Xiaoli at China brokerage CITICS Futures Co.
 
With officials from the US Federal Reserve saying again last week that better jobs data could spur them to cut the $85 billion of monthly quantitative easing in place since end-2012, "That should keep downward pressure on gold prices," reckons Wang.
 
Gold prices managed "something of a recovery at the end of last week," says one London trading desk in a note.
 
Friday's rally, reckons Edward Meir writing for US brokerage INTL FCStone, came "on news of political tensions emanating out of Asia," with China's airforce scrambling jets in response to Japanese and US flights over airspace claimed by the Communist state.
 
US vice president Biden is this week visiting China, Japan and South Korea.
 
Looking at the gold market, "Physical flows were limited last week with the Thanksgiving holiday," says a note from ANZ Bank, "but light physical related selling [was] seen above $1250 per ounce."
 
New data released Friday by the London Bullion Market Association showed the average daily volume of wholesale gold traded in October between the LBMA's clearing-member banks rising slightly from September.
 
Coming just shy of Oct. 2012 at 19.8 million ounces, however, that was the lowest October reading since 2010.
 
Last month saw sales of gold coins by leading bullion refiner the Perth Mint in Western Australia fall by one third, it said on its website.
 
Amid the drop in prices – the worst Dollar gold price drop since 1978 – "Evidently, some buyers still expect gold prices to fall even further," notes Commerzbank's commodity team, "and have thus been exercising restraint when it comes to purchasing coins."
 
With Google searches for the word "Bitcoin" rising 7-fold in the last month alone, the Financial Times reports that the UK's Royal Mint – currently state-owned – is considering "the possibility of manufacturing a physical commemorative coin with a Bitcoin theme."

Gold lower at 1237.68 (-13.72). Silver 19.71 (-0.231). Dollar higher. Euro lower. Stocks called better. US 10yr 2.78% (+4 bps).

Posted: 02 Dec 2013 05:21 AM PST

What are gold, silver and bitcoin doing to each other?

Posted: 02 Dec 2013 05:10 AM PST

The Real Asset Co

Gold, Silver Reverse Rally on US Data

Posted: 02 Dec 2013 04:45 AM PST

FRIDAY'S late 1.1% rally in gold was reversed in Asian and London trade Monday morning, with the metal trading back below $1240 per ounce as world stock markets also slipped with commodities. Silver tracked gold lower, falling from $20 per ounce at the start of Asian dealing to hit near 1-week lows $19.63.

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

Posted: 02 Dec 2013 02:19 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

Let’s Examine Some Facts About Gold and Silver, Precious Metals

Posted: 02 Dec 2013 01:47 AM PST

Mark Evans writes: I thought it would be instructive to examine some real concrete factual data rather than rely on the musings, conjectures, assertions, speculations and opinions from the masters of Newspkeak, Fedspeak and Doublespeak, that are nearly devoid of facts.  The misinformation, disinformation and white noise is deafening.......mission accomplished, but not in the rest of the world!

David H. Smith: Prepare for Precious Metals to Lift Off

Posted: 02 Dec 2013 12:00 AM PST

The end of the year is in sight, and many investors will soon be forced to take painful losses. David H. Smith, senior analyst at The Morgan Report, says that smart investors will take care to cull the weakest mining stocks from their portfolios and reinvest the proceeds in truly undervalued companies. In this interview with The Gold Report, Smith contends that once the market has worked through this process, a rejuvenated bull market in precious metals will eventually lead to a vertical rise in equities, with platinum group metals leading the way.

David H. Smith: Prepare for Precious Metals to Lift Off

Posted: 02 Dec 2013 12:00 AM PST

The end of the year is in sight, and many investors will soon be forced to take painful losses. David H. Smith, senior analyst at The Morgan Report, says that smart investors will take care to cull the weakest mining stocks from their portfolios and reinvest the proceeds in truly undervalued companies. In this interview with The Gold Report, Smith contends that once the market has worked through this process, a rejuvenated bull market in precious metals will eventually lead to a vertical rise in equities, with platinum group metals leading the way.

Stand Aside on Gold

Posted: 01 Dec 2013 04:00 PM PST

Gold prices have failed to rally from deeply oversold conditions. Moreover, this does not simply reflect dollar movements. The advance/decline line for gold in various currencies also is falling.

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