Monday, December 2, 2013

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Gold World News Flash 2

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

Posted: 02 Dec 2013 02:45 PM PST

Prior to 2009 gold and silver were the only two forms of sound money anyone was really aware of, but then creeping slowly onto the scene was Bitcoin.

Can't-miss headlines: Gold drops under $1,240, a lithium twist & more

Posted: 02 Dec 2013 02:31 PM PST

The latest morning headlines, top junior developments and metal price movements. Today, gold was sliding and meamtime Rockwood, a specialty chemicals company, had surprising news to report re: Talison.

Kingold Jewelry Is Fundamentally Undervalued, But Not For Long

Posted: 02 Dec 2013 12:55 PM PST

Despite the nation's rapid economic growth, for a number of years US based investors have been wary about exposing themselves to Chinese stocks. The opacity of the audit system and, in turn, the potential for fraudulent reporting has led many to turn down opportunities that, if subject to US regulation, they would have taken up. This emotional bias has led to a fundamental undervaluation of a large number of Chinese stocks, and over the past three to four months there has been some dramatic upside corrections. One company this is true of is Kingold Jewelry (KGJI), but there could be much more upside to come.

Kingold Jewelry

First, a look at the company itself. Kingold Jewelry engages in the design, manufacture, and sale of gold jewelry, ornaments, and investment-oriented products in the People's Republic of China (PRC). Founded in 2002, it has grown to become a leading producer of 24-karat

Gold equity picture not a pretty one – Bristow

Posted: 02 Dec 2013 12:43 PM PST

Recent performance by gold equities is a sad indictment of a sector that has not planned for the future, says Randgold Resources CEO, Mark Bristow.

Glivec Generics May Be Delayed In The U.S. - Buy Novartis

Posted: 02 Dec 2013 12:36 PM PST

Glivec (imatinib mesylate) which is prescribed for the treatment of Ph+ chronic myeloid leukemia is one of the most profitable drug in Novartis (NVS) marketed drug portfolio. The drug comprises about 8 percent of Novartis group sales but contributes much more to the bottom line (approximately 25-30% to groups net profit). With Glivec losing protection on its basic patent in 2015, investors expects generics (Sun pharma) to enter and this should dent NVS business margins.

Why Glivec is a high Margin product?

The annual cost of therapy for Glivec is a whopping $76000. The net margins that NVS fetches are extremely high because of two reasons

  • Being a wonder cure, or a gold standard for the treatment of patients diagnosed with Philadelphia positive Chronic myelogenous leukemia (Ph+ CML), the sales or promotional cost are much lower than what a company would spend otherwise. The typical SG&A spend is 25%, but

Relative GDP Performances Favor U.S. Assets

Posted: 02 Dec 2013 12:33 PM PST

Currency markets have been somewhat shortsighted of late, as most of the attention remains firmly focused on the U.S. dollar and the potential changes in trend direction that could be seen if the Federal Reserve. But the broader uncertainty that is generated by the stimulus guessing game leaves the greenback vulnerable to unpredictable price swings that do not lend themselves to high-probability investment decisions. Instead, it makes sense to look for less commonly traded alternatives and play things from the short side. One of the most attractive contrarian opportunities at this stage of the game can be seen in assets tied to the British pound, as broader GDP growth performance in the U.K. still lags well behind what is seen in the U.S.

One ETF to watch is the CurrencyShares British Pound Sterling Trust (FXB), which is back trading near its yearly highs above 160. The British pound itself has

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 fa├žade.

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.

Mercenary Links Dec 2nd: Bubble Trouble

Posted: 02 Dec 2013 12:21 PM PST


Mercenary Links Dec 2nd: Warnings of bubbles and housing trouble… Amazon’s drone blitz… the risk of global recession…  Japan’s “Goldman Sachs with guns,” RIP Paul Walker, and more.

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Recent Mercenary Links (scroll for archives)




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MUST LISTEN: On the Cusp of HISTORIC COMEX EVENTS – Turd & Doc Roundtable

Posted: 02 Dec 2013 12:05 PM PST

MUST LISTEN: On the Cusp of HISTORIC COMEX EVENTS - Turd & Doc Roundtable

DON'T MISS THIS ONE: "We are on the cusp of something historic happening on the Comex," says TF Metals Report's Turd Ferguson. In this SGTReport roundtable discussion which also includes the Doc from Silver Doctors, we examine the strange recent purchase of gold contracts with a $3,000 strike price in 2015. We cover the PROVEN [...]

The post MUST LISTEN: On the Cusp of HISTORIC COMEX EVENTS – Turd & Doc Roundtable appeared first on Silver Doctors.

The Matterhorn Interview: 20 Years of Supporting Bond Market via Gold Manipulation

Posted: 02 Dec 2013 12:00 PM PST

The Matterhorn Interview: 20 Years of Supporting Bond Market via Gold Manipulation

Lars Schall met up with Munich based quantitative market research analyst and GATA consultant Dimitri Speck. In this excellent interview Dimitri explains in detail what the effect of agreements between the FED, other central banks and bullion banks has been during the past 20 years, and why the original motivation to suppress the gold price [...]

The post The Matterhorn Interview: 20 Years of Supporting Bond Market via Gold Manipulation appeared first on Silver Doctors.

“Something” Must Happen

Posted: 02 Dec 2013 12:00 PM PST

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.  Another quite interesting situation is that there have only been 80 contracts “served” in the first 2 days.  This represents only 8,000 ounces.  This is odd because it does not benefit a “short” in any way to wait until later in the month to serve for delivery.  Carrying costs will only add up each day whereas the “ounces” are the ounces today just as they will be on Dec. 31…they don’t “shrink.”

“Why” would a short ever wait to serve delivery if by waiting their costs only increase each day?  One can only guess that possibly the gold is not there and must be sourced.  How can I say something as heretical as this?  Because we already know that AT LEAST 400,000 ounces need to be “sourced” because according to the COMEX themselves, registered inventory is not sufficient in quantity to make deliveries.  Again, why has there only been 8,000 ounces served in the first 2 days?  Is it possible that some of these shorts are offering a premium “in cash” to forego physical settlement?  What!???  This is heresy!  This would/could never EVER happen; it will be the battle cry!  If you think about it, ANYTHING “crooked” can (and does) happen on a daily basis so why would this be any different?  If you actually believe that “crookedness” doesn’t exist nearly everywhere in the financial markets…then sorry, that’s your opinion and will ultimately be your problem.

Has all of the gold been delivered yet from the October and November contracts?  I haven’t seen enough gold exit the warehouses yet to say that these deliveries have been satisfied.  For that matter, a case can be made that not all of the physical deliveries going all the way back to June have been made but that would be just plain conspiratorial wouldn’t it?  Please keep in mind that going back to Jan. 1st there has been very little gold that has entered the registered vaults and a drain of nearly 3 million ounces has already occurred to this point.  We have seen over 80% of the beginning inventory already exit this year…yet no one seems alarmed.  I don’t get it but maybe I’m not supposed to?

This year has been a one way street where gold has done nothing but exit Western inventories and gone East.  China alone has already imported over 1,000 tons (30 million ounces) this year.  Then you have the rest of the world to account for.  It is clear beyond a shadow of a doubt that well over 3,000 tons of demand can be accounted for on the back of an envelope while global supply is only 2,200 tons.  The gold had to come from somewhere right?  We even know the answer to this question, COMEX, GLD and LBMA have “bled yellow” so to speak…to the tune of roughly 2,000 tons.  The tightness has grown so acute that unfortunately this bleeding has now started with one of the truly good guys.  Sprott physical gold ETF has now seen smallish redemptions due to trading at a discount and has had to deliver out gold…no doubt also headed East.

This cannot go on forever and those in the East know this full well.  Why do you think that 6 different “cash” metals exchanges are being set up to go live shortly?  Because they know (or have been told) that shortly the deliveries will cease.  The West has been built on “fractional reserve” everything.  This works…for a while…especially with the currency itself because that can be freely created and provided.  In gold, silver, oil, wheat or heating oil, etc. …not so much.  Especially if you are hungry, need to drive somewhere or are cold.

Anyone using any common sense at all knew that sooner or later excess demand over supply would exhaust the existing inventories.  This is where the old saying “where the rubber meets the road” comes in.  We are, here and now at this moment about to see “who was correct?”  Will we witness “delivery default” or not?  I suppose that we could see a large deposit (it would be the first one in the last 12 months) and push the event out into the future to the February or April expirations but to what end?  The same end.  All I know is that as it currently stands, this is the very first time as far as I know (including the 1979-80 episodes) that more gold is standing for delivery than the COMEX reports to be available to deliver.  It has taken some 7 months to arrive here after the April and subsequent “ambushes” of price but we have arrived.  Something dramatic MUST happen over the next 30 days.  Either metal arrives into inventory or it doesn’t.  Either metal shows up or the COMEX will default.  This is a pretty simple observation.

Mother Nature has eaten up more and more supply with each successive raid in price.  The Chinese and their brethren have seen the writing on the wall and decided to open their own “arenas.”  “Arenas” that will spurn fractional reserve trading in lieu of CASH ONLY trading and settlement.  We can look forward to a pricing structure that is discovered by a real and free market with no fractional pikers allowed!Similar Posts:

Gold market around 25% quieter than usual

Posted: 02 Dec 2013 11:41 AM PST

The absence of Indian demand for gold left the market around 25% quieter than usual in November, but because of Chinese and other Asian demand for physical gold, demand remained relatively solid.

Worker killed at Freeport McMoRan’s Grasberg mine

Posted: 02 Dec 2013 11:15 AM PST

A worker was killed after an incident in an underground section of Freeport McMoRan's giant Grasberg copper/gold mine on Sunday.

December Market Outlook: SPX, Oil, Gold, Silver &Miners

Posted: 02 Dec 2013 11:09 AM PST

If you are a paid stockcharts.com user be sure to FOLLOW and VOTE here: https://stockcharts.com/public/1992897/

Follow My Stock & ETF Charts FREE Here: https://stockcharts.com/public/1992897/

Chris Vermeulen

The post December Market Outlook: SPX, Oil, Gold, Silver &Miners appeared first on ETF Trading Gold Newsletter.

Why Is Debt the Source of Income Inequality and Serfdom? It’s the Interest, Baby

Posted: 02 Dec 2013 11:00 AM PST

Why Is Debt the Source of Income Inequality and Serfdom? It's the Interest, Baby

If a Federal Reserve Note is a liability of the central bank, then what is the asset? The only possible answer is the nations productivity. So, in essence, an agent of the government, the central bank, most of which are privately owned (ownership is cloaked in secrecy) owns the entire productive output of free and [...]

The post Why Is Debt the Source of Income Inequality and Serfdom? It’s the Interest, Baby appeared first on Silver Doctors.

Dollar, euro and their influence on precious metals

Posted: 02 Dec 2013 10:54 AM PST

Many times in the past, the situation in the U.S. dollar and the euro gave us important clues about future precious metals' moves. Therefore, today we'll examine the U.S. Dollar Index and the Euro Index to see if there's anything on the horizon that could drive the precious metal market...

Market looks to 'improved' U.S. data as gold, silver reverse rally

Posted: 02 Dec 2013 10:48 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 $1,240 per ounce as world stock markets also slipped with commodities.

Gold & Silver Plunge As Cartel Offers Cyber Monday Sale

Posted: 02 Dec 2013 10:30 AM PST

Gold & Silver Plunge As Cartel Offers Cyber Monday Sale

After being pounded overnight throughout the London session back under $1250 and $20, the cartel has just provided precious metals investors with a full-fledged Cyber Monday sale, as gold has just been dropped down the proverbial mine-shaft to $1226, and silver to $19.43. The Silver Bullet Silver Shield Consumerism (Santa Slave) & Peace on Earth [...]

The post Gold & Silver Plunge As Cartel Offers Cyber Monday Sale appeared first on Silver Doctors.

The Old Spanish Gold Mine in the Sierra Estralla Mountains

Posted: 02 Dec 2013 10:28 AM PST

BrazilBrazil

Royal Mint considers gold-backed bitcoin

Posted: 02 Dec 2013 10:27 AM PST

The Royal Mint is planning to forge physical bitcoins in gold, a clear indication that institutions are looking to not only use the currency to energize the economy but also to enable consumers to use them for wealth preservation.

Gold storage in Switzerland increasing from tradition of respecting private property

Posted: 02 Dec 2013 10:18 AM PST

Switzerland and Germany have the highest per capita consumption of gold in Europe due to their understanding of the risks inherent in paper currencies and gold's value as a store of wealth.

WEAPONIZED BANKING- Coming Soon to a Bank Near You?

Posted: 02 Dec 2013 10:00 AM PST

WEAPONIZED BANKING- Coming Soon to a Bank Near You?

A new form of banking is here! The term “Weaponized Banking” was coined to explain the new tactics of cyber attacks, capital controls, derivative markets, and more. Is weaponized banking coming soon to a bank near you? The Silver Bullet Silver Shield Consumerism (Santa Slave) & Peace on Earth medallions are available now at SDBullion! [...]

The post WEAPONIZED BANKING- Coming Soon to a Bank Near You? appeared first on Silver Doctors.

China’s Insatiable Demand for Physical Gold

Posted: 02 Dec 2013 10:00 AM PST

In today's Featured Articles section in our newsletter, the featured topic is China's insatiable demand for physical gold.  This is the game changer.  The link between the highly leveraged paper (Comex) gold and the physical gold that is flowing east is weakening by the day.

Check out what is happening on Comex.  They have very little gold to deliver against a huge amount of contracts.  How this plays out will be interesting.  Harvey Organ sent Andy Hoffman his data on the OI (open interest).  Below, are Harvey' comments and Hoffman's comments…

Harvey Organ wrote: The December OI (Open Interest) contract month fell by 23,499 contracts to 10,157 and its resultant OI is extremely high and thus we have a huge number of gold ounces standing in December.

Today we strangely had only  68 notices served upon our longs for 6800  oz of gold. On first day notice on the biggest delivery calendar of the year, the tiny notices filed is just totally unbelievable.

In order to calculate what will be standing for delivery in December, I take the total number of notices served  (68) x 100 oz. per contract to give us 6800 oz. served from which add the difference between the OI standing for December (10,157) minus the number of contracts  served today (68)x 100 oz per contract.



Thus  we have the following  gold ounces standing for gold in Decemberand this is a initial standings for December gold:

68 notices x 100 oz. per contracts already served this month or 6800 oz. + (10,157- 68) x 100 oz. = 1,015,700 oz. or 31.59 tonnes of gold.

As you will see below we have only 14.249 tonnes in the registered or for sale category for the big 3 (JPMorgan, HSBC,Scotia) and 18.37 tonnes if you include Brinks. They will certainly need divine intervention if they are going to settle upon all of these longs.

Andy Hoffman replied: "As far as I know, this is the very first time that open interest has been larger than registered inventory on or after 1st notice day.  We also have not seen all of October’s deliveries to exit COMEX inventories yet so some of the metal already seems to be spoken for.  This is going to be interesting to say the least."

Harvey Organ wrote back: "If the data on Friday did not shock you, this will.

Amount of gold notices filed for Monday for Tuesday delivery:  Only 12.

Total notices served upon for the first two days:  Only 80

For comparison let us check silver:

Number of notices filed:  552 for  2,760,000 oz.

Total number of notices served upon in the first two days:  1338 for 6,690,000 oz/

I think we have a major problem in gold as they just do not have the physical gold to deliver upon."

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Alasdair Macleod: Arab gold

Posted: 02 Dec 2013 09:31 AM PST

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“I Fear For What’s Coming”

Posted: 02 Dec 2013 09:00 AM PST


Are you deeply concerned about the future of America?  Is something in your gut telling you that our system is fundamentally broken and that the mainstream media is not telling you the truth about what is happening?  If so, you are definitely not alone.  Right now, there are millions upon millions of Americans that are [...]

The post "I Fear For What's Coming" appeared first on Silver Doctors.

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

Posted: 02 Dec 2013 08:29 AM PST

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

Japanese yen vs NIKKEI 2013 money currency

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

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

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

From Japan Times:

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

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

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

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

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

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

Speculative effect

The consequence in the real world of the weaker Yen is not only limited to more expensive imports. Another ugly effect is that the speculative effect kicks in, accelerating the "unintended consequences." As the Yen got back into is declining trend, hedge funds took notice of this and are now betting on a continuing decline. As Zerohedgenotes: "While 'economists' are less convinced that the JPY will weaken further, and even the Japanese officials somewhat jawboning the currency's stability now, futures traders have pushed 'net shorts' (i.e. bets against the JPY) to their highest since July 2007. Between the possibility of a Fed taper (stronger USD) and fading economic gains (more BoJ QQE), it would appear that Japan's $70bn per month buying program is not going to shrink anytime soon. While the world has grown accustomed in recent months to 'hating' gold – despite the ECB and BoJ rumors of more money-printing and an inevitable un-taper by the Fed – for now, the 'dislike' of the JPY has exploded." Precious metals investors have learned in 2013 that a price crash is likely when hedge funds go aggressively short.

japanese yen vs gold short positions november 2013 money currency

 

The message we are trying to bring across is not that a crash is inevitable and imminent. We point out that it is likely to happen and that these are consequences of interventions.

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

currencies sentiment november 2013 money currency

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

metals sentiment november 2013 money currency

Key takeaways

What is the key take-away from this evolution? We see several conclusions and learnings in the bigger scheme of things, so this does not concern traders but only investors:

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

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

COMEX on the Precipice

Posted: 02 Dec 2013 08:20 AM PST

I hope you enjoyed your weekend as much as I; and honestly, I can't remember the last time I didn't write for four straight days.  Just taking a few days off, the list of topics to cover grew tremendously; and thus, it might take me some time to sort out my thoughts.

While Americans were busy trampling each other for Black Friday bargains – amidst what promises to be the weakest holiday spending season since 2009 – Central bank money printing has made the "1%" richer than ever; as the massive amounts of fiat currency channeled into financial entities have created bubbles in nearly every imaginable paper market; not only widening the wealth gap between the "rich" and "poor" to record levels, but causing some of the most absurd market dislocations of our lifetimes.  Watching Spanish stocks and bonds surge amid collapsing economic activity and surging unemployment is truly one of the financial "seven wonders of the world," surpassed only by Bitcoin temporarily exceeding the price of gold.

I have written much of Bitcoin lately – as in last week's "Cashless Society"; and will be hosting a very intriguing Bitcoin-focused Audio Blog this Thursday.  Moreover, I plan on penning a follow-up piece on the definition of money; and in the meantime, advise you to read this fine Gary North article on Bitcoin.  If there's one thing I'm determined to demonstrate, it's that no matter how promising the concept of non-government controlled currency may sound, Bitcoins themselves will never be more than speculative investments.  In fact, I'd venture to conclude the only reason they are surging in price is because the aforementioned money printing is being channeled into the financial sector; which in turn, sees Bitcoin as yet another opportunity to promote rampant speculation.  Quite ironic, given Bitcoin's supposed "hook" is that it is the antithesis of fiat money.

As for real money, the incessant suppression that has caused dollar-priced gold and silver prices to fall by 35% and 60%, respectively, over a two-year period featuring the most rampant currency creation in history is causing equally wide gulfs between the reality of physical demand and fraud of the paper futures markets.  Just last week, it was reported China's October gold imports nearly exceeded March's all-time high monthly level; and frankly, given the host of anecdotal and empirical data available, it's entirely possible this level is vastly higher than reported.

Simultaneously, Venezuela's Central bank debunked the latest Wall Street propaganda – i.e., Venezuela was leasing its gold to Goldman Sachs, presumably to be used to further suppress prices; although given China's announcement that it no longer intends to acquire foreign currency reserves, such a trifling amount as Venezuela's 170 or so tonnes is immaterial in relation to China's insatiable demand.  As I wrote last week, China has $3.6 trillion of currency reserves, growing at nearly $200 billion/quarter.  At current gold prices, annual worldwide gold production is worth just $100 billion; and thus, China may well buy every ounce of worldwide gold available.  Meanwhile, for those that believe accusations of gold suppression constitute nothing but "conspiracy theory," read this damning 1974 article – in which a senior staffer of Secretary of State Henry Kissinger stated, "We should look very hard at very substantial sales of U.S. gold, to raid the gold market once and for all."

Despite the myriad "horrible headlines" to speak of, today's topic was a no-brainer.  And that, of course is just how close the COMEX looms to a physical gold default.  Now don't get me wrong, I am not being a fear-monger on this topic; as for years, I have advised readers to take all data emanating from the COMEX with a grain of salt.  However, no matter how hard TPTB tries to obfuscate reality their "footprints" are becoming larger and more defined with each passing day; no more so than in the Physical PM markets, where supply and demand factors have never been more starkly divergent with paper prices.

Since April's "Alternative Currencies Destruction" – "coincidentally," occurring the day after a closed-door meeting between Obama and the heads of Wall Street's largest banks – an amazing thing has occurred.  The amount of "registered" COMEX gold inventory has plunged 80%; to the point that a measly $750 million worth separates this criminal operation from outright default.

In recent weeks, I have also spoken of the potentially calamitous circumstances surrounding the December COMEX gold contract; given how high its open interest has been compared to the small amount of underlying inventory.  This is by no means the first time we have seen high open interest as we approach first delivery date; however, it is the first time inventory has been so low – not to mention, amidst a period of record global physical demand, with prices so far below the cost of production.

Typically, most futures contracts are closed out or "rolled over" to the next month before the first delivery date.  However, this time around, this has not occurred.  And given that December – by far – is the largest physical delivery month, what is occurring is more than a bit intriguing.  As you can see below, the amount of paper claims on existing physical metal has never been higher; and in fact, has gone nearly parabolic since April's Cartel smack down.  Remember, it's not just us "tin-foilers" watching this development closely; but the entire world.  Clearly, something is not right; and given these trends, it's difficult to not forecast an inevitable, if not imminent, physical default.

Comex Registered Gold Stocks

As for what is likely to occur in the coming weeks, I decided to turn to one of the industry's few COMEX experts.  I may know a lot about Precious Metals, but the archaic, opaque world of the COMEX delivery process is not something I am very knowledgeable of.  Thus, I spoke to Harvey Organ this weekend, who reports on COMEX activity and GLD/SLV fund flows on his free daily blog.  In fact, Harvey is most well-known for being a panelist in the infamous March 2010 CFTC hearings, in which he and Bill Murphy made the case for blatant gold price manipulation.

According to Organ, the COMEX delivery process is dominated by three firms – JP Morgan, Scotia Macotta, and HSBC; with JP Morgan, by far, being the dominant player.  Quite "convenient" that JP Morgan is custodian for the opaque SLV silver ETF, and HSBC for GLD, huh?  Anyhow, with 10,157 contracts still outstanding after Friday's "first delivery day" for the December gold contract, clearly even these TBTF behemoths have a major problem on their hands.  After all, 10,157 contracts equates to 1,015,700 million ounces of physical gold standing for delivery, compared to just 590,820 ounces of registered inventory.  Never in the COMEX's nearly 40 year history has more gold been standing for delivery after first delivery day than registered inventory; and in this case, the disparity is by a multiple of two.

Moreover, two other major anomalies caught Organ's attention this week – in both cases, suggesting immense pressure on the aforementioned "big three" to meet such demand before the December delivery period ends on the 31st.  For one, not a single ounce of gold has been received in the JP Morgan vaults in recent weeks – or for that matter, the entire year.  This is extremely unusual, as JPM and the others typical import metal in advance of the heavy December delivery demand.  And equally strange, in the first two delivery days of the December contract period, we have thus far seen just 80 contracts tendered, totaling a measly 8,000 ounces.  Given there is essentially zero reason why someone holding a long contract would not quickly take delivery, it stands to reason that something very fishy is going on at the COMEX.  Heck, even the most die-hard Cartel apologist would have to ask why only 80 contract tenders have been reported out of 10,157 outstanding; but I guess we'll just have to wait and see what happens.

In the meantime, we're still being besieged by desperate Cartel efforts to prevent prices from rising.  In my view, such attempts to not only cap prices, but drive them significantly lower, in and of itself depicts something extremely ominous for the global financial system.  It's not like the entire world doesn't see blatantly obvious attacks like today's typical "Sunday Night Sentiment" and 2:15 AM paper raids – as proven in last week's article, "Irrefutable Manipulation Statistics."

24hr Gold 12-1 12-2

Heck, in that very article, I highlighted last Sunday night's paper gold price trading; which eerily looks exactly like today's – as well as countless other Sunday's throughout 2013.

24hr Gold 11-24 11-25

To conclude, I have no idea what will occur by the December delivery period close on the 31st; particularly in light of the fact that if a "long-term spending plan" (i.e., a budget) is not approved by the December 13th deadline (after which, Congress goes on a three-week vacation), America could be looking at a second government shutdown on January 15th.  However, what I do know is there is an indisputable dearth of physical inventory; which each month, becomes more and more acute.  Moreover, I don't know what is possessing the Cartel to push paper prices this far below the cost of production – as ultimately, it will only facilitate the wholesale "hoovering" of any remaining physical supply by the Chinese and their counterparts.

It is at times like these that I'm thankful to be 100% out of "Paper PM Investments" like mining shares, ETFs, and closed-end funds; and 100% in physical metal.  The former eats away at one's "net worth" like a plague, while the latter sits inertly, waiting for the inevitable reality of the laws of "Economic Mother Nature" to set in.  Will said reality set in by year-end?  Or 2014?  I don't know, but when it does, I do know I'll be on the long-side of the greatest wealth transfer in history.Similar Posts:

MUST LISTEN: On the Cusp of HISTORIC COMEX EVENTS – Turd & Doc Roundtable

Posted: 02 Dec 2013 08:16 AM PST

DON'T MISS THIS ONE: "We are on the cusp of something historic happening on the Comex," says TF Metals Report's Turd Ferguson.
In this SGTReport roundtable discussion which also includes the Doc from Silver Doctors, we examine the strange recent purchase of gold contracts with a $3,000 strike price in 2015. We cover the PROVEN Gold and Silver manipulation with the London fix, we chat about the new gold-backed crypto-currency known as e-gold, and we finish with the gripping story of the very real drain of PHYSICAL from the Comex.
According to Turd, 'We know that for the first time anyone can remember, the US banks are net long Comex gold futures, US banks meaning JP Morgan. And net long to the point of having CORNERED the paper gold market in New York because the position is so large. I'm talking the extent of 20% of open interest. And now we're heading into the December delivery period

Click here for The Doc & Turd Ferguson’s full interview with SGTReport:

Five things Bitcoin passing $1,000 means for investors

Posted: 02 Dec 2013 08:04 AM PST

Bitoin is massive news right now.

The media cannot stop talking about it. Retail investors are now chasing a rising bitcoin price and venture money is flowing into bitcoin related start-ups.

Helped into its next leg up by stories of Baidu's acceptance of the currency and China's strategic targeting of bitcoin as another anti-dollar play in the currency war, this most famous of the digital money darlings continues to hold above $1,000.

So what does this all mean for investors?

Well, many things in fact. Will Bancroft lists the five most important and explains what they mean for the markets and for your money.

Read more

 

CHINA: Running Out of Gold Mine Supply?

Posted: 02 Dec 2013 08:00 AM PST

CHINA: Running Out of Gold Mine Supply?

While Chinese gold mine production has increased substantially over the past decade, there is a threat that they may indeed be running out of economic gold mineable reserves in the future.  China has increased its gold production from less than 100 metric tonnes twenty years ago to a forecasted 430 mt (metric tons) in 2013. [...]

The post CHINA: Running Out of Gold Mine Supply? appeared first on Silver Doctors.

Worst raw-material slump since ’08 seen deepening

Posted: 02 Dec 2013 07:48 AM PST

The commodity slump that spurred bear markets in everything from gold to corn to sugar this year will deepen by the end of December as prices head for their first annual loss since 2008, if history is any guide.

A Special Cyber Monday Announcement

Posted: 02 Dec 2013 07:28 AM PST

It has been in the works for years and it's finally ready for The Big Unveiling. Yes, the TFMR Silver Round is now available for all of your holiday stacking needs. Like this thread, the coin is available to everyone BUT it does come with a special offer specifically for Vault subscribers.

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Arab gold and declining U.S. oil demand

Posted: 02 Dec 2013 07:04 AM PST

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.

Alasdair Macleod: Forex & LIBOR Rigging Won’t Work Without Gold Manipulation

Posted: 02 Dec 2013 07:00 AM PST

Alasdair Macleod: Forex & LIBOR Rigging Won't Work Without Gold Manipulation

In the latest Keiser Report, Max interviews gold expert Alasdair Macleod about 400 ounce London .995 gold bars being sent to Switzerland from Arab holders and melted down to 1 kilo .9999 bars, thus moving gold from the London standard, to the new better Chinese standard – suggesting we may be entering a post-petrodollar world. [...]

The post Alasdair Macleod: Forex & LIBOR Rigging Won’t Work Without Gold Manipulation appeared first on Silver Doctors.

So Gold Is Not Manipulated And There Are No Bubbles?

Posted: 02 Dec 2013 07:00 AM PST

I was away this past week and had the opportunity to view one of Via Mat’s vaults in Switzerland.  I plan to write about this but suffice to say that it would be easier to break out of a maximum security prison than to break into this fortress.  On my way back I had the chance to read several stories which have recently come out saying that we “can’t be in a bubble” because there have been so many people talking about just this very topic.  The logic goes that no bubble can exist if it is “recognized.”  It is thought that a “bubble” cannot exist if it is seen in real time and even Alan Greenspan has said that a “bubble” cannot be recognized until after the fact.  This is the topic that I had planned to write about today until I read a GATA dispatch regarding a State department meeting all the way back to 1974.  Don’t worry, I will keep my train of thought regarding “bubbles” and will get to it in a minute but Koos Jansen has dug up a doozy for those wanting to know the truth!

I say “doozy” because the minutes released are proof positive that U.S. government without a doubt follows the price of gold, cares what the price of gold does and understands (at least back then) that “he who has the gold makes the rules.”

These minutes show that Henry Kissinger (the inventor of the “petrodollar”) knew just how important that gold was.  He knew that gold was “power.”  He understood that they could not dishoard their gold and that it was of utmost importance to have the largest horde in the world.  He also knew (as did and confirmed by Paul Volcker in later years) that it was important not to “lose control” of the gold price.  “Control” being the operative word here.

Before going any further and without singling out anyone individually (because then they will whine and complain that they are being attacked personally) I would like to say that anyone who espouses that gold is not manipulated is simply foolish… period, end of story.  With one caveat, they could in fact know what the real deal is in which case they are not foolish, they are a liar and shilling for personal gain.  There has been enough evidence between market action, known supply and demand fundamentals, recorded conversations and correspondence and as I am fond of saying “common sense and logic,” that anyone who cannot see the manipulation either can’t, doesn’t want to or cannot bring themselves to see it.

All one has to do is ask the simple question “why,” why wouldn’t gold be manipulated?  For what possible reason would a government and financial systems allow their direct competitor and ultimately “arch enemy” to trade at freely discovered prices?  If a high gold price would be a signal that “official policy” was not working, why in the world would the policymakers “allow” a high gold price?  But gold is already high you say?  Really?  Compared to what?  Compared to the $35 per ounce that it used to be?  Compared to the $250 per ounce that it started the new century at?  Compared to what?  The reality is that gold should be, always has been and ultimately will again be compared to the total amounts of money and credit outstanding by various nations (and the system as a whole) versus the amounts of gold “held.”  I say “held” because this in fact IS an actual number.  It may be lied about (the U.S. claims to have more than they have and the Chinese less) but there is a factual number and this number of ounces, kilos or tons can be compared or “ratio’d” to the amount of fiat money and credit already created by these various nations, regions or the entirety.  I and many others have done the math on where a “fair value” for the dollar price of gold should be based on money supply and credit outstanding versus balances “held.”  This number is MANY multiples higher than the current prices.  And if it turns out that the amount of treasury gold “held” in reality is a very low or even a “zero” number then the true “price” of gold in dollars should approach infinity.  Laugh if you will but “infinity” is the point in time where a fiat currency goes terminal in hyperinflation and gold trades to a price where “no amount” of fiat will purchase it.

Getting back to “bubbles,” it is important to understand that we now live in a world where we either live in a bubble or a complete collapse.  Walking the “fine economic line” between inflation and deflation like we did for many years is no longer an option, let me explain why.  Credit “owed” has already gone terminal.  The amounts owed are already mathematically beyond what can be paid back.  The U.S. Treasury market cannot function without the ability to borrow more.  The Treasury cannot pay interest or principal without borrowing more.  Does it make any sense that interest rates are still near 0% for the debt from an entity that cannot pay without borrowing more to do so?  Aren’t interest rates supposed to go higher…the worse the “credit” becomes?  Is the U.S. in better financial shape today than at ANY point in its history as the all-time low rates would suggest?  The answer of course is “no” and the reality is that since the Treasury is beyond the point of no return, interest rates should actually be higher than they have ever been in our history.

Think about the “bubble” that we live in.  Unemployment is at an all-time high in this country.  No it’s not you say?  Just look for the truth.  Look at unemployment in terms of how it used to be calculated.  Look at it as John Williams does.  Or just look at it from a common sense standpoint, the number working divided by the entire population.  Of course you could look at it from the standpoint of food stamps, when 15%+ of your population needs government assistance just to eat then a problem exists.  I am highlighting “unemployment” here because once you understand that people are not working then you can move forward and make decisions on asset prices.  Should stocks be at an all-time high if people are not working?  Should real estate be priced at levels where people cannot afford to buy?  Should interest rates be “low” to entice the already “broke” to go deeper into debt?

I’ve jumped back and forth from “manipulation” to “bubbles” today…and for good reason.  Because you cannot really have one without the other in the terminal stages.  Yes there can be a bubble without manipulation or manipulation without having a bubble during normal times.  The current conditions however are not even close to normal.  We have gotten to the point where there has been so much past “chart painting” that all asset pricing has been distorted.  ALL charts must continually be painted lest an outlier would show up and question the logic of everything else.  To keep the system afloat, asset prices must continually be supported and or rise, any failure on the fringe would immediately works its way back to the center core.  I guess that the simplest way to explain this is with Richard Russell’s famous saying, “Inflate or die.”

The problem now is that we have been “inflating or die” for too long.  Bubbles have been blown in every direction that you look and have now become the new “normal.”  The “old” normal cannot exist because it would be seen as a contraction and “contraction” can never again be allowed to occur because the debt pyramid will collapse.  Put simply, we can never go back to “normal anything” as long as the outsized debt still exists.  We will live in a bubble where all markets are manipulated up and until the bubbles burst into a re set of all asset pricings.  There is no middle ground left, markets cannot be “trusted” on their own not to contract and begin a chain reaction…thus everything, 100% of the time must be managed and the bubbles must continually get larger.  Forget about the Fed tapering (tapping the brakes), they cannot even put monetary policy into a neutral gear without causing chain reaction that swallows up everything.  I will leave you with this quote from my mentor who I believe one day soon will describe the world of fiat finance and possibly become a quote for the history books… “We will wake up one day where everything is worth nothing.”Similar Posts:

Cyber Monday at SDBullion Starts…..NOW!

Posted: 02 Dec 2013 06:00 AM PST

Cyber Monday at SDBullion Starts.....NOW!

SDBullion’s blowout Cyber Monday deals will change each hour beginning at 9am! The details of the sale will be displayed at the top of SDBullion.com in a green tool bar. Make sure you check back every hour or you may miss out on the biggest deal of the year! Cyber Monday Starts NOW! Click Here [...]

The post Cyber Monday at SDBullion Starts…..NOW! appeared first on Silver Doctors.

Gold to remain weak despite seasonally strong period

Posted: 02 Dec 2013 05:09 AM PST

Investor inflows remain bearish and gold exchange traded fund holdings have failed to stabilise and preliminary data for November show outflows of 47 tons, a similar pace to October.

India's current account deficit falls to $5.2 billion in July-September quarter

Posted: 02 Dec 2013 05:06 AM PST

India's current account gap narrowed sharply to USD 5.2 billion, or 1.2 per cent of GDP, in the July-September quarter of 2013-14 on the back of turnaround in exports and decline in gold imports...

Read

Gold Storage In Switzerland Increasing Due To Swiss Tradition Of Respecting Private Property

Posted: 02 Dec 2013 05:01 AM PST

gold.ie

Gold Storage In Switzerland Increasing Due To Swiss Tradition Of Respecting Private Property

Posted: 02 Dec 2013 05:00 AM PST

→ People internationally are opting to store gold in allocated accounts in Switzerland due to their tradition of respecting private property and the fact that their economy is very sound. Therefore it is a good place to diversify assets in order to protect wealth.

Today's AM fix was USD 1,237.50, EUR 913.08 and GBP 754.30 per ounce.
Friday's AM fix was USD 1,245.25, EUR 915.29 and GBP 763.07 per ounce.

Gold climbed $13.60 or 1.07% Friday, closing at $1,251.20/oz. Silver rose $0.31 or 1.58% closing at $19.99/oz. Gold and silver were both up for the week at 0.64% and 0.60%, respectively. Platinum edged up $4.85, or 0.4%, to $1,360.25/oz and palladium fell $0.60, or 0.1%, to $715.60/oz.

Gold is lower today for the first time in three days as continuing speculation regarding possible 'tapering' by the Fed contributes to poor sentiment. The Bank of England and ECB meet this week and market participants await central bank policy decisions and will look for guidance regarding the continuation of ultra loose monetary policies.


GoldCore YouTube Channel

As ever, it is important to watch what the Fed and central banks do rather than what they say.

U.S. data including nonfarm payrolls, third quarter GDP and manufacturing PMI will be released this week, giving more insight into the fragility of the U.S. economy. The nonfarm payroll report on Friday is awaited and a poor number should see another spike in gold.

Gold was 0.64% higher last week which was important from a technical perspective and after the very poor November. Seasonally, November is one of gold's best months but gold ended November trading on Friday down 5.4%, its biggest monthly loss since June.

Gold will likely be supported by increased physical demand which has picked up at these lower price levels. Demand could pick up sharply again if prices fall below $1,240.

Tradition Of Respecting Private Property Makes
Allocated Gold In Switzerland Popular
Dukas Copy TV interviewed Research Director, Mark O'Byrne, over the weekend and discussed gold's recent poor performance, the paradigm shift that is the "enormous" Chinese gold story and  Switzerland's increasing importance in the global gold market.

The key points from the interview were the following:

→ The U.S. economy is weaker than is believed and the recent positive jobs number in itself does not indicate an economic recovery.

→ Warning that anything can happen in the short term and prices can be volatile. That is one of the reasons why  people should consider dollar cost averaging and gradually accumulating a position.

→  Gravity of situation not understood by people. Fact that the U.S. has to print $85 billion every month to buy its own mortgage and government debt is astounding.


Gold in U.S. Dollars, 10 Days – (Bloomberg)

→ Inflation has not happened yet but it will and those who own gold as hedge against inflation will again be rewarded in the medium to long term.

→ The China gold story is enormous.  There is a paradigm shift with China's per capita consumption of 1.3 billion people increasing from near zero in 2003. This is because from 1950-2003 gold ownership was banned in China under Chairman Mao. It has been increasing every year since 2003.

→ At present, China is producing and importing nearly half of global gold annual production almost 1,000 tons. This is just the gold that is imported through Hong Kong. There is also a huge amount of gold imported into other Chinese cities.

→ While 1,000 tonnes is a lot in terms of tonnage, in dollar terms it is very small and at today's price it is worth just under $40 billion. This is roughly what the Federal Reserve prints in just two weeks – every two weeks!

→ Institutional physical gold is flowing into Switzerland from London. Large London Good Delivery bars (400 oz) are being melted down in refineries in Switzerland and made into smaller formats, such as kilo bars, for shipment to Asia.


Gold in U.S. Dollars, 5 Years- (Bloomberg)

→ Switzerland and Germany have the highest per capita consumption of gold in Europe due to their understanding of the risks inherent in paper currencies and gold's value as a store of wealth.

→ People internationally are opting to store gold in allocated accounts in Switzerland due to their tradition of respecting private property and the fact that their economy is very sound. Therefore it is a good place to diversify assets in order to protect wealth.

→ GoldCore remain negative on gold in the short term due to the poor technicals and momentum. However, the medium and long term outlook is positive and we believe gold can surpass its inflation adjusted price from the 1980s of $2,400/oz in the coming years.

The 'GoldCore on Gold'  video can be watched here.

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Monex Precious Metals Review: Gold trades in $1255 1228 range, Silver support $19.85

Posted: 02 Dec 2013 03:10 AM PST

Silver: Monex spot silver prices opened the week at $19.67 . . . traded as high as $20.07 on Friday and as low as $19.63 on Wednesday . . . and the Monex AM settlement price on Friday was $19.97, up $.30 for the week.

Gold at 4-Month Lows on Strong USD- GDP, NFPs to Drive December Open

Posted: 02 Dec 2013 01:50 AM PST

dailyfx

Gold Price Analysis- Dec. 2, 2013

Posted: 02 Dec 2013 01:45 AM PST

dailyforex

Gold output increases by 12% from a year earlier in Australia

Posted: 02 Dec 2013 01:06 AM PST

Despite the gold price getting hammered in 2013, it appears this hasn't dented Australia's gold mining production as it puts in an increase both on the quarter and year-on-year. And it shouldn't be...

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$1255 holding the gold price in check for now

Posted: 02 Dec 2013 12:28 AM PST

Since the November 20th drop in gold, eventually falling to a five-month low of $1227 on November 25th, it is pretty clear where the gold sellers are still looking to get short – right at the...

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GOLD Technical Analysis Charts

Posted: 02 Dec 2013 12:20 AM PST

marketoracle

Gold forecast for the week of December 2, 2013, Technical Analysis

Posted: 02 Dec 2013 12:20 AM PST

fxempire

Ichimoku Cloud Analysis: GBP/USD, Gold

Posted: 02 Dec 2013 12:15 AM PST

fxstreet

CHARTS : Gold: Is It Really The Time To Buy?

Posted: 02 Dec 2013 12:15 AM PST

seekingalpha

Obama Kept His Head in the Sand During Healthcare.gov Fiasco

Posted: 01 Dec 2013 11:34 PM PST

The New York Times has an instructive account, Inside the Race to Rescue a Health Care Site, and Obama, of the scrambling in the Administration to deal with the beyond-redeption-by-the-power-of-spin disaster of the Healthcare.gov launch. It’s insider-ish because the Grey Lady was given special access (they got to visit the “war room”!) and by happenstance or design, skipped over how it was clear to the parties working on the website that the project was in horrific shape months before the official launch. Word of serious shortcomings was leaking out of the hermetic Administration more than six months prior to launch. For instance, Henry Chao, who was in charge of technology of the exchanges was reported back in March of having stated at a conference that he was nervous and was already setting his goals astonishingly low: “Let's just make sure it's not a third-world experience.” Later reports have given further details of remarkable planning failures, such as not having a firm hired to act as project overseer/integrator, and of having the White House completely overhaul the “customer” forms in July, the refusal to revise deadlines even as the site failed with a mere 200 user trial, and the lack of meaningful testing and debugging.

Consider this part of the Times account:

With billions of dollars at stake for their industry, insurers voiced apprehensions even before the website's start about the lack of thorough testing, and [industry lobbyist] Ms. [Karen] Ignagni presented a list of ideas to the Obama administration about what to do if the website malfunctioned. But, an insurance executive briefed on the meeting said, their concerns were waved off.

Now get a load of this: word of how bad things were had gotten out to the insurers so that they had enough time to discuss among themselves what to do, agree on some possible remedies, work up a presentation and get an audience with Administration officials. That is not a process that happens overnight. Yet Obama somehow didn’t know, didn’t care, or perhaps worst of all, believed if he just kept insisting things would get done on time, that would happen, that the imperial power of the Presidential edict would clear all obstacles.

So having the Times depict the Administration as surprised at the horrorshow of the October launch is either a sign of reporter credulity or astonishing denial on the part of Administration officials.

But the most damaging part of the piece isn’t what it says or neglects to say about the Obamacare tsuris. It’s that it reveals Obama to have been recklessly indifferent about the execution of what was billed as his signature policy initiative. One can only imagine how inattentive he is to other matters you’d expect him to take seriously.

I had been skeptical of Ron Suskind’s portrayal in his book Confidence Men of Obama as being not responsible for banking-related policy, that Geithner had quietly assumed control and Obama was therefore not really to blame. I don’t buy the effort to exculpate Obama. The president is ultimately responsible unless his troops made a deliberate effort, contrary to normal policy and/or instructions, to conceal what they were up to. But in light of Obama’s at best lack of curiosity about how the Obamacare launch was going, it’s not hard to believe Geithner was able to run financial services policy with little oversight or interference. Rather than taking ground, he may simply have been filling a vacuum.

Look at the anecdote that begins the story:

As a small coterie of grim-faced advisers shuffled into the Oval Office on the evening of Oct. 15, President Obama's chief domestic accomplishment was falling apart 24 miles away, at a bustling high-tech data center in suburban Virginia…. And inside the White House, after initially saying too much traffic was to blame, Mr. Obama's closest confidants had few good answers.

The political dangers were clear to everyone in the room: Vice President Joseph R. Biden Jr.; Kathleen Sebelius, the health secretary; Marilyn Tavenner, the Medicare chief; Denis McDonough, the chief of staff; Todd Park, the chief technology officer; and others. For 90 excruciating minutes, a furious and frustrated president peppered his team with questions, drilling into the arcane minutiae of web design as he struggled to understand the scope of a crisis that suddenly threatened his presidency.

"We created this problem we didn't need to create," Mr. Obama said, according to one adviser who, like several interviewed, insisted on anonymity to share details of the private session. "And it's of our own doing, and it's our most important initiative."

October 15? Obama can’t be bothered to understand what is amiss after punishing press coverage until October 15? The 1982 Tylenol tampering is the gold standard for how to deal with a product nightmare, in this case, poisonings. Here, the company was blindsided and not to blame. Yet it took responsibility and recalled all of its product immediately. By contrast, the Administration, precisely because it is the source of this disaster, is conflicted between fixing the problem, and its well-honed reflex of relying on PR as the remedy for any ailment.

And even after being crucified for telling whoppers like “You can keep your doctor, you can keep your insurance,” Team Obama seems incapable of plain, unvarnished statements. To wit:

But while the contractors were grateful to [management consultant] Mr.[Jeffrey] Zients for helping to create order, they saw the administration's "tech surge" — announced by Mr. Obama in the Rose Garden a few days before QSSI took over — as mostly an exercise in public relations.

The announcement conjured images of an army of software engineers descending on the project. In fact, the surge centered on about a half-dozen people who had taken leave from various technology companies to join the effort. They included Michael Dickerson, a site reliability engineer at Google who had also worked on Mr. Obama's campaign and now draws praise from contractors as someone who is "actually making a difference," one said.

Even so, one person working on the project said, "Surge was probably an overstatement."

The Times however engages in other types of puffery:

Out of that tense Oval Office meeting grew a frantic effort aimed at rescuing not only the insurance portal and Mr. Obama's credibility, but also the Democratic philosophy that an activist government can solve big, complex social problems. Today, that rescue effort is far from complete.

Um, Obama is a Republican with Democratic party identity politics protective coloring. He’s a huge admirer of Reagan, who expanded Federal deficits massively while promising to rein them in. But in classic “Nixon goes to China” fashion, it will take a putative Democrat to dismantle the New Deal, and Obama is still keen to achieve that end despite his ACA setbacks. And let us not forget that what made Obamacare into a Rub Goldberg machine was not the idea of having the Federal government pay for healthcare, which would have been comparatively simple to implement. It was the desire to provide for a faux “market” solution while further entrenching and enriching the health insurance companies.

And the Times closes the article with this vignette, clearly missing the irony:

"I'm absolutely sure we're going to make sure this country provides affordable health care for every single American," Mr. Obama told the donors. "And if I have to fight for another three years to make sure that happens, I will do so."

Obamacare was never intended to cover all Americans. But Obama seems incapable of refraining from lying.

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