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Gold World News Flash

Bernanke has set the stage for the Fed’s collapse -Jim Rogers
Bullion banks forcing hedging to replenish their gold stocks?
Can’t-miss headlines: Gold falls below $1,200, Animas backs GoGold bid & more
Bernanke has set the stage for the Fed’s collapse -Jim Rogers
Forbes finance writer suddenly recommends guns, ammo for preparedness against economic collapse
Gold reflects the destruction of paper money
Is America About To Reach A Breaking Point?
Bitcoin Takes on Gold
Koos Jansen: New Year’s Eve gold rush at Shanghai shopping mall
Koos Jansen: New Year's Eve gold rush at Shanghai shopping mall
Gold price in a range of currencies since December 1978 XLS version
And Now Gold Is Soaring
Consumer Confidence Jumps Most In 6 Months As "Hope" Soars
A Good Hedge AGAINST THE DOLLAR? Central banks scooping up Canadian dollars in droves
China Accumulates Gold For The “World Dream”
Chicago PMI Tumbles As Inventories Collapse Most Since 1977
Time to Buy Out of Favour Stock ETF's Turkey, Gold, Brazil for 2014 ?
Iranian Billionaire Promoting "PetroGold" With Turkey Arrested
Case Shiller Index Rises At Fastest Annual Pace Since 2006; Detroit Home Prices Soaring 17.3%
Gold And Silver Smashed To 2013 Lows
Two Lessons for 2014 Gold Investors
Two Lessons for 2014 Gold Investors
Two Lessons for 2014 Gold Investors
Gold Price and the 120-year Cycle Bottom
Silver Price Forecast to Hit New Highs As Quality Of Analysis Falls To New Lows
Gold's Rally and U.S. Dollar's Decline or Vice Versa?
A Fed Policy Change That Will Increase the Gold Price
Gold and Silver ETF Inventory Changes For 2013 - 942 Tonnes of Western Gold Gone
Gold and Silver ETF Inventory Changes For 2013 - 942 Tonnes of Western Gold Gone
Final Hours of US Mint 2013 Last Chance Products
Another knock down and then it’s gold’s year, Kaye tells KWN
Another knock down and then it's gold's year, Kaye tells KWN
Absolutely Shocking Developments In The War On Gold
Bank of Canada’s gold coins to be liquidated to help balance government’s budget
Bank of Canada's gold coins to be liquidated to help balance government's budget
What Blows Up First? Part 1: Europe
Gold and the 120-year Cycle Bottom
The Gold Price Gave Back $11 Closing at $1,203.10
China said to regard gold as the center of a new and fair monetary system
The Gold Price Gave Back $11 Closing at $1,203.10
The Gold Price In 2014: Forecasts And Predictions
Gold Goes Below $1200
Gold's Rally and Dollar's Decline or Vice Versa?
Gold Daily and Silver Weekly Charts - Year End
Gold Daily and Silver Weekly Charts - Year End
Turk sees rising rates, currency wars as new year's big threats
Silver Bells
The Miracle Metal Set To Rebound in 2014
What Blows Up First? Part 1: Europe
At KWN, Embry's outlook for 2014 -- international turmoil

Bernanke has set the stage for the Fed’s collapse -Jim Rogers

Posted: 31 Dec 2013 09:20 AM PST

by Alex Williams, MineWeb.com:

Gold has not bottomed and the US Federal Reserve will collapse in the next 10 years, says renowned investor Jim Rogers.

"100 years ago you could not have named the head of most central banks in the world," Rogers told Mineweb. "Now they’re all rockstars." Gold and equity markets have increasingly been locked in Fed-watch mode in 2013, obsessing over when or whether chairman Ben Bernanke would taper the bank’s vast bond buying scheme.

Rogers however, an ardent free-marketeer, says the market’s narrow focus on the Fed reflects the bank’s rising and now extreme interference in global markets, propelling the likes of Bernanke in the US and Mario Draghi in Europe to near household name status.

Read More @ MineWeb.com

Bullion banks forcing hedging to replenish their gold stocks?

Posted: 31 Dec 2013 08:42 AM PST

Could there be hidden agenda behind the latest drive by the bullion banks to insist miners hedge some of their output as a prerequisite for the provision of new finance?

“The Matterhorn Interview – 31 Dec 2013: Egon von Greyerz”

On the final day of the year we are publishing the interview that Lars Schall has just conducted with me in Zurich.

We cover a wide range of important areas which include the coming failure of the gold paper market, the importance of owning physical gold as insurance against a

… Read the rest

Is America About To Reach A Breaking Point?

Posted: 31 Dec 2013 07:46 AM PST

Submitted by Michael Snyder of The Economic Collapse blog,

In America today, there are close to 50 million people living in poverty and there are more than 100 million people that get money from the federal government every month. As the middle class disintegrates, poverty is climbing to unprecedented levels. Even though the stock market has been setting record high after record high, the amount of anger and frustration boiling just under the surface in our nation grows with each passing day.

And now extended unemployment benefits have been cut off for 1.3 million unemployed Americans, and it is being projected that a total of 5 million unemployed Americans will lose their benefits by the end of 2014. In addition, as I have written about previously, 47 million Americans recently had their food stamp benefits reduced. The conditions for a "perfect storm" are certainly being created. So how much longer will it be until we see all of this anger and frustration boil over in the streets of our major cities? Is America about to reach a breaking point?

If you think that the title of this article is "alarmist", you probably have not been paying attention to what has been happening over the past few weeks. For example, a 600 person brawl broke out at at movie theater in Jacksonville, Florida just the other day...

Five teenagers were arrested when a 600-person brawl broke out in a Florida movie theater’s parking lot on Christmas night.

Described by police as a “melee,” the fight occurred around 8:30 p.m. on Wednesday outside the Hollywood River City 14 movie theater in Jacksonville when a group tried to storm the theater’s doors without purchasing tickets, police said. Several had rushed an off-duty police officer working as a security guard.

The officer “administered pepper spray to disperse the group, locked the doors and called for backup, following protocol,” said Lauri-Ellen Smith, a spokeswoman for the Jacksonville Sheriff’s Office.

Soon after the pepper spray was used, “upward of 600 people moving throughout a parking lot about the size of a football field began fighting, disrupting and jumping on cars,” she said.

And a "flash mob" of "400 crazed teens" was so violent that it forced a mall in Brooklyn to shut down just a few days ago...

A wild flash mob stormed and trashed a Brooklyn mall, causing so much chaos that the shopping center was forced to close during post-Christmas sales, sources said Friday.

More than 400 crazed teens — who mistakenly thought the rapper Fabolous would perform — erupted into brawls all over Kings Plaza Shopping Center in Mill Basin on Thursday at 5 p.m., sources said.

The troublemakers looted and ransacked several stores as panicked shoppers ran for the exits and clerks scrambled to pull down metal gates.

In addition, the release of new Air Jordan sneakers caused mini-riots and brawls to break out all over the country just before Christmas.

So why is all of this happening?

Of course people will come up with all sorts of theories to explain these outbreaks of violence, but what pretty much everyone should be able to agree on is that we are seeing levels of anger and frustration rise to very dangerous levels in this country.

Right now, there are approximately 6 million Americans in the 16 to 24-year-old age group that are not in school and that are not working either. What that means is that we have an alarmingly high number of very frustrated young people that do not have anything better to do than to cause trouble.

In some of our largest cities this has become a massive problem. In fact, quite a few major U.S. cities actually have more than 100,000 "idle youth" living in them…

Just look at some of the nation’s largest cities. Chicago, Houston, Dallas, Miami, Philadelphia, New York, Los Angeles, Atlanta and Riverside, Calif., all have more than 100,000 idle youth, the Opportunity Nation report found.

But the Obama administration says that this should not be a problem. In fact, the Obama administration tells us that the unemployment rate has been steadily "declining" and that there are plenty of opportunities for everyone.

Of course that is a giant lie. Just before the last recession, about 63 percent of all working age Americans had a job. During the recession that number fell below 59 percent and it has stayed there ever since...

So the notion that we are experiencing an "employment recovery" is absolutely laughable.

But most of our politicians appear to believe this lie, and it is being used as justification to cut off extended unemployment benefits.

And the funny thing is that by cutting off these benefits, it is going to make it appear as though unemployment has gone down even more. Millions of unemployed workers that are being forced into the streets will now be counted as having "left the labor force", and it is being projected that the unemployment rate could decline by as much as half a percentage point as a result.

What a joke.

A lot of the people that are having their benefits cut off are really hurting. For instance, consider the case of 63-year-old paralegal Laura Walker...

“Not all of us have savings and a lot of us have to take care of family because of what happened in the economy,” said Walker, of Santa Clarita, who said she has applied for at least three jobs a week and shares an apartment with her unemployed son, his wife and two children. “It’s going to put my family and me out on the streets.”

So what is she going to do?

Well, at this point she appears to be down to just one option...

“I just don’t know what to do, except pray.”

And of course the unemployed are not the only ones that have had their benefits cut. As I mentioned above, all 47 million Americans that are currently on food stamps recently had their benefits reduced. The following is an excerpt from a recent article by Mac Slavo...

Earlier this year government benefits for nutritional assistance were reduced after the expiration of emergency legislation that was enacted following the 2008 financial collapse. Nearly all of the 48 million people receiving food stamp distributions were affected. The move led to warnings from food pantries and recipients around the country who said that the $40 billion in cuts would leave many American families without the ability to put food on dinner tables across America. According to Feed America, the roughly $29 per family that would no longer appear on their EBT cards will amount to about 1.5 billion meals in 2014.

The fact that government dependence has soared to all-time highs even in the midst of this so-called "economic recovery" is just another sign that the middle class is dying. For years, middle class families have tried strategy after strategy in an attempt to survive, but now it has become apparent that the middle class is rapidly approaching a breaking point...

Rising income inequality is starting to hit home for many American households as they run short of places to reach for a few extra bucks.

As the gap between the rich and poor widened over the last three decades, families at the bottom found ways to deal with the squeeze on earnings. Housewives joined the workforce. Husbands took second jobs and labored longer hours. Homeowners tapped into the rising value of their properties to borrow money to spend.

Those strategies finally may have run their course as women’s participation in the labor force has peaked and the bursting of the house-price bubble has left many Americans underwater on their mortgages.

And even though the Obama administration and the mainstream media have tried to convince us over and over that the economy is "getting better", most Americans are not buying it. In fact, according to a new CNN poll, 70 percent of all Americans believe that "the economy is generally in poor shape".

As the economy continues to decline, not all Americans will respond to their desperate situations by getting violent. Many suffer quietly, hoping that things will eventually turn around for them. Unfortunately, the ranks of the suffering grow with each passing year. For example, a recent CNN article discussed the continued growth of "tent cities" all over America...

The total number of homeless people residing in tents and makeshift homes is unknown. Many of these communities are small and hidden from public view, while others claim hundreds of residents and are sprinkled through major urban areas.

Some, like those tucked under roadways, are temporary and relocate frequently. Their conditions are vile, unsanitary and fail to provide refuge from storms and winds. Then there are communities, such as Dignity Village in Portland, Oregon, that have a more sustained presence. The 13-year-old "ecovillage" set up by homeless people is hygienic and self-sufficient.

Preliminary findings by The National Law Center on Homelessness and Poverty show that tent cities have been documented in almost every state, and they're growing.

So how do we solve these problems?

Are there any solutions that could get us out of this mess?

Of course there are. But don't hold your breath waiting for any of them to be adopted. In fact, the American people continue to express great support for the very people that got us into this mess in the first place. For example, according to a Gallup survey that was just released, Barack Obama is the most admired man in America by a very wide margin and Hillary Clinton is the most admired woman in America by a very wide margin.

And the mainstream media will continue to tell all of us that "leaders" like Obama, Clinton, Reid, Boehner, McConnell and Pelosi can be trusted to get us out of this mess.

If you believe that, there is a bridge that I would like to sell you.

The American people need to stop having blind faith in the relentless propaganda that is being spewed at them through their televisions screens. The pretty faces that you see "reporting the news" do not care about you and they are not watching out for your best interests. The corporate-controlled news is highly scripted and it is pretty much the same whatever channel you turn to. If you have any doubt that "the news" is scripted, just check out this video...

Bitcoin Takes on Gold

Posted: 31 Dec 2013 07:30 AM PST

by John Browne, Euro Pacific Capital:

Ever since President Nixon broke the US dollar’s last link to gold, the world has been set adrift on a sea of fiat currencies that have been increasingly debased, serving the interests of governments and financial elites. For the last five years, central banks have imposed near-zero rates of interest that have helped push up stock, bond, and real estate prices, but have made it nearly impossible for savers to receive meaningful returns on bank deposits.

To make matters worse, the apparatus of national security has turned financial transactions into a massive exercise in government surveillance. Under the camouflage of ‘protective’ measures, such as the USA PATRIOT Act, governments have invaded the privacy of citizens and compromised banking secrecy in an unprecedented and often unconstitutional manner. Despite huge potential transaction-cost reductions achievable through advances in digital technology, banks continue to charge exorbitant transaction fees while maintaining transfer delays that reflect a pre-digital age. In addition, bank regulators, led by the IMF, have shown a willingness, in the case of Cyprus, to make depositors liable for poor banking decisions. Many private citizens may naturally see the status quo as a deliberate policy to crush middle-class savers and pave the way for centralized socialism. Some have sought a way out.

Read More @ EuroPacificCapital.com

Koos Jansen: New Year’s Eve gold rush at Shanghai shopping mall

Posted: 31 Dec 2013 07:20 AM PST

GATA

10:16a ET Tuesday, December 31, 2013

Dear Friend of GATA and Gold:

Dispirited gold investors in the West may be cheered by a dispatch received today from Shanghai by gold researcher and GATA consultant Koos Jansen. It’s headlined “New Year’s Eve Gold Rush at Shanghai Shopping Mall” and it’s posted at his Internet site, In Gold We Trust, here:

http://www.ingoldwetrust.ch/new-years-eve-gold-rush-shanghai-shopping-ma…

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

* * *

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

Koos Jansen: New Year's Eve gold rush at Shanghai shopping mall

Posted: 31 Dec 2013 07:20 AM PST

10:16a ET Tuesday, December 31, 2013

Dear Friend of GATA and Gold:

Dispirited gold investors in the West may be cheered by a dispatch received today from Shanghai by gold researcher and GATA consultant Koos Jansen. It's headlined "New Year's Eve Gold Rush at Shanghai Shopping Mall" and it's posted at his Internet site, In Gold We Trust, here:

http://www.ingoldwetrust.ch/new-years-eve-gold-rush-shanghai-shopping-ma...

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

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and which stocks to buy now

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

Posted: 31 Dec 2013 07:15 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

And Now Gold Is Soaring

Posted: 31 Dec 2013 07:14 AM PST

Short-squeeze time? ... and suddenly CNBC goes quiet on the precious metals market movements.

We expect the BIS' Mikael Charoze, who is currently "red" after the recent gold slamdown, to promptly return to "green" at which point gold will once again mysteriously crash to its 2013 lows.

Consumer Confidence Jumps Most In 6 Months As "Hope" Soars

Posted: 31 Dec 2013 07:13 AM PST

Similar to UMich's confidence measure soaring by the most in 4 years, the Conference Board's confidence measure beat expectations and jumped the most in 6 months (though remains below the year's highs). This is the best beat in 4 months. The improvement is all based on "expectations" which soared the most in 6 months. Confidence is critical (as we noted below) especially since the massive majority of actual investors are already bullish...(and definitely not bearish)...

Of course, what is critical is the continuation of the confidence bubble...

As a gentle reminder, as we have noted previously - this move in confidence is key...

But, it's all about confidence... investors will not be willing to pay increasing multiples unless they are confident that the future streams of earnings are sustainable and forecastable... And simply put, the current levels of Consumer Sentiment need to almost double for the US equity market tp approach historical multiple valuation levels...

and the cycle appears to be shifting...

Via Citi,

Is consumer confidence set to turn?

Consumer Confidence is once again following a dynamic where we see it move higher for 4 years and 4 months before beginning to collapse

Moves higher from 1996-2000 with a smaller dip halfway through in October 1998
Moves higher from 2003-2007 with a smaller dip hallway through in October 2005
Moves higher and so far tops out in June 2013. Also sees a small dip halfway through in October 2011.

Higher yields do not help confidence...

A sharp rise in mortgage rates has a negative feedback loop to consumer confidence. For those families and individuals that were now looking/able to enter the housing market, the recent spike in rates acts as a headwind.

In addition to the economic backdrop, there is plenty of tail risk as we head into the end of the year. Oil prices have been rising since the summer began (and in reality since the Summer of 2012), partially due to geopolitical risks which are very much “top of mind.” A bigger spike due to a supply shock would choke the economic recovery.(In our view)

In the US, the appointment of a new Fed Chairman and the upcoming budget/debt ceiling debates are likely to bring added volatility. Tapering itself can also induce concern as the “Bernanke put” is being removed from markets.

In Europe, many of the structural problems related to the single currency union have not actually been addressed and the peripheral countries could still create turmoil going forward (see Fixed Income section focusing on Italy in particular for more on this). There has also been little concern with both the German elections and the German Court decision on the constitutionality of the OMT program. A surprise in either of these could be cause for concern.

Emerging Markets are still not out of the woods yet as growth has been weak relative to expectations and countries with current account deficits are beginning to feel pressure in their FX and Bond markets. This is an issue we believe is only starting to develop which we will continue to expand on at later dates.(We have also looked at this in our EM FX section this week)

Overall, the weak economic backdrop, poor housing recovery and potential for tail risk events over the next few months suggest that we have topped out in Consumer Confidence, a warning sign for equity markets.

The relationship between Consumer Confidence is clear, and IF June did mark the high and Confidence continues to decline, then we would expect to see that translate to weakness in the equity markets. The removal of the “Bernanke put” only adds to this concern.

A major turn has taken place in equity markets on average four months after Consumer Confidence turns, which would point to a decline beginning around September-October. As we have previously expressed, we remain of the bias that a correction in equity markets on the order of 20%+ is likely this year/ into 2014 and the current dynamics support such a move.

Should we see a decline of that magnitude, it is almost certain that yields would move lower in a rush to safe assets.

For now the mid-year highs are holding as confidence cannot escape its secular downturn.

A Good Hedge AGAINST THE DOLLAR? Central banks scooping up Canadian dollars in droves

Posted: 31 Dec 2013 07:00 AM PST

by Kevin Carmichael, The Globe and Mail:

The world's central banks are stashing away Canadian dollars at a faster rate than any other major currency, a vote of confidence at a time when the loonie has lost some of its shine in foreign-exchange markets.

Official holdings of Canadian dollars surged 23.6 per cent to $112.5-billion (U.S.) in the third quarter from the fourth quarter of 2012, according to new International Monetary Fund data released Monday.

The nine-month period marked the Canadian dollar's debut on the IMF's list of currencies held as foreign-exchange reserves by the countries that participate in its voluntary quarterly surveys

Read More @ TheGlobeandMail.com

China Accumulates Gold For The “World Dream”

Posted: 31 Dec 2013 06:58 AM PST

by Koos Jansen, In Gold We Trust:

Gold will return to the international monetary system and China will have a great influence in how this will play out. In 2013 China has imported 2000 tons of gold, quickly becoming one of the most powerful voices at the IMF table. In the following translation we can read how Mr. Zu He Liang, director at the Chinese Gold Market Research Center, sees a future for gold.

Translated by Yi Zhang from Dublin California.

Closely Followed Gold Prices reflects the Pursuit of the "World Dream"

By Zu He Liang

May 7, 2013, Beijing – The 2013 World Gold Market Trend Conference. This conference was co-sponsored by the Capitol University of Economics and Trade, The Chinese Gold Market Research Center, Economic-Trade Gold Limited and the CMP Group.

Read More @ InGoldWeTrust.com

Chicago PMI Tumbles As Inventories Collapse Most Since 1977

Posted: 31 Dec 2013 06:54 AM PST

Stocks dropped and bonds rallied modestly as the early subscribers received the Chicago PMI which missed expectations significantly. Seemingly, with taper in place, bad news is bad news as the 59.1 print (vs a 60.8 exp) is the biggest miss in 6 months. Under the covers things are even worse with the lowest employment index since April. Inventories also collapsed (by the most since 1977) which is a problem since New orders and production also plunged suggesting the post-government shutdown 'surprise' GDP-enhancing inventory-build is entirely a one-off event (as we noted here).

Biggest miss in 6 months...

Inventories collapsed the most since 1977...

and employment dumps...

Time to Buy Out of Favour Stock ETF's Turkey, Gold, Brazil for 2014 ?

Posted: 31 Dec 2013 06:47 AM PST

The best time to buy cheap is when you are afraid to bring up your ideas around the water cooler at work for fear of the peer laughter. Our work centers on looking for oversold conditions and crowd behavioral anomalies that can give us better low risk entries with good upside potential. A combination of fundamentals and technical, combined with Elliott Wave Theory patterns can lead to nice profits with low risk. For just a few quick ideas that would make sense in this area, we point out 3 ETF’s that you could look at entering now as they are way out of favor and very oversold.

Iranian Billionaire Promoting "PetroGold" With Turkey Arrested

Posted: 31 Dec 2013 06:33 AM PST

Earlier this week, in "Why The Turkish Government May Be The Casualty Of A $119 Billion PetroDollar Loophole" we said "dare to mess with the Petrodollar and the wrath of the US government will hunt you down... sooner or later." Sure enough, after resulting in a Turkish government scandal, punishing its stock market and sending the Lira reeling, the blowback has reached Iran where billionaire Babak Zanjani was arrested yesterday on corruption charges, although in reality his chief transgression was allowing the Petrogold system to show that the Petrodollar is now longer irreplaceable.

Iran's PressTV reported that the Monday arrest comes after 12 Iranian lawmakers accused Babak Zanjani of corruption, calling for an inquiry into his financial activities in a letter to the heads of the three branches of the Iranian government. "Experts say Babak Zanjani's estimated net worth is around USD 13.8 billion. The corporate mogul, aged nearly 40, owns and operates many holdings and companies, including the UAE-based Sorinet group, Qeshm Airlines and Rah Ahan Football Club in Iran." According to Head of Iran's Supreme Audit Court Amin-Hossein Rahimi, Zanjani's role in the course of transferring the country's oil revenues involved breach of law.

"After sanctions were imposed against the National Iranian Oil Company, Iran had to export oil and they gave Babak Zanjani the task of exporting some of this oil worth around USD 3.0003 billion. The problem is that they were supposed to get collateral from him by law and this was not done. This is a violation," Rahimi said in a press conference. Some other lawmakers believe Zanjani is part of a mafia that makes financial benefits out of the sanctions imposed against Iran. "Zanjani is not alone. There is a network of individuals. They are getting rich out of people's misery caused by sanctions. There is corruption here," said Iranian legislator Mohammad Reza Tabesh.

So, Zanjani was tasked to circumvent oil sanctions which he did for over a year, but now, for some inexplicable reason, he is arrested for not "getting collateral"?

Of course, that, however, is only half the story. For the full version we go to Turkey's Cumhuriyet newspaper which last week explained the full extent of Zanjani's "transgressions", the bulk of which involved allowing Iran to avoid the Petrodollar and promoting Petrogold.

This is how the real story goes as explained by Bloomberg:

Babak Zanjani, an Iranian blacklisted by the U.S. Treasury for evading Iran sanctions, denies Turkish media reports saying he was involved in illegal trade with people implicated in the country's corruption probe, Turkey's Cumhuriyet newspaper reports citing a letter from Zanjani.
Zanjani, who was used by Iranian govt to finance sales of Iranian oil, according to the U.S. Treasury, says he was involved in gold trade with Turkey
Zanjani says has a minor business relationship with Riza Sarraf, formerly Reza Zarrab, an Iranian-Azeri businessman who was arrested in the corruption probe. As a reminder, Sarraf was arrested two weeks ago along with children of two Turkish cabinet ministers, other senior bureucrats as part of a probe into accusations of graft, money laundering.
Zanjani says annual trade volume of his group of companies is around 7 billion euros; trade with Sarraf makes up a fraction of it
Zanjani says he made investments in Turkey due to "his confidence in Prime Minister Recep Tayyip Erdogan's leadership"

And seeing how Erdogan's government is on the edge, and may fall any minute, that confidence appears misplaced, with the result being Zanjani's arrest. What is unknown is whether his detention was merely Iran no longer needing his assistance to promote the usage of petrogold as a bypass of the petrodollar system now that the Iranian sanctions have been lifted. The only question we have is how much of Zanjani's arrest was due to behind the scenes US influence making it clear that the Iranian detente will only take place - nuclear enrichment strawman forgotten - only if all those who made Petrogold possible are quitely put behind bars...

Case Shiller Index Rises At Fastest Annual Pace Since 2006; Detroit Home Prices Soaring 17.3%

Posted: 31 Dec 2013 06:28 AM PST

Moments ago the October Case Shiller home price index was released which came largely as expected: the seasonally adjusted number rose by 1.05% in the month, which despite the collapse in mortgage applications, shows that cash still rules everything, as average home prices across the Composite 20 cities increased at a 13.63% annual clip, the highest since February 2006. Both were a fraction higher than the expected 0.95% and 13.50% M/M and Y/Y increases. On the more relevant NSA basis (according to the authors) however, the October increase was 0.18%, the lowest since January and an indication that the institutional "all cash" buying wave is finally fading.

Indeed, as can be seen on the chart below, the actual home price gains over the past three months have plateaued and absent another major push in early 2014 facilitating Wall Street's purchases of US real estate, it is very likely that this chart will once again resume trending lower.

And to show specifically just what the Case Shiller index tracks, here - once again - is an update on the housing market of bankrupt Detroit. In October prices rose 0.9% for the 8th consecutive monthly increase, and rose 17.3% from a year earlier. All is obviously well.

Gold And Silver Smashed To 2013 Lows

Posted: 31 Dec 2013 05:56 AM PST

As the US session starts, despite a dearth of news and actvity in other markets, the precious metals complex is being smashed lower (on heavy volume). Gold just hit 2013 lows at $1182 and Silver at $18.837 is near its 2013 lows also.

It seems someone wants the status-quo-defying precious metals going out at their lows as central-planning-supporting stocks go out at their highs...

on heavy volume...

Two Lessons for 2014 Gold Investors

Posted: 31 Dec 2013 03:25 AM PST

2014 finds gold investment shunned by trend-following money managers in the West...

GOLD has had worse years than 2013, but not many, writes Adrian Ash at BullionVault, in this article first published at ThisIsMoney.

Dropping more than 27% this year against the US dollar, gold suffered its worst year since 1981 (down 32%) and worse yet than 1975 (down 25%). But perverse as it sounds, 2013 proved gold's role as financial insurance.

For UK investors over the last 40 years, as this annual asset performance comparison shows, gold priced in Sterling has lagged the returns from the stockmarket (including dividends), gilts, cash savings and UK house prices 16 times. It has beaten those assets only eight times. In those years however, the gains on gold far outweighed its losses under better economic conditions, beating those other assets' average 3.8% return by 46 percentage points. Overall, gold has delivered 11% annual gains since 1973, second-only to the total return from the FTSE (15.4%) and comfortably beating the pace of inflation as the Pound has steadily lost purchasing power. But with stock markets surging this year, it was only natural that the price of financial insurance would fall.

2013 also proved that China's surging gold demand does not, as yet, set gold prices worldwide. Western money managers still hold the whip hand, and it was their about-turn in sentiment which sparked the crash in gold prices this spring. This change in sentiment had various roots. Boredom with six years of financial crisis. The sharp rise in equities. Growing expectation that the US central bank, the Federal Reserve, would start to reduce its QE money printing. Trend-following money managers ran for the exits from gold, shown clearly by the sharp fall in gold ETF holdings. From the record-high holdings of December last year these giant trust-fund vehicles shed one-third of their gold in 2013. That turned what had been around 250 tonnes of annual demand since the gold ETFs were launched a decade ago into 800 tonnes of supply. Turning over some 4,500 tonnes per year, the gold market buckled.

Yes, Chinese households and investors proved eager buyers, snapping up all that gold and more besides. Like a growing number of private investors in the West, they took the price crash to be an opportunity, adding to their gold holdings as a long-term investment. But their demand leapt as a result of the price drop, and it was the positioning of speculative traders in US gold futures and options which weighed heaviest of all. From a strongly bullish stance, hedge funds and other leveraged players as a group raised their betting against gold prices to the highest level since 1999, the very low of gold's two-decade bear market.

2013's deafening chorus of bearish forecasts from bank analysts also matches that historic turning point. All a bloody-minded contrarian would need now is for a Western government to start selling gold. But Gordon Brown is long gone. The idea of selling Cyprus' small gold reserves was merely discussed, not actioned in spring. Western central banks continue to hold gold close, and emerging-market governments continue to buy. When asked, they all name gold's insurance function as the No.1 reason.

Looking to 2014, events in India could be important. Formerly the No.1 consumer nation, it is now locked out of the global gold market by import restrictions aimed at cutting India's trade deficit, in the hope of supporting the Rupee without stronger interest rates. Any relaxation of the government's rules could support prices if Western selling continues. But metal is still flowing into the former No.1 market regardless, but without any duty being paid and with criminals enjoying a 10% margin over legal suppliers.

The strategic question for gold bulls, and longer-term allocations, is whether the drop of 2013 will prove to have been 1981, when gold sank from then record-highs to begin a 20-year drop. Or was it more like 1975, when central banks talked tough in inflation but then failed to follow through with strong-enough interest rates? That reloaded gold's long bull market on the 1970s, clearing hot money out of the trend and then sending prices eight times higher as resurgent inflation saw stock markets and the returns to cash savers collapse in real terms.

Here sentiment amongst Western money managers and hedge funds will again prove decisive. Further tapering by the US Fed may already be priced into gold, but the mere idea of less QE helped spark the spring 2013 crash. Less money printing, however, won't change the zero interest rates or record peace-time debts being worn by savers and investors across the West as 2014 begins.

Two Lessons for 2014 Gold Investors

Posted: 31 Dec 2013 03:25 AM PST

2014 finds gold investment shunned by trend-following money managers in the West...

GOLD has had worse years than 2013, but not many, writes Adrian Ash at BullionVault, in this article first published at ThisIsMoney.

Two Lessons for 2014 Gold Investors

Posted: 31 Dec 2013 03:25 AM PST

2014 finds gold investment shunned by trend-following money managers in the West...

GOLD has had worse years than 2013, but not many, writes Adrian Ash at BullionVault, in this article first published at ThisIsMoney.

Gold Price and the 120-year Cycle Bottom

Posted: 31 Dec 2013 02:32 AM PST

Trading volume across all exchanges has been muted lately due to the holidays. Traders are still mostly on vacation which has produced low volatility and a lack of excitement. Not much is going on in the news front, either. There was one news headline recently that was quite conspicuous, however. A news site known as the Deccan Chronicle (www.deccanchronicle.com) published a story on Dec. 25 entitled, "Lift of import curbs may crash gold prices." The story was in reference to the Indian government's proposal to relax import duties on gold. Dharmesh Bhatia, of Kotak Commodities Services Ltd., was quoted in the article as predicting a gold price crash if the Indian government removes the duties on gold imports or even relaxes the curbs significantly.

Silver Price Forecast to Hit New Highs As Quality Of Analysis Falls To New Lows

Posted: 31 Dec 2013 02:27 AM PST

The coming explosion in the value of silver will be a shock to the world due to the failure of the analyst community. I am completely amazed at the lack of quality analysis today. Except for a few good analysts, there's a sea of lousy ones who continue to put out work that becomes increasingly worthless each and every passing day. While we can totally write-off most of the forecasting that comes from the MSM - Main Stream Media, I am quite surprised at the amount of garbage coming from the alternative media. I don't mean to be blunt here, but sometimes it's best to be honest.

Gold's Rally and U.S. Dollar's Decline or Vice Versa?

Posted: 31 Dec 2013 01:58 AM PST

In our Dec. 20 commentary, we discussed the outlook for the USD Index, Euro Index, and how these currencies were likely to impact gold. We summarized the essay by writing that the situation was bullish for the USD Index, and bearish for the euro. We wrote that the implications for gold were bearish. That was 10 days ago and we haven't seen any big price swings since then (except for an intra-day decline in the USD Index, but we will move to that in just a few paragraphs). Has anything changed? Was there any kind of confirmation or invalidation that would increase the bullishness of the situation for gold? Or, perhaps, the situation is even worse now than it was before (despite a small move higher)? Let's take a look (charts courtesy of http://stockcharts.com).

A Fed Policy Change That Will Increase the Gold Price

Posted: 31 Dec 2013 01:03 AM PST

Mises.org

Gold and Silver ETF Inventory Changes For 2013 - 942 Tonnes of Western Gold Gone

Posted: 30 Dec 2013 11:47 PM PST

Gold and Silver ETF Inventory Changes For 2013 - 942 Tonnes of Western Gold Gone

Posted: 30 Dec 2013 11:47 PM PST

Final Hours of US Mint 2013 Last Chance Products

Posted: 30 Dec 2013 11:26 PM PST

The final hours of the US Mint’s 2013 Last Chance Sale have arrived, and that means this year’s commemorative silver coins, last year’s annual America the Beautiful Quarters Silver Proof Set, and several other products will be discontinued. An entire page is dedicated to the event on the US Mint’s website, and the list below […]

Another knock down and then it’s gold’s year, Kaye tells KWN

Posted: 30 Dec 2013 09:08 PM PST

GATA

12:04a ET Tuesday, December 31, 2013

Dear Friend of GATA and Gold:

Hong Kong fund manager William Kaye tells King World News tonight that 2014 will be gold’s year but probably not until the bullion banks that do the bidding of Western central banks push the price down once more to facilitate a final draining of the metal behind the exchange-traded fund GLD. China and India, Kaye notes, seem to be acquiring substantially more gold than is being produced, and so the dishoarding from Western vaults is unlikely to be able to continue much longer. KWN proprietor Eric King adds an intriguing piece of intelligence at the end of the interview. It’s posted at the KWN blog here:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/12/31_A…

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

* * *

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:

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To contribute to GATA, please visit:

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

Another knock down and then it's gold's year, Kaye tells KWN

Posted: 30 Dec 2013 09:08 PM PST

12:04a ET Tuesday, December 31, 2013

Dear Friend of GATA and Gold:

Hong Kong fund manager William Kaye tells King World News tonight that 2014 will be gold's year but probably not until the bullion banks that do the bidding of Western central banks push the price down once more to facilitate a final draining of the metal behind the exchange-traded fund GLD. China and India, Kaye notes, seem to be acquiring substantially more gold than is being produced, and so the dishoarding from Western vaults is unlikely to be able to continue much longer. KWN proprietor Eric King adds an intriguing piece of intelligence at the end of the interview. It's posted at the KWN blog here:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/12/31_A...

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

Absolutely Shocking Developments In The War On Gold

Posted: 30 Dec 2013 09:02 PM PST

Today the man who predicted the recent takedown in the gold market ahead of time spoke with King World News about some absolutely astonishing developments in the war on gold and silver. William Kaye, who 25 years ago worked for Goldman Sachs in mergers and acquisitions, also addresses what these major developments in the war on gold will mean for investors. Below is what Kaye had to say in his powerful and timely interview.

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

Bank of Canada’s gold coins to be liquidated to help balance government’s budget

Posted: 30 Dec 2013 08:54 PM PST

GATA

By Bill Curry
The Globe and Mail, Toronto
Monday, December 30, 3013

http://www.theglobeandmail.com/news/politics/bank-of-canadas-gold-coins-…

Canada’s first gold coins had barely been minted before Ottawa yanked them out of circulation a hundred years ago in an effort to stop gold from leaving the country during the First World War.

After a century of sitting in cloth bags inside the Bank of Canada vault, they are among a wide range of assets the Conservative government is liquidating — in this case literally — to save taxpayers a few dollars and help balance the books. The plan is to melt down more than 200,000 gold coins from the years 1912 to 1914, when Ottawa suspended the gold standard.

The coins have been the subject of whispers among collectors curious what happened to the $5 and $10 gold coins that Ottawa had pulled out of circulation. The mystery was lifted late last year when the Bank of Canada announced it would be offering 30,000 of the bank’s 246,000 coins for sale to collectors.

The sale is unlikely to make a big difference to Ottawa’s bottom line, but it is among a string of recent moves by the federal goverment to unload public assets as it moves to balance the books by 2015. Ottawa is in the process of selling off a variety of items, from foreign embassies to port lands. But the government’s decision to cash in on high gold prices by selling and melting the coins upset some coin collectors. Those who already had the coins in their collection did not appreciate the flood of new coins into the market, which could push down the value.

The $10 coins sold for either $1,000 or $1,750 each, depending on whether they were “premium” quality or not. The sale recently closed. Final numbers won’t be known until the spring, but a mint official confirms they came very close to selling all the coins. In fact, the move created a bit of a gold rush among Canadian collectors.

“It’s the most popular topic for 2013, for sure,” said Michael Wang, a Vancouver coin collector who bought individual coins and also paid $12,000 for a six-coin set. “My wife was about to kill me when I told her I bought this thing,” he said, laughing.

But unlike some who were dissapointed with the coins, Mr. Wang has no regrets. “Just to hold a piece of history in Canada, that’s really the important part,” he said. “This is Yukon gold or Ontario gold from back in the 1910s. It’s not like recycled gold that people are getting now from jewellery and other things that are being melted and refined. This is the actual, physical gold that came out of the ground.”

The coins had been sitting in bags at the Bank of Canada in Ottawa for decades. They were officially recorded as part of Canada’s gold holdings in the Exchange Fund Account of foreign currency.

A copy of the private agreement between the Department of Finance, the Royal Canadian Mint and the Bank of Canada offers some insight into the government’s motivation for the sale. The agreement, which was obtained through Access to Information by Ottawa researcher Ken Rubin, said the objective was to improve the liquidity of the government’s assets, provide a piece of Canadian history to coin collectors and to “extract value from coin sales for the government and taxpayers.”

Canadian currency was pegged to the price of gold from the pre-Confederation days in 1854 to 1914, reflecting a common international practice of the time. These were the first gold coins to feature a Canadian symbol: the Arms of the Dominion of Canada. The other side features King George V.

Canada briefly returned to the gold standard in 1926, but effectively abandoned it for good in 1929. The United States effectively abandoned the gold standard in 1933, but didn’t make the move official until the 1970s.

The Canadian coins weigh roughly eight grams for the $5, and 16 grams for the $10, and are 90 per cent gold. Ottawa and the Royal Canadian Mint packaged and marketed them as collectors’ items at prices above their melt value.

“These sorts of things don’t happen very often,” said Bret Evans, managing editor of Canadian Coin News. “We knew the Bank of Canada had scooped them up, but the exact information, how many were there, whether they still existed even was not known. … The hobby has long been fuelled by rumours of what were in the bank’s vaults.”

Not all collectors were happy with the government’s decision. “They should have melted them back in 1912, 1913 and 1914,” said Frank Rossi, owner of Universal Coins in Ottawa.

Mr. Rossi said collectors who already had these coins were not pleased with the sale because it drove down the value of their collections. “A market had been established,” he said. “Then all of a sudden all of these coins start appearing. … This has diluted the market. I don’t even think those coins that they did issue were in that great of a shape anyway. The coins were way overvalued. … They sold the sizzle, they didn’t sell the steak.”

It is not clear yet whether the sale did in fact push down the value of the coins. Tracking of prices by Canadian Coin News shows prices held constant throughout the sale, but that could be because there hasn’t been a lot of data lately on sales of the coins between collectors.

While buying the coins may not have been a great financial move for Canadians, it appears to have worked out well for the government. A spokesperson for Finance Canada said the government expects to make a “modest” profit from the coin sales, but it is too early to say exactly how much. In an e-mail, David Barnabe suggested that none of the remaining coins has yet been melted.

‎”The government is considering various options to manage the remaining gold coins,” he said, “including timelines for melting and any resale of the bullion.”

* * *

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:

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Bank of Canada's gold coins to be liquidated to help balance government's budget

Posted: 30 Dec 2013 08:54 PM PST

By Bill Curry
The Globe and Mail, Toronto
Monday, December 30, 3013

http://www.theglobeandmail.com/news/politics/bank-of-canadas-gold-coins-...

Canada's first gold coins had barely been minted before Ottawa yanked them out of circulation a hundred years ago in an effort to stop gold from leaving the country during the First World War.

After a century of sitting in cloth bags inside the Bank of Canada vault, they are among a wide range of assets the Conservative government is liquidating -- in this case literally -- to save taxpayers a few dollars and help balance the books. The plan is to melt down more than 200,000 gold coins from the years 1912 to 1914, when Ottawa suspended the gold standard.

... Dispatch continues below ...

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The sale is unlikely to make a big difference to Ottawa's bottom line, but it is among a string of recent moves by the federal goverment to unload public assets as it moves to balance the books by 2015. Ottawa is in the process of selling off a variety of items, from foreign embassies to port lands. But the government's decision to cash in on high gold prices by selling and melting the coins upset some coin collectors. Those who already had the coins in their collection did not appreciate the flood of new coins into the market, which could push down the value.

The $10 coins sold for either $1,000 or $1,750 each, depending on whether they were "premium" quality or not. The sale recently closed. Final numbers won't be known until the spring, but a mint official confirms they came very close to selling all the coins. In fact, the move created a bit of a gold rush among Canadian collectors.

"It's the most popular topic for 2013, for sure," said Michael Wang, a Vancouver coin collector who bought individual coins and also paid $12,000 for a six-coin set. "My wife was about to kill me when I told her I bought this thing," he said, laughing.

But unlike some who were dissapointed with the coins, Mr. Wang has no regrets. "Just to hold a piece of history in Canada, that's really the important part," he said. "This is Yukon gold or Ontario gold from back in the 1910s. It's not like recycled gold that people are getting now from jewellery and other things that are being melted and refined. This is the actual, physical gold that came out of the ground."

The coins had been sitting in bags at the Bank of Canada in Ottawa for decades. They were officially recorded as part of Canada's gold holdings in the Exchange Fund Account of foreign currency.

A copy of the private agreement between the Department of Finance, the Royal Canadian Mint and the Bank of Canada offers some insight into the government's motivation for the sale. The agreement, which was obtained through Access to Information by Ottawa researcher Ken Rubin, said the objective was to improve the liquidity of the government's assets, provide a piece of Canadian history to coin collectors and to "extract value from coin sales for the government and taxpayers."

Canada briefly returned to the gold standard in 1926, but effectively abandoned it for good in 1929. The United States effectively abandoned the gold standard in 1933, but didn't make the move official until the 1970s.

"These sorts of things don't happen very often," said Bret Evans, managing editor of Canadian Coin News. "We knew the Bank of Canada had scooped them up, but the exact information, how many were there, whether they still existed even was not known. ... The hobby has long been fuelled by rumours of what were in the bank's vaults."

Not all collectors were happy with the government's decision. "They should have melted them back in 1912, 1913 and 1914," said Frank Rossi, owner of Universal Coins in Ottawa.

Mr. Rossi said collectors who already had these coins were not pleased with the sale because it drove down the value of their collections. "A market had been established," he said. "Then all of a sudden all of these coins start appearing. ... This has diluted the market. I don't even think those coins that they did issue were in that great of a shape anyway. The coins were way overvalued. ... They sold the sizzle, they didn't sell the steak."

It is not clear yet whether the sale did in fact push down the value of the coins. Tracking of prices by Canadian Coin News shows prices held constant throughout the sale, but that could be because there hasn't been a lot of data lately on sales of the coins between collectors.

While buying the coins may not have been a great financial move for Canadians, it appears to have worked out well for the government. A spokesperson for Finance Canada said the government expects to make a "modest" profit from the coin sales, but it is too early to say exactly how much. In an e-mail, David Barnabe suggested that none of the remaining coins has yet been melted.

‎"The government is considering various options to manage the remaining gold coins," he said, "including timelines for melting and any resale of the bullion."

* * *

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Vancouver Convention Centre West
Sunday-Monday, January 19-20, 2014
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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:

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To contribute to GATA, please visit:

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What Blows Up First? Part 1: Europe

Posted: 30 Dec 2013 04:07 PM PST

Gold and the 120-year Cycle Bottom

Posted: 30 Dec 2013 04:00 PM PST

The Gold Price Gave Back $11 Closing at $1,203.10

Posted: 30 Dec 2013 03:45 PM PST

Gold Price Close Today : 1203.10
Change : -11.00 or -0.91%

Silver Price Close Today : 19.581
Change : -0.432 or -2.16%

Gold Silver Ratio Today : 61.442
Change : 0.777 or 1.28%

Silver Gold Ratio Today : 0.01628
Change : -0.000208 or -1.26%

Platinum Price Close Today : 1364.00
Change : -12.00 or -0.87%

Palladium Price Close Today : 709.90
Change : -1.15 or -0.16%

S&P 500 : 1,847.07
Change : -0.33 or -0.02%

Dow In GOLD$ : $283.58
Change : $ 3.01 or 1.07%

Dow in GOLD oz : 13.718
Change : 0.146 or 1.07%

Dow in SILVER oz : 842.87
Change : 19.49 or 2.37%

Dow Industrial : 16,504.29
Change : 25.88 or 0.16%

US Dollar Index : 80.170
Change : -0.330 or -0.41%

Today silver and GOLD PRICES gave back all Friday's gains. The gold price shrank $11 to $1203.10 while the silver price faded 43.2 cents to 1958.1c. The GOLD PRICE continues to dance around and now below an internal resistance/support line from the April low, while it remains above the downtrend line from the May high. Main point to observe is that it has not yet given any solid signal of turning up. Absent a close above $1,220 expect more downside.

The SILVER PRICE has the mildest of uptrends going, with double bottoms early in December and mid-December. Needs to stay above 1930c to maintain even that mediocre uptrend. A close over 2050c would signal an uptrend.

We're still walking through doll-house markets, so thin you could poke your finger through the walls. Dangerous to draw many conclusions from these.

Dow made another new all-time closing high today, although not an intraday high. That came Friday at 16,529.01. Oddly enough, with the Dow closing up 25.88 at 16,504.29, all the other indices fell. S&P lost 0.33 or 0.02% to 1,841.07. That negates the chance for a key reversal in the Dow, but not in the S&P500.

What can you say about markets climbing a wall? Stay out of their way. No telling where they will go or when they will break.

Silver and gold prices were slapped silly today, so the Dow in Gold and Dow in Silver rose. DiG added 0.98% to 13.71 oz, a new high for the move. DiS didn't quite make a new high, 841.41 oz against the last high at 841.56 oz. Both moved up and away from their 20 day moving averages, first tripwire of a downturn. I keep looking at these charts and seeing a near completed move, but there's nothing to confirm that.

Scabrous US dollar stabbed its fans in the back again today, falling 33 basis points (0.42%) to 80.17. It crumpled at the downtrend line like Count Dracula facing a crucifix. I keep on reading analysts calling for a higher dollar, but I can't find anything here even as inspiring as drinking a cup of coffee and finding a drowned fly at the bottom. Worse, the Dollar Index has formed a falling triangle, and those most often break out to the downside.

Euro tempered its excitement today and traded in a smaller range but with a higher close. Gained 0.37% to $1.3800, right on the downtrend line. Let's see what happens when the Big Boys return on 2 January to scatter all these thin market chiselers.

Yen rose a little today, about like frost heaving the ground over a grave. Up 0.4% to 95.13 cents/Y100. Only question is, what's keeping it even that high?

Ten year treasury yield closed at 2.976% today. Friday saw the highest interest rate since July 2011. Higher rates mean trouble for the Fed on the same scale as the La Brea tarpit for a saber-toothed tiger.

On 30 December 1861 US banks suspended convertibility of their paper money into gold or silver. This was so much fun (for the banks) that it continued until 1879.

Y'all think now. What other business, other than banking, could default on its most solemn contract yet remain in business? If any of the rest of us tried that, we'd go to jail, but now the bankers, our new nobility, are Too Big To Jail. In the US we have a very advanced legal system, with two complete sets of laws: one for the banks, then one for us peasants. Pass the gruel.

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.

China said to regard gold as the center of a new and fair monetary system

Posted: 30 Dec 2013 03:45 PM PST

6:44p ET Monday, December 30, 2013

Dear Friend of GATA and Gold:

China sees gold as the basis of a new world monetary system that is fair to all nations and not favoring any nation issuing a dominant currency, according to a speech given this year by Zu He Liang, director of the Chinese Gold Market Research Center, and reported today by gold researcher and GATA consultant Koos Jansen at his Internet site, In Gold We Trust:

http://www.ingoldwetrust.ch/china-accumulates-gold-world-dream

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

The Gold Price Gave Back $11 Closing at $1,203.10

Posted: 30 Dec 2013 03:45 PM PST

The Gold Price In 2014: Forecasts And Predictions

Posted: 30 Dec 2013 02:58 PM PST

In his latest editorial, Michael Kosares, founder of USAGold.com and author of “The ABCs of Gold Investing – How To Protect and Build Your Wealth With Gold“, introduces a series of forecasts and predictions to its readers. Not that he seems obsessed with forecasting and predicting, but he provided his readers with a nice (comprehensive) overview. He matched his own expectations with one of them, in particular the one from Scotia Mocatta (see first bullet point below). Readers are invited to sign-up for the newsletter to receive quality commentary from USAGold.com.

Mind that our own stance regarding predictions remains unchanged compared to a year ago: “Forecasting isn't about predicting the market; it's about marketing the prediction” (see The Truth About Gold Price Predictions & Market Forecasts).

Bulls Among The Financial Institutions

Scotia Mocatta, a member of the London Gold Fix, says in its lengthy “Precious Metals Forecast 2014″: “Given the funds are still net long, there are still many long term investors in ETFs and investment buying in the East is strong, highlights that the bulk of the market has not turned bearish. The next bullish chapter for Gold we think will involve greater monetization of Gold as confidence in fiat money and government paper deteriorates and when that happens we think central banks and investors will end up chasing prices higher. How high prices end up going is difficult to say. In 2008, the market dropped 33 percent, before rallying 180 percent to the 2011 highs. It would require a 63 percent rally from the $1,180/oz lows to get back to the highs, which seems a tall order in the current climate, but it may not be out of the question at some stage in the years ahead. For 2014, a return to $1,435/oz would not be too surprising, but whether prices could then move up above $1,450/oz might be expecting too much. If they did, it would suggest sentiment is turning more bullish. Whether sentiment turns bullish next year, or further down the road is difficult to call, but at some stage given the debt situation we think it will.”
Merrill Lynch forecasts a $1294 average with a rise to $1350 by year-end. It says gold will under-perform silver, but that gold could trade as high as $2000 per ounce by 2016.
Germany’s Commerzbank says gold “will shake off its current weakness” and end the year around $1400 per ounce. “Speculative financial investors have now largely exited the gold market, as evident from the fact that net-long positions are at a seven-year low,” it says. “The negative market sentiment towards gold is also reflected in negative media reports and for the most part pessimistic price forecasts. All of this may indicate a rapid reversal of the trend. After the price has successfully bottomed out, gold ETFs should report inflows again from the second quarter, supporting the price recovery.” It also says that a pick-up in economic economy will create “stronger industrial demand in 2014.”
Barclays Bank, another member of the London Gold Fix, says gold will average $1350 in the first quarter of 2014 but track back to $1270 per ounce by year-end.

Bears Among The Financial Institutions

Goldman Sachs predicts “significant decline” in gold for 2014 – at least a 15% decline.
UBS lowered its 2014 gold forecast to a $1200 per ounce average. “Our expectation for weaker prices by no means suggests a straight path south. The $1200 average forecast reflects the view that the gold market will fluctuate widely as it faces the crosscurrents of an improving macro backdrop, the changing landscape of physical demand and, ultimately, the implications on mine production.”
Analysts at J.P Morgan Cazenove forecasted average gold prices to drop by 10% to $1,263 an ounce for 2014 and by12% to $1,275 for 2015, according to a research note dated Thursday. The New Year will be characterized by tapering and low U.S. inflation, with the downside exacerbated by the re-emergence of producer-price hedging, the analysts said.
Credit Suisse: “If the gold price were to continue to retreat along its current trajectory, the metal would be trading close to $900 per ounce by the end of 2014.”
Societe General, a member of the London Gold Fix, predicts an average price of $1050 per ounce in the final three months of 2014: “Regardless of the precise timing underpinning our negative view towards gold is that the ultraloose stance of monetary policy is gradually unwound.”
Morgan Stanley says gold will extend losses into 2014 amid speculations the Federal Reserve will pare stimulus. “We recommend staying away from gold at this point in the cycle.”

Calls from individual investors and gold enthusiasts

Art Cashin from UBS:

“There are always surprises. You will recall that although she hasn’t been confirmed by the Senate, Yellen is to take over as the Chairman of the Fed. And every Fed Chairman, not only the ones that I’ve known over 50 years but the ones that have been there for the full 100 year history, have been tested in their first year by some market event. For Greenspan it was the Crash of 1987, and for Bernanke it was the Great Recession. I’m going to be very interested because we are seeing one possible impact of that already and that is mortgage rates are creeping up — therefore, mortgage applications have dropped off. We’re back to mortgage applications falling to the level they were when Lehman was being deconstructed.

That is a very, very significant indicator. It is more timely than some of the housing sales and a variety of other things. So if we find that the mortgage rates creep up and the mortgage applications continue to fall, the Fed may have to reverse itself with a ‘red face’ even before it gets started. I think it would be very significant in that people would begin to wonder, ‘Is the Fed in any control at all?’ If they had to reverse rather quickly, before they even began the taper, then people would wonder, ‘How much in control are these people? How much do they know?’”

Richard Russell:

“I believe that coming up we are going to see a fourth devaluation of the dollar against gold. By doing this the US Treasury will overnight have a vastly greater supply of wealth compared with its debt, putting its finances in a much healthier state.

How high might the US re-set the official price of gold? You pick a number — $5,000, $10,000 or $50,000, but the number should be high enough so that the price of gold won’t have to be re-set again in a hurry.

There are two problems with a re-set in the price of gold. (1) The government may decide to confiscate gold from its people. (2) There are arguments regarding how much gold the US Treasury actually owns. There have been no recent audits, and some of our gold may have been loaned out.”

Bachharaj Bamalwa, director of the All India Gems and Jewellery Trade Federation (via the IndoAsian News Service):

“The World Bank and the International Monetary Fund may have written off gold as an investment option but the yellow metal shows no sign of losing its sheen in India. In 2013 not only did gold prices witness an upward march to touch Rs 34,600 per 10 grams, the demand also remained somewhat intact. Steady demand, despite import restrictions, saw gold prices swaying between Rs 26,440 per 10 grams in April to Rs 34,600 per 10 grams in August. ‘Gold will always remain an asset class in India. It will never fetch any negative return. Temporarily, there can be some reverses but in the long term it cannot fade away.”

Marc Faber from the Gloom Boom Doom Report:

“My sense is that at the present time, the US market is relatively expensive compared to foreign markets, especially to European markets and to emerging markets. On a cyclically-adjusted P/E [price-to-earnings] basis, it is actually going to return very little over the next seven to 10 years. . . ‘Given all the money printing that is going on globally – and not just in the US – and given that the total credit as a percent of the advanced economies is now 30% higher than in 2007 before the crisis hit, I think that gold is a good insurance.’”

James Rickards, Author of “Currency Wars”:

“There’s certainly some Central Bank manipulation. There’s some fundamental reasons having to do with what we’ve been talking about, which is deflation. Gold should go down in a deflation environment initially. But if deflation gets bad enough, the government will make the price of gold go up because they get desperate to create inflation.

If you’ve tried everything, if you want inflation, and you’ve tried everything to create it, so you tried money printing, cutting rates, currency wars, Operation Twist, QE, forward guidance, nominal GDP targeting, you’ve tried everything, you still didn’t get the inflation. There’s one thing that always works, which is devaluing your currency against gold. So there could come a time when deflation gets so bad that the Fed and the treasury actually raise the price of gold, not to enrich gold investors, but to get close to generalized inflation. Because if gold goes up, silver and oil will go up along with it. It’s exactly what happened in 1933. So that’s one path. But the other, perhaps more likely path, is that the Fed just keeps printing money and finally succeeds in changing behavior, velocity of the turnover money picks up and inflation goes up on its own. Then gold will race way ahead of that.”

Tyler Durden from ZeroHedge:

“The question of Buba’s relationship with other central banks still remains open, however one thing we have just learned is the pace at which the German Central Bank has been able to repatriate its gold. It would make a snail proud. Yesterday Buba head Jens Weidmann told Bild that gold valued at €1.1 billion has been repatriated so far. Putting a weight to this number: to date the Bundesbank has received shipments of a paltry 37 tons of gold from its existing storage place in either New York or Paris to Germany: ‘The gold reserves of the country will be stored in Frankfurt because it has a special storage with the corresponding equipment,’ said Carl-Ludwig Thiele, a Bundesbank board member.

The repatriated amount over the course of all of 2013 represents just over 5% of the total stated target of 700 tons, and is well below the 87.5 tons that the Bundesbank would need to repatriate each year if it were to collected the 700 tons ratably ever year in the 8 year interval between 2013 and 2020.

So the question begs: since the price of gold has tumbled in 2013 (according to many driven in part by the Buba’s own demand, which would make procuring gold in the open market for the US and French central banks that much easier for subsequent dispatch to Frankfurt) and one would assume there would be many more sellers than buyers of physical, why would the Bundesbank not be able to obtain a far greater share of the gold? Unless, of course, neither New York nor Paris actually have free, unencumbered physical gold in their possession -with most of it leased out to various even closer ‘partners’ – and are scrambling to procure as much physical as they can find at the new low, low prices (thank you paper gold ETF dumping).

Chris Powell from GATA:

We see these enormous volumes of gold moving from West to East, sometimes through Switzerland. We saw the disparity in the Bank of England’s gold vaulting reports between February and June, where 1,200 tons of gold seemed to disappear. When I asked the Bank of England about that they basically told me to drop dead and they would have no further comment on the matter.

All of this echoes what Kaye [Hong Kong analyst, William Kaye] is saying. We can see these gold outflows from the West, and we can also see the inflows to the East. We don’t know exactly when the metal will run out, but we do know we have seen this movie once before. This is exactly what happened when the London Gold Pool was drained. The pool collapsed and there were emergency US Air Force transport flights, according to the Federal Open Market Committee Meeting Minutes, flying gold over from the United States to the Bank of England in 1968. This was at a time when the Bank of England was advancing its own gold into the market on behalf of the United States, in an attempt to hold the gold price at $35 an ounce.

In March of 1968, the outflow of gold had reached hundreds of tons per week. At that point, the nations participating in the London Gold Pool realized they had only a few weeks’ worth of gold left at that staggering rate of outflow. So, they closed the London Gold Pool.

The dollar price of gold literally failed at that point. The price of gold was $35 an ounce of gold one day, and the next day there was no price at all because there was no official market. I suspect that either that will happen, and the gold that is available will run out, or more likely the central banks will see what’s coming and arrange an international currency revaluation. At that point there will be chaos in the gold and currency markets, but in the end this will mean substantially higher gold after the official reset of the international gold price.”

Doug Casey from Casey Research:

“First thing you should do is buy some gold coins – or one gold coin I should say – and buy an equal amount of silver coins and that should constitute your financial foundation . . . Bonds remain a triple threat to your capital. With interest rates at all time lows, that means bonds are at all time highs. . .Second thing is that bonds are denominated in paper currencies and those currencies are going to lose value much faster over the next couple of years due to the trillion of units being created by governments,” he added. “Third thing is default risk…so bonds are a horrible place for your money, I wouldn’t trust them with a 10-foot pole.”

Jeff Clark from Casey Research:

“If you’re like me, you’ve bought gold due to the money printing policies of most developed countries and the effect those policies will have on the future purchasing power of our paper money. Probably also because there’s no viable way for governments to escape the consequences of all the debt they’ve piled up. And maybe because politicians can’t be trusted to formulate a realistic strategy to avoid any number of monetary, fiscal, or economic crises going forward.

These are valid, core reasons to hold gold in a portfolio at this point in time. But a new trend is under way, and someday soon it will be just as much a driving force for gold prices as anything else: a good old-fashioned supply crunch.

A few metals analysts have mentioned it, but it escapes many and certainly is off the radar of the mainstream financial media. But unless several critical factors reverse course, a supply shortage is on the way with clear implications for the price of gold.”

Richard Kyosaki:

“When the big bad wolf, also known as the Next Recession or New Depression, hits sometime between 2015 and 2035, these pigs will also be food for the wolf. The third pig builds his house out of tangible assets. These pigs are entrepreneurs and professional investors who study and invest for their own future, investing in real assets, not paper assets. When the big bad wolf comes, in that 20-year window between 2015 and 2035, those who have built houses of “bricks” are likely to get richer. They become richer because they built with bricks, investing in tangible assets such as real estate, gold, silver, oil, food, and businesses they control.

I would definitely avoid paper assets such as stocks, bonds, mutual funds, and ETFs and the reason is these are paper assets, not real assets. Think of the story of the Three Little Pigs: The first pig built his house out of straw, the second pig built his house out of sticks, and the third pig built his house out of bricks. Here’s my spin on that story: The first pig represents the poor. Poor people build their house out of paper. They work hard for cash and save cash. Their strategy is to work hard, live below their means, and save money. When the big bad wolf appears, huffing and puffing, these pigs are wolf food. The second pig represents the middle class. They build their houses out of illusions, believing in job security, benefits, owning their home, saving money, and investing in a retirement plan filled with stocks, bonds, mutual funds, and ETFs.”

James Turk from Goldmoney:

“There is another reason to look back over the past 13 years, Eric, and view them as one time span: One losing year after 12 winning years is not that bad. Even with 2013 added in, over the last 13 years gold has generated an average annual return greater than 13%. It has been and remains one of the best assets to own, particularly given that neither physical gold nor physical silver has counterparty risk, and just like every other bubble inflated by banks or governments, the ‘Money Bubble’ will pop too.”

John Embry from Sprott Asset Management:

“I’ve been to San Francisco with my wife 40 times, and I have never seen the city of San Francisco slower at any time in the past 40 years. I went shopping for Christmas gifts, and normally there would be lines out in the street at some of these places. Instead, I went right in with no wait, made my purchases and went straight to the cashier and paid without waiting.

So there is something strange going on. Everyone is saying the US economy is strengthening, and President Obama was saying today that there could be a real turnaround in 2014. I see all of this as propaganda and outright lies because from what I observed with my own eyes, the bullish talk is patently false.

I don’t see the strength in the US economy at all. They just had about the third or fourth upward revision of the 3rd quarter GDP. And now, because the consumer had not been doing well, they cranked up the consumer numbers in the latest adjustment. So I think there is something seriously wrong, and as a result they are falsifying a lot of data in a desperate attempt to try to cover it up. But I strongly believe that the harsh reality will become all too obvious as 2014 unfolds.”

Gold Goes Below $1200

Posted: 30 Dec 2013 02:11 PM PST

Gold is getting hammered down below the psychological support zone at $1200 as we move into the last day of trading before the advent of 2014. The break, coming in spite of a weaker Dollar, does not bode well for the fortunes of the metal to begin the New Year. The story remains the same – gold performed abysmally this past year as big speculators were chasing gains in the equity markets and yanking money out of gold and many other commodities in general.

I see nothing on the near term horizon to suggest that this is going to change as we begin 2014, barring some sort of catalyst such as an event that comes out of nowhere. Right now the VIX is indicating complete complacency and a total lack of fear/concern anywhere.

The daily chart shows the price moving down into a most important technical support zone. Gold has been able to garner enough buying on forays into this zone to force a rebound in the price, even if that rebound did not last all that long. Whether or not these buyers remain willing at this level is unclear. If not, gold is going to break the bottom of the support zone near $1180 and will easily lose another $30 for starters. If the buyers show up, then the metal can continue to grind sideways above this support zone but without a catalyst to kick it higher, the intermediate trend dictates that rallies in the metal should be sold.

I am noting that the ADX is moving sideways indicating that the downtrend has temporarily halted on the daily chart but that the bears remain firmly in control of this market. If support at $1180 breaks, look for the ADX to turn up as gold will resume its downtrend and might then target the $1100 level depending on how many hedge funds decide to exit from the long side of this market. Remember, they are still net longs in there and that is what concerns me that the bleeding in gold is not yet finished.

We got the CFTC Commitments of Traders data released this afternoon as the report was delayed due to the Christmas holiday last week. It did indicate some long liquidation from the hedge fund community occurred last week but they still are NET LONGS in this market to the tune of some 28,700 contracts. The Other Large Reportables actually increased their net long position about 3,800 contracts with the result that the two groups of large speculators remain net longs. The small specs, or general public, actually finally moved to a small net short position.

The big, bad bullion banks were generally buying again this week but never fear, the “gold is always manipulated at all times crowd” will swear up and down that these banks are the ones that are knocking the price lower. Both the Producer/User/Merchant category and the Swap Dealers were Buying from Hedge funds who were selling this past week.

All in all, the report provides further evidence that money flows are coming out of gold and into equities. This is the reason the gold price is continuing to sag lower. It will until this process ends and then reverses.

(original source: Dan Norcini’s personal blog)

Gold's Rally and Dollar's Decline or Vice Versa?

Posted: 30 Dec 2013 01:26 PM PST

Gold Daily and Silver Weekly Charts - Year End

Posted: 30 Dec 2013 01:25 PM PST

Gold Daily and Silver Weekly Charts - Year End

Posted: 30 Dec 2013 01:25 PM PST

Turk sees rising rates, currency wars as new year's big threats

Posted: 30 Dec 2013 12:43 PM PST

3:40p ET Monday, December 30, 2013

Dear Friend of GATA and Gold:

GoldMoney founder and GATA consultant James Turk today tells King World News that the biggest threats in 2014 may be rising interest rates and the intensification of currency wars triggered by Japan. An excerpt from the interview is posted at the King World News blog here:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/12/30_T...

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

Silver Bells

Posted: 30 Dec 2013 12:42 PM PST

As the Christmas season passes, and the end of 2013 is upon us; this is a natural time to reflect upon what has transpired over the last year in the precious metals sector. Obviously 2013 will not be viewed as a good year, in retrospect, by precious metals investors.

This was the year of Hostage Markets; the year that the One Bank demonstrated in its own, inimitable, heavy-handed manner that it had corrupted our markets to the point where it could freeze bullion prices at any number it chose – regardless of supply/demand fundamentals. However, while these fundamentals have become virtually invisible, by no means have they ceased to exist.

Rather, in exerting absolute short-term control over bullion markets the One Bank has inadvertently once again demonstrated its (long-term) impotence against those fundamentals. When it perpetrated the Cyprus Steal to create a "precedent" for its newest form of paper-theft (the "bail-in"); the One Bank caused a stampede out of its own paper-called-gold, and an unprecedented collapse in the entire paper-gold market.

Worse still (for the Bankers), this exodus out of paper-called-gold manifested itself primarily in the form of a stampede into real, physical bullion. In part; this was a reflection of paper-called-gold holders swapping paper for metal – with the inevitable effect of a massive draw-down in Comex inventories.

However, the stampede out of paper-called-gold also caused an inevitable plunge in the price of gold, all "gold". Thus at the same time that Western paper-holders were causing an artificial drop in the price of gold by moving from paper to metal; Eastern gold-buyers also stampeded into the market – attracted by the give-away prices created by that exodus.

Indeed, as reported earlier this year; at one point gold imports into China and India alone had spiked to an annualized rate of about 4,000 tonnes/year. This occurs in a global market where annual mine-supply is well below 3,000 tonnes/year, and falling.

Facing a new "supply crisis" in bullion markets (and again one of its own creation); the One Bank responded with its most blatantly brutal tactics to date. By manipulating the exchange rate of India's currency to a record-low (via its now-exposed FX-rigging); the One Bank blackmailed the government of India into suspending all gold imports into the world's largest gold market.

The Laws of Supply and Demand responded, again. Part of the frustrated demand for gold within the Indian population re-ignited gold-smuggling into India. Indeed, the government of India had spent years liberalizing trading rules for importing gold into the country precisely because gold-smuggling had previously been so prevalent. Thus it required only days to re-open those dormant smuggling routes.

However (as also previously noted) part of the frustrated demand for gold in India has morphed into demand for Poor Man's gold: silver. A year which started out appearing to be a record year for Indian gold-imports quickly pivoted into a year of record silver imports instead.

The Miracle Metal Set To Rebound in 2014

Posted: 30 Dec 2013 11:00 AM PST

[This article originally appeared in the Daily Resource Hunter on July 16, 2013]

Almost everywhere I go, almost every place I look, I’m seeing new uses for what I call the “miracle material.” Research budgets are skyrocketing. The top scientific minds of the world are flocking into a new field that barely existed five years ago.

In the past year, for example, I’ve visited U.S. National Laboratories, such as Sandia in New Mexico. I’ve visited restricted defense sites like the Naval Research Laboratory, near Washington, D.C. I’ve visited major industrial players like Boeing and… well, others that I toured, but under non-disclosure agreements that keep me from saying too much.

Here’s what I can tell you: I see all manner of new uses for this “miracle material.” These new apps are taking the old economy to new places. Companies are already making big money — and planning to make an even bigger mint-load — with new applications for advanced batteries, better electronics, improved optics and stronger and lighter construction materials.

Indeed, from the iPhone in your pocket to the airport where Boeing’s new 787 Dreamliner lands, it’s fair to say that this material has become the foundation for a new North American — and global — economic revolution. There’s a profitable way to play it, too.

I’m talking about carbon. In particular, I’ve been watching the evolution of carbon in the form of graphite, graphene, nanotubes and more — new “miracle materials” that have new uses each year. As longtime readers surely know, one of the most investable pure-play carbon ideas is GrafTech International (GTI). With current prices in the doldrums, it’s time to look at it again.

Small, but Mighty

GrafTech is headquartered in Parma, Ohio, where it started back in the 1880s supplying carbon arc street lamps to the city of Cleveland. Today, GrafTech has 19 manufacturing facilities globally and a sales presence in over 70 countries.

GrafTech has a modest market cap of $1 billion — tiny compared with the big oil, mining and service plays that we often deal with here. Yet GrafTech is mighty in its own sort of way. That is, GrafTech provides indispensible graphite products for customers across a range of industries, to include steel manufacturing, advanced energy and cutting-edge electronics.

In the past year and a half, GrafTech’s share price has drifted down. This was due to all manner of market negativity, ranging from the lingering effects of the 2008 market crash and Great Recession to the more recent “down” market for steel. Whatever the constellation of reasons for the share price decline, right now the company is a bargain — nearly 50% off from my initial write-up.

For all the disappointment of its share price retreat, market metrics fail to acknowledge that GrafTech is a leader in must-have carbon applications, as well as futuristic carbon-based ideas. In other words, GrafTech is doing well, and its shares are positioned to come back strong, riding the wave of an even slightly improved economy. I can foresee a double from here, in the next year.

Critical to Low-Cost, High-Quality Steel

Let’s start by reviewing GrafTech in terms of its bread and butter, which is selling into the steel industry. GrafTech graphite electrodes are critical to electric arc furnaces, which are the source of much of the highest-quality steel that gets poured into ingots.

Yes, the global steel industry is hurting because of the Chinese economic slowdown — to be precise, China is still growing, but at a slower pace. Lower steel prices mean that manufacturers have an incentive to close the least efficient operations.

But in the steel biz, the least efficient furnaces are NOT the carbon arc smelters. Indeed, electric arc equipment tends to be the most efficient at steelmaking. In other words, you run the electric arc furnaces and scale back on the other old plant and equipment. In fact, on average, graphite electrodes represent a mere 2% of production costs for arc furnaces.

Meanwhile, across the steel industry, there are no substitutes for what GrafTech sells, and there are only a few competitors. That is, steelmakers can buy graphite product from German and Japanese companies, but there are no outsiders coming up that can easily break into the electrode arena. It helps that GrafTech holds a large portfolio of over 700 patents on graphite products and related carbon applications.

Engineered Carbon

Aside from steel, GrafTech has a fast-growing business with engineered carbon solutions, such as graphite-based structural materials, fireproofing, coatings, batteries and innumerable other new energy applications.

Let’s take fireproofing as an example. GrafTech sells a product called “expandable graphite,” which other manufacturers can add to plastic, foam, putty, paint or other coatings. Expandable graphite doesn’t take up much volume initially. Yet when it warms up in a fire, this material expands to over eight times its volume and creates a “char” layer. That is, expandable graphite forms an insulating, nonburning barrier with a high heat rating.

Not to be ghoulish, but if the steel in the World Trade Center had been fireproofed with expandable graphite, the structural elements might not have weakened as quickly or as much due to fire. The Twin Towers might never have collapsed.

Or consider GrafTech’s line of flexible graphite materials. Think of a roll of wallpaper, except it’s made of graphite or reinforced laminated graphite. You can make all manner of gaskets, pipe coatings and other applications out of this material, and it’s as easy as unrolling the material and cutting it to fit a shape. Some versions of the product are strong enough, and of sufficient corrosion resistance, to be certified for use in nuclear power applications.

Or consider the carbon sheets that go into small, powerful batteries. The market for smaller, better batteries grows every day, from more and more iPhones and such, to the embryonic automotive sector that builds and sells “electric” cars — in whole or in part of the propulsion system. Globally, this is a sector that’s just on the cusp of rocket-like growth.

GrafTech’s product catalog is filled with a similar array of items that support all manner of futuristic applications. It’s just a question of the markets evolving and customers meeting up with GrafTech materials that can offer a solution.

In a recent meeting with one of the country’s leading carbon researchers, he told me that “each one of these [carbon-based] ideas could be a billion-dollar industry — or more — in its own right.” And GrafTech is on the ground floor of this coming business cornucopia.

Already Showing on the Bottom Line

At GrafTech, many of these new technological ideas have already taken root and show up on the bottom line. GrafTech’s engineered solutions business has grown strongly from $121 million in sales in 2009 to $223 million in 2012. Thus, new carbon apps are already helping GrafTech to balance out the cyclical nature of the steel industry, as well as creating organic sales growth in their own right.

I foresee better days ahead for GrafTech. The technology is impressive and hard for others to imitate, let alone surpass. GrafTech sales are strong. Profits can grow. The share price ought to rebound from current lows and outpace the rest of the market.

That’s all for now. Thanks for reading.

Byron W. King
for The Daily Reckoning

Ed. Note: Byron appears regularly in the Daily Resource Hunter email edition, and gives readers a leg-up on the world’s most exciting resource and energy plays. If you’re not getting the Daily Resource Hunter email edition, you’re missing out on some serious profit opportunities. Don’t wait. Sign up for FREE, right here.

Original article posted on Daily Resource Hunter

What Blows Up First? Part 1: Europe

Posted: 30 Dec 2013 10:22 AM PST

2013 was a year in which lots of imbalances built up but none blew up. The US and Japan continued to monetize their debt, in the process cheapening the dollar and sending the yen to five-year lows versus the euro. China allowed its debt to soar with only the hint of a (quickly-addressed) credit crunch at year-end. The big banks got even bigger, while reporting record profits and paying record fines for the crimes that produced those profits. And asset markets ranging from equities to high-end real estate to rare art took off into the stratosphere.

Virtually all of this felt great for the participants and led many to conclude that the world's problems were being solved. Instead, 2014 is likely to be a year in which at least some – and maybe all – of the above trends hit a wall. It's hard to know which will hit first, but a pretty good bet is that the strong euro (the flip side of a weakening dollar and yen) sends mismanaged countries like France and Italy back into crisis. So let's start there.

The basic premise of the currency war theme is that when a country takes on too much debt it eventually realizes that the only way out of its dilemma is to cheapen its currency to gain a trade advantage and make its debts less burdensome. This works for a while but since the cheap-currency benefits come at the expense of trading partners, the latter eventually retaliate with inflation of their own, putting the first country back in its original box.

In 2013 the US and especially Japan cheapened their currencies versus the euro, which was supported by the European Central Bank's relative reluctance to monetize the eurozone's debt. The following chart shows the euro in the past six months:

For more details:

Euro rises to more than 2-year high vs. dollar; yen falls
The euro jumped to its strongest level against the dollar in more than two years on Friday as banks adjusted positions for the year end, while the yen hit five-year lows for a second straight session.

The dollar was broadly weaker against European currencies, including sterling and the Swiss franc. Thin liquidity likely helped exaggerate market moves.

The European Central Bank will take a snapshot of the capital positions of the region’s banks at the end of 2013 for an asset-quality review (AQR) next year to work out which of them will need fresh funds. The upcoming review has created some demand for euros to help shore up banks’ balance sheets, traders said.

“There’s a lot of attention on the AQR, and there’s some positioning ahead of the end of the calendar year,” said John Hardy, FX strategist at Danske Bank in Copenhagen.

Comments from Jens Weidmann, the Bundesbank chief and a member of the European Central Bank Governing Council, also helped the euro. He warned that although the euro zone’s current low interest rate is justified, weak inflation does not give a license for “arbitrary monetary easing.

The euro rose as high as $1.3892, according to Reuters data, the highest since October 2011. It was last up 0.3 percent at $1.3738.

The currency has risen more than 10 cents from a low hit in July below $1.28, as the euro zone economy came out of a recession triggered by its debt crisis.

Unlike the U.S. and Japanese central banks, the European Central Bank has not been actively expanding its balance sheet, giving an additional boost to the euro.

Here's what a stronger euro means for France, the second-largest and arguably worst-managed eurozone country:

French Economy Contracts 0.1% In Third Quarter
The final estimate of France's gross domestic product, or GDP, in the third quarter remained unchanged at the previous estimation of a contraction of 0.1 percent, indicating that the euro zone’s second-largest economy is struggling to sustain the rebound it witnessed in the second quarter with a growth of 0.6 percent.

The third-quarter GDP growth was in line with analysts' estimates. According to data released on Tuesday by the National Institute of Statistics and Economic Studies, the deficit in foreign-trade balance contributed (-0.6 points) to the contraction in the third quarter, compared to the positive (0.1 percent) contribution made in the preceding quarter.

Some thoughts
At the beginning of 2013, most of the eurozone was either still in recession or just barely climbing out. Then the euro started rising, making European products more expensive and therefore harder to sell, which depressed those countries' export sectors and made debts more burdensome. So now, under the forced austerity of an appreciating currency, countries like France that were barely growing are back in contraction. And countries like Greece that were flat on their back are now flirting with dissolution.

Recessions – especially never-ending recessions – are fatal for incumbent politicians, so pressure is building for a European version of Japan's "Abenomics," in which the European Central Bank is bullied into setting explicit inflation targets and monetizing as much debt as necessary to get there. The question is, will it happen before the downward momentum spawns political chaos that spreads to the rest of the world. See Italian President Warns of Violent Unrest in 2014.

At KWN, Embry's outlook for 2014 -- international turmoil

Posted: 30 Dec 2013 10:13 AM PST

1:13p ET Monday, December 30, 2013

Dear Friend of GATA and Gold:

Sprott Asset Management's John Embry today gives King World News his outlook on 2014 -- international political turmoil and likely economic turmoil as well with market manipulation becoming more extreme and obvious:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/12/30_2...

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

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