Gold World News Flash |
- What If Nations Were Less Dependent on One Another?
- U.S. Total Gold Exports Up 31% In October 2013
- 1 In 20 US Households Has Over A Million In Assets: This Is Where They Are
- This isn't the Alamo but rather Valley Forge
- Daily Nugget – India’s gold exports fall by 30%
- Noonan: The Trend in Gold Remains Down – But For How Long?
- Silver Prices – When Monetary Demand Trumps Industrial Demand
- Russian Police Hunt For Alleged Suicide Bomber On The Loose in Sochi
- Armed Citizen Shoots Gun-Wielding Man in Dollar General
- Gold's decline in 2013 was caused by a central bank attack, Sprott says
- Want Cheap Stocks? Think Frontier Markets
- Gold – Disconnect Between Fundamentals And Price. Perception Rules
- Market Monitor – January 18th
- Gold Disconnect Between Fundamentals And Price - Perception Rules
- Spectacular Gold Demand (79 Tons) on SGE in Week 2, 2014
- Vast Stretches Of Impoverished Appalachia Look Like They Have Been Through A War
- "Two Roads Diverged" - Wall Street's Doubts Summarized As "The Liquidity Tide Recedes"
- Gold - Disconnect Between Fundamentals And Price. Perception Rules
- This Past Week in Gold
- Silver Prices - When Monetary Demand Trumps Industrial Demand
- Dollar Powers Ahead
- Gold Investors Weekly Review – January 17th
- Gold – Disconnect Between Fundamentals And Price. Perception Rules.
- Demographic Cliff Great Deflation - Harry Dent on How to Prosper in the Coming Downturn
- A Glimpse into the Coming Economic Collapse
- Stocks and Bonds Tops, Gold and Silver Bottom Climacterics Now
- Paul Craig Roberts: The hows and whys of gold price manipulation
- China Claims To Already Have the Third Largest Gold Reserves in the World
- Terrifying Technicals: This Chartist Predicts An Anti-Fed Revulsion, And A Plunge In The S&P To 450
- Jim’s Mailbox
- The Formula for Weimar Germany… Showing Up in the US Today?
- "The Hows And Whys Of Gold Manipulation"
- "The Hows And Whys Of Gold Manipulation"
- Bullion banks run 'hurt and rescue' against miners, Maguire says
- The Gold Price Flew Up $11.70 to End the Week at $1,251.70
- The Gold Price Flew Up $11.70 to End the Week at $1,251.70
- Sprott sees likelihood of gold delivery difficulties in February
- Maguire - New Buyer To Create Massive Short Squeeze In Gold
- China & the West View Gold Very Differently – Here’s Why
- Why the West Sells Gold and China Buys It
- Gold Drives Silver Is Key To Where Silver Is Going
- These 10 Charts Suggest the Outlook for Gold Is Good for 2014 and Beyond
- Gold Drives Silver
- A Glimpse into the Coming Collapse
- Something's Afoot in Gold and Silver
- Technicals Finally Reflecting Fundamentals In Resource Sector With Bullish Breakouts
- Gold Daily and Silver Weekly Charts
- Gold Daily and Silver Weekly Charts
- Billionaire Sprott - Expect A Failure To Deliver Gold & Lawsuits
- Economic Collapse 2014 -- Massive HYPERINFLATION Needed to Prop Up Stock Market
| What If Nations Were Less Dependent on One Another? Posted: 18 Jan 2014 11:45 AM PST Autarky is more than a ten-dollar word for self-sufficiency, as it implies a number of questions that "self-sufficiency" alone might not. by Charles Hugh Smith, Peak Prosperity:
The ability to survive without trade or aid from other nations, for example, is not the same as the ability to reap enormous profits or grow one's economy without trade with other nations. In other words, ‘self-sufficiency’ in terms of survival does not necessarily imply prosperity, but it does imply freedom of action without dependency on foreign approval, capital, resources, and expertise. Freedom of action provided by independence/autarky also implies a pivotal reduction in vulnerability to foreign control of the cost and/or availability of essentials such as food and energy, and the resulting power of providers to blackmail or influence national priorities and policies. |
| U.S. Total Gold Exports Up 31% In October 2013 Posted: 18 Jan 2014 11:26 AM PST from SRS Rocco:
According to the USGS Gold Mineral Industry Survey, total gold exports from the U.S. to Hong Kong increased from 12.2 metric tons (mt) in September to 17.8 mt in October. Furthermore, Switzerland had the largest increase as it imported 23.7 mt in October compared to 13.9 mt in September. If we look at the chart below, we can see that total U.S. gold exports increased 31% from 37.6 mt in September to 49.4 mt in October: |
| 1 In 20 US Households Has Over A Million In Assets: This Is Where They Are Posted: 18 Jan 2014 11:23 AM PST Bernanke may be printing the wealth effect to the benefit of the richest 1%, but that only serves to make the already wealthiest even wealthier. When it comes to the creation of new millionaire households, the epicenter of new wealth creation is about as far from Wall Street, West Putnam Avenue or Rodeo Drive as can be. In fact, the state that saw the fastest climb up in millionaire rankings in 2013 doesn't have a single Tiffany or Saks Fifth Avenue, and the closest BMW dealership is a six-hour drive from the capital (stats which are guaranteed to change by the end of the year). Presenting North Dakota: the state which jumped 14 spots in the latest ranking of millionaire households. Per the WSJ, which crunched the the numbers released by Phoenix Marketing International, there were 53,000 more millionaire households in 2013 compared to the year before. "About 6.15 million millionaire households are spread across the U.S., according to the report. That means 1 in every 20 households in the U.S. has more than $1 million in investable assets. Those figures don't include the value of real estate." As expected, the top of the overall millionaire households per capita rankings didn't change much. Maryland was No. 1 for the third consecutive year, with 7.7% of households holding more than $1 million in assets. New Jersey, Connecticut and Hawaii followed. Those four states, in various orders, have led the rankings every year since 2006. The complete breakdown is shown on the map below.
It was the middle and bottom of the ranking that saw most changes, at times quite violent. Judging by the collapse in household wealth, it seems the second Nevada housing bubble has indeed popped.
Nobody was a bigger winner in 2013 than the center of the shale boom: North Dakota.
The main difference, however, between North Dakota and other states: 'its people in the oil patch aren't about to flaunt it. "The only way you know a Bakken millionaire is he'll be driving a The results sorted: by highest number of millionaires per capita:
And the states where the creation of new millionaire households was fastest in 2013:
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| This isn't the Alamo but rather Valley Forge Posted: 18 Jan 2014 11:18 AM PST 11:28a PT Saturday, January 18, 2014 Dear Friend of GATA and Gold: Other nonprofit groups are doing their new year's appeals and GATA, already inadequate in fundraising, would be still more negligent in not attempting one too, so here goes. While our exposure of surreptitious rigging of the gold market has produced some pretty good successes over the last year and has encouraged others to examine the subject -- http://www.gata.org/taxonomy/term/21 -- the enemies of free markets and limited and accountable government have intensified their efforts too. While they have been forced to become ever more heavy-handed and to raise suspicions about themselves if not to give themselves away outright, they have also devastated the monetary metals industry and its investors. The industry, largely oblivious to begin with, ignorant of both the monetary nature of its product and the control of the price of its product by central banks, is more cowardly than ever, long having betrayed its fiduciary obligation to its shareholders. And even those of its shareholders who understand what's going on are mostly busted. Financial donations to GATA have dried up and now we're running on fumes -- even as opinion on gold market manipulation is turning in our favor. This is not the Alamo; we're not going to be wiped out until they turn off the lights and the Internet and close the borders, and long before that ever happens the bad guys will be out in the open and will have many more adversaries than little GATA. The situation for us right now is rather more like Valley Forge -- with boots we'll march again. Two very promising expeditions are already planned, and the bad guys are more vulnerable than ever. We're so grateful to those who have stood with us despite the recent adversity. We appreciate and understand the terrible losses suffered by our friends who have fallen away in despair. But we think this struggle is still worth waging -- and insofar as it will determine the method of valuation of all capital, labor, goods, and services in the world, a democratic, market valuation or a totalitarian valuation, it still seems to us the most important struggle in the world. If you believe in this struggle but have not already sent some help our way, please consider doing it now. It will make a difference. It can be accomplished here: CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT A Personal Touch in Buying Precious Metals If you've not secured your allocation of precious metals and numismatic coins, 2014 may be the last year to get them at affordable and undervalued prices. With huge amounts of gold leaving the West for Asia, the future availability of precious metals is very much in doubt. All Pro Gold has competitive pricing on all bullion and numismatic products -- and offers prompt delivery too. Long-time GATA supporters Fred Goldstein and Tim Murphy are glad to answer any questions or concerns about acquiring the monetary metals. All Pro Gold has an extensive electronic library of articles from the world's top market analysts. Learn more at www.allprogold.com or write to Fred and Tim at info@allprogold.com or telephone them at 1-855-377-4653. Join GATA here: Vancouver Resource Investment Conference http://www.cambridgehouse.com/event/vancouver-resource-investment-confer... GATA Reception in Vancouver Mines and Money Hong Kong http://www.minesandmoney.com/hongkong/ * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT Jim Sinclair plans seminars in Asheville and Austin Gold advocate and mining entrepreneur Jim Sinclair will hold his next market seminars from 2 to 6 p.m. Saturday, January 25, at the Clarion Inn Asheville, 550 Airport Road, Fletcher, North Carolina, and from 2 to 6 p.m. Saturday, February 8, at the Austin, Texas, Airport Hilton. Advance registration is required. Details for the Asheville seminar are posted at Sinclair's Internet site, JSMineSet.com, here: http://www.jsmineset.com/2014/01/07/north-carolina-qa-session-venue-conf... Details for the Austin seminar are posted at JSMineSet.com here: http://www.jsmineset.com/2014/01/02/austin-texas-qa-session-confirmed/ |
| Daily Nugget – India’s gold exports fall by 30% Posted: 18 Jan 2014 11:15 AM PST by Jan Skoyles, TheRealAsset.co.uk
Gold is likely to be treading water ahead of the Fed's first FOMC meeting, when Chairwoman Yellen will take the top seat for the first time. The shocking labour statistics last week, combined with positive economy data and low inflation this week will play a major role in the tapering plan, which many had previously assumed to be aggressive going forward. Gold is likely to see a major move following the meeting, however we are unlikely to see new highs or lows in the preceding days. Institutional buying seems to be ticking up this year, as the number of open positions in COMEX gold futures have increased since the beginning of 2014. This is despite low inflation levels, which suggests ongoing concern over inflation and short-covering. |
| Noonan: The Trend in Gold Remains Down – But For How Long? Posted: 18 Jan 2014 10:02 AM PST If your perception is focused solely on where the price of gold is, as opposed to where you think or believe it So says Michael Noonan (edgetraderplus.com) in edited excerpts from his original article* entitled Gold – Disconnect Between Fundamentals And Price. Perception Rules. [The following is presented by Lorimer Wilson, editor of www.FinancialArticleSummariesToday.com and www.munKNEE.com and may have been edited ([ ]), abridged (…) and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. This paragraph must be included in any article re-posting to avoid copyright infringement.]Noonan goes on to say in further edited excerpts: All of the fundamentals are screaming high demand for and a shortage of physical gold, but price keeps on dropping so why is gold not at a higher price? Because fundamentals are not the answer, rather, it is all about perception and the perception that fundamentals should rule is a misplaced one, at least for now. The COMEX & LBMA Vaults Are Bare! Everyone who is even remotely interested in gold knows that the COMEX and LBMA vaults are just about bare. The COMEX has been nursing a default on physical delivery for gold and silver since last summer. There have been none. Those who stood to take delivery received cash, or rolled forward. This is certainly an acknowledgment that there is no gold or silver, yet that fact has not translated into a stampede of customers demanding gold. Even Deutsche Bank cannot get delivery of their own gold! Gold’s On Sale at 35% Off For a Limited Time Only! Keep focused on your objectives and the reality of events. Right now, people can buy gold coins and bars almost at will. If Deutsche Bank has to wait seven years to get just some of its gold back, and they are not an isolated example, if the vaults are nearly depleted, and you can buy gold coins and gold bars from dealers every day, in light of the whole world recognizing a shortage, everyone should be taking advantage of the disconnect between perceived value and the reality of current prices and buying as much as they can and, for right now, there is a 35% off sale going on! Better a Year Early Than a Day Late! This is lock-and-load, fire at will, and not a time to be keeping one's powder dry. If you know all the available physical gold is being shipped East, primarily to China, and you have immediate access to however many ounces you want to buy, why is there anyconcern over the current price of gold? What happens if you cannot buy at any price?! Better a year early than a day late. The reality is, whatever gold is available is relatively cheap. If you can answer the question, for how much longer will you be able to buy it, then plan accordingly. If you cannot answer that question, then plan accordingly for that event, as well. We understand that the charts reflect the bogus COMEX manipulated paper price of gold, but that is all that is available, and the physical market, measured by tonnes going to a variety of mostly BRICS nations, is at a premium to paper. However unreal For further technical analysis on the future for gold, silver, the XAU and HUI check out: No Predictions Here! Despite the fact that others who make predictions draws reader attention, we do not make them. For one, no one knows how the future will develop – just review all of the predictions from 2013 for proof. Secondly, there are utterly unnecessary. The market will indicate when the trend has changed, and there will be ample opportunity to be long paper futures, that is, if there is still a paper futures market in the next year. The trend remains down. Any predictions you may be reading currently are mostly a regurgitation from the same ones who made predictions last year. Is it really necessary to ask how they worked out? One thing we can say about the charts of the market is that Will the current $1,200/ozt. area continue to hold? Odds say no, based only on the current down trend, but things can change. However, it is always best to wait for confirmation of a change before acting contrary to the current trend. [Editor's Note: The author's views and conclusions in the above article are unaltered and no personal comments have been included to maintain the integrity of the original post. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.]*http://edgetraderplus.com/market-commentaries/gold-disconnect-between-fundamentals-and-price-perception-rules Other Noonan Articles: 1. Noonan: Charts Suggest Lower Lows for Gold & Silver to Come in 2014  Because the natural laws of supply and demand do not apply to gold and silver, the only way we can track the influence of endless paper supply on the market is through the most reliable source, the market itself, and the best way to track the market is through charts.Let’s take a look at what they are conveying today. Read More » 2. Noonan: "Gold Ain't Going Higher – At Least For the Short Term" – and Here's Why  Does the fast-fading world reserve currency [the USD] look like it is collapsing? A look at the performance of the U.S. Dollar Index does not suggest that it is, weak as it is. If the fiat dollar is not in danger of imminent "collapse," or even breaking down, then gold does not have this event as an impetus for rallying higher. [Frankly speaking,] until that changes, gold ain't going higher, at least in the short term. Read More » 3. Noonan: Charts Say "Still No Ending Action to Decline In Gold & Silver"  The decline is holding near the last swing low. Will the June low hold? The odds are greater for the low not holding, based on the trend, but there is no way to determine the probability of the June low giving way, for it is possible it will not. Read More » 4. Noonan: Charts Say NO End In Sight for Decline In Gold & Silver Prices No matter what the latest "news" development is for PMs that paints a rosy picture, those in the fundamentalist camp are looking through rose-colored glasses to expect change in the near future. The charts for gold & silver continue to tell a more accurate story that belie all known fundamentals, and the charts shown here depict a market in decline with no apparent end in sight. Read More » 5. Noonan on Gold & Silver: "When Fundamentals Fail, Charts Prevail" & This Is What They're Conveying Fundamentals are relative, charts are absolute. They accurately reflect all that is going on, regardless of reasoning/motivation and…right now, the charts are letting us know that higher PM prices are unlikely to occur anytime soon. Barring some kind of "overnight surprise" that will shock the markets, odds favor lower prices over higher prices unless and until demand shows up in chart activity. Read More » 6. Noonan: Charts are Infallible! Here's Why & What They're Saying About Gold & Silver  Some of the finest and most highly regarded minds in the world of PMs have been saying gold and silver are going higher…[but] the charts have "said" otherwise, and that has been the correct read…The fundamentals may be as bullish as can be [but] the charts are sending a different message. Read More » 7. Noonan: Gold & Silver Could Move Sideways for Another 1-2 Years – Here's Why Using past history of how price responds, it is likely that gold, and silver, could move sideways for another year or two. While this flies in the face of so many current, supposedly “expert”, opinions [mine is not based on opinion but, rather, is strictly based on the facts as conveyed by the charts. Take a look and you will see that too!] Read More » 8. Noonan: These Charts Clearly Show What's Happening With Gold & Silver – Take a Look Below is a perfect example of how the charts timed the movement in the price of gold and silver over the past week. Yes, you CAN time the market as this article clearly demonstrates! When the market "talks," we listen.] Read More » 9. Noonan: Window of Opportunity to Buy Physical Gold & Silver Narrowing – Don't Wait, Buy Now! The window of opportunity to buy physical gold and silver continues to narrow. Like the housing market top was known to be coming, when it came, those who waited too long regretted it. When the bottom for the physical PMs is known as a certainty, those who waited for a "better price" may also regret that decision. It is all about choice. Read More » 10. Noonan: The Most Factual Information On Gold & Silver Is Right HERE In an election, it does not matter if voter turnout is high or low, the outcome is determined by the actual votes cast. The same holds true for the markets. Only those who make an actual buy or sell decision determine the outcome of the market trend. The market "voters" turn up in charts, recorded in the price range, close, and volume. Collectively, a "story" unfolds, and it usually is an accurate one as it does not include any opinions. Opinions do not matter. Articles written about fundamentals, pundit declarations, etc., all fall under the category of opinions. The market is the best source for information, and that is a fact. Read More »
The post Noonan: The Trend in Gold Remains Down – But For How Long? appeared first on munKNEE dot.com. |
| Silver Prices – When Monetary Demand Trumps Industrial Demand Posted: 18 Jan 2014 10:00 AM PST by Dr. Jeffrey Lewis, Silver-coin-investor:
The catalyst for much higher prices will be of a monetary, rather than an industrial, demand-led series of events. A Parallel to the Current State of Finance The current financial markets are a giant slow motion train wreck that we are living through, slipping along a surface lined with frictionless fiat. |
| Russian Police Hunt For Alleged Suicide Bomber On The Loose in Sochi Posted: 18 Jan 2014 09:46 AM PST Up until now, most terrorist provocations surrounding the Sochi winter olympics set to begin on February 7, had been in the surrounding cities (here is dramatic video footage of the recent suicide bombing in Sochi) while the actual venue has been largely left untouched. Perhaps this is due to the security gauntlet that has wrapped the city under the constant supervision of countless eyes in the sky and about 70,000 police and soldiers. This tenuous peace, however, was disturbed this morning when as Bloomberg reported, Russian police were searching for an alleged terrorist Razmena Ibragimova, according to a wanted poster on display at a security checkpoint in Sochi's airport. Ibragimova, 22, is "currently located on Sochi territory" and may attempt a suicide bombing, according to the poster. According to information from BlogSochi she was spotted on the street outside the foreign ministry building in Sochi. BlogSochi has the photo details:
And while so far Sochi has not seen an actual act of terrorism, it seems ticket demand for the games is inversely proportional with the build up in security for what is set to be the most expensive winter olympics in history with over a $51 billion price tag, of which over $3 billion will be spent on security. Bloomberg reports that listings of tickets put up for resale on a "fan to fan" website have soared almost 50 percent over the past week, with more than 3,100 offers now posted. Most offers include multiple tickets, up to a maximum eight per offer. "The U.S. website of CoSport, the exclusive ticket agent for North America and most of Western Europe, still lists seats available for some sought-after events such as the gold-medal match in men's ice hockey. The Sochi 2014 website, the official sales outlet for residents of Russia and many other countries, has tickets available for more than 100 events."
Of course, should a deadly terrorist attack take place, nosediving ticket sales will be the least of Putin's concern, or of Russia, which is still riding high on the reputational gains achieved after the various diplomatic victories in 2013. Which is why security at the games is indeed unprecedetned, as the following 10 minutes review from The National demonstrates.
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| Armed Citizen Shoots Gun-Wielding Man in Dollar General Posted: 18 Jan 2014 09:45 AM PST by Lily Dane, The Daily Sheeple:
The quick actions of an armed citizen stopped a gun-wielding man in his tracks at a Dollar General store. The gunman walked into the store in Orrville, Alabama, and began waving his pistol around. He ordered a customer and a cashier towards the break room at gunpoint. It was the gunman's unlucky day: that customer happened to be armed. He pulled out his concealed handgun and fired one shot into the gunman's chest. Dallas County Sheriff Harris Huffman Jr. explained the incident to WSFA: |
| Gold's decline in 2013 was caused by a central bank attack, Sprott says Posted: 18 Jan 2014 09:44 AM PST 9:43a PT Saturday, January 18, 2014 Dear Friend of GATA and Gold: Last year's decline in gold was the result of an attack by Western central banks on gold exchange-traded funds as the central banks exhausted their own supplies, Sprott Asset Management CEO Eric Sprott writes in new commentary: http://www.sprott.com/markets-at-a-glance/one-more-sign-of-manipulation-... He is interviewed about his analysis by the Sprott Money weekly wrap-up program here: http://www.sprottmoney.com/sprott-money-weekly-wrap-up In the interview Sprott says the attack seems to have run its course, with gold and gold mining shares already rising again. CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Buy metals at GoldMoney and enjoy international storage GoldMoney was established in 2001 by James and Geoff Turk and is safeguarding more than $1.7 billion in metals and currencies. Buy gold, silver, platinum, and palladium from GoldMoney over the Internet and store them in vaults in Canada, Hong Kong, Singapore, Switzerland, and the United Kingdom, taking advantage of GoldMoney's low storage rates, among the most competitive in the industry. GoldMoney also offers delivery of 100-gram and 1-kilogram gold bars and 1-kilogram silver bars. To learn more, please visit: http://www.goldmoney.com/?gmrefcode=gata Join GATA here: Vancouver Resource Investment Conference http://www.cambridgehouse.com/event/vancouver-resource-investment-confer... GATA Reception in Vancouver Mines and Money Hong Kong http://www.minesandmoney.com/hongkong/ * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT How to profit with silver -- Future Money Trends is offering a special 16-page silver report with profiles of nine companies and technical analysis of their stock performance. Six of the companies have market capitalizations of less than $800 million and one company has a market cap of only $30 million. The most exciting of these companies will begin production in a few weeks and has a market cap of just $150 million. Half of all proceeds from the sale of this report will be donated to the Gold Anti-Trust Action Committee to support its efforts exposing manipulation and fraud in the gold and silver markets. To learn about this report, please visit: http://www.futuremoneytrends.com/index.php?option=com_content&id=376&tmp... |
| Want Cheap Stocks? Think Frontier Markets Posted: 18 Jan 2014 09:30 AM PST People go to a retail store searching for bargains. If an item is priced at a 50% discount, they might buy it or search a nearby store or online to see if they can get it even cheaper. If a store has a closing down sale, crowds often turn up in droves. Others sometimes do extensive searches for niche stores where few people go but there's value for money. It's funny how investors rarely mimic this type of behaviour. Stocks which have gone down in price are viewed with suspicion. Something must be wrong with them. If a company's in distress, most investors will put it in the too-hard basket. As for neglected stocks or markets, well there must be reasons for the neglect and further investigation requires work which many aren't willing to do. So-called frontier markets suffer many of the attributes which put off investors. They're priced well off pre-GFC peaks, they have companies and sectors in distress and they're completed off the radar screens of institutional investors. Add to this that many of these markets are in faraway places, with unfavourable political regimes and hugely volatile stock market price action given thin liquidity - and you have a perfect recipe for investor neglect. In Asia Confidential's eyes though, some of these frontier markets offer the best opportunities for investors over the next decade. And one of the most exciting opportunities is in Indochina. Today, we're going to look at one of these markets, Vietnam, which is starting to attract investor interest after five years in the wilderness. It underwent a massive credit bust and is just coming out the other side. In many ways, Vietnam is 2-3 years ahead of China, which has just started to undergo its own credit bust. Vietnam's classic credit bust I was working at a stock broker in South-East Asia in 2007 and remember the excitement generated then by some of the region's smaller markets. At the time, Vietnam became the "it" market. Asia's top sell-side economists and strategists poured into the country and waxed lyrical about the growth story there. I don't think some of them were quite as bullish as their research reports relayed, but being a bull brought in plenty of money at the time. They were the go-go days prior to 2008 where there was too much cheap money and booming frontier markets got some love. Then the GFC happened and these frontier markets were taken to the cleaners. Vietnam's main stock market went down ~80%. Given its reliance on exports, GDP growth in Vietnam dropped from more than 8.5% in 2007 to close to 5% in 2009. The government tried to revive the massive credit boom through an aggressive stimulus program in 2009. The printed money led to reckless lending, with credit growth of 35% Cagr from 2007-2010 and bank loan to deposit ratios peaking at 136%. Inflation rocketed to 23% in 2011, resulting in foreign investment drying up. The latter was crucial given Vietnam's reliance of foreign direct investment (FDI) to the tune of about US$12 billlion each year (or about 6x that of Indonesia relative to the economy, to put that in perspective). Due to spiking inflation, the local currency, VND, dropped 40% in value from peak to trough. Vietnam's strict capital controls didn't prevent massive capital flight as savers exchanged local currency for gold and U.S. dollars (Vietnamese are estimated to have 50% of their net worth in gold and US$). The government was forced to raise interest rates by 500 basis points and implement significant macro-economic reform. GDP fell to 5% in 2012, its lowest level in 13 years.
Much of the reckless lending went into real estate. From 2009-2011, the government implemented several regulations to reduce credit to the sector, such as increasing taxes and restricting the ability of buyers to "flip" properties. From the peak levels of 2010, real estate prices have fallen 60%.
The above isn't to suggest that the government was pro-active in initiating reform. Far from it. Like most governments, the ruling Communist Party in Vietnam fiercely resisted reform until they were forced into action by the dramatic bursting of the credit bubble. In fact, the government only just started to restructure the banking sector last year. And it's still largely held off from overhauling other state-owned enterprises (SOEs). This isn't surprising given the vested interests of SOEs which were the biggest beneficiaries of the credit boom via the corruption which flourished at the time (remind anyone of China?). Things are turning around There are several signs though that the worst of the credit crisis may be behind Vietnam:
There's still much work to be done though. As mentioned, banking reform is overdue. Banks have been reluctant to lend due to non-performing loan (NPL) issues as a result of the credit bust. No-one believes the official NPL figure of 4.7%. Most think it's 12-15%. Until NPLs are cleaned up, lending growth can't accelerate to further spur the economy. The government set up the Vietnam Asset Management Company (VAMC) in July last year to buy the banks' bad loans. Well, the VAMC won't exactly buy these loans but act as a conduit to warehouse bad loans until a buyer is found. If there are no buyers, loans will be written down over five years. Without going into all of the details, the setting up of this company isn't a brilliant solution but should incrementally improve the ability of banks to reduce NPLs and start handing out more loans. Attractive long-term prospects There are a number of things to like about the long-term prospects for Vietnam too: 1. The country has one of Asia's most attractive demographic profiles. About 70% of Vietnam's population are under the age of 45. Positive demographics don't guarantee economic success but they help. Remember that GDP growth comprises population growth (more specifically, working-age population) plus productivity growth.
2. Vietnam is becoming a highly attractive destination for foreign companies. The country promises to be the next great Asian exporter of electronics and sophisticated mechanical products, with labor costs less than half those of China and Thailand. For years, Taiwanese and Chinese companies were setting up shop in Vietnam to manufacture footwear and garments. Now the largest FDI contributors are Japanese and Korean, focusing on higher-end tech and mechanical products. The below chart from the World Bank, courtesy of Asia Frontier Capital, shows why Vietnam is attracting significant foreign capital.
3. There's an emerging middle class which should fuel a consumption story. Despite the downturn, anybody who's visited Vietnam of late will notice still packed restaurants, retail shops and so forth. 4. Vietnam should be a primary beneficiary of the rise of neighbours including China, Myanmar and Thailand. I've written previously about the potential for Myanmar to reclaim its former glory as it opens up its economy again (it was Asia's richest country in the 1960s before the current regime took over). The potential of Thailand shouldn't be discounted either despite the political problems (which may soon provide another good buying opportunity). Short-term catalysts Valuations are no longer dirt cheap but remain cheap nonetheless. At around 11x forward price-to-earnings ratio (PER), it's close to the Asia-ex Japan average. But keep in mind that Vietnam earnings are coming off a remarkably low base, unlike the rest of Asia. Also, the PER is deceptive. Using the median PER rather than mean (the former excludes outliers and is a better gauge), the market PER drops to 9x. Moreover, the market is distorted by ETF investment in the very large companies. A third of the stock market is under 7x PER. The market remains very cheap outside the largest stocks. Add to this that the market remains close to 50% below its 2007 peak and it's clear that Vietnam has plenty of room to go higher. For it to do so though will require a few things. First, there needs to be further progress on the NPL issue. Second, the government has to get serious about SOE reform. Third, the government also has to follow through with promises to increase foreign ownership limits from 49% to 60%. As an aside, there are a few ways to invest in the Vietnam stock market. You can do it via an ETF such as Van Eck's Market Vectors ETF (NYSE: VNM). Or you can go through managed funds such Dragon Capital and Asia Frontier Capital, both of which are reputable. Risks The long-term risk is that the economy recovers and a credit boom/bust cycle ensues again. You'd hope that the government has learned the painful lessons of the recent crisis but nothing is guaranteed in this business. And, of course, there's the broader risk of a renewed global economic slump which would hurt Vietnam disproportionately. That said, some of the current positive moves on the economic front would put the country in a better position to withstand such a slump. AC Speed Read - Frontier markets offer some of the best investment opportunities over the next decade. - We particularly like Indochina, including Vietnam. - Vietnam has been through a classic credit bust and is coming out the other side. - Investors are starting to take notice but the Vietnam market remains cheap. This post was originally published at Asia Confidential: |
| Gold – Disconnect Between Fundamentals And Price. Perception Rules Posted: 18 Jan 2014 09:15 AM PST by Michael Noonan, Edge Trader Plus:
The stock market's investment compass was smashed back then, when many once considered solid companies lost half their value, some even more. The investment community was stunned. But that is "ancient" history, as is almost anything that is longer than a few months in time. That has been [nearly] forgotten and replaced by the fiat euphoria levitating the stock market for the past few years. |
| Posted: 18 Jan 2014 09:13 AM PST Top Market Stories For January 18th, 2014: Comex Warehouse Potential Claims Per Deliverable Ounce Rises to Historical High 112 to 1 – Jesse's Café Gold Drives Silver – 321 Gold Fresh wave of gold buying ahead of Chinese New Year – Mineweb Something's afoot in Gold and Silver… – SilverSeek Contrarians' Wildest Dream Coming True [...] |
| Gold Disconnect Between Fundamentals And Price - Perception Rules Posted: 18 Jan 2014 08:58 AM PST What will it take to turn the gold market around? One would think it would be obvious that fundamentals are not the answer, while so many believe that fundamentals rule. We are reminded of the fundamentalists, especially "value investors" whose financial world was literally turned upside down when the stock market crashed in 2008. While "value" and "fundamentals" were considered the economic bedrock of the stock market, it turns out that everything is really steeped in perception, for they changed dramatically. |
| Spectacular Gold Demand (79 Tons) on SGE in Week 2, 2014 Posted: 18 Jan 2014 08:45 AM PST “Gold isn’t condensed fear, it’s condensed labour” by Koos Jansen, In Gold We Trust:
This type of demand puts the physical gold market under severe stress, hence the scramble for gold in London a few days ago. "There is a shortage of big bars, especially good-delivery 400-ounce bars", said Bernard Dahdah from Natixis "One part of the problem is that large quantities of these bars that have come from ETFs, have now been moved to be re-refined into three-nines bars of smaller sizes and are therefore no longer available to the London market." The 1 month Gold Forward Offered Rate has been negative throughout the entire week Chinese demand was this strong. Until January 31 demand for physical could remain elevated, after which it will likely return to its average strong levels. |
| Vast Stretches Of Impoverished Appalachia Look Like They Have Been Through A War Posted: 18 Jan 2014 08:19 AM PST Submitted by Michael Snyder of The Economic Collapse blog, If you want to get an idea of where the rest of America is heading, just take a trip through the western half of West Virginia and the eastern half of Kentucky some time. Once you leave the main highways, you will rapidly encounter poverty on a level that is absolutely staggering. Overall, about 15 percent of the entire nation is under the poverty line, but in some areas of eastern Kentucky, more than 40 percent of the population is living in poverty. Most of the people would work if they could. Over the past couple of decades, locals have witnessed businesses and industries leave the region at a steady pace. When another factory or business shuts down, many of the unemployed do not even realize that their jobs have been shipped overseas. Coal mining still produces jobs that pay a decent wage, but Barack Obama is doing his very best to kill off that entire industry. After decades of decline, vast stretches of impoverished Appalachia look like they have been through a war. Those living in the area know that things are not good, but they just try to do the best that they can with what they have. In previous articles about areas of the country that are economically depressed, I have typically focused on large cities such as Detroit or Camden, New Jersey. But the economic suffering that is taking place in rural communities in the heartland of America is just as tragic. We just don't hear about it as much. Most of those that live in the heart of Appalachia are really good "salt of the earth" people that just want to work hard and do what is right for their families. But after decades of increasing poverty, the entire region has been transformed into an economic nightmare that never seems to end. The following is a description of what life is like in Appalachia today that comes from a recent article by Kevin D. Williamson...
In these kinds of conditions, people do whatever they have to do just to survive. With so much poverty around, serving those on food stamps has become an important part of the local economy. In fact, cases of soda purchased with food stamps have become a form of "alternative currency" in the region. In his article, Williamson described how this works...
I would encourage everyone to read the rest of Williamson's excellent article. You can find the entire article right here. In Appalachia, the abuse of alcohol, meth and other legal and illegal drugs is significantly higher than in the U.S. population as a whole. In a desperate attempt to deal with the pain of their lives, many people living in the region are looking for anything that will allow them to "escape" for a little while. The following is an excerpt from an excellent article by Chris Hedges which describes what life is like in the little town of Gary, West Virginia at this point...
Of course this kind of thing is not just happening in the heart of Appalachia. All over the country there are rural communities that are economically depressed. In fact, according to the Wall Street Journal, economic activity in about half of the counties in the entire nation is still below pre-recession levels...
So what are our "leaders" doing to fix this? Well, they plan to ship millions more of our good jobs overseas. Unfortunately, I am not kidding. Republicans in the House of Representatives are introducing "fast track" trade promotion authority legislation that will pave the way for rapid approval of the secret trade treaty that Barack Obama has been negotiating. The following is how I described this insidious treaty in a previous article...
Once again, our politicians are betraying the American people and millions of jobs will be lost as a result. Not that the economy needs another reason to go downhill. The truth is that our economic foundations have already been rotting away for quite some time. But now the ongoing economic collapse seems to be picking up steam again. For example, the Baltic Dry Index (a very important indicator of global economic activity) is collapsing at a rate not seen since the great financial crash of 2008...
Soon economic conditions will get even worse for Appalachia and for the rest of the country. The consequences of decades of very foolish decisions are rapidly catching up with us, and millions upon millions of Americans are going to experience immense economic pain during the years to come. |
| "Two Roads Diverged" - Wall Street's Doubts Summarized As "The Liquidity Tide Recedes" Posted: 18 Jan 2014 07:25 AM PST From Russ Certo, head of rates at Brean Capital Two Roads Diverged As we know, it has been a suspect week with a variety of earnings misses. Although I have been constructive on risk asset markets generally, equities anecdotally, as figured year end push for alpha desires could let it run into year end. New year and ball game can change quickly. Just wondering if a larger rotation is in order. There is an overall considerable theme of what you may find when a liquidity tide recedes as most major crises or risk pullbacks have been precipitated by either combination of tighter monetary or fiscal policy. Some with a considerable lag like a year after Greenspan departed from Fed helm, or many other examples. I'm not suggesting NOW is a time for a compression in risk but am aware of the possibility, especially when Fed Chairs take victory laps, Bernanke this week. Symbolic if nothing more. Cover of TIME magazine? I happen to think that 2014 is a VERY different year than 2013 from a variety of viewpoints. First, there appears to be a dispersion of opinion about markets, valuations, policy frameworks and more. This is a healthy departure from YEARS of artificiality. Artificiality in valuations, artificiality in market and policy mechanics and essentially artificiality in EVERY financial, and real, relationship on the planet based on central bank(s) balance sheet expansion and other measures intended to be a stop-gap resolution to tightening financial conditions, adverse expectations of economic activity, and the great rollover....of both financial and non-financial debt financing. Boy, what a week in the IG issuance space with over $100 billion month to date, maybe $35 billion on the week. Debt rollover on steroids. Beneath the veneer of market aesthetics, I already see fundamental (and technical) relevance. This could be construed as an optimist pursuit or reality that markets are incrementally transcending reliance and/or dependence on the wings of central bank policy prerogatives. The market bird is trying to fly on its own with inklings of a return to FUNDAMENTAL analysis. A good thing, conceptually, and gradualist development of passing the valuation baton back to market runners. A likely major pillar objective of policy despite more than a few critics worried about seemingly dormant lurking imbalances created by immeasurable policy and monetary and fundamentally skewed risk asset relationships globally. This exercise of summarization of ebb and flow and comings and goings of markets and policy naturally funnels a discussion to what stature of central bank policy currently or accurately exists? Current events. What is the accurate stage of policy? I actually think this is a more delicate nuance than I perceive viewed in overall market sentiment. Granted, we have taken a major step for mankind, which is the topical engagement of some level of scope or reduction of liquidity provisioning," not tightening." Tip of the iceberg communique with markets to INTRODUCE the concept of stepping off the gas but not hitting the break. Reeks of fragility to me but narrative headed in right direction to stop medicating the patient, the global economy. Some markets have logically responded in kind. The highest beta markets as either beneficiaries or vulnerable to monetary policy changes, the emerging markets, have reflected at least the optics of change with policy. More auditory than optics in hearing a PROSPECTIVE change in garbled Fedspeak. The high flyer currencies which capture the nominal flighty hot money flows globally affirmed the Fed message. In literally the simplest of terms, the G7 industrialized, not peripheral; interest rate complex has simply moved the needle in form of +110 basis point higher moves in nominal sovereign interest rates. And there are a bevy of other expressions which played nicely and rightly conformed to the messages coming out of the central bank sandbox. But there are ALSO notable dichotomies, which send a different or even the opposite message. I perceive a deviation in perception of message as some markets or market participants appear to be betting on taper or a return to normalcy in global growth or U.S. growth outcomes??? OR no taper, or conversely QE4 or whatever. Sovereign spreads have moved materially tighter vs. industrial and supposed risk free rates (Tsys, Gilts, Bunds) both last year and in the first three weeks of 2014. Something a new leg of QE would represent, not a taper. A different year!!! There have been VERY reliable risk asset market beta correlations over the last 5 years and sovereign or peripheral spreads have been AS volatile and correlated as any asset class. These things trade like dancing with a rattle-snake. Greece, Spain, France etc. They can bite you with fangs. They have been meaningfully more correlated to high yield spreads and yields and to central bank balance sheet expansion as nearly any asset class. So, the infusion of central bank liquidity into markets has seen "relief" rallies in peripherals and one would think the converse would be true as well. The valuations have represented the flavor and direction of risk on/risk off or liquidity on/liquidity off reliably for many months/years. But I THOUGHT markets were deliberating tapering views and expressions as validated by some good soldier markets BUT that is not necessarily what the rally in riskiest of sovereign "credits" is suggesting. The complex seems to be decoupling with Fed balance sheet correlation and message. Some are OVER 100 standard deviations from the mean! They are rich and could/should be sold. Especially if one was to follow the obvious correlation with the direction of central bank as stated. But look to other arena's like TIPS breakevens which also have been correlated with liquidity and risk on/off and central bank balance sheet expansion. Correlated to NASDAQ, HY, peripherals and the like. BUT this complex COUNTERS what peripherals are doing. They haven't shown up to the punch bowl party yet. Not invited. This is a departure of markets that have largely and generally been in synch from a liquidity and performance correlation view. Like gold and silver which got tattooed vis a vis down 35%+ performance last year MOSTLY, but not exclusively, due to perceptions of winds of central bank change. BUT even within a contrary, the fact that rallies in Spain, France, Greece, and Italy reflect more of central bank easing notions, the opposite of taper. In essence, the complex has gone batty uber-appreciation this year. Sure, many eyeball the Launchpad physical metals marginal stabilization no longer falling on a knife but the miner bonds and the mining stocks are string like bull with significant appreciation. This decidedly isn't the stuff of taper which had the bond daddy's romancing notions of 3% 10yr breaks, 40 basis point Green Eurodollar sell-offs, emerging market rinse, and upticks in volatility amongst other things. Equity bourses appear to be changing hands between investors with oscillating rotations which mark the first prospective 3 week consecutive sell-off in a while. New year. This is taper light. Somewhere in between and further blurs the correlation metrics. So, which is it? Are we tapering or not and why are merely a few global asset classed pointed out here, why are they deviating or arguably pricing in different central bank prospects or scenarios or outcomes? I'm not afraid but I am intrigued as to the fact that there may some strong opinions within markets and I perceive a widely received comfortability with taper or tightening notions, negative leanings on interest rate forecasts, a complacency of Fed call if you will. And all of these hingings occur without intimate knowledge of the most critical variable of all, what Janet Yellen thinks? She has been awfully quiet as of late and there are many foregone conclusions or assumptions in market psyche without having heard a peep from the new MAESTRO. Moreover, looking in the REAR view mirror within a week where multiple (two) Fed Governor proclamations, communicated and implicated notions which arguably would be considered radical in ANY other policy period of a hundred years. How to conduct "monetary policy at a ZERO lower bound (Williams) " and "doing something as surprising and drastic as cutting interest on excess reserves BELOW zero (Kocherlakota)." This doesn't sound like no stinking taper? A tale of two markets. To be or not to be. To taper or not to taper. Two roads diverged and I took the one less traveled by, and that has made all the difference. Robert Frost. Which is it? Different markets pricing different things. Right or wrong, the market always has a message; listen critically. Russ |
| Gold - Disconnect Between Fundamentals And Price. Perception Rules Posted: 18 Jan 2014 07:04 AM PST The stock market's investment compass was smashed back then, when many once considered solid companies lost half their value, some even more. The investment community was stunned. But that is "ancient" history, as is almost anything that ... Read More... |
| Posted: 18 Jan 2014 07:03 AM PST Summary: Long term - on major sell signal since Mar 2012. Short term - on buy signals. Gold sector cycle - up as of 12/27. COT data is favorable for a bear market rally. Read More... |
| Silver Prices - When Monetary Demand Trumps Industrial Demand Posted: 18 Jan 2014 05:18 AM PST Jeffrey Lewis |
| Posted: 18 Jan 2014 05:06 AM PST The US dollar finished last week well bid. It is at six week highs against the euro. It recovered from the brief dip at the start of the week below JPY103 and finished the week above JPY104.00. The Australian dollar fell to new multi-year lows, as did the Canadian dollar. Most emerging market currencies also fell.
The notable exception to this general pattern was sterling. Strong retail sales helped ease some anxiety that had been creeping in about sustainability of the UK's expansion.
It was the apparent resiliency of the UK and US economies that was the main fundamental development in recent days. The poor US jobs data had sparked some speculation that the economy was sufficiently fragile that the Federal Reserve would have to re-think its tapering tactics that it just had unveiled last month. The combination of the healthy gain in a key component of retail sales (excluding autos, gasoline and building materials), stronger than expected regional Fed surveys (Empire and Philly) and a Beige Book that seemed to slightly upgrade the economic assessment, pointed in the direction of continued exit from QE. A number of Fed officials, not of all who are voting members on the FOMC, encouraged this conclusion by investors.
Before the weekend, the euro slumped to almost $1.3500. It finished the North American session below its 100-day moving average (~$1.3665) for the first time since September. A break of this area could open trigger a new wave of long liquidation that could carry the single currency toward $1.3450. The euro's technical condition has deteriorated and the five days average is trending below that 20-day average.
As poor as the euro's technical readings are, sterling's are positive. The RSI an MACD are turning higher. Sterling stalled in front of the $1.6460 area, which corresponds to a 50% retracement of the losses seen since the multi-year high above $1.6600 was seen briefly on the first trading session of the year. A move above $1.6500-20 is needed to signal the resumption of the uptrend. Support has been established in front of $1.6300.
The greenback also finished last week above its 100-day moving average against the Swiss franc (~CHF0.9075), an area it has been flirting with, but for which it was unable to sustain a convincing break. The CHF0.9130 area offers immediate resistance.
The dollar finished the week little changed against the yen, but this overlooks the ride it took. It first fell to JPY102.85 in follow through selling after the US employment report, but proceeded to recover back to almost JPY105 as the dollar buying strategy on pullbacks continues to be seen. The RSI and MACDs are still pointing lower, but rather than signal a new leg down in the dollar, we suspect a consolidation phase is more likely.
The technical condition of the dollar-bloc currencies is poor and the Canadian dollar is challenging the Australian dollar for leadership of decline. Economic data from both countries have encouraged rate cut speculation. The Bank of Canada meets next week. A rate cut is highly unlikely, though dovish comments by the central bank are likely. This could trigger a bout of short-covering, perhaps on a sell-the-rumor-and-buy-the-fact type of activity. Key support for the US dollar is seen in the CAD1.0880-CAD1.0900 area.
Australia reports Q4 CPI figures and a subdued report could fan rate cut expectations. The Australian dollar traced out a big outside down week and many market participants are looking for $0.8500 in the coming weeks. Ironically, the New Zealand dollar was dragged lower, even though the market sees a growing risk of a rate hike at the end of the month. The $0.8500 area now marks important resistance and the Kiwi can make its way toward $0.8100.
The US dollar trended higher against the Mexican peso last week and reached its best level since September. It has approached the upper end of the Q4 '13 trading range. Although the technical indicators are not generating strong signals, we suspect the market has moved too far too fast. The dollar closed marginally above its Bollinger Band (+/- 2 standard deviations around the 20-day moving average). Support is seen near MXN13.15. The top of the range appears to be around MXN13.3450.
Outside of the currencies we usually review here, we observe among the clearest technical signal may be that the euro is poised to weaken against the Swedish krona. It has traced out a large head and shoulders pattern and finished last week below the neckline. The left shoulder was carved in mid-November near SEK9.00. The head was put in place in mid-December near SEK9.10. The right shoulder was formed in the first half of this month. The neckline can be found around SEK8.82. If this is indeed a valid pattern, the measuring objective is near last summer lows around SEK8.55.
Observations from the speculative positioning in the CME currency futures:
1. The net speculative position switched from long to short Swiss francs. It is the first net short position in 5 months. It was more the result of longs being cut (6.2k contracts) than shorts being added (+1.5k contracts).
2. The net speculative Canadian dollar position stands at a new record short of 67.3k contracts. Gross shorts rose 10.5k contracts to 101.6k. As noted above, we suspect the Canadian dollar is vulnerable to a short squeeze after the central bank meeting on January 22.
3. In three of the seven currency futures we review here, there was a reduction of both gross shorts and longs (yen, Australian dollar and Mexican peso). In the previous reporting period, there were four currencies were subject to such position adjustments (yen, sterling, Swiss franc and Australian dollar).
4. There net long euro position fell for the third consecutive week. The net short yen position was reduced for a third week as well.  |
| Gold Investors Weekly Review – January 17th Posted: 18 Jan 2014 03:39 AM PST In his weekly market review, Frank Holmes of the USFunds.com nicely summarizes for gold investors this week's strengths, weaknesses, opportunities and threats in the gold market. The price of the yellow metal went lower after two consecutive weeks of gains. Gold closed the week at $1,254.02, up $5.57 per ounce (0.45%). The NYSE Arca Gold Miners Index went 5.85% higher on the week. This was the gold investors review of past week. Gold Market StrengthsGold strengthened $5.60 this week, with its price increasing $48.40 per ounce so far this year. As the chart above shows, the yellow metal continues to form its technical double bottom and is now breaking away from the 50-day moving average. Normally, as U.S. economic prospects improve, gold retreats. However, so far this year the negative correlation between the dollar and gold is at the lowest since October of last year.
Gold received a boost this week as a government report showed the cost of living in the U.S. increased by the most in six months, boosting gold's appeal as a hedge against inflation. The consumer price index (CPI) rose 0.3 percent in December from the previous month, putting inflation back on everyone's radar. Gold Market WeaknessesMining companies continue to slash exploration expenditures as budgets tumble. The massive cuts in exploration in 2013 are being extended this year. Last year, exploration spending plunged by roughly $10 billion, or 30 percent, and may drop an additional 10 percent this year as major producers and junior explorers alike trim budgets, according to MinEX Consulting. Colossus Minerals, a former star of the junior mining sector, announced it will seek creditor protection after failing to make an interest payment due at the end of 2013. The fall of this name was predictable earlier last year when its dewatering process proved unsuccessful. However, Colossus continued to be a component of the GDXJ ETF up until the latest rebalancing in December. This is yet another reminder for investors of the risks posed by passive gold ETFs and their stock selection lacking fundamental analysis. Gold Market OpportunitiesThe U.K. Financial Authority gold price setting investigation has claimed its first casualty as Deutsche Bank announced it will withdraw from participating in setting gold and silver benchmarks in London. The bank justified the move as a means of scaling back its commodities business. UBS sees platinum outperforming gold, pulled by higher economic growth in developed nations. The metal could see upward pressure in the near term as Lonmin Plc and Impala Platinum Holdings, two of the world's largest producers, will start to receive strike notices after a South African union called for yet another stoppage. Gold Market ThreatsThe Precious Metals Research team at BMO published a report that seeks to debunk some of the misconceptions about the outlook for the gold mining industry. According to the analysts, production is not likely to decline short term the way many have speculated, which will remove one of the positive supply tailwinds for gold. In addition, it asserts that companies will have a harder time cutting costs than is being assumed, and that the enforcement of the cost-cutting measures will be harder than it may appear. Goldman Sachs' Head of Commodities Research Jeffrey Currie remains bearish on virtually all commodities, but particularly on gold, reiterating his prediction of last year that gold will fall to $1,050 per ounce by the end of this year. Currie noted that not one commodity has a bullish supply story; not even gold after the recent cuts to exploration and development budgets across the industry. The Indian Government on Thursday announced a hike in import tariff value for gold and silver. The import tariff value of gold was hiked by 3.83 percent, and that of silver was hiked by 3.92 percent, in tandem with the precious metal prices in the international market. The move shows the Indian Government sees no urgency to remove or decrease the import burden that led to a dramatic decrease in legal gold imports. |
| Gold – Disconnect Between Fundamentals And Price. Perception Rules. Posted: 18 Jan 2014 03:18 AM PST What will it take to turn the gold market around? One would think it would be obvious that fundamentals are not the answer, while so many believe that fundamentals rule. We are reminded of the fundamentalists, especially "value investors" whose financial world was literally turned upside down when the stock market crashed in 2008. While "value" and "fundamentals" were considered the economic bedrock of the stock market, it turns out that everything is really steeped in perception, for they changed dramatically. The stock market's investment compass was smashed back then, when many once considered solid companies lost half their value, some even more. The investment community was stunned. But that is "ancient" history, as is almost anything that is longer than a few months in time. That has been [nearly] forgotten and replaced by the fiat euphoria levitating the stock market for the past few years. What does this have to do with gold? Like everything else, it is all about perception, even in the Precious Metals, [PM]. It gold a commodity, it is money? [History proves that only fools consider it a "barbaric metal.'] It has been the most consistent barometer of value for many centuries. This is but one perception that many in the PM camp have forgotten to hold fast, and they only focus on current price relative to its peak of a few years ago. A few years out of over 5,000, and some wonder about the validity of gold as a safe haven? Oh, ye of little faith comes to mind. It is a misplaced hand-eye coordinated thought. "All of the fundamentals are screaming high demand for and a shortage of physical gold, but price keeps on dropping." Or any close variation that captures price insecurity in the minds of "gold bugs," or as we call them, smart people. If your perception is focused solely on where the price of gold is, as opposed to where you think or believe it ought to be, the elites would like to sell you a renewable subscription to their "Fiat Is Better" newsletter. Why is gold not at higher price levels? An excellent question, and we repeat, the perception that fundamentals should rule is a misplaced one, at least for now. Everyone who is even remotely interested in gold knows that the COMEX and LBMA vaults are just about bare. The COMEX has been nursing a default on physical delivery for gold and silver since last summer. There have been none. Those who stood to take delivery received cash, or rolled forward. This is certainly an acknowledgment that there is no gold or silver, yet that fact has not translated into a stampede of customers demanding gold. Even Deutsche Bank cannot get delivery of their own gold! Keep focused on your objectives and the reality of events. Right now, people can buy gold coins and bars almost at will. If Deutsche Bank has to wait seven years to get just some of its gold back, and they are not an isolated example, if the vaults are nearly depleted, and you can buy gold coins and gold bars from dealers every day, in light of the whole world recognizing a shortage, everyone should be taking advantage of the disconnect between perceived value and the reality of current prices and buying as much as they can! One thought to keep in mind is, if fundamentals are not what is moving the markets, then what is? If the perceived catalyst of fundamentals is wrong, then there must be some unseen forces at work. If we can perceive what those forces are, we may better understand why PMs are priced where they are. We will have a related article on silver, tomorrow, to address that one. For right now, there is a 35% off sale going on. This is lock-and-load, fire at will, and not a time to be keeping one's powder dry. If you know all the available physical gold is being shipped East, primarily to China, and you have immediate access to however many ounces you want to buy, why is there any concern over the current price of gold? What happens if you cannot buy at any price?! Better a year early than a day late. The reality is, whatever gold is available is relatively cheap. If you can answer the question, for how much longer will you be able to buy it, then plan accordingly. If you cannot answer that question, then plan accordingly for that event, as well. We understand that the charts reflect the bogus COMEX manipulated paper price of gold, but that is all that is available, and the physical market, measured by tonnes going to a variety of mostly BRICS nations, is at a premium to paper. However unreal the COMEX and LBMA pricing mechanism may be, it is all that is available, at least for now. Despite the fact that others who make predictions draws reader attention, we do not make them. For one, no one knows how the future will develop, just review all of the predictions from 2013 for proof. Secondly, there are utterly unnecessary. The market will indicate when the trend has changed, and there will be ample opportunity to be long paper futures, that is, if there is still a paper futures market in the next year. The trend remains down. Any predictions you may be reading currently are mostly a regurgitation from the same ones who made predictions last year. Is it really necessary to ask how they worked out? One thing we can say about the charts of the market is that they do not mislead. They can be misread, at times, but overall, the trend is accurate. Will the current 1200 area continue to hold? Odds say no, based only on the current down trend, but things can change. However, it is always best to wait for confirmation of a change before acting contrary to the current trend. Compare how quickly price rallied from the late June low, and the wider bar ranges relative to how price has been "hugging" that support line for the past several weeks. Also, the ranges are smaller and volume is less. The difference is what suggests that price can still go lower, or do more retesting of the 1200 area, at a minimum. Can price, or will price rally further into next week? Odds say yes, based upon the upper range close, Friday, but how much and for how long, given the trend line resistance is not highly promising. This does not mean price cannot rally $50 next week, but that we have to make judgments based on what is known, at this time. Just look at the chart and ask yourself, how many longs are making money since 2011? To be clear, this pertains to the futures only. We have been constantly advocating the purchase of physical PMs throughout the decline, but for a vastly different reason.
October and November saw 1260 as support in gold. Once broken, in November, 1260 has become resistance. Proof of that was when price was rebuffed near mid-December on a retest. We saw the small range bars, 2nd and 3rd from the end, as weak demand, especially after price declined on a wider range bar, 4th from the right. Friday's ability to rally came as a surprise, but the overall picture is still one of weakness. Maybe 1260 will be tested again this coming week. It will be important to observe how price reacts to get an idea of the current strength of weakness for gold futures.
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| Demographic Cliff Great Deflation - Harry Dent on How to Prosper in the Coming Downturn Posted: 18 Jan 2014 01:10 AM PST There's little happy talk in Harry Dent's new book, "The Demographic Cliff: How to Survive and Prosper During the Great Deflation of 2014â€"2019," yet the author sees incredible opportunities for the investors and businesses that see this crisis coming. The founder of Dent Research relies strongly on demographic statistics and trends to predict a crash starting in early 2014 and lasting into 2015 or 2016, which will make 2008 look like a mere tumble. In this interview with The Gold Report, he delves into the economic implications of Baby Boomers aging around the world, and discusses strategies for investors to protect themselves. |
| A Glimpse into the Coming Economic Collapse Posted: 18 Jan 2014 01:04 AM PST By Jeff Thomas, International Man Beginning in 1999, we predicted a systemic economic collapse that would take place in the First World and would impact all other economies. We began to list some of the "dominoes" that would fall as the collapse evolved and described that the "Great Unravelling," as we termed it, would take roughly ten years. At that time, we guesstimated that the first two of the dominoes, a real estate crash and subsequent stock market crash in the US, would begin in about 2005. |
| Stocks and Bonds Tops, Gold and Silver Bottom Climacterics Now Posted: 18 Jan 2014 12:56 AM PST “We view prospective near-term and multi-year returns as strongly unfavorable, and prospective market risk as unusually elevated.”John Hussman, January 2014 Choppy, decidedly Unbullish Equities Market Action thus far in 2014 is one Major Clue the Climacterics we earlier forecast have arrived in Key Markets. They may take a few days to a few weeks to fully develop, but they have arrived. |
| Paul Craig Roberts: The hows and whys of gold price manipulation Posted: 17 Jan 2014 10:09 PM PST 10:06p PT Friday, January 17, 2014 Dear Friend of GATA and Gold: Assisted by fund manager Dave Kranzler, former Assistant U.S. Treasury Secretary Paul Craig Roberts gives an excellent summary of the U.S. government's suppression of the price of gold. Their commentary is headlined "The Hows and Whys of Gold Price Manipulation" and it's posted at Roberts' Internet site here: http://www.paulcraigroberts.org/2014/01/17/hows-whys-gold-price-manipula... CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT How to profit with silver -- Future Money Trends is offering a special 16-page silver report with our forecast for 2013 that includes profiles of nine companies and technical analysis of their stock performance. Six of the companies have market capitalizations of less than $800 million and one company has a market cap of only $30 million. The most exciting of these companies will begin production in a few weeks and has a market cap of just $150 million. Half of all proceeds from the sale of this report will be donated to the Gold Anti-Trust Action Committee to support its efforts exposing manipulation and fraud in the gold and silver markets. To learn about this report, please visit: http://www.futuremoneytrends.com/index.php?option=com_content&id=376&tmp... Join GATA here: Vancouver Resource Investment Conference http://www.cambridgehouse.com/event/vancouver-resource-investment-confer... GATA Reception in Vancouver Mines and Money Hong Kong http://www.minesandmoney.com/hongkong/ * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT Buy metals at GoldMoney and enjoy international storage GoldMoney was established in 2001 by James and Geoff Turk and safeguards more than $1.7 billion in metals and currencies. Buy gold, silver, platinum, and palladium from GoldMoney over the Internet and store them in vaults in Canada, Hong Kong, Singapore, Switzerland, and the United Kingdom, taking advantage of GoldMoney's low storage rates, among the most competitive in the industry. GoldMoney also offers delivery of 100-gram and 1-kilogram gold bars and 1-kilogram silver bars. To learn more, please visit: http://www.goldmoney.com/?gmrefcode=gata |
| China Claims To Already Have the Third Largest Gold Reserves in the World Posted: 17 Jan 2014 10:00 PM PST Le Cafe Américain |
| Terrifying Technicals: This Chartist Predicts An Anti-Fed Revulsion, And A Plunge In The S&P To 450 Posted: 17 Jan 2014 07:31 PM PST Via Walter J. Zimmermann Jr. of United-ICAP,
Main Points 1. History is written as much by the unforeseen consequences of key events as by the events themselves. We prefer not to think in these terms, but history clearly reveals that the adverse consequences of well intended efforts often have a much more dramatic and lasting impact than the original efforts themselves. 2. In fact history suggests a law of adverse consequences where the more insistent and forceful the well intended effort, the more dramatic, powerful and harmful the blowback. In simple terms, attempts to force the world to improve have always ended badly. 3. This law of adverse consequences is a very common phenomena in medicine and is known by the euphemism of ‘side effects’. Adverse drug reactions to prescribed medications are the fourth leading killer in America, right after heart disease, cancer, and stroke. However this expression of the law of unintended consequences gets even less press than its expressions in human history. Neither is a popular topic. 4. One could easily write several volumes of history focused exclusively on the unwelcome repercussions from otherwise well-intended efforts. However as this is a subject that we would all rather avoid I suspect it would be a very difficult book to market. 5. Instead of a book I have opted for two pages of examples. The present situation strongly suggests that the high risk of unexpected blowback from current economic policies are much more deserving of our full attention than the past history of unwelcome consequences. 6. QE has already created what is arguably the most bullish market sentiment in history. And that extreme bullish sentiment has already driven most stock indices to new all time highs. So now would be a good time for some sober reflections on what could go wrong. 7. One sector that seems dangerously poised to go badly wrong are the junk and emerging bond markets. What will happen when Treasuries start yielding the same rates as previously issued junk debt? A massive exodus will happen. Junk bonds and emerging market debt will become a disaster area. 8. We already know how wildly successful Fed stimulus has been at creating speculative bubbles. Fed inflated bubbles that have already burst include a Dot-Com bubble, a credit bubble, a real estate bubble, and a commodity market bubble. The biggest bubble of them all is still inflating. That would be this stock market bubble. 9. There are now fewer banks than ever before in modern history. And the biggest banks are larger than ever before in history. The war against ‘too big to fail’ was lost before it began. Fewer, bigger banks means a more fragile financial system. 10. The worst of the bullish sentiment extremes of previous major stock market peaks have all returned. Analysts are positively gushing with ebullience. There is a competition to see who can come up with the highest targets for the various stock indices. No one sees any downside risk. All are confident that the Fed can and will fix anything. This is a situation ripe for adverse consequences. This is a market where blowback will be synonymous with blind-sided. No one will prepare for what they cannot see coming.
Comparing Costs: Major US Wars versus Quantitative Easing The chart above suggests that the magnitude of the Federal Reserve economic stimulus program is only comparable to previous major war efforts. The dollar costs plotted here bears that out.
War Costs All of the war costs on the previous page were taken from one report dated 29 June 2010. That report was prepared by Stephen Dagget at the Congressional Research Service. I adjusted his numbers to 2013 dollars. You can find his report in PDF format on-line. However some further comments may be useful here. Civil War The Civil War number combines the Northern or Union costs and the Southern or Confederate costs. In 2011 dollars the price of waging the war for the Union was $59.6 billion dollars and $20.1 billion for the Confederacy. I simply added these two numbers and then converted to 2013 dollars. Post 9/11 Wars Here I combined the costs of the Persian Gulf war, and Iraq war, and the war in Afghanistan into one category and then adjusted to 2013 dollars. Sending a Man to the Moon I thought it would be interesting to compare the costs of sending a man to the moon to the costs of QE. Most references to the cost of putting a man on the Moon only cite the Apollo project. But of course that is very wrong. Apollo arose from Gemini which grew out of Mercury. So for the true cost of sending a man to the Moon I included all costs for the Mercury missions, the Gemini program, the Lunar probes, the Apollo capsules, the Saturn V rockets, and the Lunar Modules. I relied on numbers gathered from NASA by the Artemis Project. I then converted those costs to 2013 dollars. World War II versus Quantitative Easing WW II World War II transformed the United States from a sleepy agricultural enterprise into the world’s dominant economic super-power, and defeated both Nazi Germany and Imperial Japan at the same time. It may seem entirely callous to calculate US Dollar costs for a war that claimed 15,000,000 battle deaths, 25,000,000 battle wounded, and civilian deaths that exceeded 45,000,000 but there is a point to this exercise. The second world war defeated the strategy of geographical conquest through militarism as a national policy. Of course WW II had it’s own undesirable blowback as anything on this gigantic a scale would. However it seems pretty clear that replacing fascism and militarism with democracy was a step of progress for mankind. WW II and QE Since the 1950’s many have argued that it took World War II to pull the world out of the Great Depression. As a life-long student of the Great Depression Bernanke must be aware of this debate. In terms of the dollar amounts involved, World War Two is the only project comparable in size to QE. So it seems reasonable to assume that Bernanke’s goal here is to have QE fulfill the economic role of a World War Three; a war-free method of pulling the world out of the Great Recession. However human history suggests that the sheer magnitude and forced nature of the QE program all but ensures serious, unexpected and adverse consequences.
Learning from History I am not bearish on the human race. When I read history I see things getting better. When I read history I find the slow replacement of brutality with compassion. When I read history I find the long term trend to be the replacement of centralized authority with local self-determination. And I find that every single effort to fight these long term trends has failed. And as history continues to unfold the efforts to fight these trends tends to fail more quickly, more dramatically, and more decisively. There is an ancient Chinese proverb that states “Plan too far ahead and nature will seem to resist.” That aphorism definitely resonates with my experience and observations. If there is something inherent in the flow of time that unfolds an improvement in the human condition, then there is also something in the nature of things that resists the application of force, whether well intended or not. If all of the above is an accurate accounting of things, then the key issue for policy makers is finding the fine line that separates supporting the natural flow of human evolution from attempting to force change. The former will help while the later will end badly. The question today has to do with Quantitative Easing. Is QE a gentle nurturing of economic evolution or is it the next doomed attempt to force things to get better? The QE program is so enormous, and relentless, and insistent, that I fear it is the later. And if QE is a huge attempt to force the economy to improve, than we had better start bracing for the blowback. QE: the blowback to come What kind of blowback should we prepare for? The lesson of history is that trying to force things to get better does not merely create unwelcome repercussions. It does not merely slow the pace of natural evolution. Attempts to enforce a certain outcome always appears to create the opposite effect. We do not find a law of adverse consequences. We find a law of opposite impacts. Let us review the sample examples from the previous charts. Every effort to jam an ideology or a plan down the throat of the world only creates the opposite of the intended effect. I would maintain that this is one of the few lessons from history that can be relied on. If the Federal Reserve is trying to force feed us prosperity then the inevitable blowback will be adversity. If the Fed is trying to compel the most dramatic economic recovery in history, then the blowback may well be the deepest depression in history. If the Fed is trying to enforce confidence and optimism then the blowback will be fear and despair. If the Fed is trying to force consumers to spend then the blowback will be a collapse in consumer confidence. I sincerely hope that I am completely wrong here, that I am missing something, that there is a flaw in my logic. However until I can locate such a flaw I must trust the technical case for treating this Fed force-fed rally in the stock market as something that will end badly. Here's how it plays out...
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| Posted: 17 Jan 2014 07:26 PM PST Jim, The rats are jumping the manipulation ship. JP Morgan exiting metals markets, now Deutsche Bank. CIGA Wolfgang German Gold Manipulation Blowback Escalates: Deutsche Bank Exits Gold Price Fixing Submitted by Tyler Durden on 01/17/2014 10:31 -0500 Germany’s blowback against gold manipulation is accelerating. Following yesterday’s report that Bafin took a hard line against precious... Read more » The post Jim’s Mailbox appeared first on Jim Sinclair's Mineset. |
| The Formula for Weimar Germany… Showing Up in the US Today? Posted: 17 Jan 2014 07:12 PM PST History is often written to benefit certain groups over others.
Indeed, you will often find the blame for some of the worst events in history placed on the wrong individuals or factors. Most Americans today continue to argue over liberal vs. conservative beliefs, unaware that the vast majority of economy ills plaguing the country originate in neither party but in the Federal Reserve, which has debased the US Dollar by over 95% in the 20th century alone.
With that in mind, I want to consider what actually caused the hyperinflationary period in Weimar Germany. Please consider the quote from Niall Ferguson’s book, “The Ascent of Money” regarding what really happened there:
Yet it would be wrong to see the hyperinflation of 1923 as a simple consequence of the Versailles Treaty. That was how the Germans liked to see it, of course…All of this was to overlook the domestic political roots of the monetary crisis. The Weimar tax system was feeble, not least because the new regime lacked legitimacy among higher income groups who declined to pay the taxes imposed on them.
At the same time, public money was spent recklessly, particularly on generous wage settlements for public sector unions. The combination of insufficient taxation and excessive spending created enormous deficits in 1919 and 1920 (in excess of 10 per cent of net national product), before the victors had even presented their reparations bill… Moreover, those in charge of Weimar economic policy in the early 1920s felt they had little incentive to stabilize German fiscal and monetary policy, even when an opportunity presented itself in the middle of 1920.
A common calculation among Germany’s financial elites was that runaway currency depreciation would force the Allied powers into revision the reparations settlement, since the effect would be to cheapen German exports.
What the Germans overlooked was that the inflation induced boom of 1920-22, at a time when the US and UK economies were in the depths of a post-war recession, caused an even bigger surge in imports, thus negating the economic pressure they had hoped to exert. At the heart of the German hyperinflation was a miscalculation.
You’ll note the frightening similarities to the US’s monetary policy today. We see:
1) Reckless spending of public money, particularly in the form of entitlement spending 2) Excessive spending resulting in massive deficits. 3) Little incentive for political leaders to rein in said spending. 4) Intentional currency depreciation in order to make debt payments more feasible.
This sounds like a blueprint for was US leaders (indeed most Western leaders) have engaged in post-2007. The multi-trillion Dollar question is if we’ve already crossed the line in terms of setting the stage for massive inflation down the road. We believe that it is quite possible… for the following reasons.
· The US now sports a Debt to GDP ratio of over 100%. · Every 1% rise in interest rates will result in over $100 billion more in interest payments on US debt. · Indications of inflation (stealth price hikes, wage protests, etc.) are showing up throughout the economy. · Indications that other countries are moving to abandon the US Dollar are present.
In a nutshell we are in a very dangerous position. This doesn’t mean hyperinflation HAS to occur. Indeed, history often times rhymes rather than repeats. However, the fact of the matter is that the same policies which create Weimar Germany are occurring in the US today. How they play out remains to be seen, but it is unlikely it will end well.
For a FREE Special Report outlining how to set up your portfolio from this, swing by: http://phoenixcapitalmarketing.com/special-reports.html
Best Regards Phoenix Capital Research
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| "The Hows And Whys Of Gold Manipulation" Posted: 17 Jan 2014 06:16 PM PST We looked into the abyss if the gold price rose further. A further rise would have taken down one or several trading houses, which might have taken down all the rest in their wake. Therefore at any price, at any cost, the central banks had to quell the gold price, manage it. It was very difficult to get the gold price under control but we have now succeeded. The US Fed was very active in getting the gold price down. So was the U.K. - Eddie George, then Governor of the Bank of England, 1999That quote was Eddie George in reference to the reason why he sold half of England's 800 tonne gold reserve. Looking back, the sale was a colossal financial failure for England as the announcement of it drove the price of gold under $300 and ounce and most of the gold was sold well under $300/oz. England will never get that gold back unless they are willing to pay a price that would be many multiples of the current market price for an ounce - or if they confiscate what remains in GLD... The manipulation of the gold market by the U.S. Government and the Federal Reserve has been going on for decades. It intensified after the Bretton Woods Treaty established the dollar as the global reserve currency. Since the Fed rolled out its QE program, its manipulation of the gold market has ramped up to the point at which it has become obvious to anyone involved in the markets and who has half a brain. Paul Craig Roberts has been working hard to write articles which expose the truth about how the Government is systematically dismantling the U.S. Constitution and Rule of Law and replacing them with a system of political and financial repression. He invited me to write an article with him on how the Fed/Government manipulates the gold market for the purpose of defending QE and the dollar. Here's the link: The Hows and Whys of Gold Manipulation Keep in mind that the article is read world-wide and translated into several different languages, so we had to do our best to explain securities markets concepts in a manner which would be accessible to anyone not familiar with how securities and bullion markets operate. Just like every other instance in history of Government intervention in markets and economies, this scheme has created economic dislocations and severe adverse consequences. When it ultimately fails, the collateral damage caused from this will impact everyone. Faith is belief in something without evidence. With all the evidence available, anyone who refuses to believe that the gold market is manipulated is making a faith-based judgement. |
| "The Hows And Whys Of Gold Manipulation" Posted: 17 Jan 2014 06:16 PM PST We looked into the abyss if the gold price rose further. A further rise would have taken down one or several trading houses, which might have taken down all the rest in their wake. Therefore at any price, at any cost, the central banks had to quell the gold price, manage it. It was very difficult to get the gold price under control but we have now succeeded. The US Fed was very active in getting the gold price down. So was the U.K. - Eddie George, then Governor of the Bank of England, 1999That quote was Eddie George in reference to the reason why he sold half of England's 800 tonne gold reserve. Looking back, the sale was a colossal financial failure for England as the announcement of it drove the price of gold under $300 and ounce and most of the gold was sold well under $300/oz. England will never get that gold back unless they are willing to pay a price that would be many multiples of the current market price for an ounce - or if they confiscate what remains in GLD... The manipulation of the gold market by the U.S. Government and the Federal Reserve has been going on for decades. It intensified after the Bretton Woods Treaty established the dollar as the global reserve currency. Since the Fed rolled out its QE program, its manipulation of the gold market has ramped up to the point at which it has become obvious to anyone involved in the markets and who has half a brain. Paul Craig Roberts has been working hard to write articles which expose the truth about how the Government is systematically dismantling the U.S. Constitution and Rule of Law and replacing them with a system of political and financial repression. He invited me to write an article with him on how the Fed/Government manipulates the gold market for the purpose of defending QE and the dollar. Here's the link: The Hows and Whys of Gold Manipulation Keep in mind that the article is read world-wide and translated into several different languages, so we had to do our best to explain securities markets concepts in a manner which would be accessible to anyone not familiar with how securities and bullion markets operate. Just like every other instance in history of Government intervention in markets and economies, this scheme has created economic dislocations and severe adverse consequences. When it ultimately fails, the collateral damage caused from this will impact everyone. Faith is belief in something without evidence. With all the evidence available, anyone who refuses to believe that the gold market is manipulated is making a faith-based judgement. |
| Bullion banks run 'hurt and rescue' against miners, Maguire says Posted: 17 Jan 2014 05:01 PM PST 5p PT Friday, January 17, 2014 Dear Friend of GATA and Gold: Bullion banks Goldman Sachs and Scotia Mocatta are leading "hurt and rescue" expeditions against gold mining companies, trying to induce new rounds of hedging just before the gold market is squeezed, London metals trader Andrew Maguire tells King World News: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/1/17_Ma... CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT How to profit with silver -- Future Money Trends is offering a special 16-page silver report with our forecast for 2013 that includes profiles of nine companies and technical analysis of their stock performance. Six of the companies have market capitalizations of less than $800 million and one company has a market cap of only $30 million. The most exciting of these companies will begin production in a few weeks and has a market cap of just $150 million. Half of all proceeds from the sale of this report will be donated to the Gold Anti-Trust Action Committee to support its efforts exposing manipulation and fraud in the gold and silver markets. To learn about this report, please visit: http://www.futuremoneytrends.com/index.php?option=com_content&id=376&tmp... Join GATA here: Vancouver Resource Investment Conference http://www.cambridgehouse.com/event/vancouver-resource-investment-confer... GATA Reception in Vancouver Mines and Money Hong Kong http://www.minesandmoney.com/hongkong/ * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT Buy metals at GoldMoney and enjoy international storage GoldMoney was established in 2001 by James and Geoff Turk and safeguards more than $1.7 billion in metals and currencies. Buy gold, silver, platinum, and palladium from GoldMoney over the Internet and store them in vaults in Canada, Hong Kong, Singapore, Switzerland, and the United Kingdom, taking advantage of GoldMoney's low storage rates, among the most competitive in the industry. GoldMoney also offers delivery of 100-gram and 1-kilogram gold bars and 1-kilogram silver bars. To learn more, please visit: http://www.goldmoney.com/?gmrefcode=gata |
| The Gold Price Flew Up $11.70 to End the Week at $1,251.70 Posted: 17 Jan 2014 04:25 PM PST Gold Price Close Today : 1,251.70 Gold Price Close 10-Jan-14 : 1,246.70 Change : 5.00 or 0.4% Silver Price Close Today : 20.267 Silver Price Close 10-Jan-14 : 20.201 Change : 0.066 or 0.3% Gold Silver Ratio Today : 61.760 Gold Silver Ratio 10-Jan-14 : 61.715 Change : 0.046 or 0.1% Silver Gold Ratio : 0.01619 Silver Gold Ratio 10-Jan-14 : 0.01620 Change : -0.00001 or -0.1% Dow in Gold Dollars : $ 271.81 Dow in Gold Dollars 10-Jan-14 : $ 272.55 Change : -0.73 or -0.3% Dow in Gold Ounces : 13.149 Dow in Gold Ounces 10-Jan-14 : 13.184 Change : -0.04 or -0.3% Dow in Silver Ounces : 812.09 Dow in Silver Ounces 10-Jan-14 : 813.68 Change : -1.59 or -0.2% Dow Industrial : 16,458.56 Dow Industrial 10-Jan-14 : 16,437.05 Change : 21.51 or 0.1% S&P 500 : 1,838.69 S&P 500 10-Jan-14 : 1,842.37 Change : -3.68 or -0.2% US Dollar Index : 81.370 US Dollar Index 10-Jan-14 : 80.750 Change : 0.62 or 0.8% Platinum Price Close Today : 1,452.60 Platinum Price Close 10-Jan-14 : 1,434.70 Change : 17.90 or 1.2% Palladium Price Close Today : 747.65 Palladium Price Close 10-Jan-14 : 745.15 Change : 2.50 or 0.3% The GOLD PRICE flew up $11.70 to end at $1,251.70. Silver today mounted 24.2 cents to end at 2026.7 cents. Ahh, the positives! Gold's fourth weekly higher close. The gold price above the 50 DMA ($1,241.86). Gold at the neckline for what promises to be an upside down head and shoulders. Gold within shooting distance of the December $1,267.50 high. Gold, with a positive MACD in positive alignment, a positive RSI, positive full stochastics, and positive rate of change. All I could ask more is gold above $1,550 -- but wait. Be patient. Meanwhile the GOLD/SILVER RATIO, which falls during gold and silver rallies, has been inching downward since Mid December. Today it closed below its 50 DMA and right at the 20 and 200 DMAs, trying to fall out of bed. Wait, wait, wait! Did I neglect to mention that all three gold stock indices today burst their bonds and soared skyward? Yea, the HUI, GDX, and XAU in tandem. Now silver. the SILVER PRICE, up three of the last four weeks. On the weekly chart dancing with its downtrend line from 2011 [sic]. On the daily chart in an uptrend from the December low at 1872c. Next barrier is 2050 cents to break out of this congestion that has reigned below that number since mid-November. Then silver must o'erleap 2100c. Yet what progress already! It stands above its 20 and 50 DMAs (1985c and 2004dc). I don't want to bore y'all like some proud papa with pictures of a new baby, so I won't list all the positive indicators. There are lots of 'em. The silver and GOLD PRICE picture continues to improve steadily. And all this unashamed progress today came in the teeth of a boldly stronger dollar. I have been buying little by little since the lows, and will buy more when silver crosses 2100c and gold crosses $1,267.50. Only fly in this ointment is physical gold coin premiums, which are barely flabby. Not bad, just a mite soft. Silver premiums are holding up well. All this is the very best set-up we have seen in a year, but must be confirmed by higher prices and continued upward progress. Well, this IS interesting. This was a down week for the S&P500 but not for the Dow. It was the fourth UP week in a row for gold, and 3 out of 4 for silver. White metals rose this week, too, while the dollar finally made up its mind to climb. Stocks remain bewildered and squabbling with each other. All indices but the Dow fell today (the "Invisible Hand" of the NGM, painting the tape with the most widely followed index? Real or Memorex?). Dow inched up 41.55 (0.25%) to 16,458.56 but the S&P500 said "No" and stumbled 7.2 (0.4%) to 1,838.69. Maybe I'm prejudiced -- everybody is -- but this looks weak. Then add a falling Relative Strength Index and the MACD on a sell signal. Rate of change is below zero (negative) for both indices. All these witness that momentum -- the line of least resistance -- is down. Still, I will admit this remains somewhat equivocal. Stocks might jump Monday to new highs, nixing my interpretation. But both are poised to fall through their 20 DMAs, and with all those other negatives weighing them down, I expect Monday to be a rough day for stock bulls. I watch the Dow in Gold and Dow in Silver because sometimes turns in these precede outright turns in gold or silver, or coincide and confirm. Both these indicators promise gloom for stock investors. Dow in Gold has moved from the high side of its trading channel at 13.80 oz (G$285.27 gold dollars), below its 20 DMA, and to the low side of its trading channel. Today's 13.13 oz (G$271.42) close hangs close above the channel's bottom boundary and the 50 DMA at 12.99 oz (G$268.53). All indicators point toward the earth's magma core. Dow in Silver presents a like picture. Dropped today 0.86% to 810.37 oz, hanging barely above the 50 DMA at 804.97. The goofy, sorry US DOLLAR INDEX finally came out swinging today. It scampered up 36 basis points (0.44%) to end at 81.37, highest close since November. 200 DMA lieth near above at 81.58. When it punches through that, 'twill run for 83. The perky dollar hit the euro like a cat-o-nine-tails, flogging it out of the trading channel and down below its 50 DMA ($1.3613. Closed down 0.57% at $1.3540. First target is about $1.3341, the 200 DMA. Japanese yen kept its head timidly low today, rising 0.05% -- if that can be called a "rise" -- to 95.86 cents per 100 yen. It has been thoroughly rebuked and chastened for its audacious rise last week. Y'all enjoy your weekend! Argentum et aurum comparenda sunt -- -- Gold and silver must be bought. - Franklin Sanders, The Moneychanger The-MoneyChanger.com © 2013, The Moneychanger. May not be republished in any form, including electronically, without our express permission. To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $3,130.00; silver's primary is up targeting 16:1 gold/silver ratio or $195.66; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold or 18 ounces of silver. or 18 ounces of silver. US $ and US$-denominated assets, primary trend down; real estate bubble has burst, primary trend down. WARNING AND DISCLAIMER. Be advised and warned: Do NOT use these commentaries to trade futures contracts. I don't intend them for that or write them with that short term trading outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures. NOR do I recommend investing in gold or silver Exchange Trade Funds (ETFs). Those are NOT physical metal and I fear one day one or another may go up in smoke. Unless you can breathe smoke, stay away. Call me paranoid, but the surviving rabbit is wary of traps. NOR do I recommend trading futures options or other leveraged paper gold and silver products. These are not for the inexperienced. NOR do I recommend buying gold and silver on margin or with debt. What DO I recommend? Physical gold and silver coins and bars in your own hands. One final warning: NEVER insert a 747 Jumbo Jet up your nose. |
| The Gold Price Flew Up $11.70 to End the Week at $1,251.70 Posted: 17 Jan 2014 04:25 PM PST Gold Price Close Today : 1,251.70 Gold Price Close 10-Jan-14 : 1,246.70 Change : 5.00 or 0.4% Silver Price Close Today : 20.267 Silver Price Close 10-Jan-14 : 20.201 Change : 0.066 or 0.3% Gold Silver Ratio Today : 61.760 Gold Silver Ratio 10-Jan-14 : 61.715 Change : 0.046 or 0.1% Silver Gold Ratio : 0.01619 Silver Gold Ratio 10-Jan-14 : 0.01620 Change : -0.00001 or -0.1% Dow in Gold Dollars : $ 271.81 Dow in Gold Dollars 10-Jan-14 : $ 272.55 Change : -0.73 or -0.3% Dow in Gold Ounces : 13.149 Dow in Gold Ounces 10-Jan-14 : 13.184 Change : -0.04 or -0.3% Dow in Silver Ounces : 812.09 Dow in Silver Ounces 10-Jan-14 : 813.68 Change : -1.59 or -0.2% Dow Industrial : 16,458.56 Dow Industrial 10-Jan-14 : 16,437.05 Change : 21.51 or 0.1% S&P 500 : 1,838.69 S&P 500 10-Jan-14 : 1,842.37 Change : -3.68 or -0.2% US Dollar Index : 81.370 US Dollar Index 10-Jan-14 : 80.750 Change : 0.62 or 0.8% Platinum Price Close Today : 1,452.60 Platinum Price Close 10-Jan-14 : 1,434.70 Change : 17.90 or 1.2% Palladium Price Close Today : 747.65 Palladium Price Close 10-Jan-14 : 745.15 Change : 2.50 or 0.3% The GOLD PRICE flew up $11.70 to end at $1,251.70. Silver today mounted 24.2 cents to end at 2026.7 cents. Ahh, the positives! Gold's fourth weekly higher close. The gold price above the 50 DMA ($1,241.86). Gold at the neckline for what promises to be an upside down head and shoulders. Gold within shooting distance of the December $1,267.50 high. Gold, with a positive MACD in positive alignment, a positive RSI, positive full stochastics, and positive rate of change. All I could ask more is gold above $1,550 -- but wait. Be patient. Meanwhile the GOLD/SILVER RATIO, which falls during gold and silver rallies, has been inching downward since Mid December. Today it closed below its 50 DMA and right at the 20 and 200 DMAs, trying to fall out of bed. Wait, wait, wait! Did I neglect to mention that all three gold stock indices today burst their bonds and soared skyward? Yea, the HUI, GDX, and XAU in tandem. Now silver. the SILVER PRICE, up three of the last four weeks. On the weekly chart dancing with its downtrend line from 2011 [sic]. On the daily chart in an uptrend from the December low at 1872c. Next barrier is 2050 cents to break out of this congestion that has reigned below that number since mid-November. Then silver must o'erleap 2100c. Yet what progress already! It stands above its 20 and 50 DMAs (1985c and 2004dc). I don't want to bore y'all like some proud papa with pictures of a new baby, so I won't list all the positive indicators. There are lots of 'em. The silver and GOLD PRICE picture continues to improve steadily. And all this unashamed progress today came in the teeth of a boldly stronger dollar. I have been buying little by little since the lows, and will buy more when silver crosses 2100c and gold crosses $1,267.50. Only fly in this ointment is physical gold coin premiums, which are barely flabby. Not bad, just a mite soft. Silver premiums are holding up well. All this is the very best set-up we have seen in a year, but must be confirmed by higher prices and continued upward progress. Well, this IS interesting. This was a down week for the S&P500 but not for the Dow. It was the fourth UP week in a row for gold, and 3 out of 4 for silver. White metals rose this week, too, while the dollar finally made up its mind to climb. Stocks remain bewildered and squabbling with each other. All indices but the Dow fell today (the "Invisible Hand" of the NGM, painting the tape with the most widely followed index? Real or Memorex?). Dow inched up 41.55 (0.25%) to 16,458.56 but the S&P500 said "No" and stumbled 7.2 (0.4%) to 1,838.69. Maybe I'm prejudiced -- everybody is -- but this looks weak. Then add a falling Relative Strength Index and the MACD on a sell signal. Rate of change is below zero (negative) for both indices. All these witness that momentum -- the line of least resistance -- is down. Still, I will admit this remains somewhat equivocal. Stocks might jump Monday to new highs, nixing my interpretation. But both are poised to fall through their 20 DMAs, and with all those other negatives weighing them down, I expect Monday to be a rough day for stock bulls. I watch the Dow in Gold and Dow in Silver because sometimes turns in these precede outright turns in gold or silver, or coincide and confirm. Both these indicators promise gloom for stock investors. Dow in Gold has moved from the high side of its trading channel at 13.80 oz (G$285.27 gold dollars), below its 20 DMA, and to the low side of its trading channel. Today's 13.13 oz (G$271.42) close hangs close above the channel's bottom boundary and the 50 DMA at 12.99 oz (G$268.53). All indicators point toward the earth's magma core. Dow in Silver presents a like picture. Dropped today 0.86% to 810.37 oz, hanging barely above the 50 DMA at 804.97. The goofy, sorry US DOLLAR INDEX finally came out swinging today. It scampered up 36 basis points (0.44%) to end at 81.37, highest close since November. 200 DMA lieth near above at 81.58. When it punches through that, 'twill run for 83. The perky dollar hit the euro like a cat-o-nine-tails, flogging it out of the trading channel and down below its 50 DMA ($1.3613. Closed down 0.57% at $1.3540. First target is about $1.3341, the 200 DMA. Japanese yen kept its head timidly low today, rising 0.05% -- if that can be called a "rise" -- to 95.86 cents per 100 yen. It has been thoroughly rebuked and chastened for its audacious rise last week. Y'all enjoy your weekend! 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. |
| Sprott sees likelihood of gold delivery difficulties in February Posted: 17 Jan 2014 03:42 PM PST 3:25p PT Friday, January 17, 2014 Dear Friend of GATA and Gold: Sprott Asset Management's Eric Sprott tells King World News that he is looking forward to the likelihood that February will bring delivery difficulties in gold futures contracts: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/1/17_Bi... CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT A Personal Touch in Buying Precious Metals If you've not secured your allocation of precious metals and numismatic coins, 2014 may be the last year to get them at affordable and undervalued prices. With huge amounts of gold leaving the West for Asia, the future availability of precious metals is very much in doubt. All Pro Gold has competitive pricing on all bullion and numismatic products -- and offers prompt delivery too. Long-time GATA supporters Fred Goldstein and Tim Murphy are glad to answer any questions or concerns about acquiring the monetary metals. All Pro Gold has an extensive electronic library of articles from the world's top market analysts. Learn more at www.allprogold.com or write to Fred and Tim at info@allprogold.com or telephone them at 1-855-377-4653. Join GATA here: Vancouver Resource Investment Conference http://www.cambridgehouse.com/event/vancouver-resource-investment-confer... GATA Reception in Vancouver Mines and Money Hong Kong http://www.minesandmoney.com/hongkong/ * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT Jim Sinclair plans seminars in Asheville and Austin Gold advocate and mining entrepreneur Jim Sinclair will hold his next market seminars from 2 to 6 p.m. Saturday, January 25, at the Clarion Inn Asheville, 550 Airport Road, Fletcher, North Carolina, and from 2 to 6 p.m. Saturday, February 8, at the Austin, Texas, Airport Hilton. Advance registration is required. Details for the Asheville seminar are posted at Sinclair's Internet site, JSMineSet.com, here: http://www.jsmineset.com/2014/01/07/north-carolina-qa-session-venue-conf... Details for the Austin seminar are posted at JSMineSet.com here: http://www.jsmineset.com/2014/01/02/austin-texas-qa-session-confirmed/ |
| Maguire - New Buyer To Create Massive Short Squeeze In Gold Posted: 17 Jan 2014 03:41 PM PST  Today London metals trader Andrew Maguire warned King World News that major European buyer is going to create a massive short squeeze in the gold market. He also spoke about what is going on behind the scenes in the war on gold. Below is what Maguire said in Part II of his powerful interview.This posting includes an audio/video/photo media file: Download Now |
| China & the West View Gold Very Differently – Here’s Why Posted: 17 Jan 2014 03:26 PM PST [It has been] suggested recently that there must be collusion between America and China over the transfer of  physical gold from Western capital markets. They assume that governments know what they are doing, so there is a bigger game afoot of which we are unaware. The truth of the matter, though, is simply that China and Western capital markets view gold very differently. Let me explain.So says Alasdair Macleod (goldmoney.com) in edited excerpts from his original article* entitled Why the West sells gold and China buys it. [The following is presented by Lorimer Wilson, editor of www.FinancialArticleSummariesToday.com and www.munKNEE.com and may have been edited ([ ]), abridged (…) and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. This paragraph must be included in any article re-posting to avoid copyright infringement.]Macleod goes on to say in further edited excerpts: You will hardly find anyone in the London Bullion Market who regards gold as money; and for them if gold is no longer money Chinese demand for it is not a monetary issue. Instead it threatens the bullion banks’ business that a useful financial asset, capable of earning many times its physical value in fees, commissions, turns and interest, is being leeched out of the market by Chinese aunties. For a technical analysis on the future for gold, silver, the XAU and HUI check out: It is clear that nearly all Western central bankers share the above view, believing that gold will never play a monetary role again. We also know that Marxist-educated government advisers in China have been sheltered from the Keynesians’ antipathy against gold and instead have been brought up on Marx’s belief that Western capitalism will eventually destroy itself. It therefore follows they believe that western paper currencies will probably be destroyed as well. We can only speculate otherwise, but the following conclusions about why the Chinese are accumulating gold seem to make most sense:
The idea that America is colluding with China in the gold market must therefore be nonsense. The truth has everything to do with different philosophies about gold.
That is why the West is less worried about losing physical gold than it should be, and China is glad of the opportunity to buy it – and she can be expected to continue to do so whatever the price, because she knows that in the final analysis gold is the only true money. [Editor's Note: The author's views and conclusions in the above article are unaltered and no personal comments have been included to maintain the integrity of the original post. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.]*http://www.goldmoney.com/research/research-archive/why-the-west-sells-gold-and-china-buys-it Related Articles: (The articles posted on munKNEE.com deliberately present a diverse perspective on subjects discussed. Below are links, with introductory paragraphs, to a variety of related articles designed to help you become truly informed regarding both sides of the issues so that you can assess the merits of all points of view and come to your own conclusion.)1. Noonan: Is Gold's Decline Being Caused By Fed Payback Time to China?  The manipulated raids in the gold market since last April may be hurting the Precious Metals game players, weakening their confidence and "disproving" gold's worth against a fiat currency, but they serve a greater purpose, as in Federal Reserve payback time to China. Here's why. Read More » 2. Noonan: "Gold" War Has Replaced Cold War in China/Russia vs. U.S. Struggle for Economic Dominance  With the Western central bankers conducting a clearance sale, and depleting their physical holdings in the process, China and Russia are importing gold at cheaper and cheaper price levels. In the war for gold, the East and West are still winning, but for vastly different reasons. Let me explain. Read More » 3. China Converting U.S. Dollar Debt Holdings Into Gold At Accelerating Rate China, Russia and other nations are exiting their dollar-denominated holdings in favor of gold. This action should put pressure on the dollar and U.S. treasuries, pushing not only central banks, but mainstream investors towards the safety of precious metals and other tangible assets that cannot be defaulted on. There will be a rush out of dollars and into assets with no counter-party risk, it is just a matter of how soon it happens. Read More »  Most Americans simply don’t understand that Russia and China have the power to collapse the U.S. economy by going to a gold for oil system. All they have to do is pull the trigger. Let me explain. Words: 1515 Read More » 5. China Continues Buying Gold Like There Was No Tomorrow! Here Are the Impressive Numbers  China continues to buy gold with both hands, keeping up all the gold they produce and importing even more! Imports were up 50% in October vs. the previous month; up 68% in November and up 74% in December. What will January bring given the continued weakness in the price of gold? Probably even more buying! Read More » 6. China’s Role in the Future of Gold  In this infographic we look at how gold growth in China will impact the future of the precious metal. In Q4 of 2011 and continuing into 2012, China has bought more gold overall than even India and will continue to play an important role in consumption. Read More » 7. Gold Reserves: Who Are the 10 Biggest Owners – and How Soon Might China Become #1? China currently is a distant 5th behind the U.S. in the extent of gold reserves it currently owns but gives every indication that it is intent on adding more. How long might it take for China to be number one in gold reserves? Read More » The post China & the West View Gold Very Differently – Here’s Why appeared first on munKNEE dot.com. |
| Why the West Sells Gold and China Buys It Posted: 17 Jan 2014 03:18 PM PST A number of readers and bloggers have recently suggested there must be collusion between America and China over the transfer of physical gold from Western capital markets. They assume that governments know what they are doing ... Read More... |
| Gold Drives Silver Is Key To Where Silver Is Going Posted: 17 Jan 2014 02:58 PM PST Investors' interest in silver is starting to rebound after last year's carnage. As capital prepares to return to this beaten-down asset, many investors are wondering how to game silver price action. Gold is the key. The white metal closely mirrors and amplifies the price action in the yellow one. Gold is not only silver's primary driver, but its overwhelmingly dominant one. Gold is critical for timing silver buying and selling. The more years you spend trading precious metals, the more self-evident this truth becomes. Gold drives silver, full stop. After my 14 years of closely watching gold and silver price action in real-time all day every day, I simply take this ironclad relationship for granted. I can scarcely even write about silver without mentioning it in passing. Gold drives silver is a core trading axiom much like buy low sell high. Silver looks extraordinarily bullish in 2014, from multiple perspectives discussed in my latest few essays. In each of them I peripherally mentioned gold drives silver, which is like saying the sky is blue. So I've been very surprised by feedback on this fact ranging from incredulity to hostility. Some don't believe it, others challenge me to prove it, and a few are angered by the affront silver is mostly dependent on gold. In defense of the latter, sometimes I mischievously provoke the hardcore silver zealots with flippant comments like calling silver "gold's little lapdog". They just love that! But the hard math of market history doesn't lie, gold drives silver to a massively dominant degree. Silver is effectively a leveraged play on gold, just like the gold stocks. This critical truth is supported by extensive historical underpinnings. The silver price is highly correlated with gold, which no one will dispute. These precious metals move in unison the vast majority of the time. While this is readily evident observationally to veteran investors, it is also absolutely provable statistically. Correlation coefficients are the constructs that mathematically quantify the relationships between two data series, such as the price of silver and the price of gold. Technically correlation coefficients are derived from dividing the covariance (how data changes together) of two variables by the product of their standard deviations. If that sentence didn't make your eyes glaze over, you're a better man than me. Thankfully this tedious underlying math is automated through modern computer spreadsheets. Microsoft Excel's CORREL function does all the heavy lifting. Statisticians label the resulting correlation coefficient as "R". But that's not quite enough for investors to risk capital on. Multiplying the correlation coefficient by itself yields a second construct called the coefficient of determination, or "R-squared". This reveals the actual percentage of any price's movement that is statistically explainable by a second price's action. I bastardize this label to "r-square" in my work. So if silver and gold have a 0.9 correlation coefficient, squaring that yields an r-square of 81%. 81% of the price action in one is directly explainable by the price action in the other. In this example, just 1/5th of either one's price action is independent of the other's. Over time achieving success in investing demands making high-probability bets, so if an r-square is high enough the residual is largely irrelevant. As statisticians love to point out, correlation does not imply causation. Silver and gold are indeed highly correlated, their price action deeply interrelated. So mathematically at least, the case for silver driving gold is equal to the one for gold driving silver. Maybe silver is actually the dominant metal, and gold simply follows it! But of course this makes little sense fundamentally or practically, gold dominates silver. The global gold market is orders of magnitude larger than silver's, gold trading dwarfs silver trading. All over the world, traders are quick to buy and sell gold based on stock-market performance, economic data, and central-bank actions. The tiny highly-speculative silver market just follows along for the ride. If you watch silver futures very closely in real-time, there is a seconds-to-minutes delay after gold moves. Silver is a speculators' playground dominated by greed and fear. Silver traders watch gold closely for their trading cues. They grow bullish and greedily buy silver when gold is strong, so silver follows and amplifies gold's upside. Then they wax bearish and rush to fearfully sell silver when gold is weak, so silver leverages gold's downside. The giant gold market drives the tiny silver one, not the other way around. Our charts this week offer the hard mathematical proofs of silver's near-total dependence on gold. They show silver prices superimposed over gold's during their last secular bulls and bear. Correlation r-squares derived from Excel's CORREL function over key spans for silver are shown in yellow. You can easily replicate these results with your own daily closing data if you feel the need to verify this truth.
In recent weeks' essays on why silver is so incredibly bullish this year, I mentioned in passing that gold is responsible for over 92% of silver's price action in its entire secular bull. That was stealthily born over a dozen years ago in November 2001 when silver traded just above $4. That very bottoming month was when we first started recommending physical silver as an investment for our newsletter subscribers. If you take every daily silver and gold close since then, all 3059 trading days, and have Excel calculate the correlation coefficient between these two prices, it runs 0.9602. Multiplying that by itself yields an r-square of 92.2%. That is staggeringly high over such a long span of time. Around 12/13ths of all silver's price behavior on a closing interday basis over the past dozen years is a direct function of gold's own! Gold drives silver, it is the key to understanding where silver is going. Gold dominates sentiment among silver traders, so they almost always buy and sell in lockstep with gold. And if gold can mathematically explain 12/13ths of silver's price action, then everything else including silver's fundamentals effectively only accounts for 1/13th. In probability terms, that is negligible. Investors need to bet on the dominating odds. So if you are trying to buy silver low to later sell high, and your research on timing is so silver-centric it ignores gold, you are wasting your time. Don't get mad at me, that's the cold, hard truth of market history. I myself sometimes wish silver was less correlated with gold than it is, that silver futures traders weren't so darned preoccupied with gold futures. There are times when gold vexingly holds silver back, like 2013. I ran gold/silver correlations for other key periods too, such as silver's entire secular bull up to its dazzling April 2011 peak. That was the last time silver was growing popular, and boy was it fun. Silver's r-square with gold still ran a very high 86.8% over that span. You can further dissect silver's massive bull into a two major runs, from late 2005 to the late-2008 stock-panic low and from there to early 2011's heights. Silver's correlation r-square with gold ran 78.1% and 81.3% over those critical spans for silver investors. So at very worst, fully 4/5ths of silver's incredible bull-market surges that earned fortunes for us and our subscribers were statistically explainable by gold's own secular bull! Gold drives silver. That's why I've always devoted way more time to studying gold, it is the key to understanding silver and gaming its moves. Provocatively in last year's epic carnage, the worst year for both gold and silver in nearly a third of a century, this correlation really moderated. The gold/silver r-square between silver's bull-to-date peak in April 2011 and its brutal June 2013 low was just 44.5%. Silver was moving more independently relative to gold than usual. And that may be why the gold-drives-silver truth is somewhat controversial today. A couple factors explain this temporary reprieve in gold's crushing dominance over silver. Back in early 2011, silver had skyrocketed in a near-parabolic ascent threatening to become a mania. It was wildly overbought as I warned just before that topping, and needed to correct sharply to rebalance sentiment. And it did, with silver soon plummeting in one of its characteristic near-crashes. This wasn't gold's fault. Gold was not too overbought at that point, although it would later follow in the late summer of 2011. The extreme greed that drove silver's massive early-2011 gains had to be neutralized by the great sentiment pendulum swinging the opposite way to extreme fear. So silver corrected on its own accord, although the daily gold action still affected the pace of this enormous correction. And then 2013's anomaly arrived. Gold plummeted last year because the Fed-driven levitation in the general stock markets sucked capital and interest away from alternative investments. American stock investors dumped GLD gold-ETF shares so fast that the resulting flood of gold supply exceeded the rest of the world's gold demand growth. This crushed gold prices and silver was sucked into that brutal once-in-a-lifetime perfect storm of selling. But unlike GLD, the flagship SLV silver ETF did not suffer heavy differential selling last year. So silver was far more resilient than it had any right to be in such a horrendous year for gold. This SLV bullish divergence weakened gold's stranglehold on silver last year. But with silver's epic correction over, and GLD selling reversing as the greatly-overvalued stock markets top, the usual gold/silver relationship should resume. Some investors have been wondering if silver's super-high correlation with gold is something new in today's secular bull. Was silver's last secular bull also dominated by gold in the 1970s? Yes it was. This next chart applies the same correlation analysis back then. Though silver peaked at a then-astounding $48 in January 1980, I lopped off those fleeting highs to better show silver's action leading up to them.
Between November 1971 and January 1980 when silver blasted parabolic in a full-blown popular mania, its correlation r-square with gold was 88.2%. Over 7/8ths of all silver's price action in that entire secular bull was directly explainable by gold's own! That was actually a little higher than the 86.8% seen in today's secular bull up to silver's April 2011 peak. Gold has always dominated silver, it's nothing new. This was also true during the post-parabola silver crash in 1980, when silver plummeted 77.5% in just 4 months! That made 2013's carnage look like playschool. Yet despite silver's parabola being far more extreme than gold's, the gold-price action still mathematically explained 89.5% of silver's. Gold drives silver. Silver traders watch gold for their trading cues, and then simply mirror whatever gold is doing. It is absolutely essential to understand that this link is emotional, not fundamental. It's greed and fear, not supply and demand, that has inexorably linked silver with gold's fate. Silver traders buy when gold is strong, and sell when gold is weak. Rational or not, since they have done this for so many decades and created such a stellar correlation this behavior is self-reinforcing. We have no choice but to ape it. Does gold's dominance over silver extend back before the 1970s? I don't know. My daily gold and silver price data only goes back to June 1969. I've searched occasionally over the years for an older daily dataset, but still haven't found one. If I had one, I'd certainly do the analysis. But I strongly suspect that data before August 1971 is irrelevant. That of course marks the most important gold event in US history. Prior to then, US dollars were fully convertible into gold. With the US government legally fixing the dollar gold price, we were on a gold standard. Whenever gold threatened to decouple from its set dollar price, big players could arbitrage any differences by trading dollars for gold or vice versa with the US Treasury. So gold volatility in dollar terms was vastly lower before 1971, nonexistent by today's standards. The century-long silver price charts I've occasionally seen show silver prices usually tracking gold pretty closely, with little volatility before Richard Nixon "temporarily" suspended the gold standard in August 1971. There is no comparability across that vast discontinuity, the gold-standard and post-gold-standard eras are day-and-night different. So I suspect pre-1971 silver-price action has zero lessons for today. But between silver's two mighty secular bulls of the 1970s and 2000s, there was a massive secular bear. To complete this gold/silver correlation analysis, I ran some numbers over that span too. Even then, silver remained highly correlated with gold during the great majority of that span. Silver's big moves still mirrored gold, as you can see visually in this chart. But there was a peculiar long uncorrelated span.
Technically silver's secular bear ran for 13 years between January 1980 and March 1993, although after that silver essentially just ground sideways until November 2001. During that secular-bear-proper span, silver's correlation r-square with gold was 65.7%. Fully 2/3rds of all silver's secular-bear price action was directly explainable by gold's own. And during the worst of that bear, the correlation was even higher. The lion's share of silver's post-parabola losses happened by silver's May 1986 low. In that span silver's r-square with gold was 77.0%. Gold drove over 3/4ths of silver's price action! So even in secular bears, silver traders still key off gold for their buying and selling decisions. Gold drives silver, through bull and bear alike. You can't understand silver, nor hope to trade it successfully, unless you really study gold. After silver's absolute bear-market low in early 1993, this metal spent the next 9 years or so just grinding sideways near lows. Amazingly silver was almost totally uncorrelated with gold over this span, having an r-square with gold of just 2.5%! For a variety of reasons beyond the scope of this essay, silver was actually trading on its own psychology and fundamental merits then. But that episode was an anomaly. My gold-and-silver daily-closes dataset encompasses 44.7 years since 1969, a heck of a long time. And even including that 8.7-year uncorrelated span deep in a secular-bear wasteland, the overall correlation r-square of silver and gold was 85.1%! That is over 11,263 trading days. Across that enormous secular sea encompassing everything imaginable, nearly 6/7ths of silver's price action was driven by gold. So it seems prudent to continue to expect gold to dominate silver sentiment and therefore silver prices in the years to come. The historical market performance and data is crystal-clear, gold drives silver. Silver investors need to keep this in mind. Silver is a fascinating metal to study, with its own independent global supply-and-demand fundamentals. Yet technically it has always been slave to gold's fortunes. Silver is effectively a leveraged play on gold, the vast majority of its performance can be mathematically explained by gold's own. Thankfully gold is due for a massive mean-reversion rebound upleg in 2014 as the stock markets roll over and extreme GLD differential selling reverses. This coupled with silver's technical launchpad, record futures shorting, and SLV resilience positions silver for a huge upleg this year. The highest-potential way to ride silver's recovery is through silver stocks. These miners and explorers were beaten down to fundamentally-absurd levels in last year's carnage. The best of them are poised to skyrocket as silver recovers. We recently published a 27-page report profiling our dozen fundamental favorites, the fruits of hundreds of hours of expert world-class research. For just $95, you can learn about these elite silver stocks and seize the opportunity to buy low before they start flying with silver. We also publish acclaimed weekly and monthly subscription newsletters. They offer an increasingly-rare contrarian perspective cultivated from our decades of hard-won experience, knowledge, wisdom, and ongoing research. In them I explain what is going on in the markets, why, and how to trade them with specific stock trades. Subscribe today and start preparing for the massive changes 2014 brings! The bottom line is gold drives silver. For the entire four decades of the post-gold-standard era, the vast majority of silver's price action has been statistically explainable by gold's own. This happened in bull and bear markets alike. Silver has always been a highly-speculative market where greed and fear reign supreme, and these buying-and-selling emotions have always piggybacked off the fortunes of gold. Since gold is silver's overwhelmingly dominant driver, silver can only be successfully traded by studying gold. The time to buy silver is when gold is on the verge of a major upleg. That's when capital will start returning to silver and eventually drive outsized gains leveraging gold's. And since 2014 is due to be an awesome year for gold as it mean reverts higher, silver is destined to enjoy one heck of an upleg this year. |
| These 10 Charts Suggest the Outlook for Gold Is Good for 2014 and Beyond Posted: 17 Jan 2014 02:58 PM PST While we may see some further weakness in the short term the 7 charts on gold and 1 each on silver, platinum So says Mark O’Byrne (goldcore.com) in edited excerpts from his original article* entitled 7 key gold charts: “Bull market ahead”. [The following is presented by Lorimer Wilson, editor of www.FinancialArticleSummariesToday.com and www.munKNEE.com and may have been edited ([ ]), abridged (…) and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. This paragraph must be included in any article re-posting to avoid copyright infringement.]O’Byrne goes on to say in further edited excerpts: Often "a picture paints a thousand words" and the 7 key gold charts [plus one each on silver, platinum and palladium] below should make gold bears nervous. The charts were compiled by Nick Laird of ShareLynx.com (Sharelynx.com is a great website for charts and well worth the subscription.) So without further ado, lets look at these important gold charts. Gold Chart 1 – The banks are long gold … Gold Chart 2 – Gold stocks are being withdrawn … Gold Chart 3 – Supplies are being held back … Gold Chart 4 – COT Data shows that banks and others are positioned perfectly for a bull run to start … Gold Chart 5 – Pivot point time – double bottom … Gold Chart 6 – Never been a better buy …
Gold Chart 7 – Just bounced off one of it’s most oversold phases …
Silver Chart – Silver double bottom … Palladium Chart – Time to breakout … Platinum Chart – Time to get out of it’s funk … Sentiment is as bad as we have seen it in the precious metals market. As the charts show, such sentiment, price action and oversold conditions tend to coincide with major lows in gold and silver prices and multi-month price gains. The Future For Gold Very poor sentiment towards gold and oversold conditions is reminiscent of the conditions seen in late 2008 and January 2009 [as seen in the chart below] when gold prices had fallen by more than 25% in 9 months. Subsequently, gold rose from a low on January 15, 2009 at $802.60/oz to a high less than 12 months later at $1,215/oz for a gain of over 50%. A similar move today would see gold above $1,800/oz by year end.
We believe similar gains may be seen in the coming months and years. Investors should position themselves accordingly. [Editor's Note: The author's views and conclusions in the above article are unaltered and no personal comments have been included to maintain the integrity of the original post. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.]* http://www.goldcore.com/goldcore_blog/Seven_Key_Gold_Charts_Bull_Market_Ahead (GoldCore Limited trading as GoldCore is registered in the Companies Registration Office under Company number 377252. Registered for VAT under number 6397252A. © 2014) Related Articles: (The articles posted on munKNEE.com deliberately present a diverse perspective on subjects discussed. Below are links, with introductory paragraphs, to a variety of related articles designed to help you become truly informed regarding both sides of the issues so that you can assess the merits of all points of view and come to your own conclusion.)1. Gold & Silver to Plunge – Again – Then Move Up Dramatically Later in 2014 Back in early May, 2013, I correctly forecast the lows in gold & silver which occurred 2 months later. Today, my new analyses of gold & silver indicates they both will show further weakness during the first quarter of 2014 before both jumping dramatically in price before the end of 2014. Below are the specific details of my forecasts (with charts) to help you reap substantial financial rewards should you wish to avail yourself of my insightful analyses. Read More » 2. Nick Barisheff: "Today's the 2nd-Greatest Opportunity to Buy Gold Since 2002!"  Last year…saw gold's greatest decline in 32 years…but I'm still confident that gold's bullish fundamentals are still intact and that what I said in my recently published book, $10,000 Gold, still holds true. Here’s why. Read More » 3. It's PARAMOUNT to OWN some PHYSICAL Gold & Silver – Here's WHY Stop lamenting the current price of gold and silver and questioning the validity of owning PMs because without gold and/or silver it will be almost impossible to survive what is to come. No one knows when, but when it does, and it is a historical certainty, are you really going to care what you paid for your gold and silver? Read More » 4. Noonan: "Gold" War Has Replaced Cold War in China/Russia vs. U.S. Struggle for Economic Dominance With the Western central bankers conducting a clearance sale, and depleting their physical holdings in the process, China and Russia are importing gold at cheaper and cheaper price levels. In the war for gold, the East and West are still winning, but for vastly different reasons. Let me explain. Read More » 5. Noonan: Charts Suggest Lower Lows for Gold & Silver to Come in 2014 Because the natural laws of supply and demand do not apply to gold and silver, the only way we can track the influence of endless paper supply on the market is through the most reliable source, the market itself, and the best way to track the market is through charts.Let's take a look at what they are conveying today. Read More » 6. Gold In 2014: Price Forecasts ($900 – $1,435) & Commentary  Below are a series of forecasts and predictions of what 2014 could bring for the price of gold (as low as $900/ozt. & no higher than $1,435/ozt.) and the reasons why with interesting commentary by some individual investors and gold enthusiasts. Read More » 7. China Converting U.S. Dollar Debt Holdings Into Gold At Accelerating Rate China, Russia and other nations are exiting their dollar-denominated holdings in favor of gold. This action should put pressure on the dollar and U.S. treasuries, pushing not only central banks, but mainstream investors towards the safety of precious metals and other tangible assets that cannot be defaulted on. There will be a rush out of dollars and into assets with no counter-party risk, it is just a matter of how soon it happens. Read More » 8. "$10,000 Gold" Exclusive Excerpts from Nick Barisheff's New Book $10,000 Gold offers a candid insight into the current state of the economy, the underlying causes of gold's rising value and why the price of gold will continue climbing to $10,000/ounce and beyond in the years to come. The book contends that intelligent investors have no choice but to invest in this precious metal to stay safe no matter what lies ahead. Read More » 9. Just Gold & Silver: The Most Read Such Articles In 2013 munKNEE.com will receive well over 1,000,000 visitors again in 2013 and is now the "go-to" destination for diversified commentary and analyses on the current gold & silver doldrums and the future expectations for these precious metals. Below are introductions (with links) to the 13 most read such articles in 2013 in order of popularity. Interestingly, each of the 13 are as relevant today as the day they were posted so they are well worth taking the time to read. Read More » 10. The Pros & Cons of Buying Gold Bars vs. Ingots vs. Coins  It is during difficult times [such as these when] quantitative easing and currency wars have highlighted the volatility and vulnerability of currencies…that the true, safe value of gold really stands out. It is now easier for you to convert your savings into gold than ever before and this article outlines the reason for buying physical gold and the advantages and disadvantages of buying gold bars, ingots and/or coins. Read on! Words: 853 Read More » 11. Gold To Begin a Parabolic Rise In 2014 – Here's Why We are now starting the hyperinflationary phase in the USA and many other countries – and this will all start in 2014. What will be the trigger? The answer is simple – the fall of the U.S. dollar. Read More » 12. 12 Reasons Why Gold Should Bounce Sharply Higher in 2014  Is it time to throw in the towel? Is the bull market in precious metals really over? I don't think so because my analyses suggest that nearly all of the fundamental factors that have been driving the gold price higher in the past decade have only strengthened in the |
| Posted: 17 Jan 2014 02:45 PM PST Investors' interest in silver is starting to rebound after last year's carnage. As capital prepares to return to this beaten-down asset, many investors are wondering how to game silver price action. Gold is the key. Read More... |
| A Glimpse into the Coming Collapse Posted: 17 Jan 2014 02:35 PM PST Beginning in 1999, we predicted a systemic economic collapse that would take place in the First World and would impact all other economies. We began to list some of the "dominoes" that would fall as the collapse evolved and described ... Read More... |
| Something's Afoot in Gold and Silver Posted: 17 Jan 2014 02:26 PM PST Almost unnoticed, Open Interest in gold futures has taken off spectacularly, increasing by over 35,000 contracts since the beginning of the month, which is shown in the following chart. Read More... |
| Technicals Finally Reflecting Fundamentals In Resource Sector With Bullish Breakouts Posted: 17 Jan 2014 01:43 PM PST Important Notice of Speaking Engagement Come to see me present in Vancouver at 1PM on Monday January 20th, 2014 at the Vancouver Resource Investment Conferenceat the Vancouver Convention Center this Sunday and Monday…This show is one of the largest of the year and could be quite exciting as the sector appears to be bottoming. I will be highlighting some of our best performers from 2013 and some new commodities that should rebound in 2014. Please register for free by clicking here or copying and pasting the following link… http://cambridgehouse.com/event/13931/tickets Our bellwether recommendations such as Graftech (GTI), Cameco (CCJ), Molycorp (MCP), Potash Corp (POT) and Stillwater (SWC) are making bullish technical breakouts. They may just beginning their rise, which may indicate our graphite, uranium, rare earths, potash and PGM junior miners could outperform providing premium subscribers invested in possibly the best junior miners with superior leverage.
Now only a few weeks after the shorts reached a record level back in December, the beaten down resource sector is leading the market as evidenced by the outperformance of the TSX Venture Index, rise above its 200 day moving average and nine month breakout. A huge influx of money has been coming into the resource sector and expect M&A to heat up. Witness Goldcorp (GG) launching a hostile takeover for Osisko Mining (OSK.TO) for $2.6 billion. Goldcorp is going after Malartic low grade-bulk tonnage Malartic Gold Mine. If Goldcorp is buying a low grade, high production asset then they probably think gold prices are headed significantly higher unlike the pundits on the TV. Now only three short weeks later the TSX Venture may be forming a bullish golden crossover and breaking out at the critical 975 level on the Index. This is a break above new 9 month highs and we may be just days away from the 50 day crossing the 200 day. The resource sector is heating up with merger and acquisition activity as I predicted only a few weeks ago in the interview from early December with The Mining Report. Now the technicals may be reflecting the fundamentals. When the herd was ignoring our sector I positioned my readers ahead of the curve and called it a rare holiday bargain sale and focus on the fundamentals not the pundits on TV. Jeb Handwerger: Follow the Fundamentals in Mining MarketsSource: JT Long of The Mining Report (12/10/13)
The Mining Report: Jeb, you’ve been in the resource market since 1996. Based on what you’ve seen, what are the current trends? Jeb Handwerger: I first came into this sector when everyone was chasing the dot-com stocks. This was after the Bre-X scandal, where they were falsifying the assays. No one wanted to touch the gold miners, especially exploration stocks. They ran into the dot com sector and energy. Many people quit their jobs to become day traders. Gold had been in a correction since 1981 for 20 years. What we’re seeing right now is very similar to what we saw back at that 30-year low earlier this decade—miners hedging production, miners cutting off production because of low prices, miners laying off workers, write-downs, initial public offerings of tech stocks with ridiculous valuations and zero earnings. The resource market is basing. There are benefits to this process. You can see which companies are outperforming and you can see which companies have a strong balance sheet to weather the storm. You can see which companies are getting attention from investors and institutions and which companies are still advancing. Some people I talk to are thinking about leaving the sector. That’s not the right approach. Gains could be exponential. The right approach is to rotate into situations that will outperform, even if gold and silver stay flat. Stick to advisors who are finding the most compelling situations. Corrections take longer than people expect—the longer and the deeper the base, the more powerful the eventual upswing. It could be huge with the record amount of cash on the sidelines and the large number of shorts who may need to cover their position. TMR: How can investors know which companies are going to outperform? JH: It doesn’t take a rocket scientist. Pull up a simple chart of which companies are beginning to outperform the index over different time frames, the Market Vectors Gold Miners ETF (GDX:NYSE.A) or PHLX Gold/Silver Sector (XAU:NASDAQ). The charts are a reflection of the fundamentals. During the past year, many junior mining companies have outperformed, many of which we featured in my Gold Stock Trades newsletter. For instance, two of our junior exploration recommendations in Nevada,NuLegacy Gold Corporation (NUG:TSX.V; NULGF:OTCPK) and Corvus Gold Inc. (KOR:TSX) show that significant outperformance is critical during these times as capital seeks out the outperformers.
TMR: What are those themes? JH: A success story that I have followed for about a year and a half is Comstock Mining Inc. (LODE:NYSE.MKT). The company is growing production, with the goal of building free cash flow and sustaining itself. The management and technical team is very impressive, with proven track records. TMR: Comstock Mining is producing right now, but it’s not profitable. It just got new permitting to expand. What will it take for it to be profitable? JH: Just a little more time. It is coming closer to creating earnings per share and free cash flow. It expanded its heap-leach pad. It is going up to 40,000 ounces a year (40 Koz/year), which will bring average costs down, generating greater profit. The company has the potential to grow production to possibly 200 Koz. over the next few years. I visited the property and was very impressed by the experienced team that has been put together to advance such a high-quality producing operation. Comstock is a junior that is actually producing, with good margins. The company could soon generate positive earnings per share possibly, in Q1/14. This cash flow and sustainability could allow Comstock to explore and add to its massive reserves without diluting current shareholders. Comstock is literally just scratching the surface right now. Its geological team is really excited about exploration, as there are numerous high-grade bonanza targets, most notably the Chute zone. The next few quarters could be huge for this company, as it should achieve positive earnings. Do not be surprised to see majors looking at the company’s operations, should the gold price turn higher. Comstock has been flat for two years despite major fundamental progress. To me, this is a screaming buy. The stock is way undervalued and that is why some smart contrarian funds like Century Management have bought millions of shares. Follow the savvy value funds. TMR: What other companies in Nevada have the balance sheets that would attract investors? JH: I recommended Corvus back in 2011 and it has been one of my best performers. I have visited the project twice. It is near Death Valley, about 90 minutes from Vegas. Corvus Gold has been hitting high grades at its Yellow Jacket target. It could be the beginning of a starter pit, which would help out with the economics big time. Corvus is working on a mine plan for the North Bullfrog project, which should be watched as the high grades could significantly improve economics. The company just announced major funding from some of the top investors in the industry to advance this project. The company has an incredible asset, deep pockets, an excellent geological team and a very tight share structure. TMR: Corvus announced drill results on Bullfrog in October. While the stock is up from May, it’s flattened out short of its 2012 high. What’s going on there? JH: I think it will break that 2012 high in 2014 and will eventually be listed on the NYSE. Over the past six months since we reinitiated coverage, it went from $0.50 to $1.20 in one of the toughest junior mining markets. It is up 70% in the past six months, while the GDXJ is down 18%. Being able to pick the winners in a junior environment is no easy task. Luckily, my readers have been blessed with several that put us in a stronger position as we stuck to high-quality stories in mining-friendly jurisdictions. Corvus has the share structure and the support of John Hathaway’s Tocqueville Gold Fund and AngloGold Ashanti Ltd. (AU:NYSE; ANG:JSE; AGG:ASX; AGD:LSE) to take the company to the next stage of its growth in 2014. TMR: Paramount Gold and Silver Corp. (PZG:NYSE.MKT; PZG:TSX) might try to sell its San Miguel mine in Mexico. Could that help it advance the Sleeper project? JH: Yes. San Miguel is on the radar of the big boys, especially its neighbors Coeur Mining Inc. (CDM:TSX; CDE:NYSE) and Fresnillo Plc (FRES:LSE), two of the biggest silver producers in one of the biggest silver-producing regions of the world, the Sierra Madre. Paramount has the land position surrounding those two companies and has recently published metallurgical results, which may have a significant impact on the project’s economics. When the gold price stabilizes and turns higher, look for Paramount's San Miguel in the prolific Sierra Madre to be one of the first takeout targets. There has been a large increase in M&A activity there. I also recently visited Paramount’s Sleeper project in August and was very impressed even though the market is giving it a zero valuation, despite it being possibly the largest undeveloped gold and silver asset in the State of Nevada. Historically, the Sleeper open-pit mine was one of the highest-grade and lowest-cost producers back in the day. I spoke with the geologists, who believe there may be additional high-grade targets. Remember the Sleeper project when it was in production had armed guards in the pit? That’s how rich the gold was there. Sleeper has an advanced preliminary economic assessment showing the positive economics, excellent infrastructure and a huge NI-43-101-compliant resource. Investors can buy it for nearly nothing. It is absolutely a screaming buy. TMR: People have been mining Nevada for 200 years. Is there still more left to be found? JH: Yes, there are many projects that are buried and not visible to the human eye. I’ve always been interested in the Cortez Trend. I’ve invested in a lot of different situations in the Cortez Trend that never panned out. I finally found a junior that could make it. It has also been one of our major outperformers up over 70% in the past six months, while the index was down 18%. NuLegacy Gold is run by Dr. Roger Steininger, who found the first Cortez Trend deposit, the Pipeline deposit, with Royal Gold Inc. (RGLD:NASDAQ; RGL:TSX) in 1989. It eventually got bought out by Barrick Gold Corp. (ABX:NYSE). He has a good relationship with Barrick, and that’s how he got this joint venture between NuLegacy and Barrick for the Red Hills project, on land contiguous to Barrick’s Goldrush discovery. I like the joint venture because once NuLegacy spends $3.9 million ($3.9M), Barrick has to either carry it or buy it out. It just closed on an over-subscribed private placement. It raised $2M with Global Resources Investment Trust. TMR: What else in Nevada should investors watch? JH: I’ve always told my subscribers to watch Kinsley Mountain. Let me back up a little. In 2011, Fronteer Gold Inc. (FRG:TSX; FRG:NYSE.MKT), which had the Long Canyon discovery, was our major pick. Many of my subscribers and I made a lot of money off of the takeout by Newmont Mining Corp. (NEM:NYSE) for $2.3 billion ($2.3B). Pilot Gold Inc. (PLG:TSX) is the spin out of Fronteer. Pilot has one of the top geologists who helped advance Long Canyon for Fronteer, Moira Smith. Pilot recently hit nice results from Kinsley Mountain. After selling Fronteer after the Newmont takeout, I just got back in and took an initial position after the good results. It’s very impressive. Once this market turns, people are going to become aware that this may have the potential to be the next Long Canyon. I also just bought Canamex Resources Corp. (CSQ:TSX.V; CX6:FSE), which is hitting unbelievable results on its Bruner project. These are some of the best results I have ever seen in Nevada and don't understand why investors don't realize the potential at this project located in Nye County. The stock is trading at only $0.07. Hecla Mining Co. (HL:NYSE) has made a large investment in this company at much higher prices and is represented on the board of directors and the technical advisory. It’s a steal for new investors. TMR: Where else can investors go to prepare for an upswing? JH: Alaska. Check out the numbers from the Fort Knox mine for Kinross Gold Corp. (K:TSX; KGC:NYSE). Fort Knox is right down the road from International Tower Hill Mines Ltd.’s (ITH:TSX; THM:NYSE.MKT)Livengood project. It has a lot of similarities and advantages to Fort Knox but has been underperforming ever since it announced a feasibility study that most investors and analysts completely misunderstood. TMR: What does the price of gold have to be for International Tower Hill to make sense? JH: According to the last feasibility, it needs $1,500 gold to get close to breaking even. But that feasibility was based on a mine plan that was done back at the height of the market in 2010. There are many different options on this project and in many ways it is superior to Fort Knox. That is how the company attracted the people who built Fort Knox and Pogo to advance Livengood. I am confident that one day this will be a mine as it is located in a mining part of the state and it has a technical team that knows how to build mines. One has to be patient with a massive 20 million-ounce asset like this as it has been underperforming. However, it has the potential if gold starts moving higher to significantly outperform to the upside. TMR: Will there be a new feasibility study? JH: It is looking at different optimizations. There are strategic partners that are seriously considering it because they may want a mine on their books that can have large production numbers. International Tower Hill is one of those few projects that have the potential to produce 500 Koz/year. It has huge optionality and leverage. TMR: Are you finding any gold opportunities in Canada? JH: I recently took a position in Probe Mines Limited (PRB:TSX.V). Probe is developing the Borden Lake project in Ontario. It has made a high-grade discovery near infrastructure and has potential to expand. This project is a unique find because it’s a totally new discovery. It may be a totally new district. The potential for it to be huge and grow is great. It’s one of the few stocks that’s outperforming in one of the toughest junior resource markets. The outperforming companies are going to be the first to build value for shareholders in the coming upswing. Probe recently announced metallurgy, which was very impressive with good recoveries and key for the preliminary economic assessment. TMR: You also follow uranium. The sector is still way down since Fukushima. Is it too early to get in? JH: Smart investors look for the biggest bang for the buck. Uranium recently hit eight-year lows, but the fundamentals show there are more reactors under construction today than there were before Fukushima. China, Saudi Arabia, and the U.S., for the first time in 30 years, are building reactors. All around the world there are new reactors being built to provide a diverse energy mix that’s safe, clean and economic. For Asian nations, natural gas is expensive. They’re building huge liquefied natural gas (LNG) terminals in British Columbia to help bring down those costs. There is a huge energy boom in Canada, not only in the oil sands, but also in uranium. CNOOC Ltd. (CEO:NYSE), China National Offshore Oil Corp., bought out Nexen Inc. (NXY:TSX; NXY:NYSE) for close to $15B. It also signed a uranium deal with Cameco Corp. (CCO:TSX; CCJ:NYSE). I just took a position in Enterprise Group Inc. (E:TSX.V). It’s getting awarded contracts in the energy services field. It is earning $0.05/share/quarter. There are great growth aspects there and the company is making some impressive acquisitions. The Athabasca Basin and Western Canada is an area that’s going to be of great interest because the Chinese need energy. Talk about a boom—just look at some of the news coming out of Western Canada with the massive building of liquefied natural gas plants. In addition, the last shipment from the Russian Megatons to Megawatts program has happened. That’s 24 million pounds coming out of the uranium market that the U.S. had for more than 20 years. Utilities are going to have to look for new sources. But it takes many years to build a mine in the Athabasca Basin. Cigar Lake has taken more than 30 years to build. We think the Athabasca Basin is a great area, but a lot of the activity is very early-stage stuff. TMR: What about the Preston Lake area, where the Western Athabasca Syndicate is working? JH: The Syndicate is a strategic partnership between four companies—Skyharbour Resources Ltd. (SYH:TSX.V), Noka Resources (NOV:TSX.V), Athabasca Nuclear Corp. (ASC:TSX.V) and Lucky Strike Resources (LKY:TSX.V). Each company has an option to earn 25% on the property. It’s not far from a highway that runs through the land package. It’s still very early stage. In the Athabasca Basin, I focus on Lakeland Resources Inc. (LK:TSX.V). That’s mostly because I followed Jody Dahrouge for many years with Fission Energy Corp. He was one of the major forces be |
| Gold Daily and Silver Weekly Charts Posted: 17 Jan 2014 01:20 PM PST |
| Gold Daily and Silver Weekly Charts Posted: 17 Jan 2014 01:20 PM PST |
| Billionaire Sprott - Expect A Failure To Deliver Gold & Lawsuits Posted: 17 Jan 2014 12:42 PM PST  In one of his most important and powerful interviews, today billionaire Eric Sprott warned King World News that we are going to see a failure to deliver gold and lawsuits that will emerge from banks manipulating the gold market. The Canadian billionaire also included an astonishing chart. Below is what Sprott, Chairman of Sprott Asset Management, had to say in part I of this remarkable interview series.This posting includes an audio/video/photo media file: Download Now |
| Economic Collapse 2014 -- Massive HYPERINFLATION Needed to Prop Up Stock Market Posted: 17 Jan 2014 12:00 PM PST MARC FABER: We're In A Gigantic Financial Asset Bubble That Could Burst Any Day The global economy is slowing down, because the global economy's largely emerging economies nowadays, and there's no growth in exports in emerging economies, there's no growth, in the local economies. Because big... [[ This is a content summary only. Visit http://www.GoldSilverNewsBlog.com or http://www.newsbooze.com or http://www.figanews.com for full links, other content, and more! ]]  |
Autarky vs. Self-Sufficiency
Total U.S. gold exports picked up substantially in October after a low was hit in September at 37.6 metric tons. As the price of gold declined from $1,400 at the beginning of September to a low of $1,250 in October, gold exports increased to Hong Kong & Switzerland.
How will old yeller react to new Yellen?
It is crystal clear to anyone willing to go a few steps beyond the headlines that massive intervention and ignorance of risk act as massive governors to progress, real economic growth and natural capital formation. Nevertheless, what is less clear is how these failures will manifest in precious metals – especially the silver market. 
What will it take to turn the gold market around? One would think it would be obvious
In the second weekly report, that covers the five trading days from 6-1-2014 to 10-1-2014, today released by the Shanghai Gold Exchange we can read a spectacular amount of physical gold has been withdrawn from the vaults; 79 tons. Last week I wrote withdrawals were down, but could well pick up this month as China will celebrate Chinese new year on January 31, 2014 according to the Chinese Lunar calendar. And withdrawals did pick up..
It may seem like a confusing time to be a mining investor, but Jeb Handwerger, ofGold Stock Trades, insists it doesn’t take a rocket scientist. “Stick to the fundamentals,” he says. “The technicals will eventually reflect the fundamentals.” In this interview with
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