Gold World News Flash

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• Economic Growth Is Achieved By Two Events
• Louise Yamada - 2 Key Gold & Silver Charts To Start 2014
• Rick Rule – Silver Shorts About To Have A Religious Experience
• How The U.S. Employs Overseas Sweatshops To Produce Government Uniforms
• Six Reasons Why The Government Is Destroying The Dollar
• Resource Sector Starts 2014 With A Boom Higher: TSX Venture Up 11 Consecutive Days
• 23 Reasons To Be Bullish On Gold
• Do The Forex Boys Expect A Rally In Metals
• Big money showing interest in monetary metals, Rule tells King World News
• Reflections on the golden dance from West to East
• Silver and Gold Prices Find Themselves Fighting Over Familiar Ground — Gold Must Hold Above $1,220
• Silver and Gold Prices Find Themselves Fighting Over Familiar Ground — Gold Must Hold Above $1,220
• Gold Daily and Silver Weekly Charts
• Gold Daily and Silver Weekly Charts
• Proof that Monday's gold smash was not a 'fat finger' mistake but an algorithm attack
• Why Gold Will Drop to $1,000 Per Ounce
• Rick Rule - Silver Shorts About To Have A Religious Experience
• 23 Reasons to Be Bullish on Gold
• Gold on Roller Coaster 2014 Start as Price Falls Again
• Inflation vs Deflation – Monetary Tectonics In 25 Amazing Charts
• Fed Tapering? With These Deflation Risks?
• Fed Tapering? With These Deflation Risks?
• Fed Tapering? With These Deflation Risks?
• Gold has beaten all other currencies since 2000
• 3-Month Silver Trade Off Extreme Sentiment
• 3-Month Silver Trade Off Extreme Sentiment
• GLD's gold sent to Asia isn't coming back, Williams tells KWN
• What Interest Rates Mean for Stocks
• What Interest Rates Mean for Stocks
• Gold vs. Fed Debasement
• Gold vs. Fed Debasement
• Who's Buying Gold, and Why
• Who's Buying Gold, and Why
• TF Metals Report: Where is the German gold?
• This Will Create A Major Panic & Then Destroy The Gold Shorts
• Profit Potential From the Front Lines of Cyberwar
• The Slow March to Ruin
• 23 Reasons to Be Bullish on Gold
• Gold’s support above $1,200 getting stronger – Phillips
• Gold price in for another tough year, but floor to be found around $1,150
• Can’t-miss headlines: Gold slides to $1,220, Impact hits gold in Mexico & more
• Platinum bonds seen beating bearish gold
• End of “Wall Street Party” Will Be a Catastrophe! Here’s Why
• Silver Price Charts and Other Factors Say Now is Time to Buy (Part 2)
• What do you know about inflation?
• US Jobs Data See Gold Prices Fall Ahead of Fed Minutes
• Gold and Money Supply Prepare for Messy Divorce
• Bron Suchecki: Tricks can be played with Comex gold storage data
• Gold price smashes again having less effect, Grant Williams tells KWN
• Market Monitor – January 8th

Economic Growth Is Achieved By Two Events Posted: 08 Jan 2014 10:00 PM PST by David Schectman, MilesFranklin.com: Richard Duncan, author of The Dollar Crisis has some interesting views on the economy.  They are a bit off the beaten path, but very much worth pondering. Summing up his views… THE FACTORS THAT LEAD TO A GROWING ECONOMY Economic growth is achieved by two events.  New workers coming into the work place and credit growth.  Both are now failing. We have shrinking demographics and less income growth. Credit growth drove the economy since 1960.  In 1964 it was one trillion.  Now it's $58 trillion, a 58-times expansion of credit. Read More @ MilesFranklin.com

Louise Yamada - 2 Key Gold & Silver Charts To Start 2014 Posted: 08 Jan 2014 09:01 PM PST With major markets on the move as we kick off 2014, today King World News is pleased to share a piece of legendary technical analyst Louise Yamada's "Technical Perspectives" report. Yamada is without question one of the greatest technical analysts Wall Street has ever seen. This information is not available to the public and we are grateful to Louise for sharing her incredible work with KWN readers globally. This posting includes an audio/video/photo media file: Download Now

Rick Rule – Silver Shorts About To Have A Religious Experience Posted: 08 Jan 2014 08:40 PM PST from KingWorldNews: It's interesting to note that in the first segment of this discussion we talked about the fact that big, big money had been circling the resource industry, and that big, big money was (now) coming to settle. I happen to know right now that very, very, very big money is (now) circling the precious metals themselves — the physical sector. And (the big money is also circling) the certificated precious metals like the Sprott Physical Trusts. The money hasn't yet come to settle, but it's very important to know what might happen to those markets if the big money began to settle. Rick Rule continues @ KingWorldNews.com

How The U.S. Employs Overseas Sweatshops To Produce Government Uniforms Posted: 08 Jan 2014 08:27 PM PST Submitted by Michael Krieger of Liberty Blitzkrieg blog, The following article from the New York Times is extraordinarily important as it perfectly highlights the incredible hypocrisy of the U.S. government when it comes to overseas slave labor and human rights. While the Obama Administration (and the ones that came before it) publicly espouse self-important platitudes about our dedication to humanitarianism, when it comes down to practicing what we preach, our government fails miserably and is directly responsible for immense human suffering. Let’s get down to some facts. The U.S. government is one of the largest buyers of clothing from overseas factories at over $1.5 billion per year. To start, considering our so-called “leaders” are supposedly so concerned about the state of the U.S. economy, why aren’t we spending the money here at home at U.S. factories? If we don’t have the capacity, why don’t we build the capacity? After all, if we need the uniforms anyway, and it is at the taxpayers expense, wouldn’t it make sense to at least ensure production at home and create some jobs? If a private business wants to produce overseas that’s fine, but you’d think the government would be a little more interested in boosting domestic industry. However, the above is just a minor issue. Not only does the U.S. government spend most of its money for clothing at overseas factories, but it employs some of the most egregious human rights abusers in the process. Child labor, beatings, restrictions on bathroom brakes, padlocked exits and much more is routine practice at these factories. Even worse, in the few instances in which the government is required to actually use U.S. labor, they just contract with prisons for less than $2 per hour using domestic slave labor. Then, when questions start to get asked, government agencies actually go out of their way to keep the factory lists out of the public’s eye, even going so far as denying requests when pressed for information by members of Congress. Sadly, as usual, at the end of the day this is all about profits and money. Money government officials will claim is being saved by the taxpayer, but in reality is just being funneled to well connected bureaucrats. From the New York Times: WASHINGTON — One of the world’s biggest clothing buyers, the United States government spends more than $1.5 billion a year at factories overseas, acquiring everything from the royal blue shirts worn by airport security workers to the olive button-downs required for forest rangers and the camouflage pants sold to troops on military bases.   But even though the Obama administration has called on Western buyers to use their purchasing power to push for improved industry working conditions after several workplace disasters over the last 14 months, the American government has done little to adjust its own shopping habits.   Labor Department officials say that federal agencies have “zero tolerance” for using overseas plants that break local laws, but American government suppliers in countries including Bangladesh, the Dominican Republic, Haiti, Mexico, Pakistan and Vietnam show a pattern of legal violations and harsh working conditions, according to audits and interviews at factories. Among them: padlocked fire exits, buildings at risk of collapse, falsified wage records and repeated hand punctures from sewing needles when workers were pushed to hurry up.   In Bangladesh, shirts with Marine Corps logos sold in military stores were made at DK Knitwear, where child laborers made up a third of the work force, according to a 2010 audit that led some vendors to cut ties with the plant. Managers punched workers for missed production quotas, and the plant had no functioning alarm system despite previous fires, auditors said. Many of the problems remain, according to another audit this year and recent interviews with workers.   At Zongtex Garment Manufacturing in Phnom Penh, Cambodia, which makes clothes sold by the Army and Air Force, an audit conducted this year found nearly two dozen under-age workers, some as young as 15. Several of them described in interviews with The New York Times how they were instructed to hide from inspectors.   “Sometimes people soil themselves at their sewing machines,” one worker said, because of restrictions on bathroom breaks. And there is no law prohibiting the federal government from buying clothes produced overseas under unsafe or abusive conditions. Why am I not surprised… “It doesn’t exist for the exact same reason that American consumers still buy from sweatshops,” said Daniel Gordon, a former top federal procurement official who now works at George Washington University Law School. “The government cares most about getting the best price.”   Labor and State Department officials have encouraged retailers to participate in strengthening rules on factory conditions in Bangladesh — home to one of the largest and most dangerous garment industries. But defense officials this month helped kill a legislative measure that would have required military stores, which last year made more than $485 million in profit, to comply with such rules because they said the $500,000 annual cost was too expensive. As usual, it is all about the money. You think average Americans are seeing any of that massive profit? Believe me, someone is and it’s not you. At Manta Apparels, for example, which makes uniforms for the General Services Administration, employees said beatings are common and fire exits are kept chained except when auditors visit. The local press has described Manta as one of the most repressive factories in the country. A top labor advocate, Aminul Islam, was organizing there in 2010 when he was first arrested by the police and tortured. In April 2012, he was found dead, a hole drilled below his right knee and his ankles crushed.   Conditions like those are possible partly because American government agencies usually do not know which factories supply their goods or are reluctant to reveal them. Soon after a fire killed at least 112 people at the Tazreen Fashions factory in Bangladesh in November 2012, several members of Congress asked various agencies for factory addresses. Of the seven agencies her office contacted, Representative Carolyn Maloney, Democrat of New York, said only the Department of the Interior turned over its list.   Federal officials still have to navigate a tangle of rules. Defense officials, for instance, who spend roughly $2 billion annually on military uniforms, are required by a World War II-era rule called the Berry Amendment to have most of them made in the United States. In recent years, Congress has pressured defense officials to cut costs on uniforms. Increasingly, the department has turned to federal prisons, where wages are under $2 per hour. Federal inmates this year stitched more than $100 million worth of military uniforms.   The Marine Corps and Navy still do not require audits of these factories. The Air Force and Army exchanges do, but the audits can come from retailers, and defense officials fail to do routine spot checks to confirm their accuracy.   The Marine Corps and Navy still do not require audits of these factories. The Air Force and Army exchanges do, but the audits can come from retailers, and defense officials fail to do routine spot checks to confirm their accuracy.   For now, Bangladesh’s garment sector continues to grow, as do purchases from one of its bulk buyers. In the year since Tazreen burned down, American military stores have shipped even more clothes from Bangladesh. This is the human equivalent of factory farming and every decent American citizen should be appalled that this is happening on multiple levels. Please share this post to raise awareness. Full article here.

Six Reasons Why The Government Is Destroying The Dollar Posted: 08 Jan 2014 08:20 PM PST by Daniel R. Amerman, SilverBearCafe.com: The United States government has six interrelated motivations for destroying the value of the dollar: 1. Creating money out of thin air on a massive basis is all that stands between the current state of hidden depression, and overt depression with unemployment levels potentially rivaling those seen in the Great Depression of the 1930s. 2. It is the most effective way to not just pay down current crushing debt levels using devalued dollars, but also to deal with the rapidly approaching massive generational crisis of paying for Boomer retirement promises. Read More @ SilverBearCafe.com

Resource Sector Starts 2014 With A Boom Higher: TSX Venture Up 11 Consecutive Days Posted: 08 Jan 2014 07:59 PM PST It has been disappointing to see the decline over the past three years in the resource sector and commodities, but it does not surprise me.  We are living in volatile, chaotic times when governments and banks will do whatever they can to disguise inflation through shorting, margin and manipulation.  Eventually, these downturns end and when they do massive rebounds begin.  When you see record shorts like we are seeing now in gold it usually signals a major bullish turning point imminently ahead. We must put this decline in proper perspective and realize that this is a counter-trend deviation from the long term secular uptrend in precious metals and commodities that occurs every few years.  The end of 2013 marked 100 years of the Federal Reserve System.  What have they accomplished? The debt of the country has soared resulting in a major loss in the purchasing power of the U.S. dollar.  It has caused the few to get rich and the masses to get poorer through a hidden tax called inflation. Gold has soared exponentially over the past 100 years especially the past twelve before 2013.  The dollar has lost over 95% of its purchasing power over the past century.  This year marks the first annual decline in gold since 2000, which may prove to be a rare buying opportunity. The taper is not a signal to sell gold but to possibly buy.  Inflation should start to pick up.  Notice gold and silver are still holding the summer 2013 lows and the TSX Venture is breaking above the 200 day moving average. The TSX Venture is up 11 straight days. The small miners are a leading indicator and may be signaling the smart money is expecting gold to hold the $1200 bottom.  This technical reversal may forecast increased interest of smart capital into the sector. We have already seen our featured companies such as Corvus (CORVF), Tasman (TAS), Big North Graphite (NRT.V), Lakeland Resources(LK.V) and Nulegacy Gold (NUG.V) benefit from this turn with a golden crossover. Uranerz (URZ), Comstock Mining (LODE), Wellgreen Platinum (WG.V), Pele Mountain (GEM.V) and Canamex Resources (CNMXF) are on the verge of this major bullish trend reversal of the 50 day crossing the 200 day.  This improving technical landscape in our featured companies and the TSX Venture closing above the 200 day moving average while gold and silver is basing may signify that the recent taper and improving economy may actually be the beginning of a coming boom to the entire resource complex. Gold and silver may be ending a healthy correction which triggered sell stops and shook out the momentum and marginal players.    Gold and silver could be putting in bottoms over the next few trading days.  Mark my words when I say you ain’t seen nothing yet in this precious metals market. This period reminds me of the late 90′s when everyone was chasing high priced tech stocks and ignoring the deeply discounted junior miners.  Over the next decade great wealth was made in the resource sector and dot com and biotech investors were destroyed. Precious metals are way undervalued.  Gold is still cheaper than the 1980 high when inflation is factored in, yet debts are exponentially higher.  Discoveries are few and far between and producers are shutting down mines.  These are the ingredients to lead to the next leg higher in gold and silver. My job is to position my readers on the long term trend in real assets which over time should protect them from inflation and the loss of purchasing power of the dollar.  Many banks and brokers have been shorting the resource sector and getting their retail accounts to short miners.  Margin debts are reaching record highs.  This may indicate a major market correction in equities and a rise in commodities similar to early 2000. Notice the Venture making a strong rally even as gold and silver prices are basing.  Don’t short resource stocks especially when they are hitting three year lows and historically discounted valuations.  This has got to be probably the worst possible time to sell, short or to exit the resource sector and possibly the best time to buy high quality junior miners in one’s lifetime. Governments around the world have been printing fiat currency through quantitative easing and manipulating a negative interest rate policy.  Is the Euro Debt problem really solved?  Is China’s banking system in trouble as well?  Investors around the world must be prepared for inflation and protect themselves from situations like Cyprus where depositors were slaughtered to pay the debts of the banks. Although many investors are ignoring precious metals and the junior miners, I continue to encourage you to not follow the masses and the media.  Do you really believe that the U.S., Japan or the indebted European nations will ever pay back its debts?  Or that bitcoin is an alternative to gold and silver? All these indebted countries are devaluing their currencies and forcing interest rates to extremely low levels to pay back their out of control debts.  I am continuing to buy gold, silver and rotating into the high quality junior miners trading literally for a penny of a penny on a dollar.  Gold and silver has been a form of money for thousands of years.  Who knows where bitcoin will be in two or three? When the debt storm returns like in 2010 and 2011, we may see a major move into tangible assets especially gold, silver and some of the high quality junior miners in safe jurisdictions like Nevada.  This move in precious metals could come rapidly at anytime. Don't try to time the bottom as only liars can ever catch it.  One could easily miss the powerful upswing where investors can make exponential gains on their money.   New value buying after tax loss selling combined with short covering could lead to major gains in the miners in the first quarter of 2014.  A turnaround can occur any day. In 2011, equities were cheap compared to the overvalued gold miners.  Now two year later the cycle is the reverse, gold miners are cheap compared to equities.  Now is the time to pick up the mining shares on the cheap when the masses are short and sell the overvalued equities which the herd are taking out margin to buy. We know these margin fed rallies usually end with a lot of pain and these sell offs in the miners provide the best buying opportunities. With regards to gold and silver, I believe we are very near a bottom.  I see the downside risk as maybe $50 and the potential upside of thousands of dollars.  The time to buy is when funds are facing redemption and marginal players face capitulation.  We may have seen that at the end of 2013. Experienced players have never seen the shares at such bargain prices and are continuing to accumulate.   The majors are already beginning to make major changes, selling assets and cutting expenses.  We may be near a major bottom that comes around maybe once in a lifetime. I never thought we would see this buying opportunity happen again in my lifetime but the media, who are owned by the banks who have shorted this sector to oblivion, have wiped the marginal investor out and forced them to sell assets for pennies on the dollar. This is the law of the casino.  Many go home empty handed, while only a patient few come out winners.  I believe the selling capitulation now is giving value investors a major gift who may soon enter this beaten down sector big time. Look for savvy investors come swooping in to pick up shares in early 2014 as they may see unbelievable opportunities in this space.  Smart investors are on the lookout for assets trading at significant discounts to what major investors paid recently. For instance, one company which I have just recently bought and plan to buy more of is Canamex Resources (CSQ.V or CNMXF).  Hecla paid $.18 back in 2012 before amazing discoveries.  Now Canamex can be bought at around 1/3rd of that value despite hitting unbelievable results in 2013.  Some of the best I have seen from Nevada. Canamex controls the Bruner Gold Project in mining friendly Nye County, Nevada where they are making a major new gold discovery. The project is extremely well located in an area of multi-million ounce deposits near the famous Round Mountain Mine two hours southeast of Reno.  Canamex has made some very positive discoveries recently at the project.  The company is demonstrating that there are high grade feeder zones on the property that could be used as a starter pit. Canamex continues to hit amazing results on a consistent basis and attracted the attention of major gold producers such as Hecla who came on as a significant shareholder after months of research and due diligence on the asset back in 2012.  Hecla bought a major position in this company around 15% at $.18, around three times higher than where it is now.  This investment of capital, an active representative on the board and technical expertise came after six months of due diligence and analysis. Investors can buy it now at close to a 1/3rd of that Hecla’s purchase price.  Over the past year, Canamex has made unbelievable geological progress.  Canamex has released some awesome holes from both the historic resource area and the new discovery at Penelas East. In the historic area they hit 57.9 meters of over 5 grams/ton.  In addition, The Penelas East Target is one of the seven target areas on the property and the technical team has hit on 38 out of 44 drill holes with some of the best results being over 100m of 4+ gram grade.  They released results of 79.9 meters of 1.5 grams per ton. In a regular resource market these high grade results over large intersections would get the market very excited and the stock should fundamentally be at much higher levels despite a struggling gold market.  As the resource market turns Canamex may be one of the first takeover targets from a major and may see increased interest as investors return to the sector in 2014. The metallurgical studies of both the historical resource area and Penelas East show that this could be a lower capital intensive asset.  These geological and metallurgical results warrant further funding in 2014 as this could be the type of asset an emerging major like Hecla would want to own 100%. Look for Canamex (CSQ.V or CNMXF) to breakout from this ascending triangle at $.075.  Notice the strong accumulation in the fourth quarter of this year as the company appears to be forming a bottom since this summer. Technical traders are looking for a golden crossover of the 50 and 200 day moving average which indicates a major trend change. Listen to my recent interview with Bob Kramer, CEO of Canamex Resources (CSQ.V or CNMXF) by clicking here…  We discuss the recent discovery and what sets Canamex apart from so many of the junior miners. For more information on Canamex Resources visit http://canamex.us or contact CEO Robert Kramer at (604) 336-8621. Disclosure: Author/Interviewer Owns Canamex and the company is a sponsor on website. Conflicts of interest apply. Do your own due diligence.   ___________________________________________________________________________ Sign up for my free newsletter by clicking here…  Sign up for my premium service to see new interviews and reports by clicking here… Please see my disclaimer and full list of sponsor companies by clicking here… Accredited investors looking for relevant news click here… Please forward this article to a friend.  To send feedback or to contact me click here… Listen to other interviews with movers and shakers in the mining industry below or by clicking here… Listen to internet radio with goldstocktrades on BlogTalkRadio

23 Reasons To Be Bullish On Gold Posted: 08 Jan 2014 05:58 PM PST Submitted by Laurynas Vegys via Casey Research, It's been one of the worst years for gold in a generation. A flood of outflows from gold ETFs, endless tax increases on gold imports in India, and the mirage (albeit a convincing one in the eyes of many) of a supposedly improving economy in the US have all contributed to the constant hammering gold took in 2013. Perhaps worse has been the onslaught of negative press our favorite metal has suffered. It's felt overwhelming at times and has pushed even some die-hard goldbugs to question their beliefs… not a bad thing, by the way. To me, a lot of it felt like piling on, especially as the negative rhetoric ratcheted up. Last year's winner was probably Goldman Sachs, calling gold a "slam-dunk sale" for 2014 (this, of course, after it's already fallen by nearly a third over a period of more than two and a half years—how daring they are). This is why it's important to balance the one-sided message typically heard in the mainstream media with other views. Here are some of those contrarian voices, all of which have put their money where their mouth is… Marc Faber is quick to stand up to the gold bears. "We have a lot of bearish sentiment, [and] a lot of bearish commentaries about gold, but the fact is that some countries are actually accumulating gold, notably China. They will buy this year at a rate of something like 2,600 tons, which is more than the annual production of gold. So I think that prices are probably in the process of bottoming out here, and that we will see again higher prices in the future." Brent Johnson, CEO of Santiago Capital, told CNBC viewers to "buy gold if they believe in math… Longer term, I think gold goes to $5,000 over a number of years. If they continue to print money at the current rate, I think it could be multiples of that. I see a slow steady rise punctuated with some sharp upward moves." Jim Rogers, billionaire and cofounder of the Soros Quantum Fund, publicly stated in November that he has never sold any gold and can't imagine ever selling gold in his life because he sees it as an insurance policy. "With all this staggering amount of currency debasement, gold has got to be a good place to be down the road once we get through this correction." George Soros seems to be getting back into the gold miners: he recently acquired a substantial stake in the large-cap Market Vectors Gold Miners ETF (GDX) and kept his calls on Barrick Gold (ABX). Don Coxe, a highly respected global commodities strategist, says we can expect gold to rise with an improving economy, the opposite of what many in the mainstream expect. "You need gold for insurance, but this time the payoff will come when the economy improves. In the past when everything was falling all around you, commodity prices were soaring out of sight. We had three recessions in the 1970s and gold went from $35 an ounce to $850. But this time, gold is going to appreciate when we start getting 3% GDP growth." Jeffrey Gundlach, bond guru and not historically known for being a big fan of gold, came out with a candid endorsement of the yellow metal: "Now, I kind of like gold. It's definitely very non-correlated to other assets you may have in your portfolio, and it does seem sort of cheap. I also like the GDX." Steve Forbes, publishing magnate and chief executive officer of Forbes magazine, publicly predicted an impending return to the gold standard in a speech in Las Vegas. "A new gold standard is crucial. The disasters that the Federal Reserve and other central banks are inflicting on us with their funny-money policies are enormous and underappreciated." Rob McEwen, CEO of McEwen Mining and founder of Goldcorp, reiterated his bullish call for gold to someday top $5,000. "We now have governments willing to seize their citizens' assets. We now have currency controls on the table, which we haven't seen since the late 1960s/early '70s. We have continued debasement of currencies. And the economies of the Western world remain stagnant despite enormous monetary stimulation. All these facts to me are bullish for gold and make me believe the price will bounce back relatively soon." Doug Casey says that while gold is not the giveaway it was at $250 back in 2001, it is nonetheless a bargain at current prices. "I've been buying gold for years and I continue to buy it because it is the way you save. I'm very happy to be able to buy gold at this price. All the so-called quantitative easing—money printing—by governments around the world has created a glut of freshly printed money. This glut has yet to work its way through the global economic system. As it does, it will create a bubble in gold and a super-bubble in gold stocks." And then there's the people who should know most about how sound the world's various types of paper money are: central banks. As a group, they have added tonnes of bullion to their reserves last year… Turkey added 13 tonnes (417,959 troy ounces) of gold in November 2013. Overall, it has added 143.6 tonnes (4,616,847 troy ounces) so far this year, up 22.5% from a year ago, in part thanks to the adoption of a new policy to accept gold in its reserve requirements from commercial banks. Russia bought 19.1 tonnes (614,079 troy ounces) in July and August alone. With the year-to-date addition of 57.37 tonnes—second only to Turkey—Russia's gold reserves now total 1,015 tonnes. It now holds the eighth-largest national stash in the world. South Korea added a whopping 20 tonnes (643,014 troy ounces) of gold in February, and now carries 23.7% more gold on its balance sheet than at the end of 2012."Gold is a real safe asset that can help (us) respond to tail risks from global financial situations effectively and boosts the reliability of our foreign reserves holdings," said central bank officials. Kazakhstan has been buying gold every month, at an average of 2.4 tonnes (77,161 troy ounces) through October. As a result, the country's reserves have seen a 21% increase to 139.5 tonnes from a year ago. Azerbaijan has taken advantage of a slump in gold prices and has gone from having virtually no gold to 16 tonnes (514,411 ounces). Sri Lanka and Ukraine added 5.5 (176,829 troy ounces) and 6.22 tonnes (199,977 troy ounces) respectively over the past year. China, of course, is the 800-pound gorilla that mainstream analysts seem determined to ignore. Though nothing official has been announced by China's central bank, the chart below provides some perspective into the country's consumer buying habits. China ended 2013 officially as the largest gold consumer in the world. Chinese sentiment towards gold is well echoed in a statement made by Liu Zhongbo of the Agricultural Bank of China: "Because gold has capabilities to absorb external economic shocks, growth of its use in the international monetary system will be imminent." And those commercial banks that have been verbally slamming gold—it turns out many are not as negative as it might seem… Goldman Sachs proved itself to be one of the biggest hypocrites: while advising clients to sell gold and buy Treasuries in Q2 2013, it bought a stunning (and record) 3.7 million shares of GLD. And when Venezuela decided to raise cash by pawning its gold, guess who jumped in to handle the transaction? Yes, they claim the price will fall this year, but with such a slippery track record, it's important to watch what they do and not what they say. Société Générale Strategist Albert Edwards says gold will top $10,000 per ounce (with the S&P 500 Index tumbling to 450 and Treasuries yielding less than 1%). JPMorgan Chase went on record in August recommending clients "position for a short-term bounce in gold." Gold's price resistance to Paulson & Co. cutting its gold exposure, along with growing physical gold demand in Asia, were cited among the main reasons. ScotiaMocatta's Sunil Kashyap said that despite the selloff, there's still significant physical demand for gold, especially from India and China, which "supports prices." Commerzbank calls for the gold price to enter a boom period this year. Based on investment demand from Asian countries—China and India in particular—the bank predicted the yellow metal will rise to $1,400 by the end of 2014. Bank of America Merrill Lynch, in spite of lower price forecasts for gold this year, reiterated they remain "longer-term bulls." Citibank's top technical analyst Tom Fitzpatrick stated gold could head to $3,500. "We believe we are back into that track where gold is the hard currency of choice, and we expect for this trend to accelerate going forward." None of these parties thinks the gold bull market is over. What they care about is safety in this uncertain environment, as well as what they see as enormous potential upside. In the end, the much ridiculed goldbugs will have had the last laugh. We can speculate about when the next uptrend in gold will set in, but the action for today is to take advantage of price weakness. Learn about the best gold producers to invest in—now at bargain-basement prices. Try BIG GOLD for 3 months, risk-free, with 100% money-back guarantee. Click here to get started.

Do The Forex Boys Expect A Rally In Metals Posted: 08 Jan 2014 04:58 PM PST The AUDUSD is aligned to commodities like: coal, gold, copper, iron ore, rare metals. If it moves up that is in the anticipation that either the USD is moving down, or AUD will be strong because of exports Read More...

Big money showing interest in monetary metals, Rule tells King World News Posted: 08 Jan 2014 04:36 PM PST 7:36p ET Wednesday, January 8, 2014 Dear Friend of GATA and Gold: Sprott Asset Management's Rick Rule tells King World News tonight that big money and even government entities are beginning to show interest in the monetary metals, "the physical sector": http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/1/8_Ric... CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. 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 Vancouver Convention Centre West Sunday-Monday, January 19-20, 2014 Vancouver, British Columbia, Canada http://www.cambridgehouse.com/event/vancouver-resource-investment-confer... GATA Reception in Vancouver Free admission, cash bar 5-8 p.m. Monday, January 20, 2014 Lions Pub, 888 West Cordova St. Vancouver, British Columbia, Canada Mines and Money Hong Kong Hong Kong Convention and Exhibition Centre Monday-Friday, March 24-28, 2014 Hong Kong Special Administrative Region, China 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: http://gata.org/tshirts Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16 ADVERTISEMENT How to profit with silver -- and which stocks to buy now Future Money Trends is offering a special 16-page silver report with 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...

Reflections on the golden dance from West to East Posted: 08 Jan 2014 04:26 PM PST 7:28p ET Wednesday, January 8, 2014 Dear Friend of GATA and Gold: This letter seldom bothers with anonymous Internet postings, since anonymity diminishes credibility, and certainly this letter would never publicize anything anonymous that was defamatory to anyone particularly. But sometimes an anonymous blogger like the one who runs the FOFOA Internet site (it stands for "Friend of Friend of Another", a reference to the famous anonymous "Another" and "Friend of Another" disquisitions posted at the USAGold Internet site years ago) offers an especially perceptive view of gold's evolving place in the financial system that is well worth reading. FOFOA's January 1 meditation, headlined "Happy New Year," is one such meditation, and it generally reflects GATA's views. It can be found here: http://fofoa.blogspot.com/2014/01/happy-new-year.html Another such anonymous reflection turns up today on the Internet site of gold researcher and GATA consultant Koos Jansen. This commentary recognizes the golden dance between West and East and the cooperative rigging of the currency markets by the major Western and Eastern central banks while the transfer of gold eastward is carefully and surreptitously managed. It's headlined "Gold Pricing and the Flows of Gold Metal" and it's posted at Jansen's Internet site, In Gold We Trust, here: http://www.ingoldwetrust.ch/gold-pricing-and-the-flows-of-gold-metal CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. 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 Vancouver Convention Centre West Sunday-Monday, January 19-20, 2014 Vancouver, British Columbia, Canada http://www.cambridgehouse.com/event/vancouver-resource-investment-confer... GATA Reception in Vancouver Free admission, cash bar 5-8 p.m. Monday, January 20, 2014 Lions Pub, 888 West Cordova St. Vancouver, British Columbia, Canada Mines and Money Hong Kong Hong Kong Convention and Exhibition Centre Monday-Friday, March 24-28, 2014 Hong Kong Special Administrative Region, China 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: http://gata.org/tshirts Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16 ADVERTISEMENT How to profit with silver -- and which stocks to buy now Future Money Trends is offering a special 16-page silver report with 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...

Silver and Gold Prices Find Themselves Fighting Over Familiar Ground — Gold Must Hold Above $1,220 Posted: 08 Jan 2014 04:26 PM PST Gold Price Close Today : 1225.30 Change : -4.10 or -0.33% Silver Price Close Today : 19.518 Change : -0.247 or -1.25% Gold Silver Ratio Today : 62.778 Change : 0.577 or 0.93% Silver Gold Ratio Today : 0.01593 Change : -0.000148 or -0.92% Platinum Price Close Today : 1412.20 Change : -0.50 or -0.04% Palladium Price Close Today : 737.40 Change : -3.40 or -0.46% S&P 500 : 1,837.49 Change : -0.39 or -0.02% Dow In GOLD$ : $277.74 Change : $ -0.22 or -0.08% Dow in GOLD oz : 13.436 Change : -0.011 or -0.08% Dow in SILVER oz : 843.46 Change : 7.09 or 0.85% Dow Industrial : 16,462.74 Change : -68.20 or -0.41% US Dollar Index : 81.180 Change : 0.170 or 0.21% Silver and GOLD PRICES find themselves fighting over familiar ground. The gold price dropped $4.10 (0.3%) to $1,225.30 while silver lost 24.7 cents (0.13%) to 1951.8c. Today changes nothing and adds no new insight. The gold price remains above its 20 DMA and in the uptrend begun on 31 December. Gold has drawn a falling bullish wedge and broke out of that, and the breakout remains above the wedge's upper boundary line. Touched off it today. The SILVER PRICE shows a similar wedge, and a like performance. Not counting the 1872c thin market low on 31 December, silver is in an uptrend with a lower boundary rising through its December lows. However, it teeters on the edge. Really can't close below 1940c and gold must hold on above $1,220. It's all one big wheezy deal, and how it turns out is anybody's guess. Balance of proof they have bottomed remains on shoulders of silver and gold, and can only be borne by rising to higher prices. It's amazing how much power printing money out of thin air gives you. For a while, you can even suspend the law of cause and effect. Extent of that power was seen today when the mighty stock market wilted at the hint in the Federal Open Market Committee's notes of its last meeting that it might, someday, somehow "taper." This taper handle turns out to be the best tool for manipulating public opinion since terrorism was invented. Clearly, by its money printing the Fed has placed a floor under stock prices. Everybody knows it, that's why they wilt at the magic word "taper." 'Twill be hard to resist the pull of this magic. Excepting the Nasdaq twins, stock indices fell across the board. Dow lurched down 68.2 (0.41%) to 16,462.74 while the S&P500 stumbled 0.39 (0.2%) to 1,837.49. Just the chart, ma'am, and a syllogism. Definition: a downtrend is a series of lower lows and lower highs. Since 31 December 2013 Dow and S&P500 have posted lower lows and lower highs. Ergo, the Dow and S&P500 are in a downtrend, transitory and migratory as it may be. Whether this downtrend will be of the evanescent or long-lasting variety time has not yet revealed to us. But stock's slide was not enough to lower the Dow in Gold and Dow in Silver, since metals dropped more than stocks. DiG ended at 13.44 oz, up a wee 0.07%. DiS jumped 1.25% to 843.81 oz. US dollar index pulled away from its congestion today, rising 17 basis points (0,21%) to 81.18. 'Tis now reaching for the 200 DMA at 81.65. Crossing that will add gas to its tank. Euro broke clean through the lower boundary of its rising bearish wedge and lost 0.30% to $1.3578. Needs one more lower close to cement the breakdown. Next support does not appear until $1.3295. Ow. Yen changed its mind again today and fell back 0.24% to 95.38 cents/Y100. Japanese Nice Government Men don't want it to climb above that 20 DMA. Ten year US Treasury Note yield ticked up today, 1.91% to 2.993%. Probably on "taper" news. Momentum remains upward, although at a glacial pace. 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.

Silver and Gold Prices Find Themselves Fighting Over Familiar Ground — Gold Must Hold Above $1,220 Posted: 08 Jan 2014 04:26 PM PST Gold Price Close Today : 1225.30 Change : -4.10 or -0.33% Silver Price Close Today : 19.518 Change : -0.247 or -1.25% Gold Silver Ratio Today : 62.778 Change : 0.577 or 0.93% Silver Gold Ratio Today : 0.01593 Change : -0.000148 or -0.92% Platinum Price Close Today : 1412.20 Change : -0.50 or -0.04% Palladium Price Close Today : 737.40 Change : -3.40 or -0.46% S&P 500 : 1,837.49 Change : -0.39 or -0.02% Dow In GOLD$ : $277.74 Change : $ -0.22 or -0.08% Dow in GOLD oz : 13.436 Change : -0.011 or -0.08% Dow in SILVER oz : 843.46 Change : 7.09 or 0.85% Dow Industrial : 16,462.74 Change : -68.20 or -0.41% US Dollar Index : 81.180 Change : 0.170 or 0.21% Silver and GOLD PRICES find themselves fighting over familiar ground. The gold price dropped $4.10 (0.3%) to $1,225.30 while silver lost 24.7 cents (0.13%) to 1951.8c. Today changes nothing and adds no new insight. The gold price remains above its 20 DMA and in the uptrend begun on 31 December. Gold has drawn a falling bullish wedge and broke out of that, and the breakout remains above the wedge's upper boundary line. Touched off it today. The SILVER PRICE shows a similar wedge, and a like performance. Not counting the 1872c thin market low on 31 December, silver is in an uptrend with a lower boundary rising through its December lows. However, it teeters on the edge. Really can't close below 1940c and gold must hold on above $1,220. It's all one big wheezy deal, and how it turns out is anybody's guess. Balance of proof they have bottomed remains on shoulders of silver and gold, and can only be borne by rising to higher prices. It's amazing how much power printing money out of thin air gives you. For a while, you can even suspend the law of cause and effect. Extent of that power was seen today when the mighty stock market wilted at the hint in the Federal Open Market Committee's notes of its last meeting that it might, someday, somehow "taper." This taper handle turns out to be the best tool for manipulating public opinion since terrorism was invented. Clearly, by its money printing the Fed has placed a floor under stock prices. Everybody knows it, that's why they wilt at the magic word "taper." 'Twill be hard to resist the pull of this magic. Excepting the Nasdaq twins, stock indices fell across the board. Dow lurched down 68.2 (0.41%) to 16,462.74 while the S&P500 stumbled 0.39 (0.2%) to 1,837.49. Just the chart, ma'am, and a syllogism. Definition: a downtrend is a series of lower lows and lower highs. Since 31 December 2013 Dow and S&P500 have posted lower lows and lower highs. Ergo, the Dow and S&P500 are in a downtrend, transitory and migratory as it may be. Whether this downtrend will be of the evanescent or long-lasting variety time has not yet revealed to us. But stock's slide was not enough to lower the Dow in Gold and Dow in Silver, since metals dropped more than stocks. DiG ended at 13.44 oz, up a wee 0.07%. DiS jumped 1.25% to 843.81 oz. US dollar index pulled away from its congestion today, rising 17 basis points (0,21%) to 81.18. 'Tis now reaching for the 200 DMA at 81.65. Crossing that will add gas to its tank. Euro broke clean through the lower boundary of its rising bearish wedge and lost 0.30% to $1.3578. Needs one more lower close to cement the breakdown. Next support does not appear until $1.3295. Ow. Yen changed its mind again today and fell back 0.24% to 95.38 cents/Y100. Japanese Nice Government Men don't want it to climb above that 20 DMA. Ten year US Treasury Note yield ticked up today, 1.91% to 2.993%. Probably on "taper" news. Momentum remains upward, although at a glacial pace. Argentum et aurum comparenda sunt -- -- Gold and silver must be bought. - Franklin Sanders, The Moneychanger The-MoneyChanger.com © 2013, The Moneychanger. May not be republished in any form, including electronically, without our express permission. To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $3,130.00; silver's primary is up targeting 16:1 gold/silver ratio or $195.66; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold or 18 ounces of silver. or 18 ounces of silver. US $ and US$-denominated assets, primary trend down; real estate bubble has burst, primary trend down. WARNING AND DISCLAIMER. Be advised and warned: Do NOT use these commentaries to trade futures contracts. I don't intend them for that or write them with that short term trading outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures. NOR do I recommend investing in gold or silver Exchange Trade Funds (ETFs). Those are NOT physical metal and I fear one day one or another may go up in smoke. Unless you can breathe smoke, stay away. Call me paranoid, but the surviving rabbit is wary of traps. NOR do I recommend trading futures options or other leveraged paper gold and silver products. These are not for the inexperienced. NOR do I recommend buying gold and silver on margin or with debt. What DO I recommend? Physical gold and silver coins and bars in your own hands. One final warning: NEVER insert a 747 Jumbo Jet up your nose.

Gold Daily and Silver Weekly Charts Posted: 08 Jan 2014 03:11 PM PST

Gold Daily and Silver Weekly Charts Posted: 08 Jan 2014 03:11 PM PST

Proof that Monday's gold smash was not a 'fat finger' mistake but an algorithm attack Posted: 08 Jan 2014 02:58 PM PST 5:57p ET Wednesday, January 8, 2014 Dear Friend of GATA and Gold: Market data provider Nanex in Winnetka, Illinois, tonight produces proof that Monday's smash down in the gold futures market was not a mistaken "fat finger" trade but the product of a high-frequency algorithm trading program painstakingly designed to take the market down. Nanex's report, with great charts, is here: http://www.nanex.net/FlashCrash/OngoingResearch.html Zero Hedge's commentary on the report is here: http://www.zerohedge.com/news/2014-01-08/proof-golds-latest-slam-was-not... CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. 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 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 Vancouver Convention Centre West Sunday-Monday, January 19-20, 2014 Vancouver, British Columbia, Canada http://www.cambridgehouse.com/event/vancouver-resource-investment-confer... GATA Reception in Vancouver Free admission, cash bar 5-8 p.m. Monday, January 20, 2014 Lions Pub, 888 West Cordova St. Vancouver, British Columbia, Canada Mines and Money Hong Kong Hong Kong Convention and Exhibition Centre Monday-Friday, March 24-28, 2014 Hong Kong Special Administrative Region, China 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: http://gata.org/tshirts Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16 ADVERTISEMENT 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/

Why Gold Will Drop to $1,000 Per Ounce Posted: 08 Jan 2014 02:20 PM PST When the market fails to confirm your thesis, it's time to step aside. You always hear traders say that they never "marry" a stock. That's because once you fall into the story, you tend to lose perspective. You seek out only opinions that confirm your thinking, tossing all other analysis out the window. Inevitably, this behavior leads to ruin. Even if you aren't a trader, there's still merit in adopting this maxim. It doesn't mean you have to drop all of the conviction from your investment strategy. Just know that it's impossible to tame the market. If you try to fight it at key turning points, there's a good chance you'll get burned. In December 2012, there was a new record in gold holdings by popular exchange-traded funds. The spot price hovered around $1,700. The 12-year golden bull appeared alive and well. That’s where the trouble started. At this point, gold had become too tradable with the invention of ETFs. They offered investors exposure to the physical metal. With ETFs, momentum traders could easily gain exposure to physical gold and hop right off if they didn't like the ride anymore. One of the market’s inconvenient truths is that one wave of selling can inspire countless other investors to run and hide. The same herd mentality that pushes prices skyward can also send them crashing down. That’s true of anything you trade on an open market — even gold. With that in mind, early last February, I made the following observation in The Rude Awakening as speculators exited gold: "Gold's mojo has vanished. "And if stocks have any say in the matter, it isn't coming back anytime soon. "I love my charts. But I don't need a picture to show you what's going on here… "By now, you know the trends. In the 1990s, gold was stagnant while stocks enjoyed an extended bull run. As stocks started to fall out of favor in the early 2000s, gold's massive rally began. "Right now, another shift is brewing. The tide is turning in favor of equities." That day, Feb. 4, gold was sitting at $1,667. A week later, we looked at the charts and called $1,550. Within the next two months, it dipped below $1,550… ultimately crashing to $1,330 by April 15. "$1,550," we wrote that day, "was enthusiastically bought every time gold dipped since its 2011 top. When this critical support area broke, it was lights out. Sellers are now in control. You must accept the fact that gold has entered a bear market." Come June 11, with gold at $1,374, I drew the new support level at $1,350. If the price crossed that line, I figured a swift drop to a range of $1,200-1,250 was reasonable. It only took another nine days for the Midas metal to break below $1,350 and sink to its year low — $1,178. At that point, I expected the metal to continue its downtrend, ultimately landing somewhere between $1,100-1,000. I still think that today. Where did I get $1,000 from, you ask? Well, $1,000 seems like a reasonable long-term floor. At that price, gold will have completely retraced its 2010-2011 push toward $2,000. I added the long-term moving average to this chart to give you a smooth look at gold's big, secular trend. Once price fell below this mark for the first time in 11 years, it became apparent that the massive uptrend was in trouble. Now, you might be thinking this is a chance to buck the herd and be a contrarian and think, Gold's dropping… people are selling… I should buy. But it's important to remember that the herd is usually wrong — at market turning points. Following the herd for the meat of a big move like the surge in stocks in the 1980s and 1990s or gold's roaring bull market in the 2000s was the correct move. But knowing when to jump on board (and when to head for the hills) is the tricky part. That's where technical analysis comes in handy. By analyzing price charts and projecting trend lines, you have the chance to spot major market turning points before the average investor catches on. If you set aside your emotions and follow the trends, you have a shot at buying into a big move while most investors are still selling — or selling out of a winning position while the herd sits and waits for a comeback that might never arrive. Let's use gold's 20-year chart as a breakdown… Take the late 1990s, for example. Gold was still locked in a downtrend — a series of lower highs and lower lows formed a downward trend channel. Instead of buying right away, you could've followed the trends and waited until the downtrend was broken. That would've been early 2002, when gold broke out toward $300. That marked a perfect opportunity for an aggressive buy. And even if you're a more conservative investor, you could have waited for a rising channel to form before making a buy. That would have postponed your purchase until mid-2003, when gold finally posted a meaningful higher low near $330. After you figured out your entry, there wasn't much more to do. Gold's bull market played out beautifully. The early stages (before most folks thought twice about gold) from 2002-06 gave you a tight rising channel. As gold started gaining popularity as an outperforming investment in 2006, you witnessed increased volatility, a much wider channel and even bigger gains. Until it broke below its trend channel, my analysis gave gold the benefit of the doubt on the upside. It wasn't until the big break that began setting up last winter that it appeared that the decade-long secular bull was finished. This is a perfect example of not trying to call a top — but to take what the market gives you. I wasn't super bearish gold at $1,800. It was still possible that the action we were seeing was noise or consolidation — or just a potential test of support (a necessity of a healthy bull run). It wasn't until just below $1,600 that I shifted my thinking firmly to the bear case. If you still doubt gold's trajectory… take a long-term look at the Dow/gold ratio. That is, the Dow Jones industrial average priced in gold. The ratio touched an absurd peak of 43-to-1 when the tech bubble began to pop in 2000. It was reasonable to think the ratio was headed back to its 1932 level of 2-to-1… or the 1980s level of 1-to-1. In reality, the Dow-gold ratio bottomed a little below 6-to-1 in late 2011. At writing, it's back above 13-to-1. Clearly, the market didn't give a hoot about what anyone thought was reasonable. It's pretty obvious what happened when the Dow finally broke higher after years of decline versus gold. It signaled the massive performance shift we wrote about in February. After more than a decade in the driver's seat, gold is giving up ground to stocks. If you're still squeamish, ask yourself: Is your desire to buy gold based on reasonable analysis of market conditions? Or is it simply an emotional reaction to the sell-off? If you're a long-term-oriented investor, we suggest giving gold a chance to consolidate or move lower. After all, what's the rush? When was the last time you saw any asset class permanently recovered from a violent drop the very next day? It just doesn't work that way… There will be snapback rallies and more downside. Expect to wait a long, long time before a suitable base forms. The gold market experienced a great boom. Naturally, people flocked to it. Investors, traders, hedge funds and your crazy co-worker bought gold. People wanted to own it because of its performance. Now they've already left or are leaving. I don't think they'll be rushing back to buy anytime soon. Treat gold as a safe haven if you're going to buy now. If you jump into a gold position this year expecting explosive gains, you'll find nothing but disappointment… If you are well versed in trading, you could always try to play a snapback move in gold futures or miners instead. Gold will be off for a while… but miners potentially offer you a more powerful trading opportunity. You could gain some exposure through an ETF like Market Vectors Gold Miners ETF (NYSE:GDX). If that's your game, feel free to investigate it. We recommend keeping tight stops and expecting the unexpected. Regards, Greg Guenthner for The Daily Reckoning P.S. I’ve been telling my Rude Awakening readers about this for months now. Today I was able to share my views with Daily Reckoning, including a unique opportunity to gain exclusive access to my most in-depth market research. If you’re not getting The Daily Reckoning email edition, you’re missing out on the full story, including daily chances to learn about real, actionable profit opportunities. Don’t miss another issue. Sign up for FREE, right here.

Rick Rule - Silver Shorts About To Have A Religious Experience Posted: 08 Jan 2014 02:10 PM PST Today one of the wealthiest people in the financial world warned King World News that the silver shorts are about to have a "truly religious experience." This is an incredibly important interview with Rick Rule, who is business partners with billionaire Eric Sprott, where he describes what is about to bring the gold and silver shorts to their knees and force the rigged paper markets to a "cash basis." This posting includes an audio/video/photo media file: Download Now

23 Reasons to Be Bullish on Gold Posted: 08 Jan 2014 02:05 PM PST It’s been one of the worst years for gold in a generation. A flood of outflows from gold ETFs, endless tax increases on gold imports in India, and the mirage (albeit a convincing one in the eyes of many) of a supposedly improving economy in the US have all contributed to the constant hammering gold took in 2013. Perhaps worse has been the onslaught of negative press our favorite metal has suffered. It’s felt overwhelming at times and has pushed even some die-hard goldbugs to question their beliefs… not a bad thing, by the way. To me, a lot of it felt like piling on, especially as the negative rhetoric ratcheted up. Last year’s winner was probably Goldman Sachs, calling gold a “slam-dunk sale” for 2014 (this, of course, after it’s already fallen by nearly a third over a period of more than two and a half years—how daring they are). This is why it’s important to balance the one-sided message typically heard in the mainstream media with other views. Here are some of those contrarian voices, all of which have put their money where their mouth is… Marc Faber is quick to stand up to the gold bears. “We have a lot of bearish sentiment, [and] a lot of bearish commentaries about gold, but the fact is that some countries are actually accumulating gold, notably China. They will buy this year at a rate of something like 2,600 tons, which is more than the annual production of gold. So I think that prices are probably in the process of bottoming out here, and that we will see again higher prices in the future.” Brent Johnson, CEO of Santiago Capital, told CNBC viewers to “buy gold if they believe in math… Longer term, I think gold goes to $5,000 over a number of years. If they continue to print money at the current rate, I think it could be multiples of that. I see a slow steady rise punctuated with some sharp upward moves.” Jim Rogers, billionaire and cofounder of the Soros Quantum Fund, publicly stated in November that he has never sold any gold and can’t imagine ever selling gold in his life because he sees it as an insurance policy. “With all this staggering amount of currency debasement, gold has got to be a good place to be down the road once we get through this correction.” George Soros seems to be getting back into the gold miners: he recently acquired a substantial stake in the large-cap Market Vectors Gold Miners ETF (GDX) and kept his calls on Barrick Gold (ABX). Don Coxe, a highly respected global commodities strategist, says we can expect gold to rise with an improving economy, the opposite of what many in the mainstream expect. “You need gold for insurance, but this time the payoff will come when the economy improves. In the past when everything was falling all around you, commodity prices were soaring out of sight. We had three recessions in the 1970s and gold went from $35 an ounce to $850. But this time, gold is going to appreciate when we start getting 3% GDP growth.” Jeffrey Gundlach, bond guru and not historically known for being a big fan of gold, came out with a candid endorsement of the yellow metal: “Now, I kind of like gold. It’s definitely very non-correlated to other assets you may have in your portfolio, and it does seem sort of cheap. I also like the GDX.” Steve Forbes, publishing magnate and chief executive officer of Forbes magazine, publicly predicted an impending return to the gold standard in a speech in Las Vegas. “A new gold standard is crucial. The disasters that the Federal Reserve and other central banks are inflicting on us with their funny-money policies are enormous and underappreciated.” Rob McEwen, CEO of McEwen Mining and founder of Goldcorp, reiterated his bullish call for gold to someday top $5,000. “We now have governments willing to seize their citizens’ assets. We now have currency controls on the table, which we haven’t seen since the late 1960s/early ’70s. We have continued debasement of currencies. And the economies of the Western world remain stagnant despite enormous monetary stimulation. All these facts to me are bullish for gold and make me believe the price will bounce back relatively soon.” Doug Casey says that while gold is not the giveaway it was at $250 back in 2001, it is nonetheless a bargain at current prices. “I’ve been buying gold for years and I continue to buy it because it is the way you save. I’m very happy to be able to buy gold at this price. All the so-called quantitative easing—money printing—by governments around the world has created a glut of freshly printed money. This glut has yet to work its way through the global economic system. As it does, it will create a bubble in gold and a super-bubble in gold stocks.” And then there’s the people who should know most about how sound the world’s various types of paper money are: central banks. As a group, they have added tonnes of bullion to their reserves last year… Turkey added 13 tonnes (417,959 troy ounces) of gold in November 2013. Overall, it has added 143.6 tonnes (4,616,847 troy ounces) so far this year, up 22.5% from a year ago, in part thanks to the adoption of a new policy to accept gold in its reserve requirements from commercial banks. Russia bought 19.1 tonnes (614,079 troy ounces) in July and August alone. With the year-to-date addition of 57.37 tonnes—second only to Turkey—Russia’s gold reserves now total 1,015 tonnes. It now holds the eighth-largest national stash in the world. South Korea added a whopping 20 tonnes (643,014 troy ounces) of gold in February, and now carries 23.7% more gold on its balance sheet than at the end of 2012.“Gold is a real safe asset that can help (us) respond to tail risks from global financial situations effectively and boosts the reliability of our foreign reserves holdings,” said central bank officials. Kazakhstan has been buying gold every month, at an average of 2.4 tonnes (77,161 troy ounces) through October. As a result, the country’s reserves have seen a 21% increase to 139.5 tonnes from a year ago. Azerbaijan has taken advantage of a slump in gold prices and has gone from having virtually no gold to 16 tonnes (514,411 ounces). Sri Lanka and Ukraine added 5.5 (176,829 troy ounces) and 6.22 tonnes (199,977 troy ounces) respectively over the past year. China, of course, is the 800-pound gorilla that mainstream analysts seem determined to ignore. Though nothing official has been announced by China’s central bank, the chart below provides some perspective into the country’s consumer buying habits. China ended 2013 officially as the largest gold consumer in the world. Chinese sentiment towards gold is well echoed in a statement made by Liu Zhongbo of the Agricultural Bank of China: “Because gold has capabilities to absorb external economic shocks, growth of its use in the international monetary system will be imminent.” And those commercial banks that have been verbally slamming gold—it turns out many are not as negative as it might seem… Goldman Sachs proved itself to be one of the biggest hypocrites: while advising clients to sell gold and buy Treasuries in Q2 2013, it bought a stunning (and record) 3.7 million shares of GLD. And when Venezuela decided to raise cash by pawning its gold, guess who jumped in to handle the transaction? Yes, they claim the price will fall this year, but with such a slippery track record, it’s important to watch what they do and not what they say. Société Générale Strategist Albert Edwards says gold will top $10,000 per ounce (with the S&P 500 Index tumbling to 450 and Treasuries yielding less than 1%). JPMorgan Chase went on record in August recommending clients “position for a short-term bounce in gold.” Gold’s price resistance to Paulson & Co. cutting its gold exposure, along with growing physical gold demand in Asia, were cited among the main reasons. ScotiaMocatta‘s Sunil Kashyap said that despite the selloff, there’s still significant physical demand for gold, especially from India and China, which “supports prices.” Commerzbank calls for the gold price to enter a boom period this year. Based on investment demand from Asian countries—China and India in particular—the bank predicted the yellow metal will rise to $1,400 by the end of 2014. Bank of America Merrill Lynch, in spite of lower price forecasts for gold this year, reiterated they remain “longer-term bulls.” Citibank‘s top technical analyst Tom Fitzpatrick stated gold could head to $3,500. “We believe we are back into that track where gold is the hard currency of choice, and we expect for this trend to accelerate going forward.” None of these parties thinks the gold bull market is over. What they care about is safety in this uncertain environment, as well as what they see as enormous potential upside. In the end, the much ridiculed goldbugs will have had the last laugh. We can speculate about when the next uptrend in gold will set in, but the action for today is to take advantage of price weakness. Learn about the best gold producers to invest in—now at bargain-basement prices. Try BIG GOLD for 3 months, risk-free, with 100% money-back guarantee. Click here to get started.

Gold on Roller Coaster 2014 Start as Price Falls Again Posted: 08 Jan 2014 01:24 PM PST Gold prices fall on Wednesday for the second consecutive session following two positive days to start 2014. ETF Securities U.S. Research Director Mike McGlone tells TheStreet's Joe Deaux that... [[ 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! ]]

Inflation vs Deflation – Monetary Tectonics In 25 Amazing Charts Posted: 08 Jan 2014 01:17 PM PST We introduced the first chartbook from Incrementum Liechtenstein in the fall of last year. It showed the debt bear market in 50 amazing charts. In their second chartbook, Ronald Stoeferle and Mark Valek from Incrementum Liechtenstein analyzed in great detail the raging war between inflation and deflation, as well as gold's role in it. The authors introduce the term “monetary tectonics” as a metaphor for this war. Similar to tectonic plates under a volcano, monetary inflation and deflation is currently working against each other: Monetary inflation  is the result of a parabolically rising monetary base M0 driven by the central bank monetary easing policy. Monetary deflation is the result of shrinking monetary aggregates M2 and M3 because of credit deleveraging. The following chart clearly shows that 2013 was a pivot year in which the monetary base M0 grew exponentially while net M2 (expressed on the chart line as M2 minus M0) declined significantly. The chartbook shows several trend which confirm the deflationary monetary pressure: Total credit market debt as a % of US GDP has been shrinking since 2007 ("debt deleveraging"). US bank credit of all commercial banks is stagnating (close to negative growth), similar to the period 2007/2008. See first chart below. Money supply growth in the US and the Eurozone is trending lower. See second chart below. Personal consumption expenditures are exhibiting disinflation . The gold/silver-Ratio is declining. Gold tends to outperform silver during disinflationary and/or deflationary periods. The gold to Treasury ratio is declining. See third chart below. The Continuous Commodity Index (CCI) has been in a steep decline since the fall of 2011.     On the other hand, inflationary pressure is present through the following trends: An explosion of the monetary base M0. See first chart below. US households show signs of stopped deleveraging. See second chart below. The currency in circulation keeps on expanding. Commercial banks have piled up an enormous amount of excess reserves which, in case of a rate hike by central planners, could flood the market through lending in the fractional banking system. See thrid chart below.     How is gold impacted in this inflation vs deflation war? The key conclusion of the research is that, due to the fractional reserve banking system and the dynamics of the 'monetary tectonics', inflationary and deflationary phases will alternate in the foreseeable future. Gold, being a monetary asset in the view of Austrian economics, tends to rise in inflationary periods and decline during times of disinflation. The key take-away for investors is to position themselves accordingly and consider price declines as buying opportunities for the coming inflationary period. How comes one can be so sure that inflation is coming? Consider that the government must avoid deflation; it is a horror scenario for the following reasons: Price deflation results in a real increase in the value of debt and a nominal decline in asset values. Debt can no longer be serviced. Price deflation would lead to massive tax revenue declines for the government due to a declining taxable base. Deflation would have fatal consequences for large parts of the banking system. Central banks also have the mandate to ensure 'financial market stability' Interesting to know, Stoeferle and Valk developed the "Incrementum Inflation Signal," an indicator of how much monetary inflation reaches the real economy based on market and monetary indicators. According to the signal, investors should take positions according to the the rising, neutral or falling inflation trends.   Read the full chartbook (50 slides) Monetary Tectonics Chartbook

Fed Tapering? With These Deflation Risks? Posted: 08 Jan 2014 12:58 PM PST The US central bank may be a long way from finished printing money yet...   AN ARTICLE in the Wall Street Journal on Monday, "Where Deflation Risks Stir Concerns", brought to mind some very serious considerations, writes Miguel Perez-Santalla at BullionVault.   Though recent memory only recalls the deflation and anemic economy of Japan, it behooves us to take a larger look at history to see the reaction of more open societies to this type of crisis.   As stated in that WSJ article: "Germany's hyperinflation in the 1920s was followed in the 1930s by deflation that created widespread economic hardship in that country as prices fell 23%." This was due to the inability of a business to remain profitable, forcing them to cut back on pay and let go of workers. That drove unemployment higher.   But what the article fails to mention is that this was also a major catalyst in what led to Germany's uprising and eventually to World War Two. In fact, economic strife in the twentieth century, which opened the door to revolutionaries, was the major driver of the bloodshed that followed throughout Europe, for example in Bolshevik Russia and the Spanish Civil War as well.   Today in the European Union, "Prices are falling only in Latvia, Greece and Cyprus," says the WSJ. Looking at these three countries and the social unrest reported, this is certainly a cause for concern. Will there be more violent outbreaks caused by a shrinking economy? Will there be a domino effect that spreads throughout the Eurozone to other weaker economies?    In the experiment of social engineering we call the Eurozone there are concerns for its survival. The coming years will surely be a test of the governing bodies' ability to control in a peaceful manner both social unrest and increasing poverty. The recent economic calamity has spread real hardship.   On the other side of the Atlantic the United States of America, which has pretty much felt insulated from the economic woes of Europe, may come to have this concern as well. The increasing income disparity, between rich and poor, combined with a deflationary economy, would be disastrous for the nation.   Though currently growth looks positive it remains a concern to the US government and the Federal Reserve that we may slip into a period of falling prices, wages and credit. The world is a much smaller place than it was less than a lifetime ago. This means that these concerns are not only valid but also an ominous threat.   This is the reason why the Fed remains cautious and not so ready to stop its Quantitative Easing money-printing as many economists expect. The US has historically been able to beat the threat from deflation mostly on the back of a growing population, increasing the utilization of natural resources to the benefit of economic productivity. But currently the population is growing at its slowest rate since the Great Depression. This combined with low credit growth and near-deflation in many consumer prices, plus our already large public debt burden, poses a long term threat.   In the US, new gas and oil exploration and discoveries have grown, and this in no small way has been a positive factor to the overall economy, driving down  many prices by cutting fuel costs. But will it be enough in the face of our other economic obstacles? Will the combination of a possible Eurozone deflation with a slow growing US, as well as rising inequality, trigger major social unrest here?   With such uncertainty over the future of the global and domestic economies it is logical to seek some assurances. This is most likely why our Gold Investor Index in December remained positive, coming in at 52.9 and showing yet again more buyers of gold than sellers.   Overall, and led by primarily long-term buy and hold investors, BullionVault users continue to maintain their position in the only sure thing the global economy has ever known. The risk of deflation, which led the Fed to print unheard of quantities of money starting 2008, isn't done yet.

Fed Tapering? With These Deflation Risks? Posted: 08 Jan 2014 12:58 PM PST The US central bank may be a long way from finished printing money yet...   AN ARTICLE in the Wall Street Journal on Monday, "Where Deflation Risks Stir Concerns", brought to mind some very serious considerations, writes Miguel Perez-Santalla at BullionVault.   Though recent memory only recalls the deflation and anemic economy of Japan, it behooves us to take a larger look at history to see the reaction of more open societies to this type of crisis.   As stated in that WSJ article: "Germany's hyperinflation in the 1920s was followed in the 1930s by deflation that created widespread economic hardship in that country as prices fell 23%." This was due to the inability of a business to remain profitable, forcing them to cut back on pay and let go of workers. That drove unemployment higher.   But what the article fails to mention is that this was also a major catalyst in what led to Germany's uprising and eventually to World War Two. In fact, economic strife in the twentieth century, which opened the door to revolutionaries, was the major driver of the bloodshed that followed throughout Europe, for example in Bolshevik Russia and the Spanish Civil War as well.   Today in the European Union, "Prices are falling only in Latvia, Greece and Cyprus," says the WSJ. Looking at these three countries and the social unrest reported, this is certainly a cause for concern. Will there be more violent outbreaks caused by a shrinking economy? Will there be a domino effect that spreads throughout the Eurozone to other weaker economies?    In the experiment of social engineering we call the Eurozone there are concerns for its survival. The coming years will surely be a test of the governing bodies' ability to control in a peaceful manner both social unrest and increasing poverty. The recent economic calamity has spread real hardship.   On the other side of the Atlantic the United States of America, which has pretty much felt insulated from the economic woes of Europe, may come to have this concern as well. The increasing income disparity, between rich and poor, combined with a deflationary economy, would be disastrous for the nation.   Though currently growth looks positive it remains a concern to the US government and the Federal Reserve that we may slip into a period of falling prices, wages and credit. The world is a much smaller place than it was less than a lifetime ago. This means that these concerns are not only valid but also an ominous threat.   This is the reason why the Fed remains cautious and not so ready to stop its Quantitative Easing money-printing as many economists expect. The US has historically been able to beat the threat from deflation mostly on the back of a growing population, increasing the utilization of natural resources to the benefit of economic productivity. But currently the population is growing at its slowest rate since the Great Depression. This combined with low credit growth and near-deflation in many consumer prices, plus our already large public debt burden, poses a long term threat.   In the US, new gas and oil exploration and discoveries have grown, and this in no small way has been a positive factor to the overall economy, driving down  many prices by cutting fuel costs. But will it be enough in the face of our other economic obstacles? Will the combination of a possible Eurozone deflation with a slow growing US, as well as rising inequality, trigger major social unrest here?   With such uncertainty over the future of the global and domestic economies it is logical to seek some assurances. This is most likely why our Gold Investor Index in December remained positive, coming in at 52.9 and showing yet again more buyers of gold than sellers.   Overall, and led by primarily long-term buy and hold investors, BullionVault users continue to maintain their position in the only sure thing the global economy has ever known. The risk of deflation, which led the Fed to print unheard of quantities of money starting 2008, isn't done yet.

Fed Tapering? With These Deflation Risks? Posted: 08 Jan 2014 12:58 PM PST The US central bank may be a long way from finished printing money yet...   AN ARTICLE in the Wall Street Journal on Monday, "Where Deflation Risks Stir Concerns", brought to mind some very serious considerations, writes Miguel Perez-Santalla at BullionVault.   Though recent memory only recalls the deflation and anemic economy of Japan, it behooves us to take a larger look at history to see the reaction of more open societies to this type of crisis.   As stated in that WSJ article: "Germany's hyperinflation in the 1920s was followed in the 1930s by deflation that created widespread economic hardship in that country as prices fell 23%." This was due to the inability of a business to remain profitable, forcing them to cut back on pay and let go of workers. That drove unemployment higher.   But what the article fails to mention is that this was also a major catalyst in what led to Germany's uprising and eventually to World War Two. In fact, economic strife in the twentieth century, which opened the door to revolutionaries, was the major driver of the bloodshed that followed throughout Europe, for example in Bolshevik Russia and the Spanish Civil War as well.   Today in the European Union, "Prices are falling only in Latvia, Greece and Cyprus," says the WSJ. Looking at these three countries and the social unrest reported, this is certainly a cause for concern. Will there be more violent outbreaks caused by a shrinking economy? Will there be a domino effect that spreads throughout the Eurozone to other weaker economies?    In the experiment of social engineering we call the Eurozone there are concerns for its survival. The coming years will surely be a test of the governing bodies' ability to control in a peaceful manner both social unrest and increasing poverty. The recent economic calamity has spread real hardship.   On the other side of the Atlantic the United States of America, which has pretty much felt insulated from the economic woes of Europe, may come to have this concern as well. The increasing income disparity, between rich and poor, combined with a deflationary economy, would be disastrous for the nation.   Though currently growth looks positive it remains a concern to the US government and the Federal Reserve that we may slip into a period of falling prices, wages and credit. The world is a much smaller place than it was less than a lifetime ago. This means that these concerns are not only valid but also an ominous threat.   This is the reason why the Fed remains cautious and not so ready to stop its Quantitative Easing money-printing as many economists expect. The US has historically been able to beat the threat from deflation mostly on the back of a growing population, increasing the utilization of natural resources to the benefit of economic productivity. But currently the population is growing at its slowest rate since the Great Depression. This combined with low credit growth and near-deflation in many consumer prices, plus our already large public debt burden, poses a long term threat.   In the US, new gas and oil exploration and discoveries have grown, and this in no small way has been a positive factor to the overall economy, driving down  many prices by cutting fuel costs. But will it be enough in the face of our other economic obstacles? Will the combination of a possible Eurozone deflation with a slow growing US, as well as rising inequality, trigger major social unrest here?   With such uncertainty over the future of the global and domestic economies it is logical to seek some assurances. This is most likely why our Gold Investor Index in December remained positive, coming in at 52.9 and showing yet again more buyers of gold than sellers.   Overall, and led by primarily long-term buy and hold investors, BullionVault users continue to maintain their position in the only sure thing the global economy has ever known. The risk of deflation, which led the Fed to print unheard of quantities of money starting 2008, isn't done yet.

Gold has beaten all other currencies since 2000 Posted: 08 Jan 2014 12:56 PM PST 4p ET Wednesday, January 8, 2014 Dear Friend of GATA and Gold: Lousy as 2013 was for gold in U.S. dollar terms, James Anderson of GoldSilver.com reports this week that from 2000 to the end of 2013 not one government currency performed better than gold did. A chart of government currencies' performance against gold in the new century is posted at GoldSilver.com here: http://goldsilver.com/article/race-to-debase-fiat-currency-vs-gold-fiat-... CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. 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/ Join GATA here: Vancouver Resource Investment Conference Vancouver Convention Centre West Sunday-Monday, January 19-20, 2014 Vancouver, British Columbia, Canada http://www.cambridgehouse.com/event/vancouver-resource-investment-confer... GATA Reception in Vancouver Free admission, cash bar 5-8 p.m. Monday, January 20, 2014 Lions Pub, 888 West Cordova St. Vancouver, British Columbia, Canada Mines and Money Hong Kong Hong Kong Convention and Exhibition Centre Monday-Friday, March 24-28, 2014 Hong Kong Special Administrative Region, China 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: http://gata.org/tshirts Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16 ADVERTISEMENT 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. 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.

3-Month Silver Trade Off Extreme Sentiment Posted: 08 Jan 2014 12:51 PM PST Sentiment in silver futures is at an extreme. That might make a trade...   TODAY we're going to share a timeless piece of trading wisdom that will help anyone make a lifetime of low-risk, high-reward trades, write Amber Lee Mason and Brian Hunt, editors of DailyWealth Trader for Steve Sjuggerud.   And we're going to share our top way to put this knowledge to work right now...   The piece of wisdom is: To consistently win in the market, the trader must be a "connoisseur of extremes".   An extreme is when the majority of market participants are betting heavily on one side of the market. It's just like overstretching a rubber band: When it's stretched past the limit, it snaps back...and prices move at super-speed.   Extremes can occur in an asset's fundamentals (valuation)...They can occur in an asset's technicals (price and trading volume)...And they can occur in market sentiment toward an asset (pessimism versus optimism).   Over the last few months, we've shown subscribers a couple of sentiment extremes...   A simple way to judge sentiment is with the "commitment of traders" (or COT) report. It's a government report that classifies market participants and tracks their positions. When these positions reach an extreme level of bullishness or bearishness, it can signal an impending market reversal.   Since we showed a COT extreme in the oil market, prices have fallen 4%. Since we showed a COT extreme in the copper market, prices have broken out to a new eight-month high.   We have a similar setup right now in silver.   Take a look at the chart below. It shows the last three years of trading in silver (the black line) and the silver positions held by speculative trading funds (the blue line). As you can see, the blue line recently hit an extreme low. Speculative trading funds have rarely been this down on silver in the last 20 years.     Our go-to expert on sentiment analysis is Jason Goepfert, who runs the excellent SentimenTrader website. He notes: "When [the COT] measures reach this kind of extreme in commodities, it's usually good for at least a 1-3 month jump..." That's exactly what happened to silver in late 2011: a 36% rise in two months. It happened again in summer 2012: a 33%, three-month rise. (We showed subscribers how to trade it.) And again in summer 2013: a 32%, two-month rise. (Again, we showed how to trade it.)   But the best part about this "extreme" trade isn't the potential upside...It's the very low, very well-defined downside.   You see, silver prices have fallen along with sentiment. Right now, the silver price is sitting just 6% above its two-year low.   If silver violates these lows, silver's bear market will likely get "more extreme" before it's ready to snap back. We don't want to stick around for that. So we'd suggest setting a hard stop at $17.75. That's about 7% below today's levels.   On the upside, we could easily see a quick 30% jump, just like the last three times around. In other words, you're risking $1 to potentially make $4. That's a low-risk, high-reward trade.   And that's what you find when you become a connoisseur of extremes.

3-Month Silver Trade Off Extreme Sentiment Posted: 08 Jan 2014 12:51 PM PST Sentiment in silver futures is at an extreme. That might make a trade...   TODAY we're going to share a timeless piece of trading wisdom that will help anyone make a lifetime of low-risk, high-reward trades, write Amber Lee Mason and Brian Hunt, editors of DailyWealth Trader for Steve Sjuggerud.   And we're going to share our top way to put this knowledge to work right now...   The piece of wisdom is: To consistently win in the market, the trader must be a "connoisseur of extremes".   An extreme is when the majority of market participants are betting heavily on one side of the market. It's just like overstretching a rubber band: When it's stretched past the limit, it snaps back...and prices move at super-speed.   Extremes can occur in an asset's fundamentals (valuation)...They can occur in an asset's technicals (price and trading volume)...And they can occur in market sentiment toward an asset (pessimism versus optimism).   Over the last few months, we've shown subscribers a couple of sentiment extremes...   A simple way to judge sentiment is with the "commitment of traders" (or COT) report. It's a government report that classifies market participants and tracks their positions. When these positions reach an extreme level of bullishness or bearishness, it can signal an impending market reversal.   Since we showed a COT extreme in the oil market, prices have fallen 4%. Since we showed a COT extreme in the copper market, prices have broken out to a new eight-month high.   We have a similar setup right now in silver.   Take a look at the chart below. It shows the last three years of trading in silver (the black line) and the silver positions held by speculative trading funds (the blue line). As you can see, the blue line recently hit an extreme low. Speculative trading funds have rarely been this down on silver in the last 20 years.     Our go-to expert on sentiment analysis is Jason Goepfert, who runs the excellent SentimenTrader website. He notes: "When [the COT] measures reach this kind of extreme in commodities, it's usually good for at least a 1-3 month jump..." That's exactly what happened to silver in late 2011: a 36% rise in two months. It happened again in summer 2012: a 33%, three-month rise. (We showed subscribers how to trade it.) And again in summer 2013: a 32%, two-month rise. (Again, we showed how to trade it.)   But the best part about this "extreme" trade isn't the potential upside...It's the very low, very well-defined downside.   You see, silver prices have fallen along with sentiment. Right now, the silver price is sitting just 6% above its two-year low.   If silver violates these lows, silver's bear market will likely get "more extreme" before it's ready to snap back. We don't want to stick around for that. So we'd suggest setting a hard stop at $17.75. That's about 7% below today's levels.   On the upside, we could easily see a quick 30% jump, just like the last three times around. In other words, you're risking $1 to potentially make $4. That's a low-risk, high-reward trade.   And that's what you find when you become a connoisseur of extremes.

GLD's gold sent to Asia isn't coming back, Williams tells KWN Posted: 08 Jan 2014 12:49 PM PST 3:45p ET Wednesday, January 8, 2014 Dear Friend of GATA and Gold: In the second part of his latest interview with King World News, fund manager Grant Williams, editor of the "Things That Make You Go Hmmm. ..." letter, notes the rising number of claims to each gold ounce immediately available for delivery on the New York Commodities Exchange and the huge decline in gold held by the exchange-traded fund GLD, gold that has moved to Asia and "is not coming back." An excerpt from his interview is posted at the KWN blog here: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/1/8_Thi... CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. 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 Vancouver Convention Centre West Sunday-Monday, January 19-20, 2014 Vancouver, British Columbia, Canada http://www.cambridgehouse.com/event/vancouver-resource-investment-confer... GATA Reception in Vancouver Free admission, cash bar 5-8 p.m. Monday, January 20, 2014 Lions Pub, 888 West Cordova St. Vancouver, British Columbia, Canada Mines and Money Hong Kong Hong Kong Convention and Exhibition Centre Monday-Friday, March 24-28, 2014 Hong Kong Special Administrative Region, China 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: http://gata.org/tshirts Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16 ADVERTISEMENT How to profit with silver -- and which stocks to buy now Future Money Trends is offering a special 16-page silver report with 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...

What Interest Rates Mean for Stocks Posted: 08 Jan 2014 12:45 PM PST 17 years and not much to show for it? Meet the Dow, 1964-1981...   On 31st DECEMBER 1964, writes Tim Price at ThePriceOfEverything, the Dow Jones Industrial Average stood at 874.   On December 31st, 1981, it stood at 875. In Warren Buffett's words: "I'm known as a long term investor and a patient guy, but that is not my idea of a big move." To see in stark black and white how the US stock market could spend 17 years going nowhere – even when the GDP of the US rose by 370% and Fortune 500 company sales went up by a factor of six times during the same period – the price chart for the Dow is shown below. So the US stock market suffered a Japan-style lost decade, and then some. Back to Buffett, again. "To understand why that happened, we need first to look at one of the two important variables that affect investment results: interest rates. These act on financial valuations the way gravity acts on matter:   "The higher the rate, the greater the downward pull. That's because the rates of return that investors need from any kind of investment are directly tied to the risk-free rate that they can earn from government securities. So if the government rate rises, the prices of all other investments must adjust downward, to a level that brings their expected rates of return into line.   "In the 1964-81 period, there was a tremendous increase in the rates on long-term government bonds, which moved from just over 4% at year-end 1964 to more than 15% by late 1981. That rise in rates had a huge depressing effect on the value of all investments, but the one we noticed, of course, was the price of equities. So there – in that tripling of the gravitational pull of interest rates – lies the major explanation of why tremendous growth in the economy was accompanied by a stock market going nowhere." In his magisterial (and deeply witty) 2013 Year In Review, Cornell chemistry professor and economic agent provocateur David Collum reminds us that: "The 32-year-old bond bull is long in the tooth, fully priced for an inflation-free world. We have central bankers on a bond-buying spree that has the surreal effect of keeping interest rates low by printing money. Of course, these shenanigans will end, and price discovery in bonds will be accompanied by investors' self-discovery.   "Optimists bray that rising rates are bullish, a sign that the world economy is recovering. In 1999, however, Buffett wrote a compelling article in Fortune attributing secular equity moves to one and only one parameter – the direction of long-term interest rates. Secular equity bull markets occur when long-term rates are dropping – not low but dropping – and secular bears occur when rates are rising. He didn't equivocate.   "So are rates really that low? In a word, yes.. The salad days of the bond market are in our rear- view mirror. The rate bottom and subsequent rise will be global. Rising rates will spread into the markets and economy at large, causing concurrent stagnation, dropping price earnings ratios (from nosebleed Case-Shiller estimates of 24), collapse of credit-fuelled/capex-lite corporate profit margins, and crush under-funded pensions and municipalities rendering them less funded. If rates have nowhere to go but up, what direction are they headed?" So how you feel about asset allocation this year should largely be a function of how you feel about interest rates. And if you fear that interest rates are more likely to rise – triggered, perhaps, by a combination of Fed tapering and general weariness / revulsion at the manipulation of so many financial assets – then you should perhaps question your commitment to Western equity markets as well as to bonds, given Buffett's and Collum's assertions above.   The observation bears repeating. "Secular equity bull markets occur when long-term rates are dropping...and secular bears occur when rates are rising." This is hardly rocket science.   Of course, 2014 could be yet another year in which equity markets rise further, driven by hopes and expectations of still more QE, but that's not a bet we're entirely comfortable making. Since we're primarily attracted by valuations and not by momentum, we're now fishing for equities in a clearly demarcated pool (Asia and Japan – because that's where values are most compelling). We are not interested in most western markets because the value isn't visible to us and the underlying growth (fundamentals, anybody?) looks pathetic.   And our monetary authorities have showered financial markets with kerosene by ensuring that the conventional 'risk-free' alternative to equities (i.e. government debt) is anything but. So we find ourselves trimming fixed interest exposure and duration risk, and largely replacing it with floating rate exposure instead. (It has been several years since we held Gilts, and we've never held US Treasuries.)   Our two allocations to 'alternative' assets proved variously problematic in 2013. With a few exceptions, trend-following funds struggled to find sufficient strong trends to harvest meaningful returns. But we retain the exposure in large part because we think that a) human nature is unlikely to change profoundly this year, so any return to the primacy of fear over greed could easily generate profits to be reaped from the downside of markets and b) the position-sizing and in particular the risk management generally practised by trend-following managers offers some significant insurance in the event of any pronounced market 'accidents'.   Our other exposure to 'alternative' assets was, of course, in the monetary metals and related holdings. As David Collum accurately concedes: "It was a very expensive year to be in the Church of Austrian Economics and Hard Assets." 2013 was the year that the mainstream financial media went aggressively anti-gold, and Collum cites three pertinent quotations from the New York Times: "There is simply nothing in the economic picture today to cause a rush into gold. The technical damage caused by the decline is enormous and it cannot be erased quickly. Avoid gold and gold stocks.   "Two years ago gold bugs ran wild as the price of gold rose nearly six times. But since cresting two years ago it has steadily declined, almost by half, putting the gold bugs in flight. The most recent advisory from a leading Wall Street firm suggests that the price will continue to drift downward, and may ultimately settle 40% below current levels.   "The fear that dominated two years ago has largely vanished, replaced by a recovery that has turned the gold speculators' dreams into a nightmare." But as he also points out, these quotes are from 1976, when the spot price of gold fell from $200 to $100 an ounce. Thereafter, gold rose from $100 to $850.   Why do we continue to keep the faith with gold (and silver)? We can encapsulate the argument in one statistic.   Last year, the US Federal Reserve enjoyed its 100th anniversary, having been founded in a blaze of secrecy in 1913. By 2007, the Fed's balance sheet had grown to $800 billion. Under its current QE programme (which may or may not get tapered according to the Fed's current intentions), the Fed is printing $1 trillion a year.   To put it another way, the Fed is printing roughly 100 years' worth of money every 12 months. (Now that's inflation.) Conjuring up a similar amount of gold from thin air is not so easy.

What Interest Rates Mean for Stocks Posted: 08 Jan 2014 12:45 PM PST 17 years and not much to show for it? Meet the Dow, 1964-1981...   On 31st DECEMBER 1964, writes Tim Price at ThePriceOfEverything, the Dow Jones Industrial Average stood at 874.   On December 31st, 1981, it stood at 875. In Warren Buffett's words: "I'm known as a long term investor and a patient guy, but that is not my idea of a big move." To see in stark black and white how the US stock market could spend 17 years going nowhere – even when the GDP of the US rose by 370% and Fortune 500 company sales went up by a factor of six times during the same period – the price chart for the Dow is shown below. So the US stock market suffered a Japan-style lost decade, and then some. Back to Buffett, again. "To understand why that happened, we need first to look at one of the two important variables that affect investment results: interest rates. These act on financial valuations the way gravity acts on matter:   "The higher the rate, the greater the downward pull. That's because the rates of return that investors need from any kind of investment are directly tied to the risk-free rate that they can earn from government securities. So if the government rate rises, the prices of all other investments must adjust downward, to a level that brings their expected rates of return into line.   "In the 1964-81 period, there was a tremendous increase in the rates on long-term government bonds, which moved from just over 4% at year-end 1964 to more than 15% by late 1981. That rise in rates had a huge depressing effect on the value of all investments, but the one we noticed, of course, was the price of equities. So there – in that tripling of the gravitational pull of interest rates – lies the major explanation of why tremendous growth in the economy was accompanied by a stock market going nowhere." In his magisterial (and deeply witty) 2013 Year In Review, Cornell chemistry professor and economic agent provocateur David Collum reminds us that: "The 32-year-old bond bull is long in the tooth, fully priced for an inflation-free world. We have central bankers on a bond-buying spree that has the surreal effect of keeping interest rates low by printing money. Of course, these shenanigans will end, and price discovery in bonds will be accompanied by investors' self-discovery.   "Optimists bray that rising rates are bullish, a sign that the world economy is recovering. In 1999, however, Buffett wrote a compelling article in Fortune attributing secular equity moves to one and only one parameter – the direction of long-term interest rates. Secular equity bull markets occur when long-term rates are dropping – not low but dropping – and secular bears occur when rates are rising. He didn't equivocate.   "So are rates really that low? In a word, yes.. The salad days of the bond market are in our rear- view mirror. The rate bottom and subsequent rise will be global. Rising rates will spread into the markets and economy at large, causing concurrent stagnation, dropping price earnings ratios (from nosebleed Case-Shiller estimates of 24), collapse of credit-fuelled/capex-lite corporate profit margins, and crush under-funded pensions and municipalities rendering them less funded. If rates have nowhere to go but up, what direction are they headed?" So how you feel about asset allocation this year should largely be a function of how you feel about interest rates. And if you fear that interest rates are more likely to rise – triggered, perhaps, by a combination of Fed tapering and general weariness / revulsion at the manipulation of so many financial assets – then you should perhaps question your commitment to Western equity markets as well as to bonds, given Buffett's and Collum's assertions above.   The observation bears repeating. "Secular equity bull markets occur when long-term rates are dropping...and secular bears occur when rates are rising." This is hardly rocket science.   Of course, 2014 could be yet another year in which equity markets rise further, driven by hopes and expectations of still more QE, but that's not a bet we're entirely comfortable making. Since we're primarily attracted by valuations and not by momentum, we're now fishing for equities in a clearly demarcated pool (Asia and Japan – because that's where values are most compelling). We are not interested in most western markets because the value isn't visible to us and the underlying growth (fundamentals, anybody?) looks pathetic.   And our monetary authorities have showered financial markets with kerosene by ensuring that the conventional 'risk-free' alternative to equities (i.e. government debt) is anything but. So we find ourselves trimming fixed interest exposure and duration risk, and largely replacing it with floating rate exposure instead. (It has been several years since we held Gilts, and we've never held US Treasuries.)   Our two allocations to 'alternative' assets proved variously problematic in 2013. With a few exceptions, trend-following funds struggled to find sufficient strong trends to harvest meaningful returns. But we retain the exposure in large part because we think that a) human nature is unlikely to change profoundly this year, so any return to the primacy of fear over greed could easily generate profits to be reaped from the downside of markets and b) the position-sizing and in particular the risk management generally practised by trend-following managers offers some significant insurance in the event of any pronounced market 'accidents'.   Our other exposure to 'alternative' assets was, of course, in the monetary metals and related holdings. As David Collum accurately concedes: "It was a very expensive year to be in the Church of Austrian Economics and Hard Assets." 2013 was the year that the mainstream financial media went aggressively anti-gold, and Collum cites three pertinent quotations from the New York Times: "There is simply nothing in the economic picture today to cause a rush into gold. The technical damage caused by the decline is enormous and it cannot be erased quickly. Avoid gold and gold stocks.   "Two years ago gold bugs ran wild as the price of gold rose nearly six times. But since cresting two years ago it has steadily declined, almost by half, putting the gold bugs in flight. The most recent advisory from a leading Wall Street firm suggests that the price will continue to drift downward, and may ultimately settle 40% below current levels.   "The fear that dominated two years ago has largely vanished, replaced by a recovery that has turned the gold speculators' dreams into a nightmare." But as he also points out, these quotes are from 1976, when the spot price of gold fell from $200 to $100 an ounce. Thereafter, gold rose from $100 to $850.   Why do we continue to keep the faith with gold (and silver)? We can encapsulate the argument in one statistic.   Last year, the US Federal Reserve enjoyed its 100th anniversary, having been founded in a blaze of secrecy in 1913. By 2007, the Fed's balance sheet had grown to $800 billion. Under its current QE programme (which may or may not get tapered according to the Fed's current intentions), the Fed is printing $1 trillion a year.   To put it another way, the Fed is printing roughly 100 years' worth of money every 12 months. (Now that's inflation.) Conjuring up a similar amount of gold from thin air is not so easy.

Gold vs. Fed Debasement Posted: 08 Jan 2014 12:41 PM PST How the US central bank will dispose of all the trillions it's printed since 2008...   IF YOU'VE been wondering if the US Federal Reserve will ever destroy the trillions of dollars it has printed since 2008, wonder no more, writes Dan Amoss in The Daily Reckoning.   Since 2007, the US monetary base has soared from $800 billion to $3.7 trillion. Such unprecedented inflation is the product of round after round of quantitative easing (QE):     Each time the Fed launched a new QE program, it assured the public it had an 'exit strategy' from unconventional policy. Investors assume an exit strategy involves reversing QE – selling assets (Treasuries and mortgage-backed securities) and destroying the money the Fed had previously created.   But if you pay attention to the key decision-makers at the Fed, it becomes clear that odds of a shrinking monetary base are next to nil...   Talk of shrinking the Fed's balance sheet is very premature. First, it needs to slow (or 'taper') the rate at which it's printing and expanding its balance sheet. We got a measly $10 billion in tapering last FOMC meeting.   Then, it needs to stop printing; the last two times the Fed stopped printing, in 2010 and 2011, there were brutal sell-offs in stocks and other risky assets. Finally, if the reaction to stopping the printing press hasn't already panicked the Fed back into easing, it might try reversing its prior QE operations.   We wish them good luck! A contraction of the Fed's balance sheet would start a stampede to sell overinflated, risky assets. The Fed probably has models predicting how the markets should respond to a reversal of QE. But as we saw last spring after Bernanke quietly suggested QE would one day end, the rapid doubling of long-term interest rates took the Fed by surprise.   Investors assume tapering is a dramatic change in US Federal Reserve behaviour. And they expect tapering will crush the gold market yet again. So a broader perspective is revealing. Here's a chart showing the growth in the Fed's balance sheet through the end of 2014, assuming no taper (in black) and a $20 billion-per-month taper (in red). Notice the difference? There is hardly any difference. And remember, the Fed only tapered by half that amount!     With all the media attention on tapering (and its impact on gold prices), one would think the Fed is on the verge of unwinding its entire post-2008 balance sheet surge. But an unwinding would be so destructive to the delicate 'wealth effect' it isn't going to occur. The trillions that have been created aren't going to be destroyed.   Here's how the Fed will tighten, if it tightens at all...   The Fed will retain all the bonds it has acquired – at least until they mature. If the Fed feels the need to adjust short-term rates, it may attempt to use repurchase agreements, or 'repo' trades. Put simply, repos involve the Fed selling securities from its balance sheet while simultaneously agreeing to buy them back at a specified time and price (repos get more complicated from here).   In the old-school, pre-2008 era, the Fed raised the fed funds rate – the rate at which banks lend reserve balances to other banks overnight – by shrinking the supply of reserves available to borrow. Unless and until the Fed shrinks its balance sheet (and the supply of excess reserves) by trillions of dollars, it won't be able to raise the fed funds rate to even a meager 1%.   Instead, if the Fed ever wants to raise short-term rates again, it's much more likely to use repo trades to set interest rates in the money markets. Repo trades are a 'chicken' way of temporarily (not permanently) selling Treasuries and mortgages from its balance sheet.   The alternative – permanent asset sales – would shrink the Fed's balance sheet and the monetary base. Since repos are a tamer, market-friendly choice, we can expect the Fed to try using repos.   The global paper money system tends to seize up as soon as it starts going in reverse. Liquidity, once injected, tends to stay in the system. So central banks may talk tough, but they'll keep acting easy.   Besides, where is this mythical US economy that exists in isolation from the Fed's manipulation? Take away the Fed stimulus – which pumps up asset prices and pulls forward future consumption – and all stimulus-fuelled activity would come crashing to a halt.   Easy auto and mortgage financing have pulled forward demand for cars and houses, respectively. Higher interest rates would put pressure on Washington politicians to cut long-term entitlement spending plans, which in turn would depress the industries and households that rely on government spending.   In other words, this mythical 'self-sustaining' US economic expansion – one which will allow a normalization of monetary policy – exists only in the minds of Fed academics. Japan, for example, is still in a hopelessly stimulus-addicted situation 20 years after entering into 'unconventional' policy. Its economy would be vaporized if interest rates were to rise just one or two percentage points.   Gold investors who've bailed out on the assumption QE will eventually reverse and the money supply will eventually shrink will find it necessary to return to the market. And new investors will seek shelter from the blizzard of paper money supply that will be required to keep the global debt pyramid stable.   Movements in gold should reflect the recklessness of central bank policy over the last two years. The market didn't see it as reckless, so some investors sold gold under the belief central banks are all-powerful and haven't trapped themselves into permanently easy policy.   When will there be broad recognition of central banks' recklessness? I don't know, but I'm confident gold will be a lot higher at the point of broad recognition. Gold trades like an option on monetary disorder. The Fed and other central banks have set their currencies on a one-way path to disorder.

Gold vs. Fed Debasement Posted: 08 Jan 2014 12:41 PM PST How the US central bank will dispose of all the trillions it's printed since 2008...   IF YOU'VE been wondering if the US Federal Reserve will ever destroy the trillions of dollars it has printed since 2008, wonder no more, writes Dan Amoss in The Daily Reckoning.   Since 2007, the US monetary base has soared from $800 billion to $3.7 trillion. Such unprecedented inflation is the product of round after round of quantitative easing (QE):     Each time the Fed launched a new QE program, it assured the public it had an 'exit strategy' from unconventional policy. Investors assume an exit strategy involves reversing QE – selling assets (Treasuries and mortgage-backed securities) and destroying the money the Fed had previously created.   But if you pay attention to the key decision-makers at the Fed, it becomes clear that odds of a shrinking monetary base are next to nil...   Talk of shrinking the Fed's balance sheet is very premature. First, it needs to slow (or 'taper') the rate at which it's printing and expanding its balance sheet. We got a measly $10 billion in tapering last FOMC meeting.   Then, it needs to stop printing; the last two times the Fed stopped printing, in 2010 and 2011, there were brutal sell-offs in stocks and other risky assets. Finally, if the reaction to stopping the printing press hasn't already panicked the Fed back into easing, it might try reversing its prior QE operations.   We wish them good luck! A contraction of the Fed's balance sheet would start a stampede to sell overinflated, risky assets. The Fed probably has models predicting how the markets should respond to a reversal of QE. But as we saw last spring after Bernanke quietly suggested QE would one day end, the rapid doubling of long-term interest rates took the Fed by surprise.   Investors assume tapering is a dramatic change in US Federal Reserve behaviour. And they expect tapering will crush the gold market yet again. So a broader perspective is revealing. Here's a chart showing the growth in the Fed's balance sheet through the end of 2014, assuming no taper (in black) and a $20 billion-per-month taper (in red). Notice the difference? There is hardly any difference. And remember, the Fed only tapered by half that amount!     With all the media attention on tapering (and its impact on gold prices), one would think the Fed is on the verge of unwinding its entire post-2008 balance sheet surge. But an unwinding would be so destructive to the delicate 'wealth effect' it isn't going to occur. The trillions that have been created aren't going to be destroyed.   Here's how the Fed will tighten, if it tightens at all...   The Fed will retain all the bonds it has acquired – at least until they mature. If the Fed feels the need to adjust short-term rates, it may attempt to use repurchase agreements, or 'repo' trades. Put simply, repos involve the Fed selling securities from its balance sheet while simultaneously agreeing to buy them back at a specified time and price (repos get more complicated from here).   In the old-school, pre-2008 era, the Fed raised the fed funds rate – the rate at which banks lend reserve balances to other banks overnight – by shrinking the supply of reserves available to borrow. Unless and until the Fed shrinks its balance sheet (and the supply of excess reserves) by trillions of dollars, it won't be able to raise the fed funds rate to even a meager 1%.   Instead, if the Fed ever wants to raise short-term rates again, it's much more likely to use repo trades to set interest rates in the money markets. Repo trades are a 'chicken' way of temporarily (not permanently) selling Treasuries and mortgages from its balance sheet.   The alternative – permanent asset sales – would shrink the Fed's balance sheet and the monetary base. Since repos are a tamer, market-friendly choice, we can expect the Fed to try using repos.   The global paper money system tends to seize up as soon as it starts going in reverse. Liquidity, once injected, tends to stay in the system. So central banks may talk tough, but they'll keep acting easy.   Besides, where is this mythical US economy that exists in isolation from the Fed's manipulation? Take away the Fed stimulus – which pumps up asset prices and pulls forward future consumption – and all stimulus-fuelled activity would come crashing to a halt.   Easy auto and mortgage financing have pulled forward demand for cars and houses, respectively. Higher interest rates would put pressure on Washington politicians to cut long-term entitlement spending plans, which in turn would depress the industries and households that rely on government spending.   In other words, this mythical 'self-sustaining' US economic expansion – one which will allow a normalization of monetary policy – exists only in the minds of Fed academics. Japan, for example, is still in a hopelessly stimulus-addicted situation 20 years after entering into 'unconventional' policy. Its economy would be vaporized if interest rates were to rise just one or two percentage points.   Gold investors who've bailed out on the assumption QE will eventually reverse and the money supply will eventually shrink will find it necessary to return to the market. And new investors will seek shelter from the blizzard of paper money supply that will be required to keep the global debt pyramid stable.   Movements in gold should reflect the recklessness of central bank policy over the last two years. The market didn't see it as reckless, so some investors sold gold under the belief central banks are all-powerful and haven't trapped themselves into permanently easy policy.   When will there be broad recognition of central banks' recklessness? I don't know, but I'm confident gold will be a lot higher at the point of broad recognition. Gold trades like an option on monetary disorder. The Fed and other central banks have set their currencies on a one-way path to disorder.

Who's Buying Gold, and Why Posted: 08 Jan 2014 12:37 PM PST A bunch of reasons to consider gold investing for 2014...   GOLD has just had one of its worst years in a generation, writes Laurynas Vegys, research analyst with Jeff Clark for Casey Research's latest BIG GOLD letter.   A flood of outflows from gold ETFs, endless tax increases on gold imports in India, and the mirage (albeit a convincing one in the eyes of many) of a supposedly improving economy in the US have all contributed to the constant hammering gold took in 2013.   Perhaps worse has been the onslaught of negative press our favorite metal has suffered. It's felt overwhelming at times and has pushed even some die-hard goldbugs to question their beliefs...not a bad thing, by the way.   To me, a lot of it felt like piling on, especially as the negative rhetoric ratcheted up. Last year's winner was probably Goldman Sachs, calling gold a "slam-dunk sale" for 2014 (this, of course, after it's already fallen by nearly a third over a period of more than two and a half years – how daring they are).   This is why it's important to balance the one-sided message typically heard in the mainstream media with other views. Here are some of those contrarian voices, all of which have put their money where their mouth is...   Marc Faber is quick to stand up to the gold bears. "We have a lot of bearish sentiment, [and] a lot of bearish commentaries about gold, but the fact is that some countries are actually accumulating gold, notably China. They will buy this year at a rate of something like 2,600 tons, which is more than the annual production of gold. So I think that prices are probably in the process of bottoming out here, and that we will see again higher prices in the future."   Brent Johnson, CEO of Santiago Capital, told CNBC viewers to "buy gold if they believe in math...Longer term, I think gold goes to $5,000 over a number of years. If they continue to print money at the current rate, I think it could be multiples of that. I see a slow steady rise punctuated with some sharp upward moves."   Jim Rogers, billionaire and cofounder of the Soros Quantum Fund, publicly stated in November that he has never sold any gold and can't imagine ever selling gold in his life because he sees it as an insurance policy. "With all this staggering amount of currency debasement, gold has got to be a good place to be down the road once we get through this correction."   George Soros seems to be getting back into the gold miners: he recently acquired a substantial stake in the large-cap Market Vectors Gold Miners ETF (GDX) and kept his calls on Barrick Gold (ABX).   Don Coxe, a highly respected global commodities strategist, says we can expect gold torise with an improving economy, the opposite of what many in the mainstream expect. "You need gold for insurance, but this time the payoff will come when the economy improves. In the past when everything was falling all around you, commodity prices were soaring out of sight. We had three recessions in the 1970s and gold went from $35 an ounce to $850. But this time, gold is going to appreciate when we start getting 3% GDP growth."   Jeffrey Gundlach, bond guru and not historically known for being a big fan of gold, came out with a candid endorsement of the yellow metal: "Now, I kind of like gold. It's definitely very non-correlated to other assets you may have in your portfolio, and it does seem sort of cheap. I also like the GDX."   Steve Forbes, publishing magnate and chief executive officer of Forbes magazine, publicly predicted an impending return to the gold standard in a speech in Las Vegas. "A new gold standard is crucial. The disasters that the Federal Reserve and other central banks are inflicting on us with their funny-money policies are enormous and underappreciated."   Rob McEwen, CEO of McEwen Mining and founder of Goldcorp, reiterated his bullish call for gold to someday top $5,000. "We now have governments willing to seize their citizens' assets. We now have currency controls on the table, which we haven't seen since the late 1960s/early '70s. We have continued debasement of currencies. And the economies of the Western world remain stagnant despite enormous monetary stimulation. All these facts to me are bullish for gold and make me believe the price will bounce back relatively soon."   Doug Casey here at Casey Research says that while gold is not the giveaway it was at $250 back in 2001, it is nonetheless a bargain at current prices. "I've been buying gold for years and I continue to buy it because it is the way you save. I'm very happy to be able to buy gold at this price. All the so-called quantitative easing – money printing – by governments around the world has created a glut of freshly printed money. This glut has yet to work its way through the global economic system. As it does, it will create a bubble in gold and a super-bubble in gold stocks."   And then there's the people who should know most about how sound the world's various types of paper money are: central banks. As a group, they have added tonnes of bullion to their reserves last year...   Turkey added 13 tonnes (417,959 troy ounces) of gold in November 2013. Overall, it has added 143.6 tonnes (4,616,847 troy ounces) so far this year, up 22.5% from a year ago, in part thanks to the adoption of a new policy to accept gold in its reserve requirements from commercial banks.   Russia bought 19.1 tonnes (614,079 troy ounces) in July and August alone. With the year-to-date addition of 57.37 tonnes – second only to Turkey – Russia's gold reserves now total 1,015 tonnes. It now holds the eighth-largest national stash in the world.   South Korea added a whopping 20 tonnes (643,014 troy ounces) of gold in February, and now carries 23.7% more gold on its balance sheet than at the end of 2012."Gold is a real safe asset that can help (us) respond to tail risks from global financial situations effectively and boosts the reliability of our foreign reserves holdings," said central bank officials.   Kazakhstan has been buying gold every month, at an average of 2.4 tonnes (77,161 troy ounces) through October. As a result, the country's reserves have seen a 21% increase to 139.5 tonnes from a year ago.   Azerbaijan has taken advantage of a slump in gold prices and has gone from having virtually no gold to 16 tonnes (514,411 ounces).   Sri Lanka and Ukraine added 5.5 (176,829 troy ounces) and 6.22 tonnes (199,977 troy ounces) respectively over the past year.   China, of course, is the 800-pound gorilla that mainstream analysts seem determined to ignore. Though nothing official has been announced by China's central bank, the chart below provides some perspective into the country's consumer buying habits.     China ended 2013 officially as the largest gold consumer in the world. Chinese sentiment towards gold is well echoed in a statement made by Liu Zhongbo of the Agricultural Bank of China: "Because gold has capabilities to absorb external economic shocks, growth of its use in the international monetary system will be imminent." And those commercial banks that have been verbally slamming gold – it turns out many are not as negative as it might seem...   Goldman Sachs proved itself to be one of the biggest hypocrites: while advising clients to sell gold and buy Treasuries in Q2 2013, it bought a stunning (and record) 3.7 million shares of GLD. And when Venezuela decided to raise cash by pawning its gold, guess who jumped in to handle the transaction? Yes, they claim the price will fall this year, but with such a slippery track record, it's important to watch what they do and not what they say.   Société Générale strategist Albert Edwards says gold will top $10,000 per ounce (with the S&P 500 Index tumbling to 450 and Treasuries yielding less than 1%).   J.P.Morgan Chase went on record in August recommending clients "position for a short-term bounce in gold." Gold's price resistance to Paulson & Co. cutting its gold exposure, along with growing physical gold demand in Asia, were cited among the main reasons.   ScotiaMocatta's Sunil Kashyap said that despite the selloff, there's still significant physical demand for gold, especially from India and China, which "supports prices."   Commerzbank calls for the gold price to enter a boom period this year. Based on investment demand from Asian countries – China and India in particular – the bank predicted the yellow metal will rise to $1,400 by the end of 2014.   Bank of America Merrill Lynch, in spite of lower price forecasts for gold this year, reiterated they remain "longer-term bulls."   Citibank's top technical analyst Tom Fitzpatrick stated gold could head to $3,500. "We believe we are back into that track where gold is the hard currency of choice, and we expect for this trend to accelerate going forward."   None of these parties thinks the gold bull market is over. What they care about is safety in this uncertain environment, as well as what they see as enormous potential upside.   In the end, the much ridiculed goldbugs will have had the last laugh.   We can speculate about when the next uptrend in gold will set in, but the action for today is to take advantage of price weakness. Learn about the best gold producers to invest in – now at bargain-basement prices. Try BIG GOLD for 3 months, risk-free, with 100% money-back guarantee.

Who's Buying Gold, and Why Posted: 08 Jan 2014 12:37 PM PST A bunch of reasons to consider gold investing for 2014...   GOLD has just had one of its worst years in a generation, writes Laurynas Vegys, research analyst with Jeff Clark for Casey Research's latest BIG GOLD letter.   A flood of outflows from gold ETFs, endless tax increases on gold imports in India, and the mirage (albeit a convincing one in the eyes of many) of a supposedly improving economy in the US have all contributed to the constant hammering gold took in 2013.   Perhaps worse has been the onslaught of negative press our favorite metal has suffered. It's felt overwhelming at times and has pushed even some die-hard goldbugs to question their beliefs...not a bad thing, by the way.   To me, a lot of it felt like piling on, especially as the negative rhetoric ratcheted up. Last year's winner was probably Goldman Sachs, calling gold a "slam-dunk sale" for 2014 (this, of course, after it's already fallen by nearly a third over a period of more than two and a half years – how daring they are).   This is why it's important to balance the one-sided message typically heard in the mainstream media with other views. Here are some of those contrarian voices, all of which have put their money where their mouth is...   Marc Faber is quick to stand up to the gold bears. "We have a lot of bearish sentiment, [and] a lot of bearish commentaries about gold, but the fact is that some countries are actually accumulating gold, notably China. They will buy this year at a rate of something like 2,600 tons, which is more than the annual production of gold. So I think that prices are probably in the process of bottoming out here, and that we will see again higher prices in the future."   Brent Johnson, CEO of Santiago Capital, told CNBC viewers to "buy gold if they believe in math...Longer term, I think gold goes to $5,000 over a number of years. If they continue to print money at the current rate, I think it could be multiples of that. I see a slow steady rise punctuated with some sharp upward moves."   Jim Rogers, billionaire and cofounder of the Soros Quantum Fund, publicly stated in November that he has never sold any gold and can't imagine ever selling gold in his life because he sees it as an insurance policy. "With all this staggering amount of currency debasement, gold has got to be a good place to be down the road once we get through this correction."   George Soros seems to be getting back into the gold miners: he recently acquired a substantial stake in the large-cap Market Vectors Gold Miners ETF (GDX) and kept his calls on Barrick Gold (ABX).   Don Coxe, a highly respected global commodities strategist, says we can expect gold torise with an improving economy, the opposite of what many in the mainstream expect. "You need gold for insurance, but this time the payoff will come when the economy improves. In the past when everything was falling all around you, commodity prices were soaring out of sight. We had three recessions in the 1970s and gold went from $35 an ounce to $850. But this time, gold is going to appreciate when we start getting 3% GDP growth."   Jeffrey Gundlach, bond guru and not historically known for being a big fan of gold, came out with a candid endorsement of the yellow metal: "Now, I kind of like gold. It's definitely very non-correlated to other assets you may have in your portfolio, and it does seem sort of cheap. I also like the GDX."   Steve Forbes, publishing magnate and chief executive officer of Forbes magazine, publicly predicted an impending return to the gold standard in a speech in Las Vegas. "A new gold standard is crucial. The disasters that the Federal Reserve and other central banks are inflicting on us with their funny-money policies are enormous and underappreciated."   Rob McEwen, CEO of McEwen Mining and founder of Goldcorp, reiterated his bullish call for gold to someday top $5,000. "We now have governments willing to seize their citizens' assets. We now have currency controls on the table, which we haven't seen since the late 1960s/early '70s. We have continued debasement of currencies. And the economies of the Western world remain stagnant despite enormous monetary stimulation. All these facts to me are bullish for gold and make me believe the price will bounce back relatively soon."   Doug Casey here at Casey Research says that while gold is not the giveaway it was at $250 back in 2001, it is nonetheless a bargain at current prices. "I've been buying gold for years and I continue to buy it because it is the way you save. I'm very happy to be able to buy gold at this price. All the so-called quantitative easing – money printing – by governments around the world has created a glut of freshly printed money. This glut has yet to work its way through the global economic system. As it does, it will create a bubble in gold and a super-bubble in gold stocks."   And then there's the people who should know most about how sound the world's various types of paper money are: central banks. As a group, they have added tonnes of bullion to their reserves last year...   Turkey added 13 tonnes (417,959 troy ounces) of gold in November 2013. Overall, it has added 143.6 tonnes (4,616,847 troy ounces) so far this year, up 22.5% from a year ago, in part thanks to the adoption of a new policy to accept gold in its reserve requirements from commercial banks.   Russia bought 19.1 tonnes (614,079 troy ounces) in July and August alone. With the year-to-date addition of 57.37 tonnes – second only to Turkey – Russia's gold reserves now total 1,015 tonnes. It now holds the eighth-largest national stash in the world.   South Korea added a whopping 20 tonnes (643,014 troy ounces) of gold in February, and now carries 23.7% more gold on its balance sheet than at the end of 2012."Gold is a real safe asset that can help (us) respond to tail risks from global financial situations effectively and boosts the reliability of our foreign reserves holdings," said central bank officials.   Kazakhstan has been buying gold every month, at an average of 2.4 tonnes (77,161 troy ounces) through October. As a result, the country's reserves have seen a 21% increase to 139.5 tonnes from a year ago.   Azerbaijan has taken advantage of a slump in gold prices and has gone from having virtually no gold to 16 tonnes (514,411 ounces).   Sri Lanka and Ukraine added 5.5 (176,829 troy ounces) and 6.22 tonnes (199,977 troy ounces) respectively over the past year.   China, of course, is the 800-pound gorilla that mainstream analysts seem determined to ignore. Though nothing official has been announced by China's central bank, the chart below provides some perspective into the country's consumer buying habits.     China ended 2013 officially as the largest gold consumer in the world. Chinese sentiment towards gold is well echoed in a statement made by Liu Zhongbo of the Agricultural Bank of China: "Because gold has capabilities to absorb external economic shocks, growth of its use in the international monetary system will be imminent." And those commercial banks that have been verbally slamming gold – it turns out many are not as negative as it might seem...   Goldman Sachs proved itself to be one of the biggest hypocrites: while advising clients to sell gold and buy Treasuries in Q2 2013, it bought a stunning (and record) 3.7 million shares of GLD. And when Venezuela decided to raise cash by pawning its gold, guess who jumped in to handle the transaction? Yes, they claim the price will fall this year, but with such a slippery track record, it's important to watch what they do and not what they say.   Société Générale strategist Albert Edwards says gold will top $10,000 per ounce (with the S&P 500 Index tumbling to 450 and Treasuries yielding less than 1%).   J.P.Morgan Chase went on record in August recommending clients "position for a short-term bounce in gold." Gold's price resistance to Paulson & Co. cutting its gold exposure, along with growing physical gold demand in Asia, were cited among the main reasons.   ScotiaMocatta's Sunil Kashyap said that despite the selloff, there's still significant physical demand for gold, especially from India and China, which "supports prices."   Commerzbank calls for the gold price to enter a boom period this year. Based on investment demand from Asian countries – China and India in particular – the bank predicted the yellow metal will rise to $1,400 by the end of 2014.   Bank of America Merrill Lynch, in spite of lower price forecasts for gold this year, reiterated they remain "longer-term bulls."   Citibank's top technical analyst Tom Fitzpatrick stated gold could head to $3,500. "We believe we are back into that track where gold is the hard currency of choice, and we expect for this trend to accelerate going forward."   None of these parties thinks the gold bull market is over. What they care about is safety in this uncertain environment, as well as what they see as enormous potential upside.   In the end, the much ridiculed goldbugs will have had the last laugh.   We can speculate about when the next uptrend in gold will set in, but the action for today is to take advantage of price weakness. Learn about the best gold producers to invest in – now at bargain-basement prices. Try BIG GOLD for 3 months, risk-free, with 100% money-back guarantee.

TF Metals Report: Where is the German gold? Posted: 08 Jan 2014 11:26 AM PST 2:25p ET Wednesday, January 8, 2014 Dear Friend of GATA and Gold: The German Bundesbank's supposed attempt to repatriate its gold from the Federal Reserve Bank of New York "keeps getting sillier by the day," the TF Metals Report's Turd Ferguson writes. His commentary is headlined "Where Is the German Gold" and it's posted at the TF Metals Report's Internet site here: http://www.tfmetalsreport.com/blog/5375/where-german-gold CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. 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 Vancouver Convention Centre West Sunday-Monday, January 19-20, 2014 Vancouver, British Columbia, Canada http://www.cambridgehouse.com/event/vancouver-resource-investment-confer... GATA Reception in Vancouver Free admission, cash bar 5-8 p.m. Monday, January 20, 2014 Lions Pub, 888 West Cordova St. Vancouver, British Columbia, Canada Mines and Money Hong Kong Hong Kong Convention and Exhibition Centre Monday-Friday, March 24-28, 2014 Hong Kong Special Administrative Region, China 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: http://gata.org/tshirts Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16 ADVERTISEMENT How to profit with silver -- and which stocks to buy now Future Money Trends is offering a special 16-page silver report with 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...

This Will Create A Major Panic & Then Destroy The Gold Shorts Posted: 08 Jan 2014 11:13 AM PST Today one of the most highly respected fund managers in Singapore spoke with King World News about an event which is going to shock market participants and create a major panic in the gold market that will destroy the gold shorts. Grant Williams, who is portfolio manager of the Vulpes Precious Metals Fund, also included an unbelievable chart and laid out the roadmap for how this will end in his part II of his powerful interview below. This posting includes an audio/video/photo media file: Download Now

Profit Potential From the Front Lines of Cyberwar Posted: 08 Jan 2014 10:10 AM PST There’s big news in the booming cyberdefense sector. In the first week of 2014, we have a new multibillion-dollar business combination that defends against hacks and cyberattacks. It illustrates the “5th Domain of War” theme I’ve mentioned before (especially in the Tomorrow in Review newsletter.) That is, there’s really big money flowing into defense-related software. Before I tell you the details, let’s set the stage. By coincidence, over the weekend, I was perusing literature about rising Chinese militarism. That alone makes for a long story. Among other things, however, I was reading commentary by British military historian Max Hastings. His work on World War II is highly respected. This is a “one-two punch” kind of approach to stopping cyberattacks. Sort of a “hunter-killer” approach, now within one company. Hastings quoted a senior Chinese general who said a bit “much,” if you know what I mean. The Chinese general stated that “In the information era, seizing and maintaining superiority in cyberspace is more important than was seizing command of the sea and air in World War II.” Whoa! Hold that thought. Seizing cyber is “more important” than the sea or air? We have some serious, strategic-level business and defense-investment angles there. Let’s get to the point. Last week, in the midst of the New Year break, a company named FireEye Inc. (FEYE:NASDAQ) acquired a privately held company named Mandiant. It’s a cash/stock deal valued north of $1 billion. FireEye provides security software. Mandiant does too, with a focus on implementing emergency responses to computer network breaches. FireEye debuted on the Nasdaq last September. Since then, the FireEye share price has about doubled, with a big pop at the end of last week. With the Mandiant acquisition, FireEye has a market cap well over $6 billion, although it has yet to turn a profit. Meanwhile, Mandiant’s metrics are $100 million in revenue in 2012, up more than 76% from the previous year. So Mandiant is growing fast, with almost all of its business being domestic. At the same time, Mandiant is beginning to develop an international presence. The name Mandiant might be familiar. Last year, Mandiant released a major report on cyberattacks against the U.S. government and U.S. businesses, especially defense contractors. Mandiant identified a long list of hackers from across the world working to implant bad software and otherwise “spy” on corporate and government computers. Much of Mandiant’s report focused on cyberattacks from China. In particular, Mandiant fingered a unit of top-notch hackers associated with China’s People’s Liberation Army, working out of a command center near Shanghai — speaking of Chinese army generals who want to “seize” cyberspace. Basically, the FireEye deal with Mandiant combines two complementary companies. FireEye provides attack-detection technology that works differently from most anti-virus products. That is, most anti-virus products are filtering systems of one form or another. They monitor the Web and identify malicious software that has already begun to hit other targets around the world. But FireEye software isolates incoming traffic in virtual containers. Then the software monitors code for suspicious activity in a sort of virtual “petri dish,” before deciding whether to let the traffic through or isolate it. This is a novel approach, and FireEye has a long head start on much of its competition. On the Mandiant side, the company provides timely response to cyberattacks, such as isolating bad code, eradicating it, stopping further damage, identifying the source and more. This is a “one-two punch” kind of approach to stopping cyberattacks. Sort of a “hunter-killer” approach, now within one company. It’s right up the alley of critical needs for all manner of defense systems, both in government and within the research community, with contractors, logistics and more. And of course, the civilian side of the economy is begging for this kind of cyberdefense capability as well. FireEye and Mandiant were no strangers to each other. As far back as April 2012, the companies teamed up on a number of initiatives. It seemed to work out well, with complementary corporate cultures. Then in February 2013, FireEye began to integrate its software with Mandiant threat-detection products, because many customers were already deploying their products and services together. So in a sense, this is truly a market-driven effort. The new FireEye-Mandiant business structure comes as the U.S. government, state governments, agencies, utilities, Corporate America and many more live in daily fear of getting hacked, pirated, cyberrobbed and otherwise damaged. While we’re on the subject, it’s clear that most so-called anti-virus software doesn’t work very well — or why else are so many systems getting hacked so often? In many hacking situations, the victim (so to speak) doesn’t even know that it’s being hacked until after the malicious software has already had a chance to do damage. By then, it’s possible that a company or government entity has already lost critical secrets or data are erased or perhaps a bank account is empty. Looking ahead, many players in government and business, as well as other sectors of the economy, could turn to the FireEye-Mandiant combination for future protection. This is a company that’s going places. But if you’re interested in timing the momentum, I’d allow the dust to settle from last week’s announcement of the deal between FireEye and Mandiant. I’m sure investors would love to see more information on business deals, cash flow and revenues. I want to see where the bottom-line numbers are heading. Right now, the share price seems to be ahead of the fundamentals. In other words, I’m enthusiastic about where FireEye could go. It’s intriguing tech coming along at just the right time. Still, investmentwise, we need to see performance too. After all, the world is full of great companies that never seem to make any money. That’s all for now. Thanks for reading. Best wishes, Byron W. King for The Daily Reckoning Ed. Note: The cybersecurity topic has been popping up everywhere recently. Heck, even local colleges are now offering degrees in advanced cybersecurity. Bottom line, this story isn’t going anywhere. Best to get in while you still can. And one of the best ways to stay up to speed is by reading Tomorrow in Review, where this essay was prominently featured. It’s a completely free service that details the world’s most exciting and important new technologies, and offers readers several chances to discover real, actionable profit opportunities. Don’t miss another issue. 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The Slow March to Ruin Posted: 08 Jan 2014 09:18 AM PST As many as 50,000 stray dogs roam the streets and vacant homes of bankrupt Detroit, replacing residents, menacing humans who remain, and overwhelming the city’s ability to find them homes or peaceful deaths. They are among the victims of a historic financial and political collapse. Detroit, a former auto-manufacturing powerhouse, declared the largest U.S. municipal bankruptcy on July 18, after years of decline. The city had more than $18 billion in long-term debt and had piled up an operating deficit of close to $400 million. Falling revenue forced cutbacks in police, firefighting… and dog control. Gradually, in imperceptible baby steps, what was once preposterous and odious becomes normal and acceptable. Hey. Dogs don’t vote. They don’t make campaign contributions. They don’t have any lobbyists in Washington. To hell with them. You don’t find Department of Defense staffers wandering the empty slums of a bankrupt city. Witness one of the wonders of modern imperial democracy. In its effort to enrich the defense industry, not only is the U.S. free to engage in all the “wars of choice” it chooses, but it also is free to choose which side it supports. Minding its own business seems to be out of the question. So in Egypt, the U.S. is free to choose. Will it go for those who claim to represent the forces of democracy, light, justice, and progress? Or will it throw its immense weight behind the side that promises law, order, and a reliable treaty with Israel? Frankly, we don’t give a damn. But we will let dear readers get exercised on the issue, if they choose. Here is The Wall Street Journal, naturally, telling its readers that it is “Time to Choose Sides in Egypt.” And here is John Bolton arguing, naturally, for a policy of unrestraint: “Discrete crises in collapsing Middle Eastern and African countries are giving way to broader regional chaos, which is now a geostrategic factor…” Blah. Blah. Blah. Is there a bigger jackass than John Bolton? He makes no mention of his own role in causing the regional chaos in the Middle East. He was a major warmonger — arguing for the invasion of Iraq, which is now on track to cost the U.S. more than $5 trillion. And who gained? Only Islamic terrorists… and the defense industry. Now Bolton says we should go into Egypt on the side of the military. Why? He doesn’t like the Muslim Brotherhood. How many brothers has he met? We don’t know, but he gives the impression that he thinks they are bad people. Facing off against him in the Journal is Elliott Abrams. We couldn’t make much sense of Mr. Abrams’ argument other than that he thinks the military rulers are bad people. We were going to quote a passage of it for you, but we couldn’t find anything worth retyping. Several editorials urge the U.S. to back the Muslim Brotherhood in Egypt, as one put it, if we are really “believers in democracy.” Well, that leaves us out! What’s really interesting is how the defense industry, the meddlers, and the warmongers have put themselves in a winning situation. Nobody knows which side God is on. Nobody knows what will happen if one side wins or the other loses. All we know with reasonable certainty is that the more meddling we do in the affairs of others, the more enemies we make… and the more of the national treasure is transferred to the zombies in the defense industry. But that’s how it goes. Gradually, in imperceptible baby steps, what was once preposterous and odious becomes normal and acceptable. And then you wake up and realize that things have gone too far… and there’s no turning back. Here’s something to chew over from They Thought They Were Free, by Milton Mayer, in which Germans recall how life changed, little by little, from 1933-45: “To live in this process is absolutely not to be able to notice it — please try to believe me — unless one has a much greater degree of political awareness, acuity, than most of us had ever had occasion to develop. “Each step was so small, so inconsequential, so well explained, or, on occasion, ‘regretted,’ that, unless one were detached from the whole process from the beginning, unless one understood what the whole thing was in principle, what all these ‘little measures’ that no ‘patriotic German’ could resent must someday lead to, one no more saw it developing from day to day than a farmer in his field sees the corn growing. One day it is over his head.” Zombies. Debt. Meddling in the economy by the feds. Meddling in other people’s business by the Pentagon. Americans are already in it way over their heads. Regards, Bill Bonner for The Daily Reckoning Ed. Note: Even though many Americans are “in it way over their heads” as Bill points out, there are a few who’ve made it their mission to see above the crowds. And you can stand on their shoulders. Sign up for the Laissez Faire Today email edition to learn how. Original article posted on Laissez Faire Today

23 Reasons to Be Bullish on Gold Posted: 08 Jan 2014 08:55 AM PST Why giving up on gold may be one of the worst mistakes investors can make today. Read More...

Gold’s support above $1,200 getting stronger – Phillips Posted: 08 Jan 2014 08:39 AM PST Despite attempts to knock gold back, the price is well supported at these levels and psychologically strong, says Julian Phillips. Read more….

Gold price in for another tough year, but floor to be found around $1,150 Posted: 08 Jan 2014 08:39 AM PST According to Natixis's Nic Brown, while prices are likely to push lower in 2014, they are unlikely to push much below $1150 before turning. Read more….

Can’t-miss headlines: Gold slides to $1,220, Impact hits gold in Mexico & more Posted: 08 Jan 2014 08:39 AM PST The latest morning headlines, top junior developments and metal price movements. Today the gold price is on the decline and Impact cuts some high grade silver and gold in Mexico. Read more….

Platinum bonds seen beating bearish gold Posted: 08 Jan 2014 08:15 AM PST According to Momentum Asset Management, South African platinum company bonds will probably outperform the debt of gold producers this year. Read more….

End of “Wall Street Party” Will Be a Catastrophe! Here’s Why Posted: 08 Jan 2014 08:08 AM PST It is risky to be in markets, but also risky to be out of them. The issue is whether it is less risky to remain on the long-side for a while than it is to leave or  go short (something that few can or should try to do) these overvalued markets.  So says Monty Pelerin (economicnoise.com) in edited excerpts from his original post* entitled Recognizing The Dangers. [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.] Pelerin goes on to say in further edited excerpts: Readers know my concerns about the dangers of financial markets. By most reasonable measures markets appear to be greatly overvalued. That doesn't mean there is still not a lot of upside left though. Anthony Wile (thedailybell.com) expresses his sentiments on this issue in an article** entitled The Bearish – Bullish Conundrum. His thoughts, regarding both options, are similar to mine. He begins below with an observation I could not agree with more: “…the markets are considerably, fantastically over bought and that whatever happens after this "Wall Street Party" is going to be a sort of catastrophe. One could also argue, however, that it is foolishness to bet decisively against the top banking elites evidently organizing this latest, last blowout. We've analyzed what's been set in place and it doesn't seem to us that those behind this ploy are ready to declare it over, certainly not yet. The groundwork has been laid, but there is much yet to reap: Janet Yellen, the Fed's uber-dove, has not yet taken office. England's uber-dove Mark Carney has only just begun his term at the top. Together these formidable easy-money mavens could print tidal waves of money to lubricate Anglosphere equity markets. This is part of a larger coordination of easy money policies affecting Asia, as well. The JOBS act allows private firms to advertise opportunities to a global audience, even though purchasers have to be accredited investors. The massive PR effect of the JOBS Act has barely been felt. The IPO pipeline is still jammed with warmist and "green" corporate product still waiting to be funded. Gold has been hammered down by the same elite banking forces that are forcing markets higher. The pressures on gold via dollar appreciation show no signs of easing any time soon. Fracking continues unabated, providing a further "feel good" story about energy resources and the prospect of stable energy prices going forward. Sign up for our FREE Market Intelligence Report newsletter What could slow the "party" or end it would be significantly higher interest rates; but central banks, coordinated by the Bank for International Settlements, have proven to be effective thus far at controlling dollar-reserve rates despite the torrents of dollars that have been printed over the past half-decade. Also, it is not as if central banks have stinted on the money printing. While the Fed itself has admitted to something like US$16 trillion distributed post-crisis, mostly in short-term loans (probably not paid back), the actual total is a good deal higher. Close to five years ago, we estimated that central banks would probably print about US$100 trillion to try to prop up the failing system. We figure the total thus far is somewhere around US$50 trillion, though it could be higher. Despite these unimaginable sums, price inflation has certainly not reached hyper levels though, to be sure, the amount of price inflation is considerably understated. There is no overriding certainty that central banks will lose control of their monetary base in the next month or even in the next year and, if they begin to, there are always stopgap measures such as the US "plunge protection team" which can brazenly – and illegally – go into the market with freshly printed central bank money to stabilize it, as necessary, at least in the short-term. "Follow the munKNEE" via Facebook – https://www.facebook.com/lorimer.wilson At some point there will be a breakdown. Real market forces will reassert themselves but "when" is not easy to discern. I personally know people who are continually trying to sell this market short and are surrendering over and over because the timing is not right. The IPO market is revving up; top central banking doves are in place; the JOBS Act is ready to pour its promotions on receptive investors around the world; central banks are coordinating money printing in ways never seen before; gold remains down. It is sensible to predict the demise of this empyrean equity fairy tale but those elite bankers controlling the central banking money printing have different ideas. To sell THEM short is not a good idea, as they have proven to be both brutal and determined over generations and continue to have formidable weaponry that allows them to pursue their goals. One can make the bearish case with ease in this illogical market but logic may have little to do with it currently and no one can say with any precision when a final crash may come. For now, the punch bowl sits squarely in the center of the table. There may be a good deal of volatility associated with this "party" but I don't see any sign that someone intends to confiscate the booze as of yet.”  [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.economicnoise.com/2014/01/05/recognizing-dangers/ **Source of quote above: http://www.thedailybell.com/editorials/34895/Anthony-Wile-The-BearishBullish-Conundrum/#sthash.niZ1nfLd.dpuf Related Articles: (Please note: 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. This Chart of the Dow Suggests "Bring on 2014 – We Ain't Seen Nothin' Yet!" The Dow is up almost 28% but the chart below showing how it’s 12% annualized gain over the past 5-years compares with past bull markets suggest we are probably not at a top – that “We ain’t seen nothin’ yet!” Take a look. Read More » 2. Some Factors to Consider As To Whether the Market Will End UP or DOWN in 2014 What is the likely market return in the coming new year? This articles tries to answer that question by presenting technical and fundamental market factors that are influencing the market in the coming year. Some of these factors point to a positive market return this year while others point to negative influences. Let’s take a look. Read More » 3. Stock Market Bubble Going to Burst & Unleash Destructive Forces on Global Economy The Fed has manufactured a parabolic move in the stock market…which is much more aggressive (and thus even more unsustainable) than witnessed at either the 2000 or 2007 stock market tops. Parabolas always collapse – there are never any exceptions – so when the pin finds this bubble it’s going to take down not only our stock market, but unleash a destructive force on the global economy. Read More » 4. Warren Buffett's Favorite Valuation Metric Suggests Stock Market Is OVERvalued by 15% Here's some perspective on the potential value of the U.S. equity market using Warren Buffett’s favorite valuation metric – total stock market capitalization relative to GDP. Read More » 5. Global Stock Markets At Key Resistance Lines – Will They Break Out or Crash? Markets around the globe are all facing key resistance levels at the same time. Can they pull a "Great Escape" and bust through? Yes they can and if they do, it would be very bullish for equity markets around the world [and if they don't, then watch out below!]. Read More » 6. S&P 500 & Dow 30 Index Performances: Illusion vs.Reality The Dow Jones Industrial Average is a fabricated number that has little relation to the actual average performance of the stock market as a whole. For sure, it is not industrial in nature, and by no means is it an average. It’s like creating an all-star team of the very best-performing companies and broadcasting to the world that this is the average of all companies out there. Read More » 7. These Indicators Suggest Stock Market Returns Are "Too Good To Be True" Current macro conditions indicate that we are in a sweet spot for equity returns…that global growth is continuing and there is little or no tail risk in the immediate future. It’s time to get long equities…but I have this nagging feeling that these market conditions are too good to be true. If you look, there are a number of technical and fundamental clouds on the horizon. Read More » 8. Don't Be Scared "Stockless"! There's No Fear Anymore – Anywhere! There's no fear anymore – anywhere – and I'm talking about the type of fear that overwhelms investors – and, in turn, the market. The surest indication of this can be found in the following chart. Read More » 9. Stocks to Continue to Soar & Gold to Continue to Fall in 2014 – Here's Why Each December we publish a list of investment themes that we feel are critical to the coming year. Below are our expectations for the U.S, Japanese and European stock markets, municipal bonds and gold. Read More » 10. Relax! Take Stock Market Bubble Warnings With a Grain of Salt – Here's Why Bubble predictions are headline-grabbing claims that are sure to attract reader/viewership and more than a few worried individuals who will be pushed to act but, like all forecasts, these bubble warnings should be taken with a grain of salt. Read More »   The post End of “Wall Street Party” Will Be a Catastrophe! Here’s Why appeared first on munKNEE dot.com.

Silver Price Charts and Other Factors Say Now is Time to Buy (Part 2) Posted: 08 Jan 2014 08:05 AM PST "Las Lágrimas de la Luna" could well reach $500/oz in the next few years. This expression is how ancient Incas of Peru referred to silver…"Tears From The Moon." Although silver production is globally widespread, tiny Peru is the world's largest silver producer. However, many mining companies contribute to world silver production. Here are the World's 20 Largest Silver Producing Companies Silver Reserves By Country The world silver reserves are estimated to be around 530,000 tonnes. The countries with the largest silver reserves are Peru (120,000 tonnes), Poland (85,000), Chile (70,000) and Australia (69,000). Over the past ten years there was a steady increase in silver mine production. Even though mining companies were excavating more and more silver, the mine production could not meet the demand. Therefore, this gap has to be closed by reusing scrap silver. However, recycling silver is difficult for three reasons. First, the amount of silver used in some applications is very small. Second, other applications that contain silver such as solar panels have a long life cycle. Third, a great deal of silver in computers, cell phones and TVs is discarded Silver Demand Characteristics By geographical area, the United States is the largest consumer of silver. It is also the largest consumer of silver jewelry. Over the last couple of years demand to buy silver as jewelry has remained strong, as gold remained at high prices, leading consumers to substitute. The next largest silver consumers are China, Japan, India and Germany. Silver Price History Long-term silver price trend with charts Silver is way below its nominal record price of $50 in 1980.  It is even further below the government inflation adjusted level of $135.  And if you use REAL inflation adjusted numbers, like Shadowstats, the REAL 1980 inflation adjusted price of silver would have to be $450!  Silver is a precious and depleting resource – and when you look at the price of housing, cars, education, food, energy, taxes, insurance back in the 1980′s, it is insane to think that silver is so cheap on any level.  Especially when the uses of silver have skyrocketed since the 1980's.  It is now used in technology on a massive scale and is even now said to cure cancer.    (Source:  SilverShield) $500 SILVER LOOMS I am old enough to remember when silver was $1.39/oz (1940s to 1960s). And when the investing world 'discovered' the shiny white metal…it went parabolic from $1.39 to nearly $50 (intra-day). From 1964 silver enjoyed a ballistic ride to Jan1980…..during that period silver soared nearly 3,500% (ie soared 36 times!)…a 34% CAGR.   Were we to see a déjà vu all over again (thank you Yogi Berra), the silver 'phoenix'  will have topped $700/oz.  Skeptics might ask: IS THIS POSSIBLE? I SAY YES for several reasons: ·         If it happened before it can occur again. ·         There was no Internet communication in the earlier period. TODAY'S Instant international  marketing makes global dissemination of ideas and information real-time communication. ·         History is testament that in 1980 only 5% of global investors had any form of precious metals. Moreover, recently precious metal experts state only 1-2% of global investors own today any form of precious metals. And although I am not certain, I suspect the majority of current investors own GOLD RATHER THAN SILVER. This can all change via mass Internet marketing of silver with a view to educate and illuminate the ignorant billions of international investors. ·         President Obama's grandiose socialist plan financed by a National Debt of $17 TRILLION…estimated to rise to $22 TRILLION by the time he leaves the white House, will force the Fed to sharply devalue the greenback in order not to default on the National Debt. ·         Pension Plans, Insurance & Bank Trust Depts. are slowly waking up to the heretofore spectacular investment performance of silver vis-à-vis fiat investments….ie Stock, Bonds and plain old Cash. I will elaborate in detail about this in Part 3 of this Silver Analysis. ·         And then there is the insatiable demand by China and India with nearly 2.5 Billion population. Here are several facts why the white metal will again forge all-time record highs: -        China's and India's insatiable demand for the white metal continues growing -        Yearly Consumption/Production ratio demonstrates acute deficits -        Unlike gold…silver is consumed by industrial and medical usage -        Silver's global mining production shows a pathetic 2.8% CAGR during the past 10 years -        Investment demand for the white metal will go ballistic…once the present consolidation ends -        Currency Devaluation Contagion will soon engulf the world, thus fuelling all precious metals higher -      Sales of US Minted Silver coins are at all-time record highs…despite the recent correction in value -        Mexico is currently considering making SILVER the national currency…rather than the fiat peso -        A growing number of states are seeking shiny new currencies made of silver and gold -      Utah and Arizona state legislature recently recognized silver and gold as legal tender. Furthermore, other states considering legislation to make gold bullion and silver bullion legal currency are Montana, Colorado, Idaho, Indiana, New Hampshire, Georgia, Washington, Minnesota, Tennessee, and Virginia. Based upon all the above criteria and rationale, I conservatively estimate silver might top $500/oz by the year 2020. Vronsky For The Daily Reckoning Note: This originally appeared on Silver Phoenix 500. P.S. Readers of The Daily Reckoning email edition get all of our most informative tips and strategies for anticipating the next big moves in precious metals. Sign up for The Daily Reckoning by clicking here.

What do you know about inflation? Posted: 08 Jan 2014 08:04 AM PST We read about inflation not being a problem in today's world, meaning that prices are not yet high enough to stir revolt among voters.  The word "inflation" is almost always taken to mean price inflation, at least since the end of World War II.  According to this view, inflation is well-contained if prices are relatively stable and low. Monetary inflation, or increases in the money supply, is generally ignored unless price inflation becomes an issue.  Yet we know that productivity and technological advancements can put downward pressure on prices, thereby masking the effects of money supply increases.  We also know that banks can go into protective mode and leave massive amounts of central bank money on their books rather than lending it out under the fractional reserve multiplier.  In such cases, low price inflation could mean a ticking time bomb rather than a measure of central bank brilliance.     It wasn't always easy to jack up the supply of money but the printing press and computers have changed that.  It thus became important for economists to distinguish between sound and unsound money, and the effects each had on the lives of the people who used them.  One touchstone of sound money was its resistance to being increased at will.   Another was its voluntary acceptance by the great majority of people who offer goods and services in trade.  Clearly, then, the federal reserve note and other fiat currencies are anything but sound.  About the only force keeping production in check is their price in terms of other currencies.  Given that all governments are addicted to the printing press, this is hardly reassuring. It's the height of irony that most people are obsessed with getting more money, yet almost none of them are concerned about its quality, how it is produced, and who produces it.  As long as it buys stuff, why should they care?  There's a reason why they should care.  As Lew Rockwell has written, "How important is sound money? The whole of civilization depends on it."   With this in mind I've put together a little quiz to focus the reader's attention on inflation.  Given the sentence stem "Inflation is," apply it to the statements that follow and decide if the completed sentence is correct or incorrect.  Inflation is . . . 1.  A policy of money production that, when controlled by a central bank such as the Fed, assures a stable economy. 2.  A policy of credit expansion that is responsible for recurrent booms and busts 3.  A policy we can blame mostly on Democrats and their welfare recipients 4.  A policy we can blame mostly on Republicans and their welfare recipients 5.  A policy we can blame exclusively on the monopoly money producers, which in the U.S. is the Fed and the commercial banks. 6.  Nothing to worry about as long as Ron Paul is out of office 7.  An indispensable means of financing wars surreptitiously. 8.  counterfeiting by another name 9.  Nothing to worry about as long as we have real smart guys on the Federal Reserve Board formulating policy 10.  Taxation without legislation 11.  A subtle means of undermining the moral basis of society  12.  Contrary to popular belief, a phenomenon that arose frequently in the 19th century because the U.S. was on a free market gold coin standard 13.  A phenomenon held in check by the constraints of production and redemption, as well as the market forces of supply and demand, under a free market gold coin standard 14.  A policy for sustainable economic growth, as long as it doesn't get out of hand, i.e., is equivalent to the rate of growth of real GDP 15.  A regressive form of taxation 16.  The solution to preventing deflation, which is the number one monetary horror 17.  Usually defined as a rise in price of a basket of goods and services with the coincidental result that blame rests on those who raise prices 18.  "what happens when people increase the money supply by fraud, imposition, and breach of contract." 19.  The means of avoiding economic crises 20.  The Federal Reserve policy that set the stage for the 1929 Crash and the depression that followed 21.  The massive asset purchase policy Ben Bernanke pursued vigorously to save the 10 biggest U.S. banks, which hold 77% of the assets of the banking industry. (paywall) 22.  A policy government pursued in the Great Depression, which lasted over a decade 23.  A policy government did not pursue in the 1920-21 Depression, which was over in less than two years.  24.  A policy the Fed should have pursued in the wake of drastically falling prices of the early 1930s 25.  A nostrum the Fed did pursue in unprecedented fashion in a futile attempt to counteract the falling prices of the early 1930s 26.  Best controlled by government's monopolistic control of money and the money supply, since democratic governments invariably act for the welfare of its citizens 27.  Best controlled by the voluntary exchange system of the free market, since individuals tend to look after their own welfare 28.  A requirement of an advanced economy fueled by fiat money 29.  An intervention into a market economy that is rejected by free market theory 30.  "An extension of the nominal quantity of any medium of exchange beyond the quantity that would have been produced on the free market." [p. 85] 31.  Any increase in the economy's supply of money, period

US Jobs Data See Gold Prices Fall Ahead of Fed Minutes Posted: 08 Jan 2014 06:24 AM PST GOLD PRICES reversed a $10 rise Wednesday lunchtime in London, falling back to near 1-week lows at $1220 as stronger-than-expected US data buoyed the Dollar ahead of the release of minutes from the Federal Reserve's "QE taper" vote last month.   A variable guide to official non-farms data, due Friday, today's report from payrolls services provider ADP said the US private sector added 238,000 jobs in December, beating both Nov. and consensus forecasts.   Asian stock markets closed higher but Europe slipped.   Gold prices for Eurozone investors fell back to €900 per ounce, a three-and-a-half year low when first breached in mid-December.   "A quiet session overnight," said one London broker's desk. "A noted lack of physical demand."   Wednesday's later release of minutes from the US Fed's last policy meeting of 2013 – when it finally tapered $10 billion from its $85bn-per-month of quantitative easing – "will [also] deter buyers from the market for the time being," it added.   "We may see a lower move in gold prices in the aftermath of the Fed minutes," one US brokerage analyst adds.   The only Fed voter to dissent from tapering last month, "I'm now comfortable with the current approach," said Boston Fed president Eric Rosengren late Tuesday.   "I wouldn't want to take any dramatic steps," he went on, but called a $10 billion monthly taper from the current $75bn total "appropriate."   Although Fed chairman Ben Bernanke discussed the central bank's thinking at length when announcing the taper, "the gold price is under pressure ahead of this evening's publication," says a note from Commerzbank's commodities analysts in Frankfurt.   Also "likely to have weighed on the gold price," says Commerzbank, was Tuesday's over-subscribed bond issue by Ireland, which last month exited the €67.5bn EU/IMF bailout programme of 2010, raising half its 2014 borrowing needs.   "[Gold price] fundamentals seem unfavorable over the next couple of years," says a new forecast from Moodys Investor Services, "as the global economy maintains forward momentum, governments unwind various stimulus programs, and the threat of inflation remains subdued in most major economies."   The research and rating agency now expects gold prices to average $1100 per ounce in 2014 "and beyond", down from the previous forecast of $1200.   Silver prices are also set to fall, says Moodys, down to an average $18 from their earlier $20 forecast.   The metal fell Wednesday to $19.45 per ounce following the US jobs data, unwinding the last of the New Year's 8.5% rise.   "[Today's Fed minutes] are unlikely to be bullish for precious metals," says Standard Bank's daily note.   Chinese consumer demand ahead of the New Year continued strong meantime, according to local press reports.   But gold prices on the Shanghai exchange closed lower, down 1.3% in Yuan and cutting the premium to global benchmarks to $14 from yesterday's six-month peak of $18 per ounce.

Gold and Money Supply Prepare for Messy Divorce Posted: 08 Jan 2014 06:00 AM PST Gold's main fundamental relationship over the past 10 years has broken down. It's a rude awakening to gold holders. However, understanding this break in the trend is imperative for figuring out gold's next move – up or down. Today we'll take an in-depth look at what's going on. Avoid this gold update at your own peril! "Most gold bugs won't see it coming" says my colleague Greg Guenthner, editor of the aptly named Rude Awakening. "Unfortunately for them" he continues, "many of these gold bugs will keep holding – tying to 'hope' the losses away – all the way to the bottom." Although he didn't specifically come out and say it, I know Mr. Guenthner was referencing what I believe is the #1 fact that gold investors must know. That is, you can't trust the most commonly-listed fundamentals for gold. Luckily we've got a graphic to sum up what I'm talking about. You see, the seemingly unbreakable 10-year, fundamental relationship between gold and the M2 money supply is done-for. Now that we've given the long-term chart some time to shake-out, it's clear that this is a game-changer. Point being: the money supply is still rocketing higher, interest rates are abysmally low, the Fed is continuing to pile nearly $1 trillion per year into bond purchases and yet gold prices are floundering. Gold, from a fundamental standpoint, is now on its own. We can't count on any semblance of a relationship with the money supply. Frankly we can't even count on supply and demand data in the physical space — even that's been a crapshoot lately. In a moment I'll tell you what gold we CAN count on, but first… If you didn't pick up on this trend early in 2011 or 2012, then 2013 was a staunch reminder that the good old days of gold fundamentals are gone. In regard to the chart above, the relationship between the money supply and gold, for now, is dead. You can't say it any other way. That's the great part about analyzing the charts. You don't need to get into the nitty gritty of quantitative easing (QE)… where the money is flowing… or what the new Fed Chairman Janet Yellen is thinking. Instead you can just look at the aftermath. From the chart above you can see that there's a clear disconnect between a gold bug's fundamental argument and what's really happening – a costly disconnect for traders. In the meantime, if you're wondering what IS following the money supply higher, the answer is simple: stocks. Over the past 5 years The Dow, S&P and Nasdaq have continued a steady move higher. Over the past 24 months these broad-based stock barometers have moved in near lock-step fashion with the Fed's increased balance sheet. Indeed, as the Fed continued to utilize its QE policies it was stocks, not gold, that have gained. Back to our metal discussion, gold is on its own now. On that note allow me to be clear: Just because gold decoupled from its fundamental relationship doesn't mean it's automatically headed lower. No, this does NOT guarantee gold's demise. Rather, it's an important factor you MUST consider when investing in gold or gold shares. You can't just look at the skyrocketing money supply and assume gold is headed higher. Same goes with some of the other fundamentals we've followed in these pages. Sure, you can tally the physical gold buying world-over, the easy money policies in the U.S. , check your favorite "overbought/oversold" indicators or even look at the U.S. dollar index as an inverse indicator – but over the past 12-24 months none of them would have done us a lick of good. The single factor that we can count on going forward is simple price action. Until we can latch on to the next meaningful fundamental trend, we'll have to keep a keen eye on price targets, support and resistance. The most recent level of important support is the $1,200-level. For gold to make a leap higher we'll have to see continued support above this level. If gold breaks to the downside – no matter what happens in the fundamentals (!)—we could be in for a rocky road. To steal a term from Mr. Guenthner above, in the short-term we won't be able to "hope" the losses away. Keep an eye on prices and beware of latching on to fundamentals – it could prove to be our best advice for the coming year. Keep your boots muddy, Matt Insley for The Daily Reckoning Ed. Note: What the market has in store for the gold price in 2014 is still too soon to tell. But Matt certainly offers some sage advice. And in today’s Daily Resource Hunter he offered his readers even more than that… They were treated to no less than 3 chances to discover specific, actionable investment opportunities. It’s just one perk of being a subscriber of his free Daily Resource Hunter. Not a member? Sign up for FREE, right here. Your next issue is just a few hours away. Original article posted on Daily Resource Hunter

Bron Suchecki: Tricks can be played with Comex gold storage data Posted: 08 Jan 2014 05:31 AM PST 8:30a ET Wednesday, January 8, 2014 Dear Friend of GATA and Gold: The Perth Mint's Bron Suchecki today cautions against making too much of the gold storage data from the New York Commodities Exchange, since tricks have been played with it to deceive the market. Suchecki's comments are headlined "In the Land of the Goldbugs Who Choose to Be Blind, the One-Eyed Blogger Is King" and it's posted at his blog, Goldchat, here: http://goldchat.blogspot.com/2014/01/in-land-of-goldbugs-who-choose-to-b... CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. 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. 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 Vancouver Convention Centre West Sunday-Monday, January 19-20, 2014 Vancouver, British Columbia, Canada http://www.cambridgehouse.com/event/vancouver-resource-investment-confer... GATA Reception in Vancouver Free admission, cash bar 5-8 p.m. Monday, January 20, 2014 Lions Pub, 888 West Cordova St. Vancouver, British Columbia, Canada Mines and Money Hong Kong Hong Kong Convention and Exhibition Centre Monday-Friday, March 24-28, 2014 Hong Kong Special Administrative Region, China 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: http://gata.org/tshirts Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16 ADVERTISEMENT 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/

Gold price smashes again having less effect, Grant Williams tells KWN Posted: 08 Jan 2014 05:11 AM PST 8:05a ET Wednesday, January 8, 2014 Dear Friend of GATA and Gold: Fund manager and market analyst Grant Williams tells King World News today that the anomalous smashes in the gold market seem once again to be having less effect, with price recoveries coming faster. "There is very little gold available versus all the paper claims," Williams says. "This massive trend of Asian buying of physical gold, wherever they can get their hands on it, is going to take over the gold market. I've had entities approach me looking to buy gold 'in whatever quantities they can find.' At some point this is going to matter." An excerpt from the interview is posted at the King World News blog here: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/1/8_Gol... CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. 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/ Join GATA here: Vancouver Resource Investment Conference Vancouver Convention Centre West Sunday-Monday, January 19-20, 2014 Vancouver, British Columbia, Canada http://www.cambridgehouse.com/event/vancouver-resource-investment-confer... GATA Reception in Vancouver Free admission, cash bar 5-8 p.m. Monday, January 20, 2014 Lions Pub, 888 West Cordova St. Vancouver, British Columbia, Canada Mines and Money Hong Kong Hong Kong Convention and Exhibition Centre Monday-Friday, March 24-28, 2014 Hong Kong Special Administrative Region, China 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: http://gata.org/tshirts Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16 ADVERTISEMENT 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. 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.

Market Monitor – January 8th Posted: 08 Jan 2014 05:00 AM PST Top Market Stories For January 8th, 2014: Race To Debase – Fiat Currency Vs Gold – Fiat Currency Vs Silver – 2000 – 2014 – Goldsilver Comex Warehouses: Potential Claims On Deliverable Bullion at Historically High 80 to 1 - Jesse's Café What Blows Up First? Part 2: Japan - John Rubino Too Big to Pop - 321 [...]

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