Gold World News Flash |
- Parents Angered Because School Rewards Straight A Students with Pizza Party
- ECONOMIC COLLAPSE 2014 -- Yellen Cannot Stop Taper
- Gold & Silver Trading Alert: Silver’s Upswing and Euro’s Resistance
- These Gold Charts Will Make Your Heart Beat Faster
- VIX Gives Stock Market Sell Signal, GLD Tumbles Off the Trendline
- The World Gold Council Clueless on Chinese Gold Demand?
- The Twisted Motives Behind Political Correctness
- The Chinese Dominoes Are About To Fall: Complete List Of Upcoming Trust Defaults
- Charles Gave On Gold As A ‘Deflation’ Hedge
- Jim’s Mailbox
- Guest Post: Does The Trail Of Dead Bankers Lead Somewhere?
- The Gold Price Gave Back $4.10 Today Closing at $1,320.60
- The Gold Price Gave Back $4.10 Today Closing at $1,320.60
- FOMC Minutes and Thoughts on Forward Guidance
- Goodbye Dollar, Hello Yuan
- Nick Santiago -- Central Banks Trying To Banish Fear 07.Feb.14
- Dr. Paul Craig Roberts -- Gold and Gangster Capitalism
- ECONOMIC COLLAPSE 2014 -- China, Japan, Soros Begin MASS SELL-OFF
- Gold Daily and Silver Weekly Charts
- Gold Daily and Silver Weekly Charts
- Australian comics satirize the failure of central banking
- Market Collapse immenant as 8th Banker dies
- Trust Is Lost & The Financial Destruction Will Only Get Worse
- GOLD Outperforming the Stock Market in 2014 so far
- Here Is The Roadmap To $4,000 Gold & Skyrocketing Silver
- Gold and Silver Trading - Silver's Price Upswing and Euro's Resistance
- Gold and Silver Margin Call - The Real Reason for Bear Stearns Collapse
- The Essentialist’s Glossary: Updated for the ‘Teens (N-Z)
- India takes back 31 coal blocks from private firms
- Look to gold and silver in these uncertain times
- The big gold ETF turnaround and its prospective impact
- SWOT: Unpacking gold’s recent strong performance
- Australians to dig Gold Fields out of trouble at mechanised mine
- The Next Great Commodity Rally Begins Today
- Me Again
- Koos Jansen: World Gold Council clueless on Chinese gold demand?
- Mexico Gold & Silver Mining Stocks
- Mexico Gold & Silver Mining Stocks
- Gold Demand Trends Diverge
- Gold Demand Trends Diverge
- Gold Price Recovers $1320 After Weak US Home-Building Data, "Worried Fed" Could Spark "Another Leg Higher"
- Silver Stackers: Measure your Stash like a Miner
- Supply and Demand Key to Base Metals Success: Adam Low
- Supply and Demand Key to Base Metals Success: Adam Low
- Supply and Demand Key to Base Metals Success: Adam Low
- Timing Is Everything
- Putin And The Flash Mob Empire
| Parents Angered Because School Rewards Straight A Students with Pizza Party Posted: 20 Feb 2014 12:30 AM PST by Joshua Cook, Freedom Outpost: Motivation or exclusion? That’s the question which is being asked at Silver Spring, Maryland’s Eastern Middle School. The school organizes parties – with dancing, games and pizza – for straight A students, allowing students with Bs and Cs to come to the events after classes end and the pizza is gone. The practice has become yet another issue to people who worry that exclusion from the event might lower students’ self-esteem. The media is fixated on “income equality,” and appears to be against success being rewarded for hard work. The ideas of participation trophies and wealth redistribution become more and more popular with social engineers. The oddest part of the story, though, is the fact that a reporter asked two of the straight A students, who attended the party, whether the party was fair. One of the kids said he didn’t know, and one said she could see how it might be, but that it was good motivation. This type of action could actually instill guilt for success. |
| ECONOMIC COLLAPSE 2014 -- Yellen Cannot Stop Taper Posted: 20 Feb 2014 12:15 AM PST Fed Says It Would Take Something Big To Stop The Taper ECONOMIC COLLAPSE 2014 -- Yellen Cannot Stop Taper UK unemployment rises unexpectedly which indicates the economy is now declining. German car sales are slumping and food prices in the US are sky rocketing. The housing bubble is about to... [[ This is a content summary only. Visit http://www.GoldSilverNewsBlog.com or http://www.newsbooze.com or http://www.figanews.com for full links, other content, and more! ]]  |
| Gold & Silver Trading Alert: Silver’s Upswing and Euro’s Resistance Posted: 20 Feb 2014 12:00 AM PST by Przemyslaw Radomski, Gold Seek:
Not much happened in gold and mining stocks this week, but silver moved higher. We sometimes saw this type of divergence right at the local tops, but it was not an extremely reliable sign. Let's take a closer look. As the situation didn't really change yesterday, the comments that we had made previously didn't change as well: Gold moved higher and the rally above the declining resistance line is now quite significant. |
| These Gold Charts Will Make Your Heart Beat Faster Posted: 19 Feb 2014 11:54 PM PST Gold lovers' hearts beat faster last week, as the metal rose above $1,300 an ounce for the first time since November. The precious metal also climbed above its 200-day moving average, which hasn't happened in about a year. ISI's John Mendelson noted that the generic gold future "rallied off its mid-December low and has decisively broken out above its downtrend line connecting the descending tops from late August, a near-term positive." The next price he's targeting is $1,350, the price gold was at in late October. |
| VIX Gives Stock Market Sell Signal, GLD Tumbles Off the Trendline Posted: 19 Feb 2014 11:27 PM PST The VIX gave its SPX sell signal. It may drop back below 14.73, but the clincher is that it also broke out above the prior high at 15.24, even if only by a penny. The Hi-Lo index hasn’t moved beneath its sell signal yet, but remember , it is a laggard. |
| The World Gold Council Clueless on Chinese Gold Demand? Posted: 19 Feb 2014 10:30 PM PST by Koos Jansen, In Gold We Trust:
Chinese Gold Market Essentials
The Chinese gold market is completely structured top down. The main physical (spot and deferred) exchange in China is the Shanghai Gold Exchange (SGE), that serves as the entrance point for imported and mined gold to the Chinese marketplace. Additionally the SGE is supplied by recycled gold. The Shanghai Futures Exchange (SHFE) facilitates the trading of gold futures contracts (to compete with the pricing power of Western markets). |
| The Twisted Motives Behind Political Correctness Posted: 19 Feb 2014 07:34 PM PST Submitted by Brandon Smith of Alt-Market.com, As I have confessed in the past, in my early years I found myself active in the Democratic Party and the general liberal methodology. I had no understanding of the concept of the false left/right paradigm. I had no inkling of the dangers of globalism and central banking. I had no concept of decentralization or non-participation. I had never even heard of libertarianism. I knew only that George W. Bush was a criminal (and I was right), but the problem went far deeper than the GOP. I was astoundingly ignorant of the bigger picture. However, what I did have going for me was an almost violent sense of nonconformity. I hated collectivists, yet I found myself surrounded by them while working within the leftist culture. It was the insanity of self-proclaimed “liberals” that taught me the true nature of the facade of politics. When I realized that the Democrats were essentially the same corrupt entity as the neoconservatives, everything in my life changed. One aspect of liberalism with which I am now very familiar is political correctness. I didn’t understand it at the time, not until I stepped outside the cultism of it and looked in from a wiser place. It always bothered me, but I couldn’t quite grasp why until later. Then, it hit me like a revelation. Political correctness was not a political ideology. No, it was a religion, a full-fledged spiritual con, a New Age ghetto of frothing mishmash that is sociological voodoo. And the leftists were eating it up like steak night at an all-you-can-eat buffet. These people were rationally retarded. Every idea they proposed they merely parroted from books and articles they had read. They were like malfunctioning automatons trapped in a cycle of discontented social criticism. Their desperation to invent meaning in the midst of their irrelevant lives made me feel ill. If they could not find a legitimate cause to champion, they would create one out of thin air and defend it relentlessly, regardless of how shallow it truly was. When I outline my analysis of economic destabilization within the United States or I write about the rise of the police state, I am driven by a fundamental sense of concrete concern. There are indeed real problems in the world, swirling in a storm of obvious factual conflicts. But the warriors of the PC culture don’t see any of it. Rather, they fantasize about injustices that don’t exist, trespasses that are ultimately fictional. They imagine themselves champions of some greater purpose that, in the end, doesn’t matter. Recently, I read a news story about a “transgendered teen” in Maine. When the boy was in the fifth grade, he decided to dress as a girl and demanded to use the girl’s bathroom at his public school, despite having the biological apparatus of a male. This story was international news, folks! Why? I can’t say, except that the mainstream media have made a point to focus on “gender optional” issues as if they represent some kind of civil rights uprising. The issue perfectly illustrates the disturbing nature of politically correct culture. Teachers at the school did not deny the student the use of restroom facilities. In fact, they allowed him to use the teacher’s bathrooms to avoid any confusion. The Maine Supreme Judicial Court, on the other hand, had other ideas. It ruled that the school’s refusal to allow the boy to use the girl’s facilities constituted a violation of the State’s anti-discrimination law. The ruling has been heralded as a massive victory for the politically correct narrative. Now, let me make one thing clear: I could not care less about this boy’s sexual orientation (if he even has one). I do think the very idea that a fifth-grader at about the age of 10 is sexually conscious enough to develop a sense of gender dissuasion is absurd. Children who haven’t even experienced puberty yet, proclaiming they are transgendered? Utter nonsense. I find it far more likely that the student’s PC-obsessed parents influenced him to come to such a decision despite his naivety. That said, a person’s sexual proclivities are not my concern. In fact, I have no interest whatsoever in the infatuations of any individual. That is a personal matter. I do not judge such people on their attractions. I do, though, judge people on how they handle their infatuations. What happens when someone wears his sexuality on his shoulder like a fashion accessory? Why is that even necessary? Is it not rather mentally backward for any person to base his public persona solely on his carnal compulsions? Do I dance around on the sidewalk bellowing to strangers how much I love the curves of women? Do I require a sociopolitical legal apparatus to vindicate my existence? Do I feel the need to shame gay people into publicly embracing my straight man’s libido? No, I do not. The PC culture demands that we, as individuals, openly accept the sexual orientations of anyone and everyone; otherwise, we are labeled prejudiced monsters. It is not enough that we object in a logical manner. No, we must fall to our knees and thank the stars for the very existence of gender chameleons. In the end, the psychological gender position of any particular person does not overrule his biological features. A child with a penis is a boy. Period. He will never be a girl. Ever. Not without surgical aid. And even then, he will never have the ability to give birth, which is the very hallmark of femininity. (Sorry, feminists, but that’s how it goes.) A boy, no matter his mental orientation, does not belong in a girl’s lavatory. The privacy rights of the girls outweigh the gender confusion of the boy. If I were a girl (why not play some gender games since everyone else is), I would beat the living hell out of any boy gallivanting in a dress in a bathroom I was using and make sure he never dared come back. And, by extension, if I were a rather mischievous boy with an aptitude as a peeping tom, why not dress up in a tutu in the hopes of getting a glimpse of the forbidden while being legally protected by the State? The warped conflicts that arise, though, are not the creation of the child in question. A fifth-grader has no concept of gender rights or political correctness. This issue was a creation of the PC cult and its acolytes. These people don’t actually care about the children they involve in their legal dramas. They exploit them, with every intent to abandon them once they have chiseled their agenda into the gray matter of every American. What truly motivates these people? Why do they do what they do? I think my experience with leftists makes me a well-positioned observer of the psychology of the culture. Here are the hidden thought processes I have witnessed while dealing directly with the PC army. PC Elitism One of the unfortunate side effects of religion is that proponents often use it as a means to feel superior to others. I have seen it in Christianity as much as I have seen it in any other belief system. It is the primary reason why I refuse to subscribe to organized and establishment-sanctioned spiritualism. Religion should be a personal experience first and foremost, not an easy way to fit in with the collective. Communing with others who share one’s beliefs should be secondary. Hypocritically, politically correct adherents often criticize Christians for their collectivist elitism while suffering from the same problem themselves. PC culture allows participants to pretend as though they have some greater understanding of the world, an elevated knowledge of life that makes them superior to the uninitiated. It is important to understand that when a person pursues the methodology of zealotry, he doesn’t do it to make the world a better place; he does it to feel better about his place in the world. The politically correct are so violent in the assertion of their ideals because they crave the subjugation of the mainstream and a recognition of their “rightness.” They don’t want people to “accept” their beliefs as tolerable. They want people to adore their beliefs as supreme. They want every man, woman and child to reinforce their ideals without question. The malfunction of this philosophy is that zealots are never finished. They must always find new ways to feel superior to others. So they continuously engineer new taboos and new sins, no matter how ridiculous, so that they can forever look down upon the laymen. Because of this, there will never be an end to PC law. It will go on forever, labeling numerous social interactions and stances as “aberrant” — never satiated and never satisfied. PC Futurism The young are always searching for ways to feel wiser than the old. This is just the natural way of things, at least in America. Now, I know from ample experience that age does not necessarily denote intelligence. I’ve met plenty of idiotic people who had decades of time to learn from their mistakes but didn’t. But the young, many of whom lack time and struggle, have a terrible tendency to either pretend that they have “seen it all.” Or they pretend that the very atmosphere of the day somehow gives them a greater insight than generations past. The reality is that most of them know very little of import. This attitude comes from a philosophy called “futurism” (popular with the Nazis and the Soviets), which holds that all the beliefs and discoveries of the past mean nothing compared to the beliefs and discoveries of the present. This ideology is alluring to the young, because it gives them a way to feel intellectually dominant over older and more “ignorant” people who are “behind the times.” Political correctness is basically an appendage of futurism. By labeling elders as social bigots and products of a barbaric era who don’t understand the “lingo” of the PC elite, liberalism draws in and collectivizes the fledgling left. Younger generations are given a cultural avenue toward high priesthood, a right of passage usually reserved for the aged. They get to skip ahead past all the trials and tribulations of life and announce their deep awareness of the so-called greater good. The values of forefathers past become archaic scrawlings of racist and prejudiced cavemen who could never appreciate the “brilliance” of today’s academia. The inherent freedoms of natural law that have existed since time began are nothing more than obstacles to them, standing in the way of a new and better world where they have somehow outsmarted human instinct and centuries of history. PC Collectivism The very foundation of political correctness is solidified in a desire for the perpetual reinforcement of one’s worldview. PC people need every other person around them to sing the praises of their pure virtues. If I happen to disagree with the idea of gender bending, for instance, as some kind of socially persecuted subculture that needs overt government protection, then I am, of course, labeled a hateful Neanderthal. If I stand in opposition to the concept of victim group status in general, in which the state demands that designated “minorities” be given special treatment regardless of the status of the individual, then I become a racist political fossil ignorant of the bigger picture. You see, if you disagree with PC culture in any way (even if that way is rational), you cannot win. To refute political correctness is to refute the god of the New Age; and to refute their god, even with concrete logic, is blasphemy. This kind of blind faith in political correctness lends itself entirely to collectivism. The average person begins to think that without a viable appreciation of the philosophy, he may be left out or cast aside. Most people do not know how to function without the approval of others. Therefore, even if a father happens to have a healthy skepticism over the idea of a make-up wearing fifth-grade boy waltzing into his daughter’s school bathroom, he is likely to keep his mouth shut, because to speak out would be a risk to his position within the group, or the community. PC Control The prevalence of PC philosophy is not subtle. I have always found it interesting that political correctness seems to consistently support the demands of the state. Our system smothers children with it in public school, our workplaces are rife with the propaganda for fear of lawsuits and colleges are veritable breeding grounds for the PC oligarchy. Politically correct culture goes out of its way to constantly test others to make sure they are also true believers. This is exactly what is going on in the following interview with Jerry Seinfeld, who, to his credit, dashes the nonsense to the ground.
The truth is some discrimination is healthy, and some discord is needed for a society to remain balanced. As long as we don’t allow our disagreements to end in the physical harm of others, then those disagreements are our natural-born right. If you are a racist (this goes for non-whites as well), that’s fine. Just don’t act out your racism in a violent way around me, or I will have to put you down permanently. If you have a distaste of homosexuality (or asexuality, as seems popular nowadays), then whatever, I don’t care. You shouldn’t have to have organizations like GLAAD (formerly the Gay & Lesbian Alliance Against Defamation) in your face attempting to force you to put on a smile for gaydom, coordinate man-on-man heavy-petting protests in your favorite restaurant (Chick-fil-A) while you’re trying to eat a damn sandwich, push boys into the girl’s bathroom, or trying to shut down your favorite TV shows because the stars happen to share your views (“Duck Dynasty”). Now, PC proponents will argue that the very existence of bigotry does harm to society as a whole, and it must be educated out of individuals. Frankly, I see that kind of utopian fascism as a far greater threat to society as a whole than bigotry ever will be. Look at where we are today because of the PC nightmare! We have a Nation on the verge of industrial and economic collapse, partly because companies are forced by law or persuaded by government subsidies to hire people with victim group status, even if they are unqualified, while ignoring highly qualified people who just happen to have lighter skin. We have children not even old enough to discover their own inherent character being clinically diagnosed with “gender dysphoria” by a psychiatric community of quacks, which conjured most PC terminology out of thin air. We have boys who are told that they are stunted for acting out their natural male impulses and girls who are told that true femininity is weakness and that they should act more masculine. We have a mainstream culture that coddles and infantilizes young adults, young girls who think promiscuity is the key to womanhood and that motherhood is disgusting (which I find rather ironic), and young men who have no testicular fortitude and no clue how to take charge of their own lives. The American family unit has been completely destroyed. We have women who are ashamed to set aside careers to raise children because feminism frowns upon “breeders” who bring down the whole gender. We have men who abandon their children and refuse to take responsibility. And we have a weak-minded population addicted to collective affirmation and unwilling to think outside the box for fear of being shunned and shamed. Honestly, I can’t see a single redeeming quality to political correctness other than the fact that those people who espouse it do so loudly and obnoxiously, making it easier for me to identify and avoid them or to take special note of them as an obvious zombie threat in an America swiftly declining into mundane oblivion. |
| The Chinese Dominoes Are About To Fall: Complete List Of Upcoming Trust Defaults Posted: 19 Feb 2014 07:03 PM PST As has been widely reported on these pages in the past month, after a near-reality experience almost claimed the first material Chinese shadow banking default, the Chinese government and central bank did what they do best: a mysterious "white knight" emerged out of nowhere, and bailed out the Credit Equals Gold #1 Trust. A few days later, we reported that China Development Bank lent 2 billion yuan to coal company Shanxi Liansheng, which owes almost 30b yuan to lenders including banks, trusts and asset management firms. And while we know how "difficult" it was for China to do the wrong thing and encourage moral hazard, despite repeated assurances by one after another PBOC director that this time the central bank means business, we have good news: these two narrowly averted Trust defaults are just the beginning - it is all downhill from here. As Bank of America reports in an analysis by David Cui, the Trust defaults are about to get hot and heavy. To wit:
From BofA's David Cui 12 potential defaults reported by the media Table 1 summarizes the information on the 12 major potential defaults in the trust industry that have been reported by the media. Most of them are coal mine related and heavily concentrated in one area, Shanxi Province. So far it seems to us that most of them may get extended upon the due date. The only exception over the next few months appears to be a product issued by China Credit Trust for a lead and zinc miner in Sichuan, Nonggeshan. Even without any major default over the next few months, the process of debt restructuring can be messy and weigh heavily on market sentiment.
19 Feb 2014, Rmb109mn borrowed by Liansheng & arranged by Jilin Trust
(Shanghai Securities News, 2/11; Economic Information, 2/13) 21 Feb 2014, Rmb500mn borrowed by Liansheng & arranged by Shanxi Trust
(Caiing 1/27; China Securities Journal, 1/27; 21st Century Business Herald, 2/14) 07 Mar 2014, Rmb664mn borrowed by Liansheng & arranged by Changan Trust
(Caiing 1/27; China Securities Journal, 1/27; 21st Century Business Herald, 2/14) 31 Mar 2014, Rmb196mn borrowed by Magic Property & arranged by CITIC Trust
(Source: Financial Planning Weekly, 3/6/2013; Guangzhou Daily, 4/6/2013, Boxun, 5/10/2013) 14 May 2014, Rmb1.5bn borrowed by Liansheng & arranged by China Jiangxi International Trust
(Caiing 1/27; China Securities Journal, 1/27; 21st Century Business Herald, 2/14) 30 May 2014, Rmb140mn borrowed by Nonggeshan & arranged by China Credit Trust
(Source: 21st Century Business Herald, 31/7/2012; Caiing, 1/27) 25 Jul 2014, Rmb1.3bn borrowed by Xinbeifang & arranged by China Credit Trust
(Source: China Securities Journal, 1/15) 27 Jul 2014, Rmb319mn borrowed by Hongsheng & arranged by Huarong Trust
(21st Century Business Herald, 20/12/2013) 7 Sept 2014: Rmb400mn borrowed by Zengdai & arranged by CCB Trust
(Source: Securities Daily, 9/7/2013; CCB Trust) 20 Nov 2014, Rmb600mn borrowed by Liansheng & arranged by China Jiangxi Int'l Trust
(Caiing 1/27; China Securities Journal, 1/27; 21st Century Business Herald, 2/14) 23 Dec2014: Rmb1.1bn borrowed by Xiaoyi Dewei & arranged by China Resources Trust
(Source: Financial Planning Weekly, 11 Nov 2013) 15 Jan 2015, Rmb1.2bn borrowed by Hongsheng's owner & arranged by Minmetals Trust
(21st Century Business Herald, 20/12/2013) 2Q/3Q 2014 – the next peak maturing period for collective trusts We consider the trust market the most vulnerable part of the major financing channels for companies, i.e. loan, corporate bond and trust. The quality of the borrowers in the trust market tends to among the lowest. Within the trust market, collective trust products, i.e. those sold to more than one investor, tend to be risker than single trust products, i.e. those sold to a single investor. This is because investors in single trust products tend to be more substantial in resources, thus most likely more sophisticated in their risk control. The Wind database lists close to 12,000 collective trust products, worth Rmb1.34tr, which cover roughly half of the collective trust market (Rmb2.72tr as of the end of 2013). It has reasonably good quality data series on the issuing dates and amounts raised. However, data on maturing dates are sporadic. We estimate that the average duration of the trust products is around 2 years. Based on this assumption and the issuing dates, we have mapped out a rough maturing profile of the collective trust market. As we can see from Chart 1, 2Q and 3Q this year will be the next peak maturing period for this market.
Coal mine trusts maturity schedule We went through the offering documents of the top 200 collective trust products by size (the smallest being Rmb400mn), worth some Rmb145bn in total. They represent roughly 10% of the trust products in the Wind database and 5% of the overall collective trust market. We identified the industries of the issuers, the regions where their businesses are located and the maturity dates of the products. Table 2 summarizes the results.
We believe that coal mine trusts are the most likely to default over the coming months because 1) coal price has dropped sharply in recent quarters; 2) most of the issuers are private enterprises; and 3) they tend to be from provinces whose governments rely heavily on resources related income, e.g., Shanxi and Inner Mongolia. On the other hand, the property market has been reasonably buoyant in recent times while LGFVs generally have access to re-financing until the implicit guarantee is removed (a whole different topic worthy another report later). Based on the maturing schedule of the top 200 collective trust products, we expect more noise about coal mine trust defaults around Apr, June and July (Chart 2).
Table 3 lists the coal mine trust products that are in our study.
For the trust market, we only have data on approximately half of the collective trust market, which in turn, accounts for about a quarter of the overall trust market. So essentially, we only covered about 1/8 of the total trust market with our analysis. Single trusts are less risky than collective trusts. Nevertheless, if the solvency issue is a systemic problem as we expect, many single trusts will ultimately default by our assessment. Our analysis has largely zoomed in on coal mine trusts because they represent the clear and present danger given how depressed the coal market has been. However, property related trusts may come under increasing pressure as we sense that the property market may be turning south in small cities. As a result, some of those related products may threaten to default reasonably soon. Then we have the big unknown – LGFV trusts. Whether and when they may default is largely a political decision in our opinion. |
| Charles Gave On Gold As A ‘Deflation’ Hedge Posted: 19 Feb 2014 05:21 PM PST From Charles Gave of GaveKal Gold As A 'Deflation' Hedge Economists have had many market puzzles to ponder in this era of monetary excess, going back to Alan Greenspan's long bond "conundrum" nearly a decade ago. The latest market conundrum is gold: why did it begin rallying on news that US liquidity growth would be slowing (the taper), and why has it remained strong despite weak global CPI prints and flagging broad money growth the world over. This is particularly hard to understand for Organization for Economic Co-operation and Development investors, who think of gold as an inflation hedge. But it is less counterintuitive for the emerging markets. To explain, let us for simplicity's sake divide the world into two categories: 1) those countries which have foreign exchange controls; and 2) those which do not. The first category will be comprised mostly of emerging economies, the second mostly of developed economies. If you are a rich person in one of the countries with capital-account restrictions, it can be difficult to diversify your assets abroad. In quite a few of these countries, even if one cannot for example buy a US government bond, one can buy gold, often produced locally. So gold becomes the substitute for international assets in a diversified portfolio. Since the monetary history of quite a few of these countries is checkered at best (hyperinflation, defaults, taxes on capital flows, devaluations, etc), gold becomes the best available hedge against bad policy, as well as against a bear market in the local stock market. And it works—see the chart of Brazil as an example.
Of course, emerging markets are often as vulnerable to the vicissitudes of foreign capital flows as they are to domestic policy. Fed policy risk offers another motive for gold-hoarding in emerging markets (EM). If US monetary policy adds to the volatility of EM exchange rates, then residents need to hedge against this—and, as mentioned, their hedging options are limited. This is how we get the bizarre situation where holding gold protects against devaluation and growth/deflationary pressures in the emerging markets. Gold will keep rising as long as US policy is exporting volatility—we see no imminent change in this situation under Janet Yellen's Federal Reserve. As the French economist Frederic Bastiat told us long ago, with any economic policy, there is what we see, and what we don't see. The markets are looking for the effects of Fed policy in key US data points, like the employment figures. Yet the exchange rates of economies that now make up a significant portion of the global growth pie—Brazil, Indonesia, India, China, etc—are also quite relevant to the future of the financial markets in the developed world. |
| Posted: 19 Feb 2014 05:16 PM PST Jim, If gold is all about faith in the fiat alternative, then this makes an awful lot of sense. What better way to create faith in the fiat currency and overall soundness of the economy, than to paint all government statistics with smiley faces? As long as people believe… all will be well. But fear... Read more » The post Jim’s Mailbox appeared first on Jim Sinclair's Mineset. |
| Guest Post: Does The Trail Of Dead Bankers Lead Somewhere? Posted: 19 Feb 2014 05:02 PM PST Submitted by Michael Snyder of The Economic Collapse blog, What are we to make of this sudden rash of banker suicides? Does this trail of dead bankers lead somewhere? Or could it be just a coincidence that so many bankers have died in such close proximity? I will be perfectly honest and admit that I do not know what is going on. But there are some common themes that seem to link at least some of these deaths together. First of all, most of these men were in good health and in their prime working years. Secondly, most of these "suicides" seem to have come out of nowhere and were a total surprise to their families. Thirdly, three of the dead bankers worked for JP Morgan. Fourthly, several of these individuals were either involved in foreign exchange trading or the trading of derivatives in some way. So when "a foreign exchange trader" jumped to his death from the top of JP Morgan's Hong Kong headquarters this morning, that definitely raised my eyebrows. These dead bankers are starting to pile up, and something definitely stinks about this whole thing. What would cause a young man that is making really good money to jump off of a 30 story building? The following is how the South China Morning Post described the dramatic suicide of 33-year-old Li Jie...
If this was just an isolated incident, nobody would really take notice. But this is now the 7th suspicious banker death that we have witnessed in just the past few weeks...
So did all of those men actually kill themselves? Well, there is reason to believe that at least some of those deaths may not have been suicides after all. For example, before throwing himself off of JP Morgan's headquarters in London, Gabriel Magee had actually made plans for later that evening...
And 57-year-old Richard Talley was found "with eight nail gun wounds to his torso and head" in his own garage. How in the world was he able to accomplish that? Like I said, something really stinks about all of this. Meanwhile, things continue to deteriorate financially around the globe. Just consider some of the things that have happened in the last 48 hours... -According to the Bangkok Post, people are "stampeding to yank their deposits out of banks" in Thailand right now. -Venezuela is coming apart at the seams. Just check out the photos in this article. -The unemployment rate in South Africa is above 24 percent. -Ukraine is on the verge of total collapse...
-This week we learned that the level of bad loans in Spain has risen to a new all-time high of 13.6 percent. -China is starting to quietly sell off U.S. debt. Already, Chinese U.S. Treasury holdings are down to their lowest level in almost a year. -During the 4th quarter of 2013, U.S. consumer debt rose at the fastest pace since 2007. -U.S. homebuilder confidence just experienced the largest one month decline ever recorded. -George Soros has doubled his bet that the S&P 500 is going to crash. His total bet is now up to about $1,300,000,000. For many more signs of financial trouble all over the planet, please see my previous article entitled "20 Signs That The Global Economic Crisis Is Starting To Catch Fire". Could some of these deaths have something to do with this emerging financial crisis? That is a very good question. Once again, I will be the first one to admit that I simply do not know why so many bankers are dying. But one thing is for certain - dead bankers don't talk. Everyone knows that there is a massive amount of corruption in our banking system. If the truth about all of this corruption was to ever actually come out and justice was actually served, we would see a huge wave of very important people go to prison. In addition, it is an open secret that Wall Street has been transformed into the largest casino in the history of the world over the past several decades. Our big banks have become more reckless than ever, and trillions of dollars are riding on the decisions that are being made every day. In such an environment, it is expected that you will be loyal to the firm that you work for and that you will keep your mouth shut about the secrets that you know. In the final analysis, there is really not that much difference between how mobsters operate and how Wall Street operates. If you cross the line, you may end up paying a very great price. |
| The Gold Price Gave Back $4.10 Today Closing at $1,320.60 Posted: 19 Feb 2014 04:40 PM PST Gold Price Close Today : 1320.60 Change : -4.10 or -0.31% Silver Price Close Today : 21.844 Change : -0.047 or -0.21% Gold Silver Ratio Today : 60.456 Change : -0.057 or -0.10% Silver Gold Ratio Today : 0.01654 Change : 0.000016 or 0.10% Platinum Price Close Today : 1422.90 Change : 0.00 or 0.00% Palladium Price Close Today : 735.20 Change : 1.75 or 0.24% S&P 500 : 1,828.75 Change : -12.01 or -0.65% Dow In GOLD$ : $251.09 Change : $ (0.62) or -0.25% Dow in GOLD oz : 12.146 Change : -0.030 or -0.25% Dow in SILVER oz : 734.32 Change : -2.53 or -0.34% Dow Industrial : 16,040.56 Change : -89.84 or -0.56% US Dollar Index : 80.220 Change : 0.170 or 0.21% After a twelve-day winning streak (less one day for gold) it wasn't surprising that silver and GOLD PRICES took a rest. The gold price gave back $4.10 to $1,320.60. The SILVER PRICE lost 4.7 cents to 2184.4c. A tiny dip like today's is no cause for worry. Bigger question is what silver and GOLD PRICES will do as the correction progresses. Best if gold holds above $1,300 and silver above 2100c. Since none of us has a crystal ball, we can only buy the dips and hope. It would, however, be very unusual for any market to make a breakout as dramatic as silver's on Friday, following 2-1/2 months of range trading and coming off a six-month double bottom simply to wilt and drop. I don't expect that, but bull markets climb a wall of worry. In another stunning display of a central bank's ability to promote instability in markets, the FOMC meeting minutes published today show that the Fed MIGHT back off its long standing promise to keep interest rates low until frogs fly. Is this stupid? Let me count the ways. First, the Fed has addicted stocks to low interest rates and printing money, so whenever they breathe a hint of change, stocks tremble like they had the DTs. Second, rising interest rates normally accompany a recovering stock market. Third, low rates are devastating and will blow up pension and retirement plans and killing savers. Fourth, low rates keep money flowing to uneconomic businesses rather than cleansing the economy by cutting them off with high rates. Is that enough? Fed's FOMC minutes depressed stocks today. Dow plumped down 89.84 (0.56%) to 16,040.56. S&P500 sighed and sank 12.01 (0.65%) to 1,828.75. Dow in Gold still hasn't closed below its 200 DMA (11.91 oz) yet. Today it lost only 0.42% to 12.15 oz (G$251.16 gold dollars). Dow in silver fell minutely, 0.1%, to 734.12 oz. US DOLLAR INDEX bounced predictably off the bottom boundary of its range -- predictably but not meaningfully, up 17 basis points (0.21%) to 80.22. Everything about the dollar points lower, but who knows what might make the Nice Government Men change their minds? Euro backed off 0.17% to $1.3736, but remains about that old uptrend line so should inch higher. Yen rose 0.03% to 97.73. Moving sideways. Argentum et aurum comparenda sunt -- -- Gold and silver must be bought. - Franklin Sanders, The Moneychanger The-MoneyChanger.com © 2014, The Moneychanger. May not be republished in any form, including electronically, without our express permission. To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $3,130.00; silver's primary is up targeting 16:1 gold/silver ratio or $195.66; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold or 18 ounces of silver. or 18 ounces of silver. US $ and US$-denominated assets, primary trend down; real estate bubble has burst, primary trend down. WARNING AND DISCLAIMER. Be advised and warned: Do NOT use these commentaries to trade futures contracts. I don't intend them for that or write them with that short term trading outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures. NOR do I recommend investing in gold or silver Exchange Trade Funds (ETFs). Those are NOT physical metal and I fear one day one or another may go up in smoke. Unless you can breathe smoke, stay away. Call me paranoid, but the surviving rabbit is wary of traps. NOR do I recommend trading futures options or other leveraged paper gold and silver products. These are not for the inexperienced. NOR do I recommend buying gold and silver on margin or with debt. What DO I recommend? Physical gold and silver coins and bars in your own hands. One final warning: NEVER insert a 747 Jumbo Jet up your nose. |
| The Gold Price Gave Back $4.10 Today Closing at $1,320.60 Posted: 19 Feb 2014 04:40 PM PST Gold Price Close Today : 1320.60 Change : -4.10 or -0.31% Silver Price Close Today : 21.844 Change : -0.047 or -0.21% Gold Silver Ratio Today : 60.456 Change : -0.057 or -0.10% Silver Gold Ratio Today : 0.01654 Change : 0.000016 or 0.10% Platinum Price Close Today : 1422.90 Change : 0.00 or 0.00% Palladium Price Close Today : 735.20 Change : 1.75 or 0.24% S&P 500 : 1,828.75 Change : -12.01 or -0.65% Dow In GOLD$ : $251.09 Change : $ (0.62) or -0.25% Dow in GOLD oz : 12.146 Change : -0.030 or -0.25% Dow in SILVER oz : 734.32 Change : -2.53 or -0.34% Dow Industrial : 16,040.56 Change : -89.84 or -0.56% US Dollar Index : 80.220 Change : 0.170 or 0.21% After a twelve-day winning streak (less one day for gold) it wasn't surprising that silver and GOLD PRICES took a rest. The gold price gave back $4.10 to $1,320.60. The SILVER PRICE lost 4.7 cents to 2184.4c. A tiny dip like today's is no cause for worry. Bigger question is what silver and GOLD PRICES will do as the correction progresses. Best if gold holds above $1,300 and silver above 2100c. Since none of us has a crystal ball, we can only buy the dips and hope. It would, however, be very unusual for any market to make a breakout as dramatic as silver's on Friday, following 2-1/2 months of range trading and coming off a six-month double bottom simply to wilt and drop. I don't expect that, but bull markets climb a wall of worry. In another stunning display of a central bank's ability to promote instability in markets, the FOMC meeting minutes published today show that the Fed MIGHT back off its long standing promise to keep interest rates low until frogs fly. Is this stupid? Let me count the ways. First, the Fed has addicted stocks to low interest rates and printing money, so whenever they breathe a hint of change, stocks tremble like they had the DTs. Second, rising interest rates normally accompany a recovering stock market. Third, low rates are devastating and will blow up pension and retirement plans and killing savers. Fourth, low rates keep money flowing to uneconomic businesses rather than cleansing the economy by cutting them off with high rates. Is that enough? Fed's FOMC minutes depressed stocks today. Dow plumped down 89.84 (0.56%) to 16,040.56. S&P500 sighed and sank 12.01 (0.65%) to 1,828.75. Dow in Gold still hasn't closed below its 200 DMA (11.91 oz) yet. Today it lost only 0.42% to 12.15 oz (G$251.16 gold dollars). Dow in silver fell minutely, 0.1%, to 734.12 oz. US DOLLAR INDEX bounced predictably off the bottom boundary of its range -- predictably but not meaningfully, up 17 basis points (0.21%) to 80.22. Everything about the dollar points lower, but who knows what might make the Nice Government Men change their minds? Euro backed off 0.17% to $1.3736, but remains about that old uptrend line so should inch higher. Yen rose 0.03% to 97.73. Moving sideways. Argentum et aurum comparenda sunt -- -- Gold and silver must be bought. - Franklin Sanders, The Moneychanger The-MoneyChanger.com © 2014, 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. |
| FOMC Minutes and Thoughts on Forward Guidance Posted: 19 Feb 2014 04:37 PM PST As high income economies improve and the financial sectors stabilize, central bankers understandably and rightly, want to move away from the unorthodox policies that were necessary to avoid an even larger collapse and more suffering. At the same time, they want to reassure investors, businesses and households that they do not intend on increasing interest rates any time soon. The process by which central banks do this has been dubbed forward guidance.
Initially, as the Bank of Canada Governor, Carney used a date approach. This approach was eschewed by the Bank of England and the Federal Reserve for more a more data specific approach. Both central banks picked an unemployment rate, 7.0% and 6.5% respectively. To varying degrees, both central banks noted, for anyone who wanted to listen, that these were thresholds for which policy would be re-examined, not triggers a for a change in policy.
Both of the thresholds are being approached, dare one say before most observers, including those at the central banks expected. The substance of forward guidance must evolve with economic conditions. Those who argued that the Carney would ditch forward guidance confuse the communication mechanism with its substance. The FOMC minutes for last month's meeting show that US officials are also wrestling with the evolution of its forward guidance.
There seems to be a finite number of possible tactics. Officials could, for example, simply lower the current thresholds. This, however, may undermine the credibility of forward guidance. Another alternative could be to adopt a more qualitative approach. This is what the BOE seems to be doing.
A third possible course for the Federal Reserve is to emphasize its third mandate: financial stability. The problem with this is that if financial stability was threatened the Fed would more likely have to be accommodative than restrictive. A fourth option would be to adopt a different threshold, to wit: The FOMC does not anticipate the need to increase interest rates while the core PCE deflator is below, say 1.7% (it stood at 1.2% at the end of last year). The fifth option is to find a different channel to communicate one's intention. The Federal Reserve can make it point, for example, through its quarterly interest rate forecasts.
No doubt with some many business people and economists and various interests and sensibilities represented, there are bound to be advocates of each course. Judging from the January FOMC meeting, it is not clear the Fed has decided yet. Put in a larger context, we suspect the Fed will opt for the more qualitative approach and placing more emphasis on signaling function of its interest rate forecasts.
In some ways, though, this evolution of the forward guidance communication style is largely a question of adaptation not speciation. This is also an important take away from the FOMC minutes. Not only did Bernanke put the Fed on the tapering path, but also raised the cost of deviating from that path.
Even before the minutes, it seemed clear to us, that the bar to stop tapering or speed it up (which seems somewhat less relevant now in the face of the dramatic slowing of the US economy to something probably around 1.5% annualized, based on the current information set and conservative projections) is set high. The minutes reinforce this sense.
The key though is not how the economy does. Rather it is what the economy does relative to the Fed's outlook. The minutes make clear that last month, officials recognized that the pace of the economy in H2 were due to temporary factors that would likely be reversed in the H1 2014. This means that there should be little doubt that the Fed continues to taper. Forward guidance is the communication style to manage expectations. Tapering, that is policy.  |
| Posted: 19 Feb 2014 04:16 PM PST
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You know what's it like, the driver stands there in front of the car that has just hit you up the back while looking at something happening down the street rather than checking on you hitting your breaks…and yet, he says "sorry, but you stopped too quickly, it wasn't my bad driving". Why is it that people just refuse to admit the truth even where it comes up and slaps them in the face? It's exactly the same with the Death of the Dollar. Denial is the first stage in the mourning process that people go through when they have lost a loved one. Yes, just the mere fact that there is many an American out there who is actually denying this means that the Dollar is lying feet up on its back, six feet under already today. They are simply, in denying the fact, espousing the 7 stages of bereavement. The Dollar is dead. Today it's Australia that will be sending flowers to the Americans. ASX, the Australian Stock-Exchange operator and the Bank of China announced today that they are going to provide a Yuan settlement service between the two countries by the end of the first half-year 2014. China represents the biggest trading partner for the Australian market and trading in Dollars has no sense today. Transactions have been increasingly made in Yuan rather than the Dollar over the past few years. This new agreement comes just after last October's agreement between the Eurozone and China and the currency-swap deal. For all of those out there that will be screaming from the rooftops that China is slowing down, that the economy is under-performing (incidentally, they are still performing way better than any of us in the western world) the Chinese currency is one of the top traded currencies today in the world, and Australia has just said they don't care if the economy is slowing down. The reason why the deal has been struck is because they are looking at China in the long-term view. Since September 2013, the Yuan has been in the top ten of tradable currencies, according to research carried out by the Bank of International Settlements. The Yuan saw a jump from 17th position in 2010 to 9th place in 2013. There may be a slow-down in the economy and there may be problems with the structural reforms undertaken by the government, but in the long-term the Yuan will be traded more and more. The Australians are proving that today. The financial market reforms have been centered on liberalization of the capital account and the convertibility of the Yuan. The only countries that offer complete convertibility at the moment are the USA, Japan and Australia. Certainly the shadow-banking problems are far from over. There will be more that come out of the woodwork in the coming weeks. It is estimated that 40% of the 10 trillion Yuan in trust products that are used in shadow banking will mature in 2014. That means that we could be in for a lot more examples of the $126 million-worth of products issued by Jilin Province Trust that defaulted on the repayment to investors over the past couple of weeks after having made loans to the failing coal company Shanxi Liansheng Energy (at the same time as 6 other trusts also made loans of up to 5 billion Yuan to this company that was already bankrupt and dead). 80%of trust-product principal is going to be repaid to investors between 2014 and 2016. That could spell trouble. Bailing out trust investors continually will bring about problems of financial stability of the country. But, in the long-term there is the belief that the Yuan will succeed. All of that is true, but the Dollar may well be dead completely, and buried, before the Yuan fails. Remember it's not the value of the Dollar that is important or whether or not the Yuan can be a valued asset in the world to trade with, it's the perception that we, as consumers and countries, actually have of that currency. The Australians are showing that the Yuan has just been perceived as possibly of greater value than the Dollar. Tissue to dry your eyes? Originally posted: Goodbye Dollar, Hello Yuan You might also enjoy:London Housing: Same Old Story | What's With the Chocolate? | Banks: You Can Bank on It! | China: What Happened to the Gold Data? Stiglitz: "Sick"! | Hyperinflation – 10 Worst Cases | Death of the Dollar | You're Miserable USA! | Emerging Markets: Lock, Stock and Barrel | End of the Financial World 2014 | Kristallnacht on Wall Street? Bull! | China's Credit Crunch | Working for the Few | USA:The Land of the Not-So-Free
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| Nick Santiago -- Central Banks Trying To Banish Fear 07.Feb.14 Posted: 19 Feb 2014 03:30 PM PST www.FinancialSurvivalNetwork.com presents Nick "InTheMoneyStocks" Santiago called this quite a while ago. He believes that stocks topped and Gold and Silver have bottomed. He disagreed with Martin Armstrong's call that the Dow was going to 32,000. He might get the last laugh, judging from the... [[ 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! ]]  |
| Dr. Paul Craig Roberts -- Gold and Gangster Capitalism Posted: 19 Feb 2014 03:00 PM PST Andy Duncan has the pleasure to interview former Assistant Secretary of the Treasury, Dr. Paul Craig Roberts. Andy gets straight to it and asks Dr. Roberts about his view on a manipulated price of gold. Dr. Roberts elaborates on how he sees what has occurred since early April, whom was behind it... [[ 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! ]]  |
| ECONOMIC COLLAPSE 2014 -- China, Japan, Soros Begin MASS SELL-OFF Posted: 19 Feb 2014 01:30 PM PST China Sold Second-Largest Amount Ever Of US Treasurys In December: And Guess Who Comes To The Rescueat a time when America's two largest foreign creditors, China and Japan, went on a buyers strike, the entity that came to the US rescue was BelgiumSoros cuts J.C. Penney, trims Herbalife, others... [[ This is a content summary only. Visit http://www.GoldSilverNewsBlog.com or http://www.newsbooze.com or http://www.figanews.com for full links, other content, and more! ]]  |
| Gold Daily and Silver Weekly Charts Posted: 19 Feb 2014 01:14 PM PST |
| Gold Daily and Silver Weekly Charts Posted: 19 Feb 2014 01:14 PM PST |
| Australian comics satirize the failure of central banking Posted: 19 Feb 2014 01:12 PM PST 4:16p ET Wednesday, February 19, 2014 Dear Friend of GATA and Gold: For some reason 24hGold.com posted the other day a link to the 2008 segment of the unfortunately short-lived Australian news parody program "Newstopia" satirizing the Reserve Bank of Australia. The skit is always worth watching for its suggesting how central banking fails the public interest. The "Newstopia" skit features comedian Shawn Micallef as a news anchor interviewing the actor Nicholas Bell, who plays the secretary of the Reserve Bank of Australia, "Tony Froth," and who smugly explains the central bank's manipulation of interest rates to control incomes, production, and prices in the name of keeping the national economy "on an even keel." ... Dispatch continues below ... ADVERTISEMENT A Personal Touch in Buying Precious Metals If you've not secured your allocation of precious metals and numismatic coins, 2014 may be the last year to get them at affordable and undervalued prices. With huge amounts of gold leaving the West for Asia, the future availability of precious metals is very much in doubt. All Pro Gold has competitive pricing on all bullion and numismatic products -- and offers prompt delivery too. Long-time GATA supporters Fred Goldstein and Tim Murphy are glad to answer any questions or concerns about acquiring the monetary metals. All Pro Gold has an extensive electronic library of articles from the world's top market analysts. Learn more at www.allprogold.com or write to Fred and Tim at info@allprogold.com or telephone them at 1-855-377-4653. Micallef becomes skeptical, replying: "Doesn't that put me in the same position -- either I have more money to buy expensive things or less money to buy the same things when they're cheaper?" Indeed, while GATA does not advocate returning to some form of the gold standard -- GATA wants central banks out of the gold market entirely and forced to be completely transparent -- in light of the worsening turmoil in the financial markets under central banking and the ever more extreme and undemocratic interventions of central banks, adherents of central banking well might be asked how returning to a gold standard could be any worse. Unfortunately little is being done to extract accountability from central banks even in nominally democratic countries. The "Newstopia" skit is not quite 3 1/2 minutes long, is headlined "'Newstopia' Explains the Reserve Bank," and is posted at You Tube here: http://www.youtube.com/watch?v=NIfH0vY2ANA CHRIS POWELL, Secretary/Treasurer Join GATA here: Mines and Money Hong Kong http://www.minesandmoney.com/hongkong/ * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT Jim Sinclair plans seminars in Los Angeles and San Diego Gold advocate Jim Sinclair's next market analysis seminars will be held in Los Angeles from 11 a.m. to 2 p.m. on Saturday, March 8, and in San Diego from 2 to 6 p.m. the following day, Sunday, March 9. Details, including registration information, are posted at Sinclair's Internet site, JSMinset.com, here: http://www.jsmineset.com/qa-session-tickets/ |
| Market Collapse immenant as 8th Banker dies Posted: 19 Feb 2014 01:03 PM PST 8th Banker dies as market collapse draws closer by Masterofmanythings HONG KONG (INTELLIHUB) — All month we have been reporting on the suspicious string of apparent suicides that have hit the financial industry. Multiple bankers have been found dead in recent weeks, all of them have been ruled... [[ 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! ]]  |
| Trust Is Lost & The Financial Destruction Will Only Get Worse Posted: 19 Feb 2014 01:00 PM PST  On the heels of stocks struggling, crude oil breaking $103, and gold and silver consolidating recent gains, today a man out of Europe who has been extremely accurate with his calls on the gold market sent King World News a tremendous piece which warns that trust in the system has now been lost, and the financial destruction will only get worse from here. Below is what Ronald-Peter Stoferle of Incrementum AG out of Liechtenstein had to say.This posting includes an audio/video/photo media file: Download Now |
| GOLD Outperforming the Stock Market in 2014 so far Posted: 19 Feb 2014 10:33 AM PST GOLD PRICE UP While BITCOIN Price CRASHES - GOLD is Still The True SAFE HAVEN Imagine a world in which you can buy anything in secret. No banks. No fees. No worries inflation will make today's money worth less tomorrow. The digital currency Bitcoin promises all these things. And while it's... [[ 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! ]]  |
| Here Is The Roadmap To $4,000 Gold & Skyrocketing Silver Posted: 19 Feb 2014 09:57 AM PST  In the aftermath of a significant move in gold and silver prices to start 2014, today Kevin Wides out of Switzerland sent King World News a fantastic piece which illustrates the roadmap to $4,000 gold and skyrocketing silver prices. Below is what Wides had to say along with his outstanding charts: This posting includes an audio/video/photo media file: Download Now |
| Gold and Silver Trading - Silver's Price Upswing and Euro's Resistance Posted: 19 Feb 2014 09:28 AM PST In short: In our opinion, no positions are currently justified from the risk/reward perspective. Not much happened in gold and mining stocks this week, but silver moved higher. We sometimes saw this type of divergence right at the local tops, but it was not an extremely reliable sign. Let’s take a closer look (charts courtesy of http://stockcharts.com). |
| Gold and Silver Margin Call - The Real Reason for Bear Stearns Collapse Posted: 19 Feb 2014 09:20 AM PST Ted Butler has put one of his newsletters into the public domain. It raises some interesting points. As you may recall Bear was suffering losses in a number of financial instruments at the time. But there has not been serious discussion about their precious metal positions. |
| The Essentialist’s Glossary: Updated for the ‘Teens (N-Z) Posted: 19 Feb 2014 09:00 AM PST Today, we bring you the concluding third of our Essentialist Glossary. The first two thirds can be found here: The Essentialist’s Glossary: Updated for the ‘Teens (A-F), and here The Essentialist’s Glossary: Updated for the ‘Teens (G-M), respectively.
Nanocap
NSA
Obamacare
Old Alan Greenspan
Penny Stock
Personalized Medicine
Petrodollar
P/E Ratio:
QE
QEfinity
Regenerative "Medicine"
Robert Triffin
Small Towns and Old Towns
Schwer Uberlegen
Sensation Mongers
Significant Base Formation
Speculating
Stock Analyst
Stock Split
Tapir
Triffin Dilemma
Unified Theory of Greed (UTG)
Value Investing
Wissen
Yahoo!
Young Al Greenspan
ZIRP
Zugzwang
3D Printing Ed. Note: Perhaps you have your own definitions? Send 'em to us here: dr@dailyreckoning.com. After we receive them, we’ll screen them to make sure they pass the Presbyterian standard… then include them in the glossary. Soon we'll have a permanent section for them. In the meantime, sign up for the FREE Daily Reckoning email edition, to read them before anyone else. |
| India takes back 31 coal blocks from private firms Posted: 19 Feb 2014 08:09 AM PST The coal ministry is taking back the 31 blocks allocated to private firms over delays in developing them, jeopardising billion-dollar projects. |
| Look to gold and silver in these uncertain times Posted: 19 Feb 2014 08:09 AM PST In this uncertain world, gold and silver will continue to give such protection in extreme times, says Julian Phillips. |
| The big gold ETF turnaround and its prospective impact Posted: 19 Feb 2014 08:09 AM PST Chinese and Indian gold demand in particular will probably bring stability to the gold price, but it is the potential turnaround in ETF sales/purchases which could provide the key to price growth this year. |
| SWOT: Unpacking gold’s recent strong performance Posted: 19 Feb 2014 08:09 AM PST Gold rose to $51 an ounce for the week, breaking above its 200-day moving average for the first time since August 2012. |
| Australians to dig Gold Fields out of trouble at mechanised mine Posted: 19 Feb 2014 08:09 AM PST Gold Fields has brought in a crack Australian engineering team to help ramp up production on South Deep, its last troublesome South African asset. |
| The Next Great Commodity Rally Begins Today Posted: 19 Feb 2014 07:32 AM PST While most traders white-knuckled the sharp equity drop last month, a much bigger (and more important) trend emerged… In case the market has distracted you, here's what you've missed: Gold is up nearly 10% on the year… Silver is up 13%… After a sharp drop in January, crude oil has risen more than 4.5% since Jan. 1… Thanks in part to a harsh winter, natural gas has spiked a whopping 31%… Due to drought concerns, soybeans are up more than 5.5%, while coffee has blasted higher by 38%… I think you get my point. 2013 was not kind to commodities across the board. Precious metals hit the skids and grabbed most of the headlines—but other commodities also either suffered or stagnated as the year progressed. But someone flipped the switch this year, triggering breakout after breakout. If you step back for a bigger picture view, you can see how the S&P GSCI Commodity Index appears to be testing a major breakout zone after a massive 3-year coil…
Remember, commodities (as a group) are still way below their 2008 highs. Many have room to run from here… There's one commodity I've watched closely for months now. Now, I believe it has finally put in a bottom and is set to scream higher in the coming weeks and months. After a terrible 2013, this could end up as the comeback story of the year when all is said and done. Regards, Greg Guenthner |
| Posted: 19 Feb 2014 07:24 AM PST Another interview with Cory over at the Korelin Economics Report is now available. Yesterday, we talked about whether the gold market is due for a little pullback after a pretty impressive run over the last few weeks and we also got into some of the details behind East/West demand in the recently released Gold Demand Trends [...] This posting includes an audio/video/photo media file: Download Now |
| Koos Jansen: World Gold Council clueless on Chinese gold demand? Posted: 19 Feb 2014 07:01 AM PST 10a ET Wednesday, February 19, 2014 Dear Friend of GATA and Gold: Gold researcher and GATA consultant Koos Jansen today details how Chinese gold demand is badly underestimated by the World Gold Council and other analysts. He also describes his communications with them to show that they don't seem very interested in learning about what they're overlooking. Jansen's commentary is headlined "The World Gold Council Clueless on Chinese Gold Demand?" and it's posted at his Internet site, In Gold We Trust, here: http://www.ingoldwetrust.ch/world-gold-council-clueless-on-chinese-gold-... CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Jim Sinclair plans seminars in Los Angeles and San Diego Gold advocate Jim Sinclair's next market analysis seminars will be held in Los Angeles from 11 a.m. to 2 p.m. on Saturday, March 8, and in San Diego from 2 to 6 p.m. the following day, Sunday, March 9. Details, including registration information, are posted at Sinclair's Internet site, JSMinset.com, here: http://www.jsmineset.com/qa-session-tickets/ Join GATA here: Mines and Money Hong Kong http://www.minesandmoney.com/hongkong/ * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT A Personal Touch in Buying Precious Metals If you've not secured your allocation of precious metals and numismatic coins, 2014 may be the last year to get them at affordable and undervalued prices. With huge amounts of gold leaving the West for Asia, the future availability of precious metals is very much in doubt. All Pro Gold has competitive pricing on all bullion and numismatic products -- and offers prompt delivery too. Long-time GATA supporters Fred Goldstein and Tim Murphy are glad to answer any questions or concerns about acquiring the monetary metals. All Pro Gold has an extensive electronic library of articles from the world's top market analysts. Learn more at www.allprogold.com or write to Fred and Tim at info@allprogold.com or telephone them at 1-855-377-4653. |
| Mexico Gold & Silver Mining Stocks Posted: 19 Feb 2014 06:50 AM PST Prime rib gold and silver miners in Mexico now at hamburger prices, says this analyst... MIKE KACHANOVSKY is a consultant providing analysis of junior mining and exploration stocks. Kachanovsky's work is published on a freelance basis in a variety of publications, including the Mexico Mike column in Investor's Digest of Canada. Founder of SmartInvestment.ca, he now reckons you scan buy prime rib gold miners at the same price as hamburgers, as he explains in this interview with The Gold Report, Kachanovsky reveals how to find the prime rib of the gold market. The Gold Report: Mexico is a mining jurisdiction where mining investors have made a lot of money, especially over the last decade. Mexico recently passed a 7.5% royalty on earnings before interest, depreciation and amortization (EBIDA) for mining companies operating there. Are the salad days over for miners in that jurisdiction? Mike Kachanovksy: There are still a lot of unknowns on how this new royalty is going to affect mining companies in general and how it's going to be applied within the country. The majority of the producers I talk to don't feel it is going to be that disruptive because it's a royalty on earnings, not a gross smelter royalty. The way it is structured, companies that aren't making a lot of money right now won't be paying a lot of extra taxes. There are also going to be deductions that companies can put in play that would lower their overall tax spike from the new royalty. For the companies that are already in production and that have been established in Mexico, it's really not going to doom their operations. However, it is discouraging retail investors from participating and buying up Mexico-related stocks. There's uncertainty and fear in the market until people start to understand it's not going to devastate the bottom lines of miners. TGR: Could the tax be lowered? Mike Kachanovsky: I don't think the Mexican government will change the actual total amount, but it will probably allow more leeway and flexibility on what counts as earnings and what deductions will be allowed against that royalty. One thing to keep in mind: Part of the rationale for bringing this new law into place was that it would force companies to pay a certain amount of money back. It would go to the immediate local domestic or regional government. That money could be used to pay for schools or road construction or a lot of the things that the mining companies are doing now voluntarily. Perhaps some of these companies that already have scholarship programs and are building playgrounds and schools for their local communities will be able to deduct that money they're spending already in goodwill. My feeling is that there will be enough pressure behind the scenes that the structure of this royalty will be less restrictive than how it stands right now. TGR: Do you think companies are going to avoid Mexico as a result of this royalty? Mike Kachanovsky: I've heard some saber rattling from certain companies that say they are going to restrict investment within Mexico and start looking at other jurisdictions. I think it's a lot of political brinkmanship. The arguments for continuing to operate in Mexico are still more positive than negative. Even with this new royalty, Mexico is still one of the most favorable and lowest-cost mining jurisdictions in the world. TGR: A handful of junior mining companies have recently completed bought-deal financings. Does this signal a warmer financing environment for junior mining companies – especially those operating in Mexico? Mike Kachanovsky: I consult for a number of funds that are saying now is the time to start investing in these junior mining stocks. The stocks are so beaten down that a firm can put $2 million down on a financing and end up owning a third of the company. I believe that we're going to see bought-deal financings and more appetite for private placements that will allow companies to get funded and move forward. However, there are still companies that have extremely attractive projects that are not able to get financing just yet. The market is still too weak for them to attract funding. I think we're still at the much earlier stage. At some point we're going to see a lot of money flowing into the sector. Right now, the lowest-hanging fruit is being picked. We're still a long way from a healthy speculative market. TGR: SNL Metals Economics Group, which is based in Halifax, Nova Scotia, estimated that the total worldwide budget for non-ferrous metals exploration dropped about 30% to $15.2 billion in 2013 from $21.5bn in 2012. Yet Mexico remained a top-five destination for exploration spending. What keeps the drills turning in Mexico? Mike Kachanovsky: Mexico is still relatively underexplored and it has a treasure trove of prospective geology. There's always going to be that discovery potential that makes the risk/reward balance in favor of continuing on with exploration. Even in an environment where metals prices have come down, the chance of finding a brand-new high-grade deposit in Mexico that could be economic to develop will have companies spending money. The cost of exploration in Mexico is still much lower than many other places in the world. Exploration spending has dropped now that a lot of junior mining companies have access to high-quality consulting firms and drilling contractors. A company can get a lot more meters of drilling done today for less than it would have cost two years ago. TGR: Mexico is known more for its silver than gold. Which are you more excited about right now? Mike Kachanovsky: I'm a silver bull, but investors need to have leverage to both. We're at the latter stage of a very long and severe correction for both metals. As things roll over into a more bullish posture, silver tends to outperform gold on the upside. If I were going to be putting new money into a metal today, I would probably put a little bit more weight toward silver. TGR: Mining magnate Rob McEwen, who's well known in mining circles, told Mineweb.com that consolidation will pick up this year. He added that his namesake company is likely to grow through mergers and acquisitions (M&A). Do you see an uptick in M&A coming? Mike Kachanovsky: Absolutely. The urgency and likelihood that it's going to pick up this year is just that much higher because there's less exploration spending and existing mines are being depleted. If these companies want to stay in business they're going to need to either find more minerals or buy them. The severity of this correction means there are a lot of very attractive projects available that have lost half or even 90% of their market value. It's cheaper to buy late-stage defined deposits than it is to look for them and drill them. TGR: What are some companies producing silver and gold in Mexico that finished the year strong and are poised for further gains this year? Mike Kachanovsky: Investors have to look for the companies that survived the downturn intact with prospects for growth. TGR: You've had success as an investor by getting in on a big move at the beginning of a cycle. As an investor, what signs will signal that the next move is close? Mike Kachanovsky: I'm encouraged by the fact that the junior miners as a group are outperforming the metals. In the beginning of this correction, the metals were still moving higher but the stocks had started to sell off. They stayed in this bearish posture for more than two years. A big part of what drives the overall performance of a sector is what big money investors are doing. There were a lot of mutual fund redemptions and hedge funds selling across the board in the mining space during the last several years. A great many of them I suspect were positioned net short. That is now starting to unwind and they're starting to aggressively accumulate sector leaders that have been beaten down. When I start seeing high-volume accumulation off the lows, the bottom is in for the entire sector. There is a parallel to 2003 when I first started to make money in these mining stocks. There was a long, painful bear market that had driven a lot of the mining stocks down to extreme lows. Then there was this uptick. The first hint was that metals started to increase in value and mining stocks were increasing at a faster pace than the metals. There were fewer exchange-traded funds in 2003, but some of the larger junior mining ETFs that are available today are showing much faster gains than overall metals. That tells me that investors are starting to buy a basket of these undervalued stocks and position themselves for the next bull market. TGR: Could the big funds just be coming in to take advantage of a short-term rally? Mike Kachanovsky: I don't think so. The liquidity isn't there to flip these stocks. Companies are buying these stocks because they're at extreme low valuations and it's unlikely that they're going to trade them after a short bounce. TGR: Do you have any final thoughts for us? Mike Kachanovsky: Investors have to be very systematic. In the more speculative days of the sector, an investor could just about buy any name and make money on it – hype and speculation ruled the day. In this market, investors need to spend more time doing research before putting money on the line to identify the stronger companies, the ones that have the best management, projects that will still be producing years down the road, and that have been able to meet the challenges of lower metals prices by lowering their costs and improving their profit margins. Those are the kind of companies that it takes a little extra time to find and those are the ones that you could buy with confidence now. The advantage of this terrible correction is that top-quality companies are now priced in the same range as the junk. You're buying prime rib and paying the price of hamburger. You might as well go and sort through and find where these prime-rib candidates are and load up. You might as well buy the best companies and be positioned to make the most money instead of just picking up some of the weaker performers that are also trading at their lows. TGR: Thanks for your time today. |
| Mexico Gold & Silver Mining Stocks Posted: 19 Feb 2014 06:50 AM PST Prime rib gold and silver miners in Mexico now at hamburger prices, says this analyst... MIKE KACHANOVSKY is a consultant providing analysis of junior mining and exploration stocks. Kachanovsky's work is published on a freelance basis in a variety of publications, including the Mexico Mike column in Investor's Digest of Canada. Founder of SmartInvestment.ca, he now reckons you scan buy prime rib gold miners at the same price as hamburgers, as he explains in this interview with The Gold Report, Kachanovsky reveals how to find the prime rib of the gold market. The Gold Report: Mexico is a mining jurisdiction where mining investors have made a lot of money, especially over the last decade. Mexico recently passed a 7.5% royalty on earnings before interest, depreciation and amortization (EBIDA) for mining companies operating there. Are the salad days over for miners in that jurisdiction? Mike Kachanovksy: There are still a lot of unknowns on how this new royalty is going to affect mining companies in general and how it's going to be applied within the country. The majority of the producers I talk to don't feel it is going to be that disruptive because it's a royalty on earnings, not a gross smelter royalty. The way it is structured, companies that aren't making a lot of money right now won't be paying a lot of extra taxes. There are also going to be deductions that companies can put in play that would lower their overall tax spike from the new royalty. For the companies that are already in production and that have been established in Mexico, it's really not going to doom their operations. However, it is discouraging retail investors from participating and buying up Mexico-related stocks. There's uncertainty and fear in the market until people start to understand it's not going to devastate the bottom lines of miners. TGR: Could the tax be lowered? Mike Kachanovsky: I don't think the Mexican government will change the actual total amount, but it will probably allow more leeway and flexibility on what counts as earnings and what deductions will be allowed against that royalty. One thing to keep in mind: Part of the rationale for bringing this new law into place was that it would force companies to pay a certain amount of money back. It would go to the immediate local domestic or regional government. That money could be used to pay for schools or road construction or a lot of the things that the mining companies are doing now voluntarily. Perhaps some of these companies that already have scholarship programs and are building playgrounds and schools for their local communities will be able to deduct that money they're spending already in goodwill. My feeling is that there will be enough pressure behind the scenes that the structure of this royalty will be less restrictive than how it stands right now. TGR: Do you think companies are going to avoid Mexico as a result of this royalty? Mike Kachanovsky: I've heard some saber rattling from certain companies that say they are going to restrict investment within Mexico and start looking at other jurisdictions. I think it's a lot of political brinkmanship. The arguments for continuing to operate in Mexico are still more positive than negative. Even with this new royalty, Mexico is still one of the most favorable and lowest-cost mining jurisdictions in the world. TGR: A handful of junior mining companies have recently completed bought-deal financings. Does this signal a warmer financing environment for junior mining companies – especially those operating in Mexico? Mike Kachanovsky: I consult for a number of funds that are saying now is the time to start investing in these junior mining stocks. The stocks are so beaten down that a firm can put $2 million down on a financing and end up owning a third of the company. I believe that we're going to see bought-deal financings and more appetite for private placements that will allow companies to get funded and move forward. However, there are still companies that have extremely attractive projects that are not able to get financing just yet. The market is still too weak for them to attract funding. I think we're still at the much earlier stage. At some point we're going to see a lot of money flowing into the sector. Right now, the lowest-hanging fruit is being picked. We're still a long way from a healthy speculative market. TGR: SNL Metals Economics Group, which is based in Halifax, Nova Scotia, estimated that the total worldwide budget for non-ferrous metals exploration dropped about 30% to $15.2 billion in 2013 from $21.5bn in 2012. Yet Mexico remained a top-five destination for exploration spending. What keeps the drills turning in Mexico? Mike Kachanovsky: Mexico is still relatively underexplored and it has a treasure trove of prospective geology. There's always going to be that discovery potential that makes the risk/reward balance in favor of continuing on with exploration. Even in an environment where metals prices have come down, the chance of finding a brand-new high-grade deposit in Mexico that could be economic to develop will have companies spending money. The cost of exploration in Mexico is still much lower than many other places in the world. Exploration spending has dropped now that a lot of junior mining companies have access to high-quality consulting firms and drilling contractors. A company can get a lot more meters of drilling done today for less than it would have cost two years ago. TGR: Mexico is known more for its silver than gold. Which are you more excited about right now? Mike Kachanovsky: I'm a silver bull, but investors need to have leverage to both. We're at the latter stage of a very long and severe correction for both metals. As things roll over into a more bullish posture, silver tends to outperform gold on the upside. If I were going to be putting new money into a metal today, I would probably put a little bit more weight toward silver. TGR: Mining magnate Rob McEwen, who's well known in mining circles, told Mineweb.com that consolidation will pick up this year. He added that his namesake company is likely to grow through mergers and acquisitions (M&A). Do you see an uptick in M&A coming? Mike Kachanovsky: Absolutely. The urgency and likelihood that it's going to pick up this year is just that much higher because there's less exploration spending and existing mines are being depleted. If these companies want to stay in business they're going to need to either find more minerals or buy them. The severity of this correction means there are a lot of very attractive projects available that have lost half or even 90% of their market value. It's cheaper to buy late-stage defined deposits than it is to look for them and drill them. TGR: What are some companies producing silver and gold in Mexico that finished the year strong and are poised for further gains this year? Mike Kachanovsky: Investors have to look for the companies that survived the downturn intact with prospects for growth. TGR: You've had success as an investor by getting in on a big move at the beginning of a cycle. As an investor, what signs will signal that the next move is close? Mike Kachanovsky: I'm encouraged by the fact that the junior miners as a group are outperforming the metals. In the beginning of this correction, the metals were still moving higher but the stocks had started to sell off. They stayed in this bearish posture for more than two years. A big part of what drives the overall performance of a sector is what big money investors are doing. There were a lot of mutual fund redemptions and hedge funds selling across the board in the mining space during the last several years. A great many of them I suspect were positioned net short. That is now starting to unwind and they're starting to aggressively accumulate sector leaders that have been beaten down. When I start seeing high-volume accumulation off the lows, the bottom is in for the entire sector. There is a parallel to 2003 when I first started to make money in these mining stocks. There was a long, painful bear market that had driven a lot of the mining stocks down to extreme lows. Then there was this uptick. The first hint was that metals started to increase in value and mining stocks were increasing at a faster pace than the metals. There were fewer exchange-traded funds in 2003, but some of the larger junior mining ETFs that are available today are showing much faster gains than overall metals. That tells me that investors are starting to buy a basket of these undervalued stocks and position themselves for the next bull market. TGR: Could the big funds just be coming in to take advantage of a short-term rally? Mike Kachanovsky: I don't think so. The liquidity isn't there to flip these stocks. Companies are buying these stocks because they're at extreme low valuations and it's unlikely that they're going to trade them after a short bounce. TGR: Do you have any final thoughts for us? Mike Kachanovsky: Investors have to be very systematic. In the more speculative days of the sector, an investor could just about buy any name and make money on it – hype and speculation ruled the day. In this market, investors need to spend more time doing research before putting money on the line to identify the stronger companies, the ones that have the best management, projects that will still be producing years down the road, and that have been able to meet the challenges of lower metals prices by lowering their costs and improving their profit margins. Those are the kind of companies that it takes a little extra time to find and those are the ones that you could buy with confidence now. The advantage of this terrible correction is that top-quality companies are now priced in the same range as the junk. You're buying prime rib and paying the price of hamburger. You might as well go and sort through and find where these prime-rib candidates are and load up. You might as well buy the best companies and be positioned to make the most money instead of just picking up some of the weaker performers that are also trading at their lows. TGR: Thanks for your time today. |
| Posted: 19 Feb 2014 06:46 AM PST Diverging demand trends characterized the 2013 gold market, says World Gold Council... The FINAL gold demand figures for 2013 are in, and they come as no surprise to anyone who has been following the gold market over the past year, writes Sumit Roy at Hard Assets Investor. Last year was a tale of two markets for gold with record amounts of physical consumer buying that was offset by even larger amounts of selling in the investment gold market. All told, global gold demand tumbled by 15% to 3,756.1 tonnes in 2013, according to the latest Gold Demand Trends report from the World Gold Council.  On the physical side of the market, things couldn't have been any better. Jewelry demand jumped 17%, putting it back to what the WGC calls "pre-crisis" levels, or the highest point since 2008.  Even more impressive than the increase in jewelry consumption was the surge in physical bar and coin demand. That category saw an enormous 28% rise to a record 1,654.1 tonnes on the back of record demand from China.  Consumer gold demand in China (bar and coin demand plus jewelry) totaled 1,065.8 tonnes, surpassing India for the first time. However, India's demand was not shabby by any means. At 974.8 tonnes, it was the third-highest total ever and came in the face of stringent import restrictions by the government. Combined, China and India accounted for about half of global gold demand in 2013. Also supporting demand were purchases by central banks. As a group, they purchased 368.6 tonnes, down 32% from the 50-year high set in 2012, but still a very healthy amount. According to the WGC, the big buyers were Russia with 77 tonnes; Azerbaijan with 20 tonnes; and Korea with 20 tonnes.  Overshadowing all of the aforementioned good news on physical demand was the massive investment selling in the gold market in 2013. Investors in exchange-traded funds and similar products sold an incredible 880.8 tonnes worth of gold. That's a big swing from the 279.1 tonnes worth of purchases in 2012, and was the primary reason why gold prices plunged 29% last year. Finally, the supply side of the market was much less eventful than the demand side. Overall supply slipped 1.7%. A 14% decrease in recycled gold – which tends to fluctuate with prices – was partially offset by a 5% increase in mine production.  Coming off such a volatile year last year, 2014 promises to be an interesting period for the gold market. Investors should keep a close eye on whether the record gold demand in China keeps up, and whether the pace of selling by exchange-traded funds slows. |
| Posted: 19 Feb 2014 06:46 AM PST Diverging demand trends characterized the 2013 gold market, says World Gold Council... The FINAL gold demand figures for 2013 are in, and they come as no surprise to anyone who has been following the gold market over the past year, writes Sumit Roy at Hard Assets Investor. Last year was a tale of two markets for gold with record amounts of physical consumer buying that was offset by even larger amounts of selling in the investment gold market. All told, global gold demand tumbled by 15% to 3,756.1 tonnes in 2013, according to the latest Gold Demand Trends report from the World Gold Council. On the physical side of the market, things couldn't have been any better. Jewelry demand jumped 17%, putting it back to what the WGC calls "pre-crisis" levels, or the highest point since 2008. Even more impressive than the increase in jewelry consumption was the surge in physical bar and coin demand. That category saw an enormous 28% rise to a record 1,654.1 tonnes on the back of record demand from China. Consumer gold demand in China (bar and coin demand plus jewelry) totaled 1,065.8 tonnes, surpassing India for the first time. However, India's demand was not shabby by any means. At 974.8 tonnes, it was the third-highest total ever and came in the face of stringent import restrictions by the government. Combined, China and India accounted for about half of global gold demand in 2013. Also supporting demand were purchases by central banks. As a group, they purchased 368.6 tonnes, down 32% from the 50-year high set in 2012, but still a very healthy amount. According to the WGC, the big buyers were Russia with 77 tonnes; Azerbaijan with 20 tonnes; and Korea with 20 tonnes. Overshadowing all of the aforementioned good news on physical demand was the massive investment selling in the gold market in 2013. Investors in exchange-traded funds and similar products sold an incredible 880.8 tonnes worth of gold. That's a big swing from the 279.1 tonnes worth of purchases in 2012, and was the primary reason why gold prices plunged 29% last year. Finally, the supply side of the market was much less eventful than the demand side. Overall supply slipped 1.7%. A 14% decrease in recycled gold – which tends to fluctuate with prices – was partially offset by a 5% increase in mine production. Coming off such a volatile year last year, 2014 promises to be an interesting period for the gold market. Investors should keep a close eye on whether the record gold demand in China keeps up, and whether the pace of selling by exchange-traded funds slows. |
| Posted: 19 Feb 2014 05:57 AM PST GOLD PRICE losses of $5 per ounce in Asian trade were reversed in London Wednesday morning, with the metal regaining $1320 as new data showed new US house-building falling below analyst forecasts during January's poor weather. With minutes from the Federal Reserve's latest policy meeting due for release later today, "If the weather starts to thaw out and we still see activity struggling," says a note from US brokerage INTL FCStone, "this will undoubtedly get the attention of a worried Fed and perhaps lead to another significant leg higher in gold prices. "But we are not there just yet." Despite falling from Monday's early 3-month high above $1330, says Germany's Commerzbank in its daily commodities note, the gold price "remains above the important 200-day moving average." Physical silver prices in London meantime outpaced gold, rising back towards Monday and Tuesday's spikes just shy of $22 per ounce. Asian equities rose Wednesday, but European stock markets fell. Major government bond prices rose, nudging 10-year US yields back below 2.70%. Italian bond yields held near 8-year lows as the centre-left Matteo Renzi, named as prime minister by President Napolitano, met for a second day with other political leaders, including ex-prime minister and convicted tax evader Silvio Berlusconi. Speaking to BNN TV on Tuesday, "We thought the gold price could spike up to around $1320 in February or March," said New York consultancy CPM Group's Jeffrey Christian. "We're there, and we think you'll see some profit-taking over the next couple of weeks," he added, forecasting a gold price trading range of $1220-1320 for the next two months. China's wholesale premium, over and above the global gold price, retreated Wednesday below $3 per ounce as Yuan gold ended the day almost unchanged at the Shanghai Gold Exchange. Trading volume in the most active Shanghai contract fell to a 1-week low. But equal to $1.2 billion, it still outpaced recent averages. In contrast to Tuesday, when Australia's ANZ Bank reported "solid physical buying" in the Asian session, "Selling was seen from the outset" today says Swiss refining and finance group MKS, "pressuring gold and silver lower. "The selling persisted...before some light demand from early Europe helped the gold price recover." |
| Silver Stackers: Measure your Stash like a Miner Posted: 19 Feb 2014 01:40 AM PST Silver Investor |
| Supply and Demand Key to Base Metals Success: Adam Low Posted: 19 Feb 2014 12:00 AM PST Adam Low of Raymond James believes that the outlook is excellent for zinc, good for copper and neutral for iron ore. In this interview with The Gold Report, he argues that it comes down to supply and... Visit the aureport.com for more information and for a free newsletter |
| Supply and Demand Key to Base Metals Success: Adam Low Posted: 19 Feb 2014 12:00 AM PST Adam Low of Raymond James believes that the outlook is excellent for zinc, good for copper and neutral for iron ore. In this interview with The Gold Report, he argues that it comes down to supply and demand. Copper supply may soon lag demand, and zinc demand, which is increasing steadily, will soon face a 10% decline in supply. Low suggests eight miners that should benefit from providing the metals the global economy will need to support future growth. |
| Supply and Demand Key to Base Metals Success: Adam Low Posted: 19 Feb 2014 12:00 AM PST Adam Low of Raymond James believes that the outlook is excellent for zinc, good for copper and neutral for iron ore. In this interview with The Gold Report, he argues that it comes down to supply and demand. Copper supply may soon lag demand, and zinc demand, which is increasing steadily, will soon face a 10% decline in supply. Low suggests eight miners that should benefit from providing the metals the global economy will need to support future growth. |
| Posted: 18 Feb 2014 10:16 PM PST It's one thing to be right. Being right on timing is another. I remember speaking on an investment panel in 2006 at a Bay Area Health and Wealth conference when the subject of Fannie Mae and Freddie Mac came up. I confidently offered, at the height of the housing market, that the two government mortgage companies would go under. Sell the stocks short or buy put options, I said. However, it took two years before the two government-sponsored entities (GSEs) were placed in conservatorship. And it was 2010 before the stocks were delisted after Fannie Mae's shares traded for less than a dollar for more than 30 days. I was right, but might as well have been wrong. Likewise, among those with a rooting interest in the price of precious metals, someone is always claiming that $5,000 per ounce for gold or $100 per ounce for silver is right around the corner. All the rationalizations sound plausible if that's what fits your ear: The Fed is printing money like crazy. The government is borrowing like crazy. The Chinese are buying like crazy. Politicians are legislating like they're crazy. If you think the gold at Fort Knox is really there, you're crazy. There's always a story that explains why gold is headed to the moon—it's just the timing never seems to work out. Coming off a horrible year for gold and silver, though, and a worse one for mining stocks, maybe now is indeed the time to take the plunge in the metals and the shares while Wall Street thinks the idea is all wet. While there are people who have a knack at getting in the market at the right time, there are also those who buy in at such low prices that perfectly timing the market becomes unnecessary—and right now we're seeing such a deep-discount phase. Have a look at our recently aired online video event, Upturn Millionaires, and hear some of the best resource market timers ever explain why smart investors should buy gold mining stocks now. There are multiple signs that the time may be right. For example, the gold price recently broke through its 200-day moving average, which it hadn't done in a year. The price has rallied off a double bottom ($1,178) and broke through resistance at $1,275. Technically the yellow metal looks very good. And finally, there are so many black swans circling that we really shouldn't call them black swans anymore. What caused the financial crash in 2007 hasn't been fixed, but merely papered over. Take Greece for instance, which is on the verge of bailout number three. The Greek government has €11 billion in bonds coming due in May. The IMF is €3.8 billion behind in scheduled aid payments because it wants to understand the country's finances going forward. Good luck with that. European Union analyst Andrew Cullen writes in The Cantillon Observer that the current calm in the EU precedes a storm. He sees three events crashing into an overleveraged, derivatives-über-exposed banking system that will lead to crisis. The European Central Bank (ECB) will be forced to buy assets from banks, flooding the banks with liquidity and allowing them to then purchase more sovereign bonds to hold interest rates down. Failure of ECB bank stress tests will spur a recapitalization of the banks, with a deep stock market correction to follow. The recent emerging-markets turmoil was likely just a warmup for what's brewing. And what's brewing is good for precious metals. To help you seize the moment, resource investing legend Rick Rule has penned the piece below especially for Casey Research readers—a rarity. The kind of advice he provides is the type investors usually pay dearly for, and at investment conferences, audiences hang on his every word. The returns Rick has achieved are legendary, and new offerings are always oversubscribed (your writer is a partner in two of Rule's exploration limited partnerships). So please read on and learn why Rick Rule believes the resource supercycle is still intact. Doug French, Contributing Editor Rick Rule: Why the Resource Supercycle Is Still IntactRick Rule, Chairman and Founder, Sprott Global Resource Investments Ltd. Natural-resource-based industries are very capital intensive, and hence extremely cyclical. It is not unreasonable to say that as a natural-resource investor, you are either contrarian or you will be a victim. These markets are risky and volatile! Why cyclicality?Let's talk about cyclicality first. Some of the cyclicality of these industries is a function of their being extraordinarily capital intensive. This lengthens the companies' response times to market cycles. Strengthening copper prices, for example, do not immediately result in increased copper production in many market cycles, because the production cycle requires new deposits to be discovered, financed, and constructed—a process that can consume a decade. Price declines—even declines below the industry's total production costs—do not immediately cause massive production cuts. The "sunk capital" involved in discovery and construction of mining projects and attendant infrastructure (such as smelters, railways, and ports) causes the industry to produce down to, and sometimes below, their cash costs of production. Producers often engage in a "last man standing" contest, to drive others to mothball productive assets, citing the high cost of shutdown and restart. They fail to mention their conflicts of interest as managers, whose compensation is linked to running operational mines. Interest-rate cycles can raise or lower the cost and availability of capital, and the accompanying business cycles certainly influence demand. Given the "trapped" nature of the industry's productive assets, local political and fiscal cycles can also influence outcomes in natural-resource investments. Today, I believe that we are still in a resource "supercycle," a long-term period of increasing commodity prices in both nominal and real terms. The market conditions of the past two years have made many observers doubt this assertion. But I believe the current cyclical decline is a normal and healthy part of the ongoing secular bull market. Has this happened in the past?The most striking analogy to the current situation occurred in the epic gold bull market in the 1970s. Many of you will recall that in that bull market, gold prices advanced from US$35 per ounce to $850 per ounce over the course of a decade. Fewer of you will recall that in the middle of that bull market, in 1975 and 1976, a cyclical decline saw the price of gold decline by 50%, from about $200 per ounce down to about $100 per ounce. It then rebounded over the next six years to $850 per ounce. Investors who lacked the conviction to maintain their positions missed an 850% move over six short years. The current gold bull market, since its inception in 2000, has experienced eight declines of 10% or greater, and three declines—including the present one—of more than 20%. This volatility need not threaten the investor who has the intellectual and financial resources to exploit it. The natural-resources bull market lives…The supercycle is a direct result of several factors. The most important of these is, ironically, the deep resource bear markets which lasted for almost two decades, commencing in 1982. This period critically constrained investment in a capital-intensive industry where assets are depleted over time. Productive capacity declined in every category; very little exploration took place; few new mines or oilfields replenished reserves; infrastructure and processing assets deteriorated. Critical human-resource capabilities suffered as well; as workers retired or got laid off, replacements were neither trained nor hired. National oil companies (NOCs) exacerbated this decline in many nations by milking their oil and gas industries to subsidize domestic spending programs for political gain. This was done at the expense of sustaining capital investments. The worst examples are Mexico, Venezuela, Ecuador, Peru, Indonesia, and Iran. I believe 25% of world export crude capacity may be at risk from failure of NOCs to maintain and expand their productive assets. Demands for social contributions in the form of taxes, royalties, carried equity interests, social or infrastructure contributions, and the like have increased. Voters are not concerned that producers need real returns to recover from two decades of underinvestment or to fund capital investments to offset depletion. Today this is actively constraining investment, and hence supply. Poor people getting richer…The supercycle is also driven by globalization and the social and political liberalization of emerging and frontier markets. As people become freer, they tend to become richer. As poor countries become less poor, their purchases tend to be very commodity-centric, especially compared to Western consumers. For the 3.5 billion people at the bottom of the economic pyramid, the goods that provide the most utility are material goods and consumables, rather than the information services or "high value-added" goods. A poor or very poor household is likely to increase its aggregate calorie consumption—both by eating more food and more energy-dense food like meat. They will likely consume more electrical power and motor fuel and upgrade their home from adobe or thatch to higher-quality building materials. As people's incomes increase in developing and frontier markets, the goods they buy are commodity-intensive, which drives up demand per capita. And we are talking billions of "capitas." Rising incomes and savings among certain cultures in the Middle East, South Asia, and East Asia—places with a strong cultural affinity for bullion—have increased the demand for gold, silver, platinum, and palladium bullion. Bullion has been a store of value in these regions for generations, and rising incomes have generated physical bullion demand that has surprised many Western-centric analysts. Competitive devaluationThe third important driver in this cycle has been the depreciation of currencies and the impact that has had on nominal pricing for resources and precious metals. Most developed economies have consumed and borrowed at worrying levels. The United States federal government has on-balance-sheet liabilities of over $16 trillion, and off-balance-sheet liabilities estimated at around $70 trillion. These numbers do not include state and local government liabilities, nor the likely liabilities from underfunded private pensions. Not to mention increased costs associated with more comprehensive health care and an aging population! Many analysts are even more concerned about the debts and liabilities of other developed economies—Europe and Japan. In both places, debt-to-GDP ratios are greater than in the US. Europe and Japan are financing themselves through a combination of artificially low interest rates and more borrowing and money printing. This drives down the value of their currencies, helping their exports. But which nations' leaders will stand firm and allow their export industries to wither as their domestic producers suffer from cheap competing foreign goods? If Japan's Abe is successful at increasing his country's exports at the expense of its competitors like Taiwan, Korea, or China, then his policies could lead to competitive devaluation. And how will the European community react, for that matter? Loss of purchasing power in fiat currencies increases the nominal pricing of commodities and drives demand for bullion as a preferred savings vehicle. The factors that have driven this resource supercycle have not changed. Demand is increasing. Supplies are constrained. Currencies are weakening. Thus I believe we remain in a secular bull market for natural resources and precious metals. With that in mind, I would call the current market for bullion and resource equities a sale. Where to invest?Let's talk about a type of company most of us follow: mineral exploration companies, or "juniors." We often confuse the minerals exploration business with an asset-based business. I would argue that is a mistake. Entities that explore for minerals are actually more similar to "the research and development" space of the mining industry. They are knowledge-based businesses. When I was in university, I learned that one in 3,000 "mineralized anomalies" (exploration targets) ended up becoming a mine. I doubt those odds have improved much in 40 years. So investors take a 1-in-3,000 chance in order to receive a 10-to-1 return. These are not good odds. But understanding the industry improves them substantially. Exploration companies are similar to outsourcing companies. Major mining companies today conduct relatively little exploration. Their competitive advantage lies in scale, financial stability, and engineering and construction expertise. Similar to how big companies in other sectors outsource certain tasks to smaller, more specialized shops, the big miners let the juniors take on exploration risk and reward the successful ones via acquisitions. Major companies are punished rather than rewarded for exploration activities in the short term. Majors therefore tend to focus on the acquisition of successful juniors as a growth strategy. Today, the junior model is broken. Many public exploration companies spend a majority of their capital on general and administrative expenses, including fundraising. Overlay a hefty administrative load on an activity with a slim probability of success, and these challenges become even more severe. One response from the exploration and financial community has been to put less emphasis on exploration success and focus instead on "market success." In this model, rather than "turning rocks into money," the process becomes "turning rocks into paper, and paper into money." One manifestation of that is the juniors' habit of recycling exploration targets that have failed repeatedly in the past but can be counted on to yield decent confirmation holes, and the tendency to acquire hyper-marginal deposits and promote the value of resources underground without mentioning the cost of actually extracting them. The industry has been quite successful, during bull markets, at causing "sophisticated" investors to focus on exciting but meaningless criteria. Being successful in natural-resource investing requires you to make choices. If your broker convinces you to buy the sector as a whole, they will have lived up to their moniker—you will become "broker" and "broker." We have already said that exploration is a knowledge-based business. The truth is that a small number of people involved in the sector generate the overwhelming majority of the successes. This realization is key to improving our odds of success. "Pareto's law" is the social scientists' term for the so-called "80-20 rule," which holds that 80% of the work is accomplished by 20% of the participants. A substantial body of evidence exists that it is roughly true across a variety of disciplines. In a large enough sample, this remains true within that top 20%—meaning 20% of the top 20%, or 4% of the population, contributes in excess of 60% of the utility. The key as investors is to judge management teams by their past success. I believe this is usually much more relevant than their current exploration project. It is important as well that their past successes are directly relevant to the task at hand. A mining entrepreneur might have past success operating a gold mine in French-speaking Quebec. Very impressive, except that this same promoter now proposes to explore for copper, in young volcanic rocks, in Peru! In my experience, more than half of the management teams you interview will have no history of success that shows that they are apt at executing their current project. Management must be able to identify the most important unanswered question that can make or break the project. They must be able to say how that question or thesis was identified, explain the process by which the question will be answered, the time required to answer the question, how much money it will take. They also need to know how to recognize when they have answered the question. Many of the management teams you interview will be unable to address this sequence of questions, and therefore will have a very difficult time adding value. The resource sector is capital intensive and highly cyclical, and we expect that the current pullback is a cyclical decline from an overheated bull market. The fundamental reasons to own natural resource and precious metals have not changed. Warren Buffett says, "Be brave when others are afraid, be afraid when others are brave." We are still "gold bugs." And even "gold bulls." Subscribe to Sprott's Thoughts for free insights and opinion from Rick Rule, Eric Sprott, John Embry, and others from across the Sprott organization. Click here to subscribe. Rick Rule is the chairman and founder of Sprott Global Resource Investments Ltd., a full-service brokerage firm located in Carlsbad, CA. He has dedicated his entire adult life to different aspects of natural-resource investing and has a worldwide network of contacts in the natural-resource and finance worlds. As chairman of Sprott US Holdings Inc., the parent company of Sprott Global, he leads a team of earth science and finance professionals who are experienced with resource investment management. He is a frequent speaker at industry conferences and is interviewed for numerous radio, television, print, and online media outlets concerning natural-resource investment and industry topics. He and his team have long experience in many resource sectors including agriculture, alternative energy, forestry, oil and gas, mining, and water. Sprott US Holdings is active in securities brokerage, segregated account money management, and investment partnership management involving both equity and debt instruments across the entire spectrum of the natural-resource industry. |
| Putin And The Flash Mob Empire Posted: 18 Feb 2014 07:44 PM PST Going For Gold Writing in 'Wall Street Journal' 14 February, Walter Russel Mead, a former senior adviser on US foreign policy at the Council on Foreign Relations, claimed that Vladimir Putin is engaged in a “death-defying geopolitical gamble (that) is the hottest game in town”. Mead said Putin's gamble “has more twists and turns than a bobsled race, more fancy footwork than a figure-skating final, and more dips and flips than a mogul run”. |
In short: In our opinion, no positions are currently justified from the risk/reward perspective.
February 18, 2014 the World Gold Council released the 
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