Gold World News Flash

---

• Silver Slumps To Worst Day In 2 Months As BofA Says “Sell Gold”
• The National Debt Cannot Be Paid Off
• USAWatchdog Discusses Economic Collapse With Alt-Market’s Brandon Smith
• Andrew Hoffman – Soma Plus Newspeak Equals America Today
• Despite Pullback, Gold May See A Massive Short Squeeze
• The 2014 Gold Rally: The Real Deal, or a Flash in the Pan?
• 'Precarious' moment for gold traders, Kaye and Fitzpatrick tell KWN
• The High Price Of Delaying The Default
• A Visual History Of Gold: The Most Sought After Metal On Earth
• Max Keiser on Bitcoin / Mt. Gox Collapse
• China Gold Imports Surge - Or Fall. You Decide
• George Soros On "Sustaining Ukraine's Breakthrough"
• The Ups and Downs of the Stock Exchange
• The Gold Price Gave Up $14.80 or 1.1% to End Comex at $1,328.20
• The Gold Price Gave Up $14.80 or 1.1% to End Comex at $1,328.20
• The Message Of The Gold Forward And Reverse Repo Rates
• Gold And Silver Outlook: Recovery, Recession, Deflation Or Seasonality?
• The 5 Greatest Gold Heists in History
• Don Coxe: Gold Will Be Worth Much More Than $1,300 per Oz
• Gold Daily and Silver Weekly Charts - Phaeton Descending
• Gold Daily and Silver Weekly Charts - Phaeton Descending
• China Gold Imports Surge – Or Fall. You Decide
• U.S. Dollar Gains - Forex Trading Alerts
• Jeffrey Saut - We Just Got A Major “Buy Signal” On Gold
• Conflicts over conflict gold
• Guns, Ammo and Other Great Ways to Fight Inflation
• Gold fix rigging may finance banker bonuses, Sprott says
• FT story on gold price rigging was erased deliberately
• China Gold Imports Surge – Or Fall. You Decide
• Lesson of the Saddle Ridge Gold Coins Hoard
• Lesson of the Saddle Ridge Gold Coins Hoard
• Lesson of the Saddle Ridge Gold Coins Hoard
• In The News Today
• Debt Default Will Kill the Dollar-Brandon Smith
• South Africa delays carbon tax, plans levies on acid mine water
• Cautious silver moves up with gold
• On gold – the banks they are a’changing
• Junior updates: Blumont bails, Turkey gold-silver discovery & more
• Interest Rates "Key" to 2014 Gold Price
• Interest Rates "Key" to 2014 Gold Price
• Spot Gold Drops 1.2% from "2012 Trendline Resistance", Seen Safe from Drop to $1000 on Surging Chinese Demand
• Spot Gold Drops 1.2% from "2012 Trendline Resistance", Seen Safe from Drop to $1000 on Surging Chinese Demand
• Spot Gold Drops 1.2% from "2012 Trendline Resistance", Seen Safe from Drop to $1000 on Surging Chinese Demand
• US Shale Gas: The Unsung Hero of a Dangerous Winter
• The Five Greatest Gold Robberies
• Have the Gold and Silver Prices Resumed the Uptrend and If So Why?
• The Enduring Value of Gold
• Wednesday Morning Links
• 3,000 Years of Inflation
• 3,000 Years of Inflation

Silver Slumps To Worst Day In 2 Months As BofA Says “Sell Gold” Posted: 27 Feb 2014 12:00 AM PST from ZeroHedge: As CNY unwinds, Russia-Ukraine safe-haven bids, and Turkish Lira (erdogan corruption) concerns flood back into the USD as a safe-haven, precious metals have come under pressure this morning. Gold has been sold but remains relatively stable but Silver is suffering its biggest down day in almost 2 months ad the gold-to-silver ratio surges back up to ts 4-month average. Silver notably underperforming Gold today… Read More @ ZeroHedge.com

The National Debt Cannot Be Paid Off Posted: 26 Feb 2014 10:53 PM PST by Keith Weiner   Government spending is out of control and, while most say they want spending cuts, people oppose cuts that impact them. Among those who get government money, there's practically an unspoken, unbreakable pact to keep the money coming. But when I say that the national debt cannot be paid off, it's not a political forecast; it's a statement on the flawed nature of the dollar. Astute observers call the dollar a fiat currency. Fiat means force. It's true that we're forced to use the dollar (e.g. by taxes on gold) but the dollar is also irredeemable. There's no way to cash it in. The dollar is credit that is never repaid. Today's dollar is a dishonored promise. This was not always true. Before 1933, the dollar represented an obligation to pay 1/20 ounce of gold. People could deposit gold and get paper notes in receipt. Those notes circulated, and any bearer could redeem them for gold. Back then, $20 was not the gold price. It was the legal rate at which gold was deposited and redeemed. In 1971, President Nixon changed the monetary system with the stroke of his pen, making the Fed no longer obligated to redeem dollars for gold. The consequences of using debt as if it were money were soon clear. Rising debt became a more serious problem than rising prices. To understand debt, credit and the importance of redemption, consider Joe borrowing sugar from neighbor Sue. To pay Sue back, Joe goes to the store, buys sugar and hands it to Sue. Not only is Sue repaid; the debt goes out of existence—it is extinguished. Borrowing money used to be like borrowing sugar. The repayment of debt in gold-backed dollars settled the loan and wiped the debt clean. Not anymore, since Nixon detached the dollar from gold. By making people pay with paper-only dollars, each debt is transferred, not cleared. Suppose Sue owed Joe $1,000, then hands Joe ten $100 bills. Sue gets out of the debt loop. But now the Fed owes Joe the $1,000. What does Joe do? He deposits his cash in a bank. Now the bank owes Joe money, while the Fed owes the bank. What does the bank do? It buys a Treasury bond. Now the Treasury owes the bank. And so on. By Nixon's design, the system omits a crucial feature. The extinguisher of debt, gold, is not allowed to do its job. Debt can only be transferred from one party to another. It's like a lump being pushed around under a rug. With no means of final payment, that lump is never put in the trash. Debt is never extinguished. In fact, the debt must increase, because the interest is constantly accruing. Interest is added to the debt, as it can't be paid off either. Total debt must grow by at least the interest. Debt actually increases faster than that, because the government craves what now passes for growth. The rate of debt increase is proportional to the debt itself. It is not a fixed dollar amount, such as $100 billion a year. It is instead a percent of total debt. Mathematics has a term for this type of growth: an exponential function. Exponential growth is not sustainable, according to credible scientists. Mainstream economists ignore this fact in the hope that that somehow growth can outpace debt, one year a time. But exponentially rising debt is not sustainable because the capacity to service the debt is finite. Without a means of extinguishing debt, servicing is merely borrowing new money to pay off old debts. This is the equivalent of taking out a home equity loan to get money to pay the mortgage. The U.S. debt is putting us in danger of economic catastrophe. Like Greece, which found no more buyers for their bonds, the U.S. relies on selling new bonds to pay interest and principal when due. The difference is that the whole world bids on U.S. Treasury bonds, for now. But eventually, market participants will realize that the American debt cannot be paid off.

USAWatchdog Discusses Economic Collapse With Alt-Market’s Brandon Smith Posted: 26 Feb 2014 09:20 PM PST by Brandon Smith, Alt-Market: I recently participated in an interview with Greg Hunter of USAWatchdog.com, a website which focuses primarily on the continuing financial crisis around the globe.  The information I briefly cover can be studied in depth in my article The Final Swindle Of Private American Wealth Has Begun, which deals with the likelihood of our current fiscal collapse becoming far more visible this year, if not fully developed.  Greg Hunter’s full article on the interview can be read here: http://usawatchdog.com/debt-default-will-kill-the-dollar-brandon-smith/ USAWatchdog.com is a great resource for the liberty minded and economically concerned, and I highly recommend that you add it to your favorites if you haven’t already. Read More @ Alt-Market.com

Andrew Hoffman – Soma Plus Newspeak Equals America Today Posted: 26 Feb 2014 09:10 PM PST from FinancialSurvivalNetwork.com: Monday's Discussion with Andy: Chinese stock market nearing 2008 lows; Chinese housing bubble starting to implode; 3 coups on three continents; FT article on gold manipulation; Russian Ruble at all time low; Collapsing currencies equal collapsing governments Click Here to Listen

Despite Pullback, Gold May See A Massive Short Squeeze Posted: 26 Feb 2014 09:02 PM PST Today an outspoken hedge fund manager out of Hong Kong warned King World News that despite the pullback in gold, we may see a massive short squeeze in the gold market. William Kaye, who 25 years ago worked for Goldman Sachs in mergers and acquisitions, also discussed the implications of this possible short squeeze for gold investors. KWN also included some comments and a key gold chart from top Citi analyst Tom Fitzpatrick to go along with Kaye's interview. This posting includes an audio/video/photo media file: Download Now

The 2014 Gold Rally: The Real Deal, or a Flash in the Pan? Posted: 26 Feb 2014 08:30 PM PST by John Kosar, Financial Sense: Gold prices first found their way onto our radar screen back in July 2013 because of some unusual investor positioning data from the Commodity Futures Trading Commission (CFTC), which we first displayed and discussed in our July 23rd report entitled Gold Prices Test Their First Upside Obstacle: Watch the Smart Money. These data showed that in late June/early July gold producers collectively moved to an essentially unhedged position the futures market for the first time in more than a decade. This rare, unusual positioning indicated that the smart money was collectively convinced that gold was undervalued at $1200 per ounce. Unbeknownst to us at the time was that gold prices actually bottomed for the year just a few weeks earlier, at $1180 on June 28th. Prices then proceeded to spike higher to $1419 by the end of August, a $239 per ounce or 20% advance in less than 2 months. However, prices then subsequently collapsed right back down to $1180 by the end of the year, convincing many investors that this was just a bounce in a bear market, and that the larger 2011 bear market had resumed. Read More @ FinancialSense.com

'Precarious' moment for gold traders, Kaye and Fitzpatrick tell KWN Posted: 26 Feb 2014 08:23 PM PST 11:20p ET Wednesday, February 26, 2014 Dear Friend of GATA and Gold: Hong Kong fund manager William Kaye tonight tells King World News that gold traders face a "precarious" moment. And Citigroup analyst Tom Fitzpatrick gives KWN a gold chart that doesn't look good for the next few days. Their analysis is posted at the KWN blog here: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/2/27_De... CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. ADVERTISEMENT Buy metals at GoldMoney and enjoy international storage GoldMoney was established in 2001 by James and Geoff Turk and is safeguarding more than $1.7 billion in metals and currencies. Buy gold, silver, platinum, and palladium from GoldMoney over the Internet and store them in vaults in Canada, Hong Kong, Singapore, Switzerland, and the United Kingdom, ­taking advantage of GoldMoney's low storage rates, among the most competitive in the industry. GoldMoney also offers delivery of 100-gram and 1-kilogram gold bars and 1-kilogram silver bars. To learn more, please visit: http://www.goldmoney.com/?gmrefcode=gata Join GATA here: Mines and Money Hong Kong Hong Kong Convention and Exhibition Centre Hong Kong Special Administrative Region, China Monday-Friday, March 24-28, 2014 http://www.minesandmoney.com/hongkong/ Canadian Investor Conference 2014 Vancouver Convention Centre West 1055 Canada Place, Vancouver, British Columbia Sunday and Monday, June 1 and 2, 2014 http://cambridgehouse.com/event/25/canadian-investor-conference-2014-inc... * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: http://gata.org/tshirts Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16 ADVERTISEMENT How to profit with silver -- and which stocks to buy now Future Money Trends is offering a special 16-page silver report with profiles of nine companies and technical analysis of their stock performance. Six of the companies have market capitalizations of less than $800 million and one company has a market cap of only $30 million. The most exciting of these companies will begin production in a few weeks and has a market cap of just $150 million. Half of all proceeds from the sale of this report will be donated to the Gold Anti-Trust Action Committee to support its efforts exposing manipulation and fraud in the gold and silver markets. To learn about this report, please visit: http://www.futuremoneytrends.com/index.php?option=com_content&id=376&tmp...

The High Price Of Delaying The Default Posted: 26 Feb 2014 07:33 PM PST Submitted by Thorsten Polleit via the Ludwig von Mises Institute, Credit is a wonderful tool that can help advance the division of labor, thereby increasing productivity and prosperity. The granting of credit enables savers to spread their income over time, as they prefer. By taking out loans, investors can implement productive spending plans that they would be unable to afford using their own resources. The economically beneficial effects of credit can only come about, however, if the underlying credit and monetary system is solidly based on free-market principles. And here is a major problem for today’s economies: the prevailing credit and monetary regime is irreconcilable with the free market system. At present, all major currencies in the world — be it the US dollar, the euro, the Japanese yen, or the Chinese renminbi — represent government sponsored unbacked paper, or, “fiat” monies. These monies have three characteristic features. First, central banks have a monopoly on money production. Second, money is created by bank lending — or “out of thin air” — without loans being backed by real savings. And third, money that is dematerialized, can be expanded in any quantity politically desired. A fiat money regime suffers from a number of far-reaching economic and ethical flaws. It is inflationary, it inevitably causes waves of speculation, provokes bad investments and “boom-and-bust” cycles, and generally encourages an excessive built up of debt. And fiat money unjustifiably favors the few at the expense of the many: the early receivers of the new money benefit at the expense of those receiving the new money at a later point in time (“Cantillon Effect”). One issue deserves particular attention: the burden of debt that accumulates over time in a fiat money regime will become unsustainable. The primary reason for this is that the act of creating credit and money out of thin air, accompanied by artificially suppressed interest rates, encourages poor investments: malinvestments that do not have the earning power to service the resulting rise in debt in full. Governments are especially guilty of accumulating an excessive debt burden, greatly helped by central banks providing an inexhaustible supply of credit at artificially low costs. Politicians finance election promises with credit, and voters acquiesce because they expect to benefit from government’s “horn of plenty.” The ruling class and the class of the ruled are quite hopeful that they can defer repayment to future generations to sort out. However, there comes a point in time when private investors are no longer willing to refinance maturing debt, let alone finance a further rise in indebtedness of banks, corporations, and governments. In such a situation, the paper money boom is doomed to collapse: rising concern about credit defaults is a deadly enemy to the fiat money regime. And once the flow of credit dries up, the boom turns into bust. This is exactly what was about to happen in many fiat currency areas around the world in 2008. A fiat money bust can easily develop into a full-scale depression, meaning failing banks, corporations filing for bankruptcy, and even some governments going belly up. The economy contracts sharply, causing mass unemployment. Such a development will predictably be interpreted as an ordeal — rather than an economic adjustment made inevitable by the ravages of the preceding fiat money boom. Everyone — those of the ruling class and those of the class of the ruled — will predictably want to escape disaster. Threatened with extreme economic hardship and political desperation, their eyes will turn to the central bank which, alas, can print all the money that is politically desired to keep overstretched borrowers liquid, first and foremost banks and governments. Running the electronic printing press will be perceived as the policy of the least evil — a reaction that could be observed many times throughout the troubled history of unbacked paper money. Since the end of 2008, many central banks have successfully kept their commercial banks afloat by providing them with new credit at virtually zero interest rates. This policy is actually meant to make banks churn out even more credit and fiat money. More credit and money, provided at record low interest rates, is seen as a remedy of the problems caused by an expansion of credit and money, provided at low interest rates, in the first place. This is hardly a confidence-inspiring route to take.   It was Ludwig von Mises who understood that a fiat money boom will, and actually must, ultimately end in a collapse of the economic system. The only open question would be whether such an outcome will be preceded by a debasement of the currency or not: The boom cannot continue indefinitely. There are two alternatives. Either the banks continue the credit expansion without restriction and thus cause constantly mounting price increases and an ever-growing orgy of speculation, which, as in all other cases of unlimited inflation, ends in a “crack-up boom” and in a collapse of the money and credit system. Or the banks stop before this point is reached, voluntarily renounce further credit expansion and thus bring about the crisis. The depression follows in both instances A monetary policy dedicated to averting credit defaults by all means would speak for a fairly tough scenario going forward: depression preceded by inflation. This is a scenario quite similar to what happened, for instance, in the fiat money inflation in eighteenth-century France. According to Andrew Dickson White, France issued paper money seeking a remedy for a comparatively small evil in an evil infinitely more dangerous. To cure a disease temporary in its character, a corrosive poison was administered, which ate out the vitals of French prosperity.   It progressed according to a law in social physics which we may call the "law of accelerating issue and depreciation." It was comparatively easy to refrain from the first issue; it was exceedingly difficult to refrain from the second; to refrain from the third and with those following was practically impossible.   It brought ... commerce and manufactures, the mercantile interest, the agricultural interest, to ruin. It brought on these the same destruction which would come to a Hollander opening the dykes of the sea to irrigate his garden in a dry summer.   It ended in the complete financial, moral and political prostration of France — a prostration from which only a Napoleon could raise it.

A Visual History Of Gold: The Most Sought After Metal On Earth Posted: 26 Feb 2014 06:34 PM PST This infographic introduces the yellow metal and tells the story of how it became the most sought after metal on earth. Gold was one of the first metals discovered by ancient peoples and eventually gold grew to symbolize both wealth, royalty, and immortality. Gold began to be used as money by many cultures, but the Romans were the first to use it widespread. The rarity, malleability, durability, ease to identify, and intrinsic value of gold made it perfect for money. While many civilizations throughout the world used gold for money, eventually its role would change with the coming of the gold standard system. In modern history, gold was shaped by events such as Roosevelt’s confiscation order in 1933 and President Nixon ending the direct convertibility of gold to US dollars in 1971. Although gold is no longer the basis of the modern monetary system, there is more gold demand today than ever before.   See full infographic here   Source: VisualCapitalist

Max Keiser on Bitcoin / Mt. Gox Collapse Posted: 26 Feb 2014 05:13 PM PST Max Keiser on crypto-currencies & Dean Baker on aggregate demandErin welcomes The Keiser Report's Max Keiser talks about Bitcoin, Mt. Gox, and a second generation crypto-currency alternative, his very own Maxcoin! Although Mt. Gox is facing trouble, Keiser doesn't believe that Bitcoin is going... [[ 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! ]]

China Gold Imports Surge - Or Fall. You Decide Posted: 26 Feb 2014 05:09 PM PST Dollar Collapse

George Soros On "Sustaining Ukraine's Breakthrough" Posted: 26 Feb 2014 05:01 PM PST Authored by George Soros, originally posted at Project Syndicate, Following a crescendo of terrifying violence, the Ukrainian uprising has had a surprisingly positive outcome. Contrary to all rational expectations, a group of citizens armed with not much more than sticks and shields made of cardboard boxes and metal garbage-can lids overwhelmed a police force firing live ammunition. There were many casualties, but the citizens prevailed. This was one of those historic moments that leave a lasting imprint on a society's collective memory. How could such a thing happen? Werner Heisenberg's uncertainty principle in quantum mechanics offers a fitting metaphor. According to Heisenberg, subatomic phenomena can manifest themselves as particles or waves; similarly, human beings may alternate between behaving as individual particles or as components of a larger wave. In other words, the unpredictability of historical events like those in Ukraine has to do with an element of uncertainty in human identity. People's identity is made up of individual elements and elements of larger units to which they belong, and peoples' impact on reality depends on which elements dominate their behavior. When civilians launched a suicidal attack on an armed force in Kyiv on February 20, their sense of representing "the nation" far outweighed their concern with their individual mortality. The result was to swing a deeply divided society from the verge of civil war to an unprecedented sense of unity. Whether that unity endures will depend on how Europe responds. Ukrainians have demonstrated their allegiance to a European Union that is itself hopelessly divided, with the euro crisis pitting creditor and debtor countries against one another. That is why the EU was hopelessly outmaneuvered by Russia in the negotiations with Ukraine over an Association Agreement. True to form, the EU under German leadership offered far too little and demanded far too much from Ukraine. Now, after the Ukrainian people's commitment to closer ties with Europe fueled a successful popular insurrection, the EU, along with the International Monetary Fund, is putting together a multibillion-dollar rescue package to save the country from financial collapse. But that will not be sufficient to sustain the national unity that Ukraine will need in the coming years. I established the Renaissance Foundation in Ukraine in 1990 – before the country achieved independence. The foundation did not participate in the recent uprising, but it did serve as a defender of those targeted by official repression. The foundation is now ready to support Ukrainians' strongly felt desire to establish resilient democratic institutions (above all, an independent and professional judiciary). But Ukraine will need outside assistance that only the EU can provide: management expertise and access to markets. In the remarkable transformation of Central Europe's economies in the 1990's, management expertise and market access resulted from massive investments by German and other EU-based companies, which integrated local producers into their global value chains. Ukraine, with its high-quality human capital and diversified economy, is a potentially attractive investment destination. But realizing this potential requires improving the business climate across the economy as a whole and within individual sectors – particularly by addressing the endemic corruption and weak rule of law that are deterring foreign and domestic investors alike. In addition to encouraging foreign direct investment, the EU could provide support to train local companies' managers and help them develop their business strategies, with service providers remunerated by equity stakes or profit-sharing. An effective way to roll out such support to a large number of companies would be to combine it with credit lines provided by commercial banks. To encourage participation, the European Bank for Reconstruction and Development (EBRD) could invest in companies alongside foreign and local investors, as it did in Central Europe. Ukraine would thus open its domestic market to goods manufactured or assembled by European companies' wholly- or partly-owned subsidiaries, while the EU would increase market access for Ukrainian companies and help them integrate into global markets. I hope and trust that Europe under German leadership will rise to the occasion. I have been arguing for several years that Germany should accept the responsibilities and liabilities of its dominant position in Europe. Today, Ukraine needs a modern-day equivalent of the Marshall Plan, by which the United States helped to reconstruct Europe after World War II. Germany ought to play the same role today as the US did then. I must, however, end with a word of caution. The Marshall Plan did not include the Soviet bloc, thereby reinforcing the Cold War division of Europe. A replay of the Cold War would cause immense damage to both Russia and Europe, and most of all to Ukraine, which is situated between them. Ukraine depends on Russian gas, and it needs access to European markets for its products; it must have good relations with both sides. Here, too, Germany should take the lead. Chancellor Angela Merkel must reach out to President Vladimir Putin to ensure that Russia is a partner, not an opponent, in the Ukrainian renaissance.

The Ups and Downs of the Stock Exchange Posted: 26 Feb 2014 04:49 PM PST  Click here to follow ZeroHedge in Real-time on FinancialJuice How the volatility of the market can be seen every day! Yesterday, the London financiers were out there celebrating on their 14-year high and backing that the 'only way was up'. Then today they woke up too late after hitting the bottle too much and now that high has dropped as China's economy is causing greater concerns for the rest of the financial world. How things change in the space of just a few hours. Nothing is constant and nothing lasts forever. But a rose by any other name still smells of the same thing and here it is pretty much of a stench. People might be harping on about the bankruptcy imminently to be announced by Mt. Gox and the collapse of the Bitcoin Foundation just over the horizon, but aren't the financial markets doing the self-same thing and just virtually inflating their own markets? Yesterday shares around the world reached highs amidst a succession of mergers. The FTSE 100 hadn't been that high since 2000. But, it was only analysts that stood back and calmly stated that there needed to be supporting arguments to believe that the economy was out of the dark ages and into brighter times. They were right today and it was only false hopes and wishing that pushed the markets higher yesterday. • It was all virally emanating from Wall Street which saw the S&P 500 hit an all-time high, closing up 0.62% at 1847.  • The Dow Jones Industrial Average increased to 16207, up 0.6%. • The NASDAQ rose 0.69% to 4292.  • The FTSE 100 closed at 6865, with an increase of 28 points. • That's just 70 points short of the dotcom days of 1999 when the old year went out with a bang. • Investors around the world are confident (perhaps overly so, as usual) and the Facebook purchase of WhatsApp has something to do with that buoyancy.  • But balls eventually stop bouncing when there's no momentum left.  • There was also talk of the merger going on between Dixons and Carphone Warehouse in the UK that had some effect on investor confidence. • Although you only have to look at Consumer confidence to get some of the picture.  • The figures released today show that they are lower than expected and stand at 78.1, rather than the estimated 80.  • What exactly do consumers have to be confident about? As usual the market was not showing the reality of the economic situation and we have been hearing of over-pricing in the market for weeks and even months now. But, some in the UK are expecting the FTSE to go beyond the 7000-mark in the next few months. Europe was doing much the same thing and was riding on the crest of that wave too. • The DAX increased by 0.5% yesterday by close and Spain saw a 1.2%-rise.  • But, on opening today the Dow Jones Industrial Average had already lost 52 points to 16154, or 0.3%.  • The S&P 500 also dropped 1.8% or 0.1% to 1845. Where did all the confidence go? Have the investors suddenly woken up to the fact that it's all based upon nothing? The highs that we are experiencing are nothing more than fabricated evidence and that it's pointless throwing money out of the windows and let alone a helicopter unless the economy is really stabilized. • France has just announced that it will miss its deficit target set for 2015 (3.9%).  • So will Spain (6.5%).  • That will mean more budget cuts in the future.  • The forecasts just released on growth by the European Commission say that GDP will grow by 1.2% in 2014, rising to 1.8% by next year for the EU. • Cyprus will suffer a worse contraction than economists had forecast for this year, down by -4.8%. • Inflation has also been lowered from 1.5% to just 1%. The FTSE 100 dropped this morning by 61 points, or 0.9% to 6804 by mid-day today. Now it is down 0.41% at 6810 at 15.45 GMT. So is it going to reach the 7000-mark and break the records? It was the Shanghai Composite that dampened the confidence of the investors this morning as it recorded its biggest decrease for the past half year, down by 2%. • The Shanghai Composite fell because there was an unexpected slowdown in house-price growth according to figures released yesterday.  • The housing bubble has been in the spotlight for the past few months now and there is a prediction that it is getting closer.  • Banks are also slowing down on their lending and the government is placing a tighter control on credit. The London Stock Exchange is like a bipolar sufferer going from one extreme to another, constantly on the medication. We are just watching them go through their elevated agitated mood of euphoria, mania. The bout of extreme depression will follow, impairing not their but our ability to function in daily life. That's the good thing about their disorder. They get the euphoric partying stage and we end up with the depression. Originally posted: The Ups and Downs of the Stock Exchange

The Gold Price Gave Up $14.80 or 1.1% to End Comex at $1,328.20 Posted: 26 Feb 2014 04:46 PM PST Gold Price Close Today : 1328.20 Change : -14.80 or -1.10% Silver Price Close Today : 21.254 Change : -0.709 or -3.23% Gold Silver Ratio Today : 62.492 Change : 1.343 or 2.20% Silver Gold Ratio Today : 0.01600 Change : -0.000352 or -2.15% Platinum Price Close Today : 1428.20 Change : -13.85 or -0.96% Palladium Price Close Today : 731.50 Change : -4.60 or -0.62% S&P 500 : 1,845.16 Change : 0.00 or 0.00% Dow In GOLD$ : $252.11 Change : $ 3.07 or 1.23% Dow in GOLD oz : 12.196 Change : 0.148 or 1.23% Dow in SILVER oz : 762.13 Change : 25.46 or 3.46% Dow Industrial : 16,198.41 Change : 18.75 or 0.12% US Dollar Index : 80.440 Change : 0.250 or 0.31% Silver and GOLD PRICES fell back sharply today. Silver lost 70.9 cents or 3.23% to 2125.4 cents. The gold price gave up $14.80 (1.1%) to end Comex at $1,328.20. The GOLD PRICE reach roughly it's October high ($1,361.80) with today's intraday high at $1,345.60. Whither from here? The 200 DMA stands at $1,305, major support/resistance at $1,300, and the neckline of the upside down head and shoulders gold broke out of stands about $1,380. Any of those might be targets, but gold will likely see several days of correction. A 50% correction of the end-December intraday low ($1,181.40) to today's intraday high ($1,345.60) would take the gold price to $1,263.50. Biggest nailbiter is whether Gold will hold on here, or make one last plunge below the double bottoms of June and December. I don't expect that, but it is a possibility that I must confess. The SILVER PRICE rising flag was already making me nervous yesterday, and I should have paid closer attention, especially with the RSI overbought. Today it dropped all the way down to the 200 DMA (2106c). A 50% correction from the December low (1872c) to the move's high (2218) would pull silver back to 2045c. Coincidentally, 2050 is where silver made its giant breakout on 14 February. A 62% correction would send silver to 2000c. These aren't prophecies, only forecasts and thinking out loud. Right now we just wait to see where this will stop. One good thing about this drop: it took the GOLD/SILVER RATIO up to 62.492, so you have a little more time to swap gold for silver above 60:1. I heartily recommend that swap. A reader asked me to explain why some bullion coins, like Mexican 50 pesos and Austrian 100 coronas) are cheaper than others (like American Eagles and Maple Leaves, etc.). The simple answer is found in the immortal words of Yogurt in the movie Space Balls: "Moichandizing!" Copying the Krugerrand's success, all the modern coin mints distribute through 20 or 25 major wholesalers, and enforce a high premium (profitable to the mint) on the coins, higher as the coins get smaller. Without this cartel enforcing those high premiums, they collapse, as we saw in early 2000 after pre-Y2K buyers sold back all those American Eagles they had bought, knocking premiums down to zero. If you remember nothing else, remember this: OVER TIME PREMIUM ALWAYS DISAPPEARS. As a bull market keeps sending silver or gold up, it also grinds away at those premiums. At the market peak (I've been there) NO COIN carries a premium. At peak, nobody asks what KIND of ounces you have, only "How many?" Therefore you are throwing away money when you buy premium, like the higher premium on American Eagles and other modern issue coins. You will NOT recoup that premium when you sell. Same applies to so-called numismatic coins like US $20s and $10s. I have, by the way, charts of those premiums back to 1998 to prove that numismatic coins DO NOT outperform bullion. ("Numismatic" here means the common, plentiful semi-numismatic stuff some companies companies push, like US $20 golds. It doesn't include genuinely scarce coins like an 1804 dollar.) Generally they mark those coins up 45% so they can pay the salesman a 25% commission, unlike bullion dealers who work on a 3.5% to 1% markup. Don't bother sending me emails correcting me with some boiler room salesman's sales pitch about confiscation, non-taxability, numismatic outperformance, non-reportability and other myths. I have 34 years' experience in this business, not one year's experience thirty-four times. So why are Austrian 100 coronas and Mex 50s cheaper? Because their premiums are not supported by a marketing cartel. Those were the most popular gold coins in the world until the Krugerrand was introduced in 1968 with one marketing ploy: it contained an exact ounce of gold, not 0.9802 oz (A100c) or 1.2057 oz (Mx50p). A coin can lose all its premium on the sell side, but arbitrage keeps them up on the buy side. If they fall much below their spot gold value, dealers will begin buying and melting them. That's why at wholesale no gold coin every falls much below a 2% discount (98% of melt value), since they're profitable to melt about there. Often dealers "talk their inventories." If you ask about the lower premium coins, they'll badmouth them because they don't stock them and want to sell you what they have in stock. (Sorry, it's a fallen world.) But it's always in your interest to buy the lowest cost silver and gold you can get, because OVER TIME PREMIUM ALWAYS DISAPPEARS. And no matter how many times I explain all this, some people still buy high premium American Eagle gold and silver coins, and that's fine. I tell people, "I'm your servant, not your master. Buy what you're comfortable with, not what I'm comfortable with." How much do you save with the Austrian or Mexican coins? Today about $40 an ounce. Not much if you're buying one ounce, but you get nearly a quarter ounce free on ten ounces, nearly three ounces free on a hundred. Some dealers will also say that the Austrian or Mexican or other coins are hard to sell back (aren't liquid). That is not true. Also, they'll tell you the Mexicans have been heavily counterfeited. There have been a few counterfeits, but not good enough to fool any dealer worth his scale, so that's no problem. Stocks were flat today. S&P500 rose 0.04 to 1,845.16 against yesterday's 1,845.12. Who-hoo. Dow rose 18.75 (0.12%) to 16,198.41. Dow is refusing to confirm new highs in other indices, and those others are stuck. Today's tumbles in silver and gold took the Dow in metals up. Dow in gold rose 1.08% to 12.18 oz (G$251.78 gold dollars). Dow in silver rose sharply, 3.62% or 26.68 oz, to 763.36 oz and above the 742.91 oz 200 DMA. US dollar index awoke today, but not like a giant refreshed with wine. Climbed 25 basis points (0.31%) to 80.44. It is still range trading in the lower third of its range, below all its moving averages. Today may mark a change in attitude, but the dollar index will have to show us. Didn't take much from the dollar to knock the stuffing out of the euro. It fell 0.43% to $1.3686 and trying to turn down. Yen dropped 0.22% to 97.7 cents/Y100 and no change. 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 Up $14.80 or 1.1% to End Comex at $1,328.20 Posted: 26 Feb 2014 04:46 PM PST Gold Price Close Today : 1328.20 Change : -14.80 or -1.10% Silver Price Close Today : 21.254 Change : -0.709 or -3.23% Gold Silver Ratio Today : 62.492 Change : 1.343 or 2.20% Silver Gold Ratio Today : 0.01600 Change : -0.000352 or -2.15% Platinum Price Close Today : 1428.20 Change : -13.85 or -0.96% Palladium Price Close Today : 731.50 Change : -4.60 or -0.62% S&P 500 : 1,845.16 Change : 0.00 or 0.00% Dow In GOLD$ : $252.11 Change : $ 3.07 or 1.23% Dow in GOLD oz : 12.196 Change : 0.148 or 1.23% Dow in SILVER oz : 762.13 Change : 25.46 or 3.46% Dow Industrial : 16,198.41 Change : 18.75 or 0.12% US Dollar Index : 80.440 Change : 0.250 or 0.31% Silver and GOLD PRICES fell back sharply today. Silver lost 70.9 cents or 3.23% to 2125.4 cents. The gold price gave up $14.80 (1.1%) to end Comex at $1,328.20. The GOLD PRICE reach roughly it's October high ($1,361.80) with today's intraday high at $1,345.60. Whither from here? The 200 DMA stands at $1,305, major support/resistance at $1,300, and the neckline of the upside down head and shoulders gold broke out of stands about $1,380. Any of those might be targets, but gold will likely see several days of correction. A 50% correction of the end-December intraday low ($1,181.40) to today's intraday high ($1,345.60) would take the gold price to $1,263.50. Biggest nailbiter is whether Gold will hold on here, or make one last plunge below the double bottoms of June and December. I don't expect that, but it is a possibility that I must confess. The SILVER PRICE rising flag was already making me nervous yesterday, and I should have paid closer attention, especially with the RSI overbought. Today it dropped all the way down to the 200 DMA (2106c). A 50% correction from the December low (1872c) to the move's high (2218) would pull silver back to 2045c. Coincidentally, 2050 is where silver made its giant breakout on 14 February. A 62% correction would send silver to 2000c. These aren't prophecies, only forecasts and thinking out loud. Right now we just wait to see where this will stop. One good thing about this drop: it took the GOLD/SILVER RATIO up to 62.492, so you have a little more time to swap gold for silver above 60:1. I heartily recommend that swap. A reader asked me to explain why some bullion coins, like Mexican 50 pesos and Austrian 100 coronas) are cheaper than others (like American Eagles and Maple Leaves, etc.). The simple answer is found in the immortal words of Yogurt in the movie Space Balls: "Moichandizing!" Copying the Krugerrand's success, all the modern coin mints distribute through 20 or 25 major wholesalers, and enforce a high premium (profitable to the mint) on the coins, higher as the coins get smaller. Without this cartel enforcing those high premiums, they collapse, as we saw in early 2000 after pre-Y2K buyers sold back all those American Eagles they had bought, knocking premiums down to zero. If you remember nothing else, remember this: OVER TIME PREMIUM ALWAYS DISAPPEARS. As a bull market keeps sending silver or gold up, it also grinds away at those premiums. At the market peak (I've been there) NO COIN carries a premium. At peak, nobody asks what KIND of ounces you have, only "How many?" Therefore you are throwing away money when you buy premium, like the higher premium on American Eagles and other modern issue coins. You will NOT recoup that premium when you sell. Same applies to so-called numismatic coins like US $20s and $10s. I have, by the way, charts of those premiums back to 1998 to prove that numismatic coins DO NOT outperform bullion. ("Numismatic" here means the common, plentiful semi-numismatic stuff some companies companies push, like US $20 golds. It doesn't include genuinely scarce coins like an 1804 dollar.) Generally they mark those coins up 45% so they can pay the salesman a 25% commission, unlike bullion dealers who work on a 3.5% to 1% markup. Don't bother sending me emails correcting me with some boiler room salesman's sales pitch about confiscation, non-taxability, numismatic outperformance, non-reportability and other myths. I have 34 years' experience in this business, not one year's experience thirty-four times. So why are Austrian 100 coronas and Mex 50s cheaper? Because their premiums are not supported by a marketing cartel. Those were the most popular gold coins in the world until the Krugerrand was introduced in 1968 with one marketing ploy: it contained an exact ounce of gold, not 0.9802 oz (A100c) or 1.2057 oz (Mx50p). A coin can lose all its premium on the sell side, but arbitrage keeps them up on the buy side. If they fall much below their spot gold value, dealers will begin buying and melting them. That's why at wholesale no gold coin every falls much below a 2% discount (98% of melt value), since they're profitable to melt about there. Often dealers "talk their inventories." If you ask about the lower premium coins, they'll badmouth them because they don't stock them and want to sell you what they have in stock. (Sorry, it's a fallen world.) But it's always in your interest to buy the lowest cost silver and gold you can get, because OVER TIME PREMIUM ALWAYS DISAPPEARS. And no matter how many times I explain all this, some people still buy high premium American Eagle gold and silver coins, and that's fine. I tell people, "I'm your servant, not your master. Buy what you're comfortable with, not what I'm comfortable with." How much do you save with the Austrian or Mexican coins? Today about $40 an ounce. Not much if you're buying one ounce, but you get nearly a quarter ounce free on ten ounces, nearly three ounces free on a hundred. Some dealers will also say that the Austrian or Mexican or other coins are hard to sell back (aren't liquid). That is not true. Also, they'll tell you the Mexicans have been heavily counterfeited. There have been a few counterfeits, but not good enough to fool any dealer worth his scale, so that's no problem. Stocks were flat today. S&P500 rose 0.04 to 1,845.16 against yesterday's 1,845.12. Who-hoo. Dow rose 18.75 (0.12%) to 16,198.41. Dow is refusing to confirm new highs in other indices, and those others are stuck. Today's tumbles in silver and gold took the Dow in metals up. Dow in gold rose 1.08% to 12.18 oz (G$251.78 gold dollars). Dow in silver rose sharply, 3.62% or 26.68 oz, to 763.36 oz and above the 742.91 oz 200 DMA. US dollar index awoke today, but not like a giant refreshed with wine. Climbed 25 basis points (0.31%) to 80.44. It is still range trading in the lower third of its range, below all its moving averages. Today may mark a change in attitude, but the dollar index will have to show us. Didn't take much from the dollar to knock the stuffing out of the euro. It fell 0.43% to $1.3686 and trying to turn down. Yen dropped 0.22% to 97.7 cents/Y100 and no change. 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 Message Of The Gold Forward And Reverse Repo Rates Posted: 26 Feb 2014 02:59 PM PST Despite now two doses of QE taper and much more confirmation that the FOMC will be committed to that course, gold prices have not collapsed. Conventional wisdom has been uniform in believing QE as inflationary, and thus a positive for gold prices (despite the trajectory since 2011). Removal of QE should have been, if this thinking is correct, a negative factor for gold via that inflation channel. Yet, pretty much since the first taper was announced in December, gold prices have been on a steady climb. The reason for that, and I think there is little doubt now, is gold as a "tail risk" hedge or insurance. The relationship between QE and inflation was always tenuous, particularly given the actual (as opposed to imagined) role of reserves (and excess at that) in the modern, shadow/investment banking system. Instead, I believe it was the projection of FOMC resolve in QE that allowed the entire financial system to fall into the trap of expectations – that the Fed would not countenance major systemic risks, thus removing considerations of "tail risk." Less tail risk = lower demand for tail risk hedging. That gold would reclaim a steady bid after such visible removal of FOMC-driven "surety" is a direct consequence of removing not just the pace of "reserve" expansion but the recalibration of market risk without that visible assurance. On the other side of the economics of gold lies the monetary system as it actually exists – the one in which collateral is much more money like than "money" or currency. The operational fact of QE has been the reduction in available collateral to the marketplace for secured short and overnight lending (interbank). As episodes of collateral shortages broke into the open, gold filled the breach with a resulting slam in terms of gold prices. The indication of such collateral demand was forward rates (GOFO). As with what I mentioned above of the apparent return of the golden bid, the collateral system has also been affected by changes in systemic operations post-taper. While the Open Market Desk is removing less collateral from the system in its POMO activity, that has not alleviated all collateral conditioning. In fact, as I highlighted last week, bond issuance, particularly MBS and t-bills, is declining even more rapidly. Mortgage issuance, ironically enough, is being decimated by taper threats from this past summer. T-bill issuance has collapsed under the illusion of fiscal responsibility. Yet for all these ongoing imbalances, gold has remained in that steady upward march. I think in addition to the restart in demand for tail risk, on the other side there has been added an alternate pathway for collateral to flow, thus making the appeal of gold less appetizing at the margins. On September 20, 2013, the Fed announced, via its Open Market Desk, that it would conduct daily reverse repo "tests." The first, beginning September 23, was designed to gauge effectiveness of expanded policy coverage to, in a historic first, nonbank participants (the cash side of repo). The reasons for the reverse repo program really boil down to enforcing a lower limit, or floor, on short-term interest rates that have not conformed due to the US financial system's quirks regarding banks vs. nonbanks (a fuller discussion of this here). The other primary facet of the reverse repo program is the potential for nonbanks and banks alike to use it to obtain collateral sitting idle in the SOMA "silo." In this kind of "reverse repo" (from the Fed's perspective), banks and institutions are parking cash with the Fed, collateralized by the Fed's holdings of UST. In other words, it represents another avenue to get collateral into the repo system. The first reverse repo test regime was limited to a maximum of $500mm per bidder, and was scheduled to expire on January 29, 2014. In the interim, the bidder ceiling was raised, and on January 29, the per bidder max was further increased to $5 billion and the overall "test" program was extended by another year, now set to expire on January 30, 2015. As you can see from the chart below, the "test" has been quite popular. Reverse repos are not new to the Fed's monetary toolkit. The most (in)famous usage occurred the week Lehman failed, as the FOMC directed the Open Market Desk to "drain" $50 billion in "excess liquidity" from the system. That was an attempt to get the federal funds rate back up to its target, as it tended below target in the growing fragmentation between London (eurodollars) and NYC (federal funds). As we know now from the 2008 FOMC transcripts, there were intraday discrepancies that made such a movement somewhat suspect – the Fed may have been trying to rectify the target imbalance, but only to make the geographic divide that much greater. In the current set of circumstances, given the origination demise in MBS and t-bills, it would make sense that the reverse repo "test" would take the place of gold as a marginal source of collateral. That theory is bolstered further as repo rates have sunk closer to zero, making the Fed's program a realistic, and even cost-efficient, alternative (and performing as desired by policy intentions). If collateral strains have been transferred back to the Fed's SOMA by the daily reverse repo auctions, it would offer a more complete picture as to gold's recent behavior. Put that together with the "expiration" of QE as a full-blown tail risk suppressant, and it is very compelling in my mind. This is a guest post by Alhambra Partners. Click to the website for information on Alhambra Investment Partners' money management services and global portfolio approach to capital preservation.

Gold And Silver Outlook: Recovery, Recession, Deflation Or Seasonality? Posted: 26 Feb 2014 02:58 PM PST Gold and silver seem to take a breather today. With a first significant correction since many weeks, the gold price is settling at $1329 (down 1% on the day) while silver is closing at $21,23 (down 3.3% on the day). The recent charts revealed an enormous pressure cooking in the precious metals complex as we have shown here and here. All four precious metals are at major resistance or on the verge of a major breakout. However, today’s correction could delay a major breakout, depending on the steepness of the decline in the coming days and weeks. Mr. Schnider, Head of Nontraditional Asset Classes at UBS Wealth Management, believes the prices of the precious metal may see a bearish decline of double-digit this year. In a CNBC interview he explains his view: Some of the precious metals buying recently was not truly fundamental. We expect a double-digit decline on the precious metals. We are in a risk on environment going into the second quarter of this year: rates will go up again, the dollar will strengthen, equities will continue to grow. The strength we saw this year was technically driven. Uncertainty pushed up gold and we had a technical break. Who is playing the momentum? ETF’s not, they are flat. As the economy is performing better, I expect some of those ETF’s to encounter outflows again. On the other hand, Mr. Lynn’s comes with an opposite view, as released on Marketwatch (link). Basically, he sees no recovery but rather a recession. Rightfully, he notes that “there are already signs of slowing growth everywhere, from weak jobs growth in the U.S., to turmoil in the emerging markets.” He detects three trends which support the thesis of higher gold prices: Investors buy gold in times of economic turmoil. So what kind of warning is the precious metal sending us right now? There are three possibilities — a crash in China, the arrival of deflation, and a fresh recession in the developed world. Whichever it is, gold had been more often right than wrong in the past — and it would be foolish to ignore it now. We particularly like Mr. Lynn’s vision about deflation. He writes: Deflation is also catastrophic for nations that have very high debt levels — such as all the peripheral members of the euro zone. The debts remain the same, while the income to service then shrinks every year, and if your debt-to-GDP ratio is already 130% as it is in Italy, then that is a big problem. If deflation does take hold, then two things follow. It may well move the euro crisis into its third and final act, paving the way for a final breakup. Or else the European Central Bank will be forced to launch quantitative easing on a massive scale to try and stop prices collapsing, and taking economies down with them. Either is certainly going to send gold upwards in price. And then there is the potential of a correction because of seasonality. As one author calculates on Seekingalpha, “I took a look at the performance of the spot silver price in March & April during the last 20 years to see if any meaningful conclusions can be drawn. The results were quite striking as you can see in the table below. In the past 20 years, silver has declined in price 70% of the time from March to April.” Whether the economic recovery is for real or not, remains to be seen. Judging from the recent economic data, there seems to be no recovery in real terms, only an artificial push in financial risk assets based on hopes for easy money. As investors, it all boils down to risk reduction. Precious metals have the unique characteristic to mitigate counterparty risk, which is far more important in our humble opinion than speculation (hope) on recovery or seasonality.

The 5 Greatest Gold Heists in History Posted: 26 Feb 2014 02:31 PM PST Gold has captured the imaginations of crime writers and filmmakers for years, but sometimes there are gold heists that you just can't make up. Thefts involving the world's most precious metal always make headlines. Some aren't even that daring, but it is the thought that something pirates, invaders, highwaymen and bandits used to risk their lives to steal, is still the ultimate loot. In newspaper reports there is always an underlying sense of admiration for the sheer brazenness of the robbers and some incredulity at what they may or may not have pulled off. 'Hang on lads I've got a great idea,' must feature in every gold robbery that ever took place. Do they all end in a van balanced in precarious positions? Not in this list, no. But some do end up in far worse situations, whilst others disappear into thin air. We look at our five top gold robberies of all time and enjoy the thrill of learning how some meticulously planned their heist, whilst others merely stumbled upon a pot of gold. The Great Gold Robbery Quite possibly the most famous of all the gold robberies, this notorious Victorian crime took place on the 15th of May 1855 when 91 kgs of gold was stolen from Abell and Co., Spielmann, and Bult. The three firms had placed the precious cargo, containing gold bars and coins, on a South Eastern Railway Company train at London Bridge before heading to Boulogne in France. The three boxes of gold were then estimated to be worth £12,000, which is around £2.3 million at the current market price. Due to a great spate of train robberies at the time, security was tight. Not only were the boxes checked and sealed before leaving London Bridge, by the carrier company Chaplin & Co., but they were secured with iron bars. Two different keys were needed to open the boxes. The keys were kept apart, by trusted employees of the railway. "The safe keys were entrusted to railway staff in London and Folkestone and also to the captain of the cross-channel steamer. It was the practice to load the safes with the guard on the night train from London to Folkestone". British Transport Police Once the boxes were sealed and re-weighed they travelled from London Bridge to Folkestone, under armed guard. At Folkestone they were placed onto the Lord Warden steamship to France. They were weighed once again in Boulogne, France where it was noted that Abell's box of Australian gold weighed 40 pounds less than was recorded in London, whilst Bult's box of Californian gold weighed slightly more and the Spielmann's box considerably more so. Nevertheless, all three boxes were sent onto Paris, where the combined weights matched with those recorded in Boulogne, meaning a robbery must have taken place between London and Boulogne. When Bult's box was opened in Paris on the 16th May, the clerk Pierre F. Heznard discovered 'sixteen bags of lead shot and thirteen remaining gold ingots.' When Abell's box of supposed Australian gold was opened the recipient, the bank Pockar, Dufont and Co, found the gold had been replaced in its entirety by lead shot. No damage had been caused to the boxes, they had been opened with keys, yet none were reported missing. Because of the weight of the boxes had changed between London and Boulogne, it was down to the British police to investigate. Twenty people are thought to have died as a result of the robbery, each death due to greed and anger. Hundreds of suspects were interviewed. However, four were eventually charged. Edward Agar is the criminal most oft cited as the mastermind behind the heist, a forgerer he originally met William Pierce (a ticket printer) several years before the robbery and discussed stealing the gold transported between London and Paris. Two further accomplices were later recruited: James Burgess, the train guard, and Williams Tester, the Margate stationmaster. Agar was also assisted by James Townsend Saward, a crooked criminal barrister who assisted him in getting rid of the gold. How did the criminals access the safes? Quite simply by sneakily making wax impressions of the keys during two separate incidents, one of which being when Agar pretended to be receiving delivery of a box of bullion. They prepared for the robbery by stocking up on bags of lead shot and hiding them at London Bridge station under cloaks, in specially made carpet and leather bags. Enough shot was stored that would weigh the equivalent to £12,000 of gold. On the night of the robbery Agar and Pierce were tipped off by Burgess and Tester. The former two bought first-class tickets to Folkestone. Upon entering the train they handed their luggage (lead-filled bags) to the porter (Burgess) who then stored them in his van. Pierce remained in the carriage, whilst Agar quietly slipped into Burgess' van. Here he began to work on the first box by using the keys to open the safe and a mallet to knock off the iron bars. By the time the train arrived at Redhill he had emptied the first box. Here, Tester was waiting for the train and took the gold from Agar, who had replaced the gold in this first box with lead shot. On the journey between Redhill and Folkestone, Pierce joined Agar in Burgess' van to help with the remaining two boxes. Once both were open it was clear they had not brought enough lead shot, hence the discrepancy in the weights once they arrived in France. Pierce and Agar disembarked from the train at Folkestone, taking the carpet and leather bags with them. Leaving Burgess on the train to carry on his duties as porter. The four later met at Agar's house in West London where a furnace was built and the next three days spent melting the gold down. The Brinks Mat gold heist This gold heist is the most famous in the modern day era, not only for the amount of gold that was stolen but also the almost Guy Ritchie-esque carry-on that followed in the months and years following the robbery. The heist was so famous that even thirty years on newspapers acknowledged the event and comment on what a bizarre set of circumstances it occurred in. A balaclava wearing gang of six broke into the Brinks Mat warehouse at London Heathrow. One of the gang was wearing a yellow balaclava topped off with a trilby. The gang had been tipped off by a security guard that there would be £3m in cash in the vault. The six men, led by Brian Robinson and Micky McAvoy, had received this (incorrect) inside information and access to the warehouse from security guard (and Robinson's brother-in-law) Anthony Black. The men rounded up the security staff and tied them up before pouring petrol on them. Threatening to set them alight if they did not provide access to the vaults, it was not long before the two most senior security guards were identified. Between these two individuals the gang were able to obtain the keys and combination numbers for the vault. However, they were surprised to find that there was no £3m of cash. Instead, when they opened the door to find 76 boxes of gold bullion, containing 6,800 bars of gold, weighing 3 tonnes, as well as cash and uncut diamonds, with a total market value of £25m. The gold was marked for delivery to the Far East. As they delighted in their good fortune, the gang used a forklift truck to move the gold into the van (originally expected to just transport paper) which then drove out into the night with its bottom scraping along the ground. The heist had been easy however it was the aftermath that proved bloody and not quite the gilded happy end that had been hoped for. Wensley Clarkson, author of The Curse of the Brinks Mat Robbery – Twenty Five Years On compares the misfortunes of the gang of six following the robbery to that of Howard Carter and his team after the excavation of Tutankhamun's tomb, who were said to be cursed. Twenty people are thought to have died as a result of the robbery, each death due to greed and anger. One of the most famous deaths was that of Great Train Robber Charlie Wilson. Wilson had been hired to launder some of the Brinks Mat proceeds, but turned out to be quite bad at this and lost the gang £3 million. In 1990 he and his husky dog were shot dead at their front door, by a young man riding a yellow bicycle. Even before the robbery began it was affected by stupidity and general misbehaviour of the gang, for example Black (the key to the robbery taking place) overslept by ten minutes. It wasn't hard for the police to identify Black as the inside man. He, in turn, dutifully identified Robinson and McAvoy (who then head butted him when he identified them in the police line-up). However, it wasn't as though either of them weren't pushing to be caught. Incredulously, the robbers were brazen in their delight at what they had pulled off. Both McAvoy and Robinson spent much of the proceeds from the robbery on properties in Kent, South East England. McAvoy's two Rottweiler guard dogs were reportedly named 'Brinks' and 'Mat'. Did they catch the culprits? Only Robinson and McAvoy were jailed for their role in the robbery, both receiving 25 years each. Of course the problem with stealing 6,800 gold bars all marked by the refiners, is trying to melt it down without raising alarm bells. It is estimated that £10m worth (of the original haul) was never found whilst around £13m worth of the gold was smelted down and sold on the open market. Two days following the robbery, a couple notified the police of a white hot crucible being operated in a neighbour's shed. Connecting it with the recent Brinks Mat robbery they reported it. However, when the police arrived they claimed that the neighbour's garden was outside of their jurisdiction and so it would be reported to the relevant force. There were no statements taken. It wasn't until 14 months later when the premises were raided did police arrest and charge Brian Palmer (a local jeweller and bullion dealer) for his involvement with the Brinks Mat gold. However, he was never sentenced, claiming ignorance about the origin of the gold. Prior to be sentenced, McAvoy entrusted his gold to Kenneth Noye, an expert at 'disposing' of gold. He used a Bristol-based company where the gold was mixed with copper and brass to look like scrap gold and penny coins. It is estimated that £13m of gold was 'laundered' in this way, it wasn't until the amount of money passing through a local bank grabbed the attention of the Bank of England that suspicions were aroused. Just a month after the robbery ten bullion bars were recovered by Italian police at a hotel in Vienna. The bars bore refiners marks and numbers to match that of some stolen from the Brinks Mat warehouse. However, when melted down the bars were filled with tungsten, meaning they could not be the Johnson Matthey bars stolen during the robbery. Instead, the ten men arrested in Vienna had been hoping to pass off the fakes as that same gold stolen from Heathrow. McAvoy tried to reduce his sentence by offering to pay back some of the stolen money. However, it had all gone and in January 1995 he was ordered by the High Court to pay the sum of £27,488,299, making him solely responsible for the sums stolen in the robbery, and bankrupt. The Summer Bliss robbery On the 30th of November 2012 robbers disguised as police officers, boarded the Summer Bliss in Curacao and made off with 70 gold bars, weighing around 216 kgs and estimated to be worth $11.5m. The conspicuous fishing boat named Summer Bliss was manned with an unarmed crew of four. Six robbers boarded the boat, convincing the crew that they were customs officials. It was this ruse that allowed them to be granted entry to a secure section of the boat where the gold was stored. After assaulting the captain the robbers made off with the loot. Three cars were used to transport the gold from the boat, but to where is something that stumped police. At the time of writing 56 of the 70 gold bars had been seized by police. A further 11 were found by customs officials in Puerto Rico in January 2013. The gold was thought to have come from neighbouring Suriname and Guyana, where 650,000 oz per year is mined. In order to avoid taxes and any royalty payment, half of the mined gold is often smuggled out of the country. The Summer Bliss gold was almost certainly gold being smuggled on account of the fact most of the gold shipped from Guyana is transported by air under tight security. Unsurprisingly the intended recipient of the gold has never come forward. It is unclear whether or not the six men originally arrested following the robbery, were ever formally charged or found guilty of the robbery. From virtual gold to real gold to no gold It later turned out that it was in fact an inside job, but not because of Fincham… In this day and age it can be difficult to distinguish between what is 'real' and what isn't. But to get the best of both worlds, some people choose to harvest the assets in the virtual world and then convert them to something a little more tangible. Many will be thinking of the various platforms that are currently popping up allowing you to convert your bitcoin (other crypto-currencies are available) to gold. But actually there was something in existence much before this, thanks to the infamous World of Warcraft. Katrina Fincham, an avid World of Warcraft gamer, made $75,000 by performing 'mundane tasks' and then selling the result of these efforts for real-world cash. One of those tasks was 'farming' gold. The full-time nurse was working extra hours 'farming gold' and in return was making up to $700 a day in cash (she refused to take cheques and bank transfers). With apparently 'piles' of cash building up around the house she decided to use $75,000 of her hard-earned money on gold bullion. However, when she went on holiday with her boyfriend, her house was robbed three times, during which her wall-safe containing her gold bullion was stolen. Her insurance company refused to pay out, however, declaring Fincham had only converted the cash to bullion so it would then be stolen and she could claim on the insurance. Fincham sued them, they then counter-sued claiming insurance fraud. It later turned out that it was in fact an inside job, but not because of Fincham. Her then boyfriend, (who, she had met online) had tipped off the criminals in exchange for just $500. Kerry Packer's bullion theft down under Between 8pm on Friday the 28th of April 1995 and 8.30am the following Monday, 25 gold bars weighing 285 kgs were stolen from a safe in Australian media tycoon Kerry Packer' office, as well as a glass jar full of gold nuggets and a gold and silver necklace. At the time, the loot was worth AUD 5.2 million. An 'antiquated alarm system' meant no one was alerted when the thief entered through one of three entrances to the building. The door to Packer's office had been carefully prized open and scorch marks on the carpet were found just 10cm away from the drinks cabinet, behind which the safe was hidden. The 1940s Chubb safe had been cracked open by an expert safe-breaker. Nothing was to be found inside except one fingerprint. Delighted with the find, the police believed they had found their culprit and traced the print back to a minor criminal. This individual however turned out to be a safe-mechanic and had serviced Packer's safe in the past. An inside job? Police then turned their attention to the security guards who should have been on duty over the weekend. However it didn't take long for a former security guard to come forward and admit that the majority of shift-time was spent working out at the gym and pools, that were part of Packer's complex. The final (and remaining) suspect was thought by police to be a lover of Packer's former secretary. Ms Wheatley had worked for Packer for 18 years and was known affectionately as 'The Perfumed Bulldozer.' Yet this bulldozer may have been slightly indiscrete in her pillow talk. Police believe that the thief, a loner but also a ladies man, targeted Wheatley as a means of finding out about Packer's gold. The suspect was none other than one of Australia's notorious safe-crackers. Despite the police investigations, he proved to be a master at counter-surveillance and was never charged for the Packer robbery, nor was anyone else. And the gold? Despite hopes that it would be recovered some time after the suspect's death, police believe that most of the gold bullion was moved to Melbourne where it was melted down. Not so easy is it? The highlight in this list for me is the Brinks Mat robbery. Had the collateral damage not been so horrendous (and ongoing) I would feel sorry for the original gang of six. They thought they had hit the jackpot when they discovered gold to then realise what a dangerous and murky world it can be trying to get rid of the evidence and profit from it. At every turn they stumbled under the sheer weight of the enormity of what they had done. That aside, fancy calling your dogs 'Brinks' and 'Mat'! Regards, Jan Skoyles for The Daily Reckoning Ed. Note: To get more insightful stories like this – including unique access to real, actionable profit opportunities – sign up for the FREE Daily Reckoning email edition, right here. This article originally appeared here at The Real Asset Co.

Don Coxe: Gold Will Be Worth Much More Than $1,300 per Oz Posted: 26 Feb 2014 01:57 PM PST In Financial Repression Starts Showing Its Ugly Head, one of the most read pieces of this website, we referred to an analogy between the current zero interest rate policy and the army. Don Coxe, financial strategist in global markets and commodities at Coxe Advisors, compared the interest rate suppression with a wounded soldier. We wrote: In the army, in the early days, dying soldiers were given heroin. It was the only solution to ignore the pain. However, the crucial part was the timing of withdrawing the heroin. Withdrawing either too fast or too late could have catastrophic results. Knowing when exactly to switch to pain stilling morphine was crucial. Similarly, zero percent interest rates could be considered financial heroin. The US Fed Chairman experienced it the hard way when his announcement of a potential withdrawal had immediate and destructive effects in June. In a piece in which he released today through Casey Research (source) he provides an update on the financial heroin situation: The Fed has been lulled into the economically perilous belief that capitalism should be stimulated with sustained injections of a potent narcotic long after the patient is out of the emergency ward. Zero-cost money and an underpriced mid-to-long Treasury market most certainly will make the economy rebound, not subside into languid repose. This mechanistic assumption ignores the guts component of capitalism: hard work and taking risk for reward. The Fed's long-term recovery is, in effect, based on the unstated premise that risk is a four-letter word that has, like another four-letter word beginning with "f," little place in genteel company. Mr. Bernanke must sense this, because nearly a year ago he began to warn that "tapering" was coming and "unconventional monetary policies" would not last forever. For that warning to the addicted patients—the big, bad, bonused bailout banks—he was greeted with screams of anguish and sharp stock market selloffs. His successor is committed—at least for now—to continuing the tapering. Since the Fed has quadrupled its balance sheet without triggering worrisome inflation, that component of Fed policy should easily survive a gradual return to normalcy. But the zero interest-rate policy (ZIRP), as our friend John Mauldin recently noted, is having serious effects on the economy and should be scheduled for early abandonment. This brings up the question of protection. In other words, although the stock market has attracted all the attention in the past 15 months of financial highs in paper assets, to which extent should gold be considered in a serious portfolio? After all, mainstream media, predicting a three digit gold price, has relentlessly pushed the idea of gold’s  "barbarous relic" status. Don Coxe his vision is that gold is as relevant as ever, and the indispensable portfolio protector is on sale at a deep discount. He writes: Events will, we suggest, bring gold back to center stage from its two years of languishing backstage. We cannot predict which "events" will trigger the next monster rally, but with all that paper money and all those debts and all those bad bank balance sheets, something will assuredly go wrong sometime. Gold is that unique element that is priced not just by the interaction of the classic opposites—fear and greed—but by the shifting winds and storms of those emotional and intellectual opposites. Gold was languishing at $275 when a new kind of global war began on 9/11. When the US economy emerged from recession in 2002 and embarked on a real-estate-driven boom, gold soared all the way to the $1,000 level before being sucked into the bank collapse vortex and declining to $716. But while most equities were still plunging, gold and gold stocks entered into a new bull market and soared to $1,911. Two fears drove that golden bull: fear of Fed monetary policies and fear of a collapse of Eurozone banks and economies. When those fears began to evaporate, gold investors looked down, saw no safety nets—and began bailing out. No inflation? No euro crisis? No reason to hold gold. We think most investors are missing the point: nearly six years of unprecedented money printing, unprecedented subsidization of big banks with zero-cost money, and massive government intervention into the economy have not delivered even a soupçon of robust, inflation-generating growth. Don Coxe concludes: The only thing about all of the above of which we can be reasonably certain: long before then, gold is going to be worth much more than $1,300 an ounce.

Gold Daily and Silver Weekly Charts - Phaeton Descending Posted: 26 Feb 2014 01:26 PM PST

Gold Daily and Silver Weekly Charts - Phaeton Descending Posted: 26 Feb 2014 01:26 PM PST

China Gold Imports Surge – Or Fall. You Decide Posted: 26 Feb 2014 01:21 PM PST Chinese gold imports are becoming a case study in the power of journalists to control the slant of a story by deciding which facts to highlight. The following chart contains the relevant data.

U.S. Dollar Gains - Forex Trading Alerts Posted: 26 Feb 2014 01:17 PM PST The U.S. dollar extended gains after stronger-than-expected U.S. home sales data. Earlier today, the Commerce Department showed that new home sales rose 9.6% to 468,000 units in January, while analysts had expected a 1% drop to 400,000. What impact did this largest increase in five-and-a-half years has on major currency pairs? If you want to know our take on this question, we invite you to read our today's Forex Trading Alert.

Jeffrey Saut - We Just Got A Major “Buy Signal” On Gold Posted: 26 Feb 2014 01:11 PM PST With continued volatility in major markets, today one of the savviest individuals in the business told King World News that he now has a "buy signal" on gold for the first time in a long time. Saut also included the gold chart showing the buy signal on gold and believes gold is headed higher longer-term. This posting includes an audio/video/photo media file: Download Now

Conflicts over conflict gold Posted: 26 Feb 2014 01:00 PM PST The Real Asset Co

Guns, Ammo and Other Great Ways to Fight Inflation Posted: 26 Feb 2014 12:37 PM PST Cast your mind back to the fall of 2008. Lehman Bros. had just failed, and for those in Washington, it was thought all the banks were about to go up in smoke. Of all the radical policies that were enacted in response to the crisis, one of the stealthiest was the Fed's decision to begin paying banks interest on their "excess reserves." This change, begun in October 2008, has netted the banking industry billions of risk-free dollars over the last five years. It's been nothing more than a pure government subsidy. And the majority of the public has been blissfully unaware. There are signs, however, that the Fed's gift to the banks may be coming to an end. Below, we discuss the implications of such a move on you and your savings. Before we do that, we must first explain what "excess reserves" are. …the commercial banking system is also beginning to light the fuse to ignite the inflationary tinder created by the Federal Reserve. Commercial banks are required a keep a certain amount of money on deposit at the Fed based on how much a bank holds in customer deposits. Bankers normally keep as little money at the Fed as possible. They prefer to use those funds to make loans or buy securities and earn interest. Any extra cash held at the Fed over and above what they're required to hold is known as excess reserves. Up until the fall of Lehman Bros. in September 2008, banks' excess reserves at the Fed were essentially zero. Back then, lending money as fast as possible was the name of the game. But a month later, the central bank began paying 0.25% interest to banks on any excess reserves. The result? Five years later, banks have $2.5 trillion in excess reserves sitting at the Fed. This means the Fed pays banks $6.25 billion a year in interest courtesy of a policy change made in a panic. [Note: For the banks, this makes perfect sense. Since the crash, their appetite for lending risk has been nonexistent. So why not earn a riskless quarter percent by parking cash at the Fed? But here's the real kicker. Much of that cash came to the banks as the Fed printed billions of dollars (known as QE — or quantitative easing). So banks have been receiving 0.25% from the Fed on money mostly created out of nowhere since the crash. It's a good gig if you can get it.] But this policy may be about to change. In October, the minutes of the Federal Open Market Committee meeting included a discussion of excess reserves. Specifically, it was noted that “Most participants thought that a reduction by the Board of Governors in the interest rate paid on excess reserves could be worth considering at some stage.” Alan Blinder, though, who was once the vice chairman at the Fed, wrote in The Wall Street Journal that he interpreted the minutes' tea leaves to really mean the voting members "love the idea" of reducing the rate being paid on these reserves. Changing this policy would be significant and it has the potential to unleash a torrent of liquidity through the commercial banking system. When the Fed quits paying this interest, the banks will have no reason to leave their cash at the Fed. The most reasonable option is to lend the $2.5 trillion instead. And through the power of fractionalized banking, the money supply could then be increased by up to 10 times that amount. Needless to say, $25 trillion is a gargantuan quantity of money. The total money supply as measured by M2, for example, was just short of $11 trillion in December. Now, it's unlikely to see the money supply triple if the Fed were to stop paying interest on these reserves. But it's easy to imagine a significant jump in money creation if it were lent out into the economy instead of sitting idle at the central bank. And if that happens, inflation will follow. Watching the Fed, however, is only part of the inflation story. Investors who want to protect themselves must also keep a close eye on what the commercial banks are doing. And we're beginning to see that bankers, after five years of licking their wounds, are starting to say yes again after turning potential borrowers away en masse since the crash. In other words, the commercial banking system is also beginning to light the fuse to ignite the inflationary tinder created by the Federal Reserve. This is important because, according to Steve Hanke, professor of applied economics at John Hopkins University, commercial banks create 85% of the money supply, while the remaining 15% is created by the Fed. And there's evidence that commercial bank lending is heating up. In December, bank credit was up 5.9% according to the latest H.8 numbers from the Federal Reserve. This is the largest increase we've seen since the crash. Just as a reminder, bank credit fell 6.7% in 2009. The big December increases were in the commercial and industrial loan category, which jumped 14.1%, and consumer loans, which increased 6.4%. Commercial real estate lending is also making a comeback. “More banks are now on the offense, not on defense anymore, when it comes to commercial real estate,” said bank analyst Anthony Polini. Compass Point Research & Trading analyst Kevin Barker says that commercial real estate is “definitely becoming a significant driver of loan growth [and] to the extent that the banks can take advantage, it could be a tail wind to earnings.” While investors worry about Fed tapering and rising interest rates, it's exactly what banks need. Higher rates provide banks the incentive to lend, which will spur money creation in the commercial banking system. Meaning as banks start to lend and rates begin to rise, the money supply could begin to grow, and in turn, price inflation could rear its ugly head. While gold and silver are the traditional hedges to central bank inflation, it helps to think outside those metallic boxes. This can be as simple as stocking up on items that you know you'll need in the future. Last month in The Daily Reckoning, for example, Addison Wiggin, made the case for buying five years' worth of razor blades. (See “3 Ways to Make Your Portfolio Inflation-Proof”) At last year's Agora Financial Symposium in Vancouver, I mentioned stocking up on real things like cigarettes and liquor too. You may not smoke, drink, or shoot — but you can always sell or trade cigarettes, booze, and ammunition. There are currently shortages of ammo (.22 caliber rounds sell out in minutes in my town each week), and bullet prices have exploded. Cigarettes and liquor are demonized, taxed, and seem to always increase in price. All of these physical goods should be on your "buy" list. Regards, Doug French for The Daily Reckoning Ed. Note: To learn more ways to make your lifestyle “inflation-proof” stay tuned to The Daily Reckoning email edition – a free service that goes out to over 300,000 people, every single day. And in every issue, readers are given at least 3 chances to discover real, actionable investment opportunities. It’s one of the best ways to grow your wealth no matter what the banks decide to do. Check it out for yourself by signing up for FREE, right here.

Gold fix rigging may finance banker bonuses, Sprott says Posted: 26 Feb 2014 12:28 PM PST 3:25p ET Wednesday, February 26, 2014 Dear Friend of GATA and Gold: Sprott Asset Management CEO Eric Sprott today speculates in an interview with Tekoa da Silva that the bullion banks involved with the daily gold price fixing in London may have allowed market manipulation to facilitate the annual bonuses of their employees. The interview is seven minutes long and can be seen at You Tube here: http://www.youtube.com/watch?v=pAKoBYlfwTo CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. ADVERTISEMENT How to profit with silver -- and which stocks to buy now Future Money Trends is offering a special 16-page silver report with profiles of nine companies and technical analysis of their stock performance. Six of the companies have market capitalizations of less than $800 million and one company has a market cap of only $30 million. The most exciting of these companies will begin production in a few weeks and has a market cap of just $150 million. Half of all proceeds from the sale of this report will be donated to the Gold Anti-Trust Action Committee to support its efforts exposing manipulation and fraud in the gold and silver markets. To learn about this report, please visit: http://www.futuremoneytrends.com/index.php?option=com_content&id=376&tmp... Join GATA here: Mines and Money Hong Kong Hong Kong Convention and Exhibition Centre Monday-Friday, March 24-28, 2014 Hong Kong Special Administrative Region, China http://www.minesandmoney.com/hongkong/ * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: http://gata.org/tshirts Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16 ADVERTISEMENT Buy metals at GoldMoney and enjoy international storage GoldMoney was established in 2001 by James and Geoff Turk and is safeguarding more than $1.7 billion in metals and currencies. Buy gold, silver, platinum, and palladium from GoldMoney over the Internet and store them in vaults in Canada, Hong Kong, Singapore, Switzerland, and the United Kingdom, ­taking advantage of GoldMoney's low storage rates, among the most competitive in the industry. GoldMoney also offers delivery of 100-gram and 1-kilogram gold bars and 1-kilogram silver bars. To learn more, please visit: http://www.goldmoney.com/?gmrefcode=gata

FT story on gold price rigging was erased deliberately Posted: 26 Feb 2014 11:46 AM PST 2:54p ET Wednesday, February 26, 2014 Dear Friend of GATA and Gold: The Financial Times' Monday report about a study concluding that the daily London gold price fixing is manipulated probably half the time was deliberately removed from the newspaper's Internet site by the newspaper's editorial staff and did not vanish because of any programming glitch. The confirmation has come from the newspaper's customer service department in reply to inquiries from readers. While the newspaper has not yet answered further inquiries seeking an explanation for the action, it would hardly surprise close followers of the gold market who read the Financial Times to be told that the newspaper's publishing the story in its newsprint edition was itself a mistake, since the FT seems to have a policy against acknowledging gold market manipulation and against reporting anything that might discomfort bullion banks or Western central banks that trade surreptitiously in gold. Fortunately, the FT story in question, quickly called to your attention by GATA on Sunday night U.S. Eastern time, has been captured by the Google Internet archive here: http://tinyurl.com/kz542fc The FT's reply to inquiries reads: "This is regarding the query you raised about the missing article in FT.com. Our Editorial Team have confirmed that it was their decision to remove the story 'Gold Price Rigging Fears Put Investors on Alert" from FT.com. Should you want to get further information on this please send your query to ean@ft.com. For any inquiries or assistance that you may need, do not hesitate to contact us. "Kind regards, Rusella Canio, Customer Service Executive, Financial Times Customer Service." CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. 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 Hong Kong Convention and Exhibition Centre Monday-Friday, March 24-28, 2014 Hong Kong Special Administrative Region, China http://www.minesandmoney.com/hongkong/ * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: http://gata.org/tshirts Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16

China Gold Imports Surge – Or Fall. You Decide Posted: 26 Feb 2014 11:30 AM PST Chinese gold imports are becoming a case study in the power of journalists to control the slant of a story by deciding which facts to highlight. The following chart contains the relevant data. Here's how the mainstream press, in this case Bloomberg, handled it: China's Gold Shipments From Hong Kong Decline as Demand Weakens China's gold imports from Hong Kong fell in January as jewelers and fabricators in the world's largest consumer of the precious metal reduced purchases on expectation demand may weaken after Lunar New Year holidays. Net imports totaled 83.6 metric tons last month, compared with 91.9 tons in December and 19.6 tons a year earlier, according to calculations by Bloomberg News based on data from the Hong Kong Census and Statistics Department today. Exports to Hong Kong from China declined to 19 tons in January from 34.8 tons in December, the Statistics Department said in a separate statement. Mainland China doesn't publish such data. And here's how MineWeb's Lawrence Williams handled the same story: China's January Hong Kong gold imports soar 326% year on year Statistics are how you read them and China both imported 326% more gold from Hong Kong in January than it did a year earlier, or 9% less than in the previous month. Lies, damn lies and statistics! Take the headline above and compare it with the Bloomberg headline for effectively the same story using exactly the same figures which was: China's Gold Shipments From Hong Kong Decline as Demand Weakens. Both headlines are absolutely correct based on the figures but you wouldn't believe so from reading them, indeed you could be forgiven for thinking one of them is obviously a downright lie. It just depends which way you care to spin it and some recent Bloomberg headlines do seem to have tended towards negativity with regard to Chinese gold imports. Consider the facts. According to the Bloomberg interpretation of the latest gold import and export figures from the Hong Kong Census and Statistics Department, the special administrative region exported a net 83.6 tonnes of gold to the Chinese mainland in January. As Bloomberg rightly notes this is a fall – albeit a fairly small one – of around 9% from the 91.9 tonnes in December – so far so good. But gold trade between Hong Kong and Mainland China can be seasonal so perhaps the better comparison should be to compare this with the net exports from Hong Kong to mainland China in January last year – which came to a very low 19.6 tonnes – hence the 326% rise noted in theMineweb headline. Incidentally Hong Kong net gold exports to the mainland were 96.7 tonnes in December 2012 – so the December figures for 2012 and 2013 were broadly comparable, but the January ones certainly were not! What can one surmise from that? Perhaps not a lot, although there are continual anecdotal stories in the press of huge demand in China by individuals for gold from shops which sell the precious metal in various forms. By any standard, 83.6 tonnes of gold is a lot of the yellow metal. To put it in perspective it's 3.7 tonnes more than the world's 37th largest holder of gold, Australia, holds in its total central bank reserves, and given that most over the counter gold purchases in China are in grammes rather than kilos or tonnes – and 83.6 tonnes equates to 83.6 million grammes, that suggests a huge number of Chinese are still stocking up on gold. So if this represents a weakening in demand, as the Bloomberg headline suggests, then the gold investors should still be happy with that interpretation despite its overall downbeat connotations. What can be gleaned from the figures is that gold demand in the runup to the Chinese New Year remained strong. Historically December is a strong month for Chinese gold imports as traders stock up ahead of the Lunar New Year holiday, and it usually slips back in January, but this year was somewhat different with demand obviously remaining strong right through January. Rather than taking month on month figures perhaps one should look at December and January combined as a guide to real demand over the holiday, and this may well have been exceptional. Imports into the mainland through Hong Kong ahead of this New Year holiday thus totalled 175.5 tonnes, whereas that immediately ahead of last year's New Year holiday was a mere 116.1 tonnes, suggesting that demand in this Year of the Horse was actually over 50% greater than a year ago! You can make of these statistics what you may, but to this observer it suggests that Chinese demand remains extremely strong. Of course, as we have often noted here, it is believed that China imports gold through other ports of entry than Hong Kong too as the Shanghai Gold Exchange consumption figures remain consistently well in excess of the Hong Kong export stats. We should probably leave it to Koos Jansen and his very interesting In Gold we Trust website for further comment on what we believe to be the true figures for Chinese consumption. Obviously, Williams gets it right. Chinese gold demand is highly cyclical, so comparing a relatively-weak month like January to a traditionally-strong one like December is like comparing pre-and-post-Christmas retail sales in the US; a big drop always occurs, so you can't read anything into sequential numbers. Instead, retail analysts look at year-earlier sales for a sense of the trend – and the mainstream media usually reports the year-over-year comparisons accurately. So they clearly understand the concept. Why the difference with gold? Well, it's possible that the seasonality of that market isn't well-understood. And it's also possible that there's an institutional bias in shops like Bloomberg, where gold is seen as a commodity at best and a "barbarous relic (Keynes) or "old-fashioned money" (Krugman) at worst. So perhaps Bloomberg reporters are operating under editorial guidelines that call for gold to be shown in the least favorable light. Whatever the cause of the misreporting, the fact is that China continues to pull gold away from Western central banks in increasing quantities, bringing us ever-closer to the day when the supply runs out.

Lesson of the Saddle Ridge Gold Coins Hoard Posted: 26 Feb 2014 10:20 AM PST Gold coins buried in your back-yard might seem a great safety-net. But for you, or a future historian...?   SO A COUPLE in California have unearthed maybe $10 million-worth of historic US gold coins, writes Adrian Ash at BullionVault.    The coins were buried in 8 rusty tin cans sometime in the late 19th century on land they now own. You can see the coins here, on the website of Donald Kagin PhD, the coin dealer charged with selling them for top price.    Kudos to Dr.Kagin. The global PR he's unleashed is priceless, and coin collectors worldwide will be able to pay top Dollar for these coins. Because he's arranged for 90% of what he's calling the Saddle Ridge Hoard (named after a geographical feature on the lucky couple's land) to be made available through Amazon.com   Now, as you'll see, those old cans make a stark contrast with the shiny gold. Gold does so little, remember, it doesn't even react with water or air. That makes it perfect for long-term, low-cost storage.    But also note that "what's really significant about this find," as Kagin says, "is that unlike other hoards and treasures, this one includes a great variety of dates."    Indeed, the hoard seems to have been gathered and buried over a period of some years. Because different cans held coins from certain years. Worth $27,000 in the back-half of the 19th century (when the face value of a gold coin meant what it said) these coins were put aside in stages as each of the cans was filled up.    This hoard, therefore, was most likely somebody's life savings...quietly built up over time.    Buried out in the Californian scrub, however, those careful savings were for some reason lost to them...and to their heirs...forever.    All coin and jewellery hoards are fascinating. Who buried it? Why? And what happened to mean that they left it there...making it worthless to the owners?    Such lost treasure also therefore provides a key lesson for today's savers and hoarders. Know where your wealth is stashed, and please...make sure your family know too.    There's no profit in giving your treasure to a metal-detector after the grim reaper comes calling.    What's more, unlike British Romans fleeing the Saxons...or even Viking raiders fleeing terror themselves...you may now safely bury a chunk of your wealth far overseas today, yet maintain full access to its value at all times, using BullionVault.    Then, if you are then threatened by a horde of barbarians (or its economic equivalent) you can flee to where your gold or silver already awaits, or at least get to a safer place to release and use its value.    Because history shows that's much easier than trying to flee carrying all your wealth with you. Burying your gold in the back yard, in contrast, means you must be able one day to return and unearth it.   And as the Saddle Ridge coins prove, just like every other hoard so far discovered by archaelogy, a farmer's plough or blind luck, you might not get chance.

Lesson of the Saddle Ridge Gold Coins Hoard Posted: 26 Feb 2014 10:20 AM PST Gold coins buried in your back-yard might seem a great safety-net. But for you, or a future historian...?   SO A COUPLE in California have unearthed maybe $10 million-worth of historic US gold coins, writes Adrian Ash at BullionVault.    The coins were buried in 8 rusty tin cans sometime in the late 19th century on land they now own. You can see the coins here, on the website of Donald Kagin PhD, the coin dealer charged with selling them for top price.    Kudos to Dr.Kagin. The global PR he's unleashed is priceless, and coin collectors worldwide will be able to pay top Dollar for these coins. Because he's arranged for 90% of what he's calling the Saddle Ridge Hoard (named after a geographical feature on the lucky couple's land) to be made available through Amazon.com   Now, as you'll see, those old cans make a stark contrast with the shiny gold. Gold does so little, remember, it doesn't even react with water or air. That makes it perfect for long-term, low-cost storage.    But also note that "what's really significant about this find," as Kagin says, "is that unlike other hoards and treasures, this one includes a great variety of dates."    Indeed, the hoard seems to have been gathered and buried over a period of some years. Because different cans held coins from certain years. Worth $27,000 in the back-half of the 19th century (when the face value of a gold coin meant what it said) these coins were put aside in stages as each of the cans was filled up.    This hoard, therefore, was most likely somebody's life savings...quietly built up over time.    Buried out in the Californian scrub, however, those careful savings were for some reason lost to them...and to their heirs...forever.    All coin and jewellery hoards are fascinating. Who buried it? Why? And what happened to mean that they left it there...making it worthless to the owners?    Such lost treasure also therefore provides a key lesson for today's savers and hoarders. Know where your wealth is stashed, and please...make sure your family know too.    There's no profit in giving your treasure to a metal-detector after the grim reaper comes calling.    What's more, unlike British Romans fleeing the Saxons...or even Viking raiders fleeing terror themselves...you may now safely bury a chunk of your wealth far overseas today, yet maintain full access to its value at all times, using BullionVault.    Then, if you are then threatened by a horde of barbarians (or its economic equivalent) you can flee to where your gold or silver already awaits, or at least get to a safer place to release and use its value.    Because history shows that's much easier than trying to flee carrying all your wealth with you. Burying your gold in the back yard, in contrast, means you must be able one day to return and unearth it.   And as the Saddle Ridge coins prove, just like every other hoard so far discovered by archaelogy, a farmer's plough or blind luck, you might not get chance.

Lesson of the Saddle Ridge Gold Coins Hoard Posted: 26 Feb 2014 10:20 AM PST Gold coins buried in your back-yard might seem a great safety-net. But for you, or a future historian...?   SO A COUPLE in California have unearthed maybe $10 million-worth of historic US gold coins, writes Adrian Ash at BullionVault.    The coins were buried in 8 rusty tin cans sometime in the late 19th century on land they now own. You can see the coins here, on the website of Donald Kagin PhD, the coin dealer charged with selling them for top price.    Kudos to Dr.Kagin. The global PR he's unleashed is priceless, and coin collectors worldwide will be able to pay top Dollar for these coins. Because he's arranged for 90% of what he's calling the Saddle Ridge Hoard (named after a geographical feature on the lucky couple's land) to be made available through Amazon.com   Now, as you'll see, those old cans make a stark contrast with the shiny gold. Gold does so little, remember, it doesn't even react with water or air. That makes it perfect for long-term, low-cost storage.    But also note that "what's really significant about this find," as Kagin says, "is that unlike other hoards and treasures, this one includes a great variety of dates."    Indeed, the hoard seems to have been gathered and buried over a period of some years. Because different cans held coins from certain years. Worth $27,000 in the back-half of the 19th century (when the face value of a gold coin meant what it said) these coins were put aside in stages as each of the cans was filled up.    This hoard, therefore, was most likely somebody's life savings...quietly built up over time.    Buried out in the Californian scrub, however, those careful savings were for some reason lost to them...and to their heirs...forever.    All coin and jewellery hoards are fascinating. Who buried it? Why? And what happened to mean that they left it there...making it worthless to the owners?    Such lost treasure also therefore provides a key lesson for today's savers and hoarders. Know where your wealth is stashed, and please...make sure your family know too.    There's no profit in giving your treasure to a metal-detector after the grim reaper comes calling.    What's more, unlike British Romans fleeing the Saxons...or even Viking raiders fleeing terror themselves...you may now safely bury a chunk of your wealth far overseas today, yet maintain full access to its value at all times, using BullionVault.    Then, if you are then threatened by a horde of barbarians (or its economic equivalent) you can flee to where your gold or silver already awaits, or at least get to a safer place to release and use its value.    Because history shows that's much easier than trying to flee carrying all your wealth with you. Burying your gold in the back yard, in contrast, means you must be able one day to return and unearth it.   And as the Saddle Ridge coins prove, just like every other hoard so far discovered by archaelogy, a farmer's plough or blind luck, you might not get chance.

In The News Today Posted: 26 Feb 2014 10:06 AM PST Why is patriotism thought to be blind loyalty to the government and the politicians who run it, rather than loyalty to the principles of liberty and support for the people? Real patriotism is a willingness to challenge the government when it's wrong. – Ron Paul 2012   Here Is The FT’s Gold Price Manipulation Article... Read more » The post In The News Today appeared first on Jim Sinclair's Mineset.

Debt Default Will Kill the Dollar-Brandon Smith Posted: 26 Feb 2014 09:53 AM PST By Greg Hunter's USAWatchdog.com Dear CIGAs, Economic and political writer Brandon Smith thinks America is in deep financial trouble, and the Fed knows it.  Smith contends, "First of all, I'd like to point out that at the end of last year, I brought up the prospect to the alternative economics community that the 'taper' was... Read more » The post Debt Default Will Kill the Dollar-Brandon Smith appeared first on Jim Sinclair's Mineset.

South Africa delays carbon tax, plans levies on acid mine water Posted: 26 Feb 2014 08:46 AM PST While carbon tax is delayed to 2016, South Africa may impose new levies to help fund the treatment of acid water seeping from disused gold mines. Read more….

Cautious silver moves up with gold Posted: 26 Feb 2014 08:46 AM PST Wednesday once more saw a more positive attitude to gold among US investors alongside short covering and the building of long positions on COMEX. Read more….

On gold – the banks they are a’changing Posted: 26 Feb 2014 08:46 AM PST We are beginning to see cracks in the overall bearish sentiments towards gold expressed by most bank analysts earlier this year, but some still remain unmoved by the recent positive gold price performance. Read more….

Junior updates: Blumont bails, Turkey gold-silver discovery & more Posted: 26 Feb 2014 08:46 AM PST Top junior developments, updated daily: today we take a look at high-grade gold-silver discovery in Turkey, Liberty’s latest junior investment & more. Read more….

Interest Rates "Key" to 2014 Gold Price Posted: 26 Feb 2014 07:27 AM PST Gold price rally "driven" by falling US bond yields. But $500 tag seen if rates hit 5%...   U.S. INTEREST RATES are "key" to the direction of the gold price in 2014, according to analysts and fund managers.   Historically, the gold price has "traditionally had a negative correlation with long-term US real interest rates," says Walter de Wet, head of commodities research in London for Standard Bank, moving higher when interest rates fall after accounting for inflation, and vice versa.   "A lower bond yield would imply a higher gold price," says de Wet. But further ahead, his colleagues at Standard Bank "continue to expect US bond yields to move higher towards year-end," with the 10-year Treasury bond falling in price until its yield rises a whole percentage from today, up to 3.75%.   Probably the most heavily traded government bond by maturity worldwide, 10-year US Treasuries have risen in price since the start of January. That has cut the annual yield – the rate of interest – which these fixed-income assets offer new buyers, pushing it down from 3.00% to 2.75% and below.   This drop in the 10-year US Treasury yield "has also translated into a lower real interest rate," says de Wet at Standard Bank, comparing the yield against the latest reported US rate of inflation.   Real interest rates are also "proxied" by the yield paid by 10-year inflation-linked US bonds, Standard Bank's analysis adds, noting that it "has dropped from just below 0.8% in December to the current 0.56%."   "Since the launch of the SPDR gold ETF in 2004," said a presentation last month from Claude Erb, a former commodities portfolio manager, pointing to a major vehicle for investment funds to gain gold-price exposure, "it seems that interest rates have driven the price of gold."   Identifying what he calls a "fear trade" linking bond and gold prices, on Erb's math the gold price "could fall to about $800 if interest rates rise to 4%...[and] $500 if interest rates rise to 5%."   Trevor Greetham, director of asset allocation and manager of Fidelity UK's multi-asset range, also believes interest rates are key to gold prices.    "If you wind the clock forward," he tells Investment Week, and also without referencing inflation, "interest rates could be at 5% in a few years time.   "In that environment, people will question why they are holding gold, which does not yield anything."

Interest Rates "Key" to 2014 Gold Price Posted: 26 Feb 2014 07:27 AM PST Gold price rally "driven" by falling US bond yields. But $500 tag seen if rates hit 5%...   U.S. INTEREST RATES are "key" to the direction of the gold price in 2014, according to analysts and fund managers.   Historically, the gold price has "traditionally had a negative correlation with long-term US real interest rates," says Walter de Wet, head of commodities research in London for Standard Bank, moving higher when interest rates fall after accounting for inflation, and vice versa.   "A lower bond yield would imply a higher gold price," says de Wet. But further ahead, his colleagues at Standard Bank "continue to expect US bond yields to move higher towards year-end," with the 10-year Treasury bond falling in price until its yield rises a whole percentage from today, up to 3.75%.   Probably the most heavily traded government bond by maturity worldwide, 10-year US Treasuries have risen in price since the start of January. That has cut the annual yield – the rate of interest – which these fixed-income assets offer new buyers, pushing it down from 3.00% to 2.75% and below.   This drop in the 10-year US Treasury yield "has also translated into a lower real interest rate," says de Wet at Standard Bank, comparing the yield against the latest reported US rate of inflation.   Real interest rates are also "proxied" by the yield paid by 10-year inflation-linked US bonds, Standard Bank's analysis adds, noting that it "has dropped from just below 0.8% in December to the current 0.56%."   "Since the launch of the SPDR gold ETF in 2004," said a presentation last month from Claude Erb, a former commodities portfolio manager, pointing to a major vehicle for investment funds to gain gold-price exposure, "it seems that interest rates have driven the price of gold."   Identifying what he calls a "fear trade" linking bond and gold prices, on Erb's math the gold price "could fall to about $800 if interest rates rise to 4%...[and] $500 if interest rates rise to 5%."   Trevor Greetham, director of asset allocation and manager of Fidelity UK's multi-asset range, also believes interest rates are key to gold prices.    "If you wind the clock forward," he tells Investment Week, and also without referencing inflation, "interest rates could be at 5% in a few years time.   "In that environment, people will question why they are holding gold, which does not yield anything."

Spot Gold Drops 1.2% from "2012 Trendline Resistance", Seen Safe from Drop to $1000 on Surging Chinese Demand Posted: 26 Feb 2014 06:04 AM PST SPOT GOLD prices bounced almost $16 below a new 4-month high Wednesday lunchtime in London, finally rallying after slipping all morning from $1346 per ounce.   Silver also fell as gold prices lost 1.2%, but had earlier failed to track the overnight rise and so dropped to 3-session lows beneath last week's finish at $21.80 per ounce.   Western stock markets slipped, as did the price of major government bonds.   Ten-year US Treasury yields edged higher to 2.71%.   Gold prices on the Shanghai Gold Exchange reversed Tuesday's discount to London spot, taking the premium to $1.80 per ounce on strong but lower trading volumes.   "Gold is now approaching the confluence of trend line resistance at $1347 developing from October 2012 highs and May 2013 highs," says a technical chart analysis from French investment bank and London market makers Societe Generale.   "Bullish momentum has been stalling lately," says SocGen. Only a definite close above $1347 would propel gold towards $1362 and $1375," its highs from last October and September.   Today's "pause" at 4-month highs, says a note from Swiss investment and bullion bank UBS, shows "the need for stronger conviction" amongst investors.   With spot gold prices now 12% higher from the start of 2014, "It is also sensible for physical buyers to take a break," UBS goes on, noting that Shanghai's premium to London prices "has come off significantly" and the falling Yuan could mean "potential liquidity issues make it attractive to sell gold for cash in the near-term."   The Chinese Yuan steadied above yesterday's 6-month lows to the Dollar on Wednesday, with the recent drop now widely atttributed to firm action against "currency speculators" by the People's Bank of China.   "The market hasn't quite fathomed the scale of annual Chinese buying," reckons the global head of FX and precious metals at the private-bank division of France's Credit Agricole, pointing to the "wealth effect in China over the next coming years."   Although not bullish right now – and preferring a drop in spot gold prices to $1250 to buy – "I don't think gold's going to come back to $1000, like many people are suggesting," says Credit Agricole's Davis Hall, quoted from a TV interview by Bloomberg.   "Because I'm seeing," he says, "what's happening [to incomes and wealth] in China," now the world's No.1 end-consumer market for gold, overtaking India.

Spot Gold Drops 1.2% from "2012 Trendline Resistance", Seen Safe from Drop to $1000 on Surging Chinese Demand Posted: 26 Feb 2014 06:04 AM PST SPOT GOLD prices bounced almost $16 below a new 4-month high Wednesday lunchtime in London, finally rallying after slipping all morning from $1346 per ounce.   Silver also fell as gold prices lost 1.2%, but had earlier failed to track the overnight rise and so dropped to 3-session lows beneath last week's finish at $21.80 per ounce.   Western stock markets slipped, as did the price of major government bonds.   Ten-year US Treasury yields edged higher to 2.71%.   Gold prices on the Shanghai Gold Exchange reversed Tuesday's discount to London spot, taking the premium to $1.80 per ounce on strong but lower trading volumes.   "Gold is now approaching the confluence of trend line resistance at $1347 developing from October 2012 highs and May 2013 highs," says a technical chart analysis from French investment bank and London market makers Societe Generale.   "Bullish momentum has been stalling lately," says SocGen. Only a definite close above $1347 would propel gold towards $1362 and $1375," its highs from last October and September.   Today's "pause" at 4-month highs, says a note from Swiss investment and bullion bank UBS, shows "the need for stronger conviction" amongst investors.   With spot gold prices now 12% higher from the start of 2014, "It is also sensible for physical buyers to take a break," UBS goes on, noting that Shanghai's premium to London prices "has come off significantly" and the falling Yuan could mean "potential liquidity issues make it attractive to sell gold for cash in the near-term."   The Chinese Yuan steadied above yesterday's 6-month lows to the Dollar on Wednesday, with the recent drop now widely atttributed to firm action against "currency speculators" by the People's Bank of China.   "The market hasn't quite fathomed the scale of annual Chinese buying," reckons the global head of FX and precious metals at the private-bank division of France's Credit Agricole, pointing to the "wealth effect in China over the next coming years."   Although not bullish right now – and preferring a drop in spot gold prices to $1250 to buy – "I don't think gold's going to come back to $1000, like many people are suggesting," says Credit Agricole's Davis Hall, quoted from a TV interview by Bloomberg.   "Because I'm seeing," he says, "what's happening [to incomes and wealth] in China," now the world's No.1 end-consumer market for gold, overtaking India.

Spot Gold Drops 1.2% from "2012 Trendline Resistance", Seen Safe from Drop to $1000 on Surging Chinese Demand Posted: 26 Feb 2014 06:04 AM PST SPOT GOLD prices bounced almost $16 below a new 4-month high Wednesday lunchtime in London, finally rallying after slipping all morning from $1346 per ounce.   Silver also fell as gold prices lost 1.2%, but had earlier failed to track the overnight rise and so dropped to 3-session lows beneath last week's finish at $21.80 per ounce.   Western stock markets slipped, as did the price of major government bonds.   Ten-year US Treasury yields edged higher to 2.71%.   Gold prices on the Shanghai Gold Exchange reversed Tuesday's discount to London spot, taking the premium to $1.80 per ounce on strong but lower trading volumes.   "Gold is now approaching the confluence of trend line resistance at $1347 developing from October 2012 highs and May 2013 highs," says a technical chart analysis from French investment bank and London market makers Societe Generale.   "Bullish momentum has been stalling lately," says SocGen. Only a definite close above $1347 would propel gold towards $1362 and $1375," its highs from last October and September.   Today's "pause" at 4-month highs, says a note from Swiss investment and bullion bank UBS, shows "the need for stronger conviction" amongst investors.   With spot gold prices now 12% higher from the start of 2014, "It is also sensible for physical buyers to take a break," UBS goes on, noting that Shanghai's premium to London prices "has come off significantly" and the falling Yuan could mean "potential liquidity issues make it attractive to sell gold for cash in the near-term."   The Chinese Yuan steadied above yesterday's 6-month lows to the Dollar on Wednesday, with the recent drop now widely atttributed to firm action against "currency speculators" by the People's Bank of China.   "The market hasn't quite fathomed the scale of annual Chinese buying," reckons the global head of FX and precious metals at the private-bank division of France's Credit Agricole, pointing to the "wealth effect in China over the next coming years."   Although not bullish right now – and preferring a drop in spot gold prices to $1250 to buy – "I don't think gold's going to come back to $1000, like many people are suggesting," says Credit Agricole's Davis Hall, quoted from a TV interview by Bloomberg.   "Because I'm seeing," he says, "what's happening [to incomes and wealth] in China," now the world's No.1 end-consumer market for gold, overtaking India.

US Shale Gas: The Unsung Hero of a Dangerous Winter Posted: 26 Feb 2014 06:00 AM PST I walked outside this morning to pick up my newspapers. It was still dark, but I felt this strange sensation. I wasn’t sure exactly what it was. Then it hit me: warmth! But don’t bet the ranch that winter is over. We could still get slammed with more Arctic air and more snow and ice, if you believe the market. Last week, traders bid up natural gas March futures to the highest price point in over five years, peaking at $6.275 during one buying frenzy. On the oil side, March crude is also solidly priced, with future U.S. barrels selling well over $103, the highest price in four months. Compared to that, April natgas will set you back a mere $4.95. It’s a relative bargain. Whew! Clearly, near term, energy traders are paying top dollar for security of supply. Their money is on the table. Why the high prices for gas and oil if things are warming up? When it comes to the larger picture of U.S. gas storage, the nation just dodged a very dangerous energy bullet. Indeed, looking back, we could have lived through an utter energy disaster this winter. But that didn’t happen, or we’d be talking about it — and it’s worth understanding why. The fact is, natgas storage volumes are currently at extremely low levels, unseen since the old Peak Oil days of 2003. Today’s low storage volumes are due to gas drawdowns over the very cold winter, to be sure. Literally hundreds of millions of burner tips were hot for weeks at a time. You know that. But there are other energy angles at work, too. These have not received much attention in the media, but are worth understanding. One important point is that the Midwest had a wet fall in late 2013, and farmers used unexpectedly high levels of natgas to dry crops. Propane supply (a natgas byproduct) simply dried up. Worse yet, California is in the midst of a historic, ongoing drought, which has dramatically reduced hydropower output from dams out west. Natgas-fueled power plants made up the difference, and that will continue into the indefinite future. Add up three unexpectedly high demand curves — Midwest agriculture, west coast electric demand, and east coast heating — and the national energy system was/is heavily stressed. No wonder natgas storage is at such a low level. Yes, the nation pulled through. But when you look back at it in another way, things could’ve been much worse. How bad? The U.S. gas supply might have crashed this past winter. I mean spot shortages all over, and even regional shutoffs. Why would I say that? Look back to 2003, when natgas storage volumes were exceptionally tight. In the winter of 2003, gas supply simply wasn’t there when demand hit, and natgas futures spiked upward to nearly $12. This winter, despite record cold and other gas demand, gas prices were more restrained. Otherwise, at $12 gas, imagine your monthly heating bill being perhaps three times what you’re paying now. Instead of, say, $300 per month in winter, it would be $1,000. And apply that across millions of households. It’s a big number. Or think it through in even bleaker terms. We could have had entire regions of the country suffer severe gas shortages. What if this past winter there was simply not enough gas in the lines? Pipeline and utility managers would have had to start shutting valves to, say, large industrial users. Why didn't it come to that? There was no real natgas shortage this winter, right? Right, all because the U.S has a so-called “gas glut” based on fracking and shale gale. As I said before, we dodged an energy bullet. We’re just so brilliant, eh? Oh, wait… Look back to the last natgas shortage, in 2003. That was an embryonic time for fracking and developing gas from shale. One big play was just kicking off, down in the Barnett Shale of Texas. Did anyone really plan out the energy development of the subsequent decade? Did anyone have such foresight? Anyone in high political office? Any congressional staffers? At the Department of Energy? The Environmental Protection Agency? Heck, anyone at Exxon Mobil or Chevron? (Hint: The big oil companies missed the U.S. shale boom.) C’mon… Who’s on record in 2003 as saying, “Hey, we have low natgas volumes and might not be able to meet demand. We had better get squared away for the next decade. Let’s pursue an aggressive, national-level approach to using new tech to open up resource plays like shale gas.” Umm… Nobody said that. Nobody — certainly not in Washington or any state capital — planned what happened in the past 10 years. Fracking and the gas glut was a grass-roots phenomenon that arose from the hinterlands. It started in and grew out of “flyover” country, as far as the national elite are concerned. Indeed, when it comes to fracking and shale gas, the federal government — and many state governments — spent the past 10 years doing little but opposing development (while cashing the tax checks). Today, when you look at whence comes the U.S. energy supply, many/most federal and state lands are closed to drilling and fracking. The shale gale, which saved the nation’s bacon this winter, is a phenomenon almost exclusively confined to private lands. I hope you get my point. We dodged a bad bullet. Fate took a shot at us and missed. We were lucky, I suppose — lucky small U.S. oil and gas companies were so good at developing shale. Then again, the harder you work, the luckier you get. Best wishes… Byron W. King for The Daily Reckoning P.S. If you're still unsure about investing in shale oil and gas, just think of how crucial it is to America's energy security — as demonstrated this winter. And to make sure you’re able to gain access to the best shale plays on the market, you’ll want to sign up for the FREE Daily Resource Hunter, right here.

The Five Greatest Gold Robberies Posted: 26 Feb 2014 05:41 AM PST Gold has captured the imaginations of crime writers and film makers for years, but sometimes there are gold heists that you just can’t make up. Thefts involving the world’s most precious metal always make headlines. Some aren’t even that daring, but it is the thought that something pirates, invaders, highway men and bandits used to risk their lives to steal, is still the ultimate loot. In newspaper reports there is always an underlying sense of admiration for the sheer brazenness of the robbers and some incredulity at what they may or may not have pulled off.

Have the Gold and Silver Prices Resumed the Uptrend and If So Why? Posted: 26 Feb 2014 05:37 AM PST Gold is now above $1,330 and setting a pattern of short consolidations up against overhead resistance before breaking through and moving higher. This seems to contradict the popular opinion that gold should be sold and funds invested in equity markets.

The Enduring Value of Gold Posted: 26 Feb 2014 04:44 AM PST Somehow, it doesn’t seem likely that anyone will stumble upon $10 million worth of Bitcoins, say, about 150 years from now, similar to a California couple recently finding tin cans full of gold coins buried in their back yard. When these coins were buried, gold was, literally, money. The paper currency that the North and [...]

Wednesday Morning Links Posted: 26 Feb 2014 04:29 AM PST MUST READS How bitcoin can turn it around – MarketWatch Collapse of Mt. Gox exchange spells trouble for bitcoin – AP Bitcoin believers keep the faith, see more robust system – Reuters Fed must 'actively' plan for fighting bubbles: Tarullo – MarketWatch Tarullo Backs Option of Using Rates Against Price Bubbles – Bloomberg Transcripts show Fed struggle to deal with 2008  [...]

3,000 Years of Inflation Posted: 26 Feb 2014 01:57 AM PST Price controls fix inflation no better than raising tax rates grows the tax base...   IT EMERGED last week that the average asking price for a property in the UK had risen above £250,000, writes Tim Price at ThePriceOfEverything, republished by the Cobden Centre.   Superficially this sounds like good news for home-owners. In reality, the only benefit goes to government, which enjoys a higher tax take from stamp duty at 3% as opposed to the 1% rate that applies to property purchases below the £250,000 level – assuming people can be coerced into wanting to move.   Unless home-owners are down-sizing, they merely have to pay more for the houses into which they move. And higher house prices make life just that little bit more miserable for a younger generation already plagued by the rising cost of education, the likely burden of student debt, and an increasingly competitive jobs market.   Anyone trying to join the long-standing cult that is British property ownership has reason to be wary of the government's latest attempt to inflate the property bubble by encouraging reckless credit provision via the 5% deposit 'help to buy' scheme. It's almost as if the financial-crisis-triggered-by-a-bursting-property-bubble never happened.   As Schuettinger and Butler point out in their history of wage and price controls, government- provoked inflation is nothing new. Nor are the proposed solutions, as they explain in Forty centuries of wage and price controls: how not to fight inflation (The Heritage Foundation, 1979): "The co-authors began working on this book in 1974, just after the termination of President Nixon's controls in the United States. Since that time, we have examined over one hundred cases of wage and price controls in thirty different nations from 2000 BC to AD 1978.   "We have concluded that, while there have been some cases in which controls have at least apparently curtailed the effects of inflation for a short time, they have always failed in the long run. The basic reason for this is that they have not addressed the real cause of inflation which is an increase in the money supply over and above the increase in productivity. Rulers from the earliest times sought to solve their financial problems by debasing the coinage or issuing almost worthless coins at high face values; through modern technology the governments of recent centuries have had printing presses at their disposal. When these measures resulted in inflation, the same rulers then turned to wage and price controls." The Roman Emperor Nero (AD 54-68) responded to growing economic problems by devaluing the currency. The devaluation started relatively modestly but accelerated under Marcus Aurelius (AD 161-180) when the weights of coins were reduced. "These manipulations were the probable cause of a rise in prices," wrote Levy. The Emperor Commodus (AD 180-192) turned to price controls and decreed a series of maximum prices, but things deteriorated and the rise in prices became "headlong" under the Emperor Caracalla (AD 211-217).   Egypt was the imperial province most severely affected. During the fourth century, the value of the gold solidus changed from 4,000 to 180 million Egyptian drachmai. Levy also attributes the grotesque rise in prices which followed to the increase of the amount of money in circulation. The price of the same measure of wheat in Egypt rose from 6 drachmai in the first century to 200 in the third century; in AD 314, the price rose to 9,000 drachmai and in AD 334 to 78,000. Shortly after AD 344 the price had reached more than 2 million drachmai. Other provinces endured similar inflations.   Levy wrote: "In monetary affairs, ineffectual regulations were decreed to combat [Gresham's Law, that bad money drives out good] and domestic speculation in the different kinds of money. It was forbidden to buy or sell coins: they had to be used for payment only. It was even forbidden to hoard them ! It was forbidden to melt them down (to extract the small amount of silver alloyed with the bronze). The punishment for all these offences was death. Controls were set up along roads and at ports, where the police searched traders and travellers. Of course, all these efforts were to no purpose." Perhaps the most notorious attempt to control wages and prices took place under the Emperor Diocletian. Commodity prices and wages reached "unprecedented heights" shortly after he assumed the throne in AD 284. The Empire's economic troubles have been attributed to a vast increase in the armed forces (to repel invasions by barbarian tribes); to a huge building programme of questionable value; to the consequent raising of taxes and the employment of ever more government officials; and to the use of forced labour to accomplish much of Diocletian's public works programme. (Thank goodness the current UK government isn't intent on squandering over £40 billion it doesn't actually have on a high speed rail link of dubious utility.)   Diocletian, on the other hand, attributed the inflation entirely to the "avarice" of merchants and speculators. Some things truly never change.   What is undeniable is that as taxes rose, the tax base shrank, and it became increasingly difficult to collect taxes, resulting in a vicious circle. (Happily, the Liberal Democrats in coalition with the current government have a progressive attitude towards soaking the rich.)   Probably the single biggest cause of Diocletian's inflation was his debasement of the coinage. In the early Empire, the standard Roman coin was the silver denarius. Its value had gradually been reduced in the years leading up to his reign as emperors issued tin-plated copper coins which still kept the name "denarius". Under Gresham's Law, silver and gold coins were hoarded and left circulation.   During the 50 years ending in AD 268, the silver content of the denarius fell to one five- thousandth of its original level. Trade was reduced to barter and economic activity stagnated. The middle class was almost obliterated. To overcome the baleful influence of his bureaucracy, Diocletian introduced a system of taxes based on payments in kind, which had the effect of destroying the freedom of the lower classes and tying them to the land. Then came currency reform, and the Edict on prices and wages. Historian Roland Kent: "Diocletian took the bull by the horns and issued a new denarius which was frankly of copper and made no pretence of being anything else; in doing this he established a new standard of value. The effect of this on prices needs no explanation; there was a readjustment upward, and very much upward." Diocletian had the option of either inflating – minting increasingly worthless denarii, or to deflate – in the form of cutting government expenditures. He chose to inflate. He also chose to fix the prices of goods and services and suspend the freedom of the people to decide what the currency was actually worth. He fixed the maximum prices at which beef, grain, eggs and clothing could be sold, and the wages that workers could receive, and prescribed the death penalty for anyone who disposed of his wares at a higher figure.   Less than four years after the currency reform associated with the Edict, the price of gold in terms of the denarius had risen by 250%. By AD 305 the process of currency debasement began again. Levy: "State intervention and a crushing fiscal policy made the whole empire groan under the yoke; more than once, both poor men and rich prayed that the barbarians would deliver them from it. In AD 378, the Balkan miners went over en masse to the Visigoth invaders, and just prior to AD 500 the priest Salvian expressed the universal resignation to barbarian domination." David Meiselman, in a foreword to Forty centuries... writes as follows: "What, then, have price controls achieved in the recurrent struggle to restrain inflation and overcome shortages ? The historical record is a grimly uniform sequence of repeated failure. Indeed, there is not a single episode where price controls have worked to stop inflation or cure shortages. Instead of curbing inflation, price controls add other complications to the inflation disease, such as black markets and shortages that reflect the waste and misallocation of resources caused by the price controls themselves. Instead of eliminating shortages, price controls cause or worsen shortages. By giving producers and consumers the wrong signals because 'low' prices to producers limit supply and 'low' prices to consumers stimulate demand, price controls widen the gap between supply and demand.   "Despite the clear lessons of history, many governments and public officials still hold the erroneous belief that price controls can and do control inflation. They thereby pursue monetary and fiscal policies that cause inflation, convinced that the inevitable cannot happen.   "When the inevitable does happen, public policy fails and hopes are dashed. Blunders mount, and faith in governments and government officials whose policies caused the mess declines. Political and economic freedoms are impaired and general civility suffers." The chart below, courtesy of Church House, shows the history of the most important price in the UK economy – the price of money, as set by the central bank (as opposed to the market): The chart below, courtesy of the St Louis Federal Reserve and Incrementum AG, shows the expansion of the US monetary base since 1918; the three separate iterations of QE are marked:     Some thoughts: The (government-sanctioned) price of money hasn't been this low in 300 years; The US monetary base has exploded. (We concede the role of private banks in money creation too, so we watch the velocity of money carefully;) As Robert Louis Stevenson once said, "Sooner or later everyone sits down to a banquet of consequences." We hold gold.

3,000 Years of Inflation Posted: 26 Feb 2014 01:57 AM PST Price controls fix inflation no better than raising tax rates grows the tax base...   IT EMERGED last week that the average asking price for a property in the UK had risen above £250,000, writes Tim Price at ThePriceOfEverything, republished by the Cobden Centre.   Superficially this sounds like good news for home-owners. In reality, the only benefit goes to government, which enjoys a higher tax take from stamp duty at 3% as opposed to the 1% rate that applies to property purchases below the £250,000 level – assuming people can be coerced into wanting to move.   Unless home-owners are down-sizing, they merely have to pay more for the houses into which they move. And higher house prices make life just that little bit more miserable for a younger generation already plagued by the rising cost of education, the likely burden of student debt, and an increasingly competitive jobs market.   Anyone trying to join the long-standing cult that is British property ownership has reason to be wary of the government's latest attempt to inflate the property bubble by encouraging reckless credit provision via the 5% deposit 'help to buy' scheme. It's almost as if the financial-crisis-triggered-by-a-bursting-property-bubble never happened.   As Schuettinger and Butler point out in their history of wage and price controls, government- provoked inflation is nothing new. Nor are the proposed solutions, as they explain in Forty centuries of wage and price controls: how not to fight inflation (The Heritage Foundation, 1979): "The co-authors began working on this book in 1974, just after the termination of President Nixon's controls in the United States. Since that time, we have examined over one hundred cases of wage and price controls in thirty different nations from 2000 BC to AD 1978.   "We have concluded that, while there have been some cases in which controls have at least apparently curtailed the effects of inflation for a short time, they have always failed in the long run. The basic reason for this is that they have not addressed the real cause of inflation which is an increase in the money supply over and above the increase in productivity. Rulers from the earliest times sought to solve their financial problems by debasing the coinage or issuing almost worthless coins at high face values; through modern technology the governments of recent centuries have had printing presses at their disposal. When these measures resulted in inflation, the same rulers then turned to wage and price controls." The Roman Emperor Nero (AD 54-68) responded to growing economic problems by devaluing the currency. The devaluation started relatively modestly but accelerated under Marcus Aurelius (AD 161-180) when the weights of coins were reduced. "These manipulations were the probable cause of a rise in prices," wrote Levy. The Emperor Commodus (AD 180-192) turned to price controls and decreed a series of maximum prices, but things deteriorated and the rise in prices became "headlong" under the Emperor Caracalla (AD 211-217).   Egypt was the imperial province most severely affected. During the fourth century, the value of the gold solidus changed from 4,000 to 180 million Egyptian drachmai. Levy also attributes the grotesque rise in prices which followed to the increase of the amount of money in circulation. The price of the same measure of wheat in Egypt rose from 6 drachmai in the first century to 200 in the third century; in AD 314, the price rose to 9,000 drachmai and in AD 334 to 78,000. Shortly after AD 344 the price had reached more than 2 million drachmai. Other provinces endured similar inflations.   Levy wrote: "In monetary affairs, ineffectual regulations were decreed to combat [Gresham's Law, that bad money drives out good] and domestic speculation in the different kinds of money. It was forbidden to buy or sell coins: they had to be used for payment only. It was even forbidden to hoard them ! It was forbidden to melt them down (to extract the small amount of silver alloyed with the bronze). The punishment for all these offences was death. Controls were set up along roads and at ports, where the police searched traders and travellers. Of course, all these efforts were to no purpose." Perhaps the most notorious attempt to control wages and prices took place under the Emperor Diocletian. Commodity prices and wages reached "unprecedented heights" shortly after he assumed the throne in AD 284. The Empire's economic troubles have been attributed to a vast increase in the armed forces (to repel invasions by barbarian tribes); to a huge building programme of questionable value; to the consequent raising of taxes and the employment of ever more government officials; and to the use of forced labour to accomplish much of Diocletian's public works programme. (Thank goodness the current UK government isn't intent on squandering over £40 billion it doesn't actually have on a high speed rail link of dubious utility.)   Diocletian, on the other hand, attributed the inflation entirely to the "avarice" of merchants and speculators. Some things truly never change.   What is undeniable is that as taxes rose, the tax base shrank, and it became increasingly difficult to collect taxes, resulting in a vicious circle. (Happily, the Liberal Democrats in coalition with the current government have a progressive attitude towards soaking the rich.)   Probably the single biggest cause of Diocletian's inflation was his debasement of the coinage. In the early Empire, the standard Roman coin was the silver denarius. Its value had gradually been reduced in the years leading up to his reign as emperors issued tin-plated copper coins which still kept the name "denarius". Under Gresham's Law, silver and gold coins were hoarded and left circulation.   During the 50 years ending in AD 268, the silver content of the denarius fell to one five- thousandth of its original level. Trade was reduced to barter and economic activity stagnated. The middle class was almost obliterated. To overcome the baleful influence of his bureaucracy, Diocletian introduced a system of taxes based on payments in kind, which had the effect of destroying the freedom of the lower classes and tying them to the land. Then came currency reform, and the Edict on prices and wages. Historian Roland Kent: "Diocletian took the bull by the horns and issued a new denarius which was frankly of copper and made no pretence of being anything else; in doing this he established a new standard of value. The effect of this on prices needs no explanation; there was a readjustment upward, and very much upward." Diocletian had the option of either inflating – minting increasingly worthless denarii, or to deflate – in the form of cutting government expenditures. He chose to inflate. He also chose to fix the prices of goods and services and suspend the freedom of the people to decide what the currency was actually worth. He fixed the maximum prices at which beef, grain, eggs and clothing could be sold, and the wages that workers could receive, and prescribed the death penalty for anyone who disposed of his wares at a higher figure.   Less than four years after the currency reform associated with the Edict, the price of gold in terms of the denarius had risen by 250%. By AD 305 the process of currency debasement began again. Levy: "State intervention and a crushing fiscal policy made the whole empire groan under the yoke; more than once, both poor men and rich prayed that the barbarians would deliver them from it. In AD 378, the Balkan miners went over en masse to the Visigoth invaders, and just prior to AD 500 the priest Salvian expressed the universal resignation to barbarian domination." David Meiselman, in a foreword to Forty centuries... writes as follows: "What, then, have price controls achieved in the recurrent struggle to restrain inflation and overcome shortages ? The historical record is a grimly uniform sequence of repeated failure. Indeed, there is not a single episode where price controls have worked to stop inflation or cure shortages. Instead of curbing inflation, price controls add other complications to the inflation disease, such as black markets and shortages that reflect the waste and misallocation of resources caused by the price controls themselves. Instead of eliminating shortages, price controls cause or worsen shortages. By giving producers and consumers the wrong signals because 'low' prices to producers limit supply and 'low' prices to consumers stimulate demand, price controls widen the gap between supply and demand.   "Despite the clear lessons of history, many governments and public officials still hold the erroneous belief that price controls can and do control inflation. They thereby pursue monetary and fiscal policies that cause inflation, convinced that the inevitable cannot happen.   "When the inevitable does happen, public policy fails and hopes are dashed. Blunders mount, and faith in governments and government officials whose policies caused the mess declines. Political and economic freedoms are impaired and general civility suffers." The chart below, courtesy of Church House, shows the history of the most important price in the UK economy – the price of money, as set by the central bank (as opposed to the market): The chart below, courtesy of the St Louis Federal Reserve and Incrementum AG, shows the expansion of the US monetary base since 1918; the three separate iterations of QE are marked:     Some thoughts: The (government-sanctioned) price of money hasn't been this low in 300 years; The US monetary base has exploded. (We concede the role of private banks in money creation too, so we watch the velocity of money carefully;) As Robert Louis Stevenson once said, "Sooner or later everyone sits down to a banquet of consequences." We hold gold.

You are subscribed to email updates from Save Your ASSets First To stop receiving these emails, you may unsubscribe now.	Email delivery powered by Google
Google Inc., 20 West Kinzie, Chicago IL USA 60610