Gold World News Flash

The meltdown of the Obamacare mandate
Ukraine force to Float Currency Because of Run on the Hryvnia
Weak Payrolls Number Spurs Commodity Buying
Gold Daily and Silver Weekly Charts – Non-Farm Payrolls Fizzle, Precious Metals Held in Check
Bundesbank Still Fending Off Suspicions About Gold Vaulted in the U.S.
Contrarian play for GLD will strain gold supply, Sprott tells KWN
Gold and Silver Prices Rose Strongly this Week
Gold and Silver Prices Rose Strongly this Week
FX Probe Extends To Options: "Oh God, Look What We've Uncovered"
Gold and Silver Prices Poised to Rise Dramatically
Presenting China's Largest Shadow Bank
Gold Daily and Silver Weekly Charts - Non-Farm Payrolls Fizzle, Precious Metals Held in Check
Gold Daily and Silver Weekly Charts - Non-Farm Payrolls Fizzle, Precious Metals Held in Check
Billionaire Eric Sprott - The U.S. Gold Is Gone
ECONOMIC COLLAPSE -- The 2nd Irish Exodus
'Gold cartel' author Dimitri Speck interviewed about market manipulation
The ECONOMY To COLLAPSE Around March 4 2014 - The DOOMSDAY Clock is Ticking
Bank of England staff said to have condoned FX market rigging
Restructuring the U.S. Economy – Downward
Bringing the Empire of Debt to its Knees
Jim’s Mailbox
Gold as a hyperinflation hedge
Invest 8% Gold "Whatever the Price"
Buying Gold "Popular" But at Lower Weights as Chinese New Year Spending Slows
Buying Gold "Popular" But at Lower Weights as Chinese New Year Spending Slows
2014 Y-T-D: Gold 1 Fantasies 0Â
Coming Global Collapse Will Eclipse The Terror Of 2008
In Defense of Money Laundering
Is Bundesbank repatriating only 1 tonne per week for the next six years?
Gold Prices Spike & Drop Again on US Jobs Data, German Court "Kills" Eurozone Bond-Buying Plan, Silver Adds 3.8% on Week
Germany's high court suspects that ECB bond buying is illegal
Crisis Investing in Argentina
Silver Price Outperforming Gold
As central banks disconnect, markets will break too, Williams tell KWN
Alasdair Macleod: New risks may push super-rich into monetary metals
Bron Suchecki's primer on bullion banking's fractional-reserve nature
Gold, Silver and The Fed's Total Mandate
Gold, Silver And The Gathering Crypto Currency Storm
How Can Money Printing Exist and be Absent at the Same Time?
Gold as a Hyperinflation Hedge - Black Swans, Yellow Gold
The Collapse of Industrial Civilization -- Chris Hedges
All Hell Will Break Loose & The Dominos Will Start Falling
Financial Collapse -- Income Inequality" | Joseph T. Salerno
MARTIAL LAW & ECONOMIC COLLAPSE 2014
The Gold Price Closed Higher at $1,257.60
The Gold Price Closed Higher at $1,257.60
This Is the Number One Factor Driving the Price of Gold
Federal Reserve Increases Counterfeiting
Words of Wisdom By World’s Most Successful Resource Investors
The Horrifying End Game & The Coming Big Crash

Posted: 07 Feb 2014 11:30 PM PST

by J. D. Heyes, Natural News:

To say that the roll-out of Obamacare is not going well is perhaps the understatement of the year. But even more than that, those who predicted that the law would ultimately collapse on itself might have been prophetic.

In particular, the “individual mandate” – the part of the law that the U.S. Supreme Court upheld as a “tax” and which requires, for the first time in U.S. history, that Americans be forced to buy a product or service – is failing miserably.

According to public policy experts James C. Capretta and Jeffrey H. Anderson, writing recently in the New York Post, the Obama administration is finding out that it is harder than they expected to get Americans – especially the healthy, young Americans necessary to fund older, sicker Americans – to buy insurance, leaving many to wonder if the mandate will actually survive:

Read More @ NaturalNews.com

Ukraine force to Float Currency Because of Run on the Hryvnia

Posted: 07 Feb 2014 09:40 PM PST

from Armstrong Economics:

The fear of rising war in Ukraine has sent people scrambling to buy dollars. The government has now placed restrictions on buying dollars. Ukraine's currency reserves have fallen so dramatically that the national currency, the hryvnia, is now hanging in mid-air. The National Bank of Ukraine has been forced to back off of the fixed exchange rate for they over-valued the currency and they would have been wiped out of all reserves trying to pretend there is nothing wrong.

Thus, on Feb. 7 the Central Bank introduced a new exchange rate for the hryvnia at 8.708 to the dollar in what appears to be an attempt to meet the lending requirements of the International Monetary Fund. The currency will now float and that will result in a further decline against the dollar. This geopolitical crisis is reflected in the currency and is what I have been trying to explain – it is always a matter of CONFIDENCE. This crisis is also having a negative impact upon Russian banks that went into Ukraine for business before the Lehman Brothers crisis of 2008.

Read More @ ArmstrongEconomics.org

Weak Payrolls Number Spurs Commodity Buying

Posted: 07 Feb 2014 09:20 PM PST

from Dan Norcini:

Traders were holding their breath to see whether or not today’s expected Payrolls number was going to confirm last month’s number as a one-off or whether we would get yet another abysmal reading. We got the latter.

Immediately talk of the Fed going on hold for any further tapering emerged and with it, down went the US Dollar along with Treasury yields. The result – hot money poured into equities and strangely enough, into commodities.

Gold Daily and Silver Weekly Charts – Non-Farm Payrolls Fizzle, Precious Metals Held in Check

Posted: 07 Feb 2014 08:40 PM PST

from Jesse's Café Américain:

Today was an exceptionally interesting day, with a lot of things going on from the very start.

The premiere event was the US Non-Farm Payrolls Report, which pretty much sucked out loud, coming in with a underestimates 113,000 jobs versus a 175,000 expected. This was mitigated a bit by the ‘private jobs’ added of 142,000 which was closer to estimates. And it could make us feel good because it was in ‘government jobs’ that much of the shortfall occurred.

I was a little behind the workload much of today, so I didn’t see how much play was given to the complete revision of all the numbers going back as far as I normally look. They even revised the CES Birth-Death model which is pretty much a plug, or imaginary jobs, if you prefer. How do you revise stuff you made up in the first place?

Bundesbank Still Fending Off Suspicions About Gold Vaulted in the U.S.

Posted: 07 Feb 2014 07:00 PM PST

by Ed Steer, Casey Research:

There was little volume during the trading day on Thursday, but it was still obvious that the tiny rallies in all four precious metals were sold down by JPMorgan et al shortly after the Comex open.

The gold price didn’t do much in Far East trading on their Thursday—and the low of the day, such as it was, came around 12:30 p.m. Hong Kong time. From there the price crawled higher, but picked up a bit of steam once the London a.m. gold fix was in at 10:30 GMT in London. Most of that gain disappeared by the Comex open, but then the gold price rallied until 8:50 a.m. in New York. Then the not-for-profit sellers showed up and had the price back in the box by the London p.m. gold fix. From there the gold price once again crawled higher into the 5:15 p.m. EST close.

The low and high ticks, such as they were, were recorded by the CME Group at $1,252.50 and $1,267.50 in the April contract.

Gold closed in New York at $1,2567.80 spot, up 20 cents on the day. Net volume was only 90,000 contracts.

Read More @ CaseyResearch.com

Contrarian play for GLD will strain gold supply, Sprott tells KWN

Posted: 07 Feb 2014 06:29 PM PST

11:30p SRT Friday, February 7, 2014

Dear Friend of GATA and Gold:

Buying of shares of the gold exchange-traded fund GLD likely will increase this year as a contrarian play and put serious strain on the world gold supply, Sprott Asset Management's Eric Sprott tells King World News today, adding that the U.S. gold reserve is likely depleted:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/2/7_Bil...

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
Monday-Friday, March 24-28, 2014
Hong Kong Special Administrative Region, China

http://www.minesandmoney.com/hongkong/

* * *

Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006:

http://www.goldrush21.com/order.html

Or by purchasing a colorful GATA T-shirt:

http://gata.org/tshirts

Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009:

http://gata.org/node/wallstreetjournal

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

http://www.gata.org

To contribute to GATA, please visit:

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

ADVERTISEMENT

How to profit with silver --
and which stocks to buy now

Future Money Trends is offering a special 16-page silver report with profiles of nine companies and technical analysis of their stock performance. Six of the companies have market capitalizations of less than $800 million and one company has a market cap of only $30 million. The most exciting of these companies will begin production in a few weeks and has a market cap of just $150 million.

Half of all proceeds from the sale of this report will be donated to the Gold Anti-Trust Action Committee to support its efforts exposing manipulation and fraud in the gold and silver markets.

To learn about this report, please visit:

http://www.futuremoneytrends.com/index.php?option=com_content&id=376&tmp...

Gold and Silver Prices Rose Strongly this Week

Posted: 07 Feb 2014 04:53 PM PST

Gold Price Close Today : 1,263.30
Gold Price Close 31-Jan-14 : 1,240.10
Change : 23.20 or 1.9%

Silver Price Close Today : 19.92
Silver Price Close 31-Jan-14 : 19.105
Change : 0.815 or 4.3%

Gold Silver Ratio Today : 63.419
Gold Silver Ratio 31-Jan-14 : 64.910
Change : -1.491 or -2.3%

Silver Gold Ratio : 0.01577
Silver Gold Ratio 31-Jan-14 : 0.01541
Change : 0.00036 or 2.4%

Dow in Gold Dollars : $ 258.44
Dow in Gold Dollars 31-Jan-14 : $ 261.69
Change : -3.25 or -1.2%

Dow in Gold Ounces : 12.502
Dow in Gold Ounces 31-Jan-14 : 12.659
Change : -0.16 or -1.2%

Dow in Silver Ounces : 792.88
Dow in Silver Ounces 31-Jan-14 : 821.71
Change : -28.84 or -3.5%

Dow Industrial : 15,794.08
Dow Industrial 31-Jan-14 : 15,698.85
Change : 95.23 or 0.6%

S&P 500 : 1,797.02
S&P 500 31-Jan-14 : 1,782.59
Change : 14.43 or 0.8%

US Dollar Index : 80.740
US Dollar Index 31-Jan-14 : 81.370
Change : -0.63 or -0.8%

Platinum Price Close Today : 1,377.60
Platinum Price Close 31-Jan-14 : 1,374.10
Change : 3.50 or 0.3%

Palladium Price Close Today : 708.60
Palladium Price Close 31-Jan-14 : 703.00
Change : 5.60 or 0.8%

That shoe's on the other foot now. Gold and silver rose strongly this week, stocks tumbled and only came back the last two days. US dollar index is floundering while even platinum and palladium rose.

The GOLD PRICE refuses to yield, and gained another $5.70 today to close Comex at $1,263.30 after a $1,272 high. Silver gained 1.2 cents (why bother?) to 1992c.

The GOLD PRICE has literally WALKED through it downtrend line from last April, just steadily trading sideways till it crossed that downtrending line. The gold price wants badly to close above $1,267.50, the December low, but can't quite get through. Ended today at $1,267. Mercy.

Since December 23 gold has closed every week higher than the last, except for last week. Very promising.

The SILVER PRICE remains above its 20 and 50 DMA, but without attacking 2050c can go nowhere. It must break out of that range.

The GOLD/SILVER RATIO has been dropping all this month, hinting of higher metals' prices.

Other markets remain hopeful for silver and gold. Gold/Bank Stocks is falling (gold is gaining strength against banks). Gold stock indices HUI, GDX, and XAU have all turned up after a puking-sick year.

One final spike down for silver and gold cannot be ruled out until the gold price climbs above $1,267.50 AND $1,314, the 200 day moving average -- and stays there. Still, this is the best horizon for metals we've seen in a year.

Still not clear to me whether we've seen the ultimate top in stocks or not. Either way, you can expect these countertrend rallies to be strong as a garlic milkshake. That bullish mentality still reigns o'er stocks, and will buy at the drop of a hat, and they'll drop the hat.

Yesterday stocks had their best day of 2014, and didn't slouch today,. Dow climbed 165.55 (1.06%) to 15,794.08. S&P500 scaled 23.59 (1.33%) to 1,797.02. Rally might carry to the top channel boundary, now about 16,000 where also today the 20 DMA lies (1,001) or to the 50 DMA (16,101.34). Not much higher. Analogues for those numbers on the S&P500 are 1804.25 and 1809.35.

Y'all ought to pause to remember that a bear market likes to pull the maximum number of victims into his den before he mauls them at his leisure.

Whoops, the debt limit fight is back. Aww, SHOOT! The yankee government's gonna run out of money unless congress acts by end February to let it borrow more. What if congress did nothing and the whole blasted thing shut down. Hush! I reckon I can dream, can't I?

US dollar index lost 0.30% (24 basis points) to 80.74, below the 20 DMA and barely above the 50 DMA. The dollar is doing nothing until it breaks out of the 81.50 - 79.50 range. Internally the dollar has an uptrend line at about 80.40, so breaking that would send it lower. Dollar's must-hold line is 80.

The Frankencurrency (euro) climbed back to the top of its downtrend channel and to its 50 DMA, which spot also coincides with the uptrend line the euro crashed through back in January. I am not impressed.

The Yen is atoning for its recent rally. Fell 0.24% to 97.49, but still in rally mode.

On 7 February 1947 the main cache of the Dead Sea Scrolls, dating to 150 BC - 68 AD was found in caves by the Jordan River.

Y'all enjoy your weekend!

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.

Gold and Silver Prices Rose Strongly this Week

Posted: 07 Feb 2014 04:53 PM PST

FX Probe Extends To Options: "Oh God, Look What We've Uncovered"

Posted: 07 Feb 2014 04:10 PM PST

As an increasing number of FX traders are disappearing from bulge bracket banks (for "entirely unrelated to the FX probe" reasons), the WSJ reports that European and US regulators are expanding the scope of the manipulation probe. In the course of sifting through mountains of documentation, banks have found an array of apparent misconduct, according to people involved with the investigations and now the FX options market has come under scrutiny. "It's the banks saying, 'oh God, look what we've uncovered, there's a whole lot of issues'," a person familiar with the investigation said.

Via WSJ,

A regulatory probe that flamed up in one corner of the vast foreign-exchange market is now engulfing the entire industry.

The latest conflagration: concerns about a type of foreign-exchange derivative that is widely used by financial institutions and companies world-wide, according to a person familiar with the matter.

...

These contracts, which banks often sell to clients, pay out in the event that exchange rates reach certain levels. They are heavily traded: A notional $337 billion changes hands in the overall FX options market each day, according to the Bank for International Settlements.

Behind the scenes, though, banks often buy or sell currencies aggressively to prevent those levels from being breached, according to traders and banking executives. That may be to the detriment of clients, who would otherwise potentially receive a payment, these industry officials say, although banks see it as a way to protect their cash. Such tactics are commonplace, traders say.

...

As part of banks' internal reviews into their foreign-exchange businesses, some recently have found potential problems with trading involving the options, according to the person familiar with the matter.

...

One former trader at Deutsche Bank in New York was fired after chat room messages showed he joked about his ability to affect the price of a barely-traded currency—the Argentine peso—people familiar with the matter say. The bank has fired three other executives, including at least one in Latin America, in connection to trading practices not related to the London fix, according to a person familiar with the matter.

...

Authorities are also looking into whether some foreign-exchange bankers inappropriately traded in their personal accounts. This practice is forbidden at some banks, though there is not a blanket ban across the industry. It is frowned upon because of the possibility traders could use privileged information for their own profit.

In all, about 20 traders and bankers including some in New York, London and Tokyo have now been suspended or fired since authorities started to investigate the foreign-exchange markets.

As a gentle reminder, here is the original uncovering of at least one of the manipulations:

The same pattern -- a sudden surge minutes before 4 p.m. in London on the last trading day of the month, followed by a quick reversal -- occurred 31 percent of the time across 14 currency pairs over two years, according to data compiled by Bloomberg. For the most frequently traded pairs, such as euro-dollar, it happened about half the time, the data show

Gold and Silver Prices Poised to Rise Dramatically

Posted: 07 Feb 2014 03:40 PM PST

Midas Letter

Presenting China's Largest Shadow Bank

Posted: 07 Feb 2014 03:35 PM PST

Submitted by Nicholas Borst via The Peterson Institute blog,

Shadow banks in China come in a variety of forms and guises. The term is applied to everything from trust companies and wealth management products to pawnshops and underground lenders. What surprising is that China’s biggest shadow bank is actually a creation of the central government and receives billions in financing directly from the banks. Even more interesting, this shadow bank recently pulled off a successful international IPO where it raised billions of dollars.

First, let’s deal with the terminology. The “shadow” in shadow banking doesn’t imply nefarious doings, although it frequently involves a bit of regulatory arbitrage. At the most basic level, shadow banking is borrowing funds and extending credit outside of normal banking structures.

So what is this mysterious shadow bank that has such tight government connections? It’s none other than Cinda Asset Management Company, a creation of the Ministry of Finance (MoF) and the beneficiary of a recent 2.5 billion U.S. dollar IPO in Hong Kong. In terms of total assets, Cinda is more than 15 times as large as any of the country’s trust companies.

The normal business of a distressed asset management company (AMC) is not shadow banking. It involves purchasing troubled loans at a discount and trying to collect a higher amount from the debtors. Cinda was one of the four AMC’s created by the central government to bailout the banking sector in the 1990s. The initial round of bad debt purchasing was policy-directed, starting in the late 1990s and lasting through the mid-2000s. In the second half of the 2000s, the big four AMCs began to purchase NPLs from banks on commercial terms and in the process tried to transform themselves into market-oriented businesses.

Over the last three and a half years, Cinda’s business has diverged from this model. In addition to purchasing bad debts from banks and other financial institutions, it has accumulated a vast stock of distressed debt assets directly from non-financial corporations.

These non-financial enterprises distressed assets (NFEs) include overdue receivables, receivables expected to be overdue, and receivables from corporates with liquidity issues. In effect, Cinda has become a huge source of financing for companies facing financial distress.

It comes as no surprise that real estate developers have been the primary recipient of this emergency funding. Squeezed by central government efforts to dampen the housing boom, real estate developers are frequently cut off from formal bank loans. As is the case with the growth of shadow banking in other parts of the financial system, Cinda has found a way to circumvent these restrictions by offering credit to property developers through the NFE channel. The Cinda IPO prospectus states that 60 percent of distressed receivables are attributable to the real estate sector.

What makes the whole situation a bit dubious is that Cinda has financed these purchases through a massive borrowing spree at below market rates. Over the last 3.5 years, the size of CINDA’s borrowings increased 13x, while the interest on these borrowings has fallen dramatically (paid interest was less than three percent). Despite the claim from the IPO prospectus that the borrowing was primarily from “market-oriented sources,” it seems unlikely that any market-oriented actor would loan out funds at a rate significantly below inflation and less than half of the benchmark lending rate.

The cost of funding issue is important because while Cinda’s distressed asset business is profitable, its profitability is dependent on low borrowing costs. In 2012 total interest expense is equal to 50 percent of its net income. A large increase in borrowing costs could wipe out the company’s profitability.

Why would financial institutions make such cheap loans to Cinda? One possible explanation is that the company’s tight relationship with the MoF makes it a low credit risk. MoF’s support of Cinda has been immense. MoF has allowed Cinda’s corporate tax payments to be used to pay down the bonds it issued to China Construction Bank. MoF also gave Cinda a 25 billion renminbi capital injection with a delayed payback period. The odds that MoF would let Cinda go belly up are exceedingly low.

The other reason that financial institutions might be willing to loan to Cinda on the cheap is that the company has come to play a very useful role for them. Commercial banks face constant pressure from regulators to reduce their non-performing loan (NPL) ratio. The strikingly low reported NPL rates throughout the past several years stands in stark contrast to a slowdown in economic growth and fluctuating credit conditions. Shadow lenders like Cinda play a role behind the scenes in extending credit to companies short on cash who are in danger of defaulting on their bank loans. Having this type of lender of last resort helps banks avoid increases in their NPL ratios. It doesn’t, however, reduce the exposure of banks to these distressed companies as they are still on the hook through their loans to Cinda.

The IPO prospectus of Cinda has made clear that the company has rapidly transformed itself from a traditional distressed asset manager to a provider of emergency financing. Though we lack similar disclosure, it is likely that the other three national asset management companies are proceeding along similar lines. China’s AMCs are an important part of the shadow banking system and an enabler of large-scale regulatory arbitrage.

Gold Daily and Silver Weekly Charts - Non-Farm Payrolls Fizzle, Precious Metals Held in Check

Posted: 07 Feb 2014 02:09 PM PST

Gold Daily and Silver Weekly Charts - Non-Farm Payrolls Fizzle, Precious Metals Held in Check

Posted: 07 Feb 2014 02:09 PM PST

Billionaire Eric Sprott - The U.S. Gold Is Gone

Posted: 07 Feb 2014 02:01 PM PST

With the end of another wild week of trading in global markets coming to a close, today billionaire Eric Sprott told King World News that there is no gold left in vaults where the US gold as well as other foreign countries' gold is supposed to be safely stored. The Canadian billionaire also spoke about happenings with the ETF GLD. Below is what Sprott, Chairman of Sprott Asset Management, had to say in Part II of this remarkable interview series.

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

ECONOMIC COLLAPSE -- The 2nd Irish Exodus

Posted: 07 Feb 2014 01:52 PM PST

The Irish leave home with their economy sinks, providing the rest of us with great pubs!There is a great exodus of talent and money from Ireland as their economy sinks under debts thanks to the stupid over inflated property market.

[[ This is a content summary only. Visit http://www.GoldSilverNewsBlog.com or http://www.newsbooze.com or http://www.figanews.com for full links, other content, and more! ]]

'Gold cartel' author Dimitri Speck interviewed about market manipulation

Posted: 07 Feb 2014 12:50 PM PST

3:46p SRT Friday, February 7, 2014

Dear Friend of GATA and Gold:

European fund manager, gold market researcher, and GATA consultant Dimitri Speck, author of the new book "The Gold Cartel," was interviewed this week by financial journalist Dominic Frisby about manipulation of the gold market by central banks. The interview is 22 minutes long and can be heard here:

http://commoditywatch.podbean.com/2014/02/05/dimitri-speck-gold-price-ma...

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 our forecast for 2013 that includes profiles of nine companies and technical analysis of their stock performance. Six of the companies have market capitalizations of less than $800 million and one company has a market cap of only $30 million. The most exciting of these companies will begin production in a few weeks and has a market cap of just $150 million.

Half of all proceeds from the sale of this report will be donated to the Gold Anti-Trust Action Committee to support its efforts exposing manipulation and fraud in the gold and silver markets.

To learn about this report, please visit:

http://www.futuremoneytrends.com/index.php?option=com_content&id=376&tmp...

Join GATA here:

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 safeguards more than $1.7 billion in metals and currencies. Buy gold, silver, platinum, and palladium from GoldMoney over the Internet and store them in vaults in Canada, Hong Kong, Singapore, Switzerland, and the United Kingdom, taking advantage of GoldMoney's low storage rates, among the most competitive in the industry. GoldMoney also offers delivery of 100-gram and 1-kilogram gold bars and 1-kilogram silver bars. To learn more, please visit:

http://www.goldmoney.com/?gmrefcode=gata

The ECONOMY To COLLAPSE Around March 4 2014 - The DOOMSDAY Clock is Ticking

Posted: 07 Feb 2014 12:03 PM PST

ELITE Insider Predicts USD COLLAPSE Will Occur Around March 4 2014 - The DOOMSDAY Clock is Ticking We understand that Doomsday predictions are aplenty these days, but given what's going on around the world right now it may be time to revisit the eerily prescient forecast of an elite...

[[ 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! ]]

Bank of England staff said to have condoned FX market rigging

Posted: 07 Feb 2014 11:35 AM PST

Bank of England Staff Said to Have Condoned Currency Traders' Conduct

By Suzi Ring, Gavin Finch, and Liam Vaughan
Bloomberg News
Friday, February 7, 2014

http://www.bloomberg.com/news/2014-02-07/boe-staff-said-to-have-condoned...

LONDON -- Bank of England officials told currency traders it wasn't improper to share impending customer orders with counterparts at other firms, a practice at the heart of a widening probe into alleged market manipulation, according to a person who has seen notes turned over to regulators.

A senior trader gave his notes from a private April 2012 meeting of currency dealers and two central bank staff members to the Financial Conduct Authority about six weeks ago because of mounting media coverage of the investigation, said the person, who asked not to be named while probes are underway.

Traders representing some of the world's biggest banks told officials at the meeting that they shared information about aggregate orders before currency benchmarks were set, three people with knowledge of the discussion said. The officials said there wasn't a policy on such communications and that banks should make their own rules, according to the people. The notes could drag the U.K. central bank into another market-rigging scandal two years after it was criticized by lawmakers for failing to act on warnings that Libor was vulnerable to abuse.

... Dispatch continues below ...

A spokeswoman for the Bank of England declined to comment about the 2012 meeting beyond what was contained in a summary provided to Bloomberg News last month. Those notes included a reference to "a brief discussion on extra levels of compliance that many bank trading desks were subject to when managing client risks around the main set-piece benchmark fixings." No further details of the discussion were provided.

"The Bank of England has already released its record" of the meeting, the central bank said in a statement today. "We are continuing to support the FCA in its investigations."

The central bank had no responsibility for regulating U.K. lenders until April 2013. Chris Hamilton, a spokesman for the FCA, which supervises British markets, declined to comment.

"Allegations that banks may have been rigging the forex market are extremely serious, particularly for firms but also for regulators who had been telling Parliament that banking standards were improving," Andrew Tyrie, the British lawmaker who led an inquiry into practices in the banking industry following the Libor scandal, said in a statement today.

Dealers at the April 2012 meeting with Martin Mallett, the Bank of England's chief currency dealer, and James O'Connor, who works in its foreign-exchange division, were told not to record the discussion or take notes, one of the people said. One trader wrote down what was said soon after leaving because of concerns spawned by investigations of attempted manipulation of the London interbank offered rate, or Libor, the person said.

Two traders at the meeting -- Citigroup Inc.'s Rohan Ramchandani and UBS AG's Niall O'Riordan -- are among at least 20 employees of global banks who have been fired, suspended, or put on leave since Bloomberg News first reported in June that dealers said they shared information about client orders to manipulate benchmark rates used in the $5 trillion-a-day currency market, the world's biggest.

No firms or traders have been accused of wrongdoing by government authorities. Mallett and O'Connor didn't respond to e-mails or return phone calls seeking comment. Ramchandani, who was fired, said he couldn't comment. O'Riordan, who was suspended, didn't respond to a message left on his mobile phone.

At the center of the inquiries are instant-message groups such as "The Cartel" and "The Bandits' Club." Their members, which included Ramchandani, exchanged information on client orders and agreed how to trade at the fix, the one-minute window when benchmark rates are set, five people with knowledge of the probes said in December.

The U.S. Justice Department, the Federal Reserve, the Swiss Competition Commission, and the European Commission are among more than a dozen authorities on three continents investigating currency-trading practices. New York's top financial regulator, Benjamin Lawsky, has asked more than a dozen banks, including Goldman Sachs Group Inc. and Deutsche Bank AG for documents related to foreign-exchange trading, Bloomberg News reported this week, citing a person familiar with the matter. Spokesmen for those two banks declined to comment.

The 2012 meeting was one of three held that year by the chief dealers' subgroup of the Bank of England's Foreign Exchange Joint Standing Committee. The group was set up in 2005 to bring central bank officials together with spot traders from the world's largest banks to discuss market issues.

The April session, held at BNP Paribas SA's London office on Harewood Avenue, was led by Mallett, according to the Bank of England summary. In addition to O'Connor, Ramchandani and O'Riordan, more than half a dozen traders from lenders including Royal Bank of Scotland Group Plc were in attendance, two of the people with knowledge of the meeting said.

During a 15-minute conversation on currency benchmarks, traders said they used chat rooms to match buyers and sellers ahead of the fix to avoid trading at one of the most volatile periods of the day, the people said. That required them to share aggregate positions. They instigated the discussion because they were concerned that similar practices were under scrutiny at the time in the Libor investigations, the people said.

The Bank of England officials said they viewed the practices as positive to reduce market volatility and wouldn't take the matter to the standing committee, according to the people with knowledge of the meeting. That body included a representative from the Financial Services Authority, the FCA's predecessor, according to central bank records.

By pooling information on client orders, current and former traders interviewed by Bloomberg News have said they could gain an impression of probable moves in currency markets, knowledge they said they sometimes used to place their own bets before the benchmark WM/Reuters rates are set at the 4 p.m. London close.

Spokesmen for Paris-based BNP, New York-based Citigroup, Edinburgh-based RBS, and Zurich-based UBS declined to comment.

The Bank of England, then under the leadership of Mervyn King, was criticized by lawmakers in July 2012 for failing to act on warnings about Libor, the benchmark interest rate used for $300 trillion of securities. While the U.K. central bank and the Federal Reserve Bank of New York discussed flaws in the rate-setting process for Libor in 2008, the benchmark fell outside their jurisdiction -- a conclusion the U.K. Parliament's Treasury Select Committee agreed with in a 2012 report. Rate-rigging continued at several of the largest banks for years, according to findings by the committee.

"The Libor scandal demonstrated regulators need to be extra vigilant about how key benchmarks are set," said Pat McFadden, a member of Parliament who sits on the Treasury Select Committee. "The Bank of England has taken over hugely increased responsibilities, but that system will work only if it shows a strong appetite for investigating any suggestion of improper market behavior."

* * *

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

A Personal Touch in Buying Precious Metals

If you've not secured your allocation of precious metals and numismatic coins, 2014 may be the last year to get them at affordable and undervalued prices. With huge amounts of gold leaving the West for Asia, the future availability of precious metals is very much in doubt.

All Pro Gold has competitive pricing on all bullion and numismatic products -- and offers prompt delivery too. Long-time GATA supporters Fred Goldstein and Tim Murphy are glad to answer any questions or concerns about acquiring the monetary metals. All Pro Gold has an extensive electronic library of articles from the world's top market analysts. Learn more at www.allprogold.com or write to Fred and Tim at info@allprogold.com or telephone them at 1-855-377-4653.

Restructuring the U.S. Economy – Downward

Posted: 07 Feb 2014 11:30 AM PST

Ed Note: Dr. Richebächer wrote this classique in 2006, a day after the FOMC meeting. The Fed decided not to raise rates for the third straight month. In fact, to this day it still hasn't raised rates. At the time, the mainstream thought the economy was in great shape. But Dr. Richebächer recommended that Americans remove the rose-colored glasses to see the U.S. economy for what it really is. Not only was Kurt Richebächer right… but his calls on the long-term structural damage to the U.S. economy seem to ring true during the present-day "recovery"…

The deficit country is absorbing more, taking consumption and investment together, than its own production; in this sense, its economy is drawing on savings made for it abroad. In return, it has a permanent obligation to pay interest or profits to the lender. Whether this is a good bargain or not depends on the nature of the use to which the funds are put. If they merely permit an excess of consumption over production, the economy is on the road to ruin.

- Joan Robinson, Collected Economic Papers, Vol. IV, 1973

Finally, the greatest boom in American housing history is going bust. The impact on the economy has only just begun to be felt. Demand for homes is sharply down, while the number of vacant dwellings is ballooning – up more than 40% for existing homes and more than 20% for new homes year over year. At issue now is the severity of the impending bubble aftermath.

It does not seem, though, that there is a lot of worrying around. There appears to be a widespread belief that the U.S. economy is now out of trouble because the Fed decided not to raise interest rates. We presume the following interpretation:

This is not just a pause, but the end of all rate hikes.
In the absence of an overheating economy, inflation is yesterday’s issue.
Steady or lower interest rates will boost the stock market.
As the Fed no longer tightens, the possibility of a hard landing can be dismissed.
Abundant liquidity continues to underpin the markets.

Treating bad economic news as good for the financial markets, Wall Street is running wild with more aggressive speculation. “The world economy is on track to grow at a 5.1% rate this year, but the risk of a severe global slowdown in 2007 is stronger than at any time since the September 2001 terror attacks on the United States,” said the International Monetary Fund in a report to finance ministers, mentioning two possible triggers: a sharp slowdown in the U.S. housing market or surging inflationary expectations that would force central banks to raise interest rates.

Taking this forecast into account, the sudden plunge of commodity prices may not be totally surprising. On the other hand, prices of risky assets and mortgage-backed securities have, despite the obvious problems in U.S. housing and consumer finance, held steady. Stock prices of U.S. lenders up to their necks in subprime, interest-only and negative-amortizing mortgages have been rising 5-10% since late August. Since hitting bottom in June, emerging stock markets have rebounded 20%. Developed international markets have risen by 12%, and U.S. stock markets by around 8%. A vertical slide by the yen since May suggests that yen carry trade is back with a vengeance.

Given the growing talk of impending recession in the United States, all this may appear rather surprising. The underlying rationale seems to be the assumption that this recession will be just another soft patch forcing the Fed to what the speculative community likes most: a return to easier money.

American households have offset their badly lacking income growth with an unprecedented stampede into indebtedness…

There is talk of recession, but definitely no recession scare. Popular perception appears to trust that the U.S. economy will again prove its outstanding resilience and flexibility. And are the balance sheets of private households not in excellent shape, as rising asset valuations have vastly outpaced the rise in liabilities over the years? The possible scary parts of the new development, a deeper recession and a precipitous decline in economic growth, have not yet come to the fore.

Over the past five years of recovery from the 2001 recession, U.S. economic growth has been “asset driven,” according to colloquial language. More to the point, protracted sharp rises in house prices served private households as the wand providing them with prodigal borrowing facilities to increase their spending. For years, it was the economy’s single motor. The Fed estimates that mortgage equity withdrawals exceeded $700 billion, annualized, in the first half of 2006.

In 2005, the last full year for which data are available, new borrowing by private households amounted to $1,241.4 billion. Now compare this with the following spending and income figures. Disposable personal incomes grew $354.5 billion in current dollars and $93.8 billion in inflation-adjusted dollars. Spending increased $530.9 billion in current dollars and $264.1 billion in chained dollars.

We have presented these figures to highlight the paramount importance of the large equity extractions on the part of private households for U.S. economic growth during the U.S. economy’s current recovery. Plainly, it prevented a much deeper recession. Absence of any wealth gains could have easily induced private households to do some saving out of current income.

For the consensus, the U.S. economy’s shallow recession in 2001 is the most splendid justification of Mr. Greenspan’s repeatedly expressed idea that it is better to fight the bubble’s aftermath with easy money than to prick it in its prime. This is plainly a gross misjudgment, because America’s shallowest recession was followed by five years of the shallowest economic recovery, with unprecedented large and lasting shortfalls in employment, income growth and business fixed investment.

Actually, there have been major changes in the U.S. economy’s pattern of employment and resource allocation, but altogether changes for the worse, not for the better. These structural changes are bound to depress U.S. economic growth in the long run.

The striking feature of the housing bubble – distinguishing it diametrically from an equity bubble in this respect – is its extraordinary credit and debt addiction. The reason is that it requires borrowing for two different purposes: first, for driving up house prices; and second, for the cash out of the capital gains. Every single dollar for this purpose has to be borrowed.

Since end-2000, American households have offset their badly lacking income growth with an unprecedented stampede into indebtedness, up so far by $5.3 trillion, or 77%. But as soaring house and stock prices added a total of $15.6 trillion to the asset side of their balance sheets, households miraculously ended up with an unprecedented surge in their net worth from $41.5 trillion to $53.8 trillion in the first quarter of 2006.

Referring to this fact, Fed Chairman Bernanke noted in a speech on June 13 that “U.S. households overall have been managing their personal finances well.”

Manifestly, the rapid creation of the housing bubble in 2001 did prevent a deeper recession. But this should raise the further question of how the housing bubble and its financial implications have affected the U.S. economy from a longer perspective. In other words, are they in better or worse shape today than in 2001 to weather the aftermath of the housing bubble? Our answer is categorical: Underlying cyclical and structural conditions have dramatically worsened.

In 2001, the Greenspan Fed could cushion the fallout from the bursting equity bubble with the creation of the housing bubble. This time, manifestly, there is no alternative bubble available to be inflated to cushion the fallout from the housing bubble. Rather, there is a high probability that the popping housing bubble will pull the stock market down with it. That is the first ominous difference between 2001 and today.

The second ominous difference is that the economy and the financial system have accumulated structural imbalances and debts as never before in history. Vastly excessive borrowing for consumption and speculation has turned the U.S. economy into a colossus of debts with a badly impaired capacity of income creation.

And finally, equity and real estate bubbles are very different animals, of which the latter is manifestly the far more dangerous. In its World Economic Outlook of April 2003, the International Monetary Fund published a historical study, titled When Bubbles Burst, and explained differences in the effects between bursting equity and housing bubbles. It stated, in brief, the following:

First, the price corrections during housing price busts averaged 30%, reflecting the lower volatility of housing prices and the lower liquidity in housing markets. Second, housing price crashes lasted about four years, about 1 1/2 years longer than equity price busts. Third, the association between booms and busts was stronger for housing than for equity prices… Fourth, all major bank crises in industrial countries during the postwar period coincided with housing price busts.

The severe cases of bursting housing bubbles badly affecting the banking systems in the late 1980s were in England, the Nordic countries and Switzerland, not to speak of Japan, where, however, commercial real estate played the key role.

Regards,

Dr. Kurt Richebächer
for The Daily Reckoning
October 26, 2006

Editor’s Note: The problems facing the US economy circa 2006 are the same problems we’re facing in 2014. Nearly eight years of near-zero interest rates and lackluster economic growth have seen to that. But there is hope… at least for you and your own personal wealth. By signing up for The Daily Reckoning email edition, you’ll have the chance to discover unique profit opportunities that only a handful of people in the world get access to. It’s free to sign up and there is no obligation once you’re in. So you’ve got nothing to lose and a lot to gain. Sign up for FREE, right here, to get started.

Bringing the Empire of Debt to its Knees

Posted: 07 Feb 2014 10:25 AM PST

“The relentless credit deluge in America is beyond belief…” Kurt Richebächer bemoaned in 2005. “Credit growth, financial and nonfinancial, in the United States has effectively run riot in the short time since 2000.”

Fast-forward nearly a decade and we have no doubt Kurt would express himself with even greater discontent if he were with us now. From CNN Money this afternoon:

“The CBO projects that under current policies, public debt will reach $21 trillion — or 79% of GDP — by 2024. That would be its highest level in more than 75 years and would leave debt at nearly double its long-term average of 40% of GDP.”

What would Kurt say if he were here today? Probably that a nation, no less than you or I, should earn its money before spending it. And that the U.S. may very well thrive as its public and private debt climbs ever higher… yet it’s probably in spite of indebtedness, not because of it…

…the size of its interest payments is as likely to bring the empire of debt to its knees as anything.

At writing, the national debt sits at $17.3 trillion. The debt limit will need to be raised, according to Treasury Secretary Jacob Lew, lest the U.S. default on some of its obligations. That’s old hat.

What’s more interesting is the interest on the debt. After all, the size of its interest payments is as likely to bring the empire of debt to its knees as anything.

According to the CBO, the U.S. will shell out “only” $233 billion to service its debt this year. That’s a little more than 1% of GDP. At the same time, the federal deficit is set to decline this year and next — to nearly half the amount of 2009′s deficit.

We would humbly posit, however, that digging yourself deeper into a hole isn’t an enviable position… no matter how slowly you dig. This is especially true while interest rates are so low.

What happens when they go back up, as they inevitably will?

The answer, according to the CBO report, is that interest payments will make up the biggest portion of the federal deficit. “By 2024, it will reach $880 billion, or 3.3% of GDP,” reports CNN. That will be 80% of the projected $1.1 trillion deficit a decade from now. That amount rivals what we spend on Medicare alone right now.

It sounds like the end of the road for the ol’ US of A… then again, what do we know? When we produced our film I.O.U.S.A. in 2007, the federal debt was about $9 trillion. Today, it’s nearly double that. If we’ve learned anything, it’s that these things can go on a lot longer than you’d figure. Alas, for all of our uncertainty about the journey’s time frame… the destination is certain.

“For decades,” Dr. Richebächer told us in France two years prior to I.O.U.S.A., “one dollar added to GDP in the United States was tied to $1.40 in additional debt. But all that changed in the 1970s. Since then, the debt-to-GDP growth relationship has skyrocketed. Now for one dollar of additional GDP, there is $4 in additional debt.”

The good doctor might have been engaging in a bit of hyperbole. Comparing the GDP numbers from the Commerce Department with the total credit market debt as reported by the Federal Reserve, it took $3.20 in debt to produce $1 of additional GDP at the time of that interview. But the acceleration since the 1970s is undeniable.

The good news — if that’s what you can call it — is that the upward spiral reversed as the “official” recession ended in mid-2009. We’re now back to $3.44 — the level where it was when Dr. Richebächer died, in August 2007. It’s bad news when you consider that much of that debt has been frittered away on entitlement programs, which have exacerbated the problems they were created to solve.

Regards,

Addison Wiggin
for The Daily Reckoning

Ed. Note: In the Daily Reckoning email edition, from which this essay was taken, Dr. Marc Faber followed Addison’s musings with an exploration of some specific instances of government failure. Specifically, schemes like the war on poverty… a decades-long mission to flush $20 trillion down a massive toilet. But these essays are just one benefit of reading The Daily Reckoning email edition before it hits the Daily Reckoning website… Readers of the email edition are also treated to several chances to discover real, actionable profit opportunities every single day. So don’t wait. Get the full story by signing up for The Daily Reckoning, for FREE, right here.

Jim’s Mailbox

Posted: 07 Feb 2014 09:40 AM PST

Dear Jim, According to Grant, the Central Bank Governor of India has pretty much stated that " the cooperation between the world’s central banks is gone and it’s every man for himself." The Banksters are too self absorbed to only look out for the dollar and not protect their own self-interests. This tells me we... Read more »

The post Jim’s Mailbox appeared first on Jim Sinclair's Mineset.

Gold as a hyperinflation hedge

Posted: 07 Feb 2014 09:40 AM PST

USAGold

Invest 8% Gold "Whatever the Price"

Posted: 07 Feb 2014 09:30 AM PST

Bullion Vault

Posted: 07 Feb 2014 09:01 AM PST

"Anti-graft" drive sees slowest growth in total New Year retail sales since 2004...

BUYING GOLD and silver jewelry has proven "popular" with Chinese shoppers celebrating the new Year of the Horse, according to retailers and local media.

But Beijing's drive to deter high spending by government officials after a series of corruption and luxury lifestyle scandals has dented overall spending at Chinese New Year, easing total growth to the slowest in a decade, data say.

Now the world's No.1 gold buying nation, China's households spent CNY 96 billion ($15bn) on jewelry and bullion products between January and March 2013, according to data from global market-development group, the World Gold Council.

This year, people buying gold at Caishikou, a leading jewelry retailer, spent CNY 250 million ($41m) in the first two days alone of the Chinese New Year, says Reuters, quoting data from the chain's website.

The holidays began on Lunar New Year's Eve, 31st January.

Jewelry with a horse theme proved "popular among consumers" buying gold and silver, says the Beijing Municipal Commission of Commerce, as did lower-weight bullion products.

"The popularity of smaller-sized gold ornaments is growing," said the People's Daily ahead of the New Year holidays, reporting a "sharp slowdown" in people buying gold bars in northeast China's Jilin province (population 27 million).

"Few people now buy gold bars that weigh above 10 grams," the government-owned newspaper quoted a gold retailing bank manager.

"Most choose gold ornaments weighing from five to 10 grams as holiday gifts for relatives and friends."

During the 7-day holidays to 6th February, China's overall retail spending totaled CNY 610 billion, said the Ministry of Commerce on Friday, the equivalent of $100 billion.

Quoting the data, the South China Morning Post says jewelry sales rose 30% and more from 2013 in central China's Hubei province (population 58 million), north-eastern Liaoning (43m), and mid-eastern Heilongjiang (38m).

But all told, growth in China's retail sales slowed to 13.3% from last year, the Ministry says, down from 2013's pace of 14.7% and the 16.2% of 2012.

"The number is relatively healthy, given the circumstances," the South China Morning Post quotes Moody's economist Alaistair Chan.

Chinese New Year "[was] set to be less noisy and consumerist than usual," the People's Daily said last week, "as concern over air pollution has combined with the authorities' ongoing frugality and anti-corruption drive to depress sales of fireworks and luxury gifts."

"The anti-graft campaign has made consumption cheaper and more affordable for Chinese households," reckons Barclays Capital economist Chang Jian.

Posted: 07 Feb 2014 09:01 AM PST

"Anti-graft" drive sees slowest growth in total New Year retail sales since 2004...

BUYING GOLD and silver jewelry has proven "popular" with Chinese shoppers celebrating the new Year of the Horse, according to retailers and local media.

The holidays began on Lunar New Year's Eve, 31st January.

Jewelry with a horse theme proved "popular among consumers" buying gold and silver, says the Beijing Municipal Commission of Commerce, as did lower-weight bullion products.

"Few people now buy gold bars that weigh above 10 grams," the government-owned newspaper quoted a gold retailing bank manager.

"Most choose gold ornaments weighing from five to 10 grams as holiday gifts for relatives and friends."

During the 7-day holidays to 6th February, China's overall retail spending totaled CNY 610 billion, said the Ministry of Commerce on Friday, the equivalent of $100 billion.

But all told, growth in China's retail sales slowed to 13.3% from last year, the Ministry says, down from 2013's pace of 14.7% and the 16.2% of 2012.

"The number is relatively healthy, given the circumstances," the South China Morning Post quotes Moody's economist Alaistair Chan.

"The anti-graft campaign has made consumption cheaper and more affordable for Chinese households," reckons Barclays Capital economist Chang Jian.

2014 Y-T-D: Gold 1 Fantasies 0Â

Posted: 07 Feb 2014 08:45 AM PST

As we welcomed the beginning of 2014 the advice from "gurus" was rather straight forward. Gold was going to $1,060. At the same time the stock markets would continue to advance. So our life would be financially happy if we sold our Gold and bought the favorites fantasies in the NASDAQ/technology group, such as TWTR. Well, seems the real world was to hold some disappointment for those strategists.

Coming Global Collapse Will Eclipse The Terror Of 2008

Posted: 07 Feb 2014 08:28 AM PST

Today the man who has been one of the most accurate in the world at calling movements in gold warned King World News that the coming collapse will be far worse than the terror that engulfed the world 5 or 6 years ago. William Kaye, who 25 years ago worked for Goldman Sachs in mergers and acquisitions, also warned KWN that the reaction by global governments to this coming collapse will be incredibly alarming for ordinary citizens.

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

In Defense of Money Laundering

Posted: 07 Feb 2014 08:15 AM PST

BitInstant CEO Charlie Shrem, along with alleged co-conspirator Robert Faiella, was arrested by federal authorities last week for allegedly laundering more than $1 million worth of Bitcoins. This is a tiny amount compared to the largest drug-and-terrorism money laundering case ever. Yet when British bank HSBC was found guilty in 2012 of laundering billions, the firm paid a fine of $1.9 billion. Authorities made no arrests, and HSBC still turned a $13.5 billion profit that year.

Rolling Stone's Matt Taibbi detailed the crimes HSBC helped fund, including "tens of thousands of murders" and laundering money for Al Qaeda and Hezbollah. By contrast, Silk Road users have only been shown to have bought and sold drugs. (The six murders-for-hire commissioned by alleged former Silk Road head Ross Ulbricht were never carried out.) In fact, by moving transactions online, Silk Road likely decreased the violence associated with the drug trade.

“money-laundering… boils down to a single, basic prohibited act: Doing something and not telling the government about it.”

Again, no individual associated with HSBC paid any money or spent a day in jail. Shrem is currently in custody. Why is there such a disparity? Clearly the size, scope, violence or effect of the crime can't justify the discrepancy in response. The Justice Department explained it by saying that HSBC is, in essence, Too Big to Jail.

“Had the U.S. authorities decided to press criminal charges,” said Assistant Attorney General Lanny Breuer during the announcement of the HSBC settlement. “HSBC would almost certainly have lost its banking license in the U.S., the future of the institution would have been under threat and the entire banking system would have been destabilized.”

What are the moral and practical underpinnings of a law whose punishments are harshest for those who violate it least? The Justice Department is here admitting that the costs of fairly enforcing the money laundering laws as written — potentially shaking up a major bank — outweigh the benefits.

Charlie Shrem founded BitInstant, a service that let users quickly buy into Bitcoin, in his family's garage with $10,000 of their money while still in college. He became a founding member of the Bitcoin Foundation and served as vice chairman of the board — a position he’s since stepped down from. But his startup was plagued by regulatory troubles from the start, fueled by a lack of clear regulation pertaining to Bitcoin. In a trailer for the Bitcoin documentary “The Rise and Rise of Bitcoin,” Shrem claims to spend “thousands of dollars on lawyers every day just to make sure that I’m not gonna go to jail.”

While Shrem operated in regulatory uncertainty, and didn't know the charges against him on the day he was arrested, HSBC received 30 different formal warnings in just one brief stretch between 2005 and 2006. Even then, HSBC was openly flouting the rules. The bankers knew, for instance, that they were funneling money for people such as one of 20 early financiers of Al Qaeda, a member of what Osama bin Laden himself apparently called the “Golden Chain,” according to Taibbi. Another customer was powerful Syrian businessman Rami Makhlouf, a close confidant of the Assad family.

Some, including Taibbi, have called for equal jail time for all offenders. There is no doubt that the Justice Department is overstating the lasting, worldwide effect of justly applying money laundering laws. However, the drawbacks to enforcing laws against what's estimated to make up a third of all transactions are very real. In this reality, it's legitimate to ask whether laws against money laundering should be applied to anyone.

Money laundering is, simply, the process of concealing sources of money. While the standard image of money laundering involves murders, Mexican narco-gangs, and Al Qaeda, in reality there are many reasons that normal people would want to keep their transactions anonymous — which is a big reason why Bitcoin gained popularity with libertarians in the first place.

As J. Orlin Grabbe wrote, “Anyone who has studied the evolution of money-laundering statutes in the U.S. and elsewhere will realize that the ‘crime’ of money laundering boils down to a single, basic prohibited act: Doing something and not telling the government about it.” Criminalizing this means that by default government has the right to know the source of all of every citizen's money. In some jurisdictions, money laundering can be just using financial systems or services that do not identify or track sources or destinations.

Writing in American Banker, Bitcoin advocate Jon Matonis explains that “from President Roosevelt’s 1933 seizure of personal gold to the Nazi confiscation of Jewish wealth to the recent deposit theft at Cyprus banks, asset plundering by governments has a long and colorful tradition. Protecting wealth from oppressive regimes continues to this day.”

In that piece, Matonis calls money laundering the thoughtcrime of finance, a sentiment that’s gained traction in libertarian circles. Hiding or failing to report where money comes from is, in and of itself, a victimless crime. The theory is that everyone owes it to the government to make enforcing laws against violent crime easier. But that's not really accurate, as most of the laundered money is used in other crimes whose violence stems from their being illegal, such as gambling and the drug trade.

This reporting to the government comes at a significant cost, both in terms of resources and privacy.

The Economist has estimated the annual costs of anti-money laundering efforts in Europe and North America to be in the billions. Even its most legitimate function, trying to keep people from financing terror, has been deemed a costly failure by the magazine. Curiously enough, The Economist concedes that efforts to reduce identity theft and credit card fraud are most effective at combating money laundering.

Perhaps this cost could be justified if the information gathered through the reporting requirements was used to cut off funds to terrorists. But as the HSBC case shows, that's not the case. After getting notice after notice about failing to properly report on its customers, HSBC simply hired former call center employees to "investigate" cases of money laundering to unsavory characters. And when one employee actually did, he was fired.

Besides costing billions, efforts to stamp out money laundering also erode privacy. Ensuring every transaction is above board forces banks to be cops through so-called "know your customer" laws. These laws essentially conscript private businesses “into agents of the surveillance state,"according to the American Civil Liberties Union. Bitcoin offers an interesting counterpoint: Even if accounts may be anonymous, transactions are all public, which is a level of transparency not seen in the fiat currency system.

So why does alleged Bitcoin laundering deserve jail time? On a pure cost-to-benefit basis, perhaps it makes sense to jail Shrem while giving HSBC executives a slap-on-the-wrist fine. Revoking the bank's license would rock the entire financial system, while Shrem's enterprise was already on hold at the time of his arrest.

However, laws which result in jail time for minor infractions while the worst offenders walk free deserve their own cost/benefit analysis. If money laundering laws are worth their cost to companies, to the government, and to privacy, surely they are worth applying fairly and evenly. If not, perhaps its time to rethink whether they make sense at all.

Regards,

Cathy Reisenwitz
for The Daily Reckoning

Ed. Note: There are thousands of US laws that make no sense but exist under the auspices of “government knows best.” But that doesn’t mean you have to take it lying down. Sign up for the FREE Laissez Faire Today email edition, and start living a happier, healthier life outside the prying eyes of the government.

This article originally appeared here on Vice.com.

This article was also prominently featured in Laissez Faire Today

Is Bundesbank repatriating only 1 tonne per week for the next six years?

Posted: 07 Feb 2014 07:48 AM PST

1:06p SRT Friday, February 7, 2014

Dear Friend of GATA and Gold:

Here's something regarding yesterday's German Press Agency report quoting the Bundesbank as saying that small shipments repatriating Germany's gold from the Federal Reserve Bank of New York are "preferred for security reasons" --

http://www.gata.org/node/13606

-- a report that included an assertion attributed to the German newspaper Handelsblatt that "insurers will cover gold shipments only by air, not by ship, and will not insure shipments of more than 1 tonne at a time."

GATA's friend and consultant R.M. observes:

"I was just thinking. ...

"There are 295 tonnes of German gold still to move from the Federal Reserve Bank of New York to Frankfurt under the Bundesbank's plan to repatriate 300 of its 1,500 tonnes at the New York Fed by 2020. Five tonnes are reported to have been transferred already.

"There are 307 weeks from now until January 1, 2020.

"If the Bundesbank plans taking until 2020 to repatriate the German gold, that would mean flying an average of 1 tonne of gold per week from New York to Frankfurt every week between now and 2020, or 50 flights per year with two weeks of down time per year.

"That is crazy and a security nightmare in itself, since it would establish a routine pattern of gold flights between the same destinations. So the Bundesbank's explanation for the slow pace of its gold repatriation from the New York Fed looks even more bogus."

Of course that Western central banks are generally so secretive about their gold reserves and particularly about their gold swaps and loans --

http://www.gata.org/node/12016

-- is confirmation in itself that central banks are doing things with gold for which they fear accounting to their publics and the market. No one who disparages complaints of gold market manipulation by central banks has ever tried extracting critical documentation about gold from a central bank or has tried putting to a central bank a critical question about gold as GATA often has done. Indeed, no one who disparages complaints of gold market manipulation by central banks, including self-styled experts, has ever reviewed and disputed any of the extensive documentation:

http://www.gata.org/taxonomy/term/21

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

ADVERTISEMENT

A Personal Touch in Buying Precious Metals

If you've not secured your allocation of precious metals and numismatic coins, 2014 may be the last year to get them at affordable and undervalued prices. With huge amounts of gold leaving the West for Asia, the future availability of precious metals is very much in doubt.

All Pro Gold has competitive pricing on all bullion and numismatic products -- and offers prompt delivery too. Long-time GATA supporters Fred Goldstein and Tim Murphy are glad to answer any questions or concerns about acquiring the monetary metals. All Pro Gold has an extensive electronic library of articles from the world's top market analysts. Learn more at www.allprogold.com or write to Fred and Tim at info@allprogold.com or telephone them at 1-855-377-4653.

Join GATA here:

Mines and Money Hong Kong
Hong Kong Convention and Exhibition Centre
Monday-Friday, March 24-28, 2014
Hong Kong Special Administrative Region, China

http://www.minesandmoney.com/hongkong/

* * *

Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006:

http://www.goldrush21.com/order.html

Or by purchasing a colorful GATA T-shirt:

http://gata.org/tshirts

Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009:

http://gata.org/node/wallstreetjournal

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

http://www.gata.org

To contribute to GATA, please visit:

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

ADVERTISEMENT

Jim Sinclair plans seminar in Austin

Gold advocate and mining entrepreneur Jim Sinclair will hold his next market seminar from 2 to 6 p.m. Saturday, February 8, at the Austin, Texas, Airport Hilton. Advance registration is required. Details for the Austin seminar are posted at JSMineSet.com here:

http://www.jsmineset.com/2014/01/02/austin-texas-qa-session-confirmed/

Gold Prices Spike & Drop Again on US Jobs Data, German Court "Kills" Eurozone Bond-Buying Plan, Silver Adds 3.8% on Week

Posted: 07 Feb 2014 07:20 AM PST

GOLD PRICES made and lost a swift $14 jump per ounce Friday lunchtime in London, spiking to $1270 as new US data showed the economy adding fewer jobs than expected last month, the weakest January since 2010.

But the unemployment rate also fell, down to a half-decade low of 6.6%, even as the participation rate rose slightly from its worst level in 35 years.

Gold prices fell back to trade below $1260 per ounce, heading for a 1.3% weekly rise.

The price of wholesale silver bullion bars also made and lost a sudden spike on the US Non-Farm Payrolls report, going into Friday afternoon 3.8% up on the week.

"We view weak US economic data as the main threat to our bearish gold price outlook," said a note from German investment and London bullion bank Deutsche Bank in a note this morning.

"The recent improvement in the performance of gold will run out of steam, in our view, as US real yields and the US Dollar trade-weighted index move higher."

Immediately as Friday's US jobs data came out, the US Dollar Index fell 0.5% to a 1-week low.

But from this time last year, the Dollar was unchanged when measured against a basket of the United States' trading partners' currencies.

Ten-year US Treasury bond yields meantime ticked lower Friday morning. But from Feb. 2013 they stood 0.75 percentage points higher in nominal terms, and 1.2 points higher in real inflation-adjusted terms.

The gold price traded 25% below its level of 12 months ago, settling back to $1259 per ounce as US markets opened today.

"The longevity of a higher gold price," said a note from Swiss-based investment bank and London bullion market-maker UBS this morning, "ultimately depends on how market expectations for Fed tapering alters.

"If the weather effect [on Friday's US jobs data] is dismissed and market thinking about Fed tapering shifts, gold wins."

Chinese gold prices had earlier rise sharply on the wholesale Shanghai market's return from Lunar New Year holidays.

Premiums above London gold prices jumped to $11 per ounce from the $4 level seen when trading closed a week ago.

Asian stock markets also rose, cutting their losses for 2014 to date to 7.6% on the MSCI index.

Meantime in Karlsruhe, Germany's constitutional court failed to decide the legality of the European Central Bank's OMT bail-out program for weaker Eurozone states, instead referring the matter to the European Court of Justice.

Gold prices in the Euro currency peaked shortly after the ECB detailed its Outright Monetary Transactions plan, under which it could (but hasn't yet) buy unlimited quantities of Euro member nation debt, in September 2012.

Trading one-third lower from there on Friday, Euro gold prices cut the week's earlier 1.0% gains in half at €926 per ounce.

"The language is lascerating," says UK Telegraph columnist Ambrose Evans-Pritchard of the Karlsruhe court's comments.

Effectively "killing" the program, the court calls OMT "a violation of monetary financing," he adds. "Would create a political storm in Germany if ECB now tries to enact it. So there is no back-stop [for weaker Eurozone state finances]."

Germany's high court suspects that ECB bond buying is illegal

Posted: 07 Feb 2014 06:51 AM PST

German Court Warns There Are 'Important Reasons to Assume' ECB Bond Buying Is Illegal

By Bruno Waterfield
The Telegraph, London
Friday, February 7, 2014

Germany's constitutional court has warned that it has "important reasons" to rule against the European Central Bank's promise to buy unlimited government bonds in order to save the euro.

The move is a blow to the euro's credibility because the ECB's September 2012 announcement that it was prepared to make the potentially unlimited sovereign bond purchases to defend the European Union's single currency is credited with saving the eurozone.

Eight judges representing the Senate of the Bundesverfassungsgericht, Germany's highest court, have announced that it will make a final ruling on the ECB's Outright Monetary Transactions (OMT) programme only after referring their questions for "interpretation" in the EU courts. ...

... For the complete story:

http://www.telegraph.co.uk/finance/financialcrisis/10623728/German-court...

Crisis Investing in Argentina

Posted: 07 Feb 2014 06:42 AM PST

Dear Reader,

Today's edition of The Room is bursting with good stuff… so much so that I'll make a quick introduction, then step out of the way.

I'm happy to say that first up is a cameo from David Galland, with some boots-on-the-ground intelligence about the unfolding disaster in Argentina. Claudio Maulhardt, a South American hedge fund manager, will then offer his impressive analysis of Argentina's investment prospects in light of its most recent disaster.

Then Doug French will explain some important things you should know about "paper" gold. And I'll wrap up with some of my own thoughts on how the paper-gold market affects the price of the physical stuff.

And of course, you'll find the Friday Funnies at the bottom.

Let's get to it!

Restless Argentina

By Claudio Maulhardt, with an introduction by David Galland

Greetings from the deep South… Argentina, that is. It's David Galland, stepping back into The Room, but only to introduce the author of today's guest essay, Claudio Maulhardt, managing partner of Copernico Capital Partners, a money management firm specializing in overlooked value investments in South America.

Claudio first came onto my radar after speaking at a conference held in conjunction with the annual Harvest Celebration here at La Estancia de Cafayate. I was impressed with his cautious-yet-contrarian approach to challenging markets, something his firm's track record validates in spades. In fact, not long afterwards I opened up an account with the firm and, despite all the hand-wringing over emerging markets risk just now, I couldn't be happier with the returns. It is only icing on the cake that Claudio's a very nice guy… nothing flashy, just hard working and personable.

So much so that, with no small amount of urging, he agreed to join the team of contributors to World Money Analyst, one of my favorite publications. If you are like me and take international investment diversification seriously—as you should, for the simple reason that it is the only way to mitigate the risks from the Four Horsemen of the Apocalypse: political risk, single-market risk, judicial risks, and currency risks—World Money Analyst is particularly valuable. (If you want to take a look, click here and sign up for a risk-free three-month trial).

In today's article, Claudio sheds some light on what's going on behind the curtains down here in Argentina. Speaking from my spot in the front row, I will say that things are getting "interesting." As I have written about before, Argentines are accustomed—fatalistic even—to a new financial crisis every decade or so. In the latest iteration, the government has pursued so many screwy ideas, trotted out so many failed experiments in socialism, meddled in so many markets that, at this point, it is caught up in a web so tangled, there is virtually no way to unravel it without a complete reboot. Or, more likely, without giving the current regime the boot.

In one important sign that the crisis is coming to a head, I have heard from a number of reputable sources that sellers of things—cattle, wine, cement, etc.—are refusing to accept new orders. The reason is that they don't know what price to charge. To wit, if they agree to sell something at today's prices, they may suffer a heavy loss if the government allows the peso to devalue steeply tomorrow.

Naturally, this will soon lead to supply chain problems and, simultaneously, shortages.

Now, call me crazy, or just naive, but I am—so far—enjoying the experience of living through all this. It is, at least to my way of thinking, akin to getting a master's degree in crisis economics. In addition, for those of us who have the bulk of our money in a currency other than the Argentine peso, things here are getting really, really cheap (and they were already really, really cheap).

By the time this is over, I suspect that a dollar- or euro-based investor will be able to pick up some incredible assets for a fraction of the current offer price.

Of course, before we get to the end of this particular tunnel, there is the real risk of social unrest, à la the Ukraine or Thailand, but past history and my contacts suggest that any such problems will occur, as they always do, in isolated areas in the big cities. Here in the hard-working wine-making town of Cafayate, a three-hour drive from the nearest city, my Argentine friends, shopkeepers, shrug indifferently at any talk of a serious crisis. They've seen it before and are acutely aware of how to muddle on through.

In any event, I thought—given the mainstream media's love for covering Argentina in the most negative possible light—I thought I would invite Claudio to share his insider's perspective in the following article.

Meanwhile, if you'd like to come and enjoy a week (or more) in the single place in the world where Doug Casey and I both concur life just couldn't be much better, there's no better time to do so than during the upcoming Harvest Celebration. There are two events, pretty much back to back—one primarily for owners and guests here (though as a Casey Research subscriber, you are also welcome to attend) that runs March 17–22, followed by what might be called the main event, March 25–30.

For the better part of a week, you'll enjoy pretty much the best that life has to offer while rubbing elbows with Doug Casey, John Mauldin, Bill Bonner, Frank Trotter, Claudio Maulhardt, yours truly, and an agreeable group of like-minded people. For registration details, drop Chris Leverich a note at VIPConnect@LaEst.com.

And with that characteristically long windup, here's Claudio…

Restless Argentina

Why care about Argentina?

We've heard dozens of fund managers, Wall Street analysts, and private bankers ask this question. After all, Argentina's weight in the indices has virtually vanished, and daring to add Argentina risk, could cost portfolio managers their jobs. So why bother?

Yet, Argentina was one of the best-performing equity markets in 2013. The MSCI Argentina climbed 64% in a year when all Latin American markets lost 16%.

This stellar performance did not get much media attention. However, the country managed (it always does!) to regain the headlines for what it does best: go wrong. The Argentine economy is no longer growing, the government is running a deficit of 5% of GDP that is almost entirely financed with money printing, inflation has soared to nearly 30%, and the peso has lost 36% of its value in the last twelve months.

Argentine citizens have learned their lessons the hard way. They know that money printing is a highway to crisis, so they seek to shelter their spare pesos in assets that hold value, like real estate, cars, and, ultimately, the supreme shelter of them all: the US dollar.

The greenback may have its problems at home, but it has never betrayed its Argentine holders. Argentines are prohibited from saving in foreign currencies, and all foreign exchange trades must clear through the central bank, whose supply of dollars is shrinking. The Argentine central bank has lost $23 billion in reserves in the last three years.

Naturally, Argentine citizens have found ways to circumvent these rules, giving rise to a parallel peso/dollar exchange market that exists outside of official control.

OK, that's a lot of bad news. So the question becomes: How was the Argentine market able to rally amidst all these catastrophes?

The answer is simple: They are coming to an end.

In the October 2013 mid-term elections, the incumbent government scored 24 percentage points less than in 2011, inflicting a mortal wound on Cristina Kirchner's reelection bid. That alone filled the air with hope and encouraged some audacious investors to buy Argentine stocks, sparking a fast and furious rally, which peaked in early December.

Since then, the market has been heading south. Inflation seems to have accelerated in recent months, and wages are losing purchasing power fast. Workers are threatening to strike, and there have been reports of looting and deaths in several provinces. Moreover, the parallel (black market) exchange rate soared to 70% above the official exchange rate.

In the meantime, the president underwent brain surgery. Nobody stepped up to control the situation, resulting in poor and often contradictory policy responses to the rapidly deteriorating economic and social landscape.

For example, a few weeks ago, the head of the Argentine tax revenue agency ("AFIP") announced a hike on real estate taxes. A few hours later, the chief of Cabinet denied the news. One day later, the AFIP reaffirmed there would be a tax hike. The next day the minister of Finance said that he had direct orders from the president that there would be no tax hikes.

Three high-ranking individuals squabbling with each other is a sign of incipient anarchy—and not the benign type.

Stocks could not escape the scare, and the MSCI Argentina is now 25% below its early-December peak. That retracement offers the chance to take a fresh look at Argentina, without the anxiety of having to chase a rally.

Despite its "frontier" status in equity indices, Argentina is a far cry from a true frontier country. It is the second-largest economy in South America and the third-largest in Latin America. It has the largest GDP per capita in the region, and has historically had a larger middle class and a more educated population than any of its neighbors.

More important for equity investors, though, is the extraordinary resilience of the corporate sector. Despite having been pummeled for over a decade with tax hikes, fixed prices, negative regulation, the virtual prohibition on payment of dividends, and all sorts of verbal compulsion, Argentine companies have demonstrated a tremendous ability to adapt. They've streamlined to protect margins and paid down debts to prevent succumbing to bankruptcy as a result of either inflation or currency crisis.

With virtually no leverage on their balance sheets, Argentine equities trade, on average, below book value. That alone puts them on our radar. Further, these companies are not allowed to adjust their financial statements for inflation. That makes things very interesting: After six years of around 20% inflation, balance sheets may be underestimating their assets' true value by as much as 50%.

Bolstering that conclusion is the fact that similar assets in comparable countries are priced much higher. The market tends to pay just 50% or less for Argentinian assets than it would for those same assets elsewhere. Whether mobile subscribers, cable TV subscribers, barrels of oil, or GWh of electricity, the equity market puts a large discount on assets if they are located in Argentina. It's not rare to see public Argentine equities trade cheaper than even valuations paid in private equity deals.

With a long-term view, Argentine equities look very cheap. And you needn't dig deep or participate in complicated local-currency trades to find value. Some of the most compelling opportunities trade in ADR form on the NYSE. In particular, we like oil concerns YPF (NYSE:YPF) and Petrobras Argentina (NYSE:PZE). In the TMT sector, we like Telecom Argentina (NYSE:TEO) and Grupo Clarin (London Intl SE:GCLA). And in the banking sector, we like Grupo Galicia (Nasdaq: GGAL).

In a recent report, a prestigious Wall Street firm concluded that Argentina is the cheapest equity market in the world, in both P/E and P/BV terms. Further, Argentina was the only country in all of Latin America in which EPS revisions for 2014 were positive in the last three months. However, they also concluded that investors should be "underweight" Argentina, because it deserves the discount due to political risk.

Here's the bottom line: The countdown to political change started three months ago. And while we must cross an 18-month desert before getting to that change, we think the upside is worth it. The ride will likely be rough. But you do not invest in Argentina to expect conventional returns. On our way to political change, we expect to double or maybe triple our money.

Claudio Maulhardt is managing partner of Copernico Capital Partners, a dedicated emerging-markets manager with a focus on Latin America. Prior to this, he was a senior vice president of ABN AMRO, where he worked as a Latin American research analyst in Buenos Aires and New York between 1997 and 2002. In 2001, he was recognized by The Wall Street Journal as one of the top bank research analysts. Prior to that, and since 1993, he had worked as an Argentine research analyst for Banco República in Argentina, where he was the co-head of research. Mr. Maulhardt holds a bachelor degree in economics from the Universidad de Buenos Aires. For more information on Copernico, email info@copernicofunds.com.

Paper Gold Ain’t as Good as the Real Thing

Doug French, Contributing Editor

For the first time ever, the majority of Americans are scared of their own federal government. A Pew Research poll found that 53% of Americans think the government threatens their personal rights and freedoms.

Americans aren't wild about the government's currency either. Instead of holding dollars and other financial assets, investors are storing wealth in art, wine, and antique cars. The Economist reported in November, "This buying binge… is growing distrust of financial assets."

But while the big money is setting art market records and pumping up high-end real estate prices, the distrust-in-government script has not pushed the suspicious into the barbarous relic. The lowly dollar has soared versus gold since September 2011.

Every central banker on earth has sworn an oath to Keynesian money creation, yet the yellow metal has retraced nearly $700 from its $1,895 high. The only limits to fiat money creation are the imagination of central bankers and the willingness of commercial bankers to lend. That being the case, the main culprit for gold's lackluster performance over the past two years is something else, Tocqueville Asset Management Portfolio Manager and Senior Managing Director John Hathaway explained in his brilliant report "Let's Get Physical."

Hathaway points out that the wind is clearly in the face of gold production. It currently costs as much or more to produce an ounce than you can sell it for. Mining gold is expensive; gone are the days of fishing large nuggets from California or Alaska streams. Millions of tonnes of ore must be moved and processed for just tiny bits of metal, and few large deposits have been found in recent years.

"Production post-2015 seems set to decline and perhaps sharply," explains Hathaway.

Satoshi Nakamoto created a kind of digital gold in 2009 that, too, is limited in supply. No more than 21 million bitcoins will be "mined," and there are currently fewer than 12 million in existence. Satoshi made the cyber version of gold easy to mine in the early going. But like the gold mining business, mining bitcoins becomes ever more difficult. Today, you need a souped-up supercomputer to solve the equations that verify bitcoin transactions—which is the process that creates the cyber currency.

The value of this cyber-dollar alternative has exploded versus the government's currency, rising from less than $25 per bitcoin in May 2011 to nearly $1,000 recently. One reason is surely its portability. Business is conducted globally today, in contrast to the ancient world where most everyone lived their lives inside a 25-mile radius. Thus, carrying bitcoins weightlessly in your phone is preferable to hauling around Krugerrands.

No Paper Bitcoins

But while being the portable new kid on the currency block may account for some of Bitcoin's popularity, it doesn't explain why Bitcoin has soared while gold has declined at the same time.

Hathaway puts his finger on the difference between the price action of the ancient versus the modern. "The Bitcoin-gold incongruity is explained by the fact that financial engineers have not yet discovered a way to collateralize bitcoins for leveraged trades," he writes. "There is (as yet) no Bitcoin futures exchange, no Bitcoin derivatives, no Bitcoin hypothecation or rehypothecation."

So, anyone wanting to speculate in Bitcoin has to actually buy some of the very limited supply of the cyber currency, which pushes up its price.

In contrast, the shinier but less-than-cyber currency, gold, has a mature and extensive financial infrastructure that inflates its supply—on paper—exponentially. The man from Tocqueville quotes gold expert Jeff Christian of the CPM Group who wrote in 2000 that "an ounce of gold is now involved in half a dozen transactions." And while "the physical volume has not changed, the turnover has multiplied."

The general process begins when a gold producer mines and processes the gold. Then the refiners sell it to bullion banks, primarily in London. Some is sold to jewelers and mints. "The physical gold that remains in London as unallocated bars is the foundation for leveraged paper-gold trades. This chain of events is perfectly ordinary and in keeping with time-honored custom," explains Hathaway.

He estimates the equivalent of 9,000 metric tons of gold is traded daily, while only 2,800 metric tons is mined annually.

Gold is loaned, leased, hypothecated, and rehypothecated, over and over. That's the reason, for instance, it will take so much time for the Germans to repatriate their 700 tonnes of gold currently stored in New York and Paris. While a couple of planes could haul the entire stash to Germany in no time, only 37 tonnes have been delivered a year after the request. The 700 tonnes are scheduled to be delivered by 2020. However, it appears there is not enough free and unencumbered physical gold to meet even that generous schedule. The Germans have been told they can come look at their gold, they just can't have it yet.

Leveraging Up in London

The City of London provides a loose regulatory environment for the mega-banks to leverage up. Jon Corzine used London rules to rehypothecate customer deposits for MF Global to make a $6.2 billion Eurozone repo bet. MF's customer agreements allowed for such a thing.

After MF's collapse, Christopher Elias wrote in Thomson Reuters, "Like Wall Street cocaine, leveraging amplifies the ups and downs of an investment; increasing the returns but also amplifying the costs. With MF Global's leverage reaching 40 to 1 by the time of its collapse, it didn't need a Eurozone default to trigger its downfall—all it needed was for these amplified costs to outstrip its asset base."

Hathaway's work makes a solid case that the gold market is every bit as leveraged as MF Global, that it's a mountain of paper transactions teetering on a comparatively tiny bit of physical gold. "Unlike the physical gold market," writes Hathaway, "which is not amenable to absorbing large capital flows, the paper market, through nearly infinite rehypothecation, is ideal for hyperactive trading activity, especially in conjunction with related bets on FX, equity indices, and interest rates."

This hyper-leveraging is reminiscent of America's housing debt boom of the last decade. Wall Street securitization cleared the way for mortgages to be bought, sold, and transferred electronically. As long as home prices were rising and homeowners were making payments, everything was copasetic. However, once buyers quit paying, the scramble to determine which lenders encumbered which homes led to market chaos. In many states, the backlog of foreclosures still has not cleared.

The failure of a handful of counterparties in the paper-gold market would be many times worse. In many cases, five to ten or more lenders claim ownership of the same physical gold. Gold markets would seize up for months, if not years, during bankruptcy proceedings, effectively removing millions of ounces from the market. It would take the mining industry decades to replace that supply.

Further, Hathaway believes that increased regulation "could lead, among other things, to tighter standards for collateral, rules on rehypothecat

Silver Price Outperforming Gold

Posted: 07 Feb 2014 05:55 AM PST

Since Monday financial markets have consolidated following the emerging market currency shocks of the previous week. Safe-haven bonds were strong initially, before tailing off yesterday. Equities started the week badly but steadied yesterday, and gold spiked at $1274 on Wednesday before being knocked back $20 subsequently. The result is gold was more or less unchanged on the week by last night, though early indications London time are for better prices today.

As central banks disconnect, markets will break too, Williams tell KWN

Posted: 07 Feb 2014 05:45 AM PST

10:40a SRT Friday, February 7, 2014

Dear Friend of GATA and Gold:

Singapore-based fund manager Grant Williams tells King World News today that the decline of cooperation among central banks is creating friction in the markets that could start "all hell breaking loose." Williams adds: "We're seeing capital controls already in parts of South America -- that's only going to spread. We are also seeing chaos and capital controls in the Ukraine. ... I think something similar is going to happen with gold. One day people are going to want physical gold and it's suddenly going to matter because they can't get it -- they can get only paper. When that happens, you will see a massive reset higher."

Williams' interview is excerpted at the King World News blog here:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/2/7_All...

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

Alasdair Macleod: New risks may push super-rich into monetary metals

Posted: 07 Feb 2014 05:30 AM PST

10:30a SRT Friday, February 7, 2014

Dear Friend of GATA and Gold:

New risks to currencies, bonds, and stocks resulting from the decline in "quantitative easing" and governmental resort to "bail-ins" of the banking system likely will encourage the super-rich to protect themselves with gold and silver, GoldMoney research director Alasdair Macleod writes today. His commentary is headlined "Post-Lehman Era Coming to an End" and it's posted at GoldMoney's Internet site here:

http://www.goldmoney.com/research/analysis/post-lehman-era-coming-to-an-...

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

ADVERTISEMENT

Jim Sinclair plans seminar in Austin

Gold advocate and mining entrepreneur Jim Sinclair will hold his next market seminar from 2 to 6 p.m. Saturday, February 8, at the Austin, Texas, Airport Hilton. Advance registration is required. Details are posted at JSMineSet.com here:

http://www.jsmineset.com/2014/01/02/austin-texas-qa-session-confirmed/

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

A Personal Touch in Buying Precious Metals

If you've not secured your allocation of precious metals and numismatic coins, 2014 may be the last year to get them at affordable and undervalued prices. With huge amounts of gold leaving the West for Asia, the future availability of precious metals is very much in doubt.

All Pro Gold has competitive pricing on all bullion and numismatic products -- and offers prompt delivery too. Long-time GATA supporters Fred Goldstein and Tim Murphy are glad to answer any questions or concerns about acquiring the monetary metals. All Pro Gold has an extensive electronic library of articles from the world's top market analysts. Learn more at www.allprogold.com or write to Fred and Tim at info@allprogold.com or telephone them at 1-855-377-4653.

Bron Suchecki's primer on bullion banking's fractional-reserve nature

Posted: 07 Feb 2014 05:18 AM PST

10:17a SRT Friday, February 7, 2014

Dear Friend of GATA and Gold:

The Perth Mint's Bron Suchecki today provides a good primer on the bullion banking business, explaining how the unallocated nature of much of the business is tempered by the timing of the maturity of its obligations. While Suchecki's commentary doesn't really get into GATA's issue, surreptitious intervention in the gold market by central banks, often conducted through intermediaries like bullion banks, maybe it will encourage people to aim their complaints about market manipulation more accurately. Suchecki's commentary is headlined "Fractional-Reserve Bullion Banking and Gold Bank Runs -- How Can I Default on Thee? Let Me Count the Ways" and it's posted at his Internet site, Gold Chat, here:

http://goldchat.blogspot.com/2014/02/fractional-reserve-bullion-banking-...

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

Gold, Silver and The Fed's Total Mandate

Posted: 07 Feb 2014 04:00 AM PST

The errors of financial policy, led by the world's central banks have once again created the makings of a massive crisis. Blind to risk, and completely captured by politics and ideology, it is as if the Federal Reserve and it's counterparts have been awarded a total mandate. All of the misplaced and mis priced risk is poised to flood toward precious metals.

Gold, Silver And The Gathering Crypto Currency Storm

Posted: 07 Feb 2014 03:57 AM PST

Much controversy surrounds comparisons between precious metals and the growing number of crypto currencies. In some ways an ideological wedge has formed between hard asset investors and the most vocal of electronic currency advocates. While both investment options remain relatively sequestered from the mainstream spotlight, they both offer fascinating perspectives for understanding the ongoing monetary and financial crisis.

How Can Money Printing Exist and be Absent at the Same Time?

Posted: 07 Feb 2014 03:54 AM PST

In the past years, the Federal Reserve dropped many inflationary bombs on the markets. Inflationary in the purely monetary sense by supplying money in almost ridiculous amounts, especially base money figures. During this process some commentators believed that the dollar would soon evaporate, that investors will run away in favor of the euro (like the EBC had not been printing euros for their banks), or maybe in favor of the yen (like the Japanese central bank was not that inflationary), or who knows maybe even the yuan. The dollar was supposed to be either dropped by international investors, or killed from within by internal inflationary rates (or possible by those two factors combined together). None of this happened. How are we to explain this if the Fed went almost crazy in monetary creation?

Gold as a Hyperinflation Hedge - Black Swans, Yellow Gold

Posted: 07 Feb 2014 02:47 AM PST

ANDREW DICKSON WHITE ENDS HIS CLASSIC HISTORICAL ESSAY on hyperinflation, “Fiat Money Inflation in France,” with one of the more famous lines in economic literature: “There is a lesson in all this which it behooves every thinking man to ponder.” The lesson that there is a connection between government over-issuance of paper money, inflation and the destruction of middle-class savings has been routinely ignored in the modern era. So much so, that enlightened savers the world over wonder if public officials will ever learn it.

The Collapse of Industrial Civilization -- Chris Hedges

Posted: 07 Feb 2014 02:30 AM PST

Chris Hedges : Crisis Cults and the Collapse of Industrial Civilization . Abby Martin features an exclusive interview with Pulitzer Prize winning journalist Chris Hedges, concerning areas of extreme poverty that he refers to as crisis zones, as well as the reasons behind the collapse of complex...

[[ 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! ]]

All Hell Will Break Loose & The Dominos Will Start Falling

Posted: 06 Feb 2014 09:02 PM PST

Today one of the most highly respected fund managers in Singapore warned King World News that all hell is going to break loose and the dominos are going to start falling. Grant Williams, who is portfolio manager of the Vulpes Precious Metals Fund, also spoke about what this will mean for investors around the world and also what kind of surprise to expect from the gold market.

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

Financial Collapse -- Income Inequality" | Joseph T. Salerno

Posted: 06 Feb 2014 08:31 PM PST

Joe Salerno sits down with Jeff Deist to discuss how Austrian Economics frames the issue of income inequality. Salerno is Academic Vice President at the Mises Institute. For more information, visit the Mises Institute online at Mises.org.

[[ 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! ]]

MARTIAL LAW & ECONOMIC COLLAPSE 2014

Posted: 06 Feb 2014 06:13 PM PST

AMERICA- THE PERFECT STORM: ECONOMIC COLLAPSE UNDERWAY (2014) The original post has the right idea. However the reason the coming crisis will be unlike any other in 200 years (why 200 years?) is because the global economy didn't even exist in any form until the last 50 years. Seriously. We've...

[[ 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! ]]

The Gold Price Closed Higher at $1,257.60

Posted: 06 Feb 2014 04:46 PM PST

Gold Price Close Today : 1257.60
Change : 0.30 or 0.02%

Silver Price Close Today : 19.908
Change : 0.123 or 0.62%

Gold Silver Ratio Today : 63.171
Change : -0.378 or -0.59%

Silver Gold Ratio Today : 0.01583
Change : 0.000094 or 0.60%

Platinum Price Close Today : 1374.40
Change : -4.40 or -0.32%

Palladium Price Close Today : 709.45
Change : 3.25 or 0.46%

S&P 500 : 1,773.43
Change : 21.79 or 1.24%

Dow In GOLD$ : $256.89
Change : $ 3.03 or 1.20%

Dow in GOLD oz : 12.427
Change : 0.147 or 1.20%

Dow in SILVER oz : 785.04
Change : 4.64 or 0.59%

Dow Industrial : 15,628.53
Change : 188.30 or 1.22%

US Dollar Index : 80.970
Change : -0.110 or -0.14%

The GOLD PRICE rose a chiseling 30 cents to $1,257.60 and silver didn't shine much brighter, sneaking up 12.3 cents to 1990.8c.

There's a "feel of the thing" even to markets, and a long train of rises that slow down to thirty cents feels like the apogee of a thrown baseball's trajectory. Feels like it's slowing before it falls. Of course, you could ascribe that to the GOLD PRICE resistance at $1,267.50 (today's high) or resistance at that downtrend line, which gold closed nearly plumb on top of today. Don't write this rally off yet. Squint sideways at it, maybe, but don't write it off yet.

The elephant sat on the SILVER PRICE today, too, but it's still moving up. Standing above its 50 (1976c) and 20 (1981c) day moving averages, it has a shot at breaking through 2050c.

All things added up, stocks and the euro sucked interest away from silver and gold prices today. Still, nothing has changed. Main thing now is the silver holds own above 1897c and gold above $1,210. It may take another try still for gold to breach $1,267.50, but that's not the end of the world.

Today markets roused a little excitement. Whether that changes anything or not is another story.

Lo, stocks had their best day this year, but then, that's not saying much. Dow fluttered up 188.3 (1.22%) to 15,628.53, and back above its 200 DMA (15,483.08). Since other people watch charts, too, it's reasonable to expect them to buy at the 200 DMA. The S&P500 rose 21.79 (1.24%) to 1,773.43, Behold! Enough to touch its downtrend line.

It appears stocks are lining up for an upward correction. 'Twill be fascinating to see how far they can climb.

Stocks' strength relative to gold and silver today floated the Dow in Gold and Dow in Silver. Dow in Gold rose 1.16% to 12.42 oz (G$256.74 gold dollars). Dow in Silver barely edged up, 0.89% to 783.78 oz.

Mario Draghi, Criminal-in-Charge at the European Central Bank, surprised markets today by announcing there is no deflation in Europe and leaving the interest rate alone. Market was expecting a rate cut or at least a shot of Quantitative Easing, so the opposite probably set off some short covering. Whatever they thought, the euro jumped up 0.44% to $1.3592, without, however, closing above its 20 DMA (1.3604) or 50 DMA (1.3644) or breaking through its top descending channel line. In other words, it bounced from the bottom of the trading channel to the top. That doesn't really change anything. Unless it can close above $1.3650 tomorrow, today will go down in history as, as, well, as nothing.

US Dollar Index, Enemy to its Friends, Traitor to Investors, dropped 15 basis points (0.19%) to 80.97, below the psychologically sensitive 81 line. That is slap up against its 20 DMA (80.96) and leaves the dollar suspended in the selfsame range it has wallowed in since September.

Yen tumbled 0.6% to 97.94, putting the end to its uptrend at least while a short correction endures.

SPECIAL OFFER: MORGAN SILVER DOLLARS

I bought some pre-1905 Morgan silver dollars on a swap but since I don't usually stock them, so I would like to say good-bye to these quickly, so they are priced to fly.

OFFER No. 1.

Seventy-five (75) each VG+ pre-1905 Morgan, silver dollars at $26.50 each, for a total of $1,987.50 plus $35 shipping or $2,022.50. These are not bright, shiny uncirculated coins, but all are simply graded strict Very Good or better, no culls, no rim dings, full rims, etc. Each coin contains 0.765 troy ounce of silver, allowing wear for circulation. Great coin for survival. I have only six (6) lots.

OFFER No. 2.

Ninety (90) each pre-1905 Morgan, CULL silver dollars at $23.00 each, for a total of $2,070.00 plus $35 shipping or $2,105.00. A "CULL" dollar won't meet the grade of Very Good or better. Worn and might have rim dings or rims worn down in spots, but won't quite reach an honest Very Good. Another great survival coin. I have Six (6) lots only.

Special Conditions:

First come, first served, and no re-orders at these prices. I will write orders based on the time I receive your e-mail.

Sorry, we will not take orders for less than the minimum shown above.

All sales on a strict "no-nag" basis. We will ship as soon as your check clears, but we allow Two weeks (14 days) for your check to clear. Calls looking for your order two days after we receive your check will be politely and patiently rebuffed.

It increases your chances of getting your order filled if you offer me a second choice, e.g., "I want to order One of Lot 2, but if not available will take One of Lot 2." ORDERING INSTRUCTIONS:

1. You may order by e-mail only to offers@the-moneychanger.com. No phone orders, please. Please do NOT order by replying to THIS email, because it will delay your email.

Your email must include your complete name, address, and phone number. We cannot ship to you without your address. Sorry, we cannot ship outside the United States or to Tennessee.

Repeat, you must include your complete name, address, and phone number. Our clairvoyant quit without warning last week, then I tripped, dropped, and smashed my crystal ball, and our fortune-teller is on strike, so I can no longer read your mind.

2. When you buy from us, we cannot later change or cancel the trade. We are giving you our word that we will sell at that price, and you are giving us your word that you will buy at that price, regardless what later happens in the market, up or down.

If you break your word to us, we will never again do business with you.

3. Orders are on a first-come, first-served basis until supply is exhausted.

4. "First come, first-served" means that we will enter the orders in the order that we receive them by e-mail.

5. If your order is filled, we will e-mail you a confirmation. If you do not receive a confirmation, your order was not filled.

6. You will need to send payment by personal check or bank wire (either one is fine) within 48 hours. It just needs to be in the mail, not in our hands, in 48 hours.

7. "No Nag Basis" means that we allow fourteen (14) days for personal checks to clear before we ship.

8. Mention goldprice.org in your email.

Want your order faster? Send a bank wire, but that's not required. Once we ship, the post office takes four to fourteen days to get the registered mail package to you. All in all, you'll see your order in about one month if you send a check.

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 Closed Higher at $1,257.60

Posted: 06 Feb 2014 04:46 PM PST

This Is the Number One Factor Driving the Price of Gold

Posted: 06 Feb 2014 04:00 PM PST

Real interest rates are the level of annual yield paid to savers and investors over and above the pace of inflation. PIMCO makes a convincing case that the number one factor influencing the price of gold is the changes in real yield on 10 year US Treasuries.

Federal Reserve Increases Counterfeiting

Posted: 06 Feb 2014 03:31 PM PST

At the beginning of 2012; readers were presented with a commentary about the U.S. Treasuries market (Maximum Fraud in U.S. Treasuries Market) which merely stated the obvious. There was no visible/legitimate means by which this market, and the massive quantities of new supply coming onto the market could be supported – at all.

With the world having already begun its transition away from the U.S. dollar as reserve currency to China's renminbi; we had already entered into a new, permanent paradigm of declining demand for the U.S. dollar (and thus U.S. debt). Coupled with this; the large fiscal surpluses which had been used to soak-up U.S. Treasuries (in BRIC economies, and other Emerging Markets) during previous years have shrunk considerably.

Thus we had/have parameters where nations have dramatically less incentive to accumulate U.S. dollars (through buying Treasuries), and these nations have significantly less funds with which to make any purchases of foreign debt. Combined with the explosion in supply; this could only mean an enormous drop-off in demand, and (at best) a sharp spike in Treasuries prices – if not a complete collapse of this (obvious) bubble-market.

Even more outrageous is the fact that we have had these bubble-prices for U.S. Treasuries after it had become totally obvious to anyone paying attention that the United States is now hopelessly insolvent, or in the words of a former economic advisor in the Reagan regime, "bankrupt". The (to be polite) questionable solvency of the U.S. economy dictates bond prices at absolute lows – not absolute highs. What we are supposed to believe is that virtually overnight; all of the world's bond-traders suddenly/completely forgot the concept of "risk" with respect to the pricing of U.S. Treasuries.

But on top of all of this; simultaneously we have had U.S. equities markets soaring to record highs. Back when we had sane, legitimate (legal) markets, where the Laws of Supply and Demand still applied; bond markets and equity markets ran counter-cyclical to each other. When one market was moving toward its highs, the other was dropping-off in a trough.

Yet in the magical, arithmetic-defying realm of the U.S. Treasuries market; we had Treasuries prices at record highs, despite the obvious drop-off in demand. We had Treasuries prices at record highs, despite the obvious insolvency of the U.S. government. We had Treasuries prices at record highs, despite U.S. equities markets also, simultaneously soaring into bubble country.

A portion of this massive glut of supply was soaked-up in the Fed's so-called "Operation Twist". But first of all, the total quantity of Treasuries-buying was a mere $400 billion, and secondly it was only a temporary operation. It wasn't enough to soak-up the additional supply the U.S. has been piling onto the market each year since 2007, let alone absorb any of the large drop-off in demand.

A second "round" of this bond-buying is now (supposedly) being wound-down, as the Federal Reserve pretends to begin "tapering" the money-printing publicly devoted to funding this Ponzi-scheme. But even before this mythical "tapering" began; the supply/demand numbers in this market could not possibly add up.

Words of Wisdom By World’s Most Successful Resource Investors

Posted: 06 Feb 2014 02:59 PM PST

Casey Research organized an online event with top guests including the most successful resource investors on earth. Watch the recording of the webinar “Upturn Millionaires” here.

We highlight ten insights of successful resource investing, brought to you by people like Frank Giustra, Porter Stansberry, Rick Rule and the likes:

What most people do not recognize is the ability to see tops and bottoms. It’s a question of discipline that is going to dictate whether you will make money or not.
The biggest mistake that most retail investors are making is that they always look for the top.
The biggest buy signal is when everybody hates a sector.
You have to be unemotional. Stand back, look what everybody else is doing, ask yourself why they are feeling that way and look at this dispationately.
In the last 35 years in the resource sector, these have definitely been the 3 worst years, driven by fear.
Fear is a much worse feeling than greed. Fear is what keeps markets depressed much longer than greed is keeping them up.
Sentiment is something that blows with the wind in the capital markets. Sentiment always comes back in resources. It is rational that it comes back.
Every fundamental reason which made gold to go from $250 to $1900 is still there and even exponentially.
From trough to through in the resource market, the rule of thumb is that a bear market takes 4 years and a bull market also 4 years. That’s the case since WW II.
A starting resource investor should look at the successful management teams / entrepreneurs as they are able to attract the required capital to grow into success.

Right now, select junior mining stocks are trading at valuations that will yield very high returns going forward. All of the experts agreed that it’s an unparalleled profit opportunity for investors bold enough to act now while the market is still down – because that situation won’t last much longer.

The webinar takes one hour and is a must listen for investors that are serious about resource investing.

Casey Chief Metals & Mining Strategist Louis James has put together a list of 9 dramatically undervalued stocks that are most likely to become 10-Baggers this year. Read more about Louis’ 10-Bagger List for 2014 here.

The Horrifying End Game & The Coming Big Crash

Posted: 06 Feb 2014 02:33 PM PST

Today the man who has been one of the most accurate in the world at calling movements in the gold price spoke with King World News about the horrifying end game and the coming "big crash." William Kaye, who 25 years ago worked for Goldman Sachs in mergers and acquisitions, also warned KWN about forthcoming financial seizures and how this will dramatically impact people around the world.

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

Save Your ASSets First

Saturday, February 8, 2014