Gold World News Flash

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• Trashing Saudi Cutouts: Ransacking their Gold
• There’s HOPE For AMERICA & LIBERTY In Midst Of COLLAPSE – David Morgan
• Gold Sidekick Silver Breaks Some Ground of Its Own
• Which Stocks Will Make A Fortune For Investors This Year?
• Rising Gold Imports in January Scupper Hopes India Will Lift Import Restrictions
• Von Greyerz, Roberts, and Cashin commentaries at King World News
• Handelsblatt, London Evening Standard note gold price manipulation study
• The Gold Price Closed at $1,321.60
• The Gold Price Closed at $1,321.60
• Marc Faber: “Emerging Economies Will Be Submerging Soon; Devaluations & Higher Gold Demand To Follow”
• [Full Transcript] Marc Faber: “Emerging Economies Will Be Submerging Soon; May Lead To Devaluations & Higher Gold Demand”
• Rob Kirby -- Dead Banksters, Federal Reserve monetary tyranny, global financial meltdown
• Gold Daily and Silver Weekly Charts - Last Call for February - Ukraine
• Gold Daily and Silver Weekly Charts - Last Call for February - Ukraine
• Publicity about market manipulation will hasten gold's rise, Sprott says
• Ghoulish Gold: Are You Sitting Comfortably?
• Ghoulish Gold: Are You Sitting Comfortably?
• Ghoulish Gold: Are You Sitting Comfortably?
• Easy Money vs. Gold
• Easy Money vs. Gold
• Gold/Silver Ratio "Flat Like Prices"
• Gold/Silver Ratio "Flat Like Prices"
• Howard Marks: "In The End, The Devil Always Wins"
• Jim’s Mailbox
• Even The FED Is Running out of Money -- G. Edward Griffin
• Is Larry Yun Intentionally Making A Joke Out Of The Bad Housing Data?
• Is Larry Yun Intentionally Making A Joke Out Of The Bad Housing Data?
• Ross Norman: Is the London fix fixed?
• World To Witness Frightening & Historic Wealth Destruction
• Welcome to the Currency War, Part 12: Bankrupt Rome and Soaring Euro-Bonds
• Mt. Gox files for bankruptcy, blames hackers for losses
• Should You Invest in the Marijuana Boom?
• Which Stocks Will Make A Fortune For Investors This Year?
• The Silent Scream Of The Plunging $/Yuan: A Derivatives Bomb Detonated
• The Silent Scream Of The Plunging $/Yuan: A Derivatives Bomb Detonated
• Gold’s Next Big Challenge in 2014
• New Silver Major Is Born
• Silver Profit Taking After Eight Consecutive Weeks of Rising Prices
• Gold in 2013 the Foundation for 2014
• Silver Position Limits, Commodity Perceptions and Monetary Ignorance
• Legal Tender, Gold, Silver and Alternative Currency
• Gold Prices End Feb. 6.5% Up as US GDP Revised Down, UK's FCA "Likely" to Regulate London Fix
• Bye Bye Bitcoin, Hello Hard Assets
• Alasdair Macleod: Gold in 2013 -- the foundation for 2014
• GATA secretary discusses gold-rigging studies, West's war on developing countries
• The Heart of Gold
• Stocks Up, Gold Down. Stocks Down, Gold UP!
• The U.S. Economy Is Set to Collapse Around March 4, 2014
• U.S. Secrets, Criminal Banking Syndicates & Empty Gold Vaults
• ECONOMIC COLLAPSE 2014 -- China Says U.S. Economy Is Fake And Nothing Backs The Dollar

Trashing Saudi Cutouts: Ransacking their Gold Posted: 01 Mar 2014 12:45 AM PST Hat Trick Letter

There’s HOPE For AMERICA & LIBERTY In Midst Of COLLAPSE – David Morgan Posted: 01 Mar 2014 12:30 AM PST from FinanceAndLiberty.com:

Gold Sidekick Silver Breaks Some Ground of Its Own Posted: 01 Mar 2014 12:00 AM PST by Myra P. Saefong, Market Watch: Silver isn't just tracking gold, its breaking some ground of its own — at least when it comes to holdings in exchange-traded funds and demand for silver coins. At first glance, silver appears to be moving in step with gold. Gold's GCJ4 -0.67% up 11% year to date and up over 7% month to date, while silver's SIK4 -0.88% up 10% for the year and gaining 11% for the month. "No matter what silver investors or silver fundamentals say, the silver price follows the gold price," said Julian Phillips, a South Africa-based contributor to SilverForecaster.com and GoldForecaster.com. Read More @ marketwatch.com

Which Stocks Will Make A Fortune For Investors This Year? Posted: 28 Feb 2014 09:21 PM PST from KingWorldNews: A lot of people are focused on what's going on in Ukraine right now. Things seem to be changing from hour to hour in the Ukraine. The parliament in the Crimea has been occupied by rebel forces. The country is split in two, with one wanting to join Russia, and the other wanting to join the EU. I hope it doesn't slip into civil war. This instability has caused gold to consolidate its recent gains at the highs, and the Swiss franc is at a 10-month high against the euro. So we will have to watch this situation closely. In addition to the geopolitical instability, we also have the Indians continuing to discuss repealing the import taxes on gold and especially silver. This would be a great thing for consumption because consumption will go way up. Indian gold demand was certainly climbing toward record highs before the government attempted to choke off the demand with punitive taxes. Keith Barron continues @ KingWorldNews.com

Rising Gold Imports in January Scupper Hopes India Will Lift Import Restrictions Posted: 28 Feb 2014 09:00 PM PST by Shivom Seth, MineWeb.com Gold starved Indians imported 38 tonnes of gold in January, as compared to a low of 3 tonnes in August last year. In December, gold imports rose to 25 tonnes, higher than the 19 tonnes shipped into the country in the previous month. The increase in imports has been attributed to a rise in domestic demand from the start of the year, as well as more export orders and imports by non resident Indians, who are allowed to bring up to 1 kilogram of gold by paying 10.3% duty. Traders said the direct import of jewellery has also risen in the last couple of months, all of which could have added up to the current rise. Read More @ MineWeb.com

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

Handelsblatt, London Evening Standard note gold price manipulation study Posted: 28 Feb 2014 08:22 PM PST 11:25p ET Friday, February 28, 2014 Dear Friend of GATA and Gold: Yesterday's Bloomberg News story reporting a study that found manipulation likely in the daily gold price fixing in London -- http://www.gata.org/node/13700 -- was reprinted today in the German financial newspaper Handelsblatt, headlined (translated from the German) "Banks Under Suspicion: A Decade of Manipulation in the Gold Market": http://app.handelsblatt.com/finanzen/rohstoffe-devisen/banken-unter-verd... Of course Handelsblatt, based in Dusseldorf, is the newspaper that happily got snookered by the German Bundesbank a week earlier when it interviewed a Bundesbank official about the slow pace of repatriation of Germany's gold from the Federal Reserve Bank of New York without asking a single critical question: http://www.bundesbank.de/Redaktion/EN/Interviews/2014_02_19_thiele_hande... http://gata.org/node/13669 The same study also was noted briefly today in the London Evening Standard: http://www.standard.co.uk/business/business-news/libor-whistleblower-gol... While the Bloomberg story and, apparently, the study itself let the Bundesbank and other Western central banks off the hook for their long policy of gold price suppression, at least gold market manipulation seems to be gaining legitimacy as an issue in financial journalism. CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. ADVERTISEMENT How to profit with silver -- and which stocks to buy now Future Money Trends is offering a special 16-page silver report with profiles of nine companies and technical analysis of their stock performance. Six of the companies have market capitalizations of less than $800 million and one company has a market cap of only $30 million. The most exciting of these companies will begin production in a few weeks and has a market cap of just $150 million. Half of all proceeds from the sale of this report will be donated to the Gold Anti-Trust Action Committee to support its efforts exposing manipulation and fraud in the gold and silver markets. To learn about this report, please visit: http://www.futuremoneytrends.com/index.php?option=com_content&id=376&tmp... Join GATA here: Mines and Money Hong Kong Hong Kong Convention and Exhibition Centre Monday-Friday, March 24-28, 2014 Hong Kong Special Administrative Region, China http://www.minesandmoney.com/hongkong/ Canadian Investor Conference 2014 Vancouver Convention Centre West 1055 Canada Place, Vancouver, British Columbia Sunday and Monday, June 1 and 2, 2014 http://cambridgehouse.com/event/25/canadian-investor-conference-2014-inc... * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: http://gata.org/tshirts Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16 ADVERTISEMENT 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

The Gold Price Closed at $1,321.60 Posted: 28 Feb 2014 07:44 PM PST Gold Price Close Today : 1,321.60 Gold Price Close 21-Feb-14 : 1,323.90 Change : -2.30 or -0.17% Silver Price Close Today : 21.20 Silver Price Close 21-Feb-14 : 21.782 Change : -46.80 or -2.67% Gold Silver Ratio Today : 62.33 Gold Silver Ratio 21-Feb-14 : 60.780 Change : 1.55 or 2.55% Franklin is going to the Space Center in Huntsville with his grandchildren and will publish commentary again Monday. 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.

The Gold Price Closed at $1,321.60 Posted: 28 Feb 2014 07:44 PM PST Gold Price Close Today : 1,321.60 Gold Price Close 21-Feb-14 : 1,323.90 Change : -2.30 or -0.17% Silver Price Close Today : 21.20 Silver Price Close 21-Feb-14 : 21.782 Change : -46.80 or -2.67% Gold Silver Ratio Today : 62.33 Gold Silver Ratio 21-Feb-14 : 60.780 Change : 1.55 or 2.55% Franklin is going to the Space Center in Huntsville with his grandchildren and will publish commentary again Monday. 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.

Marc Faber: “Emerging Economies Will Be Submerging Soon; Devaluations & Higher Gold Demand To Follow” Posted: 28 Feb 2014 02:29 PM PST Full Interview Transcript Available Here.  --- For more information about Sprott Global Resource Investment Ltd.'s investment professionals and their market insights, visit www.sprottglobal.com or contact tdasilva@sprott.com.

[Full Transcript] Marc Faber: “Emerging Economies Will Be Submerging Soon; May Lead To Devaluations & Higher Gold Demand” Posted: 28 Feb 2014 02:00 PM PST Full Video Interview Available Here.  During a time of stagnating emerging market growth and increasing Asian gold demand, Marc Faber, Director of Sprott Inc. and Publisher of The Gloom, Boom and Doom Report, was kind enough to share a few comments. According to Marc, "if the Chinese economy imploded, it is likely that…the government would implement a devaluation of the yuan," leading to similar currency moves in the region. Here are his full interview comments with Sprott Global Resource Investment Ltd.'s Tekoa Da Silva: TD: Marc, the narrative on natural resources involves Asian demand. You live in Asia. So what's happening on the ground there and can we rely on continued growth in the region? MF: Well, that's a very good question because

Rob Kirby -- Dead Banksters, Federal Reserve monetary tyranny, global financial meltdown Posted: 28 Feb 2014 01:35 PM PST Rob Kirby -- HIGH FINANCIAL CRIMES AGAINST HUMANITY : Dead Banksters, Federal Reserve monetary tyranny, global financial meltdown. Rob Kirby from Kirby Analytics joins us to discuss the latest in HIGH FINANCIAL CRIMES AGAINST HUMANITY. The men who knew too much! Hey somebody had to launder the drug... [[ This is a content summary only. Visit http://www.GoldSilverNewsBlog.com or http://www.newsbooze.com or http://www.figanews.com for full links, other content, and more! ]]

Gold Daily and Silver Weekly Charts - Last Call for February - Ukraine Posted: 28 Feb 2014 01:15 PM PST

Gold Daily and Silver Weekly Charts - Last Call for February - Ukraine Posted: 28 Feb 2014 01:15 PM PST

Publicity about market manipulation will hasten gold's rise, Sprott says Posted: 28 Feb 2014 01:00 PM PST 4p ET Friday, February 28, 2014 Dear Friend of GATA and Gold: On the weekly market review program at Sprott Money News, Sprott Asset Management CEO Eric Sprott says the increasing publicity about gold market manipulation likely will make gold price suppression harder for central banks and their agents and hasten a freer market in gold and a much higher price. The interview is six minutes long and can be heard at the Sprott Money Internet site here: http://www.sprottmoney.com/sprott-money-weekly-wrap-up CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. ADVERTISEMENT Jim Sinclair plans seminars in Los Angeles and San Diego Gold advocate Jim Sinclair's next market analysis seminars will be held in Los Angeles from 11 a.m. to 2 p.m. on Saturday, March 8, and in San Diego from 2 to 6 p.m. the following day, Sunday, March 9. Details, including registration information, are posted at Sinclair's Internet site, JSMinset.com, here: http://www.jsmineset.com/qa-session-tickets/ Join GATA here: Mines and Money Hong Kong Hong Kong Convention and Exhibition Centre Monday-Friday, March 24-28, 2014 Hong Kong Special Administrative Region, China http://www.minesandmoney.com/hongkong/ Canadian Investor Conference 2014 Vancouver Convention Centre West 1055 Canada Place, Vancouver, British Columbia Sunday and Monday, June 1 and 2, 2014 http://cambridgehouse.com/event/25/canadian-investor-conference-2014-inc... * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: http://gata.org/tshirts Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16 ADVERTISEMENT Safe and Private Allocated Bullion Storage In Singapore Given the increasing risks in financial markets, it is more important than ever to own physical bullion coins and bars and to store them in the safest vaults in the world in the safest jurisdictions in the world. Gold advocates Jim Sinclair and Marc Faber have recommended Singapore. Now, with GoldCore, you can own coins and bars in fully insured, segregated, and allocated accounts in Singapore with the ability to take delivery. Learn more by downloading GoldCore's Essential Guide To Storing Gold In Singapore: http://info.goldcore.com/essential-guide-to-storing-gold-in-singapore And for more information call Daniel or Sharon at +44 203 0869200 in the United Kingdom or at +1 302 635 1160 in the United States. Or email them at info@goldcore.com.

Ghoulish Gold: Are You Sitting Comfortably? Posted: 28 Feb 2014 12:51 PM PST Gold's up because of WWIII in Ukraine? Sell it, buy Greek bonds...   INSIDER secret, writes Adrian Ash at BullionVault. Financial news-stories are just that. A story, a narrative.   Read any report about stocks, bonds, gold or currencies, and you will in fact find someone trying to match event A with event B...where A is the move in an asset price but B is driving internet traffic.   "Ukraine tensions hit shares," said Reuters this Thursday. "Euro drops to two-week low."   "[US] Treasuries rose for a third day," Bloomberg added, "as political turmoil in Ukraine boosted demand for safer assets."   The aim? To make a sale (ie, capture a chunk of that internet traffic) the writer has to give the reader (or rather, their editor) the emotional comfort of living in a universe where everything fits, everything makes sense.   Too bad this universe includes people, let alone markets. We are rarely rational animals. Things rarely fit so well.   Oh sure, the latest whispers of WWIII blowing across Europe from the Black Sea have coincided with a drop in Western stock markets.   Just for the record, however, the S&P in New York stands pretty much at new all-time highs. Volatility in London's FTSE-100 just fell to a 1-month low, somewhere around half its daily average of the last 30 years.   And yes, the exit of elected despot Yanukovych...and now Russia's jet-fighter alert...also coincided with a rally in US Treasury bonds.   But UK gilts rallied faster, however, with the surge in prices driving yields 7 basis-points lower on Thursday morning alone.   And if February 2014 goes down as the month investors panicked over Ukraine's turmoil, then the biggest safe-haven of all would seem to be Greek government debt.   Yes, really. The yield offered to new buyers of Greece's 10-year bonds fell 1.3 percentage points this month. That suggests (on our maths at least) a price rise of 18% since the end of Jan.   Gold in contrast added 6% in Euro terms. Even silver managed only 12%.   Greek bonds it is then. The ultimate safe-haven for unceasing news in need of a financial punchline to Ukraine's all-too human threat of catastrophe.   Sincerely, let's hope we don't get to see how well Greek bonds or London shares hold up against gold if shooting breaks out on Ukraine's Russian border.   But journalism is, after all, only the first draft of history...a quick stab at hindsight even as events and prices keep moving.   True history, wise after the event, says investors always act too late when a true disaster gets ready to strike.   Should gold really start to move on news from Ukraine, as we noted of Syria last summer, it would suggest we're all in for a heap of trouble.

Ghoulish Gold: Are You Sitting Comfortably? Posted: 28 Feb 2014 12:51 PM PST Gold's up because of WWIII in Ukraine? Sell it, buy Greek bonds...   INSIDER secret, writes Adrian Ash at BullionVault. Financial news-stories are just that. A story, a narrative.   Read any report about stocks, bonds, gold or currencies, and you will in fact find someone trying to match event A with event B...where A is the move in an asset price but B is driving internet traffic.   "Ukraine tensions hit shares," said Reuters this Thursday. "Euro drops to two-week low."   "[US] Treasuries rose for a third day," Bloomberg added, "as political turmoil in Ukraine boosted demand for safer assets."   The aim? To make a sale (ie, capture a chunk of that internet traffic) the writer has to give the reader (or rather, their editor) the emotional comfort of living in a universe where everything fits, everything makes sense.   Too bad this universe includes people, let alone markets. We are rarely rational animals. Things rarely fit so well.   Oh sure, the latest whispers of WWIII blowing across Europe from the Black Sea have coincided with a drop in Western stock markets.   Just for the record, however, the S&P in New York stands pretty much at new all-time highs. Volatility in London's FTSE-100 just fell to a 1-month low, somewhere around half its daily average of the last 30 years.   And yes, the exit of elected despot Yanukovych...and now Russia's jet-fighter alert...also coincided with a rally in US Treasury bonds.   But UK gilts rallied faster, however, with the surge in prices driving yields 7 basis-points lower on Thursday morning alone.   And if February 2014 goes down as the month investors panicked over Ukraine's turmoil, then the biggest safe-haven of all would seem to be Greek government debt.   Yes, really. The yield offered to new buyers of Greece's 10-year bonds fell 1.3 percentage points this month. That suggests (on our maths at least) a price rise of 18% since the end of Jan.   Gold in contrast added 6% in Euro terms. Even silver managed only 12%.   Greek bonds it is then. The ultimate safe-haven for unceasing news in need of a financial punchline to Ukraine's all-too human threat of catastrophe.   Sincerely, let's hope we don't get to see how well Greek bonds or London shares hold up against gold if shooting breaks out on Ukraine's Russian border.   But journalism is, after all, only the first draft of history...a quick stab at hindsight even as events and prices keep moving.   True history, wise after the event, says investors always act too late when a true disaster gets ready to strike.   Should gold really start to move on news from Ukraine, as we noted of Syria last summer, it would suggest we're all in for a heap of trouble.

Ghoulish Gold: Are You Sitting Comfortably? Posted: 28 Feb 2014 12:51 PM PST Gold's up because of WWIII in Ukraine? Sell it, buy Greek bonds...   INSIDER secret, writes Adrian Ash at BullionVault. Financial news-stories are just that. A story, a narrative.   Read any report about stocks, bonds, gold or currencies, and you will in fact find someone trying to match event A with event B...where A is the move in an asset price but B is driving internet traffic.   "Ukraine tensions hit shares," said Reuters this Thursday. "Euro drops to two-week low."   "[US] Treasuries rose for a third day," Bloomberg added, "as political turmoil in Ukraine boosted demand for safer assets."   The aim? To make a sale (ie, capture a chunk of that internet traffic) the writer has to give the reader (or rather, their editor) the emotional comfort of living in a universe where everything fits, everything makes sense.   Too bad this universe includes people, let alone markets. We are rarely rational animals. Things rarely fit so well.   Oh sure, the latest whispers of WWIII blowing across Europe from the Black Sea have coincided with a drop in Western stock markets.   Just for the record, however, the S&P in New York stands pretty much at new all-time highs. Volatility in London's FTSE-100 just fell to a 1-month low, somewhere around half its daily average of the last 30 years.   And yes, the exit of elected despot Yanukovych...and now Russia's jet-fighter alert...also coincided with a rally in US Treasury bonds.   But UK gilts rallied faster, however, with the surge in prices driving yields 7 basis-points lower on Thursday morning alone.   And if February 2014 goes down as the month investors panicked over Ukraine's turmoil, then the biggest safe-haven of all would seem to be Greek government debt.   Yes, really. The yield offered to new buyers of Greece's 10-year bonds fell 1.3 percentage points this month. That suggests (on our maths at least) a price rise of 18% since the end of Jan.   Gold in contrast added 6% in Euro terms. Even silver managed only 12%.   Greek bonds it is then. The ultimate safe-haven for unceasing news in need of a financial punchline to Ukraine's all-too human threat of catastrophe.   Sincerely, let's hope we don't get to see how well Greek bonds or London shares hold up against gold if shooting breaks out on Ukraine's Russian border.   But journalism is, after all, only the first draft of history...a quick stab at hindsight even as events and prices keep moving.   True history, wise after the event, says investors always act too late when a true disaster gets ready to strike.   Should gold really start to move on news from Ukraine, as we noted of Syria last summer, it would suggest we're all in for a heap of trouble.

Easy Money vs. Gold Posted: 28 Feb 2014 12:45 PM PST Is that a new uptrend in gold prices? Has easy money hit its end yet...?   The DOW doesn't seem in a hurry to go anywhere. Gold has turned lower, but is still about 12% higher than where it started the year, writes Bill Bonner in his Diary of a Rogue Economist.   Our question for today: Is there really a new bull market for the yellow metal?   Of course, the answer is only known to the gods and the NSA. For us mere mortals, it fits comfortably into the vast library of which we have forgotten the address and lost the key. Only in the fullness of time will we have the answer. In the meantime, we await developments.   But let us poke around in the grass. We will not find the answer we are looking for. But we may find something else that might be useful...   Money, by definition, observation and experience, has no intrinsic value. It is just a way to hold your place in line. Or as T. Boone Pickens says, it is "just a way of keeping score in life."   Of course, money keeps score on only a part of life... and probably not the most important part. But in matters material it tells you how you stack up against your fellow man. It also tells you how much of the world's output – stuff and services – have your name on them.   For that purpose, gold is the best thing never invented. A virtual currency such as bitcoin may someday prove superior, but for now gold is No. 1.   Alas, there's a crack in every pot God ever made. And gold, too, has its fissures and faults. Sometimes, it yields to other forms of money. Last year, for example, you could move ahead in line by holding the Dollar. Gold surrendered about 30% of its Dollar value.   A major reason why gold so often looks good is that the alternatives so often look so bad. They are nicely summarized for us by Vivek Kaul, who we met recently on a trip to Mumbai, India.   Kaul's new book, Easy Money: Evolution of Money from Robinson Crusoe to the First World War, tells the sorry story of the competition – the substitutes, the ersatz currencies, the monetary impostors that the world has seen come and, inevitably, go.   The origins of today's money system can be found in Venice in the 12th century. The Bank of Venice was founded in 1171. Other banks realized they could make a business of holding deposits from rich merchants who were profiting from trade with the East. They took deposits of gold and gave receipts, which gradually came to be trusted. Writes Kaul: "As time went by, some banks developed a reputation for probity and honesty. This led to merchants, who had accounts with these banks, simply transferring receipts of these banks when they had to pay one another. This led to these receipts functioning as "paper" money.    "In some time, people running these banks also figured out that their depositors do not all come on the same day asking for their deposits back. So, in the intermittent period, they could loan out the deposited money to others for a fee. They could also simply print fake deposit receipts not backed by gold or silver, but which looked exactly like the original deposit receipt and lend that money out." History doesn't always give you a clear view of the future. But sometimes, the story of the past has the same cast of characters, themes and plot twists.   In the American colonies, for example, Mr.E-Z Money was one of the first immigrants to step off the boat.   After him, in 1690, it must have been an early Bush who came up with the following idea: The colony would raise an army to invade Quebec, then the capital of New France. What exactly the Yankees had against Quebec was never made clear. But humans entertain the gods, from time to time, with blunders and blockheadishness.   In the event, an army was raised. The expedition set out. It was a disaster. Thirty men died fighting. Two hundred died of smallpox. And the loot, which was meant to pay for the adventure, was never captured.   What to do? Issue paper money!   Called the "Massachusetts Pound," it was already on the decline when it was made legal tender in 1721. Already, merchants had drawn its measure and refused to take it. So, the government reacted in typical blockhead fashion: It made it a crime not to take the paper money at face value. Other colonies were close behind. Here in Ben Bernanke's home state, the assembly was wrestling with the bills from its own failed expedition. What could be done?   In 1702, it decided: Print money!   One bad idea led, like a sink drain to a sewer line, to an even worse one. Soon, paper money was flowing all through the colonies. And it stank. Rhode Island was the "biggest money printer of them all," writes Kaul. Against hard currency, its paper money lost about 95% of its value by 1748. "In Pennsylvania, the most responsible colony when it came to printing money, paper currency had lost 80% of its value."   Later, these paper monies disappeared completely. Go figure.

Easy Money vs. Gold Posted: 28 Feb 2014 12:45 PM PST Is that a new uptrend in gold prices? Has easy money hit its end yet...?   The DOW doesn't seem in a hurry to go anywhere. Gold has turned lower, but is still about 12% higher than where it started the year, writes Bill Bonner in his Diary of a Rogue Economist.   Our question for today: Is there really a new bull market for the yellow metal?   Of course, the answer is only known to the gods and the NSA. For us mere mortals, it fits comfortably into the vast library of which we have forgotten the address and lost the key. Only in the fullness of time will we have the answer. In the meantime, we await developments.   But let us poke around in the grass. We will not find the answer we are looking for. But we may find something else that might be useful...   Money, by definition, observation and experience, has no intrinsic value. It is just a way to hold your place in line. Or as T. Boone Pickens says, it is "just a way of keeping score in life."   Of course, money keeps score on only a part of life... and probably not the most important part. But in matters material it tells you how you stack up against your fellow man. It also tells you how much of the world's output – stuff and services – have your name on them.   For that purpose, gold is the best thing never invented. A virtual currency such as bitcoin may someday prove superior, but for now gold is No. 1.   Alas, there's a crack in every pot God ever made. And gold, too, has its fissures and faults. Sometimes, it yields to other forms of money. Last year, for example, you could move ahead in line by holding the Dollar. Gold surrendered about 30% of its Dollar value.   A major reason why gold so often looks good is that the alternatives so often look so bad. They are nicely summarized for us by Vivek Kaul, who we met recently on a trip to Mumbai, India.   Kaul's new book, Easy Money: Evolution of Money from Robinson Crusoe to the First World War, tells the sorry story of the competition – the substitutes, the ersatz currencies, the monetary impostors that the world has seen come and, inevitably, go.   The origins of today's money system can be found in Venice in the 12th century. The Bank of Venice was founded in 1171. Other banks realized they could make a business of holding deposits from rich merchants who were profiting from trade with the East. They took deposits of gold and gave receipts, which gradually came to be trusted. Writes Kaul: "As time went by, some banks developed a reputation for probity and honesty. This led to merchants, who had accounts with these banks, simply transferring receipts of these banks when they had to pay one another. This led to these receipts functioning as "paper" money.    "In some time, people running these banks also figured out that their depositors do not all come on the same day asking for their deposits back. So, in the intermittent period, they could loan out the deposited money to others for a fee. They could also simply print fake deposit receipts not backed by gold or silver, but which looked exactly like the original deposit receipt and lend that money out." History doesn't always give you a clear view of the future. But sometimes, the story of the past has the same cast of characters, themes and plot twists.   In the American colonies, for example, Mr.E-Z Money was one of the first immigrants to step off the boat.   After him, in 1690, it must have been an early Bush who came up with the following idea: The colony would raise an army to invade Quebec, then the capital of New France. What exactly the Yankees had against Quebec was never made clear. But humans entertain the gods, from time to time, with blunders and blockheadishness.   In the event, an army was raised. The expedition set out. It was a disaster. Thirty men died fighting. Two hundred died of smallpox. And the loot, which was meant to pay for the adventure, was never captured.   What to do? Issue paper money!   Called the "Massachusetts Pound," it was already on the decline when it was made legal tender in 1721. Already, merchants had drawn its measure and refused to take it. So, the government reacted in typical blockhead fashion: It made it a crime not to take the paper money at face value. Other colonies were close behind. Here in Ben Bernanke's home state, the assembly was wrestling with the bills from its own failed expedition. What could be done?   In 1702, it decided: Print money!   One bad idea led, like a sink drain to a sewer line, to an even worse one. Soon, paper money was flowing all through the colonies. And it stank. Rhode Island was the "biggest money printer of them all," writes Kaul. Against hard currency, its paper money lost about 95% of its value by 1748. "In Pennsylvania, the most responsible colony when it came to printing money, paper currency had lost 80% of its value."   Later, these paper monies disappeared completely. Go figure.

Gold/Silver Ratio "Flat Like Prices" Posted: 28 Feb 2014 12:38 PM PST 2014 will prove tough for miners who can't post good margins...   BENJAMIN Asuncion and Geordie Mark of Haywood Securities forecast 2014 gold and silver prices of $1300 and $21.50 respectively.   Speaking here to The Gold Report, they argue that with prices flat at best, the gold and silver miners who will thrive will be those blessed with the prudent but aggressive management that can post good margins at today's prices.   The Gold Report: Gold is up for the year. Do you expect this trend to continue?   Benjamin Asuncion: For 2014, we're officially forecasting an average gold price at $1300 per ounce. We've elected to err on the side of conservatism in our commodity forecasts, which leaves company valuations to be more reflective of operating performance than reliant on higher metal prices.   TGR: Ambrose Evans-Pritchard of The Daily Telegraph says if the Federal Reserve "has to back off [tapering] again, gold will have a fresh lease on life." Do you agree, and do you think the Fed is committed to tapering?   Geordie Mark: I agree that if the Fed backs off tapering, it's a total game changer for sentiment. Janet Yellen, the new Fed chair, has certainly been quite cautious as to how she's going to approach monetary policy, so right now we're in a wait and see period, but that being said, the market now appears to show a certain positive sentiment for precious metals companies.   TGR: We've seen various currency panics around the world in recent weeks. Will this lead to a flight to safety in the US Dollar?   Geordie Mark: Ultimately, strengthening of the US Dollar likely will be based on a strengthening US economy rather than capitulation of other major currencies. The outlook with regard to tapering demonstrates broader directional strength in the US Dollar. We might be able to expand on that.   TGR: For several years, what's been good for the US Dollar has been bad for gold and vice versa. Is this a new iron law, or could it change?   Geordie Mark: That's definitely been the argument in the past. However, the big thing here is that we've got another player that could firm up the gold price: China.   Benjamin Asuncion: The Chinese typically take a longer view on investing in gold. Last year we saw outflows from exchange-traded funds (ETFs) in the order of roughly 30 million ounces. That amount was quite close to the amount of gold being imported by China from Hong Kong.   The amount of gold being replaced annually is growing significantly slower than the money supply. So we are seeing support for higher metal prices, and the ounces out there are in demand, given the lower prices that are reducing production.   TGR: What's your 2014 forecast for silver?   Benjamin Asuncion: We're currently using $21.50 per ounce in our valuations, based on a gold price of $1300 per ounce, which implies a silver-gold ratio of about 60:1. This ratio is fairly consistent with the ratio we've seen from 2000 onward. Looking at the relationship between the two metals, historically silver has correlated closely with gold but demonstrated roughly twice the volatility.   TGR: Unlike gold, silver has industrial uses. How does the supply-demand question in silver look?   Geordie Mark: On the supply side, the majority of silver production comes as a byproduct of other mining operations (ie, lead and zinc), therefore, the silver price doesn't necessarily dictate the economic viability of these mines. This results in an appreciable amount of silver supply that's fairly agnostic to the silver price, which translates to greater fluctuations in prices, particularly on the downside.   On the demand side, we have industrial applications accounting for roughly half of the total demand, followed by jewelry, coinage, photography and silverware. Investment demand accounts for the remainder, for which the silver ETF holdings are a significant source. On the ETF side, we see a different picture compared to gold, with gold ETFs shedding ~30% last year, in contrast with a more optimistic picture of silver ETFs posting a marginal increase.   TGR: Gold and silver equities have lagged prices significantly in recent years. Is this changing?   Benjamin Asuncion: So far this year, we've seen this change as gold and silver have been relatively lackluster with each posting gains around 10%, a stark contrast to the equities that have risen upward of 30-40%, pointing to improving sentiment.   TGR: The crisis in precious metals equities is almost three years old. What must junior gold and silver mining producers do to ensure their survival?   Benjamin Asuncion: To ensure survival in the paradigm of declining metal prices, companies have trimmed non-operational expenditures (i.e., corporate general and administrative, and exploration) and deferred significant capital projects to preserve the balance sheet. We're also seeing some signs of more selective mining (i.e., focusing on higher grade and higher margin production). However, the latter requires a longer-term outlook.    One of the criteria we evaluate companies on is their ability to endure at current metal prices – those without significant burdens like hedges or onerous amounts of leverage or debt. We're focusing on companies with attractive valuations that we see have the opportunity for lower cost growth profiles with the means to fund development plans. Having said that, given the current equity valuations, sometimes it's cheaper or less risky to wait and buy ounces than drill them.   TGR: What must junior explorers to do survive?   Geordie Mark: Juniors need to differentiate themselves from their peers. Right now these companies need to take a step back and take time to assess or re-assess their portfolios. Exploration targeting metrics need to be cognizant of prevailing commodity prices and thus look for mineralized systems capable of potentially operating in a lower commodity price environment. Such strategy also follows for those companies with defined assets that need to be re-examined in light of a lower commodity price environment. Such strategies likely will make those companies capable of attracting available capital in the markets. Above all, companies must continue to move forward rather than to stagnate.   TGR: What do you think are the sources of optimism for investors in 2014?   Geordie Mark: Ultimately, turnarounds in operator performance. We're looking for mining companies to deliver on costs and to improve margins. Commodity prices will do what they do; they are out of our control. But solid operations performance by the companies is expected to be returned in equity valuations as the market regains confidence in individual companies, as well as in the sector as a whole.   Benjamin Asuncion: The story going into Q1/13 was declining cost profiles from operators. Some delivered on that last year, and some didn't. However, across the board most are still pointing to improved performance in 2014 relative to 2013. That's one source of optimism.   The other thing we'll be looking for in 2014 is companies that can execute on acquisitions and consolidate stranded assets. Even companies that operate and execute may be constrained by other considerations, such as being laden with more debt than they can service in the current metal price environment.   TGR: Since the bear market in gold and silver equities began in April 2011, a fair number of investors have been holding on to battered stocks with the view that there has to be a turnaround. Some stocks have continued to fall. Should investors cut their losses, cull these stocks and consolidate in companies that look like better bets?   Benjamin Asuncion: I think this consideration really has to be taken on a position-by-position basis. Our consensus here is generally evaluating all project merits, but companies that are not advancing their projects and just whittling away at their treasuries are not good bets.   I think that investors still looking for exposure within the exploration side should examine companies that still have plans to expand their projects, companies that are still in some sense moving forward. From an investment point of view, if investors are holding onto an explorer that isn't doing anything to advance its project or is overburdened with debt, they really aren't getting anything by holding on to that company. Looking forward 12 months, what will be different with that company? Investors should review their portfolios with a view to determining which companies can survive with reasonable commodity price expectations.   Geordie Mark: Ben is saying that investors should become more company specific in their investments. What's crucial is dynamic management in creating value, whether it's by additional discovery, augmenting production or undertaking cost control and improving operating margins. All of those factors are exceedingly important components of creating future value for shareholders. They are the positive milestones to put equities in a more positive light.   TMR: Ben and Geordie, thank you for your time and your insights.

Gold/Silver Ratio "Flat Like Prices" Posted: 28 Feb 2014 12:38 PM PST 2014 will prove tough for miners who can't post good margins...   BENJAMIN Asuncion and Geordie Mark of Haywood Securities forecast 2014 gold and silver prices of $1300 and $21.50 respectively.   Speaking here to The Gold Report, they argue that with prices flat at best, the gold and silver miners who will thrive will be those blessed with the prudent but aggressive management that can post good margins at today's prices.   The Gold Report: Gold is up for the year. Do you expect this trend to continue?   Benjamin Asuncion: For 2014, we're officially forecasting an average gold price at $1300 per ounce. We've elected to err on the side of conservatism in our commodity forecasts, which leaves company valuations to be more reflective of operating performance than reliant on higher metal prices.   TGR: Ambrose Evans-Pritchard of The Daily Telegraph says if the Federal Reserve "has to back off [tapering] again, gold will have a fresh lease on life." Do you agree, and do you think the Fed is committed to tapering?   Geordie Mark: I agree that if the Fed backs off tapering, it's a total game changer for sentiment. Janet Yellen, the new Fed chair, has certainly been quite cautious as to how she's going to approach monetary policy, so right now we're in a wait and see period, but that being said, the market now appears to show a certain positive sentiment for precious metals companies.   TGR: We've seen various currency panics around the world in recent weeks. Will this lead to a flight to safety in the US Dollar?   Geordie Mark: Ultimately, strengthening of the US Dollar likely will be based on a strengthening US economy rather than capitulation of other major currencies. The outlook with regard to tapering demonstrates broader directional strength in the US Dollar. We might be able to expand on that.   TGR: For several years, what's been good for the US Dollar has been bad for gold and vice versa. Is this a new iron law, or could it change?   Geordie Mark: That's definitely been the argument in the past. However, the big thing here is that we've got another player that could firm up the gold price: China.   Benjamin Asuncion: The Chinese typically take a longer view on investing in gold. Last year we saw outflows from exchange-traded funds (ETFs) in the order of roughly 30 million ounces. That amount was quite close to the amount of gold being imported by China from Hong Kong.   The amount of gold being replaced annually is growing significantly slower than the money supply. So we are seeing support for higher metal prices, and the ounces out there are in demand, given the lower prices that are reducing production.   TGR: What's your 2014 forecast for silver?   Benjamin Asuncion: We're currently using $21.50 per ounce in our valuations, based on a gold price of $1300 per ounce, which implies a silver-gold ratio of about 60:1. This ratio is fairly consistent with the ratio we've seen from 2000 onward. Looking at the relationship between the two metals, historically silver has correlated closely with gold but demonstrated roughly twice the volatility.   TGR: Unlike gold, silver has industrial uses. How does the supply-demand question in silver look?   Geordie Mark: On the supply side, the majority of silver production comes as a byproduct of other mining operations (ie, lead and zinc), therefore, the silver price doesn't necessarily dictate the economic viability of these mines. This results in an appreciable amount of silver supply that's fairly agnostic to the silver price, which translates to greater fluctuations in prices, particularly on the downside.   On the demand side, we have industrial applications accounting for roughly half of the total demand, followed by jewelry, coinage, photography and silverware. Investment demand accounts for the remainder, for which the silver ETF holdings are a significant source. On the ETF side, we see a different picture compared to gold, with gold ETFs shedding ~30% last year, in contrast with a more optimistic picture of silver ETFs posting a marginal increase.   TGR: Gold and silver equities have lagged prices significantly in recent years. Is this changing?   Benjamin Asuncion: So far this year, we've seen this change as gold and silver have been relatively lackluster with each posting gains around 10%, a stark contrast to the equities that have risen upward of 30-40%, pointing to improving sentiment.   TGR: The crisis in precious metals equities is almost three years old. What must junior gold and silver mining producers do to ensure their survival?   Benjamin Asuncion: To ensure survival in the paradigm of declining metal prices, companies have trimmed non-operational expenditures (i.e., corporate general and administrative, and exploration) and deferred significant capital projects to preserve the balance sheet. We're also seeing some signs of more selective mining (i.e., focusing on higher grade and higher margin production). However, the latter requires a longer-term outlook.    One of the criteria we evaluate companies on is their ability to endure at current metal prices – those without significant burdens like hedges or onerous amounts of leverage or debt. We're focusing on companies with attractive valuations that we see have the opportunity for lower cost growth profiles with the means to fund development plans. Having said that, given the current equity valuations, sometimes it's cheaper or less risky to wait and buy ounces than drill them.   TGR: What must junior explorers to do survive?   Geordie Mark: Juniors need to differentiate themselves from their peers. Right now these companies need to take a step back and take time to assess or re-assess their portfolios. Exploration targeting metrics need to be cognizant of prevailing commodity prices and thus look for mineralized systems capable of potentially operating in a lower commodity price environment. Such strategy also follows for those companies with defined assets that need to be re-examined in light of a lower commodity price environment. Such strategies likely will make those companies capable of attracting available capital in the markets. Above all, companies must continue to move forward rather than to stagnate.   TGR: What do you think are the sources of optimism for investors in 2014?   Geordie Mark: Ultimately, turnarounds in operator performance. We're looking for mining companies to deliver on costs and to improve margins. Commodity prices will do what they do; they are out of our control. But solid operations performance by the companies is expected to be returned in equity valuations as the market regains confidence in individual companies, as well as in the sector as a whole.   Benjamin Asuncion: The story going into Q1/13 was declining cost profiles from operators. Some delivered on that last year, and some didn't. However, across the board most are still pointing to improved performance in 2014 relative to 2013. That's one source of optimism.   The other thing we'll be looking for in 2014 is companies that can execute on acquisitions and consolidate stranded assets. Even companies that operate and execute may be constrained by other considerations, such as being laden with more debt than they can service in the current metal price environment.   TGR: Since the bear market in gold and silver equities began in April 2011, a fair number of investors have been holding on to battered stocks with the view that there has to be a turnaround. Some stocks have continued to fall. Should investors cut their losses, cull these stocks and consolidate in companies that look like better bets?   Benjamin Asuncion: I think this consideration really has to be taken on a position-by-position basis. Our consensus here is generally evaluating all project merits, but companies that are not advancing their projects and just whittling away at their treasuries are not good bets.   I think that investors still looking for exposure within the exploration side should examine companies that still have plans to expand their projects, companies that are still in some sense moving forward. From an investment point of view, if investors are holding onto an explorer that isn't doing anything to advance its project or is overburdened with debt, they really aren't getting anything by holding on to that company. Looking forward 12 months, what will be different with that company? Investors should review their portfolios with a view to determining which companies can survive with reasonable commodity price expectations.   Geordie Mark: Ben is saying that investors should become more company specific in their investments. What's crucial is dynamic management in creating value, whether it's by additional discovery, augmenting production or undertaking cost control and improving operating margins. All of those factors are exceedingly important components of creating future value for shareholders. They are the positive milestones to put equities in a more positive light.   TMR: Ben and Geordie, thank you for your time and your insights.

Howard Marks: "In The End, The Devil Always Wins" Posted: 28 Feb 2014 12:32 PM PST In the follwoing interview with Swiss Finanz und Wirtschaft, Howard Marks, chairman of the U.S. investment firm Oaktree Capital, sees more room to run for stocks. But at the same time he warns that from now on, a higher level of caution is appropriate. The bulk of the content should be largely well-known to those who follow the long-term distressed investor, but it does have such pearls as the following: If I ask you what's the risk in investing, you would answer the risk of losing money. But there actually are two risks in investing: One is to lose money and the other is to miss opportunity. You can eliminate either one, but you can't eliminate both at the same time. So the question is how you're going to position yourself versus these two risks: straight down the middle, more aggressive or more defensive. I think of it like a comedy movie where a guy is considering some activity. On his right shoulder is sitting an angel in a white robe. He says: «No, don't do it! It's not prudent, it's not a good idea, it's not proper and you'll get in trouble». On the other shoulder is the devil in a red robe with his pitchfork. He whispers: «Do it, you'll get rich». In the end, the devil usually wins. Caution, maturity and doing the right thing are old-fashioned ideas. And when they do battle against the desire to get rich, other than in panic times the desire to get rich usually wins. That's why bubbles are created and frauds like Bernie Madoff get money. Full interview below: The heat in the equity markets is back on. This week, the S&P 500 reached a new all-time high and investors are gaining confidence again. Howard Marks thinks that stocks have more room to run. But at the same time he warns that from now on, a higher level of caution is appropriate. As reason for his optimism about stocks Marks cites the growing popularity of the equity market and still pretty fair valuations. Nevertheless, he's uncomfortable with the super easy monetary policy of central banks like the Federal Reserve which forces conservative investors like him to take on more risk. Mr. Marks, next week Wall Street will celebrate the fifth anniversary of the end of the equity bear market. What are your thoughts when you're looking back to the dark days of the financial crisis? Because people play an important role in determining the course of the financial markets, stock prices move like a manic-depressive. Of course, there were some severe fundamental problems in the years 2008 and 2009: The economy was bad, capital markets were closed, and Lehman Brothers and other financials firms went bankrupt. But most people exaggerated that into a belief that the world was ending. In line with that, asset prices were ridiculously low. Therefore, five years ago the key to making money was to have money to spend and the nerve to spend it. In other words: To do the exact opposite of what most people were doing erroneously at that time. And what's your take on the stock market today, half a decade later? Around the beginning 0f 2012 it was clear that a lot of recovery from the crisis had taken place. The economy, investor psychology and the price of credit investments had recovered, and pro risk behavior had started to return to the markets. Because of that, our mantra at Oaktree Capital for the last few years has been: «move forward, but with caution». Although a lot has changed since then I think it's still appropriate to keep the same mantra. Today, things are not cheap anymore.  Rather I would describe the price of most assets as being on the high side of fair. We're not in the low of the crisis like five years ago. But similarly, I don't think we're in a bubble. This week, the S&P 500 printed a new intraday all-time high. What indicators are you looking at to feel the pulse of the market? The easy thing to look at is the P/E ratio on the S&P 500. The post war norm is about 16 and the lowest point I've ever seen was in the late seventies when it got down to 7. At the beginning of 2012 it was around 11 which was very cheap too. During the financial crisis stock prices went down and then they came back up somewhat. At the same time, company profits moved ahead sharply, which reduced the ratio of price to earnings. So equities were extremely cheap, as I wrote in March 2012 in one of my memos called «Déjà Vu All Over Again». But we're not there anymore. So where do we stand now? Let's think about a pendulum: It swings from too rich to too cheap, but it never swings halfway and stops. And it never swings halfway and goes back to where it came from. As stocks do better, more people jump on board. From 1960 to the late nineties everybody thought that owning stocks was the way to get rich with no risk. Stocks, which had always gone up 10% a year on average, went up 20% on average in the nineties. Then, from 2000 to 2012 with the burst of the dot-com bubble and later the financial crisis, people fell out of love with stocks, causing them to get too cheap. Now people are in the process of falling in love again. And every year that stocks do well wins a few more converts until eventually the last person jumps on board. And that's the top of the upswing. But I don't think that craze is back now. That's a reason for optimism, because that means more affection can develop. What are the risks investors should be aware of as this bull market goes on? If I ask you what's the risk in investing, you would answer the risk of losing money. But there actually are two risks in investing: One is to lose money and the other is to miss opportunity. You can eliminate either one, but you can't eliminate both at the same time. So the question is how you're going to position yourself versus these two risks: straight down the middle, more aggressive or more defensive. I think of it like a comedy movie where a guy is considering some activity. On his right shoulder is sitting an angel in a white robe. He says: «No, don't do it! It's not prudent, it's not a good idea, it's not proper and you'll get in trouble». On the other shoulder is the devil in a red robe with his pitchfork. He whispers: «Do it, you'll get rich». In the end, the devil usually wins. Caution, maturity and doing the right thing are old-fashioned ideas. And when they do battle against the desire to get rich, other than in panic times the desire to get rich usually wins. That's why bubbles are created and frauds like Bernie Madoff get money. How do you avoid getting trapped by the devil? I've been in this business for over forty-five years now, so I've had a lot of experience.  In addition, I am not a very emotional person. In fact, almost all the great investors I know are unemotional. If you're emotional then you'll buy at the top when everybody is euphoric and prices are high. Also, you'll sell at the bottom when everybody is depressed and prices are low. You'll be like everybody else and you will always do the wrong thing at the extremes. Therefore, unemotionalism is one of the most important criteria for being a successful investor. And if you can't be unemotional you should not invest your own money, period. Most great investors practice something called contrarianism. It consists of doing the right thing at the extremes which is the contrary of what everybody else is doing. So unemtionalism is one of the basic requirements for contrarianism. For what warning flags should investors watch out now? There are two main things to watch: valuation and behavior. A great thing about investing is that you have historic valuation standards. You should be aware of them, but you shouldn't be a slave to them.  You can compare the current P/E ratio to historic standards and see that the current P/E ratio is about fair relative to history. So valuations are moderate to a little expensive in most areas. Looking at investor behavior, you can ask yourself: Is everybody at the club, on the train or in the office talking about stocks? Is everybody having fun and making easy money? Is everybody saying «even though the market has doubled, I'm going to put more money in»? Is every deal sold out? Is every fund sold out? In other words: Is the party rolling? And if that's the case, then you should be very cautious. It's like Warren Buffett says in one of my favorite quotes: «The less prudence with which others conduct their affairs, the greater the prudence with which we must conduct our own affairs». How about the super easy monetary policy? With interest rates at almost zero percent and large-scale bond buying programs like QE3, the Federal Reserve and other central banks are encouraging such a risk-seeking behavior. The availability of cheap money in too-large quantities is behind many of the excesses in the financial markets. If you look around, what do these places have in common: the southwest of the United States, China, Ireland and Spain? Too much building! In all of these jurisdictions the overbuilding occurred because money was too easy. There's no question that the easy money policy of the Fed has dangerous aspects. On the other hand, the action of the central banks in reducing interest rates during the crisis was absolutely necessary. If they hadn't done it we would have gotten into even bigger trouble. But that doesn't mean that there aren't some negative consequences. Every governmental action has consequences. Even if the main policy is correct there are side effects, like with medicine. What are those side effects? One of the negative consequences is that money is has been cheap. In short, we don't have a free market in money. The barrower has been subsidized and the investor or saver has been penalized. If you're a company with a big loan outstanding your interest cost has gone down. On the other hand, if you're a pensioner living on your savings, your income has shrunk. The other important threat is that because central banks pushed interest rates so low, people moved out the risk curve to get the returns they needed. People used to get 6 or 7% from U.S. Treasuries. Now they have to move to riskier investments like high yield bonds to get the same return. A field where Oaktree Capital has great expertise is credit investing. How hard is it to still find attractive investments in the credit space? For bargain hunters like us it's a challenging time. We like it better in the crisis, when everybody thinks the sky is falling and everybody is willing to sell things for a fraction of what we think they're worth. Today, there is no panic and no worry. Everybody can refinance. There is little distress. The default rate on high yield bonds has been very low for the last four years. So it is slow going for us. But we're harvesting. The assets we own have become very valuable because we bought them in a time of worry and now we can sell them at highly appreciated prices. And although it's not easy there are still certain areas where we are investing: For example real estate, Europe and shipping. And what's your outlook for the bond market? I remember very well one loan that I had in the early eighties when the interest rate reached more than 22%. So over the last thirty three years, bond investing has been very successful with interest rates declining. But this can't go on much further because interest rates are down to almost zero percent now. The one thing I am pretty sure of is that interest rates can't go below zero. It's not impossible to have negative interest rates, by the way, but it's unlikely. The other point is that the conditions of the markets always change and we don't always know how they're going to change. Most people agree that there is a very high chance that the Fed will continue to taper its bond purchases. But we don't know what the effect will be. In other words: Everybody thinks tapering will make interest rates rise. But maybe interest rates already have risen in anticipation of the tapering, so that the event of the tapering itself will not cause a rise. One thing you can never be sure of in the investment world is «if A, then B».  Processes and linkages are not always predictable, Even if the Fed is scaling down QE3 gradually it will continue with a very easy monetary policy. And since central banks around the globe keep on printing cheap money, many investors are fascinated by gold. What are your thoughts on the archaic metal? At the end of 2010 I put out a memo about gold called «All That Glitters». My conclusion was that there is no intelligent way to invest in gold. Here's what I mean: A professional tries to invest by looking at a company and figuring out how much money it makes and how much money it is going to make in the future. Then he figures out what this company is worth and compares the current price to that value. But you can't figure out what gold is worth. It doesn't really have much practical use and it doesn't produce income. You might say: Gold (Gold 1321.9 -0.71%) is a good buy because it's a store of value, it protects against inflation, and it gives comfort in times of panic. So you argue that's a good reason to buy gold today at $1300. But the trouble is that all those things were also truth when it was at $1900, and the person who bought it there has lost a third of his money. Therefore, you can't invest intelligently in gold. There is no way to translate those virtues into a dollar figure. By the way: If you take the word «gold» and you take away the letter «l» then you have god. And it's the same analysis: Either you believe in it or you don't. That leads us to an essential philosophical question. What's the role of luck in investing? Luck is extremely important. Skill, hard work and perseverance are all very important. But you need luck, too. Sure, you can maximize your chances of success by doing good analysis and making good decisions. But that doesn't mean they're going to work all the time, since the world is not an orderly place and randomness plays an important part. One of the first things I learned at university is that you can't tell from the outcome whether a decision was a good investment decision or a bad investment decision because of the role of random and luck. So how can we even tell who's really a good investor and who's not? I always like to point out that nobody does their own dental work, or their medical work, or their own legal work. Therefore, in investing, like in any other field, you should hire a skilled professional because it's not easy. Let me correct that: it's easy if you want to do average. You can buy an index fund or a portfolio of average mutual funds and you get average results. But success in investing for me is not to be average; it's to be above average. That's the part that is hard. Investing is a mental activity in which you have to double think at what I call the second level, since your job is to out-think the others and most things are counterintuitive. That's not true in a physical activity like bridge building or tennis, for example, in which you don't have that level of psychological and emotional complexity. But then again, to win a grand slam tennis tournament like Wimbledon it's also not enough to be average. First of all, unlike in investing, there's not that much luck in tennis. A pro like Roger Federer knows exactly where the ball is going to go when he moves his shoulder, his elbow, his hip and his legs in a certain way. But in investing that's not true. Outcomes aren't fully predictable or dependable. And there's more: When Federer plays he tries to hit winners. If he does not hit a winner and gives an easy return, Nadal will stuff it down his throat. But when you and I play together, I don't have to try to hit winners. I can beat you by not hitting losers. I'm just going to keep the ball in play. I put it every time back knowing that if I can do it twenty times you're finally going to hit the ball into the net or off the court. So I don't have to hit a winner. I only have to avoid hitting a loser. And that's our motto at Oaktree Capital, too. We want to make a large number of competent investments and have none of them to blow up. And if we avoid the losers, the winners take care of themselves. Is that also true for your personal investment portfolio? I am a conservative investor. My ownership of Oaktree Capital and the income I derive from Oaktree's success and my investments in Oaktree funds is very substantial. So I've never felt the need to press up my risk exposure. I am not one of these people who feel that every dollar has to be fully employed at maximum return every minute. I derive a lot of comfort from having liquidity and a dependable portfolio. Before the crisis, I used Treasuries for virtually all my money that was not invested in Oaktree. That allowed me to get a return of around 6% with total safety. Today, if I want to invest in Treasuries with one to five year maturities I only get 1%. That's not enough because after taxes and inflation I lose money. So the answer is that I have increased my active investments. I'm still not maximally aggressive. By necessity, like everybody else in the world, I've moved out the risk curve – but in my case with caution.

Jim’s Mailbox Posted: 28 Feb 2014 11:43 AM PST Jim, The dollar is collapsing big time today, yet gold also? Any thoughts? CIGA Wolfgang Wolfgang, What would you do if you ran the Exchange Stabilization fund? Sell gold of course, to cushion the dollar’s fall through .7900 on the USDX. Jim   Hi Jim, Do you have any explanations for today’s sharp decline in... Read more » The post Jim’s Mailbox appeared first on Jim Sinclair's Mineset.

Even The FED Is Running out of Money -- G. Edward Griffin Posted: 28 Feb 2014 11:33 AM PST www.FinancialSurvivalNetwork.com presents, G. Edward Griffin was on today discussing the wonderful story of the two Californians who found $10 million worth of gold numistmatic coins in their back yard and are in the process of trading them for worthless fiat dollars. Obviously they've never... [[ 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! ]]

Is Larry Yun Intentionally Making A Joke Out Of The Bad Housing Data? Posted: 28 Feb 2014 10:59 AM PST But the most brilliant propagandist technique will yield no success unless one fundamental principle is borne in mind constantly and with unflagging attention. It must confine itself to a few points and repeat them over and over. Here, as so often in this world, persistence is the first and most important requirement for success.  - Adolph Hitler, "Mein Kampf" Seriously, is National Association of Realtors chief economist, Larry Yun, trying to make a joke out of using the "bad weather" excuse for poor housing market sales? As I have shown repeatedly, the poor housing market sales results are a direct result, for many fundamental reasons, of the demand-side of the market falling away.  In fact, RealtyTrac just released a report yesterday that showed institutional investor purchases of homes fell to its lowest level in January since March 2012:  LINK  That has nothing to do with the weather in any part of the country. However, I have provided links in previous articles that show that, on average across the country, the weather during January was about the same as it has been over the last 10 years.  In fact, in California it was warmer than normal.  So why is Larry Yun insistent upon shoving the "bad weather" narrative down our throats every time the NAR releases a negative housing market report.  For instance, just today, the NAR released its Pending Home Sales index for January.  It actually showed a slight uptick for January from December but was below what was expected by analysts.  So what does Larry have to say:  "Ongoing disruptive weather patterns in much of the U.S. inhibited home shopping"  (LINK). Well, let's cut to the chase.  What really happened according the NAR data?  For sake of simplicity, here's a graphic pictorial of the distribution of the NAR data for January from Zerohedge:   (click on graph to enlarge) Now, from what we know about the weather patterns across the country, California/the West was warmer than normal, the Northeast and the South were about average with a few extreme bad weather days  and the Midwest was also about average with some unusually cold days sprinkled in.   So how come the biggest drop in pending home sales occurred in the area where the weather was warmer than usual and the areas that might have been affected by the weather show gains for January? The only conclusion I can draw is one of three possibilities:   1) Larry is tragically stupid;  2) Larry is a pathological liar; or 3)  Larry is making a joke out of the fact that the housing market is beginning to collapse. Larry, if you happen to see this, please either leave a comment or respond with your explanation to my email as to why your statement about the weather is so obviously wrong.  I encourage everyone to send this blog post to the NAR and maybe they can issue an explanation other than putting out the above blueprint from "Mein Kampf."

Is Larry Yun Intentionally Making A Joke Out Of The Bad Housing Data? Posted: 28 Feb 2014 10:59 AM PST But the most brilliant propagandist technique will yield no success unless one fundamental principle is borne in mind constantly and with unflagging attention. It must confine itself to a few points and repeat them over and over. Here, as so often in this world, persistence is the first and most important requirement for success.  - Adolph Hitler, "Mein Kampf" Seriously, is National Association of Realtors chief economist, Larry Yun, trying to make a joke out of using the "bad weather" excuse for poor housing market sales? As I have shown repeatedly, the poor housing market sales results are a direct result, for many fundamental reasons, of the demand-side of the market falling away.  In fact, RealtyTrac just released a report yesterday that showed institutional investor purchases of homes fell to its lowest level in January since March 2012:  LINK  That has nothing to do with the weather in any part of the country. However, I have provided links in previous articles that show that, on average across the country, the weather during January was about the same as it has been over the last 10 years.  In fact, in California it was warmer than normal.  So why is Larry Yun insistent upon shoving the "bad weather" narrative down our throats every time the NAR releases a negative housing market report.  For instance, just today, the NAR released its Pending Home Sales index for January.  It actually showed a slight uptick for January from December but was below what was expected by analysts.  So what does Larry have to say:  "Ongoing disruptive weather patterns in much of the U.S. inhibited home shopping"  (LINK). Well, let's cut to the chase.  What really happened according the NAR data?  For sake of simplicity, here's a graphic pictorial of the distribution of the NAR data for January from Zerohedge:   (click on graph to enlarge) Now, from what we know about the weather patterns across the country, California/the West was warmer than normal, the Northeast and the South were about average with a few extreme bad weather days  and the Midwest was also about average with some unusually cold days sprinkled in.   So how come the biggest drop in pending home sales occurred in the area where the weather was warmer than usual and the areas that might have been affected by the weather show gains for January? The only conclusion I can draw is one of three possibilities:   1) Larry is tragically stupid;  2) Larry is a pathological liar; or 3)  Larry is making a joke out of the fact that the housing market is beginning to collapse. Larry, if you happen to see this, please either leave a comment or respond with your explanation to my email as to why your statement about the weather is so obviously wrong.  I encourage everyone to send this blog post to the NAR and maybe they can issue an explanation other than putting out the above blueprint from "Mein Kampf."

Ross Norman: Is the London fix fixed? Posted: 28 Feb 2014 10:58 AM PST 2:14p ET Friday, February 28, 2014 Dear Friend of GATA and Gold: Ross Norman, CEO of London bullion dealer Sharps Pixley, today defends the daily London gold price fixing against yesterday's Bloomberg News report of another study that has concluded that the fixing likely manipulates the gold price: http://www.bloomberg.com/news/2014-02-28/gold-fix-study-shows-signs-of-d... That study was the second one this week, following the one described by the Financial Times here: http://www.gata.org/node/13681 There are perfectly good explanations for some of the questions about the London gold fix, Norman writes, and he provides what he thinks they are. He also criticizes Bloomberg News for "a failure to ask the right questions." ... Dispatch continues below ... ADVERTISEMENT Jim Sinclair plans seminars in Los Angeles and San Diego Gold advocate Jim Sinclair's next market analysis seminars will be held in Los Angeles from 11 a.m. to 2 p.m. on Saturday, March 8, and in San Diego from 2 to 6 p.m. the following day, Sunday, March 9. Details, including registration information, are posted at Sinclair's Internet site, JSMinset.com, here: http://www.jsmineset.com/qa-session-tickets/ But Norman acknowledges that central banks have an interest in the London fix and he presumably would concede that they are involved in the gold market surreptitiously every day. So there are still more questions about the London fix, questions GATA long has been trying to persuade Bloomberg News, the Financial Times, and other news organizations to ask. For example, if they were known, would the objectives and motives of central banks in the gold market be universally considered noble and in the public interest? If so, why is central bank involvement in the gold market so surreptitious? What exactly are the relationships and transactions between central banks and the banks managing the London gold fix and between central banks and other bullion banks? How does the London gold fix, a private gathering of competitors in the market, get around Britain's Competition Act, the equivalent of antitrust law in the United States, which prohibits collusion among competitors? Certainly the London gold fix is unique; there is no similar mechanism for oil, soybeans, pork bellies, and other major items of trade. So why couldn't gold pricing be left to ordinary markets just as pricing of those other items is? Of course the latter questions may be answered by the first questions -- by the interest of governments and central banks in being able to influence gold pricing more surreptitiously than they might be able to do in a more open setting. And while Norman, a former gold trader for a bank that used to chair the London gold fix, may know as much about it as anyone, the fix's proceedings are not open to the public. The public can only be told that the London fix is on the up and up, as Norman maintains; the public is not permitted to see for itself. Presumably there is a reason for that, and those who are not interested in bidding on a bridge in Brooklyn can probably figure out what it is. More questions that financial journalism has failed to pose about the gold market may be found here: http://www.gata.org/node/11661 Norman's commentary is headlined "Is the London Fix Fixed?" and it's posted at the Sharps Pixley Internet site here: http://news.sharpspixley.com/article/ross-norman-is-the-london-fix-fixed... CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. * * * 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/ Canadian Investor Conference 2014 Vancouver Convention Centre West 1055 Canada Place, Vancouver, British Columbia Sunday and Monday, June 1 and 2, 2014 http://cambridgehouse.com/event/25/canadian-investor-conference-2014-inc... * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: http://gata.org/tshirts Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16

World To Witness Frightening & Historic Wealth Destruction Posted: 28 Feb 2014 10:47 AM PST On the heels of of the US Dollar Index breaking the key psychological level of 80, today Egon von Greyerz warned King World News that the world is going to see frightening and historic wealth destruction in coming years. Egon von Greyerz, who is founder of Matterhorn Asset Management out of Switzerland, also included three fantastic charts to go along with his exclusive KWN piece. This posting includes an audio/video/photo media file: Download Now

Welcome to the Currency War, Part 12: Bankrupt Rome and Soaring Euro-Bonds Posted: 28 Feb 2014 10:10 AM PST Only in a world totally corrupted by easy money could the following two things be announced on the same day. First: European Bonds Surge as ECB Stimulus Confines Crisis to Memory Yields on the euro area's government bonds have never been lower as the potential for extended European Central Bank stimulus helps exorcise memories of the region's sovereign debt crisis. The bond-market rally is broad based, encompassing both core economies such asFrance and also peripheral markets including Greece, which was pushed to the brink of exiting the currency bloc during the region's financial woes. Another of those nations, Portugal, took a step toward exiting an international bailout program today as it bought back bonds, while Italy, supported in the turmoil by ECB bond purchases, sold five-year notes at a record-low rate. "Investors are starting to look at the non-core European bond markets as a viable investment alternative again," said Jussi Hiljanen, head of fixed-income research at SEB AB inStockholm. "Further ECB actions have the potential to maintain the tightening bias on those spreads," he said, referring to the yield gap between core nations and the periphery. The average yield to maturity on euro-area bonds fell to a record 1.6343 percent yesterday, according to Bank of America Merrill Lynch indexes. It peaked at more than 6 percent in 2011, the data show. Italy's 10-year yield fell seven basis points to 3.47 percent after touching 3.46 percent, a level not seen since January 2006. Portugal's 10-year yield dropped four basis points to 4.81 percent and touched 4.78 percent, the least since June 2010, while Ireland's two-year note yield and Spain's five-year rates dropped to records. Then, at about the same time: Rome days away from bankruptcy Eternal city warns it will go bust for the first time since it was destroyed by Nero Matteo Renzi, the Italian prime minister, came under pressure on Thursday as the city of Rome was on the brink of bankruptcy after parliament threw out a bill that would have injected fresh funding. Ignazio Marino, Rome mayor, said city services like public transport would come to a halt and that he would not be a “Nero” – the Roman emperor who, legend has it, strummed his lyre as the city burnt to the ground. Marino said that Renzi, a centre-left leader and former mayor of Florence who was only confirmed by parliament this week, had promised to adopt urgent measures to help the Italian capital at a cabinet meeting on Friday. The newly-elected mayor faces a budget deficit of 816 million euros ($1.1 billion) and the city could be placed under administration if he does not manage to close the gap with measures such as cutting public services. “Rome has wasted money for decades. I don’t want to spend another euro that is not budgeted,” Marino said, following criticism from the Northern League opposition party which helped shoot down the bill for Rome in parliament. The draft law would have included funding for Rome from the central government budget as a compensation for the extra costs it faces because of its role as the capital including tourism traffic and national demonstrations. Other cash-strapped cities complained it was unfair. But Marino warned there could be dire consequences. “We’re not going to block the city but the city will come to a standstill. It will block itself if I do not have the tools for making budget decisions and right now I cannot allocate any money,” he told the SkyTG24 news channel. Marino said that buses may have to stop running as soon as Sunday because he only had 10 percent of the money required to pay for fuel in March. He added: “With the money that we have in the budget right now, I can do repairs on each road in Rome every 52 years. That’s not really maintenance.” How is it that Italy is able to borrow money at low and falling rates – which indicates that borrowers are confident of its ability to pay its bills – while its major city, far more important to that country than New York or Los Angeles is to the US, slides into bankruptcy? The answer is that Rome is irrelevant in comparison with two other facts. First, Europe is slipping into deflation, which generally leads to lower bond yields. Second, the European Central Bank is virtually guaranteed to respond to fact number one with quantitative easing on a vast scale. So the bond markets, far from rallying on the expectation of a eurozone recovery, are rising in expectation of the opposite: a new round of recession/deflation/instability that forces the abandonment of even the pretense of austerity and the adoption of aggressively easy money. In this scenario, a Roman bankruptcy is actually a good thing because it pushes the ECB, Bundesbank, Bank of Italy and the other relevant monetary entities to stop dithering and start monetizing debt in earnest. Once it gets going, the goal of the program will be to refinance everyone's debt at extremely low rates, push down the euro's exchange rate versus the dollar, yen and yuan, and shift the currency war front from Europe to the rest of the world. The race to the bottom continues.

Mt. Gox files for bankruptcy, blames hackers for losses Posted: 28 Feb 2014 09:38 AM PST By Yoshifumi Takemoto and Sophie Knight Reuters Friday, February 28, 2014 TOKYO -- Mt. Gox, once the world's biggest bitcoin exchange, filed for bankruptcy protection in Japan on Friday, saying it may have lost nearly half a billion dollars worth of the virtual coins due to hacking into its faulty computer system. ... ... For the full story: http://www.reuters.com/article/2014/02/28/us-bitcoin-mtgox-bankruptcy-id... ADVERTISEMENT Buy metals at GoldMoney and enjoy international storage GoldMoney was established in 2001 by James and Geoff Turk and is safeguarding more than $1.7 billion in metals and currencies. Buy gold, silver, platinum, and palladium from GoldMoney over the Internet and store them in vaults in Canada, Hong Kong, Singapore, Switzerland, and the United Kingdom, ­taking advantage of GoldMoney's low storage rates, among the most competitive in the industry. GoldMoney also offers delivery of 100-gram and 1-kilogram gold bars and 1-kilogram silver bars. To learn more, please visit: http://www.goldmoney.com/?gmrefcode=gata Join GATA here: Mines and Money Hong Kong Hong Kong Convention and Exhibition Centre Hong Kong Special Administrative Region, China Monday-Friday, March 24-28, 2014 http://www.minesandmoney.com/hongkong/ Canadian Investor Conference 2014 Vancouver Convention Centre West 1055 Canada Place, Vancouver, British Columbia Sunday and Monday, June 1 and 2, 2014 http://cambridgehouse.com/event/25/canadian-investor-conference-2014-inc... * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: http://gata.org/tshirts Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16 ADVERTISEMENT How to profit with silver -- and which stocks to buy now Future Money Trends is offering a special 16-page silver report with profiles of nine companies and technical analysis of their stock performance. Six of the companies have market capitalizations of less than $800 million and one company has a market cap of only $30 million. The most exciting of these companies will begin production in a few weeks and has a market cap of just $150 million. Half of all proceeds from the sale of this report will be donated to the Gold Anti-Trust Action Committee to support its efforts exposing manipulation and fraud in the gold and silver markets. To learn about this report, please visit: http://www.futuremoneytrends.com/index.php?option=com_content&id=376&tmp...

Should You Invest in the Marijuana Boom? Posted: 28 Feb 2014 08:47 AM PST Dear Reader, I planned to explore the investment landscape of the burgeoning marijuana industry in today’s missive, but it looks like the party’s already over. Appearing before the Maryland Legislature, Annapolis Police Chief Michael Pristoop testified that 37 people died in Colorado on the first day of legalization from overdosing on marijuana. What a damn shame. With morbid stats like that, the government can’t possibly allow the legalization trend to proceed any further. People’s lives are at stake! Except they’re not. Chief Pristoop got those stats from a tongue-in-cheek story in The Daily Currant, a satirical newspaper à la The Onion. He believed it to be legitimate, so he cited it during testimony. Despite the fact that exactly zero people in history have died from overdosing on marijuana. As you surely know, Colorado and Washington recently became the first states to legalize marijuana for recreational use, joining 18 other states that have legalized it for medical use only. Legalization is gaining steam across the US, and that’s unlikely to change—if only because, other than citing fake facts, opponents of legalization have no argument. Opposition to legalizing marijuana is dwindling for the same reason that opposition to gay marriage is dwindling: there’s no intelligent reason to oppose either one. Unless, in the case of marijuana, you’re concerned with its potential to cause more car accidents. But if those are your standards, we should criminalize beer, cellphones, and makeup, too. One thing’s for sure: the investment world is enamored with the idea of a brand-new green industry. As an illustration of exactly how hot this infant sector has become, take a look at this screen shot of an email received by a senior Casey Researcher this week. It’s a news release from a mining company, announcing its intent to “diversify” into the legal marijuana business: An interesting business decision. I’m not sure what synergies exist between mining and marijuana, nor do I have any particular insight into how Next Gen’s management plans to enter the green business. But I applaud its forward thinking. Apparently, so does the market. Here’s how Next Gen’s share price reacted to the announcement: It soared over 300%, transforming from a penny stock into a dime stock in one day. Again, Next Gen didn’t grow earnings, discover a new gold deposit, or accomplish anything tangible. It tripled its valuation simply by announcing its entry into the marijuana business. That’s what I call a scorching industry. So, should you put some speculative money into the hottest cannabis stock? Let’s take a quick tour around the burgeoning industry to get a picture of its investment prospects, focusing on five factors… 1) Profits Will Plummet Had Al Capone been born in any other era, he would not have amassed a $100 million fortune. It was Prohibition that allowed him to earn extraordinary returns in the otherwise standard business of providing alcohol to people. Likewise, legal purveyors aren’t going to earn anywhere near the spectacular returns that criminals enjoyed when marijuana was illegal. Drug distributors can become filthy rich because dealing drugs requires taking extraordinary risks. One misstep and you go to jail. Or worse, the rival Mexican cartel mows you down. That risk premium is why illegal drugs are so expensive, and why marijuana costs $300-400/oz in the US. But it won’t for long. How can I be so sure? Because we already have a glimpse into the future. Uruguay legalized marijuana in December, and an ounce of the stuff costs $28 there, less than 10% of what it costs to obtain it the US. It’s true that the Uruguayan government controls the marijuana industry tightly and set that $28/oz price. But the cost to produce marijuana there averages just $14/oz. So $28/oz is a reasonable guess as to where the price of marijuana would settle if the market were allowed to clear. Going forward, profit margins won’t be nearly as fat as they were in the past. 2) The Government Will Be Heavily Involved At least one guy will unquestionably make a killing from marijuana’s legalization. His initials are “U. S.,” and he wears a star-spangled hat. We’re just two months into legalization, and taxes are already hefty. In Colorado, marijuana is subject to a 2.9% sales tax, plus a 10% tax on retail marijuana sales, plus a 15% excise tax based on the average wholesale price. Washington is no better—it plans to exact a 25% excise tax, plus an 8.75% sales tax. All told, taxes in these early-adopting states will be in the neighborhood of 30%. And that’s before the feds get their cut (more on that momentarily). Further, taxes are the one exception to the rule, “What goes up must come down.” Someday, tokers might look back longingly at that 30%. After all, the average tax on a pack of cigarettes in the US is 42%. Last, the marijuana industry isn’t going to be the Wild West. Colorado is working to control pretty much every aspect of the market, as evidenced by its 144-page marijuana Rule Book. You can be sure that other states will follow suit. 3) It’s Still Illegal Though marijuana is now legal in two states, it’s still illegal under federal law. The Obama administration has said it won’t enforce marijuana prohibition in states that legalize it, as long as those states keep it under control. The federal government maintains the same position on medical marijuana, which, somewhat surprisingly, is also still illegal under federal law. The feds are moving in the right direction, albeit slowly. Two weeks ago, the Treasury Department issued new rules that open the door for banks to do business with legal and licensed marijuana dispensaries. Of course, once the feds do get on board, they’ll want a piece of the action. So be ready for even higher taxes. 4) Unsavory First Movers It’s an unfortunate fact that, because the industry was just decriminalized recently, those best positioned to jump quickly into the marijuana business are those who were already in the marijuana business. In other words: people who were classified as criminals just two months ago. Not that they were necessarily doing anything wrong by growing and distributing marijuana before it was legal. I’m sure plenty of growers and sellers are good people trying to earn a buck, just like those who grow and sell any other crop. But as with any emerging industry, the first movers will be those who already possess an intimate knowledge of said industry. And in the case of marijuana, that means people who were running illegal businesses. So if you invest in their companies, you’re entrusting your capital to someone who’s willing to break the law. As an investor, that should give you pause. Tread carefully, and dial your skepticism up to maximum. 5) Weak Candidates The investment options in this infant industry are, understandably, limited. We’re a ways off from being able to buy a bushel of hemp on the futures exchange. If you want to invest, you’ll have to go with one of a handful of public companies. And unfortunately, none of them looks compelling. The six companies in the chart below are the purest plays in the marijuana space. Their performance in 2014 is the stuff of legends—the worst performer gained 243% in the last three months: But dig into their businesses and you’ll soon find that their value comes from their scientific-sounding names, and not from actually making money. First, the companies are tiny and only trade on the illiquid over-the-counter markets. Before the share price run-up, only one, CannaVEST, had a market cap above $60 million. What’s worse, most of them don’t have any revenue. And the ones that do generate revenue spend much more than they earn. Not that this is surprising—hardly any business could become profitable in just two months, so we won’t hold that against them. The problem is their valuations: CannaVEST is worth a staggering $1.8 billion today, and most of the others are all in the hundred-million range. Let’s put it this way: if an entrepreneur walked into the Shark Tank seeking a $1.8 billion valuation for a company that doesn’t make money, Mark Cuban would laugh him out of the room. Speculative money already took these stocks to the moon. By buying one now, your only hope of profiting is for a greater fool to come along and buy it from you at a higher price. As I see it, because of sky-high valuations, the risks in this blossoming industry far outweigh the potential reward, at least for a retail investor. I’m sure there are some fantastic private deals out there, and if you’re willing to press the flesh and meet some marijuan-trepreneurs yourself, you could make money. But for non-full-time investors, you’ll want to watch this trend unfold from the sidelines, waiting for either (1) the speculative bubble to pop, so you can pick up some shares for fractions of a penny; or (2) a leader to emerge and demonstrate it can turn a profit. Here’s a tip, though: If you’re looking for an investment with potentially spectacular gains, I would like to point you to another drug, this one perfectly legal once it’s FDA-approved. What I’m talking about is an impressive biotech startup my colleague Alex Daley, Casey’s chief technology investment strategist, has dug up. The company is well on its way to launching a breakthrough Alzheimer’s treatment—which, if successful, is sure to be a game-changer for the medical industry. Clinical trial results are due out in early March, and should they be positive, the stock could easily double on the news… so right now is a great time to get in. Find out more about the company and its revolutionary product in this report. With that, I’ll now pass the reins over to our resident real estate expert Doug French for some analysis on the housing recovery. Then you’ll find some of David Galland’s classic musings in Casey Gems, and of course, the Friday Funnies. Housing: A Phony Nirvana Doug French, Contributing Editor The residential real estate market is confusing. On the ground, the stats remain ugly. Twenty percent of American homeowners are underwater, meaning they owe more on their homes than they’re worth. For these people, their home is a ball and chain limiting their mobility and opportunities. And a constant reminder of a bad financial decision. But in the media, it’s a different story. And on reality TV and rich neighborhoods in New York or San Francisco, it’s as if 2008 never happened. A San Francisco realtor wrote in a letter to SFGate: “Television shows brought real estate into our living rooms and made the buying, selling, flipping and preparing of properties a national pastime. As a Realtor, I feel like a celebrity at times when I go to parties with people asking questions and fascinated by aspects of my work. This certainly was not what I expected when I started in this career.” Realtors feeling like celebrities? That’s heady stuff. And now a celebrated Wall Street housing analyst is calling the new home market by the n-word. “Nirvana is not far around the corner,” Ivy Zelman, Institutional Investor Analyst Hall of Fame Member, told CNBC this week. Zelman grinds the numbers everyone looks to in the homebuilding space. With her bullish outlook and face for TV, we’ll be seeing plenty more of her. The comely brunette doesn’t hedge her opinions. “I think we’re going to see things rip when we see the weather thaw and customers coming out.” Shortage of Homes? Ms. Zelman insists there is a shortage of available product for buyers to choose from. She’s probably getting her intel from the likes of Pulte Homes CEO Richard Dugas, who says business will be good because of “low interest rates, a limited supply of new and existing homes, and an ongoing, albeit modest, recovery in the broader economy.” However, they’re both missing a crucial point. Supply only seems restricted because of a kink in the foreclosure fire hose, which prevents houses from gushing onto the market. Mortgages were furiously bought and sold during the boom to satisfy Wall Street’s hunger for mortgage-backed securities. These mortgages were transferred electronically through MERS (Mortgage Electronic Registration Systems). All was well and good with this until borrowers stopped paying and lenders wanted to foreclose. That’s when innovative finance banged up against a legal system that in most jurisdictions was accustomed to paper-and-ink assignments. Judges wanted proof that mortgage assignees had the standing to foreclose, and in many places, the lack of old-school written assignments impeded that process. So we’re left with an unknown number of foreclosures languishing in the pipeline, just waiting to hit the market. Also, states like Nevada and California have passed “homeowners bill of rights” legislation, forcing lenders to jump through numerous hoops before they can start foreclosure proceedings. And of course in states with judicial foreclosures (where the court dictates the foreclosure timeline, not statute), the process can take years. In other words, the notion of “limited supply” is merely an illusion. Real estate attorney Shari Olefson, the author of Foreclosure Nation, says banks are pocketing a “slew of shadow inventory.” She gives the example of a bank foreclosing on a $200,000 mortgage, knowing the home is only worth half of that. The bank will then hold the home—at that inflated value—on its books. Why? First, because it hopes the market will come back. But more importantly, the bank needn’t recognize the loss until it sells the unit. Once upon a time, bank accounting wouldn’t have allowed such nonsense. But in the wake of the financial crisis, the American Bankers Association lobbied the Financial Accounting Standards Board to change accounting rules FASB 157, 115, and 124. These changes allowed banks greater discretion in determining prices for certain types of illiquid securities on their balance sheets. That’s how a bank can say a $100,000 house is worth $200,000 and get away with it. Drowning A whopping 9.3 million Americans are still underwater 25% or more. And as interest rates rise, these people aren’t going to stick around to pay even more into their equity-draining homes. They’re likely to walk away. Seven states have underwater percentages well above the national average. It’s no surprise that over 30% of homes are underwater in sand states like Nevada, Florida, and Arizona. But the Midwest is struggling too, with Illinois, Michigan, Missouri, and Ohio all having about the same percentage of mortgages underwater. Certain cities have it even worse. Las Vegas, Orlando, Tampa, and Chicago each have negative equity percentages between 33% and 41%. Despite this financial devastation, the 20-city Case-Shiller Housing Index for December is up 13.4% from a year ago. Since March 2012, the Index has risen 24%. That’s one of the scariest parts: though prices have improved considerably, homeowners are still way underwater. For example, homes in Las Vegas now fetch 43% more than in March 2012. But 41% of mortgages there still remain deeply underwater (defined as 25% or more). It’s a similar story in Orlando, where prices have jumped 20% last year, but 36% of the area’s homes remain underwater—and Tampa, with 35% of underwater mortgages, despite home prices rising 25% since March 2012. Yet even with this massive shadow inventory hanging over the market, builders are bullish on providing new housing. “What we hear from builders right now, they did not have enough communities to meet demand in 2013,” Zelman said. “They were caught by surprise by the surge in demand, so they didn’t have enough developed lots to open up new communities. This year they caught up, they’re very prepared, we’re going to have double-digit increases in new communities.” Builders are never shy about providing supply. Nirvana? Historically, Americans, no matter their income bracket, spend half their incomes on housing and transportation, Derek Thompson notes in his piece titled America’s Weird, Enduring Love Affair with Cars and Houses. Interestingly, that high percentage is unique to the US. Thompson wonders about the ramifications if Americans began to spend more like the Japanese, Canadians, or Brits, who spend much more than Americans on culture, food at home, and alcohol, instead of houses and cars. “It would be rocky for the real estate and auto industries who have come to rely on a steady stream of spending,” Thompson writes. Well, guess what? “This isn't a vision of the future. It’s a description of the way a lot of young people live today,” he explains. Maybe that will pass when the recession does. Except while everyone knows we’ve been in a recession since December of 2007, the government says the downturn ended in June of 2009. On average, “official” recessions have hit the US every six or seven years in the US since 1947. The clock’s ticking, as 2009 is already five years in our rearview mirror. Predicting when the next “official” recession will hit is impossible. The point is that sooner rather than later, the economy is actually going to get worse than it is now. That won’t be great for selling homes. When realtors are rock stars and analysts call a market “nirvana,” we’re near a top. The top of a market built on the flimsiest foundation of false scarcity. New supply, a worsening economy, and higher interest rates will bring about a fall. Thankfully, it won’t be from the heights of 2006. But it will be anything but nirvana. Casey Gems—David Galland on War David Galland, Managing Director Originally Published on 11/3/1006 There are few scarier geopolitical situations in the world than the prospect of nuclear-armed Pakistan falling into the hands of the religious extremists… a prospect made far more likely by cross-border incursions by NATO forces. Many conservatives now openly call the current struggles World War III. From my observations, the Western governments are taking just the right steps needed to make that a self-fulfilling prophecy, with absolutely dire consequences for life, liberty, and the pursuit of economic well-being. My reading of history has it that no reasonably

Which Stocks Will Make A Fortune For Investors This Year? Posted: 28 Feb 2014 08:41 AM PST Today a man who has lived in 18 countries around the world spoke with KWN about an unloved sector of stocks that will make a fortune for investors this year. The sector he talks about will surprise KWN readers. Keith Barron, who consults with major companies around the world and is responsible for one of the largest gold discoveries in the last quarter century, also gave out the names of three of these stocks. This posting includes an audio/video/photo media file: Download Now

The Silent Scream Of The Plunging $/Yuan: A Derivatives Bomb Detonated Posted: 28 Feb 2014 08:38 AM PST Anyone who denies that the Fed is engaging in unprecedented intervention in all of the markets - especially the gold and silver markets - is guilty of either ignorance or willfully intentional denial.  But the Chinese can play the intervention game as well.  We are seeing that giant footprint of intervention in the dollar/yuan relationship, as the Chinese yuan has just experienced it biggest weekly plunge ever: Briefly, this graph (edits in white/red are mine) shows the $/yuan relationship.  It plots the amount of Chinese yuan needed to buy one U.S. dollar. When the ratio declines, it means the yuan is increasing in value vs. the dollar.  As you can see, there has been a steady decline in the $/yuan ratio, which means that Chinese Government has been letting the yuan rise in value.  That is, until about a week ago. What most market observers tend to overlook is that there are likely $10's of billions worth of OTC derivatives that have been issued by the big Too Big To Fail banks tied to the trading relationship between the $/yuan. In fact, Morgan Stanley estimates the amount to be at least $150 billion:  $/yuan Derivatives Bomb Detonated?.  They also show a table in that link which estimates possible losses to the banks if this is the case to be well in excess of $1 billion.  Morgan Stanley should know, it was one of the biggest beneficiaries of the 2008-2009 Bush/Obama bailout of Wall Street.  MS also has one of the highest net exposures as a percent of bank capital to derivatives accidents. In my view, that spike up in the $/yuan you see in the chart above has probably triggered a massive derivatives "explosion" because typically, in their keen foresight and wisdom, the bank rocket scientists never account for the risk of a big move like the one above in a such a short period of time.  If they were to price in this possibility, the derivatives contracts upon which they make $10's of millions in selling profits would be too expensive and the banks would miss out on that easy income.   But hey, we haven't seen a move like that in the history of the $/yuan contract so why should the banks ever expect it to happen?  And the Fed and Government has their back if they're wrong. Of course, this was same Nobel Prize winning wisdom that cause the Long Term Capital collapse and bailout (remember that one?) and that caused - more catastrophically - the 2008 collapse of the U.S. financial system (AIG/Goldman) and the subsequent joint Republican/Democrat 100% approved taxpayer bailout. Many analysts are wondering why the Chinese Government, which has a tight control over the trading level of the $/yuan, has enabled the above spike up to occur.  If you think about the ramifications of what I just laid out above, it leads to one possibility (hint: think about the big blow that was just delivered to western bank balance sheets if I'm right about a behind the scenes derivatives accident having just occurred). I see this as another big cruise missile just fired by China in the global currency war.  The first big missile being the massive accumulation of gold by the Chinese (as has been documented ad nauseum).  There's also another benefit to the Chinese.  Think about the massive size of China's dollar reserves.   The dollar has just become significantly more valuable vs. the yuan and so has the value of China's dollar reserves.  This gives China more buying power to buy gold using dollars. One other point, and this is tied to China's ultimate goal:  to unload its massive hoard of dollar reserves while making as little noise about it as possible.  Last night, a few hours after the yuan dropped precipitously against the dollar, the US dollar index plunged in cliff-dive fashion, losing 36 basis points in about 30 minutes.  While that may not sound significant, in currency trading terms that is a a mini-crash.  Oh, it also the key 80 line of support that has been drawn in the sand by the U.S Government, slicing through that level with ease. I would suggest, and there's no way of telling without having access to the inside books - the numbers which the banks spend millions on to make sure Congress helps the banks keep them hidden - that the Chinese have unloaded another truckload of dollars behind the all the smoke emanating from the holes created by the Chinese Government motivated $/yuan crash and the related derivatives explosions: The greatest trick the devil ever pulled was convincing the world he didn't exist.

The Silent Scream Of The Plunging $/Yuan: A Derivatives Bomb Detonated Posted: 28 Feb 2014 08:38 AM PST Anyone who denies that the Fed is engaging in unprecedented intervention in all of the markets - especially the gold and silver markets - is guilty of either ignorance or willfully intentional denial.  But the Chinese can play the intervention game as well.  We are seeing that giant footprint of intervention in the dollar/yuan relationship, as the Chinese yuan has just experienced it biggest weekly plunge ever: Briefly, this graph (edits in white/red are mine) shows the $/yuan relationship.  It plots the amount of Chinese yuan needed to buy one U.S. dollar. When the ratio declines, it means the yuan is increasing in value vs. the dollar.  As you can see, there has been a steady decline in the $/yuan ratio, which means that Chinese Government has been letting the yuan rise in value.  That is, until about a week ago. What most market observers tend to overlook is that there are likely $10's of billions worth of OTC derivatives that have been issued by the big Too Big To Fail banks tied to the trading relationship between the $/yuan. In fact, Morgan Stanley estimates the amount to be at least $150 billion:  $/yuan Derivatives Bomb Detonated?.  They also show a table in that link which estimates possible losses to the banks if this is the case to be well in excess of $1 billion.  Morgan Stanley should know, it was one of the biggest beneficiaries of the 2008-2009 Bush/Obama bailout of Wall Street.  MS also has one of the highest net exposures as a percent of bank capital to derivatives accidents. In my view, that spike up in the $/yuan you see in the chart above has probably triggered a massive derivatives "explosion" because typically, in their keen foresight and wisdom, the bank rocket scientists never account for the risk of a big move like the one above in a such a short period of time.  If they were to price in this possibility, the derivatives contracts upon which they make $10's of millions in selling profits would be too expensive and the banks would miss out on that easy income.   But hey, we haven't seen a move like that in the history of the $/yuan contract so why should the banks ever expect it to happen?  And the Fed and Government has their back if they're wrong. Of course, this was same Nobel Prize winning wisdom that cause the Long Term Capital collapse and bailout (remember that one?) and that caused - more catastrophically - the 2008 collapse of the U.S. financial system (AIG/Goldman) and the subsequent joint Republican/Democrat 100% approved taxpayer bailout. Many analysts are wondering why the Chinese Government, which has a tight control over the trading level of the $/yuan, has enabled the above spike up to occur.  If you think about the ramifications of what I just laid out above, it leads to one possibility (hint: think about the big blow that was just delivered to western bank balance sheets if I'm right about a behind the scenes derivatives accident having just occurred). I see this as another big cruise missile just fired by China in the global currency war.  The first big missile being the massive accumulation of gold by the Chinese (as has been documented ad nauseum).  There's also another benefit to the Chinese.  Think about the massive size of China's dollar reserves.   The dollar has just become significantly more valuable vs. the yuan and so has the value of China's dollar reserves.  This gives China more buying power to buy gold using dollars. One other point, and this is tied to China's ultimate goal:  to unload its massive hoard of dollar reserves while making as little noise about it as possible.  Last night, a few hours after the yuan dropped precipitously against the dollar, the US dollar index plunged in cliff-dive fashion, losing 36 basis points in about 30 minutes.  While that may not sound significant, in currency trading terms that is considered to be a mini-crash.  Oh, it also dropped below key 80 line of support that has been drawn in the sand by the U.S Government, slicing through that level with ease. I would suggest, and there's no way of telling without having access to the inside books - the books which contain the numbers for which the banks spend millions to make sure Congress helps the banks keep them hidden - that the Chinese have unloaded another truckload of dollars behind the all the smoke emanating from the holes created by the Chinese Government motivated $/yuan crash and the related derivatives explosions: The greatest trick the devil ever pulled was convincing the world he didn't exist.

Gold’s Next Big Challenge in 2014 Posted: 28 Feb 2014 08:36 AM PST Gold has a huge challenge ahead of it in the coming weeks. If the yellow metal can break above a key price barrier, it has the opportunity to regain some of its mojo lost in last year's horrific selloff… Here are the facts: Gold has greatly underperformed the broad market since late 2012. Yeah, I know that's old news. But so far, 2014 has been completely different. Commodities are streaking across the board. I told you recently that someone "flipped the switch" this year, triggering breakout after breakout. Coffee and natural gas are just two examples that zoomed right out of the gate this year. And taking a bigger picture look shows the S&P GSCI Commodity Index testing a major breakout zone after a huge 3-year coil. Meanwhile, gold is also sneaking higher. After taking its licks last year, it's quietly starting to outperform stocks… This little breakout could help gold tackle its next big challenge: resistance at $1,350. That's the price you should watch over the next several sessions. Gold was sneaking closer to this mark earlier this week. But after a four-day winning streak, gold took a tumble at $1,345 — and it hasn't moved much since. Even with some constructive price action this year, you have to remember that gold is in a bear market right now. I'll continue to view the metal with a skeptical eye until it can prove that this recent move is more than just a bear market rally… Regards, Greg Guenthner for The Daily Reckoning P.S. Whether this breakout turns around my outlook for the yellow metal remains to be seen. But one thing’s for sure… I’ll be watching its movements very closely, and as soon as I have a way to play it, my Rude Awakening readers will be the first to know. Sign up for FREE, right here, to make sure you know how to cash in no matter what gold does.

New Silver Major Is Born Posted: 28 Feb 2014 08:26 AM PST Just last month Tahoe Resources announced the achievement of commercial production at its Escobal mine.  And sounding the trumpets on such an exploit most certainly deserves investors’ attention.  When 2014 comes to a close, Tahoe will be flexing its muscles as a global top-10 silver producer! At an annual clip of approximately 20m ounces, Escobal will be the world’s third-largest primary silver mine behind only BHP Billiton’s Cannington mine (Australia) and Fresnillo PLC’s namesake Fresnillo mine (Mexico).  This mine makes Tahoe the world’s third-largest primary silver producer, behind only Fresnillo and Pan American Silver.  And it even vaults host country Guatemala into the global top 10.

Silver Profit Taking After Eight Consecutive Weeks of Rising Prices Posted: 28 Feb 2014 07:14 AM PST The rise in the gold price ran into profit-taking on Wednesday. Having risen $160 to $1345 some short-term profit taking is only to be expected, and silver followed suit. The action in silver revolved round the March contract on Comex, with some players choosing to close their positions rather than roll it into a later month. This action can be clearly seen in the chart below.

Gold in 2013 the Foundation for 2014 Posted: 28 Feb 2014 07:10 AM PST The chronological events of 2013 set the background for gold in 2014. It was a momentous year which should ensure a rise in the gold price in 2014. Before 2013 demand for physical ETFs was high. At the same time Asian demand, from China, India, Turkey and elsewhere, was accelerating leaving Western bullion markets increasingly short of physical liquidity. Hong Kong and China between them in 2012 had absorbed on official figures 1,458 tonnes, and India a further 988 tonnes, ensuring 2013 kicked off with more global demand than available supply from mines and scrap.

Silver Position Limits, Commodity Perceptions and Monetary Ignorance Posted: 28 Feb 2014 07:08 AM PST The dividing line between silver performing as a monetary asset versus an industrial commodity is tethered to a broken price discovery system, where unlimited position limits are held by the most influential of traders. This fault line, at the heart of price manipulation, paints a dangerous and false perception that permeates the trading landscape - as well as the mainstream perception of money.

Legal Tender, Gold, Silver and Alternative Currency Posted: 28 Feb 2014 07:05 AM PST History does not repeat; it rhymes. Current stability comes from confidence and force. We've all heard that cliché over and over. But to rhyme is to the use any words you choose. We can rhyme in paper or digits, but it is all backed by nothing. There is a not-so-subtle difference between currency and legal tender. Legal tender implies both force and control. And it's worthwhile to explore how far history can be re-expressed through technology.

Gold Prices End Feb. 6.5% Up as US GDP Revised Down, UK's FCA "Likely" to Regulate London Fix Posted: 28 Feb 2014 06:41 AM PST GOLD PRICES held in a tight range above $1330 per ounce Friday lunchtime in London, heading for their best monthly gain since July as new data showed the US economy expanding at a slower pace than first reported.   Revised GDP data for end-2013 showed the US economy growing 2.4% instead of 2.5% year-on-year.   The Federal Reserve's preferred measure of inflation, the PCE deflator, slowed to 1.5% rather than the 1.2% first estimated.   "In the weeks and months ahead," said new Fed chair Janet Yellen to the Senate Banking Committee Thursday, "my colleagues and I will be attentive to signals that indicate whether the recovery is progressing in line with our earlier expectations."   A possible "pause" in the Fed tapering its QE money-printing program, says a note from US brokerage INTL FC Stone, "is why we think gold has been fairly steady this year   "Investors are allowing for the possibility of a pause...Of course, the recent turmoil evident in a number of emerging market economies has also added additional impetus to gold's advance."   After gold crashed to 3-year lows of $1180 midsummer 2013, gold prices rallied 10.3% and then 6.1% over July and August.   Falling to that level again on New Year's Eve, gold has since risen 4.1% and 6.5% in January and February, peaking Monday at $1345 – some $85 per ounce below August's rebound top.   Shanghai gold prices edged higher overnight Friday, pushing the premium to London settlement to a 1-week high of $3.25 per ounce, even as the Chinese Yuan slipped to a new 6-month low on the currency market.   Chinese premiums to London gold prices went negative earlier this week for the first time since November, suggesting a surplus of supply over demand in the world's No.1 consumer nation.   The world's benchmark daily gold pricing, set at the London Fix, is now being targeted by class-action law-suit advisors, the Financial Times reported Monday – mistakenly adding that UK and German regulators are formally investigating the 100-year old auction process.   "It is likely that co-operation between participants may be occurring," says the author of another new but as yet unpublished study of the London Gold Fix, NYU Stern professor Rosa Abrantes-Metz – "a paid expert witness to lawyers helping companies and individuals sue banks," according to Bloomberg today.   UK regulator the FCA said Thursday, in updating its likely oversight of commodity markets, that "key changes [suggest] the provision of commodity benchmarks referenced in financial contracts will become a regulated activity."

Bye Bye Bitcoin, Hello Hard Assets Posted: 28 Feb 2014 06:00 AM PST I'm hoping you weren't bitten by Bitcoin's big announcement Wednesday. In short, the cybercurrency darling Bitcoin had a MAJOR setback. We'll cover some of the important details today — plus, we'll take a look at a safer place to stock your money than the latest currency du jour. According to CNN Money, "The Bitcoin trading website Mt. Gox was taken offline late Monday, putting at risk millions of dollars put there by investors who gambled on the digital currency." You can think of Mt. Gox as a marketplace for Bitcoins — much like the New York Stock Exchange (NYSE) is a marketplace for stocks. Mt. Gox, headquartered in Japan, was the biggest and "most efficient" market for Bitcoin trading. But over the past few weeks, life at Mt. Gox got tough. An alleged hacking scandal and now the overnight shutdown of the market have ravaged Bitcoin holders. "To be perfectly blunt, Bitcoin always struck me as an overambitious ship awaiting its iceberg." To continue our analogy, it's as if the whole NYSE market shut down overnight and stockholders were left holding nothing. According to The Associated Press, "At the Tokyo office tower housing Mt. Gox, Bitcoin trader Kolin Burges said he had picketed the building since Feb. 14 after flying in from London, hoping to get back $320,000 he has tied up in Bitcoins with Mt. Gox." You see, apparently, when folks have hundreds, thousands and even hundreds of thousands of dollars tied up in your cybercurrency, it's helpful not to close up shop overnight and essentially admit that everyone's money is gone. But that's what happened this week at Mt. Gox. I certainly do feel bad for anyone that got bit by the Bitcoin bug. I guess the idea of a supreme digital currency that "won't" be devalued isn't as good as it's cracked up to be. But what's worse? Being the market that shut down or being the sucker who put $320,000 into a magical cybercurrency backed by nothing more than hype and pipe dreams. Indeed, the devil is in the details. Here's why we'd never recommend bitcoin… First off, let's get something straight. Bitcoin is not a currency. Not by our definition. The main duty of a currency is to be a medium of exchange, a holder of wealth. … It needs to be liquid, easy to transfer, spend and receive. … It needs to be trusted and reliable. … It needs to be stable. When you add it up, Bitcoin doesn't tick any of the boxes above. Bitcoin isn't liquid. Other than trading in and out of U.S. dollars and some fluky usability with places like Overstock.com, users aren't really able to buy anything with Bitcoins. You can't buy a hot dog or pay your taxes with it. It's a fantasy currency. Bitcoin isn't trustworthy. Heh… gee, you mean to tell me that an online currency that trades on clandestine markets in Tokyo and for all intents and purposes is cloaked in mystery isn't trustworthy?! Say it ain't so! Bitcoin isn't stable. Throughout the cybercurrency's life, Bitcoin has never been stable. Heck, that's how it got most of its notoriety! "Whoa, did you see how much Bitcoin went up yesterday," said the gawkers. But you and I know that a true, stable currency isn't going to be making huge gains or loses every day. That's the point. A currency should be stable…and Bitcoin has never been. "The demise of Bitcoin highlights the danger of placing one’s faith — and risking one’s wealth — in a 'currency' that dates back all of a thousand days or so, versus 5,000 years, or even a mere 222 years in the case of the U.S. dollar," says Byron King. Indeed, Byron has never officially commented on Bitcoin's existence until today. But once prompted, he gave some valuable insight… "Bitcoin proves the point that a good currency is hard to find, let alone conjure out of thin air. And a hard currency that withstands the test of time is even more difficult to locate, now or looking back across the arc of history. "As Bitcoin fast fades, I cannot afford to dwell, like some weepy Confederate, over a lost cause. I simply return my gaze to the U.S. dollar, which, to be sure, we often slam these days due to its horrid mismanagement by the foolish political authorities and flat-Earth advisers that dominate our era. "Yet for all its flaws… our U.S. dollar is a highly evolved example of successful natural monetary selection over many centuries. The dollar has prevailed in a very brutal world, while elsewhere entire empires have come and gone. That should count for something. "For all the current problems of the dollar, Bitcoin was not the answer… To be perfectly blunt, Bitcoin always struck me as an overambitious ship awaiting its iceberg. "Now, looking ahead to far horizons… the holds of our respective ships are filled with dollars, although the ballast near the keel of my hull, at least, is formed of real gold and silver. "Gold, silver and dollars… That’s how the world works. It’s how the world has worked for a long time." Just as quick as Byron emailed his first words on Bitcoin, the wannabe currency may fall to the bottom of the sea. Longtime readers know the value of a hard currency and the value of protecting your wealth with things of real value — no "vaporware" here, as Byron says. No. You won't find newfangled currencies on our radar. But you will find opportunities in hard assets — gold, silver, platinum, oil, gas and more. A metal miner that brings vital commodities to the market – gold for jewelry, silver for electronics, platinum for the auto industry. Or an oil and gas driller that brings energy to the surface – fueling cars, homes and industry. Resource companies and their shares are a currency in their own right. As these producers continue to pull coveted resources from the ground they'll continue to cash in. As time passes and currencies come and go, we'll stick with a similar strategy. Keep your boots muddy, Matt Insley for The Daily Reckoning P.S. In order to make the most of your hard-earned dollars, it’s imperative to be diversified. And while precious metals are often one good option, there are several great opportunities for you to safeguard and grow your wealth no matter what fly-by-night currency comes along. In order to get the best of them, sign up for the FREE Daily Resource Hunter email edition, before you do anything else. Original article posted on Daily Resource Hunter

Alasdair Macleod: Gold in 2013 -- the foundation for 2014 Posted: 28 Feb 2014 05:47 AM PST 8:45p ET Friday, February 28, 2014 Dear Friend of GATA and Gold: GoldMoney research director Alasdair Macleod today summarizes the cracks in the Western gold price suppression scheme that were exposed in 2013 and predicts that this year will bring realization that Western central banks are running critically short on metal. Macleod's commentary is headlined "Gold in 2013: The Foundation for 2014" and it's posted at GoldMoney here: http://www.goldmoney.com/research/analysis/gold-in-2013-the-foundation-f... CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. ADVERTISEMENT How to profit with silver -- and which stocks to buy now Future Money Trends is offering a special 16-page silver report with profiles of nine companies and technical analysis of their stock performance. Six of the companies have market capitalizations of less than $800 million and one company has a market cap of only $30 million. The most exciting of these companies will begin production in a few weeks and has a market cap of just $150 million. Half of all proceeds from the sale of this report will be donated to the Gold Anti-Trust Action Committee to support its efforts exposing manipulation and fraud in the gold and silver markets. To learn about this report, please visit: http://www.futuremoneytrends.com/index.php?option=com_content&id=376&tmp... Join GATA here: Mines and Money Hong Kong Hong Kong Convention and Exhibition Centre Monday-Friday, March 24-28, 2014 Hong Kong Special Administrative Region, China http://www.minesandmoney.com/hongkong/ Canadian Investor Conference 2014 Vancouver Convention Centre West 1055 Canada Place, Vancouver, British Columbia Sunday and Monday, June 1 and 2, 2014 http://cambridgehouse.com/event/25/canadian-investor-conference-2014-inc... * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: http://gata.org/tshirts Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16 ADVERTISEMENT 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

GATA secretary discusses gold-rigging studies, West's war on developing countries Posted: 28 Feb 2014 05:37 AM PST 8:37a ET Friday, February 28, 2014 Dear Friend of GATA and Gold: Your secretary/treasurer's conversation last night with King World News proprietor Eric King covers this week's two stunning statistical studies of manipulation of the daily gold market fix in London, whether bullion banks are being set up as scapegoats for central banks involved in gold price suppression, and the economic war being waged against developing countries by the Western gold price suppression scheme: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/2/28_U.... CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. ADVERTISEMENT Jim Sinclair plans seminars in Los Angeles and San Diego Gold advocate Jim Sinclair's next market analysis seminars will be held in Los Angeles from 11 a.m. to 2 p.m. on Saturday, March 8, and in San Diego from 2 to 6 p.m. the following day, Sunday, March 9. Details, including registration information, are posted at Sinclair's Internet site, JSMinset.com, here: http://www.jsmineset.com/qa-session-tickets/ Join GATA here: Mines and Money Hong Kong Hong Kong Convention and Exhibition Centre Monday-Friday, March 24-28, 2014 Hong Kong Special Administrative Region, China http://www.minesandmoney.com/hongkong/ Canadian Investor Conference 2014 Vancouver Convention Centre West 1055 Canada Place, Vancouver, British Columbia Sunday and Monday, June 1 and 2, 2014 http://cambridgehouse.com/event/25/canadian-investor-conference-2014-inc... * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: http://gata.org/tshirts Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16

The Heart of Gold Posted: 28 Feb 2014 03:18 AM PST "The desire of gold is not for gold. It is for the means of freedom and benefit...For what avail the plough or sail, or land or life, if freedom fail?" Ralph Waldo Emerson "Over the long run, the price of gold approximates the total amount of money in circulation divided by the size of the gold stock. If the market price of gold moves a long way from this level, it may indicate a buying or selling opportunity." Ray Dalio

Stocks Up, Gold Down. Stocks Down, Gold UP! Posted: 28 Feb 2014 01:30 AM PST Kitco

The U.S. Economy Is Set to Collapse Around March 4, 2014 Posted: 28 Feb 2014 12:30 AM PST Dead Bankers and the Media Prediction the U.S. Economy Is Set to Collapse Around March 4, 2014  I think its a programed crash to make way for a new global currency backed by gold... any way the days of the Dollar as the global currency are going to end soon by the looks of it...I would buy gold if... [[ 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! ]]

U.S. Secrets, Criminal Banking Syndicates & Empty Gold Vaults Posted: 27 Feb 2014 09:08 PM PST With so much chaos taking place around the world, today King World News spoke to the man who has been focused on uncovering sensitive government and market information for over 15 years. What he had to say will shock KWN readers around the world. Chris Powell covered everything from a shocking scandal involving Western central planners to criminal banking syndicates, and the trip down the rabbit hole involves the U.S. Fed, European Western central banks, and a criminal syndicate of banks operating on their behalf. Below is what Powell had to say in this remarkable and stunning interview. This posting includes an audio/video/photo media file: Download Now

ECONOMIC COLLAPSE 2014 -- China Says U.S. Economy Is Fake And Nothing Backs The Dollar Posted: 27 Feb 2014 06:22 PM PST UK home ownership is at a record low. Best Buy, Wells Fargo are laying off more employees. The housing market is plummeting and Wells Fargo along with JPM are laying off mortgage employees. China stood up to the US and said the US economy is fake, the dollar is backed by nothing and the US has... [[ 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! ]]

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