Gold World News Flash |
- Inflection Points In the Precious Metals and the Dollar
- Silver Prices Take a Beating on Crimea and Fed Chair Yellen’s Interest-Rate Forecast
- Silver Prices Take a Beating on Crimea and Fed Chair Yellen’s Interest-Rate Forecast
- Silver Prices Take a Beating on Crimea and Fed Chair Yellen’s Interest-Rate Forecast
- Coming Default In Gold To Create Disorderly Price Spike
- Asian Metals Market Update
- The Collapse is around The Corner -- SHEEPLE Will be Slaughtered. Controlled by Propaganda
- Ron Paul & Jim Rogers Discuss Truth about Global Economic Collapse & the Elite Agenda
- Zero Hedge Is WRONG On This One.
- Zero Hedge is wrong about Chinese gold operations, Turk tells KWN
- This System IS Going To CRASH -- Claudio Grass
- Copper & Yuan Tumble As China Manufacturing PMI Drops To Lowest In 8 Months, Output Plunges
- Fukushima Water Decontamination Suspended Indefinitely
- James Rickards -- Dollar Going to Collapse 80% or 90% or More
- In The News Today
- GATA Chairman Murphy interviewed by The Daily Bell
- Interpreting Putin's Decision
- Ing expects gold default and 'dramatic and disorderly' move up
- The Keiser report – ‘Tapering won’t last’ – Egon von Greyerz
- Could The Markets Crash Again?
- When Gods War
- Gold Price Performance After Golden Crosses In The Last 4 Decades
- Yellen Fed: Not on Script
- Yellen Fed: Not on Script
- Gold Price is Likely to Keep Rallying
- Cold War Lite for the Rouble
- Cold War Lite for the Rouble
- What China Is Doing In The Gold Market Will Shock The World
- The Gold Standard Guys Are Their Own Worst Enemies
- Coming Default In Gold To Create Disorderly Price Spike
- Why China is the Gold Manipulation Culprit! -- Koos Jansen
- Gene Arensberg's Got Gold Report: Hedge funds getting longer in gold
- The Keiser report – Tapering won’t last
- Zero Hedge: How China imported all that gold without exploding the price
| Inflection Points In the Precious Metals and the Dollar Posted: 24 Mar 2014 07:14 AM PDT As we all know last week was a tough week in the PM sector. The real question we have to ask is whether this was just a short term correction in the uptrend that started at the December low or is this the end of the three month rally? We'll look at some charts to see if we can answer this question. |
| Silver Prices Take a Beating on Crimea and Fed Chair Yellen’s Interest-Rate Forecast Posted: 24 Mar 2014 01:16 AM PDT SILVER PRICES dropped significantly last week, losing 3.8% at Friday's London Fix from the week before after Russia's takeover of Crimea failed to buoy precious metals, and the US Federal Reserve brought forward the likely date for raising interest rates from zero. Fixing at $20.55 per ounce on Friday in London, silver prices stood nearly 7% below the 4-month high established in late February. Silver futures contracts for May, the most actively traded month on the US Comex, settled at $20.31 per ounce, over 5% lower than last week and $1.50 lower than the peak of February. US stock markets crept higher, and bond yields rose sharply after the Federal Reserve continued its tapering of QE asset purchases Wednesday, and revised its outlook for finally raising interest rates from zero. Ten-year Treasury rates reversed all of the previous week's drop to reach 2.79% after Federal Reserve chairman Janet Yellen's said short-term rates could be raised "around six months" after the Fed's QE program is complete. As QE tapering is expected to end new asset purchases in April or May 2015, this indicates higher rates beginning late 2015, and traders began selling zero-yielding silver – typical with expectations of higher interest rates. "The metal is now sitting back in the range that traded from late November through mid-February, and is poised for further weakness," says technical analysis from ScotiaMocatta, a market-maker on the London silver bullion market. Scotia's analysis now target's "a test of the bottom at $18.83" per ounce. Also seeing silver prices in a trading range, "Silver took support at last December's lows of $18.90," agrees chart analysis from French investment bank and London bullion market-maker Societe Generale, saying that level "confirmed a double bottom pattern." Open interest on the Comex silver futures contract, which indicates the growth or decline of activity, was reported at 145,986 contracts at Friday's close, up some 2.8% from the previous week. The Commitment of Traders Report, based on positions as of Tuesday, still shows that speculative interest in the market is bullish. But non-industry players cut their long position by 2,292 contracts. Holdings of large silver investment bars at the iShares SLV, the largest silver exchange traded fund, showed little change week over week, ending Friday at 10,164.74 tonnes. For March so far, the US Mint meantime reported sales of 1-ounce Silver Eagle coins on pace for a 17% decline from the same month last year at 3,283,500. Looking at the ongoing Crimea crisis, "Our economist views the risk of more wide-reaching trade and financial sanctions to be quite limited for now," said Friday's Market Report by Edel Tully at Swiss investment and bullion bank UBS. "[This] is only likely to come into play if Russian armed forces spread their presence into Eastern Ukraine." |
| Silver Prices Take a Beating on Crimea and Fed Chair Yellen’s Interest-Rate Forecast Posted: 24 Mar 2014 01:16 AM PDT SILVER PRICES dropped significantly last week, losing 3.8% at Friday's London Fix from the week before after Russia's takeover of Crimea failed to buoy precious metals, and the US Federal Reserve brought forward the likely date for raising interest rates from zero. Fixing at $20.55 per ounce on Friday in London, silver prices stood nearly 7% below the 4-month high established in late February. Silver futures contracts for May, the most actively traded month on the US Comex, settled at $20.31 per ounce, over 5% lower than last week and $1.50 lower than the peak of February. US stock markets crept higher, and bond yields rose sharply after the Federal Reserve continued its tapering of QE asset purchases Wednesday, and revised its outlook for finally raising interest rates from zero. Ten-year Treasury rates reversed all of the previous week's drop to reach 2.79% after Federal Reserve chairman Janet Yellen's said short-term rates could be raised "around six months" after the Fed's QE program is complete. As QE tapering is expected to end new asset purchases in April or May 2015, this indicates higher rates beginning late 2015, and traders began selling zero-yielding silver – typical with expectations of higher interest rates. "The metal is now sitting back in the range that traded from late November through mid-February, and is poised for further weakness," says technical analysis from ScotiaMocatta, a market-maker on the London silver bullion market. Scotia's analysis now target's "a test of the bottom at $18.83" per ounce. Also seeing silver prices in a trading range, "Silver took support at last December's lows of $18.90," agrees chart analysis from French investment bank and London bullion market-maker Societe Generale, saying that level "confirmed a double bottom pattern." Open interest on the Comex silver futures contract, which indicates the growth or decline of activity, was reported at 145,986 contracts at Friday's close, up some 2.8% from the previous week. The Commitment of Traders Report, based on positions as of Tuesday, still shows that speculative interest in the market is bullish. But non-industry players cut their long position by 2,292 contracts. Holdings of large silver investment bars at the iShares SLV, the largest silver exchange traded fund, showed little change week over week, ending Friday at 10,164.74 tonnes. For March so far, the US Mint meantime reported sales of 1-ounce Silver Eagle coins on pace for a 17% decline from the same month last year at 3,283,500. Looking at the ongoing Crimea crisis, "Our economist views the risk of more wide-reaching trade and financial sanctions to be quite limited for now," said Friday's Market Report by Edel Tully at Swiss investment and bullion bank UBS. "[This] is only likely to come into play if Russian armed forces spread their presence into Eastern Ukraine." |
| Silver Prices Take a Beating on Crimea and Fed Chair Yellen’s Interest-Rate Forecast Posted: 24 Mar 2014 01:16 AM PDT SILVER PRICES dropped significantly last week, losing 3.8% at Friday's London Fix from the week before after Russia's takeover of Crimea failed to buoy precious metals, and the US Federal Reserve brought forward the likely date for raising interest rates from zero. Fixing at $20.55 per ounce on Friday in London, silver prices stood nearly 7% below the 4-month high established in late February. Silver futures contracts for May, the most actively traded month on the US Comex, settled at $20.31 per ounce, over 5% lower than last week and $1.50 lower than the peak of February. US stock markets crept higher, and bond yields rose sharply after the Federal Reserve continued its tapering of QE asset purchases Wednesday, and revised its outlook for finally raising interest rates from zero. Ten-year Treasury rates reversed all of the previous week's drop to reach 2.79% after Federal Reserve chairman Janet Yellen's said short-term rates could be raised "around six months" after the Fed's QE program is complete. As QE tapering is expected to end new asset purchases in April or May 2015, this indicates higher rates beginning late 2015, and traders began selling zero-yielding silver – typical with expectations of higher interest rates. "The metal is now sitting back in the range that traded from late November through mid-February, and is poised for further weakness," says technical analysis from ScotiaMocatta, a market-maker on the London silver bullion market. Scotia's analysis now target's "a test of the bottom at $18.83" per ounce. Also seeing silver prices in a trading range, "Silver took support at last December's lows of $18.90," agrees chart analysis from French investment bank and London bullion market-maker Societe Generale, saying that level "confirmed a double bottom pattern." Open interest on the Comex silver futures contract, which indicates the growth or decline of activity, was reported at 145,986 contracts at Friday's close, up some 2.8% from the previous week. The Commitment of Traders Report, based on positions as of Tuesday, still shows that speculative interest in the market is bullish. But non-industry players cut their long position by 2,292 contracts. Holdings of large silver investment bars at the iShares SLV, the largest silver exchange traded fund, showed little change week over week, ending Friday at 10,164.74 tonnes. For March so far, the US Mint meantime reported sales of 1-ounce Silver Eagle coins on pace for a 17% decline from the same month last year at 3,283,500. Looking at the ongoing Crimea crisis, "Our economist views the risk of more wide-reaching trade and financial sanctions to be quite limited for now," said Friday's Market Report by Edel Tully at Swiss investment and bullion bank UBS. "[This] is only likely to come into play if Russian armed forces spread their presence into Eastern Ukraine." |
| Coming Default In Gold To Create Disorderly Price Spike Posted: 23 Mar 2014 11:30 PM PDT from KingWorldNews:
Also, these dueling sanctions are doing nothing for the Middle Eastern policy, which is festering away. The lack of resolution in the Middle East and what that means for oil prices is a growing concern. With what is happening here geopolitically, the energy market will become a pawn. |
| Posted: 23 Mar 2014 11:06 PM PDT Current price movement in gold and silver suggests that traders as well as investors are on the sidelines. In case gold and silver fall this week too then every rise will be used to exit short term investments. The next three weeks are very crucial for gold and silver. Traders will now start taking positions for the next quarter as well as March US nonfarm payrolls. The fall in gold and silver is just quarter end profit taking which if it continues into next week will mark the beginning of a medium term bear phase. |
| The Collapse is around The Corner -- SHEEPLE Will be Slaughtered. Controlled by Propaganda Posted: 23 Mar 2014 10:45 PM PDT Propaganda has been used as a system used to control a mass quantity of people. They have been massively successful in using TV as a method of creating an army of drooling ZOMBIE'S. Is the Stock Market About to Go Totally '90s?Average time spent watching television (U.S.) 5:11 hoursCan TV lead to... [[ This is a content summary only. Visit http://www.GoldSilverNewsBlog.com or http://www.newsbooze.com or http://www.figanews.com for full links, other content, and more! ]]  |
| Ron Paul & Jim Rogers Discuss Truth about Global Economic Collapse & the Elite Agenda Posted: 23 Mar 2014 10:30 PM PDT from Agenda NWO: |
| Zero Hedge Is WRONG On This One. Posted: 23 Mar 2014 09:59 PM PDT from Investment Research Dynamics:
As everyone knows by now, China imported a record amount of gold in 2013. As everyone should also know by now, the reason China's appetite for gold – which put the total amount of gold "consumed" by the world far in excess of the amount of gold produced by all gold mines globally in 2013 – did not send the price of gold soaring was due to unprecedented intervention in the gold market by western Central Banks using the big bullion banks (JPM, HSBC, Scotia, Deutsche Bank primarily) as their agent in the market. |
| Zero Hedge is wrong about Chinese gold operations, Turk tells KWN Posted: 23 Mar 2014 07:54 PM PDT 10:53a HKT Monday, March 24, 2014 Dear Friend of GATA and Gold: Interviewed today by King World News, GoldMoney founder and GATA consultant James Turk today disputes Zero Hedge's assertion yesterday -- http://www.gata.org/node/13818 -- that Chinese interests acquired so much gold over the last year through commodity funding deals that involved shorting gold futures contracts. Rather, Turk says, Chinese interests are borrowing in national currencies against their gold to buy more gold, and the gold price was held down over the last year only through central bank dishoarding. Turk's interview is posted at the King World News blog here: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/3/23_Wh... CHRIS POWELL, Secretary/Treasurer 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. Join GATA here: Mines and Money Hong Kong http://www.minesandmoney.com/hongkong/ Porter Stansberry Natural Resources Conference Canadian Investor Conference 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: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: |
| This System IS Going To CRASH -- Claudio Grass Posted: 23 Mar 2014 07:06 PM PDT Claudio Grass, the managing director of Global Gold joins us for this 40 minute podcast. Claudio predicts, 'This system is going to crash. We don't know yet if it's next year, or five years... but the future is not bright. I believe that the next few years are going to be harsh and the middle... [[ 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! ]]  |
| Copper & Yuan Tumble As China Manufacturing PMI Drops To Lowest In 8 Months, Output Plunges Posted: 23 Mar 2014 07:02 PM PDT HSBC's Flash China Manufacturing PMI printed at 48.1 (against a hope-strewn 48.7 bounce expectation). This is the lowest in 8 months and among the lowest prints since Lehman. Even the usually silver-lining-seeing HSBC Chief economist had little positive to add, "weakness is broad-based with domestic demand softening further." Early strength in CNY, stocks, and copper is eroding fast.
Across the board ugly...
Copper was holding in early but is fading fast now...
The Yuan rallied out of the gate on a modestly higher fixing but is fading back fast post PMI...
And for everyone hoping that bad news is good news and stimulus is coming... *CHINA MUST FACE `MORAL HAZARD' ISSUE, VICE MINISTER SAYS: CNBC
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| Fukushima Water Decontamination Suspended Indefinitely Posted: 23 Mar 2014 07:00 PM PDT from Silver Doctors:
The failure in the system, known as the Advanced Liquid Processing System (ALPS), is the latest setback in Tokyo Electric Power Co.'s (TEPCO) uphill battle to stockpile radioactive water, which is ballooning at a rate of 400 tons per day. |
| James Rickards -- Dollar Going to Collapse 80% or 90% or More Posted: 23 Mar 2014 06:43 PM PDT James Rickards, author of the new book, "The Death of Money," foresees big inflation because the U.S. dollar's buying power will shrink. Rickards predicts, "Imagine gas at $20 a gallon and bread at $10. That's what we're talking about." So, if big inflation is coming, what about gold? ... [[ 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! ]]  |
| Posted: 23 Mar 2014 06:00 PM PDT Take the example of gold. Again, there is a significant increase in its value when it is transformed to the shiny yellow metal, from its original form in the gold mine. Such being the case, how much more necessary it is for the human being to be transformed? – 'My Dear Students', SSB Vol 2,... Read more » The post In The News Today appeared first on Jim Sinclair's Mineset. |
| GATA Chairman Murphy interviewed by The Daily Bell Posted: 23 Mar 2014 05:53 PM PDT 8:49a HKT Monday, March 24, 2014 Dear Friend of GATA and Gold: GATA Chairman Bill Murphy gives The Daily Bell a comprehensive interview about GATA's work, gold's prospects, and the continuing evidence of manipulation of the gold market by central banks and their bullion bank agents: http://www.thedailybell.com/exclusive-interviews/35139/Anthony-Wile-Bill... CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT How to profit with silver -- 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 http://www.minesandmoney.com/hongkong/ Porter Stansberry Natural Resources Conference Canadian Investor Conference 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: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT 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 |
| Posted: 23 Mar 2014 05:47 PM PDT Submitted by Wei Zongyou via The Diplomat, People around the world were astounded by Vladimir Putin’s rapid decision to annex Crimea in response to the latter’s referendum to secede from Ukraine and join Russia, which Kiev and the West view as illegal. The decision also drew worldwide criticism and vehement condemnation by the West and Ukraine, and triggered a second wave of economic sanctions from the United States, and soon afterwards Europe. Relations between Russia and the West are at their chilliest since the end of the Cold War. So why has Putin risked Russia’s economic welfare and political space to swallow Crimea, push Ukraine out, and alienate the entire Western world? Is Putin “in another world” as German Chancellor Angela Merkel claimed he is? In my opinion, there are at least two considerations behind Putin’s decision. The first is the realist, geo-political consideration. In Putin’s world, since the collapse of the former Soviet Union, Russia has lost nearly one fourth of its geography, one half of its population, and more than half of its GDP. Among the “lost” territories are those that are strategically important or militarily advanced, such as Ukraine and the Baltic states. With the eastward expansion of NATO, and the integration of former Soviet satellite states and republics in Eastern Europe and the Baltics into Europe, the traditional buffer zone between Russia and the West is increasingly squeezed and Russia’s space for strategic maneuvering becomes smaller with each year. When Russia craved for entry into the West, this might not have been particularly worrisome or embarrassing for Moscow. But since Russian leaders decided long ago that joining the West was neither particularly helpful to Russia’s political standing nor particularly attractive in terms of economic gains, it has begun to view the expansion of the West at its own strategic expense as both ill-intentioned and threatening. Ukraine holds a unique position in Russia’s geo-strategic consideration. First, it is crucial territory in the passage of Russia’s oil exports to Europe. Each year more than one third of the oil Russia ships to Europe travels via the Ukraine pipeline. Second, Crimea gives Russia’s Black Sea Fleet access to the Black Sea. If the pro-West Kiev government were to have decided to end its lease to the Russian naval base in Crimea, Russia would have lost its strategic gateway to the Black Sea and the Mediterranean Sea. Third, Ukraine is deemed the most crucial member of Russia’s Eurasia Union project, an economic and strategic plan to closely connect Russia, Belarus, Ukraine, and Central Asia. If all goes according to plan, this union will integrate these former Soviet republics and now independent countries economically, politically, and diplomatically with Russia, and go some way to restoring the glory of the Soviet empire at its peak. The “coup d’état” in Kiev and the political orientation of the new government put all these things in jeopardy, if Russia remains disinterested and passive. The second consideration is more psychological in nature. Following the end of Cold War, embracing the West was the first priority of Russian foreign policy. But to Moscow’s dismay, it found that the West still harbored strong reservations and considerable distrust. Years spent courting and wooing provided little of what Russia craved most: equal membership in the West and economic prosperity. Though Russia became part of the exclusive G8, it never enjoyed the full status and say of the other seven members, always remaining an “other.” Economically, the shock remedy proposed by the West and faithfully implemented by Boris Yeltsin didn’t bring the expected economic benefit. Instead, it took Russia’s economy into freefall, leaving the average Russian worse off than before. Russia’s look West ended in humiliation and disaster. It was Putin who saved Russia from its miserable condition. He readjusted both Russia’s domestic and foreign policies, and distanced the country from the West, instead seeking opportunities to resurrect past Soviet glories. As the Russian economy improved, the West found that its time was passing. The 2008 economic crisis hit the U.S. and Europe hard and they found themselves more reliant on the emerging powers, Russia included. It is Britain, France, and even Germany who are now busy appealing to Russian oil bacons to buy more and invest more. The balance of power between Russia and the West has shifted. The small war in Georgia in the summer of 2008 only strengthened this trend and the response from the West impressed Russia greatly: Europe is rotten and the U.S. has become too weak to lead. Then came the Arab Spring and the Syria crisis. In the former case, the U.S. “led from behind,” and in the latter it was Russia that decided the course of the Syria civil war. Russians, and especially Putin learned a hard lesson from the post-Cold War romance with the West: For all the talk of democracy and freedom, the fact remains that the strong dictate to the weak. With Europe rotten and United States weakened, a resurgent and confident Russia will definitely not let a geo-strategically important former Soviet republic fall entirely into the West’s camp. By annexing Crimea, Putin not only secured Russia’s naval base and its strategic gateway to the Black Sea, he also sent a powerful message to Ukraine and the West: Ignore Russia’s legitimate strategic concerns at your own peril. |
| Ing expects gold default and 'dramatic and disorderly' move up Posted: 23 Mar 2014 05:30 PM PDT 8:25a HKT Monday, March 24, 2014 Dear Friend of GATA and Gold: Canadian fund manager John Ing today tells King World News that geopolitical strains and continued strong demand from China will be supporting gold and that he thinks there will be something close to a default and a "dramatic and disorderly" move up in gold: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/3/23_Co... CHRIS POWELL, Secretary/Treasurer 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 http://www.minesandmoney.com/hongkong/ Porter Stansberry Natural Resources Conference Canadian Investor Conference 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: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT How to profit with silver -- Future Money Trends is offering a special 16-page silver report with profiles of nine companies and technical analysis of their stock performance. Six of the companies have market capitalizations of less than $800 million and one company has a market cap of only $30 million. The most exciting of these companies will begin production in a few weeks and has a market cap of just $150 million. Half of all proceeds from the sale of this report will be donated to the Gold Anti-Trust Action Committee to support its efforts exposing manipulation and fraud in the gold and silver markets. To learn about this report, please visit: http://www.futuremoneytrends.com/index.php?option=com_content&id=376&tmp... |
| The Keiser report – ‘Tapering won’t last’ – Egon von Greyerz Posted: 23 Mar 2014 05:17 PM PDT In this 12 minute interview Max Keiser challenges Egon on wealth preservation, the Gold/Oil/Gas ‘East’ versus the ‘Paper’ West and more.
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| Could The Markets Crash Again? Posted: 23 Mar 2014 05:10 PM PDT This is the trillion-dollar question. From a common sense perspective, the simple answer is “absolutely!”
Since 1998, the markets have been in serial bubbles and busts, each one bigger than the last. A long-term chart of the S&P 500 shows us just how obvious this is (and yet the Fed argues it cannot see bubbles in advance?).
Moreover, we’ve been moving up the food chain in terms of the assets involved in each respective bubble and bust.
The Tech bubble was a stock bubble.
The 2007 bust was a housing bubble.
This next bust will be the sovereign bond bubble.
Why does this matter?
Because of the dreaded “C word” COLLATERAL.
In 2008, the world got a taste of what happens when a major collateral shortage hits the derivatives market. In very simple terms, the mispricing of several trillion (if not more) dollars’ worth of illiquid securities suddenly became obvious to the financial system.
This induced a collateral shortfall in the Credit Default Swap market ($50-$60 trillion) as everyone went scrambling to raise capital or demanded new, higher quality collateral on trillions of trades that turned out to be garbage.
This is why US Treasuries posted such an enormous rally in the 2008 bust (US Treasuries are the highest grade collateral out there).
Please note that Treasuries actually spiked in OCTOBER-NOVEMBER 2008… well before stocks bottomed in March 2009.
The reason?
The scrambling for collateral, NOT the alleged “flight to safety trade” that CNBC proclaims.
WHAT DOES THIS HAVE TO DO WITH TODAY?
The senior most assets backstopping the $600 trillion derivatives market are SOVEREIGN BONDS: US Treasuries, Japanese Government Bonds, German Bunds.
By keeping interest rates near zero, and pumping over $10 trillion into the financial system since 2007, the world’s Central Banks have forced investors to misprice the most prized collateral backstopping the entire derivatives system: SOVEREIGN BONDS.
SO what happens when the current bond bubble bursts and we begin to see bonds falling and yields rising?
Another collateral scramble begins… this time with a significant portion of the interest rate derivative market (over 80% of the $600 TRILLION derivative market) blowing up.
At that point, rising yields is the last thing we need to worry about. The assets backstopping a $600 trillion market themselves will be falling in value… which means that the real crisis… the crisis to which 2008 was the warm up, will be upon us.
This is why Central Banks are so committed to keeping rates low. This is also why all Central Bank policy has largely benefitted the large financial institutions (the Too Big To Fails) at the expense of Main Street…
THE CENTRAL BANKS AREN’T TRYING TO GROW THE ECONOMY, THEY’RE TRYING TO PROP UP THE FINANCIAL INSTITUTIONS’ DERIVATIVE TRADES.
To return to our initial question (is this just a temporary top in stocks or THE top?), THE top is what we truly have to watch out for because it will indicated that:
1) The Grand Monetary experiment of the last five years is ending. 2) THE Crisis (the one to which 2008 was just a warm up) is beginning.
For a FREE Investment Report outlining how to prepare for another market crash, swing by: www.gainspainscapital.com
Best Regards
Phoenix Capital Research |
| Posted: 23 Mar 2014 04:22 PM PDT When Gods War By Cognitive Dissonance
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When I entered high school back in 1969 the small town I grew up in was just introducing a more flexible, dare I say liberal, curriculum to broaden my indoctrination experience. I vividly remember the excitement exhibited by the principal as he (there were no ‘she’ high school principals in Southern New England back then) addressed the incoming freshman class about the educational wonders “We the Guinea Pigs” were about to encounter. I for one was as excited as the principal, having grown exceedingly bored with the standard canned textbook fare that passed for a Middle School (then called Junior High) education. In fact it was so new that even though we had already selected our High School freshman classes several months earlier just before leaving for summer vacation, there were now a few gaps in the schedule we could fill with ‘electives’. I thought I had died and gone to heaven. “Electives? You mean I can pick my own poison?” Quickly I seized upon two courses that sounded interesting, “Greek Mythology” and “Totalitarianism and Appeasement”. The guidance counselor who was assisting the planning of my cognitive conditioning was aghast, quickly informing me that oil and water do not mix. Thankfully she (guidance counselors of that era were almost exclusively female, the maternal instinct considered oh so important to my guidance) could find no published rules disallowing my choices and I would not be swayed by her stern disapproval. I was in like Flynn. Looking back from the vantage point of four plus decades of acquired wisdom I can better appreciate her concern for my welfare. Was I insane? Learning about the Gods of ancient Greece in conjunction with global politics during the run up to the World War Two madness was most assuredly a potent cocktail for my tender brain cells and not to be treated lightly. Our formal grade school ‘education’ is carefully planned out by ‘experts’, with one conditioning step after another explicitly designed to properly train Pavlov’s Dogs. Clearly I was messing with the secret sauce. Similar to two classes of drugs that by themselves are ‘safe’, but when taken together are deadly, recognizing similarities between the ancient Greek War Gods and the Nuclear Gods of twentieth century Warring Earth was either going to be supremely enlightening or my cognitive subsystems would go critical and melt down. From the point of view of the masters of the universe it was the latter that befell me. As Mrs. Cog would say “I was ruint” and would never be a fit wage slave suitable for gainful exploitation….err….employment. Two hundred years ago I would have been cast out of school on my arse and sent off to the salt mines to toil away my days till death did I part, broken by hard labor, slave wages and the foreman’s whip. Thankfully this was 1969 in New England so my sentence was commuted to two more years as a Roman Catholic altar boy and seventeen million recitals of the “Act of Contrition”. Ah, those were the blessed days my friend. “Thank you Father, may I have another?” I suppose if I had taken both courses during the same semester my head would have exploded. Thankfully this was not the case, having elected to swim with the Gods during the first semester and then dive into the dictators during the second marking period. To this day I’m not sure exactly why I selected the Greek Gods first; though being pubescent I suspect the opportunity to gaze upon images of half naked statues of Goddesses for homework might have been a significant draw.
To be perfectly frank I didn’t quite understand what the term mythology meant since everything I had learned up to this point was taught as iron clad fact, no questions allowed. Early on in our indoctrination we are trained to question who, what, where, and when, but never ever why. One simply does not question the control system itself, only the cancerous symptoms of the control system. One of the advantages of being ‘me’ was a last name that fell near the end of the alphabet, which nearly always assured me a seat in the back of the class. Strategically located as I was during the first day of Mythology class, as soon as the textbooks were passed out I quickly scanned the pages for images, then dog-eared each nubile no-no for rapid retrieval at any time. I wasn’t too concerned about the disposition of my soul considering all the images were school board approved and I attended confession every Saturday and did God’s service on Sundays. Doing so assured me I was a lock, so why not dabble with the devil now and then as long as I confessed my transgressions to the proper authorities? By the end of the first week I was thoroughly traumatized by how utterly violent, homicidal actually, and quite human-like these Greek Gods of War seemed to be. The Catholic Church assured me ‘my’ War God was all cuddles and kittens (as long as I ignored the Old Testament) so to find ‘these’ Gods sleeping around without wearing a condom, smiting the poor humans just because of a bad hair day and falling down drunk at all times of the day was, in my opinion at least, conduct unbecoming of a True God. Even though I had not begun the “Totalitarianism and Appeasement” class, thus I had not gained that particularly unique perspective yet, the similarities between the angry spiteful Greek Gods and present day society’s duplicitous leaders were glaringly obvious and I was foolish enough to say so in my out loud voice. Since I was speaking truth to the blind I quickly became persona non grata, with even my fellow slave students turning on me. “Just shut up and stop asking questions” I was told, then beaten about the head by the school bully-for-hire as the blunt instrument designed to drive home the message. Half way through the second week the teacher stopped answering my questions altogether and simply ignored my raised hand, regardless of if it was just a request for a visit to the comfort station. Thank the Gods of War that I had superior bladder control. One must carefully consider the cultural time frame in order to appreciate the insanity I was pushing back against. A year or so removed from “The Tet Offensive” which coincided with peak United States involvement in the insanity called “The Vietnam War”, Walter Cronkite’s evening news was a grim blood and guts recital of bombs, booby traps and body counts, both ‘ours’ and ‘theirs’. I was curious, fascinated even, about the ‘fact’ that the number of enemy soldiers killed was always two to three times ours. Kind of made you proud in a sick sort of way that our War Gods were that much more effective at squashing the puny humans then their clearly inferior junior grade war gods (please note the small ‘g’). Odd how it was that only much later did we ‘discover’ there were huge numbers of women and children mixed into that bloody body count.
While it appeared our Gods of War wanted to ‘win’ the conflict, or at least they said they did, they certainly weren’t trying very hard. Little did I know this was the new blueprint for future God like productions such as Afghanistan and Iraq. I was old enough to comprehend the facts, but much too young to fully understand the madness. Cultural insanity is learned the hard way; by brute force repetition and total immersion rather than the light touch of reason and logic. My questions were reasonable enough by any standards…..at least for a nation that wasn’t already totally insane. “Why were the Gods Warring” I would ask mom, dad, teachers, anyone I perceived to be an authority. Terms such as collateral damage, fratricide, napalm, friendly fire, My Lai, mine fields, cluster bombs and fragging were bandied about on the TV, in the newspapers, even between family members and strangers in the same tone of voice one would use to discuss the weather, gardening or the locally beloved Red Sox. Same ole same old. The insanity was so normalized, so integrated into everyday living, that it was rendered innocuous, harmless even, or so it was thought. Sure, ‘our’ boys were dying over there, but it was the returning walking (or wheeled) wounded you actually had to watch out for. While the dead mortals were quickly shipped home in flag draped boxes and honorably buried (“Teacher, why don’t we honor the living so they won’t be shot dead?”) those damn wounded just wouldn’t go away. They were so public, so obvious, so in your face. It was one thing to read about ‘them’ in the papers, another thing entirely to meet them face to face. To this day I vividly remember overhearing a conversation between my father and the next door neighbor about another neighbor’s son. He had returned home after surviving his turn as cannon fodder for the Warring Gods missing ‘only’ his right arm and several fingers on his left hand. My father was irritated that this ‘wounded warrior’ was walking around the neighborhood scaring the kids half to death. Why didn’t he have the decency to remain inside during daylight hours? Out of sight, out of mind I guess. My head still spins when I think about how people would talk about ‘The War’ without ever discussing anything significant or relevant. Always who, what, when, where and never WHY. We are only as sick as our deepest darkest secrets, those inner Uglies we’d rather not discuss collectively or individually. Best to leave the boogieman under the bed where he belongs rather than drag him out for confrontation. We were all just cannon fodder for the War Gods, so why get all worked up over it? Patty Hearst and the SLA had not yet appeared on the scene to mirror our own inner madness, Stockholm Syndrome writ large in our hearts and minds. Embrace the insanity with a full body love hug or be consumed by our own cognitive dissonance. Besides….the Warring Gods would eventually tire from their labors and collapse into bed to sleep it off, leaving us chattel to get back to the business of living before another royal row sets up the next cattle slaughter.
Like a hot potato passed rapidly from hand to hand to avoid a nasty scorching, my Mythology instructor bestowed upon me near perfect grades, regardless of my actual classroom submissions, in order to avoid any possibility of an after school one on one for conduct unbecoming of a student peon. Mama didn’t raise no fool and she wasn’t going to put herself alone in the same room with me and my questions. Regardless of the quality of the homework handed in or the mark received when it was returned, the report card always showed I was at the top of the class. The teacher was not going to risk a parent teacher conference for a closer inspection of the offspring’s Genesis, let alone a return for a second semester. Of course this was shear brilliance on her part because I wasn’t going to complain about grade inflation. Besides, I wanted to believe that the higher grade was based upon my classroom participation. It seems my conditioning was working after all. I got the message and kept my head, and hand, down for the rest of the semester. The Greek Mythology class completed, my reputation preceded me when I walked into the “Totalitarianism and Appeasement” class to start the second semester (I loved referring to it as my “T&A class”, always with a dirty smirk on my face) and was greeted with a scowl from the teacher, quickly followed by “Oh, it’s you”. Even before the other students were seated I was escorted out to the hall and verbally dressed down, in essence read the riot act for crimes against the state of education. “I’ve heard you’re a trouble maker, and I’ll have none of that in my class,” I was informed, finger wagging two inches from my face. “You mind your P’s and Q’s and we’ll get along just fine.” I suppose that was not the time to ask my first question, but it wasn’t my fault that I didn’t know the definition of P’s and Q’s. “Don’t you be smart with me young man” was the explanation I received. Not a good start by any stretch of the imagination, and it was all downhill from there. While Greek Mythology could always be, and actually was, explained away as fantasy story telling by toga wearing Neanderthals if some rabble rousing child started asking difficult questions, T&A was an entirely different matter. This was modern history, the reciting of horrible events barely 20 years past, massaged and managed of course to agree with generally accepted lies. Worse, the present day (1970) Godly hostilities playing out in Southeast Asia were simply a continuation of “WW(restlemania) II, When Gods Play Rough” and no freshman teacher was going to stop the flood of questions that floated to the surface of the cesspool once the top was popped open.
With the benefit of hindsight it is now clear that what really irked me about that class was the tone of the instruction, which just reflected the arrogance expressed in the textbook and of the times. Look at what those silly War Gods did back in the 30’s and 40’s, how misguided they were while power wrestling among the mortals. Too bad several million were crushed under foot over such a silly misunderstanding. Our Gods of War, the new and improved Gods of 1970, would never be so foolish as to make the same mistake again. And the teacher said all this and more with a straight face. I was equally dumbstruck by the fact that the teacher appeared to believe what she was saying and that my fellow student slaves were lapping it up unquestioningly. I was not gifted with immense insight or great intelligence, but even at my tender young age I could recognize that the mighty War Gods had not learned the error of their ways and were in fact just playing the same old tune in a different key. Dear teacher assured me otherwise. “It’s different this time. We’re stopping the spread of God hating commies.” Well……that explained that, and I of all people should understand the importance of his Holiness’s crusade since I was an altar boy who wore the sacred black and white vestments and could regurgitate Latin adoration upon command. “Mea Culpa, mea culpa, mea maxima culpa.” Translation: “My bad bro.” We mere mortals are not properly wired to understand the wondrous ways of the War Gods, having been deeply conditioned into the slave mentality from birth. All we need to know, the one training we must embody in order to be properly assimilated and then exploited, is what’s good for the Gods of Mayhem is good for the slaves. Always remember, when the Gods feast on barbecued humanity and drink their blood wine we are blessed with God given Golden Showers. Don’t bother yourself with trying to understand the divine madness of the God Wars, the fallout which consumes your mind and destroys your body. Just busy yourself with counting the nano angels dancing on the head of that nail driven through the palm of your hand while you follow the slave into the valley of death. One hot potato, two hot potato, three hot potatoes more. Blinders or blindfolds anyone? I’ve got plenty more where they came from.
There seems to be a general consensus among those whom you and I may consider at least somewhat ‘awake’ and those whom we might consider still deeply asleep. Sooner or later war is inevitable because the Divine Gods of War deem bloodletting to be good….or at least vitally necessary. Who needs leaches to cure our ills when we have Divine intervention? I would hazard a guess that the vast majority of ‘We the Fragile Humans’, when encouraged to think for ourselves and to ponder the terrible destruction to our own life and limb, would agree that wars have no purpose or benefit to us personally. Then again, what good is a war machine if you ain’t gonna use it. The next time the War Gods of finance, government, politics, industry, military, health care and especially the Divine Gods of the mainstream media implore ‘us’ to fight their wars of Peace and Godliness, just say NO. These are not ‘your’ wars, these are the Wars of Gods fought by the fragile humans of Earth for the benefit and amusement of the self appointed and self proclaimed Divine and Omnipotent. Cast off the mind meme and reject the wizard’s war ‘spell’, the claims of imminent attack and close proximity to danger. They are all lies. The Money Meme is failing and the Ponzi is crumbling; the central banking War Gods are losing control of the ‘faith and belief’ support that is the glue that holds it all together. Public support for the Pontificating Politicians is at all time lows, and these mid level Mayhem Muckers are desperate to distract, divide and destroy in order to divert attention from themselves and their puppeteers. The war drums are booming and those among us susceptible to the blood lust beat are beginning to rouse. In other words, the table is set for that inevitable war everyone expects and feels powerless to stop. You and I are not responsible, nor should we be responsible, for the decisions others make unless and until we are responsible for our own. Do not defer to the herd, to assume it is hopeless simply because the herd is surging. Refuse to be passive, to go limp in the face of insanity and a perceived lost cause. Be personally sovereign and responsible to and for yourself. Do not under any circumstances surrender your power to the Gods of War. By not preserving and conserving our power exclusively for ourselves it is slowly bled from us as if we are mortally wounded, slowly bleeding out on the battle field. Worse, we don’t die, but rather remain in a severely weakened state, near comatose and tragically incoherent. I have been speak |
| Gold Price Performance After Golden Crosses In The Last 4 Decades Posted: 23 Mar 2014 03:14 PM PDT This article is based on the latest premium edition of the Sentimentrader report (click here for a free trial). Market sentiment towards gold and silver are analyzed and put into perspective. Gold’s daily chart is currently showing its 50 day moving average crossing over its 200 day moving average. In technical analysis, this situation is known as a “golden cross”, as it marks an uptrend.
Commonly, the golden cross confirms a new uptrend. One should expect a golden cross to be good news. While we are not saying the opposite, we only point out that not all similar cases in the past have turned out to be very profitable for gold. Readers know that our focus is to bring unbiased news and analysis. In that respect, the following research, based on facts and figures, should bring an unbiased view on the history of gold’s golden crosses. From Sentimentrader:
This is not to say that gold will inevitably move lower in the days and months ahead. We only point out that history has shown that a golden cross has mostly not resulted in significantly higher prices, except in some exceptional cases. On the other hand, the correction of the last two years has been rather exceptional, which is in favor of at least a technical recovery of gold. So the signals are mixed for the time being. It is critical to monitor the reaction of technical and sentiment indicators on ongoing price evolution in the weeks and months ahead. Readers can monitor market sentiment by subscribing to the Sentimentrader report (click here for a free trial). |
| Posted: 23 Mar 2014 01:32 PM PDT Ben Bernanke did just what was expected. But new Fed chair Janet Yellen...? EVERYONE expects Janet Yellen to be a rolling over, inflationist stooge just like they did Ben Bernanke, writes Gary Tanashian in his Notes from the Rabbit Hole. Bernanke came on board after Alan Greenspan had taken the Fed Funds rate up to around 5% if I remember correctly. Inflationists and gold bugs thought they had it in the bag when 'Helicopter Ben' assumed control. Indeed, Bernanke did what he was supposed to do (per the 'Helicopter 'Ben' script) as systemic stresses began to gather in 2007, addressing that pesky Funds rate, culminating in December, 2008′s official ZIRP (zero interest rate policy). Here again is the chart showing the S&P 500′s 'Hump #3′ attended by this most beneficial monetary policy.  As noted again and again, the much trumpeted 'taper' of QE is not only not a negative for the economy, we have made a strong case that its mechanics are actually a positive, in the near term at least. But putting ZIRP on the table would be a whole different ball of wax. We need to ask ourselves what kind of distortions the above chart represents, and what would be the implication of these distortions? The S&P 500 has, at the instigation of ZIRP formed a grand Hump #3 and yet this was done without the usual attendant rise in T Bill yields. In other words, the Fed has held ZIRP and continues to hold ZIRP, despite what Janet Yellen ruminated during her post-FOMC press conference: How long after QE tapering ends will the Fed wait to raise the Funds Rate?
Nothing has changed, other than a new Fed chief was asked a provocative question and she bumbled along with an answer. Sort of. The key questions are...
and...
The answer is for all the marbles where investment (that benefits from inflationary cost effects) or non-investment (cash) are concerned. Again, as part of the above linked post, we have noted that an incentive is built in for banks to lend if ZIRP is maintained on the short end and the Fed tapers out of the QE bond buying business on the long end. Banks have indeed been lending. An end to ZIRP out in 2015, per Yellen's answer above, starts a clock ticking on a constriction of this carry trade racket, theoretically at least. All she did after all was wrestle with the English language ("So I , you know, this is the kind of term it's hard to define") a little and give an answer (sort of). But the 2009 to 2014 portion of the chart above is a distortion, no matter how you slice it. Normally, the S&P 500 runs positively with elevated or rising T Bill yields as it seems to test the will of policy makers every step of the way. This is the oldest contrarian play in the book; everybody fears rising interest rates, bears think it's in the bag and yet the bull continues. But this time the seed corn has already been used. I would argue that ZIRP should have been withdrawn long ago, let alone the vague "hard to define" timeline put out by the Fed Chief yesterday. The fact that ZIRP was not ended back in oh, 2010 or 2011, when inflation began to get out of control, was telling. What have they been afraid of? They say they want more 'jobs', less unemployment and more vibrant economic activity. But you do not use something as powerful and potentially damaging as ZIRP for years on end unless there is something else going on. This post has outgrown its original scope and so it will be concluded now. The conclusion is that it does not matter what Janet Yellen babbled yesterday, the market is going to balance the sheet sooner or later. That balancing will either come through accelerating inflationary pressures already seeded into the system as the Fed is compelled to raise interest rates or it will come in the form of a deflationary clearing of distortions as inflated asset prices come back in line. The problem is, using the T Bill rate as a proxy, that line has been crawling along the floor for 5+ years now. Financial markets promise to be very interesting during Ms. Yellen's first year at the helm. Let's keep our preconceptions and biases under control and gauge what is actually happening every step of the way. |
| Posted: 23 Mar 2014 01:32 PM PDT Ben Bernanke did just what was expected. But new Fed chair Janet Yellen...? EVERYONE expects Janet Yellen to be a rolling over, inflationist stooge just like they did Ben Bernanke, writes Gary Tanashian in his Notes from the Rabbit Hole. Bernanke came on board after Alan Greenspan had taken the Fed Funds rate up to around 5% if I remember correctly. Inflationists and gold bugs thought they had it in the bag when 'Helicopter Ben' assumed control. Indeed, Bernanke did what he was supposed to do (per the 'Helicopter 'Ben' script) as systemic stresses began to gather in 2007, addressing that pesky Funds rate, culminating in December, 2008′s official ZIRP (zero interest rate policy). Here again is the chart showing the S&P 500′s 'Hump #3′ attended by this most beneficial monetary policy. As noted again and again, the much trumpeted 'taper' of QE is not only not a negative for the economy, we have made a strong case that its mechanics are actually a positive, in the near term at least. But putting ZIRP on the table would be a whole different ball of wax. We need to ask ourselves what kind of distortions the above chart represents, and what would be the implication of these distortions? The S&P 500 has, at the instigation of ZIRP formed a grand Hump #3 and yet this was done without the usual attendant rise in T Bill yields. In other words, the Fed has held ZIRP and continues to hold ZIRP, despite what Janet Yellen ruminated during her post-FOMC press conference: How long after QE tapering ends will the Fed wait to raise the Funds Rate?
Nothing has changed, other than a new Fed chief was asked a provocative question and she bumbled along with an answer. Sort of. The key questions are...
and...
The answer is for all the marbles where investment (that benefits from inflationary cost effects) or non-investment (cash) are concerned. Again, as part of the above linked post, we have noted that an incentive is built in for banks to lend if ZIRP is maintained on the short end and the Fed tapers out of the QE bond buying business on the long end. Banks have indeed been lending. An end to ZIRP out in 2015, per Yellen's answer above, starts a clock ticking on a constriction of this carry trade racket, theoretically at least. All she did after all was wrestle with the English language ("So I , you know, this is the kind of term it's hard to define") a little and give an answer (sort of). But the 2009 to 2014 portion of the chart above is a distortion, no matter how you slice it. Normally, the S&P 500 runs positively with elevated or rising T Bill yields as it seems to test the will of policy makers every step of the way. This is the oldest contrarian play in the book; everybody fears rising interest rates, bears think it's in the bag and yet the bull continues. But this time the seed corn has already been used. I would argue that ZIRP should have been withdrawn long ago, let alone the vague "hard to define" timeline put out by the Fed Chief yesterday. The fact that ZIRP was not ended back in oh, 2010 or 2011, when inflation began to get out of control, was telling. What have they been afraid of? They say they want more 'jobs', less unemployment and more vibrant economic activity. But you do not use something as powerful and potentially damaging as ZIRP for years on end unless there is something else going on. This post has outgrown its original scope and so it will be concluded now. The conclusion is that it does not matter what Janet Yellen babbled yesterday, the market is going to balance the sheet sooner or later. That balancing will either come through accelerating inflationary pressures already seeded into the system as the Fed is compelled to raise interest rates or it will come in the form of a deflationary clearing of distortions as inflated asset prices come back in line. The problem is, using the T Bill rate as a proxy, that line has been crawling along the floor for 5+ years now. Financial markets promise to be very interesting during Ms. Yellen's first year at the helm. Let's keep our preconceptions and biases under control and gauge what is actually happening every step of the way. |
| Gold Price is Likely to Keep Rallying Posted: 23 Mar 2014 01:29 PM PDT Steve McDonald writes: If you have followed me for any amount of time, you know I am all over anything that has to do with food: seed, fertilizers, chemicals, processors. You name it, I like it. The newest name in this absolutely essential worldwide business is FMC Corp. (NYSE: FMC). They are about to split their company into two segments. The new company will be made up of their fast growing agricultural side. The remaining business will be the more cyclical lithium and soda ash operations. |
| Posted: 23 Mar 2014 01:27 PM PDT Russia's currency is a key player in the Ukraine crisis... So THIS is Cold War "lite" – the Battle over the Russian Rouble, writes Gary Dorsch, editor of the Global Money Trends newsletter. The confrontation over Ukraine has the potential for spiraling out of control and could lead to "serious problems in the heart of Europe," warned former Secretary of State James Baker on March 9.
Baker said he hopes a diplomatic solution can be reached because he thinks there's no good endgame for the Russian Federation. In truth, the Kremlin's tactical triumph in annexing Crimea without a shot being fired in anger has so stunnedthe West that the degree to which the West was outsmarted and out maneuvered has yet to sink in. Russia's de-facto annexation of the Black Sea peninsula does not threaten to plunge Europe towards a new Cold War. But it has caught German Chancellor Angela Merkel and US President Barack Obama flat footed, and they're struggling to come up with a response to Moscow's land grab. German Chancellor Merkel told an extraordinary EU summit in Brussels on March 9, "One can't just go on like nothing has happened." All the Western political actors stepped up the empty rhetoric to a fever pitch last week, in a desperate attempt to persuade Russian kingpin Vladimir Putin out of formally annexing Crimea. Yet it was Merkel who issued the most bellicose threats, warning Moscow on March 13 that it risked "massive" political and economic damage" if it refused to change course on Ukraine, saying Western leaders were united in their readiness to impose sanctions on Russia if necessary.
However, four days later, on March 17, Russian kingpin Vladimir Putin called Merkel's bluff. He signed a decree recognizing Crimea as an independent state following its majority vote of 97% to secede from Ukraine and to join Russia in a referendum. Defying Western protests, Putin signed a treaty on March 18, making Crimea part of Russia again.
Putin showed no sign of backing down despite the threat of Western sanctions...
Making clear the Kremlin's determination to stop the US-led Nato military alliance from expanding further into Ukraine, Putin then declared to the Federal Assembly on March 18th:
In Moscow's view, Ukraine's role is to serve as a buffer state. The prospect ofa new government in Kiev joining the European Union or even Nato is seen as a major threat, as would be the loss of the Russian Navy's warm-water port on the Black Sea.  While Putin was lashing out against the West in a major speech before the Russian parliament on March 18th, with old Cold War fury, currency traders were busy covering short positions in the Russian Rouble. The sudden stability of the Rouble was also seized upon by bargain hunters, and short sellers, as a reason to buy beaten down Russian bonds and stocks. The Euro slipped 2% from an all-time high of 51-Roubles to slightly below 50 Roubles. Similarly, the US Dollar slipped about 2% from a five year high at 36.75 Roubles to as low as 35.95 Roubles. In turn, the Rouble's relief rally helped to knock Russia's 10-year Treasury bond yield 27 basis points lower to 9.29% on March 20th, from a five-year high of 9.57%. Still, Russian bond yields are considerably higher than the 7.70% level that prevailed on Dec 24th. Going forward, traders expect the Russian Rouble's exchange rate versus a basket of the Euro and US$, to be the key driver influencing the direction of Russian bond yields. Behind the relief rally for the Russian markets were clear messages sent across the newswires that the West had grudgingly accepted the loss of Crimea, and that both sides had agreed to a cease-fire. On March 18th Putin sought to reassure leaders in Berlin, Paris, and London, that Moscow did not seek any further division of Ukraine.
The next day, on March 19th, US President Obama also ruled out the use of military force in the Ukraine crisis, and that the international response to Russia's seizure of Crimea will be limited to diplomacy.
In Moscow, bankers were greatly relieved that the situation hadn't deteriorated so far that Europe and the US Treasury would detonate the "nuclear option" of freezing Euros and US Dollars held in Russian accounts overseas and forcing foreign banks out of bi-lateral trade. Instead, the EU took very mild steps of imposing travel bans and asset freezes on 21 Russian officials, while the US froze the assets of just seven ranking Kremlin officials. But the West is reluctant to take sanctions to the next level, because it could spiral into a destructive trade war that could topple Europe's wobbly economy into a "triple dip" recession. Cross-border trade between Europe and Russia was $460 billion last year, with Russo-German trade accounting for almost a quarter of the total dealings. Germany is dangerously reliant on Russian supply for 40% of its natural gas and crude oil needs. In turn, 300,000 German workers build vast quantities of precision machinery, chemicals and cars that are sold to Russia. This mutual economic dependency means Berlin has taken a more cautious approach toward levying sanctions on Moscow. In the wake of the West's initial response, which was viewed as nothing more than a light slap on the wrist directed at a specific few individuals, global stock markets rebounded sharply from the previous week's losses. Gold prices tumbled as much as $50 per ounce. The US$-denominated Russian Trading System Index (RTS) which had slid deep into bear market territory, enjoyed a "Dead Cat" bounce from its March 14 low, rebounding as much as 12% from its worst levels. Traders do not believe that the annexation of Crimea is enough to provoke tougher Western sanctions that would damage the Russian economy, and both sides have already agreed to a "Cold Peace" in the region. Russia is the EU's third-biggest customer. Western car-makers, retailers and household product companies have piled into Russia, eager to tap into Europe's second biggest retail market and Russia's highly educated and relatively cheap workforce. The likes of VW, Ford, GM, Renault and German engineering giant Liebherr, Boeing, Procter & Gamble, Pepsi, Unilever, Intel, John Deere, and British Petroleum, Chevron, General Electric, Caterpillar, Mars, Cargill, and Kraft Foods have invested ten of billions in production facilities in Russia and these companies are opposed to any attempt to impose biting economic sanctions on Russia. If the West decides to cross the line and impose really tough sanctions that actually bite, such as asset freezes on Russian kingpin Putin himself, or Russian companies and Oligarchs, Russia's foreign ministry promised "a broad range of retaliatory measures that won't go unnoticed in Washington. They will hit the US like a boomerang," Moscow warned on March 20th. That could cause even more volatility on both the Russian and European bourses. The German DAX-30 index was most affected among European stock markets, because of its leading trade position with Russia – briefly tumbling to as low as 8,900 on March 14th, for a correction 10% off its recent high. According to the Bank for International Settlements, the Russians had $160bn stashed away in foreign banks as of September 2013. On March 20th Mr Putin told company bosses on Thursday to bring their assets home and clean up their businesses to help Russia survive Western sanctions over Crimea and an economic downturn.
Most importantly, Russian banks and corporations – most of them majority owned or controlled by the Kremlin, collectively owe a staggering $700bn of debt to foreign lenders. Energy giants Rosneft and Gazprom owe $90bn combined to foreign entities; the four state banks Sberbank, VTB, VEB, and Rosselkhozbank owe $60bn. Some of this debt matures this year and next year.European banks and insurance companies are up to their eyeballs in this potentially toxic Russian debt. When it comes due, it will have to be rolled over, and some of the companies will need to borrow more, simply to stay afloat. Alas, the current sanction regime of visa bans for the elite, asset freezes, and trade restrictions could make that difficult. Then there's the threat, now more broadly but still unofficially bandied about, that Russian companies should simply default on this $730bn in debt in retaliation for the sanctions. Sergei Glazyev, an economic adviser to Russian President Vladimir Putin, said on March 18th:
As such, on March 13th, former Fed chief Alan Greenspan told CNBC in a "Squawk Box" interview that the West's best options of blocking the Kremlin from further aggression, is to "affect their financial system significantly that it creates deterioration within Russia... " Diplomacy is really far less important than the stock movements within Russia. In past confrontations there really wasn't much of a stock market in Moscow.
The Russian Rouble has tumbled 20% against the US Dollar and has lost 27% of its value against the Euro compared with a year ago. A weaker Rouble increases the costs of imports for Russian consumers, and in turn, fans a faster rate of inflation. The Russian consumer price index (CPI) is 6.2% higher compared with a year ago. The CPI might be even higher, except for the dampening influence of a weakening Russian economy that is barely growing at a tepid +0.7% annualized rate in January. However, a faster rate of inflation, and higher borrowing costs for Russian companies, caused by a weaker Rouble, can sink the Russian economy into a recession later this year. And that's the secret G-7 game plan – working to weaken the Russian Rouble, in order to topple the Russian economy into a severe recession, and ultimately force the Kremlin to roll back its takeover of Crimea. Moscow's ability to defend it currency in the foreign exchange market, depends partly on the size of it foreign currency reserves. In an effort to preserve its FX-stash, on January 13th the Russian central bank said it would cease "targeted" interventions on the currency market as part of a strategic shift towards letting the Roublefloat completely freely. Bank Rossi was depleting its FX reserves, in order to counter net capital outflows that had reached $62.7bn in 2013, $54.6bn in 2012, and $84bn in 2011. The Russian central bank estimates that around $50bn per year, or 2.5% of Russia's economic output, is earned illegally in a vast underground economy, and is whisked out of the country. The dirty money enriches a smallbusiness and criminal elite at the expense of the broadercitizenry, and it flourishes because the Kremlin is unwilling to do much about cracking down on corruption, making property rights more enforceable, or making courts believable through judicial reform.Of the total illegal outflow, the central bank figures 30% is linked to trade, with 70% made up of dubious, capital transfers, through a vast state money-laundering scheme. Big state enterprises in particular are involved in shiftinglarge sums of cash abroad, and Russia's Oligarchs use offshore centers to safeguard businesses. Alexei Kudrin, chief economist of the Russian president's Economic Council, said on March 13th that capital flight from Russia mightaccelerate to $50bn per quarter in 2014, if harsher sanctions are imposed onthe country over the Ukrainian crisis.
Still, capital flight, uncertainty and the higher interest rates needed to support the ruble will take their toll on Russia. Like the Soviet Union in the 1980s, Russia cannot afford a cold war. It said that Russia is in effect ejecting itself from the BRICS. Yet in a strange way, Moscow figures that Western sanctions on foreign bank accounts might act to discourage the vast amount of dirty money flows out of the country. Since the Russian military invaded Crimea on March 3rd, the Russian central bank has been forced to abandon its "flexible" approach to managing its currency, and instead, was forced to burn through a sizeable chunk of its massive FX stash, selling $22bn to defend the Rouble. Bank Rossi has also jacked-up its 1-week repo rate by 150-basis points to 7%, to tighten liquidity, saying the decision was aimed at preventing "risks to inflation and financial stability associated with the recently increased level of volatility in the financial markets." The yield on Russia's 3-month bank deposit rates has shot up even higher to 9.32% today, compared with around 7.25% at the start of the year. Moscow's ability to win the battle over the Russian Rouble, depends to a large extent on its ability to continue to rack-up trade surpluses, that can replenish its stock of foreign currency reserves. Russia earns a net $16bn per month, on average through foreign trade. Russia's trade surpluses are largely fuels by exports of industrial commodities, such as aluminum, diamonds, crude oil, natural gas, palladium, nickel, platinum, and timber. Russia is the world's largest producer of palladium, used in the auto industry for making catalytic converters for gasoline-powered vehicles. Russia also controls 15% of the world's platinum supply and is a big supplier of titanium, a vital metal used by the aerospace industry. From less than 50% in the mid-1990s, the share of commodities in Russian exports has grown to 70% today, with oil accounting for more than half of export income.Equaling 20% of the country's GDP and half of its economic growth since 2000, hydrocarbons provide half of the Kremlin's budget revenues. Alexei Kudrin, former finance minister, estimated the Kremlin's break-even price at $117 per barrel last year. The legacy of the Russian petro-gas state is the centrality of oil and natural gas revenues, which amounted to $215billion last year. The difficulty with enacting effective sanctions against Russia lies in Western Europe, where many nations now depend on cheap Russian naturalgas to fuel their economies. Germany leads the group, purchasing 40% of its natural gas from Russia. Czechoslovakia, Finland and Ukraine, receive 100% of their natural gas from Russia. Poland receives 82% of its energy from Moscow. Thus, Putin has been credited with strengthening Russia's economic leverage. Though Russia still has economic challenges, Europe's dependence on Russian gas supplies gives Putin a trump card that did not exist during the post-Soviet chaos of the 1990's. Recently Russia's gas champion Gazprom upped the stakes by threatening Ukraine with a repeat of the 2009 crisis over $2billion of unpaid debts. "Russia's bet on using the gas weapon is working," said daily business newspaper Vedomosti. Despite sharp criticism of Russia's takeover of Crimea, there clearly is little appetite in Europe or the US for either a military confrontation with Moscow or meaningful economic sanctions.The risk for Russia on the currency markets is cushioned by the Kremlin's huge war chest of forex reserves -- which stood at $492bn on March 14th. The economic pain imposed on both sides by Iranian-style sanctions would be extreme. Unlike Europe, however, Russia's tolerance for economic pain is almost limitless, as has been repeatedly demonstrated throughout history. In any contest over pain thresholds, Russia would win hands down. Disruption of natural gas supply could be even more tRoublesome, given that Russia is the world's largest exporter, supplying more than a third of Western Europe's gas. So Moscow has a knife pointed at Europe's economic throat. It seems clear that no one either in Europe or in the White House has the will to take effective measures against the Russians. The media handwringing over whether Putin is "crazy" obscures the fact that Putin is a very smart power player on the world stage. Contrary to Mr Greenspan's theory that a severe loss in the value of the Russian stock market would stifle Moscow's aggression, it's probable that the Kremlin's main focus is centered on the gyrations in the prices of commodities. Still, in order to subdue the Russian bear, Western leaders might continue to aim their gunfire at the Russian Rouble exchange rate. On the currency front, the European Central Bank (ECB) chief Mario Draghi surprised traders on March 7th when he offered a spirited defense of the wisdom of doing nothing. That was after he and his fellow policy makers had whipped up expectations for some type of intervention that would increase the supply of Euros in the banking system, in order to insure that the Euro-zone does not fall into the same deflationary rut as Japan. An ECB source had predicted on March 3rd, there would be unanimous agreement to end so-called sterilization of the bond purchases that would inject about €175bn ($242bn) of excess liquidity into the Euro zone financial system. Strangely, the ECB opted to forgo a widely expected easing of its monetary policy. Perhaps, the ECB's tougher than expected stance is related to the political wishes of the EU's ruling class, which desires to |
| Posted: 23 Mar 2014 01:27 PM PDT Russia's currency is a key player in the Ukraine crisis... So THIS is Cold War "lite" – the Battle over the Russian Rouble, writes Gary Dorsch, editor of the Global Money Trends newsletter. The confrontation over Ukraine has the potential for spiraling out of control and could lead to "serious problems in the heart of Europe," warned former Secretary of State James Baker on March 9.
Baker said he hopes a diplomatic solution can be reached because he thinks there's no good endgame for the Russian Federation. In truth, the Kremlin's tactical triumph in annexing Crimea without a shot being fired in anger has so stunnedthe West that the degree to which the West was outsmarted and out maneuvered has yet to sink in. Russia's de-facto annexation of the Black Sea peninsula does not threaten to plunge Europe towards a new Cold War. But it has caught German Chancellor Angela Merkel and US President Barack Obama flat footed, and they're struggling to come up with a response to Moscow's land grab. German Chancellor Merkel told an extraordinary EU summit in Brussels on March 9, "One can't just go on like nothing has happened." All the Western political actors stepped up the empty rhetoric to a fever pitch last week, in a desperate attempt to persuade Russian kingpin Vladimir Putin out of formally annexing Crimea. Yet it was Merkel who issued the most bellicose threats, warning Moscow on March 13 that it risked "massive" political and economic damage" if it refused to change course on Ukraine, saying Western leaders were united in their readiness to impose sanctions on Russia if necessary.
However, four days later, on March 17, Russian kingpin Vladimir Putin called Merkel's bluff. He signed a decree recognizing Crimea as an independent state following its majority vote of 97% to secede from Ukraine and to join Russia in a referendum. Defying Western protests, Putin signed a treaty on March 18, making Crimea part of Russia again.
Putin showed no sign of backing down despite the threat of Western sanctions...
Making clear the Kremlin's determination to stop the US-led Nato military alliance from expanding further into Ukraine, Putin then declared to the Federal Assembly on March 18th:
In Moscow's view, Ukraine's role is to serve as a buffer state. The prospect ofa new government in Kiev joining the European Union or even Nato is seen as a major threat, as would be the loss of the Russian Navy's warm-water port on the Black Sea. While Putin was lashing out against the West in a major speech before the Russian parliament on March 18th, with old Cold War fury, currency traders were busy covering short positions in the Russian Rouble. The sudden stability of the Rouble was also seized upon by bargain hunters, and short sellers, as a reason to buy beaten down Russian bonds and stocks. The Euro slipped 2% from an all-time high of 51-Roubles to slightly below 50 Roubles. Similarly, the US Dollar slipped about 2% from a five year high at 36.75 Roubles to as low as 35.95 Roubles. In turn, the Rouble's relief rally helped to knock Russia's 10-year Treasury bond yield 27 basis points lower to 9.29% on March 20th, from a five-year high of 9.57%. Still, Russian bond yields are considerably higher than the 7.70% level that prevailed on Dec 24th. Going forward, traders expect the Russian Rouble's exchange rate versus a basket of the Euro and US$, to be the key driver influencing the direction of Russian bond yields. Behind the relief rally for the Russian markets were clear messages sent across the newswires that the West had grudgingly accepted the loss of Crimea, and that both sides had agreed to a cease-fire. On March 18th Putin sought to reassure leaders in Berlin, Paris, and London, that Moscow did not seek any further division of Ukraine.
The next day, on March 19th, US President Obama also ruled out the use of military force in the Ukraine crisis, and that the international response to Russia's seizure of Crimea will be limited to diplomacy.
In Moscow, bankers were greatly relieved that the situation hadn't deteriorated so far that Europe and the US Treasury would detonate the "nuclear option" of freezing Euros and US Dollars held in Russian accounts overseas and forcing foreign banks out of bi-lateral trade. Instead, the EU took very mild steps of imposing travel bans and asset freezes on 21 Russian officials, while the US froze the assets of just seven ranking Kremlin officials. But the West is reluctant to take sanctions to the next level, because it could spiral into a destructive trade war that could topple Europe's wobbly economy into a "triple dip" recession. Cross-border trade between Europe and Russia was $460 billion last year, with Russo-German trade accounting for almost a quarter of the total dealings. Germany is dangerously reliant on Russian supply for 40% of its natural gas and crude oil needs. In turn, 300,000 German workers build vast quantities of precision machinery, chemicals and cars that are sold to Russia. This mutual economic dependency means Berlin has taken a more cautious approach toward levying sanctions on Moscow. In the wake of the West's initial response, which was viewed as nothing more than a light slap on the wrist directed at a specific few individuals, global stock markets rebounded sharply from the previous week's losses. Gold prices tumbled as much as $50 per ounce. The US$-denominated Russian Trading System Index (RTS) which had slid deep into bear market territory, enjoyed a "Dead Cat" bounce from its March 14 low, rebounding as much as 12% from its worst levels. Traders do not believe that the annexation of Crimea is enough to provoke tougher Western sanctions that would damage the Russian economy, and both sides have already agreed to a "Cold Peace" in the region. Russia is the EU's third-biggest customer. Western car-makers, retailers and household product companies have piled into Russia, eager to tap into Europe's second biggest retail market and Russia's highly educated and relatively cheap workforce. The likes of VW, Ford, GM, Renault and German engineering giant Liebherr, Boeing, Procter & Gamble, Pepsi, Unilever, Intel, John Deere, and British Petroleum, Chevron, General Electric, Caterpillar, Mars, Cargill, and Kraft Foods have invested ten of billions in production facilities in Russia and these companies are opposed to any attempt to impose biting economic sanctions on Russia. If the West decides to cross the line and impose really tough sanctions that actually bite, such as asset freezes on Russian kingpin Putin himself, or Russian companies and Oligarchs, Russia's foreign ministry promised "a broad range of retaliatory measures that won't go unnoticed in Washington. They will hit the US like a boomerang," Moscow warned on March 20th. That could cause even more volatility on both the Russian and European bourses. The German DAX-30 index was most affected among European stock markets, because of its leading trade position with Russia – briefly tumbling to as low as 8,900 on March 14th, for a correction 10% off its recent high. According to the Bank for International Settlements, the Russians had $160bn stashed away in foreign banks as of September 2013. On March 20th Mr Putin told company bosses on Thursday to bring their assets home and clean up their businesses to help Russia survive Western sanctions over Crimea and an economic downturn.
Most importantly, Russian banks and corporations – most of them majority owned or controlled by the Kremlin, collectively owe a staggering $700bn of debt to foreign lenders. Energy giants Rosneft and Gazprom owe $90bn combined to foreign entities; the four state banks Sberbank, VTB, VEB, and Rosselkhozbank owe $60bn. Some of this debt matures this year and next year.European banks and insurance companies are up to their eyeballs in this potentially toxic Russian debt. When it comes due, it will have to be rolled over, and some of the companies will need to borrow more, simply to stay afloat. Alas, the current sanction regime of visa bans for the elite, asset freezes, and trade restrictions could make that difficult. Then there's the threat, now more broadly but still unofficially bandied about, that Russian companies should simply default on this $730bn in debt in retaliation for the sanctions. Sergei Glazyev, an economic adviser to Russian President Vladimir Putin, said on March 18th:
As such, on March 13th, former Fed chief Alan Greenspan told CNBC in a "Squawk Box" interview that the West's best options of blocking the Kremlin from further aggression, is to "affect their financial system significantly that it creates deterioration within Russia... " Diplomacy is really far less important than the stock movements within Russia. In past confrontations there really wasn't much of a stock market in Moscow.
The Russian Rouble has tumbled 20% against the US Dollar and has lost 27% of its value against the Euro compared with a year ago. A weaker Rouble increases the costs of imports for Russian consumers, and in turn, fans a faster rate of inflation. The Russian consumer price index (CPI) is 6.2% higher compared with a year ago. The CPI might be even higher, except for the dampening influence of a weakening Russian economy that is barely growing at a tepid +0.7% annualized rate in January. However, a faster rate of inflation, and higher borrowing costs for Russian companies, caused by a weaker Rouble, can sink the Russian economy into a recession later this year. And that's the secret G-7 game plan – working to weaken the Russian Rouble, in order to topple the Russian economy into a severe recession, and ultimately force the Kremlin to roll back its takeover of Crimea. Moscow's ability to defend it currency in the foreign exchange market, depends partly on the size of it foreign currency reserves. In an effort to preserve its FX-stash, on January 13th the Russian central bank said it would cease "targeted" interventions on the currency market as part of a strategic shift towards letting the Roublefloat completely freely. Bank Rossi was depleting its FX reserves, in order to counter net capital outflows that had reached $62.7bn in 2013, $54.6bn in 2012, and $84bn in 2011. The Russian central bank estimates that around $50bn per year, or 2.5% of Russia's economic output, is earned illegally in a vast underground economy, and is whisked out of the country. The dirty money enriches a smallbusiness and criminal elite at the expense of the broadercitizenry, and it flourishes because the Kremlin is unwilling to do much about cracking down on corruption, making property rights more enforceable, or making courts believable through judicial reform.Of the total illegal outflow, the central bank figures 30% is linked to trade, with 70% made up of dubious, capital transfers, through a vast state money-laundering scheme. Big state enterprises in particular are involved in shiftinglarge sums of cash abroad, and Russia's Oligarchs use offshore centers to safeguard businesses. Alexei Kudrin, chief economist of the Russian president's Economic Council, said on March 13th that capital flight from Russia mightaccelerate to $50bn per quarter in 2014, if harsher sanctions are imposed onthe country over the Ukrainian crisis.
Still, capital flight, uncertainty and the higher interest rates needed to support the ruble will take their toll on Russia. Like the Soviet Union in the 1980s, Russia cannot afford a cold war. It said that Russia is in effect ejecting itself from the BRICS. Yet in a strange way, Moscow figures that Western sanctions on foreign bank accounts might act to discourage the vast amount of dirty money flows out of the country. Since the Russian military invaded Crimea on March 3rd, the Russian central bank has been forced to abandon its "flexible" approach to managing its currency, and instead, was forced to burn through a sizeable chunk of its massive FX stash, selling $22bn to defend the Rouble. Bank Rossi has also jacked-up its 1-week repo rate by 150-basis points to 7%, to tighten liquidity, saying the decision was aimed at preventing "risks to inflation and financial stability associated with the recently increased level of volatility in the financial markets." The yield on Russia's 3-month bank deposit rates has shot up even higher to 9.32% today, compared with around 7.25% at the start of the year. Moscow's ability to win the battle over the Russian Rouble, depends to a large extent on its ability to continue to rack-up trade surpluses, that can replenish its stock of foreign currency reserves. Russia earns a net $16bn per month, on average through foreign trade. Russia's trade surpluses are largely fuels by exports of industrial commodities, such as aluminum, diamonds, crude oil, natural gas, palladium, nickel, platinum, and timber. Russia is the world's largest producer of palladium, used in the auto industry for making catalytic converters for gasoline-powered vehicles. Russia also controls 15% of the world's platinum supply and is a big supplier of titanium, a vital metal used by the aerospace industry. From less than 50% in the mid-1990s, the share of commodities in Russian exports has grown to 70% today, with oil accounting for more than half of export income.Equaling 20% of the country's GDP and half of its economic growth since 2000, hydrocarbons provide half of the Kremlin's budget revenues. Alexei Kudrin, former finance minister, estimated the Kremlin's break-even price at $117 per barrel last year. The legacy of the Russian petro-gas state is the centrality of oil and natural gas revenues, which amounted to $215billion last year. The difficulty with enacting effective sanctions against Russia lies in Western Europe, where many nations now depend on cheap Russian naturalgas to fuel their economies. Germany leads the group, purchasing 40% of its natural gas from Russia. Czechoslovakia, Finland and Ukraine, receive 100% of their natural gas from Russia. Poland receives 82% of its energy from Moscow. Thus, Putin has been credited with strengthening Russia's economic leverage. Though Russia still has economic challenges, Europe's dependence on Russian gas supplies gives Putin a trump card that did not exist during the post-Soviet chaos of the 1990's. Recently Russia's gas champion Gazprom upped the stakes by threatening Ukraine with a repeat of the 2009 crisis over $2billion of unpaid debts. "Russia's bet on using the gas weapon is working," said daily business newspaper Vedomosti. Despite sharp criticism of Russia's takeover of Crimea, there clearly is little appetite in Europe or the US for either a military confrontation with Moscow or meaningful economic sanctions.The risk for Russia on the currency markets is cushioned by the Kremlin's huge war chest of forex reserves -- which stood at $492bn on March 14th. The economic pain imposed on both sides by Iranian-style sanctions would be extreme. Unlike Europe, however, Russia's tolerance for economic pain is almost limitless, as has been repeatedly demonstrated throughout history. In any contest over pain thresholds, Russia would win hands down. Disruption of natural gas supply could be even more tRoublesome, given that Russia is the world's largest exporter, supplying more than a third of Western Europe's gas. So Moscow has a knife pointed at Europe's economic throat. It seems clear that no one either in Europe or in the White House has the will to take effective measures against the Russians. The media handwringing over whether Putin is "crazy" obscures the fact that Putin is a very smart power player on the world stage. Contrary to Mr Greenspan's theory that a severe loss in the value of the Russian stock market would stifle Moscow's aggression, it's probable that the Kremlin's main focus is centered on the gyrations in the prices of commodities. Still, in order to subdue the Russian bear, Western leaders might continue to aim their gunfire at the Russian Rouble exchange rate. On the currency front, the European Central Bank (ECB) chief Mario Draghi surprised traders on March 7th when he offered a spirited defense of the wisdom of doing nothing. That was after he and his fellow policy makers had whipped up expectations for some type of intervention that would increase the supply of Euros in the banking system, in order to insure that the Euro-zone does not fall into the same deflationary rut as Japan. An ECB source had predicted on March 3rd, there would be unanimous agreement to end so-called sterilization of the bond purchases that would inject about €175bn ($242bn) of excess liquidity into the Euro zone financial system. Strangely, the ECB opted to forgo a widely expected easing of its monetary policy. Perhaps, the ECB's tougher than expected stance is related to the political wishes of the EU's ruling class, which desires to |
| What China Is Doing In The Gold Market Will Shock The World Posted: 23 Mar 2014 12:53 PM PDT  With concerns developing about China's activity in the gold market, today James Turk told King World News that investors should not worry about misinformation being passed around about China's activities in gold. Turk wanted to set the record straight so that investors are not left wondering about the real motives of the Chinese.This posting includes an audio/video/photo media file: Download Now |
| The Gold Standard Guys Are Their Own Worst Enemies Posted: 23 Mar 2014 11:05 AM PDT New World Economics |
| Coming Default In Gold To Create Disorderly Price Spike Posted: 23 Mar 2014 10:56 AM PDT  Today Canadian legend John Ing spoke with King World News about a coming supply crunch in the gold market. Ing, who has been in the business for 43 years, also believes this will lead to a default that will create a "dramatic and disorderly move up in gold." Below is what Ing had to say.This posting includes an audio/video/photo media file: Download Now |
| Why China is the Gold Manipulation Culprit! -- Koos Jansen Posted: 23 Mar 2014 10:30 AM PDT Asian gold demand expert Koos Jansen joins the show this week to discuss why: 1. In the End, Everyone Will Rush to Gold! 2. Gold Will Rise to At Least $1600 in 2014 on Chinese demand Gold to replace US dollar as global reserve currency 3. Cartel smashes metals on FOMC taper, but gold completes... [[ 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! ]]  |
| Gene Arensberg's Got Gold Report: Hedge funds getting longer in gold Posted: 23 Mar 2014 08:19 AM PDT 11:15p HKT Sunday, March 23, 2014 Dear Friend of GATA and Gold: Gene Arensberg of the Got Gold Report writes tonight that "managed money" -- hedge funds and the like -- were getting longer in gold early last week: http://www.gotgoldreport.com/2014/03/managed-money-traders-reduce-comex-... CHRIS POWELL, Secretary/Treasurer 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. Join GATA here: Mines and Money Hong Kong http://www.minesandmoney.com/hongkong/ Porter Stansberry Natural Resources Conference Canadian Investor Conference 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: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: |
| The Keiser report – Tapering won’t last Posted: 23 Mar 2014 04:11 AM PDT RT, March 22, 2014 – ‘Tapering won’t last’ – Egon von GreyerzIn this 12 minute interview Max Keiser challenges Egon on wealth preservation, the Gold/Oil/Gas ‘East’ versus the ‘Paper’ West and more.
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| Zero Hedge: How China imported all that gold without exploding the price Posted: 23 Mar 2014 01:32 AM PDT GATA |
Right now I am focused on the ongoing financial implications of the Russian annexation of Crimea. We have dueling sanctions, and frankly that is ineffectual. But the market is still not grasping the financial implications. What worries me is that Ukraine owes something like $73 billion of debt and has $12 billion of debt coming due this year. Neither Russia or the West is really holding up their hands and saying, 'We'll take care of it.'
The stench of a well-trodden cow pasture is emanating from the Zerohedge article which tries to blame the decline in the price of gold during 2013 on China's use of a complicated commodities financing structure. Long time readers know that I always give ZH credit for digging up a lot of information and news items that we might otherwise miss. It is invaluable in that respect. However, Zerohedge has historically missed the boat with respect to knowledge and understanding of the precious metals market.
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