Gold World News Flash

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• Webbot 07-Mar-2014 : Dollar Hyperinflation & Death of Federal Reserve
• Jeffrey Lewis: The mainstream grapples with the last manipulated asset class
• Market Report: Gold challenges $1350
• RETAIL CRE: 225 Staple Store Closures – The Forecast Tsunami Now on the Horizon
• Five years of daylight robbery
• Chinese Exports Collapse Leading To 2nd Largest Trade Deficit On Record
• Gold industry must rebuild credibility and refine focus
• Guest Post: Obama And Putin Are Trapped In A Macho Game Of "Chicken"
• The Gold Price Lost 1 Percent or $13.60 Today in a Steep Drop to $1,338.10
• The Gold Price Lost 1 Percent or $13.60 Today in a Steep Drop to $1,338.10
• Meet The Mysterious Firm That Is About To Leave Blythe Masters Without A Job
• China Is Crashing … As Predicted
• South Africa notices gold fix controversy; GATA consultant Speck cited
• Gold Daily and Silver Weekly Charts - This Must Have Been a Non-Farm Payrolls Friday
• Gold Daily and Silver Weekly Charts - This Must Have Been a Non-Farm Payrolls Friday
• On a Manhunt for Newly Created Currency
• “Bitcoin is Gold 2.0″
• BITCOIN CRASH : HACKS, Suicides, and Ponzi Schemes. Is it Really Safe?
• The U.S. Government Is One Big Lie
• The U.S. Government Is One Big Lie
• The London Gold Fix, Manipulation & the Quantum
• The London Gold Fix, Manipulation & the Quantum
• The London Gold Fix, Manipulation & the Quantum
• Gold ETF Stocks Inflows Return
• Gold and Silver and the Paradox of Over-Optimization
• Gold Prices Drop Weekly Gain as US Jobs Data "Defy Cold Weather", Moscow Rebukes EU Over Ukraine, Shanghai Premium Ends Negative
• Surprise! A Profitable, Low-Risk Gold Company
• Koos Jansen: China's road to secret gold accumulation
• Paulson, the Ultimate Financial Meltdown Insider Is Worried… About Another One
• Friday Morning Links
• Alasdair Macleod: Elevating markets: A signal of reviving bank lending?
• Gold Price Challenges $1350
• Stock Market Top - 2014 The Year of Gold, Silver and Commodities
• Gold and Silver Stocks Interesting Developments in the Charts
• 10 Ways to Screw Up Your Retirement

Webbot 07-Mar-2014 : Dollar Hyperinflation & Death of Federal Reserve Posted: 07 Mar 2014 10:51 PM PST 07-Mar-2014 Clif High Wujo, Silver Gold, Bitcoin, US Dollar Hyperinflation, Death of Federal Reserve Title: 07-Mar-2014 Clif High Wujo, Silver Gold, Bitcoin, US Dollar Hyperinflation, Death of Federal Reserve Recording Date (start): 07-Mar-2014, 02:16 PM Pacific Coast of North America... [[ 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! ]]

Jeffrey Lewis: The mainstream grapples with the last manipulated asset class Posted: 07 Mar 2014 09:25 PM PST 12:20a ET Saturday, March 8, 2014 Dear Friend of GATA and Gold: A well-trained financial journalist would require no more than 15 minutes to grasp the facts of manipulation of the monetary metals markets, Silver Coin Investor proprietor Jeffrey Lewis writes, marveling at the off-kilter reports about such manipulation that have begun creeping into mainstream financial publications. The documentation, such as that collected by GATA, is, Lewis notes, overwhelming. His commentary is headlined "The Mainstream Grapples with the Last Manipulated Asset Class" and it's posted at Silver Coin Investor here: http://www.silver-coin-investor.com/The-Mainstream-Grapples-with-the-Las... CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. ADVERTISEMENT Jim Sinclair plans seminars in Los Angeles and San Diego Gold advocate Jim Sinclair's next market analysis seminars will be held in Los Angeles from 11 a.m. to 2 p.m. on Saturday, March 8, and in San Diego from 2 to 6 p.m. the following day, Sunday, March 9. Details, including registration information, are posted at Sinclair's Internet site, JSMinset.com, here: http://www.jsmineset.com/qa-session-tickets/ Join GATA here: Mines and Money Hong Kong Hong Kong Convention and Exhibition Centre Monday-Friday, March 24-28, 2014 Hong Kong Special Administrative Region, China http://www.minesandmoney.com/hongkong/ Canadian Investor Conference 2014 Vancouver Convention Centre West 1055 Canada Place, Vancouver, British Columbia Sunday and Monday, June 1 and 2, 2014 http://cambridgehouse.com/event/25/canadian-investor-conference-2014-inc... * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: http://gata.org/tshirts Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16 ADVERTISEMENT Safe and Private Allocated Bullion Storage In Singapore Given the increasing risks in financial markets, it is more important than ever to own physical bullion coins and bars and to store them in the safest vaults in the world in the safest jurisdictions in the world. Gold advocates Jim Sinclair and Marc Faber have recommended Singapore. Now, with GoldCore, you can own coins and bars in fully insured, segregated, and allocated accounts in Singapore with the ability to take delivery. Learn more by downloading GoldCore's Essential Guide To Storing Gold In Singapore: http://info.goldcore.com/essential-guide-to-storing-gold-in-singapore And for more information call Daniel or Sharon at +44 203 0869200 in the United Kingdom or at +1 302 635 1160 in the United States. Or email them at info@goldcore.com.

Market Report: Gold challenges $1350 Posted: 07 Mar 2014 09:00 PM PST by Alasdair Macleod, Gold Money: From last Friday’s close at $1322, gold opened strongly on Monday trading, as high as $1355 before losing two thirds of the rise on Tuesday. On Thursday afternoon (GMT) gold rallied back to challenge the $1350 level. This morning (Friday) it is in the balance as to whether or not gold will need more consolidation before moving on towards $1400, with everyone watching out for US employment numbers. The change in sentiment over the last eight weeks has encouraged small traders to go long on gold. Normally, market-makers would be able to mark prices down aggressively to shake out these short-term speculators, but it has not recently happened. This suggests that the underlying market is robust. Read More @ GoldMoney.com

RETAIL CRE: 225 Staple Store Closures – The Forecast Tsunami Now on the Horizon Posted: 07 Mar 2014 08:00 PM PST by Gordon T Long, Gold Seek: STRATEGIC INVESTMENT ANALYSIS – Macro Answers Staples, the largest US office supplies retailer just announced: It will miss analyst revenue expectations and has slashed earnings projections, It is losing customers to mass market chains and e-retailers, Same-store sales in North America, excluding sales through Staples.com, fell 7 percent as Staples sold fewer business machines, technology accessories, office supplies and computers. Revenue at the company’s international division fell 13 percent, hurt by weakness in Europe and Australia. Read More @ GoldSeek.com

Five years of daylight robbery Posted: 07 Mar 2014 07:40 PM PST by Jan Skoyles, TheRealAsset.co.uk 'Why do you invest in gold, when it doesn't pay interest?' This is one of the most frequently asked questions when it comes to gold investment discussions. Gold may not pay interest but neither, it seems do the banks. Today the Bank of England's MPC met for their monthly bank-rate setting meeting. This was the 60th meeting since they first set rates at the record low of 0.5%, five years ago. Savers' campaign group Save Our Savers estimates that since the first rate cut to 0.5% on the 5th March 2009, savers have lost 'a staggering £326 billion.' Read More @ TheRealAsset.co.uk

Chinese Exports Collapse Leading To 2nd Largest Trade Deficit On Record Posted: 07 Mar 2014 07:20 PM PST Plenty of excuses out there for this evening's collosal miss in Chinese exports (-18.1% YoY vs an expectation of a 7.5% rise) mainly based on timing issues over the Lunar New Year (but didn't the 45 economists who forecast this data know the dates before they forecast?) This is a 6-sigma miss and plunges China's trade balance to its biggest miss on record and 2nd largest deficit on record. Combining Jan and Feb data (i.e. smoothing over the holiday), exports are still down 1.6% YoY - not good for the much-heralded global recovery. Exports to the rest of the BRICs were all down over 20% but no there is no contagion from an emerging market crisis.   Even when the trade deficit was last this large, economists were more accurate - this is the biggest miss on record...   Seasonally-adjusted the data is stunningly bad... *CHINA FEB. SEASONALLY ADJUSTED EXPORTS FALL 34% MOM *CHINA FEB. SEASONALLY ADJUSTED IMPORTS FALL 0.4% MOM and non-seaonally-adjusted *CHINA'S FEB. EXPORTS FALL 18.1% FROM YEAR EARLIER (vs +7.5% expectations) The excuse... "The Spring Festival factor caused sharp fluctuations in the monthly growth rate as well as the monthly deficit," Customs said in a statement accompanying the data.   Chinese traders followed their "business habit" of bringing forward exports ahead of the holiday, and focusing on imports immediately afterwards, it added. But, our simple question is - didn't they already know this when applying their forecasts? If so - then why a 6-standard-deviation miss? At least they didn't blame the weather?!! It seems the massive imports of copper - to act as collateral for all the shadow banking loans - also did not help as imports surged... *CHINA JAN.-FEB. COPPER, PRODUCT IMPORTS 915,000 TONS   All that apparent demand and yet the price is collapsing - not good for the credit unwind And what does it say about the US that our trade balance with China collapsed MoM...

Gold industry must rebuild credibility and refine focus Posted: 07 Mar 2014 07:00 PM PST by Dorothy Kosich, MineWeb.com Recently at PDAC, mining analyst John Tumazos of John Tumazos Very Independent Research noted he received "an earful from in-my-face managers offended that I did not appreciate the wonderful mines or development projects they had conceived." What incurred the managers' wrath was a February 28th letter Tumazos sent to the CEOs of gold mining companies, Barrick, Newmont, Goldcorp, AngloGold Ashanti, Agnico-Eagle and Kinross, urging them "to renounce construction of complex large mines, whether in this hemisphere or remote locations." Read More @ MineWeb.com

Guest Post: Obama And Putin Are Trapped In A Macho Game Of "Chicken" Posted: 07 Mar 2014 05:25 PM PST Submitted by Michael Snyder of The Economic Collapse blog, The U.S. government and the Russian government have both been forced into positions where neither one of them can afford to back down.  If Barack Obama backs down, he will be greatly criticized for being "weak" and for having been beaten by Vladimir Putin once again.  If Putin backs down, he will be greatly criticized for being "weak" and for abandoning the Russians that live in Crimea.  In essence, Obama and Putin find themselves trapped in a macho game of "chicken" and critics on both sides stand ready to pounce on the one who backs down.  But this is not just an innocent game of "chicken" from a fifties movie.  This is the real deal, and if nobody backs down the entire world will pay the price. Leaving aside who is to blame for a moment, it is really frightening to think that we may be approaching the tensest moment in U.S.-Russian relations since the Cuban missile crisis. There has been much talk about Obama's "red lines", but the truth is that Crimea (and in particular the naval base at Sevastopol) is a "red line" for Russia. There is nothing that Obama could ever do that could force the Russians out of Sevastopol.  They will never, ever willingly give up that naval base. So what in the world does Obama expect to accomplish by imposing sanctions on Russia?  By treaty, Russia is allowed to have 25,000 troops in Crimea and Russia has not sent troops into the rest of Ukraine. Economic sanctions are not going to cause Putin to back down.  Instead, they will just cause the Russians to retaliate. In a letter that he sent to Congress this week, Obama claimed that the Ukrainian crisis is an "unusual and extraordinary threat to the national security and foreign policy of the United States." Language like that is going to make it even more difficult for Obama to back down. On Thursday, Obama announced "visa restrictions" on "those Russians and Ukrainians responsible for the Russian move into Ukraine's Crimean Peninsula", and a House panel passed a "symbolic resolution" that condemned Russia for its "occupation" of Crimea. But those moves are fairly meaningless.  Leaders from both political parties are now pushing for very strong economic sanctions against Russia, and there does not appear to be many members of Congress that intend to stand in the way. If the U.S. does hit Russia with harsh economic sanctions, what is going to happen? Is Russia going to back down? No way. So let's just play out the coming moves like a game of chess for a moment... -The U.S. slaps economic sanctions on Russia. -Russia seizes the assets of U.S. companies that are doing business in Russia. -The U.S. seizes Russian assets. -The Russians refuse to pay their debts to U.S. banks. -The U.S. government hits Russia with even stronger sanctions. -Russia starts dumping U.S. debt and encourages other nations to start doing the same. -The U.S. gets Europe to also hit Russia with economic sanctions. -Russia cuts off the natural gas to Europe.  As I noted the other day, Russia supplies more than half the natural gas to a bunch of countries in Europe. -The United States moves troops into western Ukraine. -Russia starts selling oil for gold or for Russian rubles and encourages other nations to start abandoning the U.S. dollar in international trade. Of course the order of many of these moves could ultimately turn out to be different, but I think that you can see the nightmare that this game of "chicken" could turn out to be. And what would be the final result? Nothing would be resolved, but the global economy would greatly suffer. What makes all of this even more complicated is that about 60 percent of the people living in Crimea are actually ethnic Russians, and a majority of the population appears to want to leave Ukraine and be reunited with Russia.  The following comes from a Reuters article... Crimea's parliament voted to join Russia on Thursday and its Moscow-backed government set a referendum on the decision in 10 days' time in a dramatic escalation of the crisis over the Ukrainian Black Sea peninsula.   The sudden acceleration of moves to bring Crimea, which has an ethnic Russian majority and has effectively been seized by Russian forces, formally under Moscow's rule came as European Union leaders held an emergency summit groping for ways to pressure Russia to back down and accept mediation. The Obama administration is calling the upcoming referendum "illegal" and says that it will not respect the will of the Crimean people no matter how the vote turns out. But the people of Crimea are very serious about this, and of course they never would be pushing for reunification with Russia if they had not gotten approval from Putin... The decision, which diplomats said could not have been made without Putin's approval, raised the stakes in the most serious east-west confrontation since the end of the Cold War.   The vice premier of Crimea, home to Russia's Black Sea Fleet in Sevastopol, said a referendum on the status would take place on March 16. All state property would be "nationalized", the Russian ruble adopted and Ukrainian troops treated as occupiers and forced to surrender or leave, he said. There is no way that the U.S. government is going to accept Crimea becoming part of Russia, and there is no way in the world that Russia is going to back down at this point.  Just consider what geopolitical expert Ian Bremmer of the Eurasia Group recently had to say... "Russia is not going to back down from Crimea, irrespective of U.S. pressure. Which means if the U.S. wants to find any resolution here, they’re going to have to find a way to come to terms with that. Now that the Crimean parliament has voted — clearly with Russian assent — we’ll have a referendum … and then further militarization of the peninsula by the Russians." What we need is someone with extraordinary diplomatic skills to defuse this situation before it spirals out of control. Unfortunately, we have Barack Obama, Valerie Jarrett and John Kerry running things. What a mess. So why is Ukraine such a big deal anyway? In a recent article, Peter Farmer explained succinctly why Ukraine is so incredibly important... The Ukraine is strategically-important for a number of reasons. It sits astride enormous petroleum and natural gas deposits found in the Black Sea region. The nation is also home to an extensive network of liquid natural gas pipelines which crisscross it; control the Ukraine and you control its pipelines - and thus the flow of energy into the hugely-lucrative European market. Western energy firms such as Exxon-Mobil, BP-Amoco and Chevron are locked in competition with the Russian energy giant Gazprom - for control/exploitation of as-yet-undeveloped petroleum deposits not only in the Ukraine, but in neighboring Poland and Romania. Fracking technologies and other new extraction methods have only added urgency to the competition. Income from fossil fuels development is the lifeblood of the new Russian economy. Threats to the regional hegemony of Gazprom are likely to be treated by Putin and Russia with the utmost urgency and seriousness.   The Crimean Peninsula is also home to the Black Sea fleet of the Russian navy, which leases its base at Sevastopol from the Ukrainian government. Since the Black Sea - via the Dardanelles - provides the only warm-water base with access to the Mediterranean Sea - it is of enormous importance to Russia. Its loss would be a crippling blow to the Russian fleet.   Finally, the Ukraine - once known as the "bread basket of Europe" - is home to arguably the finest temperate agricultural region in the world. Its topsoil is widely-acknowledged by agronomists to be among the world's best. Control the Ukraine and you control the grainery of Europe - and can exert tremendous leverage upon worldwide grain agricultural commodities prices. If the U.S. insists on playing a game of brinksmanship over Ukraine, the consequences could be disastrous. For one thing, as I mentioned above, the status of the petrodollar could be greatly threatened.  The following is how Jim Willie is analyzing the situation... If the Kremlin demands Gold bullion (or even Russian Rubles) for oil payments, then the interventions to subvert the Ruble currency by the London and Wall Street houses will backfire and blow up in the bankster faces. Expect any surplus Rubles would be converted quickly to Gold bullion. If the Chinese demand that they are permitted to pay for oil shipments in Yuan currency, then the entire Petro-Dollar platform will be subjected to sledge hammers and wrecking balls. The new Petro-Yuan defacto standard will have been launched from the Shanghai outpost. If the Saudis curry favor to the Russians and Chinese by accepting non-USDollar payments for oil shipments, then the Petro-Dollar is dead and buried. In addition, if Russia starts dumping U.S. debt and gets other nations (such as China) to start doing the same, that could create a nightmare scenario for the U.S. financial system very rapidly. So let us hope and pray that cooler heads prevail.... But if the United States and Russia do declare "economic war" on each other, all hell could start breaking loose. Unfortunately, there does not appear to be much hope of anyone backing down at this point.  In an editorial for the Washington Post, Henry Kissinger stated that it "is incompatible with the rules of the existing world order for Russia to annex Crimea." Very interesting word choice. So this is the situation we are facing... -The U.S. government seems absolutely determined to "punish" Russia until it leaves Crimea. -Russia is never going to leave Crimea, and has promised to "respond" harshly to any sanctions. Most Americans are not paying much attention to what is going on in Ukraine, but this is a very, very big deal. In the end, it could potentially affect the lives of virtually every man, woman and child on the planet.

The Gold Price Lost 1 Percent or $13.60 Today in a Steep Drop to $1,338.10 Posted: 07 Mar 2014 04:56 PM PST Gold Price Close Today : 1,338.10 Gold Price Close 27-Feb-14 : 1,331.60 Change : 6.50 or 0.5% Silver Price Close Today : 20.897 Silver Price Close 27-Feb-14 : 21.314 Change : -0.417 or -2.0% Gold Silver Ratio Today : 64.033 Gold Silver Ratio 27-Feb-14 : 62.475 Change : 1.558 or 2.5% Silver Gold Ratio : 0.01562 Silver Gold Ratio 27-Feb-14 : 0.01601 Change : -0.00039 or -2.4% Dow in Gold Dollars : $ 254.17 Dow in Gold Dollars 27-Feb-14 : $ 252.62 Change : 1.55 or 0.6% Dow in Gold Ounces : 12.296 Dow in Gold Ounces 27-Feb-14 : 12.220 Change : 0.08 or 0.6% Dow in Silver Ounces : 787.32 Dow in Silver Ounces 27-Feb-14 : 763.47 Change : 23.85 or 3.1% Dow Industrial : 16,452.72 Dow Industrial 27-Feb-14 : 16,272.65 Change : 180.07 or 1.1% S&P 500 : 1,878.04 S&P 500 27-Feb-14 : 1,854.29 Change : 23.75 or 1.3% US Dollar Index : 79.730 US Dollar Index 27-Feb-14 : 80.320 Change : -0.59 or -0.7% Platinum Price Close Today : 1,483.00 Platinum Price Close 27-Feb-14 : 1,452.15 Change : 30.85 or 2.1% Palladium Price Close Today : 781.60 Palladium Price Close 27-Feb-14 : 742.25 Change : 39.35 or 5.3% The GOLD PRICE lost 1% or $13.60 today in a steep drop to $1,338.10 while silver tumbled 3% (64.5 cents) to 2089.7c. Owch! Below 2100c. Right now it appears that the GOLD PRICE is entering a correction that will fall to the bottom of the trading channel, right now about $1,320 and rising, or even to the 200 DMA at $1,303.14. Conceivable is a drop to the neckline of the upside down head and shoulders it broke down in February, now about $1,280. I find gold corrections almost as much fun as rubbing down my feet with broken glass and salt, but we've got to live through them. I expect this one to be minor, and to offer an opportunity to buy a bushel at a sale price. On the monthly chart the gold price has three months' running rise. On the weekly chart the gold price just this week closed ABOVE the downtrend line from the August 2011 high. That's a milestone. The SILVER PRICE today at last dropped below its 200 DMA (2100c) to the upper border of the trading range that contained it form November's end through February's middle. First target for a reversal is 2036c, the 50 day moving average. Get your money can down off the shelf and get ready. Very soon silver and gold prices will offer you a buying opportunity. Watch closely. I was expecting that last week put a little cap on silver and gold for a while, and another week makes that look accurate, even though gold gained this week. Stocks continue to rise, probing how much air hot government money can blow into a balloon. Unrest in southern Africa and Russia, home to most of the world's platinum and palladium, pushed up the white metals. Their piper often plays a different tune than gold and silver's. US dollar index set itself up for a trip to 79. S&P500 made another new high this week, but the Dow laggeth still. Oddly, most indices (Nasdaq, Nasdaq 100, Russell 2000) dropped but the Dow rose 30.83 (0.2%) today to 16,452.72. S&P500 climbed 1.01 (0.05%) to end up at 1,878.04. Is the Dow making up its mind to play catch-up? If so, stocks can go higher into May. Dow in Gold rose 0.97% to 12.28 oz (G$253.85 gold dollars), and punched a little hole in the downtrend line and the 20 DMA (12.24). This whisper and today's gold drop tends to confirm my suspicion that the DiG is ripe for a rally to correct briefly its long fall from December. Dow in silver rose 3% to 787.40 oz, but unlike DiG remains below its downtrend line. Right now that coincides with the 50 DMA (795.56 oz). Both the DiS and DiG will move higher for a while. US Dollar Index rose an embarrassing five basis points (0.06%) today, just enough to avoid classification with the Zimbabwean dollar. It's a bad week indeed when a Russian invasion of Ukraine can't raise the dollar index. Dollar Index has formed a falling wedge. Wedges usually resolve with a breakout in the opposite direction they point, so that suggests the dollar should soon begin some rally, but perhaps not before visiting 79. The euro settled questions about its short term future by rising 0.15% to $1.3882. Well, really I am anticipating because the Euro closed smack on its old upper trend line, but I think a two day close above the last high ($1.3847) will probably carry it higher. Technically it could run to $1.4000 or $1.4200, but 'tis hard to picture how the eurocrats could stand that much downward pressure on their exports. Maybe the Fed is strong-arming them? The yen, on the other hand, has tanked this week, and today lost another 0.14% to 96.84, below its 50 DMA (96.97). Wait to buy your Japanese dinner china, as it will be cheaper next week. Y'all enjoy your weekend! Argentum et aurum comparenda sunt -- -- Gold and silver must be bought. - Franklin Sanders, The Moneychanger The-MoneyChanger.com © 2014, The Moneychanger. May not be republished in any form, including electronically, without our express permission. To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $3,130.00; silver's primary is up targeting 16:1 gold/silver ratio or $195.66; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold or 18 ounces of silver. or 18 ounces of silver. US $ and US$-denominated assets, primary trend down; real estate bubble has burst, primary trend down. WARNING AND DISCLAIMER. Be advised and warned: Do NOT use these commentaries to trade futures contracts. I don't intend them for that or write them with that short term trading outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures. NOR do I recommend investing in gold or silver Exchange Trade Funds (ETFs). Those are NOT physical metal and I fear one day one or another may go up in smoke. Unless you can breathe smoke, stay away. Call me paranoid, but the surviving rabbit is wary of traps. NOR do I recommend trading futures options or other leveraged paper gold and silver products. These are not for the inexperienced. NOR do I recommend buying gold and silver on margin or with debt. What DO I recommend? Physical gold and silver coins and bars in your own hands. One final warning: NEVER insert a 747 Jumbo Jet up your nose.

The Gold Price Lost 1 Percent or $13.60 Today in a Steep Drop to $1,338.10 Posted: 07 Mar 2014 04:56 PM PST Gold Price Close Today : 1,338.10 Gold Price Close 27-Feb-14 : 1,331.60 Change : 6.50 or 0.5% Silver Price Close Today : 20.897 Silver Price Close 27-Feb-14 : 21.314 Change : -0.417 or -2.0% Gold Silver Ratio Today : 64.033 Gold Silver Ratio 27-Feb-14 : 62.475 Change : 1.558 or 2.5% Silver Gold Ratio : 0.01562 Silver Gold Ratio 27-Feb-14 : 0.01601 Change : -0.00039 or -2.4% Dow in Gold Dollars : $ 254.17 Dow in Gold Dollars 27-Feb-14 : $ 252.62 Change : 1.55 or 0.6% Dow in Gold Ounces : 12.296 Dow in Gold Ounces 27-Feb-14 : 12.220 Change : 0.08 or 0.6% Dow in Silver Ounces : 787.32 Dow in Silver Ounces 27-Feb-14 : 763.47 Change : 23.85 or 3.1% Dow Industrial : 16,452.72 Dow Industrial 27-Feb-14 : 16,272.65 Change : 180.07 or 1.1% S&P 500 : 1,878.04 S&P 500 27-Feb-14 : 1,854.29 Change : 23.75 or 1.3% US Dollar Index : 79.730 US Dollar Index 27-Feb-14 : 80.320 Change : -0.59 or -0.7% Platinum Price Close Today : 1,483.00 Platinum Price Close 27-Feb-14 : 1,452.15 Change : 30.85 or 2.1% Palladium Price Close Today : 781.60 Palladium Price Close 27-Feb-14 : 742.25 Change : 39.35 or 5.3% The GOLD PRICE lost 1% or $13.60 today in a steep drop to $1,338.10 while silver tumbled 3% (64.5 cents) to 2089.7c. Owch! Below 2100c. Right now it appears that the GOLD PRICE is entering a correction that will fall to the bottom of the trading channel, right now about $1,320 and rising, or even to the 200 DMA at $1,303.14. Conceivable is a drop to the neckline of the upside down head and shoulders it broke down in February, now about $1,280. I find gold corrections almost as much fun as rubbing down my feet with broken glass and salt, but we've got to live through them. I expect this one to be minor, and to offer an opportunity to buy a bushel at a sale price. On the monthly chart the gold price has three months' running rise. On the weekly chart the gold price just this week closed ABOVE the downtrend line from the August 2011 high. That's a milestone. The SILVER PRICE today at last dropped below its 200 DMA (2100c) to the upper border of the trading range that contained it form November's end through February's middle. First target for a reversal is 2036c, the 50 day moving average. Get your money can down off the shelf and get ready. Very soon silver and gold prices will offer you a buying opportunity. Watch closely. I was expecting that last week put a little cap on silver and gold for a while, and another week makes that look accurate, even though gold gained this week. Stocks continue to rise, probing how much air hot government money can blow into a balloon. Unrest in southern Africa and Russia, home to most of the world's platinum and palladium, pushed up the white metals. Their piper often plays a different tune than gold and silver's. US dollar index set itself up for a trip to 79. S&P500 made another new high this week, but the Dow laggeth still. Oddly, most indices (Nasdaq, Nasdaq 100, Russell 2000) dropped but the Dow rose 30.83 (0.2%) today to 16,452.72. S&P500 climbed 1.01 (0.05%) to end up at 1,878.04. Is the Dow making up its mind to play catch-up? If so, stocks can go higher into May. Dow in Gold rose 0.97% to 12.28 oz (G$253.85 gold dollars), and punched a little hole in the downtrend line and the 20 DMA (12.24). This whisper and today's gold drop tends to confirm my suspicion that the DiG is ripe for a rally to correct briefly its long fall from December. Dow in silver rose 3% to 787.40 oz, but unlike DiG remains below its downtrend line. Right now that coincides with the 50 DMA (795.56 oz). Both the DiS and DiG will move higher for a while. US Dollar Index rose an embarrassing five basis points (0.06%) today, just enough to avoid classification with the Zimbabwean dollar. It's a bad week indeed when a Russian invasion of Ukraine can't raise the dollar index. Dollar Index has formed a falling wedge. Wedges usually resolve with a breakout in the opposite direction they point, so that suggests the dollar should soon begin some rally, but perhaps not before visiting 79. The euro settled questions about its short term future by rising 0.15% to $1.3882. Well, really I am anticipating because the Euro closed smack on its old upper trend line, but I think a two day close above the last high ($1.3847) will probably carry it higher. Technically it could run to $1.4000 or $1.4200, but 'tis hard to picture how the eurocrats could stand that much downward pressure on their exports. Maybe the Fed is strong-arming them? The yen, on the other hand, has tanked this week, and today lost another 0.14% to 96.84, below its 50 DMA (96.97). Wait to buy your Japanese dinner china, as it will be cheaper next week. Y'all enjoy your weekend! Argentum et aurum comparenda sunt -- -- Gold and silver must be bought. - Franklin Sanders, The Moneychanger The-MoneyChanger.com © 2014, The Moneychanger. May not be republished in any form, including electronically, without our express permission. To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $3,130.00; silver's primary is up targeting 16:1 gold/silver ratio or $195.66; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold or 18 ounces of silver. or 18 ounces of silver. US $ and US$-denominated assets, primary trend down; real estate bubble has burst, primary trend down. WARNING AND DISCLAIMER. Be advised and warned: Do NOT use these commentaries to trade futures contracts. I don't intend them for that or write them with that short term trading outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures. NOR do I recommend investing in gold or silver Exchange Trade Funds (ETFs). Those are NOT physical metal and I fear one day one or another may go up in smoke. Unless you can breathe smoke, stay away. Call me paranoid, but the surviving rabbit is wary of traps. NOR do I recommend trading futures options or other leveraged paper gold and silver products. These are not for the inexperienced. NOR do I recommend buying gold and silver on margin or with debt. What DO I recommend? Physical gold and silver coins and bars in your own hands. One final warning: NEVER insert a 747 Jumbo Jet up your nose.

Meet The Mysterious Firm That Is About To Leave Blythe Masters Without A Job Posted: 07 Mar 2014 04:44 PM PST It was about a month ago when it was revealed that the infamous JPMorgan physical commodities group, plagued by both perpetual accusations of precious metal manipulation and legal charges most recently with FERC for $410 million that it had manipulated electricity markets, was in exclusive talks to be sold to Geneva-based Marcuria Group. It was also revealed that Blythe Masters, JPMorgan's commodities chief, "probably won't join Mercuria as part of the deal." Of course, we all learned the very next day that Ms. Masters - an affirmed commodities market manipulator - and soon to be out of a job, had shockingly intended to join the CFTC trading commission as an advisor, a decisions which was promptly reversed following an epic outcry on the internet. This is all great news, but one thing remained unclear: just who is this mysterious Swiss-based company that is about to leave Blythe without a job? Today, courtesy of Bloomberg we have the answer: Mercuria is a massive independent trading behemoth, with revenue surpassing a stunning $100 billion last year, which was started less than ten years ago by Marco Dunand and Daniel Jaeggi, who each own 15% of the firm's equity. And it probably should come as no surprise that the company where the two traders honed their trading skill is, drumroll, Goldman Sachs. Dunand and Jaeggi first met studying economics at the University of Geneva in the late 1970s. Their friendship was galvanized a few years later working for grain trader Cargill Inc. and sharing an apartment while on a training course in Minneapolis. Mercuria's corporate strategy and culture have reflected the professional paths of its founders, who spent the bulk of their early careers at investment banks.     They left Cargill in 1987 for Goldman Sachs's J. Aron unit in London. They stayed until 1994, then joined Phibro for a five-year stint when it was controlled by Salomon Brothers.   That experience defined the trading strategies of Dunand and Jaeggi who moved from Phibro to start Sempra's European and Asian trading business in 1999 before founding Mercuria in 2004.   Without a commanding position in any region or commodity, the firm has sought out bottlenecks and imbalances in niche markets and positioned itself to make money trading derivatives using insights gained from its physical trading. In its early days it profited by opening a trade route shipping Russian crude to China from Gdansk, Poland.   Mercuria also differs in tone. At its headquarters on Geneva's poshest shopping street, traders and executives wear open-collared shirts, sweaters and jeans, a sharp contrast to the shirt-and-tie policies at more established firms. Not surprisingly, some of the key hires in the past couple of years as the firm expanded at a breakneck pace and added some 570 people, bringing its total headcount to 1,200, were from Goldman: "The hires include Houston-based Shameek Konar, a former managing director with Goldman Sachs Group Inc. who is chief investment officer overseeing Mercuria's corporate development, including the JPMorgan negotiations. Victoria Attwood Scott, Mercuria's head of compliance, also joined from Goldman Sachs." We find it not at all surprising that the Goldman diaspora is once again showing JPMorgan just how it's done. So just how big is Mercuria now? Well, it is almost one of the biggest independent commodities traders in the world: Mercuria traded 182 million metric tons of oil or oil equivalent in 2012, according to its website. Vitol, the largest independent oil trader, handled 261 million and Trafigura traded 102.8 million tons of oil and petroleum products. Brent crude rose 3.5 percent that year in a fourth annual advance. It slipped 0.3 percent in 2013 and is down 2.6 percent this year at about $108 a barrel.   With more trading companies trying to gain an edge by owning businesses that produce, store or process commodities, Mercuria followed suit. It now has stakes in a coal mine in Indonesia, oil and gas fields in Argentina, oil storage in China and a biodiesel plant in Germany. In June, it invested $50 million in a Romanian gas producer.   The JPMorgan unit employs about 600 and represents a range of assets assembled over decades by firms including Bear Stearns Cos. and RBS Sempra, which the bank bought during an acquisition binge beginning in 2008.   They include gas and power trading on both sides of the Atlantic, physical assets spanning 40 locations in North America, an oil-trading book with a supply and offtake contract with the largest refinery on the U.S. East Coast, 6 million barrels of storage leases in the Canadian oil sands, and Henry Bath & Sons Ltd., a 220-year-old metal-warehouse operator based in Liverpool, England. In other words, the old boys' club is about to get reassembled, only this time even further away from the supervision of the clueless, corrupt and incompetent US regulators. And with the physical commodity monopoly of the big banks finally being unwound, long overdue following its exposure here and elsewhere over two years ago, it only makes sense that former traders from JPM and Goldman reincarnate just the same monopoly in a jurisdiction as far away from the US and Fed "supervision" as possible. Which also means that anyone hoping that the great physical commodity warehousing scam is about to end, should not hold their breath. As for the main question of what happens to everyone's favorite commodity manipulator, "It hasn't been determined whether Blythe Masters, who has led the JPMorgan unit since 2006 and orchestrated the buying spree, would join Mercuria, a senior executive at Mercuria said." Which means the answer is a resounding no: after all who needs the excess baggage of having a manipulator on board who got caught (because in the commodity space everyone manipulates, the trick, however, is not to get caught). Finally, with "trading" of physical commodities, which of course include gold and silver, set to be handed over from midtown Manhattan to sleep Geneva, what, if any, is the endgame? The talks with JPMorgan forced Mercuria to put another deal on hold. Mercuria was nearing the sale of an equity stake of 10 percent to 20 percent to Chinese sovereign wealth fund State Development & Investment Co., according to two people familiar with the matter. The discussions with SDIC were halted once Mercuria neared the JPMorgan business, one of the people said. But they will be promptly resumed once JPM's physical commodities unit has been sold, giving China a foothold into this most important of spaces. Because recall what other link there is between China and JPM? China's Largest Conglomerate Buys Building Housing JPMorgan's Gold Vault One may almost see the connection here.

China Is Crashing … As Predicted Posted: 07 Mar 2014 03:27 PM PST The head of China’s sovereign wealth fund noted in 2009: “both China and America are addressing bubbles by creating more bubbles”. He’s right … Global credit excess is worse than before the 2008 crash. The U.S. and Japan have been easing like crazy, but – as Zero Hedge notes  [if you missed it when Tyler Durden first posted this] – China has been much worse:  Here is just the change in the past five years: You read that right: in the past five years the total assets on US bank books have risen by a paltry $2.1 trillion while over the same period, Chinese bank assets have exploded by an unprecedented $15.4 trillion hitting a gargantuan CNY147 trillion or an epic $24 trillion – some two and a half times the GDP of China!   Putting the rate of change in perspective, while the Fed was actively pumping $85 billion per month into US banks for a total of $1 trillion each year, in just the trailing 12 months ended September 30, Chinese bank assets grew by a mind-blowing $3.6 trillion!   Here is how Diapason’s Sean Corrigan observed this epic imbalance in liquidity creation: Total Chinese banking assets currently stand at some CNY147 trillion, around 2 ½ times GDP. As such, they have doubled in the past four years of increasingly misplaced investment and frantic real estate speculation, adding the equivalent of 140% of average GDP – or, in dollars, $12.5 trillion – to the books. For comparison, over the same period, US banks have added just less than $700 billion, 4.4% of average GDP, 18 times less than their Chinese counterparts – and this in a period when the predominant trend has been for the latter to do whatever it takes to keep commitments off their balance sheets and lurking in the ‘shadows’! Indeed, the increase in Chinese bank assets during that breakneck quadrennium is equal to no less than seven-eighths of the total outstanding assets of all FDIC-insured institutions! It also compares to 30% of Eurozone bank assets. Truly epic flow numbers, and just as unsustainable in the longer-run. And here: So what’s the problem? Well, the world’s most prestigious financial agency – the central banks’ central bank, called the Bank of International Settlements or “BIS”  –  has long criticized the Fed and other central banks for blowing bubbles.  The World Bank and top economists agree.  So do many others. As such, it was easy for us to predict a crash in China when the bubble collapses. We argued in 2009 that China’s period of easy credit was analogous to America’s monetary easing starting in 2001 … and Rome’s in 11 B.C. We noted in 2009 and against in 2011 that China is suffering from a lot of the same malaises as the American economy, including corruption, crony capitalism, and failure to disclose bad debt. In 2010, we asked “When Will China’s Bubble Burst?” China’s $23 Trillion Dollar Credit Bubble Is Bursting International Business Times noted last year that China’s debt-laden steel industry was on the verge of bankruptcy. Quartz reported in December that a huge coal company called Liansheng Resources Group declared bankruptcy with 30 billion yuan ($5 billion) in debt. Chinese Business Wisdom argues (via China Gaze) that waves of bankruptcies are striking in 10 Chinese industries: (1) shipbuilding; (2) iron and steel: (3) LED lighting; (4) furniture; (5) real estate development; (6) cargo shipping; (7) trust and financial institutions; (8) financial management; (9) private equity; and (10) group buying. AP notes today: Chinese authorities have allowed the country’s first corporate bond default, inflicting losses on small investors in a painful step toward making its financial system more market-oriented.   A Shanghai manufacturer of solar panels paid only part of 90 million yuan ($15 million) in interest [it owed] …   Until now, Beijing has bailed out troubled companies to preserve confidence in its credit markets. But the ruling Communist Party has pledged to make the economy more productive by allowing market forces a bigger role. Time asks whether China has reached its “Bear Stearns moment”: A dangerous build-up of debt and an explosion of risky and poorly regulated shadow banking have raised serious concerns about the health of China’s economy. That’s why the Chaori default — the first ever in China’s domestic corporate bond market — has sparked fears that the country could be headed for a full-blown economic crisis like the one that slammed Wall Street in 2008. “We believe that the market will have reached the Bear Stearns stage,” warned strategist David Cui and his team at Bank of America-Merrill Lynch in a report to investors.   The concern of Cui and others is that the Chaori default will be the tip-off point for an unravelling of China’s financial system. The default could wake investors and bankers to the realization that companies they thought were safe bets are potentially not, and they could begin to reassess other loans and investments to other corporations. In other words, they might start redefining what is and is not risky. That could then lead to a credit crunch, when nervous bankers become wary of lending money, or lending at affordable interest rates. More bankruptcies could result. That eventually causes the financial markets to lock up — and we end up transitioning from a Bear Stearns moment to a Lehman Brothers moment, when the financial sector melts down. “We think the chain reaction will probably start,” Cui wrote. “In the U.S., it took about a year to reach the Lehman stage when the market panicked … We assess that it may take less time in China.” The Financial Post reported in January: The U.S. and Europe learned the hard way about the dangers of shadow banks in the financial crisis but, five years later, China appears set to get its own painful lesson about what can happen when large capital flows get diverted to unregulated corners of the financial system.   ***   “We estimate that 88% of the revenues of Chinese trust companies is at risk in the long term,” said McKinsey and Ping An.   *** Billionaire investor George Soros recently wrote on a popular news website that the impending default and the growing fear reflected in Chinese markets has “eerie resemblances” to the global crisis of 2008. The big picture:  the $23 trillion dollar Chinese credit bubble is starting to collapse. As Michael Snyder wrote in January: It could be a “Lehman Brothers moment” for Asia.  And since the global financial system is more interconnected today than ever before, that would be very bad news for the United States as well.  Since Lehman Brothers collapsed in 2008, the level of private domestic credit in China has risen from $9 trillion to an astounding $23 trillion.  That is an increase of $14 trillion in just a little bit more than 5 years.  Much of that “hot money” has flowed into stocks, bonds and real estate in the United States.  So what do you think is going to happen when that bubble collapses?   The bubble of private debt that we have seen inflate in China since the Lehman crisis is unlike anything that the world has ever seen.  Never before has so much private debt been accumulated in such a short period of time.  [Note: Private debt is much more dangerous than public debt.] All of this debt has helped fuel tremendous economic growth in China, but now a whole bunch of Chinese companies are realizing that they have gotten in way, way over their heads.  In fact, it is being projected that Chinese companies will pay out the equivalent of approximately a trillion dollars in interest payments this year alone.  That is more than twice the amount that the U.S. government will pay in interest in 2014.   ***   As the Telegraph pointed out a while back, the Chinese have essentially “replicated the entire U.S. commercial banking system” in just five years… Overall credit has jumped from $9 trillion to $23 trillion since the Lehman crisis. “They have replicated the entire U.S. commercial banking system in five years,” she said.   The ratio of credit to GDP has jumped by 75 percentage points to 200pc of GDP, compared to roughly 40 points in the US over five years leading up to the subprime bubble, or in Japan before the Nikkei bubble burst in 1990. “This is beyond anything we have ever seen before in a large economy. We don’t know how this will play out. The next six months will be crucial,” she said. As with all other things in the financial world, what goes up must eventually come down.   ***   The big underlying problem is the fact that private debt and the money supply have both been growing far too rapidly in China.    According to Forbes, M2 in China increased by 13.6 percent last year… And at the same time China’s money supply and credit are still expanding.  Last year, the closely watched M2 increased by only 13.6%, down from 2012’s 13.8% growth.  Optimists say China is getting its credit addiction under control, but that’s not correct.  In fact, credit expanded by at least 20% last year as money poured into new channels not measured by traditional statistics. Overall, M2 in China is up by about 1000 percent since 1999.  That is absolutely insane.   ***   But I am not the only one talking about it.   In fact, the World Economic Forum is warning about the exact same thing… Fiscal crises triggered by ballooning debt levels in advanced economies pose the biggest threat to the global economy in 2014, a report by the World Economic Forum has warned. ***   What has been going on in the global financial system is completely and totally unsustainable, and it is inevitable that it is all going to come horribly crashing down at some point during the next few years.   It is just a matter of time.

South Africa notices gold fix controversy; GATA consultant Speck cited Posted: 07 Mar 2014 02:33 PM PST Banks Bear Brunt of Gold-Fix Blame By Chantelle Benjamin The Mail & Guardian, Johannesburg Friday, March 7, 2014 http://mg.co.za/article/2014-03-06-banks-bear-brunt-of-gold-fix-blame Evidence emerging in the United Kingdom about the possible manipulation of the gold price for a decade could have major implications for South African investors and mining companies who might be able to sue for damages in terms of South African law. The London gold fix benchmark, set by five banks twice a day, is used worldwide by mining companies, central banks, and jewellers to value gold. A similar process, involving three banks, is used to value silver. This week a New York resident, Kevin Maher, lodged a case in U.S. District Court for the Southern District of New York seeking unspecified damages against Barclays, HSBC Holdings, Bank of Nova Scotia, Societe Generale SA, and Deutsche Bank, on the grounds that they worked together and manipulated the benchmark. ... Dispatch continues below ... 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. He has based his case on a draft study by a renowned researcher, Rosa Abrantes-Metz, that was published by Bloomberg last week and said "it as likely that co-operation between participants had been occurring." Her work is supported by research by Dimitri Speck, a commodity analyst. Abrantes-Metz, a professor at New York University's Stern School of Business, is credited with helping to expose the London interbank offered rate (Libor) scandal. Her 2008 paper uncovered the rigging of the rate, which led to Barclays and UBS being fined about $6-billion. Stanlib's Kobus Nell said there had been rumours for many years about the possible manipulation of the gold price but this is the first time that a study has been conducted by someone of her calibre. In terms of the Competition Act, criminal or civil action can be taken against any company found guilty of collusion or price fixing, provided the activity took place in South Africa. That means any buying or selling in South Africa based on the gold fix price and undertaken with or by one of the five banks is covered by the act. ENS attorney Theuns Steyn, who specialises in the mining sector, said this could have "huge" implications. "If trade is here and the branches of the banks are here, it could be possible to prove jurisdiction," he said. "The difficult part would be proving and quantifying damages." The fix is calculated twice a day via a phone conference at 10.30 a.m. and 3 p.m. London time. The banks declare how many bars of gold they want to buy or sell at the current spot price, based on orders from their clients and themselves. The price is increased or reduced until the buy and sell amounts are within 50 bars of each other, at which point the fix is set. An issue for many is that the bank traders can communicate with their clients and each other during the process. Traders can tell clients about shifts in supply and demand and take fresh orders during their conference call and can buy or sell as the price changes, according to the website of London Gold Market Fixing. And the process is unregulated. The Libor is seen as the most important benchmark for setting short-term interest rates and, since 2000, has been calculated in 10 currencies. It was revealed in 2012, after an investigation, that some banks were falsely inflating or deflating their rates in order to profit from trades. The Libor is a central cog in global financial markets against which financial products worth about $450 trillion are pegged. Allegations about the rigging of the gold price, like those about the Libor, have been circulating for some time, although some analysts believe rigging would not have a big influence on the market because of the wide varieties of gold trading, from spot trading to gold exchange-traded funds. Abrantes-Metz said in an 2013 Bloomberg article that, like the Libor manipulation, the gold fix is "controlled by a handful of firms with a direct financial interest in where it is set and there is virtually no oversight -- it's based on information exchanged" among themselves. Nell said: "Gold is not a small market and there are tonnes being bought and sold every day, but it is possible that, over time, manipulation by the banks would have an impact. "Of course, the problem is, with all the other information emerging about the banks, it does raise the question, if they could get involved in currency rigging, was it possible that other collusion was going on that we do not know about?" Abrantes-Metz and some traders noticed "trading surges" after the 3 p.m. meeting and began writing about it about two years ago. Abrantes-Metz, when approached by the Mail & Guardian, said: "The structure of the benchmark is certainly conducive to collusion and manipulation and the empirical data are consistent with price artificiality." Her research, conducted with Albert Metz, the managing director of Moody's Investor Service, found there were frequent spikes in the gold price from 2004 after the 3 p.m. The study has been looking at the market from 2001. But the large price moves were overwhelmingly down. For example, in 2010, large moves during the fix were negative 92 percent of the time. She said that in the end it would be up to the regulators to establish why these movements began in 2004 and why prices tended to be downward. In January this year Deutsche Bank announced that it was pulling out of the process for setting gold and silver benchmarks because of a decision to scale back its commodities business. But it emerged this week that it might have hired a consultancy to review the bank's role in the gold fix benchmark. There has been market speculation that Standard Bank would be a good candidate to replace Deutsche Bank, particularly since it is selling its United Kingdom-based markets division to the Industrial and Commercial Bank of China and China last year became the biggest consumer of gold. In reply to questions posed by the M&G, Deutsche Bank said: "Deutsche Bank is withdrawing its participation in the gold and silver benchmark setting process following the significant scaling back of our commodities business. We remain fully committed to our precious metals business." Researcher Rosa Abrantes-Metz says that when it comes to the gold fix, "one needn't look to far for a motive. The participating banks all stand to gain both from using the privileged knowledge they glean during the fixing process and from influencing the fixing itself," she told Bloomberg last year. Research by commodity analyst Dimitri Speck found that gold prices tend to drop sharply in the London afternoon fixing, with a less pronounced drop in London morning fixes. It also drops during the trading session of the Commodity Exchange (Comex) in New York. Research by economist Paul Craig Roberts and analyst Dave Kranzler found that, in times of financial crisis, the price of gold is manipulated by central banks to calm or manipulate markets. They said that the U.S. Federal Reserve has a vested interest in influencing the gold price, actively keeping it low. "When gold hit $1 900 per ounce in 2011, the Federal Reserve realised that $2 000 an ounce would have a psychological impact that would spread into the dollar's exchange rate with other currencies, resulting in a run on the dollar as both foreign and domestic holders sold dollars to avoid the fall in value." They said the Fed began using "bullion banks as its agents to sell naked gold shorts in the New York Commodity Exchange [Comex] future market". "Short selling drives down the price, triggers stop-loss orders and margin calls, and scares participants out of gold trusts. The bullion banks purchase the deserted shares and present them to the trusts for redemption in bullion." They said the bullion could then be sold in the London physical gold market. But Ross Norman, CEO of bullion brokers Sharps Pixley, believes that the large moves in price at the time of the fixings is because large selling and buying orders collide, and that there is more activity at 3 p.m. because that is when the US market opens. * * * Join GATA here: Mines and Money Hong Kong Hong Kong Convention and Exhibition Centre Monday-Friday, March 24-28, 2014 Hong Kong Special Administrative Region, China http://www.minesandmoney.com/hongkong/ Canadian Investor Conference 2014 Vancouver Convention Centre West 1055 Canada Place, Vancouver, British Columbia Sunday and Monday, June 1 and 2, 2014 http://cambridgehouse.com/event/25/canadian-investor-conference-2014-inc... * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: http://gata.org/tshirts Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16 ADVERTISEMENT Jim Sinclair plans seminars in Los Angeles and San Diego Gold advocate Jim Sinclair's next market analysis seminars will be held in Los Angeles from 11 a.m. to 2 p.m. on Saturday, March 8, and in San Diego from 2 to 6 p.m. the following day, Sunday, March 9. Details, including registration information, are posted at Sinclair's Internet site, JSMinset.com, here: http://www.jsmineset.com/qa-session-tickets/

Gold Daily and Silver Weekly Charts - This Must Have Been a Non-Farm Payrolls Friday Posted: 07 Mar 2014 01:41 PM PST

Gold Daily and Silver Weekly Charts - This Must Have Been a Non-Farm Payrolls Friday Posted: 07 Mar 2014 01:41 PM PST

On a Manhunt for Newly Created Currency Posted: 07 Mar 2014 01:32 PM PST My poor back was aching from playing golf, I was bored with TV, and, in desperation for something to do other than taking an interest in the kids, doing some desperately-needed chores around the house, or even faking the slightest interest in ANY of that crap, I was casually looking at, you know, economic stuff. As usual, I was registering the usual shock and awe (we're freaking doomed!) at such continuing monetary and fiscal insanity, such as Total Fed Credit increasing another hefty $35.4 billion last week, with the Fed itself buying up $36.9 billion in US government securities, committing yet another blatant, brazen fraud in a long series of Quantitative Easing frauds to monetize government debt to the tune of, according to these new figures, an annualized $1.84 trillion a freaking year, for which the Federal Reserve creates $1.820 trillion out of thin freaking air! In case you missed it at the beginning of this paragraph, we're freaking doomed! Interestingly, comically segueing from "freaked out" to "interestingly," Currency in Circulation, namely dollar bills and coins, went up $ 9.6 billion last week, which is $31 in cash for every man, woman and child in America. In one week! In fact, in looking at the figures, Currency in Circulation is up $72.5 billion in the last year, which is enough NEW cash floating around for EACH of the abovementioned men, women and children in the country to get $234! Personally being a man, woman or child in America, imagine my disgruntlement and dismay when I impatiently waited until my wife finally went into the kitchen, and then sneaked a look into her purse so that I could claim MY personal $234. I figured maybe I could sneak out to go have a few refreshing brewskis and, you know, maybe see who and what's new in the marvelous, magical world of pole-dancing, only to find her purse empty! And so I casually and politely asked her about it ("Hey! You in the kitchen! Where's my damned 234 dollars?"), emphasizing how she had better cough it up because I had plans for that cash, and I mean BIG plans, but she insisted SHE didn't have hers, either! I'm investigating. Meanwhile, swerving back, tires squealing, to the topic at hand, the Monetary Base itself just jumped up $82 billion to $3.839 trillion from $3.757 trillion and (according to Barron's) is up an astounding $2.841 trillion in the last year! So, hey! You! You wanna talk about inflation in the money supply that always leads to inflation in consumer prices? No? You say you've heard it all from me so many, many times before, and you are so damned bored with hearing about it that you are deliberately NOT reading this? Well, if you are out blithely gallivanting around, instead of reading this Mogambo Dire Warning (MDW) because of your petty, spiteful nature, then OK! Fine with me! The cruel part of me is glad — GLAD, do you hear me? — that you are not going to let me tell you, for the thousandth time, how you should be buying gold, silver and oil right now, which you still wouldn't do, which means you are going to lose out on fabulous capital gains when their prices explode, thanks to the monetary idiocy of the evil Federal Reserve and the other dirtbag central banks around the world creating so much excess cash and credit. As a result, you will spend the rest of your life in pitiful poverty, mired in misery, eating weed salads and bug burgers to survive, perhaps watching me drive by in my big, shiny new car, stereo blasting, fancy hubcaps glinting in the sunlight. Perhaps, too, you will hear me laugh at you, "Hahaha! Now who's too busy to read a MDW? Hahaha!" And since you are still ignoring me, you won't hear the chilling news that the evil government cabal that calls itself the G-20 is proposing to "stimulus spend" $2 trillion in the next year, or that the Obama 2015 federal budget proposal is an astounding $3.9 trillion! Yikes! Sadly, the Butt Ugly Truth (TBUT) is that this monetary and fiscal insanity is to desperately try and save the banks for a little while longer, as the banks have lent out, and borrowed for themselves with which to speculate, all the depositors' money, dozens of times over. So, sadly, all your money in a bank is, actually, gone, according to the accounting ledgers at the banks, and the only way to get it back is if all those borrowers who borrowed money paid back the money they borrowed, which they can't do, because they don't have the money to pay back the money. But not paying back the money they borrowed is paradoxically a good thing, because everybody selling assets to raise cash to pay off debt is what makes the money supply go down, asset prices go down, things collapse, bankruptcy all around, and everybody is grumpy at being devastated. And probably a LOT sooner than expected, too, since so many assets are leveraged so unbelievably highly that any significant move downward in prices would quickly overwhelm all the investor's capital, immediately bankrupting the deal and handing their creditors a big loss, who are, ultimately, the banks, which causes a fall in the money supply. Yikes again! Perhaps fortunately, in light of the above, not only are consumers NOT paying back the money they owe, but they are borrowing more! Consumer Installment Debt was up almost $20 billion in December, rising to $3.106 trillion, which seems staggering because of it being up almost $327 billion (almost 12 percent!) in the past year, or, perhaps more meaningfully, $3,114 more debt for every one of America's 105 million credit-card holders, and coming, as it does, at a terrible time when interest rates are rising, prices are rising, but incomes are falling. It is usually at this point where I find that you WERE actually reading this Mogambo Dire Warning (MDW), you wily devil, betraying yourself with your pent-up verbal assault at me to "Shut the hell up, Mogambo! Just shut up, shut up, shut up!", which I deftly party and riposte with the powerful, "If you are NOT buying gold, silver and oil with everything you have, then you are making a huge, huge, HUGE mistake!" And then, in keeping with the sudden fencing theme, I end the refrain "thrusting home" like Cyrano de Bergerac, saying with all the deadly contempt and venom I can muster, "Moron!" Beyond that powerful closing scene, starring me as Cyrano, the handsome and brave master swordsman and lyrical wordsmith, there is nothing to add: You know what to do and why you must do it. Truthfully, the Cyrano de Bergerac reference is a bit of spontaneous whimsy that I just threw in, I don't know why. Perhaps we'll never know why. Or even care why. But we know why to buy gold, silver and oil, and that's the important thing. And the fact that it is spectacularly easy, too, only makes it more and more blindingly obvious that, "Whee! This investing stuff is easy!" Regards, The Mogambo Guru for The Daily Reckoning Ed. Note: The Mogambo’s sage wisdom has been a fixture in The Daily Reckoning for several years. And after a brief hiatus, he is back to his old tricks. To make sure you’re clue in to his most recent musings, sign up for The Daily Reckoning, for FREE, right here.

“Bitcoin is Gold 2.0″ Posted: 07 Mar 2014 01:25 PM PST This video has been making the rounds and it’s pretty amusing in many ways, most of which are not likely to be appreciated by Bitcoin advocates. See also: The Face Behind Bitcoin – Newsweek Did Newsweek just validate Bitcoin conspiracy theory? – CNN/Money Bitcoin's Mysterious Creator Is Said to Be Identified – Dealbook The Satoshi [...]

BITCOIN CRASH : HACKS, Suicides, and Ponzi Schemes. Is it Really Safe? Posted: 07 Mar 2014 11:35 AM PST Bitcoin has been hacked repeatedly. Is it really trustworthy? I believe in alternate currencies to the US dollar because the dollar is clearly a HUGE failure.Bitcoin is a great concept and is a good method of online transaction. I don't advise people use it to store their life savings in it... [[ This is a content summary only. Visit http://www.GoldSilverNewsBlog.com or http://www.newsbooze.com or http://www.figanews.com for full links, other content, and more! ]]

The U.S. Government Is One Big Lie Posted: 07 Mar 2014 11:09 AM PST As I discussed yesterday, we know the Government is lying through its teeth to us about the Ukraine situation.  It's amazing how quickly CNN and Fox News seem to have misplaced the Victoria Nuland phone tape  discussing the $5 billion the U.S. has "invested" to foment the unrest over there.  You know, the one in which she says "F_CK the EU."  Both CNN and Fox are disseminating nothing but the lies being promoted by Obama/Kerry etc without researching or reporting on the actual facts.  Kind of ironic that CNN backs the Obama regime's backing of the neo-Nazis who have taken control of western Ukraine (I'm not surprised that Fox News supports this).  The Government also lies about the employment situation in this country.  We saw the most recent example today with the Bureau of Labor Statistics monthly employment report claiming that the economy generated 175,000 jobs in February.   I don't want to go through a detailed analysis of the data as reported and the obvious statistical manipulation implemented on that data.  The real issue is the legitimacy of the data itself.  This requires thinking about the data as presented in the context of every other business data report that was released during February, especially the reports from the private sector.  As one example, the BLS claims that the construction industry added a total of 55,000 jobs in January and February.  Yet, we know from homebuilder reports that housing starts have been tanking.  And what about the "bad weather" narrative.  If housing starts declined over the period and bad weather prevented this, how on earth is it possible that profit-seeking businesses hired workers?  Does anyone really think that a homebuilder executive, who is trying to keep his stock price elevated so he can unload as many shares as possible (see the recent S-4 SEC stock transaction filings - homebuilder execs dumped shares in February), would spend money hiring workers who don't have to work? That's just one line item example.  There are several.  The point here is that if you look at the numbers being reported - regardless of how they are manipulated to paint a positive picture - in the context of everything else that has been reported about the economy, there's no possible way that the economy generated job growth in February.  In fact, the ill-reputed "birth/death" model, which everyone understands is used as "plug" number the Government uses to pad the employment data, explains 125,000 of the 175,000 jobs reported. The birth/death model has been dissected and shown to be a complete fraud ad nauseum. The smart money must understand this, because the S&P 500 futures gapped up nearly 10 points when the number hit the tape.  It's currently trading down 3 points, 13 points lower than the initial buying orgy.  The real damage was inflicted by the banks who manipulate the gold and silver market.  Instantaneously as the report hit the newswires, gold was demolished for a total of $25 before recovering some of the manipulated damage.  Right at the time the report was released, nearly 8,000 gold contracts were unloaded on the Comex..  To put this into context, in the 14 hours and 20 minutes of Comex gold futures trading that occurred from 6 p.m. the previous evening until the 8:30 a.m. Comex open today, the total volume was roughly 45 contracts per minute.  You decide if the 8,000 contracts dumped at 8:30 a.m. was legitimate selling or motivated Fed/Govt manipulation The most frightening part about all of this the fact that the Government finds it acceptable to lie to us about everything.   The U.S. Government has become as corrupted and self-serving as was the old U.S.S.R Government that many of us grew up fearing.   The lack of fear about what has happened in our own backyard is truly stunning.

The U.S. Government Is One Big Lie Posted: 07 Mar 2014 11:09 AM PST As I discussed yesterday, we know the Government is lying through its teeth to us about the Ukraine situation.  It's amazing how quickly CNN and Fox News seem to have misplaced the Victoria Nuland phone tape  discussing the $5 billion the U.S. has "invested" to foment the unrest over there.  You know, the one in which she says "F_CK the EU."  Both CNN and Fox are disseminating nothing but the lies being promoted by Obama/Kerry etc without researching or reporting on the actual facts.  Kind of ironic that CNN backs the Obama regime's backing of the neo-Nazis who have taken control of western Ukraine (I'm not surprised that Fox News supports this).  The Government also lies about the employment situation in this country.  We saw the most recent example today with the Bureau of Labor Statistics monthly employment report claiming that the economy generated 175,000 jobs in February.   I don't want to go through a detailed analysis of the data as reported and the obvious statistical manipulation implemented on that data.  The real issue is the legitimacy of the data itself.  This requires thinking about the data as presented in the context of every other business data report that was released during February, especially the reports from the private sector.  As one example, the BLS claims that the construction industry added a total of 55,000 jobs in January and February.  Yet, we know from homebuilder reports that housing starts have been tanking.  And what about the "bad weather" narrative.  If housing starts declined over the period and bad weather prevented this, how on earth is it possible that profit-seeking businesses hired workers?  Does anyone really think that a homebuilder executive, who is trying to keep his stock price elevated so he can unload as many shares as possible (see the recent S-4 SEC stock transaction filings - homebuilder execs dumped shares in February), would spend money hiring workers who don't have to work? That's just one line item example.  There are several.  The point here is that if you look at the numbers being reported - regardless of how they are manipulated to paint a positive picture - in the context of everything else that has been reported about the economy, there's no possible way that the economy generated job growth in February.  In fact, the ill-reputed "birth/death" model, which everyone understands is used as "plug" number the Government uses to pad the employment data, explains 125,000 of the 175,000 jobs reported. The birth/death model has been dissected and shown to be a complete fraud ad nauseum. The smart money must understand this, because the S&P 500 futures gapped up nearly 10 points when the number hit the tape.  It's currently trading down 3 points, 13 points lower than the initial buying orgy.  The real damage was inflicted by the banks who manipulate the gold and silver market.  Instantaneously as the report hit the newswires, gold was demolished for a total of $25 before recovering some of the manipulated damage.  Right at the time the report was released, nearly 8,000 gold contracts were unloaded on the Comex..  To put this into context, in the 14 hours and 20 minutes of Comex gold futures trading that occurred from 6 p.m. the previous evening until the 8:30 a.m. Comex open today, the total volume was roughly 45 contracts per minute.  You decide if the 8,000 contracts dumped at 8:30 a.m. was legitimate selling or motivated Fed/Govt manipulation The most frightening part about all of this the fact that the Government finds it acceptable to lie to us about everything.   The U.S. Government has become as corrupted and self-serving as was the old U.S.S.R Government that many of us grew up fearing.   The lack of fear about what has happened in our own backyard is truly stunning.

The London Gold Fix, Manipulation & the Quantum Posted: 07 Mar 2014 10:27 AM PST Does Heisenberg's uncertainty principle shed light on "manipulation" of the London Gold Fix? Or is it the other way around?   WHEN Werner Heisenberg looked at his brand new quantum formulae in 1927, writes Paul Tustain, founder and CEO of BullionVault, he noticed something weird.    The world of very small spaces and particles is ruled by matrix mechanics, but as you may remember from your school mathematics, in matrix multiplication (A * B) * C is not the same as A * (B * C). What Heisenberg saw was that because of the difference in the two matrix products there would always be uncertainty as to key physical properties of a particle. His discovery forbids a particle from having both precisely defined motion and precisely defined position at the same time.   Spotting this earned Heisenberg a Nobel prize, and a lifetime of being widely misunderstood.   The rest of us have a very deep seated 'common-sense' view of spacetime and particles, and almost all of us reject the subtle complexity of the 'Uncertainty Principle'. Indeed I am prepared to bet that if you are here reading about it for the first time you are mentally rejecting it. "Of course", you will be thinking, "whether we can measure it or not, a particle obviously has a particular position and a particular speed."    Alas you would be wrong. But don't beat yourself up about it because you are in good company. Even Albert Einstein was on your side for a while.   In physics you can pin down individual quantities very precisely, but by knowing one quantity exactly you will automatically give the particle freedom to be uncertain in another. Woe betide any physicist who interpolates between observations to state as fact something he didn't specifically measure, because physical particles do not do predictable things when they are unmeasured; they appear to spend their unobserved lives weighing up the choices of where physics allows them to be found next, and then pressing the hyperspace button to get there whenever somebody looks.   If you took to examining particle paths between observations the best route map you could draw to describe the motion of an unmeasured particle would look something like this :-     The diagram shows how we located the particle precisely at point A, and again at point B. But in being so precise about its location at an instant of time we made its motion uncertain.   At time A, it might have been going up, or down, there is no answer. In making our precise measurement of position at instant A (and B) we actually denied the particle a definitive up/down motion. It's weird, but that is how particles work in spacetime – it really is.   Nevertheless a good physicist will be able to perform certain quantum calculations, and she will be able to give us a sense of where our particle might have been found, if we had looked. She will be able to calculate that if we were to set everything up the same way and make hundreds of additional measurements at Time T, then the particle would be found in the various ranges shown on the blue dotted line on the picture, with the various probabilities shown.    Even many physicists find it unsatisfactory that the most nature allows us to say about where the particle was when we weren't looking is basically "probably about here". But there it is. Without an observation there was no single explicit position at Time T, because the phenomenon of unmeasured position did not properly exist except in our own mental models. Unmeasured position is smoothed out into a fuzzy realm of possibilities. The Gold Fix The situation of a particle's motion and position bears a striking similarity to price. Let's have a look at another picture.     The blue dots are 'quotes' from a market. Someone from Bloomberg has tracked bankers' gold price quotes, each of which is here represented as a blue spot.    Bloomberg decided to be helpful to the rest of us, and they filled in the gaps between the points with a solid line. Then they sold it to us as a gold price chart – a track of the position of price, through time.   A few years ago, before derivatives were invented, the rest of us would have taken that plotted line with a pinch of salt. We always knew it was an approximation, and not a very good one either, because when we waited to see the price reporting at the end of the day we could see a whole load of real gold deals (here the green dots) obstinately refusing to position themselves on Bloomberg's line.   We did not care much, because none of us who worked in real markets ever thought for one moment that anyone would start to treat the lines interpolated by Bloomberg as something real. They were a useful visualisation – that was all.   It was only later, when financial engineers started building products that were valued by reference to that line, and when people started making profits, or losing, depending on where Bloomberg drew their line, that investors started attaching significantly more weight to the line itself than to the reality of the reported deal prices. Is the gold price uncertain too? Okay, so I am clearly drawing a parallel. Price charts and particle route maps are doing something quite similar. But let's take it a stage further. Let's try doing what Heisenberg did, and make the bold assertion that there is no price between the data points of trades, just a realm of possibilities.   The derivatives engineers, and even a few of the gold bugs are going to go nuts with this, but it stands up to some pretty detailed scrutiny.    For a start the price that gets printed by Bloomberg is without size. If the bullion banker were to be asked a real price, by a real trader, the banker's first question would be "what is the size?" He has to know if he is quoting for a $200 deal or a $200 million dollar deal, because the prices are completely different!     This gives a third dimension to the price, one which any spot price chart always ignores. At any given point in time the price of anything is a function of the amount of it you want to buy or sell.   Unlike quantum particles this is not difficult concept to grasp. If I were a greengrocer, and you asked me for one banana, I'd probably charge you 20 pence. If you asked me for 10, I might give you a discount, and sell for £1.90 (19p each). If you asked me for 500 I might charge you a premium, because I'd have to get in the van and go and purchase a lot more bananas – so maybe £110 (22p each). But if you asked me for 1,000,000 there is no price. I don't want to sell you 1,000,000 bananas because I wouldn't know where to get them, and I certainly don't want to spend my week in the van hunting them down and paying ever larger prices for the diminishing stock! As you can see the price varies according to size.   Once you introduce this extra dimension to the price chart, so as to get the real feel for where the trading price is, the single line of Bloomberg starts to look like a gross over-simplification. Because not only is there uncertainty in the vertical momentum of the price between two measured points (trades) but also there is a completely different answer depending on the size.   So instead of a line progressing from last quote to next quote the reality is that there is a very large volume of three dimensional economic space between the points, and, with different probabilities, the next trading price could be any point within that volume.   All in all it seems to me that there is a very good case for saying that in the absence of a trade there is no such thing as price. Anyone who seeks to know a price without the hard experiment of executing a trade is deluding themselves into creating a phenomenon which does not really exist. Price is an attribute of a specific trade. It occurs meaningfully only at points in the economic continuum where an exchange happens, and it depends on the individual circumstances, reasons and emotional states of two experimenters (sorry, traders) who each foresee the price subsequently moving in opposite directions.   So price is not smoothly variable, but point-like, quantised, and a generator of uncertainty; and everything between real trades is probabilistic guesswork.  Is Gold fixed? If I were to criticise the Gold Fix I would certainly concede that it is rather stupidly named. Also in the era of Chinese walls – rules which insist colleagues do not tell each other what their common clients are doing – there is something unusual in allowing bank principals to know their own internal customer order book.   However in my opinion this oddity is rather elegantly offset by the fact that the Gold Fix allows another bank principal to steal those orders simply by offering a better price during the auction. I believe this system is much more robust than Chinese walls, because it relies on natural competition rather than self-imposed discipline.   Also two other powerful points jump out for comment:- The Gold Fix is a real trading price. It is not a sample, like LIBOR, and it is not a chart, like the Bloomberg spot gold ticker. It is a price at which a very large number of buyers and sellers chose to deal, and this makes it real.  It was dealt in open competition in very large size, positively swamping the sizes of the individual bullion bank quotes on the Bloomberg ticker. As I explained above this size gives it a right to be different. Besides, if the sellers thought they were getting a bad deal day after day wouldn't they simply deal on the spot market? Or on Comex? There is nothing stopping them.   Forgive me, but I don't really care much in any case. There remain quite a large number of people who are wedded to gold price conspiracy theories. Many of them buy paper gold (gold futures) and then grumble that sellers of paper gold exist. In my opinion they perfectly match each other's requirement!    Meanwhile not one person who has bought gold, to take delivery, has only got paper. All the sellers were able to deliver real gold. That makes a concerted price suppression story – through shorting – very difficult to swallow. More interesting than the Gold Fix But there is still unfinished business here, because the physics element of this story is far more interesting than the gold element. Could it be that a run-of-the-mill financial spat begins to show us a route to solving the central riddle of quantum physics? Now that really would be something.   Since quantum physics first arrived 87 years ago its application has been stupendously successful, but no-one has been able to explain its results in a way we can grasp and call 'reality'. Physicists remain stumped when it comes to describing the weird world they see through their simplest experiments.    In the absence of anything better we all fall back, a bit lazily, into the default human mental model of thinking of stuff as being somewhere and moving somewhere smoothly, rather than in jerks from point to point. We have taken to thinking – much as conspiracy theorists do when they look at price charts – that unmeasured particles have real position and real motion, even when they are isolated from the rest of our universe and no-one is looking.   But this perfectly natural, common sense interpretation leaves science at an impasse. Our mental model and the experimental facts are in fundamental disagreement with each other about how stuff really is.   Physicists have been wringing their hands trying to solve this. They want to explain a reality under quantum physics in a way which does not make the act of measurement special. They want reality to be permanent, whether or not they are looking, and they have come up with some truly zany models ranging from 'there is no reality' to 'there are countless zillions of realities, and entire universes are created every nano-second to cope with all the quantum possibilities'. I am not kidding. These are both pretty standard models of quantum reality which physicists are clinging to.   Yet – and this is the amazing thing – through analysing price at the Gold Fix we can actually see a workable metaphor for quantum experiments, and that really excites me. It's as if the quantum world is an incredibly fast moving market, heaving with tiny exchanges, where each exchange produces an instant of perfect precision in some physical attribute or other, enabling the countless trillions of particle events in the observable universe to map themselves, with respect to each other, into the unambiguous history of our spacetime.    I have read lots of physics books, and not understood many of them, but by sitting in my office and thinking about gold prices I can for the first time start to see how something which appears to be deeply real and continuous is in fact point-like, and fuzzy between the points. I can explain, and in an understandable way to anyone who knows markets, that between one trade and the next price is undefined, uncertain and unreal. We don't know exactly where it is, or if it's moving up or down. All we can do is copy the quantum physicists and make probabilistic guesses until the next trade.    Is there something here the physicists could learn from us? After all, so many physics laboratories have lost their brightest research stars to the quant funds.  Perhaps it's time the London bullion market offered the labs some of our Gold Fix dealers, on sabbatical, of course.

The London Gold Fix, Manipulation & the Quantum Posted: 07 Mar 2014 10:27 AM PST Does Heisenberg's uncertainty principle shed light on "manipulation" of the London Gold Fix? Or is it the other way around?   WHEN Werner Heisenberg looked at his brand new quantum formulae in 1927, writes Paul Tustain, founder and CEO of BullionVault, he noticed something weird.    The world of very small spaces and particles is ruled by matrix mechanics, but as you may remember from your school mathematics, in matrix multiplication (A * B) * C is not the same as A * (B * C). What Heisenberg saw was that because of the difference in the two matrix products there would always be uncertainty as to key physical properties of a particle. His discovery forbids a particle from having both precisely defined motion and precisely defined position at the same time.   Spotting this earned Heisenberg a Nobel prize, and a lifetime of being widely misunderstood.   The rest of us have a very deep seated 'common-sense' view of spacetime and particles, and almost all of us reject the subtle complexity of the 'Uncertainty Principle'. Indeed I am prepared to bet that if you are here reading about it for the first time you are mentally rejecting it. "Of course", you will be thinking, "whether we can measure it or not, a particle obviously has a particular position and a particular speed."    Alas you would be wrong. But don't beat yourself up about it because you are in good company. Even Albert Einstein was on your side for a while.   In physics you can pin down individual quantities very precisely, but by knowing one quantity exactly you will automatically give the particle freedom to be uncertain in another. Woe betide any physicist who interpolates between observations to state as fact something he didn't specifically measure, because physical particles do not do predictable things when they are unmeasured; they appear to spend their unobserved lives weighing up the choices of where physics allows them to be found next, and then pressing the hyperspace button to get there whenever somebody looks.   If you took to examining particle paths between observations the best route map you could draw to describe the motion of an unmeasured particle would look something like this :-     The diagram shows how we located the particle precisely at point A, and again at point B. But in being so precise about its location at an instant of time we made its motion uncertain.   At time A, it might have been going up, or down, there is no answer. In making our precise measurement of position at instant A (and B) we actually denied the particle a definitive up/down motion. It's weird, but that is how particles work in spacetime – it really is.   Nevertheless a good physicist will be able to perform certain quantum calculations, and she will be able to give us a sense of where our particle might have been found, if we had looked. She will be able to calculate that if we were to set everything up the same way and make hundreds of additional measurements at Time T, then the particle would be found in the various ranges shown on the blue dotted line on the picture, with the various probabilities shown.    Even many physicists find it unsatisfactory that the most nature allows us to say about where the particle was when we weren't looking is basically "probably about here". But there it is. Without an observation there was no single explicit position at Time T, because the phenomenon of unmeasured position did not properly exist except in our own mental models. Unmeasured position is smoothed out into a fuzzy realm of possibilities. The Gold Fix The situation of a particle's motion and position bears a striking similarity to price. Let's have a look at another picture.     The blue dots are 'quotes' from a market. Someone from Bloomberg has tracked bankers' gold price quotes, each of which is here represented as a blue spot.    Bloomberg decided to be helpful to the rest of us, and they filled in the gaps between the points with a solid line. Then they sold it to us as a gold price chart – a track of the position of price, through time.   A few years ago, before derivatives were invented, the rest of us would have taken that plotted line with a pinch of salt. We always knew it was an approximation, and not a very good one either, because when we waited to see the price reporting at the end of the day we could see a whole load of real gold deals (here the green dots) obstinately refusing to position themselves on Bloomberg's line.   We did not care much, because none of us who worked in real markets ever thought for one moment that anyone would start to treat the lines interpolated by Bloomberg as something real. They were a useful visualisation – that was all.   It was only later, when financial engineers started building products that were valued by reference to that line, and when people started making profits, or losing, depending on where Bloomberg drew their line, that investors started attaching significantly more weight to the line itself than to the reality of the reported deal prices. Is the gold price uncertain too? Okay, so I am clearly drawing a parallel. Price charts and particle route maps are doing something quite similar. But let's take it a stage further. Let's try doing what Heisenberg did, and make the bold assertion that there is no price between the data points of trades, just a realm of possibilities.   The derivatives engineers, and even a few of the gold bugs are going to go nuts with this, but it stands up to some pretty detailed scrutiny.    For a start the price that gets printed by Bloomberg is without size. If the bullion banker were to be asked a real price, by a real trader, the banker's first question would be "what is the size?" He has to know if he is quoting for a $200 deal or a $200 million dollar deal, because the prices are completely different!     This gives a third dimension to the price, one which any spot price chart always ignores. At any given point in time the price of anything is a function of the amount of it you want to buy or sell.   Unlike quantum particles this is not difficult concept to grasp. If I were a greengrocer, and you asked me for one banana, I'd probably charge you 20 pence. If you asked me for 10, I might give you a discount, and sell for £1.90 (19p each). If you asked me for 500 I might charge you a premium, because I'd have to get in the van and go and purchase a lot more bananas – so maybe £110 (22p each). But if you asked me for 1,000,000 there is no price. I don't want to sell you 1,000,000 bananas because I wouldn't know where to get them, and I certainly don't want to spend my week in the van hunting them down and paying ever larger prices for the diminishing stock! As you can see the price varies according to size.   Once you introduce this extra dimension to the price chart, so as to get the real feel for where the trading price is, the single line of Bloomberg starts to look like a gross over-simplification. Because not only is there uncertainty in the vertical momentum of the price between two measured points (trades) but also there is a completely different answer depending on the size.   So instead of a line progressing from last quote to next quote the reality is that there is a very large volume of three dimensional economic space between the points, and, with different probabilities, the next trading price could be any point within that volume.   All in all it seems to me that there is a very good case for saying that in the absence of a trade there is no such thing as price. Anyone who seeks to know a price without the hard experiment of executing a trade is deluding themselves into creating a phenomenon which does not really exist. Price is an attribute of a specific trade. It occurs meaningfully only at points in the economic continuum where an exchange happens, and it depends on the individual circumstances, reasons and emotional states of two experimenters (sorry, traders) who each foresee the price subsequently moving in opposite directions.   So price is not smoothly variable, but point-like, quantised, and a generator of uncertainty; and everything between real trades is probabilistic guesswork.  Is Gold fixed? If I were to criticise the Gold Fix I would certainly concede that it is rather stupidly named. Also in the era of Chinese walls – rules which insist colleagues do not tell each other what their common clients are doing – there is something unusual in allowing bank principals to know their own internal customer order book.   However in my opinion this oddity is rather elegantly offset by the fact that the Gold Fix allows another bank principal to steal those orders simply by offering a better price during the auction. I believe this system is much more robust than Chinese walls, because it relies on natural competition rather than self-imposed discipline.   Also two other powerful points jump out for comment:- The Gold Fix is a real trading price. It is not a sample, like LIBOR, and it is not a chart, like the Bloomberg spot gold ticker. It is a price at which a very large number of buyers and sellers chose to deal, and this makes it real.  It was dealt in open competition in very large size, positively swamping the sizes of the individual bullion bank quotes on the Bloomberg ticker. As I explained above this size gives it a right to be different. Besides, if the sellers thought they were getting a bad deal day after day wouldn't they simply deal on the spot market? Or on Comex? There is nothing stopping them.   Forgive me, but I don't really care much in any case. There remain quite a large number of people who are wedded to gold price conspiracy theories. Many of them buy paper gold (gold futures) and then grumble that sellers of paper gold exist. In my opinion they perfectly match each other's requirement!    Meanwhile not one person who has bought gold, to take delivery, has only got paper. All the sellers were able to deliver real gold. That makes a concerted price suppression story – through shorting – very difficult to swallow. More interesting than the Gold Fix But there is still unfinished business here, because the physics element of this story is far more interesting than the gold element. Could it be that a run-of-the-mill financial spat begins to show us a route to solving the central riddle of quantum physics? Now that really would be something.   Since quantum physics first arrived 87 years ago its application has been stupendously successful, but no-one has been able to explain its results in a way we can grasp and call 'reality'. Physicists remain stumped when it comes to describing the weird world they see through their simplest experiments.    In the absence of anything better we all fall back, a bit lazily, into the default human mental model of thinking of stuff as being somewhere and moving somewhere smoothly, rather than in jerks from point to point. We have taken to thinking – much as conspiracy theorists do when they look at price charts – that unmeasured particles have real position and real motion, even when they are isolated from the rest of our universe and no-one is looking.   But this perfectly natural, common sense interpretation leaves science at an impasse. Our mental model and the experimental facts are in fundamental disagreement with each other about how stuff really is.   Physicists have been wringing their hands trying to solve this. They want to explain a reality under quantum physics in a way which does not make the act of measurement special. They want reality to be permanent, whether or not they are looking, and they have come up with some truly zany models ranging from 'there is no reality' to 'there are countless zillions of realities, and entire universes are created every nano-second to cope with all the quantum possibilities'. I am not kidding. These are both pretty standard models of quantum reality which physicists are clinging to.   Yet – and this is the amazing thing – through analysing price at the Gold Fix we can actually see a workable metaphor for quantum experiments, and that really excites me. It's as if the quantum world is an incredibly fast moving market, heaving with tiny exchanges, where each exchange produces an instant of perfect precision in some physical attribute or other, enabling the countless trillions of particle events in the observable universe to map themselves, with respect to each other, into the unambiguous history of our spacetime.    I have read lots of physics books, and not understood many of them, but by sitting in my office and thinking about gold prices I can for the first time start to see how something which appears to be deeply real and continuous is in fact point-like, and fuzzy between the points. I can explain, and in an understandable way to anyone who knows markets, that between one trade and the next price is undefined, uncertain and unreal. We don't know exactly where it is, or if it's moving up or down. All we can do is copy the quantum physicists and make probabilistic guesses until the next trade.    Is there something here the physicists could learn from us? After all, so many physics laboratories have lost their brightest research stars to the quant funds.  Perhaps it's time the London bullion market offered the labs some of our Gold Fix dealers, on sabbatical, of course.

The London Gold Fix, Manipulation & the Quantum Posted: 07 Mar 2014 10:27 AM PST Does Heisenberg's uncertainty principle shed light on "manipulation" of the London Gold Fix? Or is it the other way around?   WHEN Werner Heisenberg looked at his brand new quantum formulae in 1927, writes Paul Tustain, founder and CEO of BullionVault, he noticed something weird.    The world of very small spaces and particles is ruled by matrix mechanics, but as you may remember from your school mathematics, in matrix multiplication (A * B) * C is not the same as A * (B * C). What Heisenberg saw was that because of the difference in the two matrix products there would always be uncertainty as to key physical properties of a particle. His discovery forbids a particle from having both precisely defined motion and precisely defined position at the same time.   Spotting this earned Heisenberg a Nobel prize, and a lifetime of being widely misunderstood.   The rest of us have a very deep seated 'common-sense' view of spacetime and particles, and almost all of us reject the subtle complexity of the 'Uncertainty Principle'. Indeed I am prepared to bet that if you are here reading about it for the first time you are mentally rejecting it. "Of course", you will be thinking, "whether we can measure it or not, a particle obviously has a particular position and a particular speed."    Alas you would be wrong. But don't beat yourself up about it because you are in good company. Even Albert Einstein was on your side for a while.   In physics you can pin down individual quantities very precisely, but by knowing one quantity exactly you will automatically give the particle freedom to be uncertain in another. Woe betide any physicist who interpolates between observations to state as fact something he didn't specifically measure, because physical particles do not do predictable things when they are unmeasured; they appear to spend their unobserved lives weighing up the choices of where physics allows them to be found next, and then pressing the hyperspace button to get there whenever somebody looks.   If you took to examining particle paths between observations the best route map you could draw to describe the motion of an unmeasured particle would look something like this :-     The diagram shows how we located the particle precisely at point A, and again at point B. But in being so precise about its location at an instant of time we made its motion uncertain.   At time A, it might have been going up, or down, there is no answer. In making our precise measurement of position at instant A (and B) we actually denied the particle a definitive up/down motion. It's weird, but that is how particles work in spacetime – it really is.   Nevertheless a good physicist will be able to perform certain quantum calculations, and she will be able to give us a sense of where our particle might have been found, if we had looked. She will be able to calculate that if we were to set everything up the same way and make hundreds of additional measurements at Time T, then the particle would be found in the various ranges shown on the blue dotted line on the picture, with the various probabilities shown.    Even many physicists find it unsatisfactory that the most nature allows us to say about where the particle was when we weren't looking is basically "probably about here". But there it is. Without an observation there was no single explicit position at Time T, because the phenomenon of unmeasured position did not properly exist except in our own mental models. Unmeasured position is smoothed out into a fuzzy realm of possibilities. The Gold Fix The situation of a particle's motion and position bears a striking similarity to price. Let's have a look at another picture.     The blue dots are 'quotes' from a market. Someone from Bloomberg has tracked bankers' gold price quotes, each of which is here represented as a blue spot.    Bloomberg decided to be helpful to the rest of us, and they filled in the gaps between the points with a solid line. Then they sold it to us as a gold price chart – a track of the position of price, through time.   A few years ago, before derivatives were invented, the rest of us would have taken that plotted line with a pinch of salt. We always knew it was an approximation, and not a very good one either, because when we waited to see the price reporting at the end of the day we could see a whole load of real gold deals (here the green dots) obstinately refusing to position themselves on Bloomberg's line.   We did not care much, because none of us who worked in real markets ever thought for one moment that anyone would start to treat the lines interpolated by Bloomberg as something real. They were a useful visualisation – that was all.   It was only later, when financial engineers started building products that were valued by reference to that line, and when people started making profits, or losing, depending on where Bloomberg drew their line, that investors started attaching significantly more weight to the line itself than to the reality of the reported deal prices. Is the gold price uncertain too? Okay, so I am clearly drawing a parallel. Price charts and particle route maps are doing something quite similar. But let's take it a stage further. Let's try doing what Heisenberg did, and make the bold assertion that there is no price between the data points of trades, just a realm of possibilities.   The derivatives engineers, and even a few of the gold bugs are going to go nuts with this, but it stands up to some pretty detailed scrutiny.    For a start the price that gets printed by Bloomberg is without size. If the bullion banker were to be asked a real price, by a real trader, the banker's first question would be "what is the size?" He has to know if he is quoting for a $200 deal or a $200 million dollar deal, because the prices are completely different!     This gives a third dimension to the price, one which any spot price chart always ignores. At any given point in time the price of anything is a function of the amount of it you want to buy or sell.   Unlike quantum particles this is not difficult concept to grasp. If I were a greengrocer, and you asked me for one banana, I'd probably charge you 20 pence. If you asked me for 10, I might give you a discount, and sell for £1.90 (19p each). If you asked me for 500 I might charge you a premium, because I'd have to get in the van and go and purchase a lot more bananas – so maybe £110 (22p each). But if you asked me for 1,000,000 there is no price. I don't want to sell you 1,000,000 bananas because I wouldn't know where to get them, and I certainly don't want to spend my week in the van hunting them down and paying ever larger prices for the diminishing stock! As you can see the price varies according to size.   Once you introduce this extra dimension to the price chart, so as to get the real feel for where the trading price is, the single line of Bloomberg starts to look like a gross over-simplification. Because not only is there uncertainty in the vertical momentum of the price between two measured points (trades) but also there is a completely different answer depending on the size.   So instead of a line progressing from last quote to next quote the reality is that there is a very large volume of three dimensional economic space between the points, and, with different probabilities, the next trading price could be any point within that volume.   All in all it seems to me that there is a very good case for saying that in the absence of a trade there is no such thing as price. Anyone who seeks to know a price without the hard experiment of executing a trade is deluding themselves into creating a phenomenon which does not really exist. Price is an attribute of a specific trade. It occurs meaningfully only at points in the economic continuum where an exchange happens, and it depends on the individual circumstances, reasons and emotional states of two experimenters (sorry, traders) who each foresee the price subsequently moving in opposite directions.   So price is not smoothly variable, but point-like, quantised, and a generator of uncertainty; and everything between real trades is probabilistic guesswork.  Is Gold fixed? If I were to criticise the Gold Fix I would certainly concede that it is rather stupidly named. Also in the era of Chinese walls – rules which insist colleagues do not tell each other what their common clients are doing – there is something unusual in allowing bank principals to know their own internal customer order book.   However in my opinion this oddity is rather elegantly offset by the fact that the Gold Fix allows another bank principal to steal those orders simply by offering a better price during the auction. I believe this system is much more robust than Chinese walls, because it relies on natural competition rather than self-imposed discipline.   Also two other powerful points jump out for comment:- The Gold Fix is a real trading price. It is not a sample, like LIBOR, and it is not a chart, like the Bloomberg spot gold ticker. It is a price at which a very large number of buyers and sellers chose to deal, and this makes it real.  It was dealt in open competition in very large size, positively swamping the sizes of the individual bullion bank quotes on the Bloomberg ticker. As I explained above this size gives it a right to be different. Besides, if the sellers thought they were getting a bad deal day after day wouldn't they simply deal on the spot market? Or on Comex? There is nothing stopping them.   Forgive me, but I don't really care much in any case. There remain quite a large number of people who are wedded to gold price conspiracy theories. Many of them buy paper gold (gold futures) and then grumble that sellers of paper gold exist. In my opinion they perfectly match each other's requirement!    Meanwhile not one person who has bought gold, to take delivery, has only got paper. All the sellers were able to deliver real gold. That makes a concerted price suppression story – through shorting – very difficult to swallow. More interesting than the Gold Fix But there is still unfinished business here, because the physics element of this story is far more interesting than the gold element. Could it be that a run-of-the-mill financial spat begins to show us a route to solving the central riddle of quantum physics? Now that really would be something.   Since quantum physics first arrived 87 years ago its application has been stupendously successful, but no-one has been able to explain its results in a way we can grasp and call 'reality'. Physicists remain stumped when it comes to describing the weird world they see through their simplest experiments.    In the absence of anything better we all fall back, a bit lazily, into the default human mental model of thinking of stuff as being somewhere and moving somewhere smoothly, rather than in jerks from point to point. We have taken to thinking – much as conspiracy theorists do when they look at price charts – that unmeasured particles have real position and real motion, even when they are isolated from the rest of our universe and no-one is looking.   But this perfectly natural, common sense interpretation leaves science at an impasse. Our mental model and the experimental facts are in fundamental disagreement with each other about how stuff really is.   Physicists have been wringing their hands trying to solve this. They want to explain a reality under quantum physics in a way which does not make the act of measurement special. They want reality to be permanent, whether or not they are looking, and they have come up with some truly zany models ranging from 'there is no reality' to 'there are countless zillions of realities, and entire universes are created every nano-second to cope with all the quantum possibilities'. I am not kidding. These are both pretty standard models of quantum reality which physicists are clinging to.   Yet – and this is the amazing thing – through analysing price at the Gold Fix we can actually see a workable metaphor for quantum experiments, and that really excites me. It's as if the quantum world is an incredibly fast moving market, heaving with tiny exchanges, where each exchange produces an instant of perfect precision in some physical attribute or other, enabling the countless trillions of particle events in the observable universe to map themselves, with respect to each other, into the unambiguous history of our spacetime.    I have read lots of physics books, and not understood many of them, but by sitting in my office and thinking about gold prices I can for the first time start to see how something which appears to be deeply real and continuous is in fact point-like, and fuzzy between the points. I can explain, and in an understandable way to anyone who knows markets, that between one trade and the next price is undefined, uncertain and unreal. We don't know exactly where it is, or if it's moving up or down. All we can do is copy the quantum physicists and make probabilistic guesses until the next trade.    Is there something here the physicists could learn from us? After all, so many physics laboratories have lost their brightest research stars to the quant funds.  Perhaps it's time the London bullion market offered the labs some of our Gold Fix dealers, on sabbatical, of course.

Gold ETF Stocks Inflows Return Posted: 07 Mar 2014 09:01 AM PST Stock-market capital finally started flowing back into the flagship GLD gold ETF for the first time in 14 months in February!  Though this buying was small, this is truly a momentous event.  Extreme gold-ETF outflows were the dominant culprit behind last year’s epic gold selloff.  Without that massive influx of additional supply weighing on the global markets, gold is going to surge on strong physical demand. The World Gold Council’s latest Gold Demand Trends report published just a couple weeks ago really drives home the importance of gold-ETF selling.  In 2013 they suffered their first net annual outflows ever seen since the first one was launched in 2003.  As today’s secular gold bull is the first time these gold ETFs ever even existed, the gold market has literally never experienced anything like last year.

Gold and Silver and the Paradox of Over-Optimization Posted: 07 Mar 2014 08:29 AM PST Disaster, by over-optimization, is another important way to frame the much-heralded "just in time" inventory practices which are used broadly by industry and grafted to monetary assets like precious metals. The overgrowth of the financial system and serial bailouts are akin to allowing fuels to build up in the forest, preventing the natural burn off needed to replenish the soil and pave the way for new growth. Superficially, intentions are certainly good. But many suffer despite the well-intended. No one wants to see suffering or be held responsible for it for even a microsecond.

Gold Prices Drop Weekly Gain as US Jobs Data "Defy Cold Weather", Moscow Rebukes EU Over Ukraine, Shanghai Premium Ends Negative Posted: 07 Mar 2014 07:27 AM PST GOLD PRICES fell sharply Friday lunchtime in London, dropping 1.1% inside 5 minutes of new data showing US jobs hiring was much stronger than forecast in February.   Losing another 0.5% over the next hour, gold prices dropped three-quarters of the week's earlier $27 gain per ounce, finally bouncing higher from $1330.   "Cold weather is likely to deliver another poor payroll number," Deutsche Bank analysts said ahead of the official Non-Farm jobs report, "and sustain the strength in the gold price."   "That these numbers came even while weather was bad shows the underlying strength of the US economy," the BBC quotes Scotia Capital FX strategist Camilla Sutton.   US Treasury bonds fell after the US jobs data – driving 10-year rates up 6 basis-points to a 3-week high at 2.80% – and the US Dollar index rallied from new 4-month lows on the currency market.   The Euro, having been flat at $1.3725 mid-week, and then flat at $1.3850 after Thursday's weaker-than-expected US productivity and factory orders data, today rose above $1.3900 – its highest level since Oct.2011 – before dropping half-a-cent.   Euro gold prices gave back the last of this week's earlier 2.5% gains, falling back to €962 per ounce – a level first achieved in May 2010 as the Eurozone debt crisis worsened.   "Russia will not accept...sanctions and threats" from the European Union, Moscow said today, responding to trade and financial blocks proposed by Brussels over the Ukraine crisis.   "The proposed referendum on the future of Crimea would violate the Ukrainian constitution and violate international law," said US president Obama late Thursday, a comment repeated Friday by Ukraine's interim president Turchinov.   Destroyer USS Truxton today entered the Black Sea, reportedly heading for exercises with the Romanian navy.   Any "positive effect on the gold price from an escalation in geopolitical risk," Deutsche Bank's earlier note said, "typically fades rapidly.   "However, if there were international efforts to impose sanctions on Russia, then this could start to impact the [platinum group] sector, and specifically palladium."   With strikes at South Africa's platinum mines likely to start impacting global supplies, according to London analysts, "Platinum is holding at the recent breakout highs and maintains a bullish 'reverse head & shoulders' base," reckons technical analysis from Credit Suisse.   The gold price this week "rallied back to test trendline resistance from May 2013," the Swiss investment and bullion bank said, pointing to $1352.   "The risks are for an eventual extension through [there] to challenge targets at $1362/66" – the gold price high of last October.   Meantime in Asia, Shanghai gold premiums to the international price ended the week sharply negative, more than $3 per ounce below London settlement.   "It has been a mixed week," Reuters quotes a Singapore gold bullion dealer, with clients selling above $1350 only to buy back around $1330.   A local retailer quoted separately says consumer demand tailed off when spot gold prices broke above $1320 late last month.    Some consumers "were selling scrap" says the news-wire.

Surprise! A Profitable, Low-Risk Gold Company Posted: 07 Mar 2014 06:00 AM PST Gold is wonderful in many ways, but gold miners are another story. They are not durable nor are they particularly rare. "Solidity" and "soundness" are about the last words anyone would apply to a business engaged in the mining of gold. Miners like to bury perfectly good cash in the ground. They tend to issue lots of shares to stay afloat and struggle to make a decent return on what they invest. If you’ll allow me a bit of slang, they suck. (Except when the stock prices go up — then nobody cares about this stuff.) Yet I found a seeming exception. A business that is self-funding and non-dilutive. (No issuing shares to pay the bills!) A self-described "industrialized-type gold company with a low-risk business model." [Italics added] Say what? Low-risk? Gold company? It’s true. Now, it cheats a little. It doesn’t do much mining itself. Instead, it processes the ore for other miners in the region. Let’s take a look. Dynacor Gold (DNG:tsx) proudly claims its ore-processing division, in Peru, "generates steady cash flow and profits while reducing risk." If a picture is worth a thousand words, then it may be best to show you the ore processing steps graphically. Take a look at this chart: The processing strategy is at the core of Dynacor’s engine. It has led to massive outperformance of Dynacor’s stock price over its junior gold mining peers. Over the last five years, the stock is up 400%, while the GDXJ — a decent proxy for junior gold stocks — has been more than cut in half. Really, it’s unbelievable. Take a look below to get a look at the last two years, which have been extraordinarily difficult for gold miners. Dynacor’s shares have more than doubled. As I say, at the heart of Dynacor is a decent business processing ore. It leads to steadily rising cash flow per share, as the nearby chart shows. The trailing four quarters cash flow is 29 cents per share. The stock is C$1.66 per share as I write. So you are paying less than 6 times cash flow to own it. And the company has credible plans to expand its ore-processing capacity. It’s a growth story as well as a value play. So Dynacor has a good gold business, a rare thing, but it can’t resist the itch to bury some otherwise perfectly good cash underground. Dynacor has a drilling campaign underway at a copper and gold property, Tumipampa. Management dedicates many slides in a recent presentation on this high-grade gold property. It seems to be in a good location in Peru, surrounded by six senior miners. (Dynacor has been in Peru for 20 years, and I don’t regard this as a risk that would keep me away.) The drill results look great (as they often do), and production should start in 2016. There is nothing special about this project in my mind. There are dozens of stories of great gold projects. Very few ever really pan out as great investments. Most of the time, there are cost overruns and delays and disappointments. That doesn’t prevent the geologist crowd from getting excited over drill core samples. The best I can say for Tumipampa is that at least it is self-funding. Dynacor doesn’t have to sell stock or borrow money to do what they’re doing. Nonetheless, I wish they had stuck to the ore processing and paid a dividend with the excess cash. The pursuit of Tumipampa seems a needless risk and turns me off the stock. However, you may think differently about gold exploration risks. In a different light, one might look at Tumipampa as potential big upside if it becomes a decent mine in 2016. Dynacor has just 38.6 million shares outstanding. And it’s not a serial issuer of stock. Therefore, any success is likely to have a large effect on the share price. Besides all that, give management credit for the track record so far. Dynacor is an interesting story and a unique gold stock. It’s actually been a very good investment for a long time. Better, in fact, than the much admired gold metal itself. Sincerely, Chris Mayer for The Daily Reckoning P.S. Bottom line: Mining is tough; so discovering a good company like Dynacor in a relatively bad market sector makes the reward that much sweeter. And there are plenty of great opportunities just like this, if you know where to look. To get better insight on a wealth of great investment opportunities — specifically in the resource and energy spaces — sign up for the FREE Daily Resource Hunter, right here. Each issue is packed full of insightful commentary on these markets, and gives readers at least 3 chances to gain access to life-changing investment opportunities. Don’t wait. Sign up for FREE, right here. Article posted on Daily Resource Hunter

Koos Jansen: China's road to secret gold accumulation Posted: 07 Mar 2014 05:23 AM PST 8:25a ET Friday, March 7, 2014 Dear Friend of GATA and Gold: Gold researcher and GATA consultant Koos Jansen today publishes an English translation of another remarkable commentary by a Chinese market analyst, newsletter editor, and consultant to the China Gold Association, Zhang Jie. Zhang's commentary, written last year, asserts: -- China, like Germany, has stored gold at the Federal Reserve Bank of New York but cannot try to repatriate it without risking "a tremendous confrontation." -- China's government is exploiting the Western central bank gold price suppression scheme by buying gold on the sly through intermediaries to hedge its foreign exchange surplus against depreciation by "quantitative easing" and a currency crisis. Buying gold "is the most effective means to protect China's foreign exchange reserve wealth from the threat of the Western financial hegemony." -- Having acquired much gold, China can use it to support the value of its currency, whose value so far is supported by foreign exchange reserves whose value is determined by other countries, not by China itself. -- "The foreign exchange standard has more problems than a gold standard." Zhang's commentary shows, as many other reports from China have shown in recent years, that China long has understood everything GATA has been saying about gold's enduring centrality in the world financial system and gold price suppression by Western central banks. Jansen has added his own insights, has headlined the commentary "China's Road to Secret Gold Accumulation," and has posted it at his Internet site, In Gold We Trust, here: http://www.ingoldwetrust.ch/chinas-road-secret-gold-accumulation CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. ADVERTISEMENT Buy metals at GoldMoney and enjoy international storage GoldMoney was established in 2001 by James and Geoff Turk and is safeguarding more than $1.7 billion in metals and currencies. Buy gold, silver, platinum, and palladium from GoldMoney over the Internet and store them in vaults in Canada, Hong Kong, Singapore, Switzerland, and the United Kingdom, ­taking advantage of GoldMoney's low storage rates, among the most competitive in the industry. GoldMoney also offers delivery of 100-gram and 1-kilogram gold bars and 1-kilogram silver bars. To learn more, please visit: http://www.goldmoney.com/?gmrefcode=gata Join GATA here: Mines and Money Hong Kong Hong Kong Convention and Exhibition Centre Hong Kong Special Administrative Region, China Monday-Friday, March 24-28, 2014 http://www.minesandmoney.com/hongkong/ Canadian Investor Conference 2014 Vancouver Convention Centre West 1055 Canada Place, Vancouver, British Columbia Sunday and Monday, June 1 and 2, 2014 http://cambridgehouse.com/event/25/canadian-investor-conference-2014-inc... * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: http://gata.org/tshirts Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16 ADVERTISEMENT How to profit with silver -- and which stocks to buy now Future Money Trends is offering a special 16-page silver report with profiles of nine companies and technical analysis of their stock performance. Six of the companies have market capitalizations of less than $800 million and one company has a market cap of only $30 million. The most exciting of these companies will begin production in a few weeks and has a market cap of just $150 million. Half of all proceeds from the sale of this report will be donated to the Gold Anti-Trust Action Committee to support its efforts exposing manipulation and fraud in the gold and silver markets. To learn about this report, please visit: http://www.futuremoneytrends.com/index.php?option=com_content&id=376&tmp...

Paulson, the Ultimate Financial Meltdown Insider Is Worried… About Another One Posted: 07 Mar 2014 05:14 AM PST Shah Gilani writes: Do you remember the financial crisis of 2008? The one caused by a meltdown in mortgages... trillions of dollars of which were owned and "guaranteed" by government-sponsored enterprises Fannie Mae and Freddie Mac? Do you remember that Fannie and Freddie had to be bailed out by the government - I mean taxpayers - so their total implosion wouldn't trigger a global depression?

Friday Morning Links Posted: 07 Mar 2014 04:59 AM PST MUST READS Putin rebuffs Obama, crisis escalates – Reuters Chaori Solar in landmark Chinese bond default – BBC China Chaori Solar Default: A Risky Experiment – WSJ Satoshi Nakamoto: The Face Behind Bitcoin – Newsweek Did Newsweek validate Bitcoin conspiracy theory? – CNN/Money The Fed and Financial Stability: Three Questions – Brookings Euro Rises to 2-Year High on ECB Bets; Dollar Drops [...]

Alasdair Macleod: Elevating markets: A signal of reviving bank lending? Posted: 07 Mar 2014 04:52 AM PST 7:50a ET Friday, March 7, 2014 Dear Friend of GATA and Gold: "Free markets are a myth," GoldMoney research director Alasdair Macleod writes today, "since capital markets are no longer where buyers and sellers meet to buy and sell things based on perceptions of value. Instead it is all about trends and trusting the Federal Reserve." He adds that since markets are still elevating even as the Fed purports to be reducing its bond purchases, the money pumping may have been picked up by a revival in bank lending. Macleod's commentary is headlined "Elevating Markets: A Signal of Reviving Bank Lending?" and it's posted at GoldMoney's Internet site here: http://www.goldmoney.com/research/analysis/elevating-markets-a-signal-of... CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. ADVERTISEMENT How to profit with silver -- and which stocks to buy now Future Money Trends is offering a special 16-page silver report with profiles of nine companies and technical analysis of their stock performance. Six of the companies have market capitalizations of less than $800 million and one company has a market cap of only $30 million. The most exciting of these companies will begin production in a few weeks and has a market cap of just $150 million. Half of all proceeds from the sale of this report will be donated to the Gold Anti-Trust Action Committee to support its efforts exposing manipulation and fraud in the gold and silver markets. To learn about this report, please visit: http://www.futuremoneytrends.com/index.php?option=com_content&id=376&tmp... Join GATA here: Mines and Money Hong Kong Hong Kong Convention and Exhibition Centre Monday-Friday, March 24-28, 2014 Hong Kong Special Administrative Region, China http://www.minesandmoney.com/hongkong/ Canadian Investor Conference 2014 Vancouver Convention Centre West 1055 Canada Place, Vancouver, British Columbia Sunday and Monday, June 1 and 2, 2014 http://cambridgehouse.com/event/25/canadian-investor-conference-2014-inc... * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: http://gata.org/tshirts Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16 ADVERTISEMENT Buy metals at GoldMoney and enjoy international storage GoldMoney was established in 2001 by James and Geoff Turk and is safeguarding more than $1.7 billion in metals and currencies. Buy gold, silver, platinum, and palladium from GoldMoney over the Internet and store them in vaults in Canada, Hong Kong, Singapore, Switzerland, and the United Kingdom, ­taking advantage of GoldMoney's low storage rates, among the most competitive in the industry. GoldMoney also offers delivery of 100-gram and 1-kilogram gold bars and 1-kilogram silver bars. To learn more, please visit: http://www.goldmoney.com/?gmrefcode=gata

Gold Price Challenges $1350 Posted: 07 Mar 2014 01:24 AM PST From last Friday's close at $1322, gold opened strongly on Monday trading, as high as $1355 before losing two thirds of the rise on Tuesday. On Thursday afternoon (GMT) gold rallied back to challenge the $1350 level. This morning (Friday) it is in the balance as to whether or not gold will need more consolidation before moving on towards $1400, with everyone watching out for US employment numbers. The change in sentiment over the last eight weeks has encouraged small traders to go long on gold. Normally, market-makers would be able to mark prices down aggressively to shake out these short-term speculators, but it has not recently happened. This suggests that the underlying market is robust.

Stock Market Top - 2014 The Year of Gold, Silver and Commodities Posted: 07 Mar 2014 01:16 AM PST Trader MC writes: Charts are telling me that 2014 should be a great year for Commodities and Miners and I expect a period of financial market turmoil for the US Market. I believe that we are very close to an important corrective move as the Market is due to top in March 2014. The Rhythm of the Dow Jones Index is telling me that a major top could already have been printed:

Gold and Silver Stocks Interesting Developments in the Charts Posted: 07 Mar 2014 01:01 AM PST As I promised you last night lets look at the GLDX, Junior Gold Stock Explorers etf that maybe one of the hottest areas in the markets right now. Tonight I’ll show you the two different measuring techniques I use to get an idea of where the price may move once a breakout is in progress. The first method I call the breakout to breakout method which the name implies. You can use this method when you have a top, bottom or consolidation pattern below your current consolidation pattern. Using the GLDX we see this is the case. We have the red bullish falling wedge that formed below our current blue triangle. If this plays out according to plan the blue triangle will be in the middle between the red bullish falling wedge and the price objective up to the 19.50 area.

10 Ways to Screw Up Your Retirement Posted: 06 Mar 2014 11:25 PM PST Dear Reader, My appearance in today’s missive will be brief, as I plan to pass the reins to Dennis Miller in a moment. Dennis, of course, is the editor of Miller’s Money Forever, our newsletter built specifically to meet the investment needs of retirees and those close to retirement. Those needs being, in order of importance: (1) preserving your nest egg; and (2) generating income to live on. Generating retirement income used to be much simpler. In 2000, a 5-year CD paid about 6%. If you had a million bucks, you could put it all into CDs and generate $60,000 per year with zero risk to your principal. Voilà, you were already at a middle-class lifestyle without having to do much at all. And if you were willing to venture a little bit further out on the risk spectrum or draw down your principal by a couple of percentage points per year, you could clear six figures per annum without a sweat. It’s a different story today. Now, the average CD pays 1.5%—meaning you’d need a $4,000,000 nest egg just to generate that same $60,000 in income per year. Needless to say, not many people have that kind of money. So whether retirees like it or not, they need to accept more risk to finance even a mediocre retirement. The problem is that retirees are the last investors who can afford to lose their principal. With your earning years behind you, every dollar you lose to a bad investment decision equates to income you’ll never get back. Make a couple of major blunders, and your dream retirement of playing golf and eating out a few times per week might descend into watching Phil Mickelson on a 17-inch TV with a container of Ramen noodles in your lap. But with interest rates so low, taking that risk is pretty much a necessity. That being the case, risk management is the most crucial aspect of investing for retirees. And that, in my opinion, is where Dennis and his team of analysts really shine. They don’t just pick stocks—they’ve built a comprehensive investment strategy called the “Bulletproof Portfolio” that beautifully balances the two overarching needs of retirees. First, it generates sufficient current income to finance a comfortable retirement, provided you have decent-sized nest egg. Second and even more crucially, the Bulletproof Portfolio employs a series of safeguards to ensure that your portfolio is never subject to dangerous levels of risk. If you’re anywhere near retirement age, I encourage you to check out the Bulletproof Portfolio strategy for yourself. Click here to begin your risk-free trial to Miller’s Money Forever. You’ll get a full 90 days to decide if it’s for you. If it’s not, no problem—just cancel for a full and prompt refund. Without further ado, here’s Dennis… 10 Ways to Screw up Your Retirement Dennis Miller, Senior Editor, "Miller's Money Forever" There are many creative ways to screw up your retirement. Let me show you how it’s done. Supporting adult children. My wife and I have friends with an unmarried, unemployed daughter who had a child. Our friends adopted their grandchild and are now in their late sixties raising a kid in grade school. The same daughter had a second child, and they adopted that one too. When she announced she was pregnant a third time, they finally said, “Enough! It’s time for a third-party adoption.” Last time I spoke with them, their unemployed daughter and her boyfriend were living in their basement, neither contributing financially nor lifting a finger around the house. What began as a temporary bandage had become a permanent crutch. Our friends love their grandchildren; however, they’ve become bitter. Jo and I also know of retirees who make their adult children’s car payments. I’m not talking about college-age kids; some of these “children” are close to 50. What’s their justification? “If we don’t make the payments, they won’t be able to go to work.” What I can’t grasp is how these adult children have iPads and iPhones, go on vacations, and do other cool things, but can’t seem to make their car payments. You are not the family bank. There is generally a brief window of opportunity between children leaving the nest and retirement. Use it to stash away enough money to retire comfortably! Ignore your health. I served on the reunion committee for my 50th high-school class reunion. We diligently tried to track down our classmates, but many had not lived long enough to RSVP to the party. The number of deaths from lung cancer and liver cancer were shocking. Many of those six feet under had been morbidly obese or simply never went to the doctor for checkups. I know this sounds obvious, but your health choices really do affect how long and how well you live. Retiring only to become homebound because of health problems won’t be much fun. Not keeping your retirement plan up to date. In the summer of 2013, the Employee Benefit Research Institute (EBRI) published a survey about low-interest-rate policies and their impact on both baby boomers and Generation Xers, who are following right behind. The bottom line (emphasis mine): “Overall, 25-27 percent of baby boomers and Gen Xers who would have had adequate retirement income under return assumptions based on historical averages are simulated to end up running short of money in retirement if today’s historically low interest rates are assumed to be a permanent condition, assuming retirement income/wealth covers 100 percent of simulated retirement expense.” It is a sad day when people who thought they’d saved enough realize they have not. Run your personal retirement projection annually to make sure you’re keeping up with the times. Otherwise you may have to work longer or step down your retirement lifestyle—drastically. Thinking you can continue working as long as you wish. While age discrimination is illegal, you may not be able to work forever. If illness doesn’t push you out the door, your employer might downsize (we all know who goes first) or buy you out with a lucrative lump sum. Many companies want older employees off the payroll because their healthcare costs are high; plus, they are often at the top of the salary scale. More than one employer has made the workplace so uncomfortable that an older employee felt he had to quit. Other employers will systematically build a case to terminate a senior employee with their legal team waiting in the wings to help. Whatever the reason, you may have to stop working even if you enjoy your job, so plan for it. Not increasing your rate of saving. A surefire way to end up short is to pay off a large-ticket item like your home mortgage and then continue spending that money every month. Start paying yourself instead! Don’t prioritize saving after it’s too late to benefit from years of compounded interest. Continually taking equity out of your home. Too many of my friends have been duped into taking out additional equity when refinancing with a lower-interest mortgage. If you can secure a lower rate, use it to pay off your home off faster. When you have, start making those payments to your retirement account. Retire with a substantial mortgage. The general rule of thumb is your mortgage payment should be no more than 20-25% of your income. If you retire and still have a mortgage, it might be tough to stay within those guidelines. Taking out a reverse mortgage at a young age. Debt-laden baby boomers are taking out reverse mortgages at an increasingly younger age. Just read the HUD reports. Many have very little equity to begin with and use a reverse mortgage to stop their monthly bank payments for pennies in return. Locking yourself into a fixed income at a young age is a great way to kiss your lifestyle goodbye. Many of these young boomers will find themselves wondering, “Why is there is so much life left at the end of my money?” Putting your life savings into an annuity. While annuities have their place in a retirement portfolio, going all in is dangerous, particularly at a young age. After all, your monthly payment depends in part on your age. I know folks who put their entire life savings into variable annuities. They thought they were buying a “pension plan” and would never have to worry again. The crash of 2008 slashed their monthly checks, and they have yet to recover. Retirement without worry is not that simple. Thinking your employer’s retirement plan is all you need. The era of pensions is gasping its dying breath. We have many friends who retired from the airlines with sizable pensions. When those airlines filed for bankruptcy, their pensions shriveled. No industry is immune to this danger, so we all need a backup plan. Government pensions are following suit. Just ask anyone who has worked for the city of Detroit! While the unions are fighting the city to preserve their pensions, an initial draft of the plan indicates underfunded pensions (estimated at $3.5 billion) may receive $0.25 on the dollar. Don’t fall for the trap! If you work for the government, you still need to save for retirement. Contribute to your 457 plan or whatever breed of retirement account is available to you. The federal government has over $100 trillion in unfunded promises, and many state governments are woefully underfunded. That doesn’t mean your retirement has to be. Dan again. Doug French is up next to discuss how longtime gold hater Warren Buffett has turned to bashing Bitcoin. Then, since we’re in the heart of tax season, we’ll share some of David Galland’s classic musings on the topic of tax day. Buffett vs. Bitcoin Doug French, Contributing Editor Warren Buffett has made billions investing. For that, the financial press and most investors hang on his every word. Is he a genius of all things? Far from it. As Doug Casey describes, Buffett is merely an idiot savant. The Oracle of Omaha famously hates gold. His father, Congressman Howard Buffett, was a great champion of sound money and the gold standard. Unfortunately, Warren continues to rebel against his father’s conservative convictions. Gold, Warren says, “gets dug out of the ground in Africa, or some place. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.” The yellow metal has served as money for centuries, but Buffett doesn’t seem to understand money. A good money should be: recognizable, divisible, homogenous, portable, durable, have a fairly stable value, and be generally marketable. Buffett’s beloved equities do not come close to possessing all of these qualities. While you could probably bribe a surly guard at any of the world’s borders with a gold coin, see how far offering him a share of Exxon gets you. Bashing Bitcoin Now we can add Bitcoin to the list of things Buffett despises. He claims that Bitcoin is “not a currency,” and says, “I wouldn’t be surprised if it wasn’t around in the next 10-20 years.” We could say the same about Buffett, although his Cherry Coke and hamburger diet is serving him well so far. It is a bit worrisome, however, that he was unable to pick out his favorite drink in a blind taste test, despite reportedly knocking back 60 ounces of the stuff daily. Anyway, in his dissing of Bitcoin, Buffett said the cybercurrency is “not a durable means of exchange or store of value. … It’s a speculative Buck Rogers type of thing. … People buy or sell them hoping they’ll go up or down like they did with tulip bulbs a long time ago.” That’s not exactly true. As I wrote a few weeks ago, quoting John Hathaway, “There is (as yet) no Bitcoin futures exchange, no Bitcoin derivatives, no Bitcoin hypothecation or rehypothecation.” To speculate in bitcoins, you have to actually buy bitcoins. There is no established exchange or mechanism to borrow them and sell them short, nor is there a way to purchase them on leverage, as Buffett would imply. By comparison, the tulip bulb market in 1636 Amsterdam was designed for speculation. The bulbs were in the ground, so it was a futures market from September to June. Buyers were only required to put up a small fraction of the contract price. Very few bulbs were actually delivered, and trades settled with only a payment of the difference between the contract and settlement price. In reality, Bitcoin is used more for commerce than speculation. More businesses are accepting bitcoins for payment every day. Libertarian Patrick Byrne’s company, Overstock.com, now accepts bitcoins, and the number of customers using the cybercurrency is growing exponentially. Byrne admits the company is not holding the bitcoins because it can’t pay its suppliers with them. So Overstock immediately trades any bitcoin it receives for dollars. Contrary to Buffett’s view that the Bitcoin market is some frothy bubble of speculation, the selling pressure of retailers like Overstock puts constant downward pressure on Bitcoin’s price. A Matter of Trust “Satoshi Nakamoto” created Bitcoin as an answer to government’s continued money creation and mismanagement. Satoshi, whoever he, she, or they is, wrote: “The root problem with conventional currency is all the trust that’s required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve. We have to trust them with our privacy, trust them not to let identity thieves drain our accounts. Their massive overhead costs make micropayments impossible.” Trust has been a problem lately in the Bitcoin world. The third-largest exchange, Mt. Gox, filed bankruptcy after 850,000 bitcoins were stolen. A Bitcoin bank, Flexcoin, folded this week after 896 bitcoins were taken. This is after underground commerce site Silk Road, which only accepted Bitcoin, was shut down by the authorities, and BitInstant CEO and Bitcoin millionaire Charlie Shrem were arrested for money laundering. Despite all of this negative news, a single bitcoin will still set you back $668. That’s about half the high of $1,280… but still over 10x the price a bitcoin went for just last summer. Gold 2.0? The limited amount of bitcoins and the difficulty in creating new ones makes it “gold 2.0,” according to Chriss Street, writing for American Thinker: “Since the beginning of human history, only about 5.6 billion troy ounces of gold has ever been mined. The value of gold is rooted in its medium rarity, easily handling and other qualities most other metals lack. These properties are the basis of gold serving as money. Bitcoin has a stark resemblance to gold: ‘Both are backed by no one. Both are, relative to fiat currency, inconvenient for day to day use. Since there is a limit of 21 million that may ever be “mined” by the year 2140, Bitcoins are rare units of exchange. Bitcoins will remain rare like gold.’” When it comes right down to it, Warren Buffett doesn’t like Bitcoin for the same reason he doesn’t like gold. Inflation helps his investment business, so he hates anything that might be deflationary. Bitcoin, like a true gold standard, could bring deflation. Paul Krugman hates the idea for same reason. Back in December, Krugman wrote a blog post at the New York Times titled “Bitcoin Is Evil.” The Keynesian Nobel laureate quoted Charlie Stross: “Bitcoin looks like it was designed as a weapon intended to damage central banking and money issuing banks, with a Libertarian political agenda in mind—to damage states’ ability to collect tax and monitor their citizens financial transactions.” Outperforming Buffett If you bought a share of Berkshire Hathaway during the week of March 13, 2000, it would’ve cost you $51,300. Today, that share goes for $177,989. If you instead invested that same $51,300 into gold, you’d now have $236,531 worth of gold. Bitcoin, of course, wasn’t even an apple in Satoshi’s eye in 2000. But since being created in 2009, it has skyrocketed from pennies per coin to over $600/coin. In other words, both of these “unproductive” assets have handily outperformed Buffett. Maybe that’s why he hates them. The Oracle may be an investing phenomenon, but when it comes to money, he doesn’t have a clue. When Buffett talks stocks, listen up. But when his proclamations veer into monetary matters, you’re better off covering your ears. Casey Gems: David Galland on Tax Day David Galland, Managing Director Originally Published on April 20, 2007 Congratulations on Your New Job… Working for Me! Like many of you, I have just finished being relieved of all my spare cash by Uncle “The Vig” Sam’s annual protection payment. As a small consolation, I was thrilled to learn that, in addition to being used for bombing various recalcitrant corners of the Middle East, my money is now being deployed keeping 52.6% of my fellow Americans in bread and flat-screen televisions. That percentage is, according to economist Gary Shilling, how many Americans are now receiving a significant share of their income from the government. But of course, because the government doesn’t make anything, the fount of this largess is actually… oh, yeah, you and me. With over 70 million Americans now headed for retirement, most of which have nowhere near enough money to scrape by on, the deeply dependent population is only going to grow… lockstep with the ballooning costs of Social Security and Medicare. So, I wonder, at exactly what point does the US stop being considered a free-market economy and officially warrant the label of socialist… or, for that matter, communist? Because when you think of it, the communist motto “from each according to his ability, to each according to their need,” a motto that has always resonated in certain circles, certainly seems appropriate to the evolving nature of the “new” America. Friday Funnies They say you shouldn’t judge a book by its cover. You might find that bit of wisdom difficult to heed after seeing these awful real-life book covers: Check out more ridiculous book covers here. A fair warning—some are less than wholesome. Come for Da Bull Two sisters, one blonde and one brunette, are trying to start a farm. The brunette sister finds a prized bull in the classifieds and leaves to check it out. She tells the blonde that she will contact her to come haul the b

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