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Thursday, March 27, 2014

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The case for gold: Optimal portfolio allocation

Posted: 27 Mar 2014 05:17 PM PDT

A 6-page white paper from Axel Merk of Merk Investments to give investors guidance on constructing an optimal portfolio using gold as a diversifier.

Singapore Exchange mulls starting physical gold trading

Posted: 27 Mar 2014 03:54 PM PDT

SGX may join peers in South Korea and China in offering physical bullion trading as Asian demand increases, drawing supplies out of Europe.

Watch out for Chinese gold buying below $1,300 - Phillips

Posted: 27 Mar 2014 03:18 PM PDT

Physical gold demand from China was strong in February and could remain so in March on lower prices.

Gold slips below $1,300, likely to stutter short term

Posted: 27 Mar 2014 01:02 PM PDT

Gold has now fallen back below the psychologically important $1,300 level, and although there are positive factors in play, could yet drift further downwards over the next month or so.

Indians Are Desperate For Gold Because They Know Their Rulers Are Thieves

Posted: 27 Mar 2014 12:00 PM PDT

Indians Are Desperate For Gold Because They Know Their Rulers Are Thieves

Institutional adviser Jayant Bhandari discusses why Indians remain desperate for gold, despite the Indian government’s efforts to ban gold imports. Bhandari states that Indians are desperate for gold because they know their rulers are thieves. Which begs the question, if Indian rulers are thieves, just what exactly are the Federal Reserve, TBTF banks, and the rest [...]

The post Indians Are Desperate For Gold Because They Know Their Rulers Are Thieves appeared first on Silver Doctors.

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Hostage Markets: Are The Banksters The Real Hostages?

Posted: 27 Mar 2014 11:58 AM PDT

In our current paradigm of Hostage Markets in the precious metals sector, which has existed in this extreme form for three years now; appearances can be deceiving. By all appearances; it is the One Bank which is in complete-and-absolute control of our fraud-ridden markets, and precious metals investors who are the helpless hostages. But in effective terms, is that really the case?

In fact; it is the One Bank itself that we see with less and less latitude for action, which is a qualitative basis for the definition of a "hostage". As we see prices "trapped" within an absurdly limited trading range, we begin to see that this paradigm of Hostage Markets is not a strategy of choice on the part of the One Bank – but rather a strategy of lack of choice.

Ever since the One Bank's minions in our central banks squandered most of the West's bullion, flooding bullion markets with ridiculously excessive quantities of bullion year after year, simply because they could do so; the final chapter in this game of bullion-manipulation has already been written. The "story" ends with either an (official) bullion-default, or an (unofficial) decoupling – between the banksters's paper-fraud markets and the real/legitimate bullion market.

This is because even in its least-destructive manifestation, this permanent price-suppression in bullion markets has (inevitably) created a permanent, structural deficit in supply. Regular readers are fully familiar with the dynamics here, summed-up nicely in the title of a previous commentary: "shorting consumes, investing conserves."

The supply/demand mechanics are simple, and the "chocolate bar" market makes a good hypothetical example. If we were to (under) price chocolate bars at 10 cents apiece, we know what would happen – and in a relatively short amount of time. Store shelves around the world would quickly be stripped bare, as people over-consumed this radically under-priced good.

Simultaneously, chocolate-bar manufacturers would stop making chocolate bars (and go bankrupt) because they couldn't manage to 'break even' selling their product at such an artificially low price. There would be a "default" in the global chocolate-bar market, as buyers tried to buy more chocolate bars, but there was no more supply. This hypothetical example applies to any/all markets for physical goods, because the cost-of-production is significantly greater than zero.

It is long investment (in any such "physical" market) which pushes prices higher – in a healthy manner – until supply exceeds demand, at which point prices level off in equilibrium. But with the permanent price-perversion in our precious metals markets, such an equilibrium can never/will never be achieved; a permanent supply-deficit is the only, possible outcome.

This has reduced the One Bank's overall strategy in bullion markets to a simple one: to delay losing the game as long as possible. Once we (correctly) identify the only, rational strategy here, it becomes equally easy to determine how successfully the One Bank is playing the game: the size of the supply-deficit. A small supply-deficit means the banksters are playing their game of price-manipulation well; a large supply-deficit means that these psychopaths are executing their strategy in a short-sighted, and ultimately suicidal manner.

Ever since the One Bank launched its first scorched-earth assault on bullion markets (one aspect of the contrived, Crash of '08); there has been only one relatively short interval where the banksters have been playing their game of price-manipulation well, meaning that the supply-deficit was relatively small. This began in the latter half of 2010, after two, solid years of explosively higher prices.

The Most Intriguing Thing About Bank Of America's Dividend Hike

Posted: 27 Mar 2014 11:08 AM PDT

There is perhaps no company in the past decade that has destroyed shareholder equity quite like Bank of America (BAC) has. It's almost mind-boggling to try and document just how extensive the pain has been for this one-time blue chip holding, which saw steady annual profits of $21 billion in 2006 collapse to annual losses of $2 billion by the end of the financial crisis. Not only did the company wreck its long-term earnings power, but it also heavily diluted its share owners at the worst time possible, in the midst of a crisis. At a time when Bank of America's stock price was careening into the low single digits, the company was forced to raise capital and doubled the share count from 4.4 billion in 2007 to 8.7 billion in 2009.

We almost always speak in strictly economic terms here on Seeking Alpha, but this mismanagement of the

Alamos Gold: A Beaten-Down Gold Miner That Will Soon Catch Up To Its Peers

Posted: 27 Mar 2014 11:04 AM PDT

For most gold investors 2014 has started out with a bang as almost all the gold miners and explorers are up by double digit gains year-to-date. In fact, an investor would be hard-pressed to find any miner that hasn't been well into the green this year - except for Alamos Gold (AGI).

(click to enlarge)

As investors can see, while the Market Vectors Gold Miner index (GDX) has registered a strong 15% gain YTD, Alamos Gold is down almost 20% since the year began.

What's the reason for this significant divergence? A combination of the company's lowered production guidance for the year coupled with rising costs - not a good combination for a company that has made its name with investors as being one the lowest cost producers in the industry.

But with adversity comes opportunity, and Alamos Gold's share price has taken quite a hit that may give investors

GBP/USD - Strong U.K. Retail Sales Boosts Pound

Posted: 27 Mar 2014 11:02 AM PDT

By Kenny Fisher

The British pound continues to move higher against the US dollar, as it has throughout the week. GBP/USD is trading above the 1.66 line in the North American session. On the release front, British Retail Sales bounced back in February with a strong gain. In the US, Unemployment Claims continue to drop, but Pending Home Sales disappointed with its second decline in three readings.

US Unemployment Claims continues to impress. The key indicator dropped to 311 thousand, its lowest level in over three months. The estimate was 326 thousand, marking the fourth straight week that the reading has come in below the forecast. The news was not as good from Pending Home Sales, with a reading of -0.8%. This disappointed the markets, which had expected a small gain of 0.1%. Earlier in the week, New Home Sales also lost ground in February, and concern is bound to

AstraZeneca's New Diabetes Drug May Also Combat Alzheimer's Disease

Posted: 27 Mar 2014 11:01 AM PDT

A relatively new diabetes drug, Symlin (pramlintide), developed by AstraZeneca's (AZN) Amylin Pharmaceuticals has been found to combat a major component of Alzheimer's disease (AD) and may offer a new treatment option for the millions of Americans with the memory-robbing condition. AD is a degenerative brain disease that slowly destroys memory and thinking skills and eventually destroys the ability to carry out the simplest tasks. Today there are 5 million suffers in the U.S. with AD and there is no effective treatment, and the cost of caring for AD patients is over $100 billion per year, $6 billion of those dollar are on drugs that only treat the symptoms. According to the National Institute on Aging the disease is expected to grow to 14-16 million by the year 2050. It is also estimated that if a drug can both treat the symptoms and prevent the onset of the

Dollar Rises - Gold Sinks

Posted: 27 Mar 2014 10:34 AM PDT

Same story as yesterday - The US Dollar is gaining some ground at the expense of the Euro and that is undercutting the bullish case for gold.

Geopolitical concerns are still lurking around due to events in Ukraine but as long as the market feels that escalation dangers are limited, safe haven flows into gold are waning.

Gold has now dropped $100 since making a try at $1400 on March 17. That proves the old adage that markets tend to generally fall faster than they go up ( this is not an "always" thing but it does seem to occur more than the reverse). In the case of gold, the market moved up almost entirely on worst case scenarios of WWIII, Russian moves out of the Dollar, a new Cold War, etc. None of these events have panned out exactly as their proponents have suggested they would.

This is the danger inherent in rallies which are predominantly driven by short covering as was being noted here. Once those buyers are run out, who is left to chase the price higher? Gold needed to see FRESH speculative interest coming in from the hedge fund community and it was not getting it; especially after the FOMC gave such a hawkish view on the US economy and proceeded with their tapering plans.

In watching the price action closely during the session, gold managed to claw its way back off the worst levels of the session when the stock indices initially weakened early today. As the equities then moved higher into the plus column, gold began moving lower again. Right now, as I type these comments, the equities are once again weakening a bit but gold is actually moving lower, along with silver I might add.

The HUI was actually higher early in the session but has since then given up its gain and has turned negative. Its losses however have been contained at this point although that could change by the end of the trading day.

Take a look at the following chart of the HUI. Note a couple of things on the Directional Movement Indicator. First, the -DMI ( Red Line ) has crossed back above the + DMI ( Blue Line) for the first time since the month of January. The bears have regained control over the market. Notice also that the ADX line ( Dark Line ) is showing some signs of turning higher suggesting the Potential for a trending move lower. I think we would have to see a downside violation of the 210 level however for this to occur.




I want to also note that much was made on some sites about the so-called Golden Cross, where the 50 day moving average crosses above the 200 day moving average from below. Many technicians regard this as a bullish development. For such an event to actually mean something, it is usually understood that the price of the underlying security ( in this case the index ) must REMAIN ABOVE both moving averages. That has not been the case here with the HUI. It has fallen below both moving averages just shortly after the time the Directional Movement lines reversed signaling the Bears were grabbing control of the market once again. In other words, any bullish signal from that event has been negated.

This underscores the rapidity at which markets move nowadays and especially markets which are driven by geopolitical events. Here is a bit of trading advice - unless you are very fast on the draw and spend significant amounts of time sitting in front of a computer screen watching prices and events, leave markets driven by geopolitical events alone. They are too dangerous for all but the professional traders who can move more quickly than the average screen watcher. Yes, you might miss a great opportunity for a big profit but you also risk suffering from severe losses. Just ask any of the bulls who bought up near $1390 who were just convinced that the West was going to level sanctions on Russia after the results from the Crimea region came in over that weekend a while back.

Also, never base a trade ( or an investment ) for that matter on a headline. NEVER! Let the market technical price action do that for you, AFTER you do some research on your own and not rely on the predictions of some "expert" who makes his or her case about why such and such market is going to the moon.

Remember, markets are based on differing opinions. Some are bullish; some are bearish. But keep in mind that they are just opinions and in that sense, guesses as to how the market might respond to a particular scenario. The only true proof consists of the price action. It either confirms or validates ones opinion or it does not. It really is that simple.

Traders who quickly realize that the market is not accepting their opinion and get out of the way become survivors and experienced traders. Those who want to blame other forces ( manipulators), etc, and whom refuse to get out, become former traders with a lesser net worth.

All that matters in this profession is whether or not you make money; not whether you were "right". You are only "right" if the market confirms you are right. Other than that you are just a guy with an opinion that meant nothing. Period. Humility is a virtue that will serve to protect you long after pride has made fools out of prognosticators who keep serving up one dogmatic prediction after another.

"Put not your trust in princes, in mortal man in whom there is no salvation", says the Psalmist. Wiser words were never recorded.

Here is a Daily Chart of Gold to close out these comments. I have noted the "Golden Cross" on the chart for your convenience. That is the 50 day moving average in green crossing above the 200 day moving average. Note that price has fallen below both of these moving averages, a bearish development. Typically in a strongly trending market to the upside, price will remain above these levels.
 

Bulls do have a support level within the general vicinity of that cross which comes in at the 50% Fibonacci Retracement Level at $1287. They only missed that by a few dollars today. If the bulls can reverse today's losses tomorrow to close out the week, they have a chance at stabilizing prices here. If not, and if $1287 gives way, there is some light support near $1280. After that, $1262 - $1255 is the next target.

For Gold to get some recent Bears nervous, it will have to regain its "13" handle for starters. If they can manage that, some of the shorts will go ahead and ring the cash register and move back out.






Illinois Church Told by City Officials It Can No Longer Provide Homeless People Shelter

Posted: 27 Mar 2014 10:20 AM PDT

Illinois Church Told by City Officials It Can No Longer Provide Homeless People Shelter

Throughout what has been one of the most brutal winters in recent memory, a small church in Rockford, Illinois decided to do the right thing and offer a warm, safe place to sleep for local homeless people. The church provided shelter to 30-50 people a night during the winter months, and probably even saved several [...]

The post Illinois Church Told by City Officials It Can No Longer Provide Homeless People Shelter appeared first on Silver Doctors.

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How Banks Fleece Heirs on Reverse Mortgages

Posted: 27 Mar 2014 09:51 AM PDT

Never underestimate the willingness of banks to find new and creative ways to cheat customers, particularly when big bucks are at stake.

Jessica Silver-Greenberg has an important new article at the New York Times on a heretofore undercovered abuse, that of banks violating Federal law on the settlement of reverse mortgages out of an estate. This topic has not gotten the attention it deserves, one suspects, because people who enter into reverse mortgages are generally in less than stellar financial condition and are extracting home equity while hopefully still being able to remain in the home. It’s unlikely that the heirs have thought much about what the terms of the reverse mortgage. Unless they helped their parent(s) make the decision, it’s unseemly to pry. And it’s not uncommon for elderly adults not to have their affairs well squared away before they die, so the heirs, in addition to being bereaved, are also overwhelmed by getting their arms around the estate (a partial list: getting death certificates, arranging for the disposition of the body and the funeral/memorial service, notifying friends of the deceased, finding out where they had bank accounts, paying bills that come due, and dealing with physical possessions).

Reverse mortgages have long been seen as a quasi-predatory product: you really need to read the fine print very carefully and even then, it’s not hard to miss something critical. But the behavior Silver-Greenberg describes has nothing to do with sneaky contract language. It’s flat-out fraud. Here are the critical parts of her article:

…the children of elderly borrowers are learning that their parents' reverse mortgages are now threatening their own inheritances. Reverse mortgages, which allow homeowners 62 and older to borrow money against the value of their homes that need not be paid back until they move out or die, have long posed pitfalls for older borrowers….

Under federal rules, survivors are supposed to be offered the option to settle the loan for a percentage of the full amount. Instead, reverse mortgage companies are increasingly threatening to foreclose unless heirs pay the mortgages in full, according to interviews with more than four dozen housing counselors, state regulators and 25 families whose elderly parents took out reverse mortgages.

Some lenders are moving to foreclose just weeks after the borrower dies, many families say. The complaints are echoed by borrowers across the country, according to a review of federal and state court lawsuits against reverse mortgage lenders.

Others say that they don't get that far. Soon after their parents die, the heirs say they are plunged into a bureaucratic maze as they try to get lenders to provide them with details about how to keep their family homes….

There is no data on how many heirs are facing foreclosure because of reverse mortgages. But interviews with elder care advocates, the housing counselors and heirs, suggest that it is a growing problem already affecting an estimated tens of thousands of people. And it is one that threatens to ensnare future generations, as older Americans increasingly turn to their homes for cash. Already, the combined debt of Americans from the ages of 65 to 74 is rising faster than that of any other age group, according to the Federal Reverse. And approximately 13 percent of the reverse mortgages outstanding are underwater, according to an estimate from New View Advisors, a New York consulting firm.

As Silver-Greenberg describes, perversely, the problems in the reverse mortgage market are growing even as the size of the market has fallen. The number of loans has fallen by more than half, from 115,000 in 2007 to 51,000 in 2012. But the default rate has risen steadily over the last ten years and is now at 9.4%. And as the market has fallen in size, large banks have departed, leaving it to smaller lenders and brokers who are almost certain to be less concerned about bad press than big institutions who spend a lot of brand imaging. In other words, the shrinkage of the market has probably had a direct hand in the increased abuses.

Here is an overview of how the settlement is supposed to work:

For heirs, the problem with reverse mortgages often centers on the little-known set of federal regulations administered by the Department of Housing and Urban Development….The regulations apply to reverse mortgages that are insured by the Federal Housing Administration, virtually all of the market.

Lenders must offer heirs up to 30 days from when the loan becomes due to determine what they want to do with the property, and up to six months to arrange financing. Most important, housing counselors say, is a rule that allows heirs to pay 95 percent of the current fair market value of the property — a price that is determined by an appraiser hired by the lenders. Mr. Bell of the National Reverse Mortgage Lenders Association said that lenders are strictly abiding by the 95 percent rule.

Please circulate this post to anyone who has a reverse mortgage or to children of parents who have a reverse mortgage. This is important information that will help them protect their rights. It would also help for them to identify mortgage counselors in their area for advice on how to get HUD to pressure a non-compliant lender (note that law schools often have pro-bono clinics that can also help give advice). And enlisting the local media or in areas where it is active, Occupy Homes, are other routes for putting pressure on abusive lenders.

Quick Chart Update

Posted: 27 Mar 2014 09:37 AM PDT

I'm off to a bit of a late start today and we have an A2A in less than two hours. Therefore, just this quick chart update. Not just gold and silver but crude, the LB and The Pig, too.

read more

ETF sell off, where's the Gold going: China

Posted: 27 Mar 2014 09:18 AM PDT

China's gold demand is expected to grow in 2014 with growth across jewellery and investment-bar and coin related demand.

UK Housing Boom Could Turn To Bust … Again

Posted: 27 Mar 2014 09:02 AM PDT

gold.ie

JPM’s Top Commercial Bankruptcy Lawyer Dead in a Minivan Hit & Run

Posted: 27 Mar 2014 08:44 AM PDT

JPM's Top Commercial Bankruptcy Lawyer Dead in a Minivan Hit & Run

The banker suicide saga has just reached a new level as a top level JPMorgan attorney has been exterminated in a hit & run incident involving a minivan. JPM attorney Joseph Giampapa was killed over the weekend when he was struck by a minivan in a hit and run incident.  Giampapa was reportedly hit and thrown 150 [...]

The post JPM’s Top Commercial Bankruptcy Lawyer Dead in a Minivan Hit & Run appeared first on Silver Doctors.

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Editor in Asia Leaves Bloomberg News Citing Censorship

Posted: 27 Mar 2014 08:00 AM PDT

Editor in Asia Leaves Bloomberg News Citing Censorship

Last November, I highlighted how Bloomberg News seemed to be censoring stories about corruption in China in order to preserve sales of its extremely expensive Bloomberg LP terminals in the region. The article was titled: How Bloomberg "News" Censors the News. It appears the drama has continued into 2014, with the New York Times reporting that Ben Richardson, [...]

The post Editor in Asia Leaves Bloomberg News Citing Censorship appeared first on Silver Doctors.

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Dear Keynesians: Your Sad Devotion to Your Failed Religion Hasn’t Conjured Up a Recovery–Here’s Why

Posted: 27 Mar 2014 07:38 AM PDT

That any schoolkid could predict eliminating feedback and consequences will lead to a series of disastrously poor choices by speculators and imprudent borrowers doesn’t register with the Keynesian Cargo Cult.

The Keynesian Cargo Cult’s ability to print and squander money is insignificant next to the power of Diminishing Returns. By now we all know two things about the Keynesian Cargo Cult’s religion:

1. It has failed to conjure up the recovery its sadly devoted believers insist is “just around the corner if we only borrow and squander more money” because…

2. Its main tenet–that the problem is “lack of aggregate demand,” i.e. people will buy more stuff made in China and corporations will open more stores to sell the stuff made in China–if only it was dirt-cheap to borrow more money–is completely, utterly, painfully false.

The central premise of the Keynesian Cargo Cult is that this mechanism of making it cheap and easy to borrow money will work a kind of magic that can only be manifested by dancing around a fire at night waving dead chickens and chanting “humba-humba.” The Keynesian cargo Cult calls this magic “animal spirits.”

Unfortunately, waving dead chickens while dancing around a fire doesn’t do anything in the real world, and neither does making it cheap and easy to borrow more money. It turns out that prudent people have no interest in borrowing more money, even at low rates of interest, and imprudent people are happy to do so but will stop paying the loan as soon as something untoward occurs in their finances. The cheap, easy-to-get loans default and either the banks who made the loans collapse or the taxpayers have to bail out the banks who foolishly lent money to imprudent borrowers at super-low rates of interest.

Corporations, meanwhile, look at the real risks of expanding business in a debt-saturated economy distorted by Keynesian Cargo Cult policies and realize that gambling capital on the possibility that waving dead chickens and chanting “humba-humba” will actually increase profits is a truly stupid bet, so they borrow the nearly-free money and invest it in various carry trades overseas that return a virtually risk-free return, thanks to the nearly-free cost of borrowing mountains of money from the Cargo Cult.

The Keynesian Cargo Cult is stubbornly blind to the two key dynamics of the real-world economy: diminishing returns and the S-Curve. Diminishing returns result when a system’s ability to produce an economically valuable output declines.

Higher education is a good example: tuition has soared $1,100% while the output (value of a college degree) has declined precipitously. A recent major study,Academically Adrift: Limited Learning on College Campuses, concluded that “American higher education is characterized by limited or no learning for a large proportion of students.”

‘Academically Adrift’: The News Gets Worse and Worse (The Chronicle of Higher Education)

Meanwhile, student loans exceed $1 trillion, only 37% of freshmen at four-year colleges graduate in four years (58% finally graduate in six years), and 53% of recent college graduates under the age of 25 are unemployed or doing work they could have done without going to college–retail clerks, waiting tables, etc.

The Keynesian Cargo Cult solution to the diminishing returns is to provide more debt to students, making them into debt-serfs for life. The cruel stupidity and immorality of the Keynesian Cargo Cult knows no bounds because they refuse to accept the reality that diminishing returns cannot be fixed by more debt and more squandering of good money after bad.

The truth is the failed cartel of higher education has to be leapfrogged and left in the dustbin of history: here’s a model that lowers costs by 90% and aligns the output with the real economy: The Nearly Free University and The Emerging Economy.

The Fatal Disease of the Status Quo: Diminishing Returns (May 1, 2013)

The Keynesian Cargo Cult’s solution allows no feedback from the real world, and allows no mechanism to discipline the imprudent borrower/speculator. If imprudent borrowers take on too much debt, the Keynesian Cargo Cult’s solution is to offer them more credit at rates they can afford–near-0% if necessary.

If a speculator borrows money and loses it in a high-risk gamble, the Keynesian Cargo Cult’s solution is to force the taxpayer to make good the gambler’s losses and then give the speculator more nearly-free money to continue gambling.

This “solution” works the first time around, less well the second time around, and triggers a collapse the third time around. This lifecycle is called the S-Curve:

The Keynesian Cargo Cult inflated one credit bubble in the 1990s, another in the 2000s, and by an extraordinary expansion of credit and lowering interest rates to near-zero has managed to Beat the Devil and inflate a third credit bubble in the 2010s.

That any schoolkid could predict waving dead chickens and eliminating feedback and consequences will lead to a series of disastrously poor choices by speculators and imprudent borrowers doesn’t register with the Keynesian Cargo Cult. But since the Keynesian Cargo Cult is headed by a Nobel Prize academic economist, the Cargo Cult members effusively praise the Emperor’s fine (and nonexistent) robe.

You poor, dumb, deluded fools. You’ve destroyed our economy, our values and our ability to deal with reality. Your faith is as boundless and disconnected from the real world as your policies.

Gold Is Below Its Golden Cross, Bonds, Utilities Rally

Posted: 27 Mar 2014 07:05 AM PDT

thestreet

Gold and Silver Prices Testing Critical Technical Support Levels

Posted: 27 Mar 2014 07:05 AM PDT

marketoracle

Russia Raises Gold Holdings By 7.247 Tonnes To Over 1,040 Tonnes In February

Posted: 27 Mar 2014 07:01 AM PDT

Russia Raises Gold Holdings By 7.247 Tonnes To Over 1,040 Tonnes In February

Russia has increased its gold holdings by 7.247 tonnes to 1,042 tonnes in February. Turkey and Kazakhstan also raised their bullion reserves, data from the International Monetary Fund showed today. Turkey’s gold holdings rose 9.292 tonnes to 497.869 tonnes, the data showed. Many analysts are ignoring the important context of today’s new geopolitical backdrop. Russia [...]

The post Russia Raises Gold Holdings By 7.247 Tonnes To Over 1,040 Tonnes In February appeared first on Silver Doctors.

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Gold declines to 6-week low

Posted: 27 Mar 2014 06:55 AM PDT

When can we expect a turn-around?

Gold up 9% this year

Posted: 27 Mar 2014 06:50 AM PDT

Despite, 6-week low, gold still still manages to stay positive.

Loosening import duties on gold may spike demand

Posted: 27 Mar 2014 06:31 AM PDT

With the wedding and festive seasons at full swing in India gold demand for jewelry may spike in the coming days.

Gold is at a Golden Crossroads

Posted: 27 Mar 2014 06:05 AM PDT

zerohedge

Silver is under performing on slowing economic growth in 2014, uptrend intact

Posted: 27 Mar 2014 05:21 AM PDT

Silver has given back most of its 2014 gains but as long as the price holds above $19.16, the uptrend is intact, says Jason Hamlin.

UK Housing Boom Could Turn To Bust … Again

Posted: 27 Mar 2014 05:18 AM PDT

It would seem that the measures taken in oversight and reporting, albeit a massive improvement on previous regulatory mishaps, are again proving porous. The rampant politicisation of interest rate policy and monetary tools are again creating new asset bubbles, most notably in the property and equity markets, which may in the end pose even greater risk than the financial dislocations of 2008.

Today's AM fix was USD 1,295.00, EUR 942.09 and GBP 779.14 per ounce.
Yesterday's AM fix was USD 1,314.50, EUR 952.74 and GBP 794.98 per ounce.

Gold fell $10.80 or 0.82% yesterday to $1,301.00/oz. Silver slipped $0.25 or 1.25% at $19.75/oz.

Gold bullion  dropped to its lowest level in six weeks in London as better than expected durable goods hinted to a recovery in the U.S. and increased the case for the U.S. Fed to keep reducing stimulus and start to raise interest rates. Fed Chair Yellen commented after this month's policy meeting that the bond buying program may end this fall and the first increase in the benchmark rate may follow six months later.

U.S. President Barack Obama reiterated yesterday that the U.S. and its European allies stand united against Russian attempts to redraw Ukraine's boundaries. Russia is the biggest supplier of palladium followed by South Africa, where workers have been on strike since Jan. 23rd.


Lord Adair Turner – (Bloomberg News Image)

Britain’s former chairman of the  Financial Services Authority (FSA), Lord Adair Turner, spoke at Cass Business school yesterday and warned that the UK could be repeating the 2008 financial crisis by fueling the property market. He commented that mortgage and commercial property lending in global economies had played a “central role” in nearly all financial crises and post-crisis recessions.

Lord Turner told the Telegraph, “We’ve got to increase the supply of housing because otherwise we are just piling up very strong incentives to buy housing, very strong incentives to borrow money to buy housing but against a fixed supply”. “If you do that the only thing that can give is the price.”

Lord Turner warns about the debt to income ratio. “Even the Office for Budget Responsibility has said the only way we’re going to get growth back in the next five years is for the ratio to return to 170% again. If in five years time debt has gone back up to 170%, and if interest rates have returned to 3%, 4% or 5%, then a lot of people are going to be struggling.”

Lord Turner elaborated that targeted reforms to limit credit fuelled growth were needed to prevent a repeat of the 2008 financial crisis. “The policies followed before the financial crisis failed to prevent it,” he said.

“In its wake major financial reforms have been introduced. These include higher capital and liquidity standards, more effective bank resolution procedures: measures to address risks in derivatives trading: and structural reforms such as ring fencing… While these reforms are valuable, they will be insufficient to ensure a more stable financial system and economy over the long term.
“We need to recognise and contain the potential for instability which [reliance on in real estate lending] unleashes,” added Lord Turner.

“Policies relating to the supply of new real estate, and to its taxation will likely prove as important to to financial and macroeconomic stability as reforms specifically focused on the financial system itself.  “[Credit cannot be] constrained through the use of the interest rate lever alone.”

With interest rates at post war lows and unlikely to go much lower the risks of further systemic events developing within our global financial centres, is again rising. It would seem that the measures taken in oversight and reporting, albeit a massive improvement on previous regulatory mishaps, are again proving porous. The rampant politicisation of interest rate policy and monetary tools are again creating new asset bubbles, most notably in the property and equity markets, which may in the end pose even greater risk than the financial dislocations of 2008.

When money is debased on an industrial scale by monetary authorities the results can soon turn catastrophic. It is essential that prudent investment strategies take these risks into account and that investors allocate a modest percentage of their portfolios to hard assets such as gold and silver. For more information on how to invest in gold please download a copy of our Guide to Investing In Gold.

Gold bearish forecasts rise, but uptrend intact: Jason Hamlin

Posted: 27 Mar 2014 05:05 AM PDT

Analysing yearly charts of Spot Gold, he points out that Gold is now testing a new uptrend support line at $1300 as also the 200 day moving average, for the second tim

Gold and silver testing critical technical support levels

Posted: 27 Mar 2014 04:37 AM PDT

Gold and silver are testing key technical support levels this week.

PEAK GOLD: How The Romans Lost Their Empire

Posted: 27 Mar 2014 04:00 AM PDT

PEAK GOLD: How The Romans Lost Their Empire

Precious metal currency was a fundamental factor that kept together the Roman empire and gave to the Romans their military power. But the Roman mines producing gold and silver peaked in the first century CE and the Romans gradually lost the capability of controlling their resources. In a way, they were doomed by "peak gold." [...]

The post PEAK GOLD: How The Romans Lost Their Empire appeared first on Silver Doctors.

Check out these similar articles:
  1. With Peak Oil Comes PEAK GOLD & SILVER
  2. Falling EROI Will Ultimately Destroy the US Empire! – SRS Rocco
  3. Kill Your Children! Hardcore Environmentalists In Ascendancy, Eugenics, "Peak Oil" And Social Control

Resource master Rick Rule answers the 12 most important questions on precious metals today

Posted: 27 Mar 2014 04:00 AM PDT

From Henry Bonner in Sprott's Thoughts: 

On March 18th, Rick Rule, Chairman of Sprott Global Resource Investments Ltd., answered the most important questions on natural resources and precious metals today.

Rick has recently warned investors not to become too bullish too soon – there will be more pullbacks and sell-offs ahead, he says.

Where is gold headed in the next one-to-five years?

"I believe that the gold price bottomed in 2013," Rick begins. "Between 2011 and 2013, traders drove the gold price down, unwinding leveraged bets on gold. For most of that period, there were forced sellers and not much buying.

"In the middle part of 2013, we saw a stalemate between exhausted sellers and buyers. As the forced selling by leveraged traders passed, gold began to find a bid, taking the price higher so far in 2014.

"The gold price rally will not necessarily continue through 2014. But as an investor with an outlook of three-to-five years, I believe ownership of gold will be critical to maintaining your wealth in the next few years."

Are institutions intentionally driving down prices by shorting the metals?

"The situation is different depending on the metal you are talking about," says Rick. "In platinum and palladium, for instance, there are almost no short-sellers of the metals.

"On the gold side, traders are now covering their short positions, which could indicate that downwards momentum has subsided."

Was there a concerted effort to drive down the metals?

"I believe that any potential manipulation is disappearing," said Rick. "The banks' and other major institutions' ability to manipulate metals prices is under increasing regulatory scrutiny."

How long will the Fed keep interest rates low?

"As long as they can get away with it," says Rick. "Suppressed interest rates take money from savers, who receive an artificially low return, and rewards spenders with the ability to borrow more at lower rates.

"Because spenders outnumber savers, elections and political powers tend to favor low-interest-rate policies like the current ZIRP (zero-interest-rate policy) in the United States."

So far, a weak recovery has prevented low interest rates from causing high inflation, he adds.

"We are in a very strange situation – a jobless recovery with little new investment in production. The demand for capital has been muted as a result, which has prevented easy money from translating into greater inflation.

"Because the economy remains anemic, interest rates could stay low for the next two or three years. But markets always win in the end. Eventually, I would expect inflation and higher interest rates to arise."

Will there be a 'meltdown' in the metals sector before a new bull market takes off? 

"I don't think that we will see another move down like the one from 2011 to 2013, where gold dropped 30 percent and mining stocks fell by over 50 percent. But this is still the most volatile sector in the world. Just as gold went up by over 1,000 in only a few months, we could see it return to around 1,150 at some point before the year is over.

"In fact, I believe the market will mostly move sideways over the next 18 months with intermittent rallies and subsequent sell-offs. Once this period is passed, we could see a major bull market truly take off."

Is there any store of wealth that cannot be manipulated?

"The biggest threat to your wealth is not the government, the banks or market manipulators," says Rick. "It is almost always your own lack of conviction, courage, or knowledge.

"Everyone wants to be a contrarian, but only when it's popular. That is why lots of people wanted to invest in 2011 when precious metals had enjoyed an unprecedented rise. Meanwhile, nobody wanted to invest in 2012 and 2013, when both the precious metals and the mining stocks were much cheaper.

"If you believe in the precious metals in the long term, then manipulation by financial or government institutions to drive the price lower is an opportunity. You can buy the assets you want at an artificially low price.

"So don't fear manipulation. Fear your own mistakes due to emotional decision-making and prejudices set by your experience in the immediate past."

Where are platinum and palladium headed?

"We have recently seen an increasing popularity of platinum group metals among financial institutions, who are now speculating in the price of the metal. I believe they could now begin to unwind these positions now, which could drive the price lower in the short term.

"But in the longer-term, I see them going higher," he adds. "Mining companies are losing money on their platinum production, which could force them to shut down. But platinum and palladium are extremely useful to modern society – primarily because they help prevent smog.

"For these reasons, the price has to go up," he believes.

What about silver?

"We often joke that 'silver bugs' are 'gold bugs on steroids,'" says Rick. "Moves in the price of silver tend to be more dramatic than in gold. So if gold moves up, silver can move up even more – and fall by a lot more too.

"The problem with silver is that a lot of it comes as a by-product of producing some other metal. So in order to predict the silver production from mining you need to understand the economics of the other metals, where silver is mined as a by-product.

"Another hitch is that estimates vary widely on how much silver really exists in circulation today – especially in places like India, Sri Lanka, Bangladesh, or Pakistan."

Is the general stock market in for another crash?

"It seems the general stock market has been driven by artificially low interest rates. If interest rates were to rise, as I believe they will eventually, it could severely adversely impact most stocks.

"There is no real economic recovery going on to justify higher stock prices today. Few jobs are being created and there is little capital investment. It looks like a recovery 'on paper' – but it is a confidence recovery driven by low interest rates.

"If confidence wears off and interest rates start to rise, I believe it could be extremely damaging to the overall stock market," he concludes.

If the resource sector recovers, how will we know when to get out?

"Remember back to 2010 and 2011 – and how well your portfolio was performing. Many investors were seeing their portfolios rise by double-digits each month. That is when we felt the smartest and the most aggressive.

"As the height of a bull market, investors confuse a bull market with brains. So when we become most fearlessly bullish it is time to begin to sell stocks. The easiest sign of a top is really that you begin to see solicitations everywhere to invest in that sector – from the media and publishing companies.

"In contrast, publishers begin to cancel their publications that have to do with natural resources when we are in a bear market. It is a harbinger of a bottom."

What effects will Russia's annexation of Crimea from the Ukraine have for investors?

"I believe that the impact for investors of what is happening in the Ukraine should be fairly small. The events in the Ukraine are part of the natural resources narrative, and have been used as a reason for the rise in precious metals prices. I believe that gold and other metals would be rising regardless of the situation in the Ukraine, because the buyers are simply overtaking the sellers.

"One important effect may be to diversify the supply of natural gas in Europe – resulting in greater production in Western Europe and fewer exports from Russia.

"Additionally, lawmakers in the United States could use 'energy security' for Western Europe as a pretext to allow oil and gas to be exported there – which seriously scares non-US energy producers. The crisis could provide a useful excuse for oil and gas interests in the US to bring production to the world market. And Western Europe would likely favor an alternate supply of oil and gas."

What impact will the Mexican mining tax have on the industry?

"Politicians and governments frequently turn to mining and oil and gas to increase their tax revenues because the assets are fixed. They cannot be moved elsewhere.

"I believe the new tax will not be beneficial to Mexico. State ownership of the oil industry has severely impeded the oil and gas industry there. Now, they are turning their attention to mining, which is certainly not a positive development.

"The mining industry has been a stellar contributor of revenues for the government and jobs for the Mexican people. It will only be weighed down by this tax, which is very unfortunate."

What will happen to the price of uranium in the near and long term?

"In the near-term, the market is still working through the excess supply caused by Japan's shutting down its nuclear power plants and selling supplies onto the market," says Rick.

"But in the long term, I believe uranium is a 'no-brainer.' Uranium miners spend 70 dollars per pound to produce the green metal, but it only sells for 35 dollars. They lose approximately 50 percent on every pound of uranium produced.

"As a result, the industry is using up the capital it raised during the bull market from 2004 to 2011.

"Once they run out of capital, they will have to shut down their operations unless the price of uranium has risen to a profitable level. This will cause nuclear power plants to shut down – a tremendous drain on electrical production capacity.

"Because so much energy can be produced from a small quantity of uranium relative to oil or gas, the cost of uranium represents a small portion of the costs of producing electricity from a nuclear power plant. Therefore, nuclear power generation will remain competitive as an energy source even if the cost of the metal were to double, which I believe is likely as utilities will pay what they must to ensure a supply."

Where should an investor in natural resources put their money today?

"Personalized investment advice is only available to clients. The full depth of our research and expertise at analyzing natural resource stocks is available through your Sprott Global broker.

"The best investments for your portfolio will depend on your individual situations and willingness to tolerate risk. If you would like to know what are favorite companies are today, I urge you to either contact your Sprott Global broker or become a client of Sprott Global.

Rick concludes: "Investing in natural resources and precious metals is attractive today because the sector is so much cheaper than it was three years ago. Many of the stocks are trading at a 90 percent discount to their prices in 2011. For a contrarian investor, I believe that we are seeing a historic opportunity now."

Rick Rule is the Chairman and Founder of Sprott Global Resource Investments Ltd., a full-service brokerage firm located in Carlsbad, CA. Sprott Global is an affiliate of Sprott Inc., a public company based in Toronto, Canada. Mr. Rule leads a team of earth science and finance professionals who form an intellectual pool for resource investment management. He and his team have experience in many resource sectors including mining, oil and gas, water, agriculture, forestry, and alternative energy.

 

More on the resource sector:

URGENT: A master trader's update on gold stocks

Porter Stansberry: Two critical lessons every commodities investor must know now

Resource master Rick Rule: The one thing you must know about commodities now

Fear of Deadly Reprisal, Hunger, in Rustenburg as South Africa’s Platinum Strike Marches On

Posted: 27 Mar 2014 02:22 AM PDT

""Da boyz" will be on the opposite side of that trade for fun, profit---and price management"

¤ Yesterday In Gold & Silver

Once again the gold price didn't do much in either Far East or early London trading.  However, that all changed when trading got under way on the Comex.  The gold price rolled over into the London p.m. gold fix---and then hit its low of the day [a hair below $1,300 spot] at exactly 3:30 p.m. EDT in electronic trading.  Then the price recovered a handful of dollars going into the close.

The CME Group reported the high and low ticks at $1,317.10 and $1,299.30 in the April contract.

Gold finished the Wednesday session at $1,305.80 spot, down $5.90 from Tuesday's close.  Gross volume was over 200,000 contracts once again, but once the roll-overs were subtracted out, net volume crashed all the way down to 86,000 contracts.

The silver price chart was a carbon copy of the gold chart, so there's nothing left to talk about, as it was all so orchestrated.

The high and low were recorded as $20.145 and $19.68 in the May contract.

Silver closed yesterday at $19.735 spot, down 26.5 cents from Tuesday's close.  Volume, net of March and April, was 42,000 contracts.

Platinum and palladium didn't do much until London opened---and then both began to slide from there.  Both finished with loses on the day as well.  Here are the charts.

The dollar index closed at 79.94 on Tuesday afternoon in New York, rose to its 80.13 high at 9:30 a.m. EDT in New York---and closed at 80.006.  Nothing to see here.

The golds stocks started in positive territory, but that only lasted about 20 minutes---and then they began to head lower---and by the time trading was done at 4 p.m. EDT, the HUI was down 3.73%---out of all proportion to the six dollar decline in the gold price.

It was the same thing in silver, another decline out of all proportion to the decline in the metal itself.  Nick Laird's Intraday Silver Sentiment Index closed down 4.62%.

The CME Daily Delivery Report showed that 1 gold and 56 silver contracts were posted for delivery within the Comex-approved depositories on Friday.  The short/issuer on all of the above contracts was JPMorgan Chase---and the biggest long/stopper in gold was Canada's Scotiabank with 52 contracts.  The link to yesterday's Issuers and Stoppers Report is here.  And looking at the preliminary volume/open interest figures for yesterday's trading from the CME at 3:33 a.m. EDT earlier this morning, it appears that these contracts are the last of the March deliveries in both metals.

Another day---and another withdrawal from GLD.  This time it was 57,813 troy ounces.  After one deposit and two withdrawals in the past week, GLD is now back within 2 troy ounces of the amount of gold it held on March 21.  As of 10:41 p.m. EDT yesterday evening, there were no reported changes in SLV.

Over at Switzerland's Zürcher Kantonalbank they reported a decline in their gold ETF---and a tiny increase in their silver ETF for the week ending March 21.  Their gold ETF dropped by 34,456 troy ounces---and their silver ETF gained 7,362 troy ounces.

There was no sales report from the U.S. Mint.

Over at the Comex-approved depositories on Tuesday, there was 71,542 troy ounces of gold reported received---and 204 troy ounces were shipped out.  The link to that activity is here.

After two frantic days in a row, it was much quieter in silver on Tuesday, as only 4,185 ounces were received---and 136,149 troy ounces were shipped out.  The link to that action is here.

Here's a photo that I ripped from a Zero Hedge posting yesterday---and I thank reader M.A. for sharing it with us.  As I've said on countless occasions, Putin could bring the West to it's financial and monetary knees overnight, as he knows all about the Anglo/American price management scheme in the precious metals.

I don't have that many stories today, so I hope you find some that interest you.

¤ Critical Reads

BofA to Spend $9.33 Billion in FHFA Settlement

Bank of America will spend $9.33 billion to resolve a dispute over mortgage securities with the Federal Housing Finance Agency, the regulator that oversees Fannie Mae and Freddie Mac.

The agency sued 18 financial institutions in 2011 over their sales of mortgage securities to Fannie and Freddie. It alleges many banks falsely represented the mortgage loans behind the securities. These soured after the housing bubble burst and lost billions in value.

Bank of America said that it will make cash payments of roughly $6.3 billion and also purchase securities from Fannie and Freddie worth more than $3 billion. It is one of several banks to settle with the FHFA, which announced the agreement Wednesday.

This AP story was picked up by the abcnews.com Internet site yesterday---and today's first news item is courtesy of West Virginia reader Elliot Simon.

Citigroup Fails Federal Reserve's Stress Test for Second Time in 3 Years

The Federal Reserve dealt an embarrassing blow to Citigroup on Wednesday, attacking the bank’s financial projections for its sprawling operations and denying the bank’s plan to increase dividends and repurchase stock.

In a report, the Fed rejected Citigroup’s plans to manage its capital, citing concerns about the “overall reliability of Citigroup’s capital planning process.” It was the only one of the nation’s top five banks that failed to persuade the Fed to bless its plans for shareholder payouts.

The Fed did not give many details behind its rejection, which was the second denial of Citigroup’s capital plan in the past three years. But analysts and investors said the message from the regulator was clear.

“The Fed is saying that the bank’s financial processes are not where they should be, and this is five years after the crisis,” said Mike Mayo, the CLSA banking analyst. “It is not as though they haven’t had time to clean up their act.”

This news item showed up on The New York Times website a couple of minutes after the markets closed yesterday---and I thank Phil Barlett for sending it our way.

'Too big to fail' status gives US banks 'free pass' – Fed study

While admitting that large US banks enjoy a natural advantage in financial markets, the new study fails to answer the question if new regulations on Wall Street will be able to tame the “too-big-to-fail” financial institutions.

The series of research papers, published on Tuesday by the US Federal Reserve, arrived at conclusions that sound more like good common sense in these post-crisis times: The larger financial institutions can do better business, as well as withstand sudden fluctuations in the markets compared to smaller banks simply because the bigger banks enjoy “too-big-to-fail” status.

Due to their sheer size, the economy can ill-afford for these institutions to be washed away in times of financial crisis, with critics fearing that the system has become dependent on taxpayer bailouts to keep the economy afloat.

The new research shows "it is improper to ask the taxpayer to underwrite the non-commercial banking operations of a complex bank holding company," Dallas Fed President Richard Fisher told Reuters in an interview.

This Russia Today article appeared on the Internet site yesterday morning Moscow time---and I thank reader Harry Grant for sliding it into my in-box in the wee hours of this morning.  It's worth reading.

The Real Inflation Fear - U.S. Food Prices Are Up 19% In 2014

We are sure the weather is to blame but what happens when pent-up demand (from a frosty east coast emerging from its hibernation) bumps up against a drought-stricken west coast unable to plant to meet that demand? The spot price (not futures speculation-driven) of U.S. Foodstuffs is the best performing asset in 2014 - up a staggering 19%.

That's all there is to this very brief Zero Hedge piece from yesterday morning---but the embedded chart is worth the trip, and I thank reader M.A. for sharing it with us.
 

'Very painful': World heading for bust 'unlike any other', says Jeremy Grantham

Legendary investor Jeremy Grantham says the US Federal Reserve is killing the recovery of the world's biggest economy and the ''next bust will be unlike any other''.

Mr Grantham – the co-founder and chief investment strategist at the $US112 billion ($123 billion) Boston-based fund manager GMO –said he wouldn't invest his clients' money in US stocks for at least the next seven years because of the Fed's ''misguided policies''.

Mr Grantham has an impeccable track record, having called both the internet bubble and then the US housing bubble. In November he said he believed the U.S. share market could rise another 30 per cent, although he believed it was overvalued, before crashing again.

''Over the next seven years we think the market will have negative returns. The next bust will be unlike any other because the Fed and other central banks around the world have taken on all this leverage that was out there and put it on their balance sheets. We have never had this before.

This must read commentary showed up on The Sydney Morning Herald on Tuesday local time "down under"---and I thank reader Brad Robertson for finding it for us.

Brazil at risk of recession as S&P downgrades debt to near junk

Brazil’s sovereign debt is one step away from junk after Standard & Poor’s downgraded Latin America’s powerhouse economy, prompting a furious reaction from the Brazilian treasury.

The rating agency cut Brazil’s debt one notch to BBB-, citing “fiscal slippage”, bad economic management, and one-off tricks that flattered the public accounts. It warned of a widening trade deficit and weak growth for years to come.

Marcelo Carvalho from BNP Paribas said the former darling of the BRICs quartet is staring “down the barrel of a recession”, a viewed echoed on Tuesday by Mark Mobius from Templeton Emerging Markets.

This Ambrose Evans-Pritchard commentary was posted on The Telegraph's website late Tuesday evening GMT---and it's the first offering of the day from Roy Stephens.  It's worth reading as well.

Brazil to pass anti-spy bill in victory for net neutrality

Brazil has scored big for net neutrality after its lower house of Congress approved a groundbreaking post-Snowden bill that protects its users’ privacy rights, albeit with some sacrifices.

The measure did not go as smoothly as could have. To ensure success, President Dilma Rousseff had to let it through at the cost of allowing companies such as Google and Facebook to store user information outside Brazil’s servers.

However, other provisions, which ensured that internet providers gave equal privileges to all web traffic, were left in place. This went ahead despite contrary pleas by big local phone carriers who wanted to continue charging users higher prices for separate content, such as video streaming or Skype-like services.

This news item was posted on the Russia Today website late yesterday morning Moscow time---and it's the second offering in a row from Roy Stephens.

 

The West and Russia: Why Obama's Legacy Hinges on Europe

Barack Obama has labeled Russia a "regional power" that is acting out of weakness rather than strength. That may be so. But the U.S. president's own foreign policy legacy depends heavily on Vladimir Putin -- and Europe.

From the very beginning of his presidency, Obama has been more focused on consolidating US forces rather than embarking on new international adventures. He has significantly reduced America's military footprint overseas, vocally demanded more help from US allies, emphasized the need for multilateral conflict solutions and preferred to focus on domestic issues as much as possible. Obama's retrenchment largely reflects the desires of the American electorate after eight years of George W. Bush.

What does it mean for the current crisis, though? Does his cautious approach to foreign policy automatically mean he is a weak president? And was it a factor in Putin's decision to act in Crimea?

No matter how Obama views Russia, the Ukraine crisis and how he chooses to confront Putin will be decisive for his foreign policy legacy.

This very interesting commentary showed up on the German website spiegel.de yesterday afternoon Europe time---and I thank Roy Stephens for another contribution to today's column.

Putin's Russia caught in U.S. and Chinese double-pincer

Russia's Vladimir Putin has committed a grave strategic blunder by tearing up the international rule book without a green light from China. Any hope of recruiting Beijing as an ally to blunt Western sanctions looks doomed, and with it the Kremlin's chances of a painless victory, or any worthwhile victory at all.

Mr Putin was careful to thank China's Politburo for its alleged support in his victory speech on Crimea. Foreign minister Sergei Lavrov has been claiming with his usual elasticity that “Russia and China have coinciding views on the situation in Ukraine.”

This is of course a desperate lie. China did not stand behind Russia in the UN Security Council vote on Crimea, as it had over Syria. It pointedly abstained. Its foreign ministry stated that “China always sticks to the principle of non-interference in any country’s internal affairs and respects the independence, sovereignty, and territorial integrity of Ukraine.”

We don't know exactly what China's Xi Jinping told President Barack Obama at The Hague this week it clearly had nothing in common with the deranged assertions of the Kremlin. The US deputy national security adviser Ben Rhodes appeared delighted by the talks, claiming afterwards that Russia could no longer count on backing from its "traditional ally".

Here's Ambrose Evans-Pritchard talking trash again late yesterday evening GMT over at the telegraph.co.uk Internet site.  I don't know whether he's making this stuff up, or he's being forced to print it.  Anyway, if you do decide to read it, I'd take it with a big grain of salt.  I thank Roy Stephens for bringing it to our attention.

Five more Ukraine/Crimea/Russia-related stories

1. World Bank sees Russian capital flight, hit to GDP if Crimea crisis deepens: Reuters/Globe and Mail  2. German central bank: Russia has more to lose than we do: E.U. Observer  3. Barack Obama---no cold war over Crimea: The Guardian  4. German chancellor Merkel against imposition of economic sanctions on Russia: Voice of Russia  5. Ukraine's Naftogaz to raise retail prices for household gas by 50% on May 1: Voice of Russia

[The above stories are courtesy of reader M.A. and Roy Stephens]

UBS said to suspend FX traders in New York, Zurich, and Singapore

UBS suspended foreign-exchange traders in the United States, Singapore, and Switzerland as its investigation into the alleged rigging of currency markets widened, according to a person with knowledge of the matter.

They include Onur Sert, an emerging-markets spot trader based in New York, and at least three more worldwide, said the person, who asked not to be identified because of the probe. Sert and Dominik von Arx, a spokesman for UBS in London, both declined to comment on the suspensions.

Switzerland's largest bank opened a review of its currency operations last

Four King World News Blogs

Posted: 27 Mar 2014 02:22 AM PDT

Four King World News Blogs

1. James Turk: "The West's War on Gold is Raging---and There Are New Casualties"  2. Art Cashin: "Comments By Bank of England 'Bizarre' and Concerning"  3. Dr. Paul Craig Roberts: "The Greatest Crisis in Mankind's History"  4. Robert Fitzwilson: "This is What is Going to Destroy the World's Financial System"

[Please direct any questions or comments about what is said in these interviews by either Eric King or his guests, to them, and not to me. Thank you. - Ed]

Jim Rickards: The Death of Money

Posted: 27 Mar 2014 02:22 AM PDT

Jim Rickards: The Death of Money

Jim is on the interview circuit these days because his new book "The Death of Money: The Coming Collapse of the International Monetary System" is due to hit the bookshelves on April 3.  I was fortunate enough to get an advanced copy of the book---along with a hardcover copy that came in yesterday's mail---and I can tell you right now it's an absolute must read, as I've already read it from cover to cover.  I'll have more on Jim's book later this week, or in my Saturday column.  But if you want to order an advanced copy, you can do so by clicking here.

In the meantime, here's a 38:42 minute audio interview with Jim over at the mcalvanyweeklycommentary.com Internet site, which was posted there yesterday sometime---and I thank reader Joe Nordgaard for being the first one through the door with it.

Mike Kosares: Volcker Rule starts April 1 and might push big banks out of gold

Posted: 27 Mar 2014 02:22 AM PDT

Mike Kosares: Volcker Rule starts April 1 and might push big banks out of gold

Speculative trading by banks is to end in the United States on April 1 upon implementation of the "Volcker Rule," Mike Kosares of Centennial Precious Metals in Denver notes today, with implications for the gold market.

"The big trading banks traditionally have occupied the short side of the paper gold market," Kosares writes. "Some analysts feel that those positions will be handed off to the hedge fund business so things won't change much. On the other hand, hedge funds are not considered too big to fail, so their bets could be placed more evenly on either side of the market."

Kosares' commentary is headlined "April Fools Drop-Dead Date for the Volcker Rule -- What It Might Mean for Gold" and it was posted at Centennial's Internet site, USAGold.com yesterday sometime---and I thank Chris Powell for wordsmithing 'all of the above'.

Total gold holdings in stark contrast to past decades and should change - WGC

Posted: 27 Mar 2014 02:22 AM PDT

Total gold holdings in stark contrast to past decades and should change - WGC

Financial assets have ballooned 10-fold over the last 20 years and with the continued presence of ultra-loose monetary policy, and only slow signs of economic recovery, this is unlikely to diminish soon.

As a result of this, according to the World Gold Council, gold is increasingly being looked at as a valuable string to add to one's risk management and wealth preservation bow.

And, that gold holdings account for 1% of all financial assets, is a situation that is unlikely to continue into the future and stands in "stark contrast to levels seen in past decades, as well as what research suggests optimal gold allocations should be."

This gold-related news story showed up on the mineweb.com Internet site yesterday---and it's another offering from reader M.A.

Gold advances on technical support

Posted: 27 Mar 2014 01:40 AM PDT

bangkokpost

Gold and Silver Testing Critical Technical Support Levels

Posted: 27 Mar 2014 01:40 AM PDT

countingpips

US Dollar Retreats to Chart Support, Gold May Fall Further

Posted: 27 Mar 2014 01:35 AM PDT

dailyfx

Gold: Aiming For 1,300 Break

Posted: 27 Mar 2014 01:30 AM PDT

investing

Gold Reserves Agreement Update to Redefine Monetary System?

Posted: 26 Mar 2014 09:52 PM PDT

 "Let me assure you that I share your concerns about the social impact of the long-term decline in the gold price on many low-income countries. This decline has resulted from a variety of factors, including cyclical developments, the diminished attraction of gold as an investment alternative, expansion of mine output, central bank lending of gold, and [at the time this was written, in 1999] the declining role of gold as a monetary asset," according to Stanley Fischer, writing for the International Monetary Fund (IMF) as First Deputy Managing Director in response to a letter from the World Gold Council.

read more

No bubble trouble in Dubai real estate says Marc Faber who correctly called the 2008 top

Posted: 26 Mar 2014 09:21 PM PDT

Legendary newsletter writer Dr. Marc Faber yesterday told The National newspaper on the sidelines of a local investment conference that he did not consider Dubai real estate to be in bubble territory just yet. His judgement is to be taken seriously as he called the top in the last bubble.

This correspondent can remember getting an email from the great master in July 2008 when he asked me: ‘Peter, isn’t Dubai property a huge bubble that is about to burst?’ Nobody else actually called it correctly at the time though many claimed to have been wise after the event.

No bubble trouble yet

Yesterday Dr. Faber said: ‘I don't think we're yet in a bubble stage but we had a big rise in property prices already. We have not reached the 2007 peak yet. We're not in a bubble yet, but it may become a bubble in the future.’

Dr. Faber is much more concerned about the US stock market where he expects a 20-30 per cent correction and is sheltering his assets in US treasuries at the moment. Still like many bearish commentators he has been saying something similar for several years and the markets have gone up hugely in that time.

However, bears always have the luxury of being proven right in the end. For good measure Dr. Faber is particularly negative at the moment on shares in the manufacturers of luxury products because the Chinese consumer is in trouble this year.

Chinese credit bubble

He’s very worried by the build up of credit in the Chinese economy over the past five years but has given up trying to call a top because the Chinese authorities have a seemingly unlimited ability to prop up markets. That said any long-term fan of the original Dr. Doom will know that he believes this will just make the inevitable collapse bigger in the end.

His assessment of Dubai real estate chimes with the conclusions of the article that will appear in the next edition of our sister investment newsletter (click here) that Dr. Faber has previously been kind enough to endorse.

The last time we spoke to him he said there was now a ‘premium on safe havens like Dubai’ with its zero taxation, low red tape and security in an uncertain world. Dubai property is ten-times cheaper than Monaco leaving room for higher prices as the city’s reputation as a business and financial centre grows.

Utah Kicked Off Movement for Gold, Silver Legal Tender

Posted: 26 Mar 2014 09:11 PM PDT

Description: 

Were U.S. States to adopt gold and silver bullion as legal tender on a broad scale, the alternate currency would compete with the dollar.

This week's video clip from CNBC's The Kudlow Report precedes Utah's legalization of gold and silver coins as legal tender. The report aired on the evening when the Utah House of Representatives passed its bill, which would later be signed into law by Utah Governor Gary R. Herbert in April 2012.

 

In 2014, Arizona is on track to become the second state to enact such a law. Another 12 states have introduced or are advancing similar bills. 

In the CNBC clip, Utah State Representative Brad Galvez speaks with host Larry Kudlow about his reasons for sponsoring Utah's legal tender bill. "I believe this bill is the first step in preparing ourselves here in Utah for what may be coming down the road…," Galvez explains.

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