Gold World News Flash |
- Is It Imaginable That Governments Would Confiscate Your Bank Account?
- Documenting THE COLLAPSE — Andy Hoffman
- Dark markets may be more harmful than high-frequency trading
- Economic Collapse 2014 -- Dr. Jim Willie-End or 2014, Dollar Mortally Wounded, Treasury Bond Toxic Paper
- Ukraine PM Warns Russia's "Economic Aggression" Is Unacceptable
- Economic Collapse 2014 : Documenting THE COLLAPSE -- Andy Hoffman
- Totally Corrupt West & A Possible Kill Shot On The Dollar
- Faber On Gold Manipulation, The Fed's Gold and Importance Of Not Storing Gold In U.S.
- High Frequency Trading: All You Need To Know
- Despite Pullback, Gold May Be Set For Remarkable 177% Surge
- U.S. is Doomed to COLLAPSE! China to Rule World!
- 9 Exciting Gold And Money Charts
- Gold Investors Weekly Review – April 4th
- Power Of Elites Influences Gold And Silver Price More Than China’s Gold
| Is It Imaginable That Governments Would Confiscate Your Bank Account? Posted: 07 Apr 2014 01:00 AM PDT from Gold Silver Worlds: In this video featuring resource investor Rick Rule and sound money specialist Mike Maloney, both men discuss the high probability scenario in which governments will confiscate our bank accounts (or parts of it). An interesting quote by Rick Rule: 'The idea that we have, that we are absolved of responsibility for our own financial future – in other words: if we're stupid enough to put money in a bank, that has too poor of an equity slice, the bank goes upside down….we're unsecured creditors of a moron, which makes us a double moron. We ought to be punished for that stupidity." The underlying message is clear: physical precious metals outside the banking system have the huge benefit of carrying no counterparty risk. That benefit will not be perceived by the majority of people, until it's too late. A one-second event could prevent people from a metals holding. As the saying goes: you better be 3 years too early than 3 days too late (or 3 seconds for that matter). |
| Documenting THE COLLAPSE — Andy Hoffman Posted: 06 Apr 2014 09:24 PM PDT
Andy Hoffman from Miles Franklin joins us to document the collapse: We start with the fraudulent NFP report data about which Andy says, “There’s not a single aspect of it that’s truthful.” We are witnessing the death of the U.S. economy and REAL jobs that PAY A LIVING WAGE. We also talk about the dead bankers list, and the rats now fleeing the ship at JP Morgan. We cover the China bubble, the decline of Japan which Andy says will be “the first 1st world nation to experience hyperinflation in the 21st century” as well – and much more. Thanks for joining us. This posting includes an audio/video/photo media file: Download Now |
| Dark markets may be more harmful than high-frequency trading Posted: 06 Apr 2014 07:56 PM PDT By John McCrank Fears that high-speed traders have been rigging the U.S. stock market went mainstream last week thanks to allegations in a book by financial author Michael Lewis, but there may be a more serious threat to investors: the increasing amount of trading that happens outside of exchanges. Some former regulators and academics say so much trading is now happening away from exchanges that publicly quoted prices for stocks on exchanges may no longer properly reflect where the market is. And this problem could cost investors far more money than any shenanigans related to high frequency trading. When the average investor, or even a big portfolio manager, tries to buy or sell shares now, the trade is often matched up with another order by a dealer in a so-called "dark pool," or another alternative to exchanges. ... ... For the full story: http://www.reuters.com/article/2014/04/06/us-dark-markets-analysis-idUSB... ADVERTISEMENT Buy precious metals free of value-added tax throughout Europe Europe Silver Bullion is a fast-growing dealer sourcing its products from renowned mints, refiners, and distributors. Because of a legal loophole that will close soon, you can acquire the world's most popular bullion coins free of value-added tax throughout the European Union. You can collect your order in person at our headquarters in Tallinn, Estonia, or have it delivered in any of the 28 EU countries. Europe Silver Bullion is owned and operated by North American and European experts in selling, storing, and transporting precious metals. We have an extensive product inventory of silver, gold, platinum, and palladium, and our network spans the world. Visit us at www.europesilverbullion.com. Join GATA here: Porter Stansberry Natural Resources Conference Committee for Monetary Research and Education http://www.cmre.org/news/spring-meeting-2014/ Canadian Investor Conference 2014 http://cambridgehouse.com/event/25/canadian-investor-conference-2014-inc... * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT 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. |
| Posted: 06 Apr 2014 05:16 PM PDT Dr. Jim Willie-End or 2014, Dollar Mortally Wounded, Treasury Bond Toxic Paper ... Dr. Jim Willie, Editor of "The Hat Trick Letter," predicts, "They are going to move it to $5,000 to $7,000 an ounce, and silver $200 to $400 per ounce. Because all the world's central banks are going to need gold... [[ This is a content summary only. Visit http://www.GoldSilverNewsBlog.com or http://www.newsbooze.com or http://www.figanews.com for full links, other content, and more! ]]  |
| Ukraine PM Warns Russia's "Economic Aggression" Is Unacceptable Posted: 06 Apr 2014 04:45 PM PDT "Russia was unable to seize Ukraine by means of military aggression," Ukraine's PM Yatsenyuk blasted, "Now they are implementing plans to seize Ukraine through economic aggression." His comments come after Russia's Gazprom raised prices for gas 81% from $268.50 to $485.50 (on the basis that the previous discount was a subsidy for allowing the use of the Black Sea port of Sevastopol, which Russia now has annexed) to which Yatsenyuk chided "political pressure is unacceptable, and we are not accepting the price of $500." Mr. Yatsenyuk, as WSJ reports, said his government will not pay the new price and will raise the issue in the Stockholm Arbitrage court, which was selected by the two countries years ago to settle the gas disputes - but warned his people that the country should prepare for Russia switching off natural-gas supplies.
As The Wall Street Jorunal reports, Ukraine's prime minister warned Saturday that the country should prepare for Russia switching off natural-gas supplies, as the energy monopoly Gazprom said it will raise the price for gas for Ukraine by 81%.
Mr. Yatsenyuk responded aggressively:
Gazprom's additional argument for raising the price (aside from credit-risk-adjusting for the billions already owed) is somewhat remarkable...
In other words, because we annexed territory for which we had previously given you a discount for, you now need to pay us full price.
With the US and IMF lining up to give "aid" to Ukraine, we wonder how all those taxpayers will feel when the hard-earned money gets greatly rotated from Ukraine's balance sheet straight to Gazprom's... or how the 'newly liberated' people of non-Crimean Ukraine will feel about their leaders when the country goes dark and cold... And if Yatsenyuk thinks he can wait it out... starving Gazprom of potential revenue (that they are not even paying anyway) think again... As Reuters reports,
So once again, actions by the West that were supposed to show strength will 'boomerang' back and do more to weaken the appearance of any global might that may remain. |
| Economic Collapse 2014 : Documenting THE COLLAPSE -- Andy Hoffman Posted: 06 Apr 2014 03:30 PM PDT Documenting THE COLLAPSE -- Andy Hoffman Andy Hoffman joins us to document the collapse: We start with the fraudulent NFP report data about which Andy says, "There's not a single aspect of it that's truthful." We are witnessing the death of the U.S. economy and REAL jobs that PAY A LIVING... [[ 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! ]]  |
| Totally Corrupt West & A Possible Kill Shot On The Dollar Posted: 06 Apr 2014 02:59 PM PDT  On the heels of continued chaos and uncertainty around the globe, today a 40-year market veteran sent King World News an incredibly powerful piece discussing the ongoing corruption in the Western world as well as a possible kill shot on the U.S. dollar. This is an extremely timely and fascinating piece from Robert Fitzwilson, founder of The Portola Group. Below is what he had to say in this exclusive piece for King World News.This posting includes an audio/video/photo media file: Download Now |
| Faber On Gold Manipulation, The Fed's Gold and Importance Of Not Storing Gold In U.S. Posted: 06 Apr 2014 02:10 PM PDT Gold finished 0.84% higher for the week and silver was 0.77% higher for the week. The disappointing jobs number Friday led to safe haven demand on concerns about the U.S. economy.
Video: Dr Marc Faber On The Manipulation Of Gold Prices, Bitcoin Risk, Precious Metal Allocations and Safe Gold Storage In Singapore Today Dr Marc Faber gave insights into his strategies for protecting and growing wealth in 2014 and beyond. In the webinar, some of the topics covered with Dr Faber included:
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| High Frequency Trading: All You Need To Know Posted: 06 Apr 2014 01:48 PM PDT In the aftermath of Michael Lewis' book "Flash Boys" there has been a renewed surge in interest in High Frequency Trading. Alas, much of it is conflicted, biased, overly technical or simply wrong. And since we can't assume that all those interested have been followed our 5 year of coverage of a topic that finally has earned its day in the public spotlight, below is a simple summary for everyone. To be sure, the thinking behind HFT is hardly revolutionary, or even new. Although today HFT is closely associated with high speed computers, HFT is a relative term, describing how market participants use technology to gain information, and act upon it, in advance of the rest of the market. Near the advent of the telescope, market merchants That said, the real proliferation of technology in trading, started in earnest in the 1960s with the arrival of the NASDAQ, the first exchange to heavily use computers. Ironically, while some form of HFT has been around for a long time, its true "potential" was first revealed in October 1987 with the first whole market flash crash, which resulted from an exponential propagation of program trading, which like right now with HFT, nobody truly understood. And even though some thought that Black Monday would have taught traders and regulators a lesson, it merely accelerated the incursion of computerized and algorihmic trading into regular markets, to such an extent that HFT now accounts for nearly three quarters of all exchange-based trading volume, while dark pools and other "off exchange venues" - or more markets that are not readily accessible to most - account for up to 40% of all total trading by volume up from 16% six years ago. The rough chronology of algorithmic trading, of which HFT is a subset, is shown in the timeline below.
Over the past decade, following regulatory initiatives aimed at creating competition between trading venues primarily as a result of the overhaul of the National Market System Regulation (or reg NMS), the equities market has fragmented. Liquidity is now dispersed across many lit equity trading venues and dark pools. This complexity, combined with trading venues becoming electronic, has created profit opportunities for technologically sophisticated players. High frequency traders use ultra-high speed connections with trading venues and sophisticated trading algorithms to exploit inefficiencies created by the new market structure and to identify patterns in 3rd parties' trading that they can use to their own advantage. For traditional investors, however, these new market conditions are less welcome. Institutional investors find themselves falling behind these new competitors, in large part because the game has changed and because they lack the tools required to effectively compete. In brief: The role of the human trader has evolved. They must now also understand how various electronic trading methods work, when to use them, and when to be aware of those that may adversely affect their trades. Market venue competition began with the Alternative Trading System regulation of 1998. This was introduced to provide a framework for competition between trading venues. In 2007 the National Market System regulation extended the framework by requiring traders to access the "best displayed price" available from an automated visible market. These regulations were intended to promote efficient and fair price formation in equities markets. As new venues have successfully competed for trade volume, market liquidity has fragmented across these venues. Market participants seeking liquidity are required by regulatory obligations to access visible liquidity at the best price, which may require them to incorporate new technologies that can access liquidity fragmented across trading venues. These technologies may include routing technology and algorithms that re-aggregate fragmented liquidity. Dark Pools – trading platforms originally designed to anonymously trade large block orders electronically – began to expand their role and trade smaller orders. This allowed dealers to internalize their flow and institutional investors to hide their block orders from market opportunists. The use of these technologies can lead to leaking trading information that can be exploited by opportunistic traders. Information is leaked when electronic algorithms reveal patterns in their trading activity. These patterns can be detected by HFTs who then make trades that profit from them. Competition for liquidity has encouraged trading venues to move from the traditional utility model, where each side of a transaction would be charged a fee, to models where the venues charge for technological services, pay participants to provide liquidity and charge participants that remove liquidity. Many trading venues have become technology purveyors. Broker-dealers have realized that they are often the party paying the trade execution fee, which is used by the venues to pay opportunistic traders a rebate for providing liquidity. To avoid paying these fees and internalise their valuable uninformed active flow, especially from retail customers, broker-dealers have also established dark pools. By internalising their flow or, in many cases, selling it to proprietary trading firms, they can avoid paying the trading fees that the venues charge for removing liquidity from their order books. The irony is that in their attempt to streamline and simplify the market with Reg ATS and Reg NMS, regulators have created the ultimate hodge podge of trading venues, information leakage nodes, and countless opportunities to frontrun both institutional and retail order blocks.
Before we continue, let's take a look at perhaps the most critical and misunderstood concept around, one which HFT advocates are quite happy to (ab)use without really understanding what it means.
There is more: as we explained back in August 2009, the correct term to focus on isn't liquidity, but Implementation Shortfall, also known as Slippage, which is the toll HFTs collect from investors - this is, on average, the cost of spread and frontrunning. Implementation Shortfall (IS) Costs – comprised of 2 pieces: Timing Delay Costs - Any delay cost incurred between the Initial Decision (Open on Day 1) and the Broker Placement Price. Think of this as the cost of Seeking Liquidity; and Market Impact Costs - Price change between the time the Order is placed with the Broker and the eventual trade price. (those curious to learn more about the nuances can do so at this link). Why is liquidity so critical? Because it goes hand in hand with the concept of the modern exchange, since the measure of consummated liquidity is a key variable in determining the successfulness of any trade venue. It also goes to show why HFTs never operate in a vacuum but in explicit symbiosis with exchanges. It was Zero Hedge who pointed out in 2012 that HFT is a critical component of exchange revenue streams, ranging anywhere between 17% and all the way up to 32%.
It is this inextricable link between the venue and the algos that dominate the venue, that has led many to suggest - correctly - that one of the key culprits for HFT proliferation is the dominant exchange business model, known as the Maker-Taker model, in which the liquidity provider is paid (in practical terms it means paying those who provide liquidity with limit orders even it the limit orders are merely "flashed" subpenny orders frontrunning a major order block), while charging liquidity takers (those who take away liquidity with market orders). This is summarized in the panel below.
No matter the reason, one thing is certain: the use of HFT has exploded. With the equity markets becoming electronic and prices quoted by the cent (as opposed to the previous eighths of a dollar), the traditional, "manual", market makers have found it difficult to keep up with the new technologically savvy firms. The playing field has been tilted in favor of HFTs, who use high speed computers, low-latency connectivity and low latency direct data feeds to realize hidden alpha... or as some call it - frontrunning. HFTs can follow active, passive or hybrid strategies. Passive HFTs employ market making strategies that seek to earn both the bid/offer spread and the rebates paid by trading venues as incentives for posting liquidity. They do this efficiently across many stocks simultaneously by utilizing the full potential of their computer hardware, venue-provided technology and statistical models. This strategy is commonly known as Electronic Liquidity Provision (ELP), or rebate arbitrage. These ELP strategies can also be signal detectors. For example, when ELP strategies are adversely affected by a price that changes the current bid/ask spread, this may indicate the presence of a large institutional block order. An HFT can then use this information to initiate an active strategy to extract alpha from this new information. Active HFTs monitor the routing of large orders, noting the sequence in which venues are accessed. Once a large order is detected, the HFT will then trade ahead of it, anticipating the future market impact that usually accompanies sizable orders. The HFT will close out their position when they believe the large order has finished. The result of this strategy is that the HFT has now profited from the impact of the large order. The concern for the institutional investor, that originally submitted the large order, is that their market impact is amplified by this HFT activity and thus reduces their alpha. The most sophisticated HFTs use machine learning and artificial intelligence techniques to extract alpha from knowledge of market structure and order flow information.
The ubiqituous presence of HFT also means that one of the key considerations when placing an order is "smart order routing" which take into account such concepts as latency arbitrage and order size. This is furhter simplied in the panel below.
Which brings us to the topic of whether all HFT does is simply frontrunning, legal as it may be, and allowing firms like Virtu to post "liquidity providing","trading" profits on 1,237 of 1,238 trading days. The answer - no. At least not explicitly. The full list of HFT strategies, broken down by their impact on various stakeholders is shown below. Again, at least on paper, some strategies are beneficial if mostly to the retail investor. The biggest question, however, is - is there such a thing as a retail investor left at a time when market trading volume has fallen to decade lows, and where HFT now comprises the bulk of lit volume.
And while on paper HFT does provide benefit, the reality is that in practice the consequences of HFT are almost unique negative. Putting aside the ethical implications of whether one views frontrunning as legal or not, the far bigger unintended consequences of HFT is that it has made trading venues inherently far more unstable and prone to sudden and unexplained crashes. Indeed, the market has suffered several adverse events as a consequence of the new fragmented, for-profit, market venue environment. In some cases, these events resulted from the unpredictable interaction of trading algorithms; in other cases they were the result of software glitches or overloaded hardware. KNIGHT CAPITAL LOSS – OVER $450 MILLION + WAVES OF ACCIDENTAL TRADES A software malfunction from Knight caused waves of accidental trades to NYSE-listed companies. The incident caused losses of over $450 million for Knight. The SEC later launched a formal investigation. GOLDMAN SACHS – $10S OF MM + TECHNICAL GLITCH IMPACTS OPTIONS An internal system upgrade resulting in technical glitches impacted options on stocks and ETFs, leading to erroneous trades that were vastly out of line with market prices. Articles suggest that the erroneous options trades could have resulted in losses of $ 10's of millions. Goldman Sachs stated that it did not face material loss or risk from this problem. NASDAQ – 3 HOUR TRADING HALT DUE TO CONNECTION ISSUE Due to a connection issue NASDAQ called a trading halt for more than three hours in order to prevent unfair trading conditions. A software bug erroneously increased data messaging between NASDAQ's Securities Information Processor and NYSE Arca to beyond double the connection's capacity. The software flaw also prevented NASDAQ's internal backup system from functioning properly. NASDAQ – DATA TRANSFER PROBLEMS FREEZE INDEX FOR 1 HOUR An error during the transferring of data caused the NASDAQ Composite Index to be frozen for approximately one hour. Some options contracts linked to the indexes were halted, though no stock trading was impacted. NASDAQ officials state that the problem was caused by human error. Although the market suffered no losses, this technical malfunction – the third in two months – raises considerable concerns. * * * Which brings us to the culmination of 50 years of changing technology, namely the changing investor-broker relationship. Traditionally, investors spent their efforts seeking alpha and brokers were charged with sourcing liquidity. Liquidity could be sourced via the upstairs market or the stock exchange. The stock exchange operated as a utility that consolidated liquidity. Beyond generating alpha, the only decision for an investor was choosing a broker to execute their trades. Today, investors are still concerned with generating alpha. However, the trading process required to execute their alpha strategies has become more complex. The consolidated utility model has been replaced by a market that is highly fragmented with for-profit venues vigorously competing for liquidity which is provided primarily by HFTs. This new environment puts brokers in a difficult position. They have a fiduciary responsibility to provide best execution to their clients. This requires them to invest in new technology to source liquidity and defend against HFT strategies. And because many of these venues now pay rebates for liquidity, which is quickly provided by HFTs, brokers are usually left having to pay active take fees to the venue. And at the same time that brokers are incurring these costs, investors are pressuring them to reduce commissions. These pressures on brokers' margins are creating conflicts of interest with their clients. By accessing venues with lower trading fees, or attempting passive order routes of their own, brokers can reduce their operating costs. However, these trade routes are not necessarily best for the investors. Sophisticated investors now demand granular execution information detailing how their order flow was managed by their broker so they can ensure they are receiving the best execution. While brokers provide aggregate performance reports, investors can build a more complete analysis, including broker performance comparison by using more granular information. Summarized visually - Before:
And After:
* * * So putting it all together, what is the current state of the market? Ironically, when one strips away all the bells and whistles of modern technology, it all goes back to a concept as old as the first market itself - namely alpha, or outperforming the broader market. In order to find hidden alpha, it is important to first understand where market participants are with respect to information utilization. The light grey area in the chart below represents the typical institutional investor, playing the role of the "ostrich" or "compiler", either choosing to ignore the changes around them or to use information only for basic compliance tasks. Most HFTs belong in the light blue "commander" stage; they take command of the information around them and let it guide their business. Taking advantage of the information opportunity, and finding hidden alpha, requires a firm to move up the stages of adaptation. COMPLEXITY: This measures the sophistication of the use of information in directing action. Whether the information is trade data or newsfeeds, it can be put to use in more or less sophisticated ways, from simple arithmetic to complex statistical methods coupled with strong strategic understanding. Arithmetic uses aim at providing no more than basic accounting measures of values, volumes and gains and losses. Statistical methods aim to identify patterns in information that can be used to guide trading. Strategic understanding introduces game theory, anticipating the reaction of other market participants when an investor employs a particular trade strategy. FREQUENCY: Each trade an investor makes provides an opportunity to learn. Gathering information from every trade, as opposed to a select few, helps give the investor a better understanding of how those trades may perform in the future. The more frequent the analysis, the more relevant the findings will be. ITERATION: Findings serve a purpose only if they are acted upon. The key is to use information to guide actions whose outcomes are then analyzed and the findings reapplied. This creates a continuous iterative loop that drives towards ever greater efficiency. BREADTH: Knowledge sharing with similar objectives (e.g. institutional investors trading large blocks) could lead to a more efficient investment implementation process for all participants. Working together, institutional investors can share block order implementation experience and data, as a utility. The result of this could help participating institutional investors defend against market impact losses and protect proprietary strategies.
HFT firms will likely plateau at stage 4, "commander", |
| Despite Pullback, Gold May Be Set For Remarkable 177% Surge Posted: 06 Apr 2014 10:53 AM PDT  Today KWN is putting out a special piece which has some absolutely outstanding gold charts that were sent to us by David P. out of Europe. These are charts that the big bullion banks follow closely in the gold and silver markets, as well as big money and savvy professionals. David believes that despite the recent weakness, the gold market may now be set up for a remarkable 177% surge that would take the price of gold over $3,500.This posting includes an audio/video/photo media file: Download Now |
| U.S. is Doomed to COLLAPSE! China to Rule World! Posted: 06 Apr 2014 10:20 AM PDT Collapse must occur in the U.S. There are no jobs anymore due to offshoring. Unemployed numbers continue to rise steadily.Developing countries are hoarding gold. What's the deal here?The elite know what's going on and will assuredly profit from it. The point here is that when this fully takes... [[ 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! ]]  |
| 9 Exciting Gold And Money Charts Posted: 06 Apr 2014 07:52 AM PDT In his latest monthly editorial, writer and researcher Peter de Graaf has pulled several charts together which show the status of the gold market. Apart from a positive seasonal influence, the fundamentals still point to strength in gold. The “fundamenals” in this context are basically the relative strength of precious metals compared to other finanical assets, in particular money (as reflected in the monetary base on the US Fed balance sheet) and stocks. The author adds some basic technical analysis to his article. Both short and long term, gold seems well positioned (the mid long term, though, is not explicitly elaborated). Historically the month of March is not very 'gold-friendly'. April and May are more conducive to providing a rally. The first chart is courtesy Seasonalcharts.com. The March pullback came on schedule and appears ready to turn into a rally.
The next chart shows the number of US dollars that are currently circulating (courtesy Mark J. Lundeen). The number is over 1 trillion dollars, and rising exponentially. This is in addition to the trillions of dollars in digital form, which make up the money supply.
This next chart shows the US Monetary Base, which continues to rise exponentially. The two tiny 'blips' in 2000 and 2001 represent the large amounts of money shoveled into the system by Mr. Greenspan to keep the system afloat. The amount of money that is added at this time is mind boggling. During the last 30 day period the base increased by 80 billion dollars. No 'tapering' here. While not all of this money will find its way into gold and silver, some of it will, and as the rally that began on December 31st picks up steam, more and more of this liquidity is expected to move into the precious metals sector.
The following chart compares gold to the US monetary base. The interpretation is that gold is cheaper than at any time during the past 100 years! The current reading is 0.4! When it climbs back to the 4.0 zone; that would imply a gold price 10 times higher than today. Chart courtesy: Macrotrends.net.
The chart below confirms the fact that gold is very cheap at this moment. Mr. Lundeen compares the current gold price to the purchasing power of a dollar in 1920. He calculates that gold needs to rise to $8750 in today's dollars to return to what it was worth in 1920. This sets the stage for a continuation of the current gold bull market.
The following chart shows the energy that is being provided by the US FED (by way of money printing), benefiting both the S&P (red line), and gold (black line). The gold price was pushed out of this relationship when huge numbers of contracts for paper gold were executed at the COMEX in mid-April 2013. On Friday April 12th 2013 at the opening of trading at the COMEX, 3.4 million ounces of gold contracts were dumped in the June contract. On Monday April 15th, another 10 million ounces hit the tape. The amount of gold (in the form of contracts) that was dumped over the two-day period represented 15% of total world gold production. Meanwhile, to fill demand from China, hundreds of tonnes of physical gold were released by the Bank of England, while a large amount of gold was pried away from GLD the gold ETF, in response to rising demand from Asian countries. Chinese and Indian people love bargains! That gold is now gone! It cannot be sold again! This has created a situation where, like a rubber band, the gold price is expected to snap back into the previous alignment.
Featured below is the daily gold chart. Price broke out at the 200DMA (red line) in February and since meeting with resistance at $1400, a test of the breakout has been underway. The supporting indicators (green lines), are providing hints that support is available here. A breakout at the black arrow will tell us that a bottom may well have been carved out. The green arrow points to a 'golden cross', with the 50DMA moving into positive alignment with the 200DMA.
Featured below is the index that compares gold to the S&P 500 index. In late 2011 this index became temporarily tilted in favor of gold. The reversal of direction that came about as gold dropped in price while the S&P 500 rose to new highs, appears to be ready to change direction again. Confirmation will come about when price breaks out at the blue arrow. The three supporting indicators (green lines) are ready to turn up.
This last chart compares the price of gold to the US long bond. The blue line is the 400 week moving average. Up until 2003 it made sense to own bonds and not gold. The green arrow points to the moment when gold took charge. Since then gold has outperformed bonds. In 2011 gold had moved up a bit 'too far too fast' and a pullback in the relationship caused this index to return to the 400WMA, where it is finding support. A breakout at the blue arrow will cause many people to become interested in gold, and bond money is expected to flow into the gold sector, as the eleven year old trend picks up steam.
About the author: Peter Degraaf is an online stock trader with over 50 years of investing experience. He publishes a daily market letter. For a sample copy please visit www.pdegraaf.com. Courtesy of the excellent website Nowandfutures.com for the Greenspan quotes used in this article. |
| Gold Investors Weekly Review – April 4th Posted: 06 Apr 2014 06:36 AM PDT In his weekly market review, Frank Holmes of the USFunds.com nicely summarizes for gold investors this week's strengths, weaknesses, opportunities and threats in the gold market. Gold closed the week at $1,303.64, up $8.37 per ounce (0.65%). The NYSE Arca Gold Miners Index rose 0.52% on the week. This was the gold investors review of past week. Gold Market StrengthsGold rose $8.37 per ounce for the week, as the futures contract posted its best one-day performance since March 12 on Friday. U.S. payrolls rose 192,000 in March, missing analysts' expectations for a 200,000 gain. The weekly price action was also supported by positive import estimates from India and expectations of further stimulus in China, where Shanghai physical premiums turned positive.
Gold sales by Japan's biggest bullion retailer increased five-fold in March as investors accelerated purchases ahead of the nation's sales tax increase on April 1. The demand was in response to Prime Minister Abe's tax hike as the government seeks to address the nation's swelling public debt and to stoke inflation. Similarly, India's gold imports are set to more than double in March from February's 33 tonnes, according to a government official with direct knowledge of the matter. Gold Market WeaknessesData from the U.S. Mint shows that sales of gold coins dropped 32 percent in March from February, despite strong sales for silver coins which rose 43 percent. Similarly, the Perth Mint reported sales of 30,177 ounces in March, down from 47,000 ounces in February. Gold Market OpportunitiesBoth the buy-side and the sell-side are warming up to gold. This week, Pecora Capital, a Florida-based asset manager, said gold will return to a record within five years as weaker equities spur demand for a safe haven. On the sell-side, Deutsche Bank raised its 2014 and 2015 gold price estimates, while Australia and New Zealand (ANZ) Bank raised its views to neutral after being bearish on the metal. ANZ analysts say their physical gold indicator increased toward the end of March, even in the face of a weaker Chinese currency. South Africa's platinum sector strikes have reached the 10-week mark as auto sales growth in the U.S. reached 10 percent this March, increasing the potential for a price spike amid supply constraints. The strikes, in which the unions have appeared intransigent, may put thousands of platinum workers out of work permanently, as mining companies seek to mechanize mines to halt cost escalation. A recent proposal criticizes the Black Empowerment status quo and calls for profit-sharing programs with employees that align their interests with those of the company and ensure all related parties receive economic benefit, not just the Black Empowerment groups. Gold Market ThreatsNatixis analysts argue downside pressures for silver are much higher than those of gold given the average mining costs for silver are around $7 per ounce (Natixis estimate). The bank has a base case for silver at $18.60 an ounce for 2014, and $15 per ounce in 2015, noting that prices could go as low as $10 per ounce. In their view, the liquidation of a portion of the nearly 20,000 tonnes of silver held in exchange traded products (ETPs) is a latent threat to the silver market. Executives from Caterpillar are expected to testify next week before a U.S. Senate subcommittee on allegations that the heavy equipment manufacturer used a foreign subsidiary to avoid paying $2.4 billion in U.S. taxes. This type of pressure on corporations to repatriate funds at a massive cost to investors is not new, and we may see more in the mining sector where companies pay taxes in the countries where they operate, not necessarily in the country where their head offices are located. |
| Power Of Elites Influences Gold And Silver Price More Than China’s Gold Posted: 06 Apr 2014 05:25 AM PDT Being successful in trading has a lot to do with finding the developing "story" behind the price structure of a market. We had good results in February because we keyed into some very important pieces of market information that would lead to a likely result for the direction of price, or what we call "the story of the market." We had less success in March because the focus was more on trying to catch up to the story, where being just a step or so behind is not as rewarding, even resulting in loss. For the past several weeks, we have shifted focus on what we see as the truer "story" of the PMs market, [Precious Metals]. Some may think we have gone off on an unrelated tangent talking about the elites and fiat currency. The PM community has maintained a relentless focus on how much gold is being imported by China, the diminishing supply of physical gold at COMEX and LBMA, and a host of other popular statistics that support what seems to be important for gold and silver adherents in their beliefs that should ultimately lead to higher prices. The Law of Supply and Demand is what determines price. Not enough are looking at how the elites are able to distort that Natural Law and bend it to their will. It is the power they can exert, and distort, on any aspect of human life, at least in the Western world, that keeps gold and silver at unnaturally low prices. The more cogent issue is, for how much longer can elites keep their unnatural control over the natural forces of Supply/Demand? Longer than most expect, which is what we have been saying for some time. It is quite possible the disappointing expectations for 2013 may repeat in 2014. Here is how we see the developing "story" that explains why gold and silver have not changed trend. "Give me control of a nation's money, and I care not who makes the laws." Mayer Amschel Bauer, aka Rothschild We cannot think of any sentence that has had, and continues to have a more pervasive, as well as perverse, influence over mankind than this one, the key to the Rothschild dynasty in its quest for world dominance. Nor is there any more corrupt and criminal enterprise than that led by the elites with their absolute control over the Western financial world and the entire Western political landscape. The subtext to the Rothschild formula of control is, "If you do not comply with our rules, you will be destroyed." That destruction can be brought about financially or literally. The United States, formed as a Constitutional Republic, has been replaced by a mirror, de facto corporate federal government that has substituted [destroyed] the organic Constitution and the Republic itself, and replaced it with a deceptive federal constitution. The switch in constitutions is just as we addressed the deception in switching U S currency with fiat Federal Reserve Notes, aka the "dollar." [See Gold And Silver - They Are Money] Almost all Americans live under the delusion that they still enjoy freedoms guaranteed by the organic Constitution, not recognizing the bait-and-switch federal constitution that only grants privileges, not inherent rights. The Common Law, recognizing God-given natural rights, has been replaced by pagan Roman law, which is statutory. Law by statute should be a huge clue for the uninformed that something is wrong, but few ever think to question anything promoted by the bankrupt corporate government. What does this have to do with the price of gold and silver? Everything! Another huge clue over this is the fact that several indicators of unprecedented demand for both gold and silver have had zero impact on the market. For the past few years, the only focus by the gold and silver crowd has been how many tonnes of gold China has been importing, marveling at the record amount moving from West to East, trying to calibrate as closely as possible how many tonnes it is. It should be enough to know that it is a record amount and that it continues to this day. Instead of expending so much time, energy, and effort determining numbers, just accept it as a given. It has been priced into the market. The more pertinent question is why has this widely known and accepted factual circumstance not had any impact on the price of gold? Does everyone really need to know how many gold and silver coins are being bought by the public from issuing mints around the world? Is it really important to know how much gold is being smuggled into India? Is there anyone who keeps tabs on PMs that is unaware that Switzerland has been running shifts around the clock recasting gold to meet Chinese preferences for smaller bars that are .9999 fine? More information already priced into the market. Yet, all this has been the heart of reporting by the PM crowd, plus coverage by the most respected minds in gold and silver, all end up concluding that gold should be $10,000 the ounce, silver $150 – $250 the ounce, or even higher for both. What are the current prices for gold and silver? Gold is about 13% and silver about 10% of projected prices. What is wrong with this picture? Almost everyone is looking at the same information and maintaining the same expectations, and all are missing the less obvious but more relevant reasons why gold and silver struggle. Their "story," while valid, is wrong. It is the power of the elites! "Give me control of a nation's money, and I care not who makes the rules." Again, the subtext is, "Play by our rules or you will be destroyed." A common trait shared by Lincoln and Kennedy is that both decided to issue a U S currency that was not central bank-created. Both presidents were "destroyed." Reagan decided to shrink the federal government, ignoring the "rules of the game." After a botched assassination attempt, Reagan went on a huge federal government expansion. He got the message, "Play by our rules, or else." He also got lucky. These are the more famous people who displeased the elites. Less is known about the recent dozen or so bankers who were "suicided." The fact that one chose "suicide" by a nail gun, firing several into his body before determining he was not succeeding and needed to give himself one in the head, should remove any question from any doubter that these were not self-directed choices, in every instance. The point is to convey the degree of power exercised by the elites, and there is no doubt about the fact that they control every aspect of your life, how you live, what you read and watch, what you eat, and of late, what little you can say or do about it without being branded as a terrorist. We have been saying that those in power will not give it up easily, more likely never, and they will destroy currencies and countries in the process of protecting their parasitic power, but it is this power of the elite that determines where gold and silver are. [A not to be forgotten part of the elite's agenda in protecting their fiat v gold is war.] No disrespect to the well-deserved respect for the precious metals pundits and the legion writers with expertise in the precious metals arena, but none are addressing the failure of the natural order of supply and demand as the supposed source for determining price. There is a power struggle going on between West v East, and until it plays itself out, the West has a vested interest in suppressing the price of gold and silver in order to preserve the worthless fiat "dollar" as the elite's chosen world reserve currency. Look at the lot of Cyprus, Greece, Ireland, whose populations have been forced to pay to keep their failed banks alive. It would have made more sense to let the insolvent banks fail, but the elites will not tolerate such fate for their corrupt system, for it would then have a domino effect on the rest of every other insolvent Western bank, propped up by the dictates of unelected officials: all central banks, BIS, IMF, the EU, etc. "Give me control of a nation's money, and I care not who makes the laws." Once one begins to understand the profound impact that sentence has had since the Rothschild dynasty took over the Western world, unnoticed, unseen, but very much present in ways most people cannot fathom. Unless and until people start to question why things are the way they are, nothing will change. Well, that was until China decided they did not like having their gold stolen from them by the Western central banking cartel. It is payback time. China does not stand alone. The formation of the BRICS nations has been in response to the reckless abandon with which the US has been exporting it inflationary Treasury Bonds, backed by the petro-dollar as the world's reserve currency. The ever-growing Eastern bloc of nations is in the process of putting an end to Western world financial dominance via fiat: fiat "dollar," fiat Pound, fiat Yen, fiat Euro, fiat Franc, etc, etc. China has been accumulating as much of the world's supply of gold as it can, [the focus of the PM community], and the accumulation has been at bargain-basement prices. China has no interest in seeing the price of gold rally, certainly not during the phase of accumulation that will then lead to mark-up. That country is willing to accommodate the West in suppressing gold during the last phase of their waning power. History tells us every fiat currency fails. It is just a matter of time. China is well aware of the fate that faces the West, and China is willing to let that demise take its natural course. Here are some clues China has given that most PM analysts are not addressing. China's time frame is much longer than the "do it now" time frame in the West. The reason China will not interfere with the West's misguided intent to suppress gold: for one, China gets it at low prices. For now, China wants to keep the Renminbi stable, [even a little suppression going on there]. It does not want to tie its currency to gold because it would immediately cause it to rally sharply. Staying pegged to the US "dollar," instead, its currency resembles the other international currencies. Unable to match the "creditworthiness" of the "dollar," China's currency officially remains somewhat subordinated to the US fiat. Were the Renminbi allowed to be gold-backed, China's currency would then become too strong, relative to the rest of the world and put China at a competitive disadvantage. For as long as China wants to remain low-key, it prefers a lower gold price. If the world's largest holder of and greatest demand for gold does not want to see it rise in value, and the West does not want gold to rally, that may be enough to keep the paper game alive. Consequently, do not expect China to be a catalyst for establishing a gold-backed currency. It serves China best to allow the West to maintain its duplicitous control over gold and silver. With no country in a hurry to have a gold-backed currency, one of the biggest factors for seeing the price of gold sky-rocket is off the table. This factor is far more significant than all the demand statistics paraded each week by PM writers. We keep saying to pay attention to the charts. They show no signs that would lead to any panic by the West. For as long as the elites remain in control in the West, gold and silver are just a few more [manipulated] commodities. The power of the elites denies the PM of their true status as money. The East is in progress of making a change. One sign of the West's determination to hold onto power is Obama's pimping for the elites, telling Russia sanctions will be imposed over the Crimea situation. Russia is entering into a barter with Iran, exchanging oil for Russian goods and using the Ruble for any contract, eliminating the US petro-dollar. Obama issues yet more threats of sanctions, all because Russia chooses to buy oil from Iran and use its own currency in a trade in which the U S has zero involvement, other demanding Russia use US currency. Obama to Putin: "We are imposing sanctions on Russia, [but we still want you to use our "dollar" in all your trade agreements]. Russia has lots of natural gas resources. The US has lots of debt. Putin to Obama: "What's in YOUR wallet?" Somehow, we feel Obama will end up singing, "Crimea River." No one knows when things will change but change they will, and only then will the price of gold and silver find their natural level. It is always worth making the distinction between buying and owning physical gold and silver v futures. We encourage buying and personally holding the physical to the extent of one's ability to buy both on a consistent basis, regardless of price. The endless printing of digital currency ensures the financial picture for the U S will end badly. Those without gold and silver will suffer considerably. Those with physical gold and silver will also suffer, but they will be better positioned to survive the financial chaos sure to follow. |
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