Gold World News Flash |
- Silver to Become Extinct in 8 to 13 Years-USGS
- Strong Dollar Pressures Gold
- TF Metals Report: Silver market rigging expose is being suppressed
- Forget The "Alibaba Top" - This Is The Chart Everyone Is Watching
- With A Venezuela Default Looming, This Is What A BofA Banker Wanted To Look At First
- Rickards tells Anglo Far-East the methods, objectives, and perps of gold market rigging
- The PunchLine: Dislocation, Dislocation, Dislocation
- Paul Craig Roberts: "A Rigged Gold Price Distorts Perception Of Economic Reality"
- Silver and Gold Prices Lower with the Gold Price Closing at $1,218.60
- Hugh Hendry Is Not Having A Good Year
- Why do Stock Markets Collapse? -- Stuff They Don't Want You to Know
- Is This A Triple Bottom In Gold?
- Is Gold Correcting Or In A Downtrend?
- Despite Drop, Gold Coiled To Break $2,000 & Silver Above $70
- Gold Daily and Silver Weekly Charts - Options Expiration on the Comex Tomorrow
- India's Changing Gold Culture
- Consciously Shifting to Precious Metals
- Stupid Writ Large
- 50 Tonnes In Ten Days: Gold Smuggling Overwhelms Government Restrictions In India
- In The News Today
- J.S. Kim: Don't be misled by the gold and silver paper markets
- US Government - The World’s Largest Subprime Debtor
- Venezuela's Gold Appears To Be Still In Venezuela But For How Long?
- Celente - Increased Worldwide Danger To Rock Gold Market
- Financial media in U.S. are controlled to ignore market manipulation, Murphy says
- Gold Price Charts "Firmly in Downtrend", Analysts Worry "$1180 Won't Hold" as Trading Sentiment Nears 30-Year Low
- Gold And Silver Voodoo Analysis Price Forecasts
- GOLD Bewitching Hour of a Triple Bottom is Upon Us
- Richard Karn's Advice for Avoiding the Walking Dead
- Elliott Wave: Extreme Optimism and a Rising US Dollar Signal an Epic Turn Ahead
| Silver to Become Extinct in 8 to 13 Years-USGS Posted: 25 Sep 2014 12:30 AM PDT from TruthNeverTold: | ||||||||||||||||||||||||||||||||
| Posted: 24 Sep 2014 09:41 PM PDT Aden Forecast | ||||||||||||||||||||||||||||||||
| TF Metals Report: Silver market rigging expose is being suppressed Posted: 24 Sep 2014 07:20 PM PDT 10:21p ET Wednesday, September 24, 2014 Dear Friend of GATA and Gold: The TF Metals Report's Turd Ferguson tonight calls attention to some investigative journalism that reportedly led to an explosive article about silver market rigging whose publication is being suppressed. Ferguson's commentary is headlined "Time to Take Action" and it's posted at the TF Metals Report here: http://www.tfmetalsreport.com/blog/6157/time-take-action CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Buy metals at GoldMoney and enjoy international storage GoldMoney was established in 2001 by James and Geoff Turk and is safeguarding more than $1.7 billion in metals and currencies. Buy gold, silver, platinum, and palladium from GoldMoney over the Internet and store them in vaults in Canada, Hong Kong, Singapore, Switzerland, and the United Kingdom, taking advantage of GoldMoney's low storage rates, among the most competitive in the industry. GoldMoney also offers delivery of 100-gram and 1-kilogram gold bars and 1-kilogram silver bars. To learn more, please visit: http://www.goldmoney.com/?gmrefcode=gata Join GATA here: Canadian Investor Conference http://cambridgehouse.com/event/31/canadian-investor-conference-toronto-... New Orleans Investment Conference https://jeffersoncompanies.com/landing/noic2014?IDPromotion=614011014520... Mines and Money London http://www.minesandmoney.com/london/ * * * 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: | ||||||||||||||||||||||||||||||||
| Forget The "Alibaba Top" - This Is The Chart Everyone Is Watching Posted: 24 Sep 2014 07:10 PM PDT While it is easy, even sentimental, to pin what may (or may not) be a bubble, or as some call it - market - top on the recent liquidity and euphoria-soaking IPO of China's megaretailer Alibaba and its sliding chart since it broke for trading, a la what the Blackstone IPO did to the previous bubble, it is also wrong. The reality is that the attention of what few carbon-based investors and traders are left, is glued to very different chart: the one below from Deutsche Bank, showing the between the S&P and the total assets owned by the Fed. Read on for the reason why:
However...
However, as of today, they appear far more predictable. Recall: "Get To Work Mr. Chinese Chairman": China Set To Fire Its Central Bank Head, Unleash The Liquidity Floodgates So, Deutsche Bank's conclusion: "Overall we would argue that markets might experience a few more bumps in the road as the global liquidity picture is not as supportive as it has been." Also known as Euphemism 101. | ||||||||||||||||||||||||||||||||
| With A Venezuela Default Looming, This Is What A BofA Banker Wanted To Look At First Posted: 24 Sep 2014 07:00 PM PDT With a 66% chance of default/devaluation implied by the Venezuelan credit market, BofA economist Francisco Roriguez sprung an unusual question on the struggling socialist nation's central bank - Can you show me your gold? As Bloomberg reports, the answer was "yes"...
At least they have all their gold thanks to Chavez' repatriation, which is more than can be said about Germany.
* * * As one commenter noted, "It's quite sad when Venezuela's Central Bank demonstrates more transparency with its assets than The Federal Reserve." | ||||||||||||||||||||||||||||||||
| Rickards tells Anglo Far-East the methods, objectives, and perps of gold market rigging Posted: 24 Sep 2014 06:44 PM PDT 9:51p ET Wednesday, September 24, 2014 Dear Friend of GATA and Gold: In a wonderful 45-minute interview with John Ward of Anglo-Far East bullion dealers, fund manager, author, and geopolitical strategist James G. Rickards explains the methods, objectives, and perpetrators of gold market manipulation. The methods, Rickards says, include strategic dumping of official gold reserves, which isn't done much anymore; dumping paper gold on the futures markets to panic weak-handed and skittish longs, especially hedge funds, which is "child's play"; and gold leasing by central banks to investment banks that leverage the gold supply by a factor of 10, effectively devaluing gold, since most gold investors don't realize that there is no metal behind their claims, just the market-manipulating power of the central banks and their investment bank agents. ... Dispatch continues below ... ADVERTISEMENT Free Storage with BullionStar in Singapore Until 2016 BullionStar is a Singapore-registered company with a one-stop bullion shop, showroom, and vault at 45 New Bridge Road in Singapore. BullionStar's solution for storing bullion in Singapore is called My Vault Storage. With My Vault Storage you can store bullion in BullionStar's bullion vault, which is integrated with BullionStar's shop and showroom, making it a convenient one-stop-shop for precious metals in Singapore. Customers can buy, store, sell, or request physical withdrawal of their bullion through My Vault Storage® online around the clock. Storage is FREE until 2016 and will have the most competitive rates in the industry thereafter. For more information, please visit Bullion Star here: Another method, Rickards says, is the exchange-traded gold fund GLD, which functions mainly to fleece ordinary investors of their gold for shipment to China. The big problem with the London gold fix, Rickards says, was not price rigging, most of that being done on the futures market in New York, but the front-running the participating banks did against the trades of their own clients. "We don't really have a reference price for gold," Rickards says. "What we have is theater." But gold investors may be confident, Rickards says, because market manipulations always fail eventually. Rickards identifies the three major participants in gold market manipulation as the U.S. Federal Reserve, the U.S. Treasury Department, and the government of China. The Fed, Rickards says, actually wants a weaker dollar and more inflation and so favors a gradually higher gold price provided it happens in an "orderly" way, and when gold was nearing $2,000, central banks freaked out. China, Rickards says, wants a lower gold price because it is still buying, not to back the yuan metallically someday but simply to hedge its foreign exchange surplus of U.S. Treasury bonds that will be devalued along with the dollar. And the Treasury Department, Rickards says, has to accommodate China's acquisition of gold so as to discourage any dumping of Treasuries. Gold market manipulation will end, Rickards says, when China gets enough gold to hedge its Treasuries fully and the Fed gets the inflation it wants. But, he adds, the Fed wrongly thinks that it can dial inflation up and down as necessary. He expects hyperinflation when markets eventually get away from the Fed. He thinks this process will conclude in a year or two. For once Rickards claims some authority for the scenario he presents. He says it is what he has been given to understand from unidentified officials at the International Monetary Fund. The interview is any important as any financial commentary in many weeks and it can be heard at the Anglo Far-East Internet site here: http://www.afeallocatedcustody.com/research/teleconferences/download-inf... CHRIS POWELL, Secretary/Treasurer Join GATA here: Canadian Investor Conference http://cambridgehouse.com/event/31/canadian-investor-conference-toronto-... New Orleans Investment Conference https://jeffersoncompanies.com/landing/noic2014?IDPromotion=614011014520... Mines and Money London http://www.minesandmoney.com/london/ * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: | ||||||||||||||||||||||||||||||||
| The PunchLine: Dislocation, Dislocation, Dislocation Posted: 24 Sep 2014 06:36 PM PDT Despite the strong consensus view that the U.S. is on a stronger economic footing than a year ago, and clearly working with stronger momentum than other major economies, The PunchLine's Abe Gulkowitz suggests the scary array of possible flashpoints in the U.S. and certainly overseas will continue to haunt policymakers and the markets.
These conflicting developments highlight the awkward challenges the Fed faces in charting a tightening posture, and in steering market expectations on the future course of interest rates. Full PunchLine letter below... | ||||||||||||||||||||||||||||||||
| Paul Craig Roberts: "A Rigged Gold Price Distorts Perception Of Economic Reality" Posted: 24 Sep 2014 05:43 PM PDT Authored by Paul Craig Roberts & Dave Kranzler, The Federal Reserve and its bullion bank agents (JP Morgan, Scotia, and HSBC) have been using naked short-selling to drive down the price of gold since September 2011. The latest containment effort began in mid-July of this year, after gold had moved higher in price from the beginning of June and was threatening to take out key technical levels, which would have triggered a flood of buying from hedge funds. The Fed and its agents rig the gold price in the New York Comex futures (paper gold) market. The bullion banks have the ability to print an unlimited supply of gold contracts which are sold in large volumes at times when Comex activity is light. Generally, on the other side of the trade the buyers of contracts are large hedge funds and other speculators, who use the contracts to speculate on the direction of the gold price. The hedge funds and speculators have no interest in acquiring physical gold and settle their bets in cash, which makes it possible for the bullion banks to sell claims to gold that they cannot back with physical metal. Contracts sold without underlying gold to back them are called "uncovered contracts" or "naked shorts." It is illegal to engage in naked shorting in the stock and bond markets, but it is permitted in the gold futures market. The fact that the price of gold is determined in a futures market in which paper claims to gold are traded merely to speculate on price means that the Fed and its bank agents can suppress the price of gold even though demand for physical gold is rising. If there were strict requirements that gold shorts could not be naked and had to be backed by the seller's possession of physical gold represented by the futures contract, the Federal Reserve and its agents would be unable to control the price of gold, and the gold price would be much higher than it is now. Gold price manipulation is used when demand for delivery of gold bullion begins to put upward pressure on the price of gold and hedge funds speculate on the rising price of gold by purchasing large quantities of Comex futures contracts (paper gold). This speculation accelerates the upward move in the price of gold. The TF Metals Report provides a good description of this illegal manipulation of the gold market:
The bullion banks do not have nearly enough gold in their possession to make deliveries to the buyers if the buyers decide to stand for delivery per the terms of the paper gold contract. The reason this scheme works is because the majority of the buyers of the contracts are speculators, not gold purchasers, and never demand delivery of the gold. Instead, they settle the contracts in cash. They are looking for short-term trading profits, not for a gold hedge against currency inflation. If a majority of the longs (the purchasers of the contracts) required delivery of the gold, the regulators would not tolerate the extent to which gold is shorted with uncovered contracts. In our opinion, the manipulation is illegal, because it is insider trading. The bullion banks that short the gold market are clearing members of the Comex/NYMEX/CME. In that role, the bullion banks have access to the computer system used to clear and settle trades, which means that the bullion banks have access to all the trading positions, including those of the hedge funds. When the hedge funds are in the deepest, the bullion banks dump naked shorts on the Comex, driving down the futures price, which triggers selling from stop-loss orders and margin calls that drive the price down further. Then the bullion banks buy the contracts at a lower price than they sold and pocket the difference, simultaneously serving the Fed by protecting the dollar from the Fed's loose monetary policy by lowering the gold price and preventing the concern that a rising gold price would bring to the dollar. Since mid-July, nearly every night in the US the price of gold remains steady or drifts higher. This is when the eastern hemisphere markets are open and the market players are busy buying physical gold for which delivery is mandatory. But as regular as clockwork, following the close of the Asian markets, the London and New York paper gold markets open, and the price of gold is immediately taken lower as paper gold contracts flood into the market setting a negative tone for the day's trading. Gold serves as a warning for aware people that financial and economic trouble are brewing. For instance, from the period of time just before the tech bubble collapsed (January 2000) until just before the collapse of Bear Stearns triggered the Great Financial Crisis (March 2008), gold rose in value from $250 to $1020 per ounce, or just over 400%. Moreover, in the period since the Great Financial Collapse, gold has risen 61% despite claims that the financial system was repaired. It was up as much as 225% (September 2011) before the Fed began the systematic take-down and containment of gold in order to protect the dollar from the massive creation of new dollars required by Quantitative Easing. The US economy and financial system are in worse condition than the Fed and Treasury claim and the financial media reports. Both public and private debt burdens are high. Corporations are borrowing from banks in order to buy back their own stocks. This leaves corporations with new debt but without income streams from new investments with which to service the debt. Retail stores are in trouble, including dollar store chains. The housing market is showing signs of renewed downturn. The September 16 release of the 2013 Income and Poverty report shows that real median household income has declined to the level in 1994 two decades ago and is actually lower than in the late 1960s and early 1970s. The combination of high debt and decline in real income means that there is no engine to drive the economy. In the 21st century, US debt and money creation has not been matched by an increase in real goods and services. The implication of this mismatch is inflation. Without the price-rigging by the bullion banks, gold and silver would be reflecting these inflation expectations. The dollar is also in trouble because its role as world reserve currency is threatened by the abuse of this role in order to gain financial hegemony over others and to punish with sanctions those countries that do not comply with the goals of US foreign policy. The Wolfowitz Doctrine, which is the basis of US foreign policy, says that it is imperative for Washington to prevent the rise of other countries, such as Russia and China, that can limit the exercise of US power. Sanctions and the threat of sanctions encourage other countries to leave the dollar payments system and to abandon the petrodollar. The BRICS (Brazil, Russia, India, China, South Africa) have formed to do precisely that. Russia and China have arranged a massive long-term energy deal that avoids use of the US dollar. Both countries are settling their trade accounts with each other in their own currencies, and this practice is spreading. China is considering a gold-backed yuan, which would make the Chinese currency highly desirable as a reserve asset. It is possible that the Fed's attack on gold is also aimed at making Chinese and Russian gold accumulation less supportive of their currencies. A currency linked to a falling gold price is not the same as a currency linked to a rising gold price. It is unclear whether the new Chinese gold exchange in Shanghai will displace the London and New York futures markets. Naked short-selling is not permitted in the Chinese gold exchange. The world could end up with two gold futures markets: one based on assessments of reality, and the other based on gambling and price-rigging. The future will also determine whether the role of reserve currency has been overtaken by time. The US dollar took that role in the aftermath of World War II, a time when the US had the only industrial economy that had not been destroyed in the war. A stable means of settling international accounts was needed. Today there are many economies that have tradable currencies, and accounts can be settled between countries in their own currencies. There is no longer a need for a single reserve currency. As this realization spreads, pressure on the dollar's value will intensify. For a period the Federal Reserve can support the dollar's exchange value by pressuring Japan and the European Central Bank to print their currencies with which to support the dollar with purchases in the foreign exchange market. Other countries, such as Switzerland, will print their own currencies so as not to endanger their exports by a rise in the dollar price of their exports. But eventually the large US trade deficits produced by offshoring the production of goods and services sold into US markets and the collapse of the middle class and tax base caused by jobs offshoring will destroy the value of the US dollar. When that day arrives, US living standards, already endangered, will plummet. American power will have been destroyed by corporate greed and the Fed's policy of sacrificing the US economy in order to save four or five mega-banks, whose former executives control the Fed, the US Treasury, and the federal financial regulatory agencies. | ||||||||||||||||||||||||||||||||
| Silver and Gold Prices Lower with the Gold Price Closing at $1,218.60 Posted: 24 Sep 2014 04:28 PM PDT
Gold put in a high about $1,227 today about 4:30 a.m. Eastern time, then spent the rest of the day giving it back. Despite that reach upward yesterday to $1,237, gold's five day chart shows no excitement. Today was basically a flat day between $1,227 and $1,216. It closed barely below its ruling downtrend line (from 1 September). Holding its breath. The SILVER PRICE remains overboughter than woolen drawers at an old ladies' convention. Today did little for silver except close it above the $17.50 line. There was a bit of movement in silver, with a 3:30 a.m. high at $17.87 and a low at $17.51 about 11:15. In the aftermarket silver has returned to $17.71, about seven cents above its Comex close. Despite the excitement silver and GOLD PRICES generated yesterday, they fell back into the glumps today. No sign yet they are turning up. Sometimes I was sort of downcast, thinking about all the world's central banks crowding into markets and manipulating them, or, if not manipulating, overwhelming them with money. As Chris Powell of GATA says, there aren't any markets any more. Then I get a good view of the sky, or remember how huge the earth is looking down from an airplane, and I am reminded how small men are, how arrogant their plans, and how quickly overthrown. Patience doesn't panic. That doesn't change the closes, but it does brighten my mood some. I keep wondering what tyrannical government action will finally make y'all stiffen up your backs and say, "NO!" Better think about it, cause here's what you have to face next: the Garbage Police. Mercy, I wish I had an imagination so overamped I could invent stuff like this, but only the Left Coast could spawn this idea. In Washington State (where all the drivers drive in the left lane) the City of Seattle will soon begin to fine you if you throw banana peels or old tomatoes in your garbage. No, no, no, you troglodytic environmental spoiler! You must sort your compostable garbage so Seattle can meet its self-imposed goal of recycling 60% of all waste. This passed the city council by a 9-0 vote, which makes one (like me) wonder why they haven't yet recycled the city council. There are so many things wrong about this, I don't know where to begin unraveling it. I could begin by denouncing the socialism of city government owning the garbage collection service, but then I'd have to get into the rest of the evils municipal socialism, and that could take hours. God deliver us from do-gooders! They will conform you to their own righteous image even if they have to cut off your hands and feet and kill you to do it. By the way, don't y'all write me any self-righteous emails about recycling, either. I don't need to compost, I have a PIG. He eats it all, and eventually I recycle him into lard, ham, bacon, and pork chops. Not one shred of edible compost escapes my pig bucket, after every meal. But then, nobody MAKES me do it. Now today's markets: US dollar index advanced 36 basis points (0.42%) through the 2013 high at 80.96 to perch at 85.15. This makes a further dollar rally look inevitable, but the present overboughtness begs for a correction soon. Head Criminal at the ECB, Mario Draghi ("Mr. Eye-bags") promised again to keep monetary policy loose for as long as it takes. To do what, I don't know. Euro obediently sagged to a new low at $1.2781, down 52%. Yen can't muster enough strength to get up off the floor. Lost 0.16% and ended at 91.71 cents/Y100 After 3 days falling away from the 200 day moving average, the 10 year Treasury note yield gained 1.34% today to 2.569%. Acts as if it wants to climb. Stocks meanwhile, buoyed (I reckon) by the myth that a strong currency goes with a strong stock market, rose sharply. Dow added 154.19 (0.9%) to 17,210.06. S&P500 rose 15.53 (0.8%) to 1,998.30. This fierce volatility, way up one day and way down the next, characterizes topping markets. S&P500 closed right at its 20 DMA (1,997.95). Dow in gold zagged back up after zigging down several days. DiG rose 1.42% to 14.14 oz (G$292.30 gold dollars), lower than Friday's high. Dow in silver (Mercy!) made another new high today at 974.25 oz (S$1,259.64 silver dollars). Gravity ought to be pulling down hard on the DiS, as it is monstrously overbought plus has thrown over the upper resistance line. Aurum et argentum comparenda sunt -- -- Gold and silver must be bought. - Franklin Sanders, The Moneychanger The-MoneyChanger.com © 2014, The Moneychanger. May not be republished in any form, including electronically, without our express permission. To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $3,130.00; silver's primary is up targeting 16:1 gold/silver ratio or $195.66; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold or 18 ounces of silver. or 18 ounces of silver. US $ and US$-denominated assets, primary trend down; real estate bubble has burst, primary trend down. WARNING AND DISCLAIMER. Be advised and warned: Do NOT use these commentaries to trade futures contracts. I don't intend them for that or write them with that short term trading outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures. NOR do I recommend investing in gold or silver Exchange Trade Funds (ETFs). Those are NOT physical metal and I fear one day one or another may go up in smoke. Unless you can breathe smoke, stay away. Call me paranoid, but the surviving rabbit is wary of traps. NOR do I recommend trading futures options or other leveraged paper gold and silver products. These are not for the inexperienced. NOR do I recommend buying gold and silver on margin or with debt. What DO I recommend? Physical gold and silver coins and bars in your own hands. One final warning: NEVER insert a 747 Jumbo Jet up your nose. | ||||||||||||||||||||||||||||||||
| Hugh Hendry Is Not Having A Good Year Posted: 24 Sep 2014 04:23 PM PDT Having infamously "thrown in the bearish towel" late last year (must read), Hugh Hendry's Eclectica fund has not enjoyed the kind of money-printing melt-up euphoria he had hoped for in 2014. According to his August letter to investors, the fund is -10.9% year-to-date, shrinking the firm's performance since inception to a mere +0.7%. His positions are intriguing but his commentary can be summed with this sentence alone, "when central banks are actively pursuing a goal of higher prices the most rational course is to tenaciously remain invested in equities." And so he is...
Via Eclectica's Hugh Hendry, Performance Summary The Fund lost -1.2% in August.
The best performing strategies were those within the Short EM theme which made +0.4% in aggregate, led by our long Mexican Peso/short Chilean Peso holding (a component of the “good versus bad” EM FX strategy) which performed well on evidence of a continued slowdown in the Chilean economy leading to interest rate cuts. Additional gains came from our Russian FX short, which we have traded tactically throughout the course of the year. Having begun 2014 short the ruble as a result of our concerns regarding the health of the Russian economy, the situation in eastern Ukraine has provided an additional catalyst. Within the China theme (which gave back -0.2% during the month), we initiated a tactical long position in the Hang Seng China Enterprises Index via call options. This reflects our view that the Chinese Government will underwrite the domestic banking system. Furthermore, the authorities have embarked on a coordinated push to encourage investment in Chinese stocks, both through increasing domestic interest and by further opening the market to international investors through the Hong Kong – Shanghai stock connect. With Chinese stock valuations and sentiment at rock bottom the potential is there for a strong outperformance. Gains from holdings in European pharma and global internet companies were insufficient to offset losses incurred during the early part of the month on European index positioning and peripheral equities as the Long DM component returned - 1.1% in aggregate. In Japan, Nikkei futures were the main drag on performance as, in contrast with equity markets elsewhere, the index fell - 1.3% after three consecutive months of gains. The total return for the theme was -0.6%. Elsewhere, our holding in the US 30 year Treasury generated a return of +0.6% as geopolitical events ensured that demand for “safe” assets held up and speculation regarding further ECB intervention made the yield on US bonds look relatively appealing.
Manager Commentary We should have done better in August. We shuffled our equity cards rather than buying more into the weakness. This has prompted us to rethink our book. As we have said previously, the global macro environment continues to be defined by a historically tepid recovery from the depths of the 2008 contraction. And this demand-light, low inflation recovery has been met by a wholesale purging of those public officials charged with running the largest central banks. The presence of Draghi and not Weber, Trichet or Duisenberg (or in Japan Shirakawa, or an American hawk such as John Taylor) helps to explain why the German, Japanese and American stock markets all rose 30% in dollar terms last year. It also helps explains why, with the European recovery wilting and medium term inflation expectations making new lows, the ECB found the wherewithal to ease further. With European stock prices down over 10% during the summer, the central bank eased policy considerably and stock prices are rising once more. Clearly this marks a monumental shift in Europe: the once austere German based central bank has jettisoned its tradition and is explicitly targeting higher prices. The same could be said about Japan. Japan’s recovery has been shaken by the consumption tax hike and any further economic weakness will most likely be met by further monetary accommodation. Again, price weakness has presented an opportunity to buy. Japan’s stock market had fallen 15% earlier this year, today it is not far from challenging its previous high. When central banks are actively pursuing a goal of higher prices the most rational course is to tenaciously remain invested in equities. Following this latest announcement of policy easing in Europe we have been actively accumulating more equities. In mid-September, we are currently long 107% equities, with 25% invested in the Nikkei, a further 10% invested in European stock indices and 8% equivalent exposure from short dated options on China’s Hang Seng China Enterprises Index, not to mention a further 63% invested in an equity book that spans Europe’s largest pharmaceutical franchises, Japan’s robotic machinery businesses and a global internet basket. That is not all. We also have a further 6bps DV01 exposure to receiving rates, predominantly long dated Treasuries. The reasoning is similar to our equity book. Central banks seem capable of expanding their price setting franchise to establish nominal rates low enough to support the tepid global recovery. We have simply cherry picked anomalous rates where market prices are not consistent with this view that very low rates are required to ensure that domestic expansions are sustained.
* * * As Hendry concluded previously, Where will it all end? Remarkably, the aftershocks of Japan's volte-face seemed to catch American policy makers out. In May, the Fed, convinced that its QE program had succeeded in re-distributing global GDP away from China and towards the US economy, began signalling its intent to taper its easy money by autumn. However, with 10-year Treasury rates having moved from 1.75% to 3% and its fourth largest trading paltrier having devalued by 20% since the previous November, the anticipated vigorous domestic American growth never actually materialised; it was captured instead by the new and even looser monetary policy of Japan. Yet again the reflexive loop had worked to sustain the monetary momentum that is feeding global stock markets. And the not so all-knowing Fed? It had to shock market expectations in October by removing the immediacy of its tighter policy and stock markets rebounded higher. Where will this all end? Can it ever end? There are multiple possible outcomes. The one markets are most vulnerable too is the re-emergence of bullish bankers. They could lend such that the consumer boom in the US and Europe finally sparks and in doing so provoke the Fed to finally tighten policy. That would spook developed market equities but not as much as you might think - they will have the palliative of the stronger GDP growth. Emerging market equities are closer to the edge of a bubble and could prove more susceptible to a greater drawdown owing to the fragilities of their debt fuelled economies. But for now, the re-emergence of risk-seeking bankers fuelling a lending boom in the West seems remote. We aren't too worried about it. In Europe for instance the banking system has an estimated 2.6trn euros of deleveraging (circa 30% of GDP) still to complete, having shed 3.5trn euros already. So we are happy to run a long developed market stock position with a short hedge composed of emerging market equity futures. We are running an unhedged long in Japanese equities as our wild bullish card (we have, of course, hedged the currency). It seems then to us that the most likely outcome is that America and Europe remain resilient without booming. But with monetary policy set so much too loose it is inevitable that we will continue to witness mini-economic cycles that convince investors that economies are escaping stall speed and that policy rates are likely to rise. This will scare markets - and emerging markets in particular - but it won't actually materialise: stronger growth in one part of the world on the back of easier policy will be countered by even looser policy elsewhere (the much fabled "currency wars"). So market expectations of tighter policy will always be rescinded and emerging markets will recover rather than crash. Developed markets just keep trending positively against this background - and might accelerate. Remember what we said about 1928 and 1998 at the beginning. Just be long. Pretty much anything. So here's how I understand things now that I am no longer the last bear standing. You should buy equities if you believe many European banks and their sovereign paymasters are insolvent. You should buy shares if you put a higher probability than your peers on the odds of a European democracy rejecting the euro over the course of the next few years. You should be long risk assets if you believe China will have lowered its growth rate from 7% to nearer 5% over the course of the next two years. You should be long US equities if you are worried about the failure of Washington to address its fiscal deficits. And you should buy Japanese assets if you fear that Abenomics will fail to restore the fortunes of Japan (which it probably won't). Hey this is easy... And then it crashed I have not completely lost my senses of course. Eclectica remain strong believers in the most powerful force in the universe - compounding positive returns - and avoiding large losses is crucial to achieving this. We have built a reputation for getting the calls right in the difficult space that is macro investing, which has served us and our clients well during both trending bull markets and times of crisis. Today, of course, the market is "golden" which is to say that the 50 day price trend is above the 200 day. But remember that during those forays into the "dead-zone", years like 2008 and 2011 when equity markets crashed, Eclectica performed handsomely. I like to think therefore that I own an alpha crisis management franchise that has rewarded our investors at limes of stock market stress. | ||||||||||||||||||||||||||||||||
| Why do Stock Markets Collapse? -- Stuff They Don't Want You to Know Posted: 24 Sep 2014 04:23 PM PDT We've all heard about booms and busts -- but why do they happen, exactly? [[ This is a content summary only. Visit http://www.GoldSilverNewsBlog.com or http://www.newsbooze.com or http://www.figanews.com for full links, other content, and more! ]]  | ||||||||||||||||||||||||||||||||
| Is This A Triple Bottom In Gold? Posted: 24 Sep 2014 02:58 PM PDT This is an excerpt from the daily StockCharts.com newsletter to premium subscribers, which offers daily a detailed market analysis (recommended service). It shows the ongoing inter-market effect of a rising dollar, which proves to be weighing on precious metals prices so far. Gold has been performing badly for some time, but especially since August 21st when our Trend Model changed from a BUY to a SELL. The chart is completely negative with price below the 20EMA, which is below the 50EMA, which is below the 200EMA. Recent support at 1240 failed quickly, but more important support at 1180 may soon be in play.
The weekly chart, however, is ever so much more revealing. We can see that the 1180 support has held twice before, so there is a good chance that it will hold upon another retest. I don’t wish to be overly optimistic because the triangle that has formed over the last year is technically a continuation pattern, meaning it is expected to resolve downward. Also note that during the consolidation, price has made progressively lower highs, showing that the bulls are losing strength. Nevertheless, a triple bottom which forms the base for a new, longer-term up leg is a distinct possibility. As for how to exploit that possibility, we would suggest that it would be best to await a clear bounce off the support area.
A major cause of gold’s weakness is the strength of the dollar, but the weekly chart of the dollar ETF (UUP) shows that the dollar has been in a long-term trading range and is currently approaching the top of that range. So the recent strength of the dollar may be about to come to an end, with price reversing and heading to the bottom of the range. That would be very positive for gold.
Conclusion: We do not intend these observations to imply a recommendation to buy gold, but as chartists we wait and watch for promising setups. In this case we can see something developing that may prove to be relief for long-suffering gold bulls. Those with interest in the yellow metal should watch it closely over the next few weeks.
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| Is Gold Correcting Or In A Downtrend? Posted: 24 Sep 2014 02:50 PM PDT Submitted by GoldBroker.com: Is gold in a a correction, or is it taking a breather within a move that will retrace the whole move since 2009? What does sentiment tell us? The gold market is a very opaque one and very hard to analyse. The amount of gold exchanging hands outside the markets is enormous. China seems to continue buying in a very discrete way and shows regularly, through speaches but also actions, that it considers gold at the core of its currency war, mainly with the United States. It's interesting to notice that, recently, on every attack on the gold price to push it down, once the original move stops, almost every time momentum fails to take gold lower. This pattern doesn't look to me as a correction into a bear market but more as a bottoming formation. Check GoldBroker’s website for accompanying charts. If we also look at the sentiment in the gold mining stocks we can observe that the price of gold mining stocks measured in hard money (gold) has hit a 71-year low. Today, you can't even mention gold stocks to portfolio managers or investors, even less tell them to buy. The only thing missing is those ready to predict that gold is valueless and its price will go to zero, as some predicted when gold hit $250 in the '90s. A recent Reuters article was even indicating a possible end to India’s historical love affair with gold. If we also look at the gold sentiment composite index as calculated by Nick Laird, we can also see it has hit the low reached in 2009, and is bottoming out. The index is compiled from datasets of precious metals, gold indices, gold stocks and gold mutual funds and these datasets have been collated from four primary gold producing regions: America, Australia, Canada and South Africa.
Gold’s price acceleration hit a low close to the 35-year low recently and reversed, even moving in positive territory. This comparison with the '70s is important for me because I strongly believe we will have an international monetary reset and gold will be part of the new system. With tensions rising in the world and the beginning of a new Cold War, I suspect this triangle pattern is more of a bottoming formation than just a correction within a bear market. The new Cold War is pushing the world more and more, if not into a military World war at least into a trade war. We are already into a currency and gold war. We already see it with the trade and travel restrictions imposed on Russia and the counter actions taken. I expect the sanctions against Russia to fail just as the US sanctions against Cuba have failed, but they will have a major impact on the world economy. In a recent article in the London Financial Times, John Dizard mentioned that gold's "popularity as a medium of exchange for international transactions has been soaring, particularly in the past few months, as the impact of US government sanctions on non-compliant banks has become severe." And that is despite gold being "the most expensive and least convenient of all of the monetary alternatives to the dollar." I am surprised this article has not attracted more attention, as I think it deserves. Smart money worldwide is already taking action, just as sovereigns like Russia and China are, by slowly, but also very discreetly, accumulating gold. All this makes me believe we are not in a corrective triangle within a bear market but rather in a bottoming formation. Gold sentiment is not just negative, it is extremely negative, while all the bears in US stocks and the dollar have capitulated. However the breakout from this triangle formation has to be watched very closely. Any move below US$1,200 and, more specifically, $1,180, to which I give a low probability, would require a new look. I have to caution you that a false breakout from a triangle formation to the downside is still possible, as it happened in 2012 (see chart #1) at the top, followed by a reversal. In manipulated markets, traditional instruments, either technical or fundamental, have to be looked at with caution and gold is, in my view, one of the most manipulated. | ||||||||||||||||||||||||||||||||
| Despite Drop, Gold Coiled To Break $2,000 & Silver Above $70 Posted: 24 Sep 2014 01:42 PM PDT  Today KWN is putting out a special piece which features two spectacular gold charts that show that despite the recent drop, gold is coiled to break $2,000 and silver to soar above $70 as the bear market in the metals comes to an end. These are charts that the big banks follow closely, as well as big money and savvy professionals. David P. out of Europe sent us the two key charts that all KWN readers around the world need to see.This posting includes an audio/video/photo media file: Download Now | ||||||||||||||||||||||||||||||||
| Gold Daily and Silver Weekly Charts - Options Expiration on the Comex Tomorrow Posted: 24 Sep 2014 01:30 PM PDT | ||||||||||||||||||||||||||||||||
| Posted: 24 Sep 2014 12:24 PM PDT India has been the world's No.1 gold buyer for thousands of years. But traditions are changing... TODAY marks the last day of Shradh, writes Adrian Ash at BullionVault, the period of "closed observance" on Hindu calendars when it's deemed "inauspicious" to start new ventures or make new investments. The end of Shradh has a political angle. Also known as Pitru Paksha, the early autumn shutdown has been used to delay nominations for upcoming elections, reports The Times of India. Fighting such "superstitions" can be dangerous. Rationalist campaigner Narendra Dabholkar was murdered in summer 2013 when pushing anti-superstition laws. This summer's delay to India's electoral process has angered many who want to reduce what they see as the stifling (and corrupting) effect of India's deep culture of religious observance. Gold looms large in that culture of course (and also in India's huge bribery and corruption culture). The peak demand season in the world's heaviest consumer market starts now, running on until Diwali at the end of October. But long term, many analysts think the wider availability of luxury goods in India will dent India's gold demand, overcoming superstition where rationalism cannot. Many financial services providers think the same of their products...from bank savings to stock-market funds. India's younger citizens are indeed breaking with tradition over gold, suggests this story on Mineweb. But not how Western observers might expect. Instead, some younger people have broken Shradh to buy gold at the recent low prices. Forecasts of Asian households "substituting" out of gold into hi-tech consumer goods and packaged financial services are as old as the global bull market in gold, if not older. But they've proven very wrong to date. The only thing to dim India's appetite for gold has in fact been government anti-import rules...imposed because 2013's demand was so huge in response to the price slump. India's gold industry is finding ways around that...literally smuggling gold in "through the backdoor" (ahem) as one expert analyst joked to me last week. News today also says the old VAT round-tripping scam...where the same metal is imported and then re-exported in a loop to earn sales tax rebates illegally...has found a new use, helping get around India's strict and stifling 80:20 rule. Ancient Rome's Pliny the Elder started the trend of European commentators calling India the "sink of the world for bullion" more than 2,000 years ago. Can that culture, and the flow of metal West to East it has demanded for so long, ever be changed by flat-screen TVs or iPhones? Keep a close eye on how India's demand...and the floor it's clearly helped put beneath gold prices to date...develops as Diwali investing, gift-giving and temple offering draws near in 2014. | ||||||||||||||||||||||||||||||||
| Consciously Shifting to Precious Metals Posted: 24 Sep 2014 11:36 AM PDT Resource-stock fund manager explains his current outlook and strategy... JASON MAYER joined Sprott Asset Management LP in November 2012 with more than 10 years of investment industry experience as lead portfolio manager on a number of funds with a focus on growth-oriented resource equities. Now Mayer tells The Gold Report's sister title, The Mining Report, how miners are having a tough time getting funded, and although Canadian oil and gas has performed well over the last few quarters, some companies might be overvalued... The Mining Report: In February, you gave a speech at The Vancouver Club that acknowledged the impact of investor fatigue on the junior mining equity space. Seven months later, are investors starting to get excited again about the space? Jason Mayer: Investors have been reacting in fits and starts, and everyone is still very cautious. I track a number of funds, and I watch how they perform on a day-to-day basis. What I have found interesting is that a number of resource funds in Canada continue to be underweight, particularly in gold equities. I notice they underperform on days that gold stocks have good moves. The generalists out there among the institutional money have little to no presence in various gold equities. For the most part, people have abandoned the space. TMR: What will it take to get them excited again? Jason Mayer: They'll want to see some upward trajectory. I don't know if it's going to be a couple of data points that confirm the arrival of an inflationary environment, or the cessation of this disinflationary environment that we've been in since 2009, but people would have to feel comfortable that the gold price isn't going to resume the decline it experienced in 2013. There are still a number of analysts and commentators out there who are calling for gold in the $800-1000 per ounce range. TMR: Is it the seemingly never-ending rise of the blue chip stocks that makes people less likely to look at the juniors, whether energy or precious metals? Jason Mayer: I don't know how much it has to do with that, but, certainly, the very strong US Dollar is influencing the gold price and precious metal equities. Everyone has their own opinion on what drives gold. Mine is pretty simple. I look at it as a currency investors can choose from among a number of currencies worldwide, the US Dollar being the primary driver of gold, because gold is typically quoted in US Dollars. The strength of the US Dollar has led people to doubt the need to hold either gold or gold-related equities in their portfolios. TMR: What about the impact on energy stocks? Jason Mayer: We've had a pretty good run for a number of the energy companies here in Canada. In fact, our energy fund that is run by Eric Nuttall is up 40+%. That is an overall reflection of how the energy equities have done, both the exploration and production (E&P) companies and the service companies. TMR: The lack of excitement has also impacted financing. You estimated that in 2011, miners raised $1 billion in flow-through funds, and in 2012, that number was down to $700 million. In 2013, it was $350m. So far this year, it is even 15% lower than that. Why has it been so hard to raise money right now? Jason Mayer: When we look at it over a multiyear horizon, we're at a 10-year low. The companies that have been hit the hardest are the miners. They're the ones that have seen the appetite for flow-through decrease the most, certainly much more than energy companies, where the appetite for flow-through continues to remain pretty healthy. The companies that have very high-quality projects have been able to access the capital markets and issue equity. In some cases, they have turned to royalties and, in very rare cases, private equity, but for the most part, the juniors are very challenged, especially the exploration companies. They're hanging on by a thread. Essentially, a lot of their expenditures are really on just keeping the lights on, so they're no longer advancing projects because the capital is just not available to them. TMR: Will this lack of capital lead to more mergers and acquisitions? Jason Mayer: I thought that would have happened by now. But that is the logical conclusion. There are two major impediments. In many cases, we see management teams that are entrenched – just there to collect a salary and a bonus. The second issue is with the acquirers, especially the majors. These are companies that went on spending sprees in 2009 and 2010. Although there are a number of very solid acquisition opportunities in this environment, some of these companies are gun shy because of their experience over the past couple of years, and support among the shareholder base can also be quite tentative. TMR: You manage the Sprott Flow-Through Limited Partnership and the Sprott Resource Class Fund. The 2014 $11.7m Flow-Through L.P. is 90% in cash, correct? Jason Mayer: The 2014 fund initially raised north of $17m. It's a process of identifying candidates, engaging them to issue flow-through and then actually consummating the transaction. So, in fact, right now, I'm 100% invested – a bit of an update, which the public documents don't reflect at the current time. I am approximately 60% invested in energy names, 40% in mining. TMR: You mentioned that the Sprott Flow-Through L.P. is 60% in energy. The Sprott Resource Class Fund flipped, from 56% energy and 42% minerals to 54% minerals and 46% energy. The energy and non-energy percentages flipped. Was that a conscious shift or a result of changes in equity valuations? Jason Mayer: That was a conscious shift. I started reducing my exposure to Canadian energy names. It was a function of both profit-taking and repositioning. Some of these companies' valuation multiples had expanded quite dramatically. I took some profits and deployed a significant portion of that into some gold-weighted equities. TMR: What are your projections for oil and gas prices? Jason Mayer: Gas is a tough one to call, but I think it will bounce around $3-4 per thousand cubic feet (Mcf). The upside will be predicated on very cold weather, which will drive additional demand. Without that, it's going to be mired in a $3-4/Mcf trading environment. The part of the equation that's a little more transparent is the supply side. The bottom line is North American natural gas production continues to hit record highs. It's going to continue to hit record highs based on a number of projects that are in the process of being commissioned and developed. That's going to bring new gas to market. A lot of this new gas that's coming onstream is highly economic, so even at $3/Mcf gas, the operators of these projects are going to continue to drill. The wild card is the demand side of the equation. There are some longer-term developments that are going to be bullish for demand, such as gas-fired electrical generation, utilizing natural gas as a transportation fuel and liquefied natural gas exports. The problem is that these are very long-dated and uncertain demand initiatives. Because of that uncertainty, I don't want to invest now based only on whether I think it's going to be a cold winter or not. TMR: That makes sense. Jason Mayer: For oil prices, I'm expecting $90-110 per barrel. The Brent benchmark is what we use. I think the demand backdrop is pretty positive. China seems to be back on track. There was a lot of concern over the past few months on where its economy was going. It looks as if the Chinese central planning authorities are committed to a 7.5% growth target, and its most recent gross domestic product number was just that. In the US, the numbers have been just spectacular. The economy appears to be picking up speed and momentum, whether you're looking at manufacturing activity, employment figures or job openings. There really don't seem to be many negative data points right now. The one area of concern is the European Union. It looked as if it was coming out of its recession, and then it had a bit of a hiccup. The whole Russia/Ukraine situation could have an impact. But generally, demand is pretty solid. On the supply side, it just costs a lot of money to produce oil. Some 96% of the supply growth outside of Opec in 2013 came from the US If you're looking at the US full-cycle costs, they're about $60 per barrel. You really need $70-80 a barrel as an absolute floor to ensure that the US will continue to drill. TMR: Do you see energy services as a less volatile way to leverage the energy space? Jason Mayer: The short answer is no. It's a very volatile group. There are a lot of different specialties within the energy services, so it's really dependent on which particular area you're talking about. But if you want to get leverage to the energy space through services, then you're probably buying something that is quite leveraged to the energy space and will do very well if the whole space does well, but it's a double-edged sword. That leverage can also work against you if things don't work out according to plan. Earlier this year, I pared back some of my services holdings; I felt that these companies really got ahead of themselves. Personally, if I want that torque and leverage to energy, I'll just play the E&P companies. TMR: You mentioned that you are consciously shifting to the materials companies, the precious metals. What number are you using for gold and silver prices in your estimates? What companies are you picking up? Jason Mayer: I'm using around $1300 per ounce. For the most part, my focus is on companies that are all-in cash flow positive. To try to capture the full picture, I like to look at the margin after adjusting not only for cash costs but also for royalties, taxes, general and administrative expenses and sustaining capital. If the gold price is under pressure, I try to pick companies that have the best chance of surviving if things get ugly. TMR: Do you have any words of wisdom for investors who are feeling stock fatigue right now from the resource space? Jason Mayer: I think the biggest thing you need to have is conviction and fortitude when a lot of these names are volatile, and try to keep your wits about you. Try not to trade based on emotion; trade based on your logic and thought processes. If your logic has not changed, stick to the tune. TMR: Thank you for talking with us today. | ||||||||||||||||||||||||||||||||
| Posted: 24 Sep 2014 11:13 AM PDT Battling the forces of BBTs and DMN our hero invites them to pull the other one... FOR SEVERAL WEEKS, the tragic soul of The Mogambo has been troubled by subtle undertones in The Force, writes the tragic Mogambo Guru from inside his bunker, inexplicably using an old Star Wars metaphor. Which brings up the interesting question as to how a Jedi light-saber would fare against a couple of belt-fed .50 caliber machineguns at point-blank range. Other than pondering those kinds of deeply philosophical questions, it was the old "It's quiet. Too quiet" kind of thing, where you are always nervously looking over your shoulder, and seeing enemies lurking in every shadow, every nerve on the razor's edge. Trigger fingers twitching, too, which is difficult to say five times quickly, which only proves the point. For instance, I started sensing strange vibrations in what people were saying, such as Paul Krugman, Janet Yellen and others, as concerns monetary policy. And when I call them up to demand an explanation, and maybe helpfully explain how they are mere Earthling idiots who don't know squat about economics, they won't take my calls! I mean, I clearly tell the receptionist that I am the Fabulous Mogambo Genius (FMG) on the line here, and I am calling to explain to them how their whole idiotic Keynesian idea of Quantitative Easing has been a big, fat, flatulent bust, and I want to find out what they are going to propose to do next, as concerns monetary policy, and it better NOT be any more of that stupid Quantitative Easing crap, as I am prepared to clearly and loudly detail how they must be the biggest idiots in the whole world to actually believe that the profound inflationary and bankrupting stupidity of vastly increasing the money-supply (and thus vastly increasing debt), and then committing that same incredible, suicidal folly over the long-term, could possibly, highly-improbably, one chance-in-a-million, one chance-in-a-zillion years, work! But, alas, I never get through to anyone. Ever! Even after I CLEARLY explained to the receptionist who I am and exactly why I, the Fabulous Mogambo Genius (FMG), am calling, so as to hopefully speed things along. Even parsing their oily remarks through a Junior Mogambo Ranger Secret Decoder Ring (JMRSDR) yielded, alas, nothing. Thus, I am left exhausted and confused, with an increased sense of dread, as actually befits the situation, but knowing little else about what's ahead, monetary-wise. Nonetheless, I instinctively knew something BIG was up, as my furrowed brow, exaggerated startle-reflex, and a frenzy of buying gold, silver, and defensive armaments so colorfully indicated. And, thinking about it, with your heart pounding, covered in a cold, clammy sweat, you suddenly realize that, alarmingly, the only thing it COULD be is a new, colossal attempt by the Federal Reserve and the government to somehow, some miraculous way, some fabulous way, some glorious deus ex machina way, please, please, please let this new version of massive Quantitative Easing work, even though 2,500 years of global economic history, a sad tale of one dirtball government after another bankrupting itself, with or without creating paper money in its death throes, proves that it can't, and it won't. Of course, since I am the aforementioned Fabulous Mogambo Genius (FMG) of story and song, I always knew that the ultimate fate of grotesquely expanding the money supply to expand the size of government was to inexorably have to, in one fashion or another, relive the infamous "bread and circuses" policies of ancient Rome, the government desperately placating the teeming, impoverished masses, suffering as they are from rising prices, a large, oppressive government and abysmal living conditions, by giving them food and entertainment, which is a disastrous policy that always leads to Bad Bad Things (BBT). So, was I more paranoid and cynical than usual, or was something actually, you know, up. But what? Who knew that it would be brought to my attention by Zerohedge.com, with the chilling title "It Begins"? When I saw it, I thought I heard banshees wailing, and ravenous wolves howling in the distance, growing frightfully closer. Ever closer. "It Begins", I am sorry to say, is not the title of a terrific new horror movie, a grand and glorious gore-fest of bloody, gun-happy shoot-'em-up action, fiery explosions, high-speed car chases and hordes of mutant zombies who mostly look like beautiful lingerie models, only less clothed. Instead, "It Begins" refers, even more horribly and tragically, to an article in Foreign Affairs magazine, written by Mark Blyth and Eric Lonergan, of the Council on Foreign Relations, which is spooky enough. Unbelievably, the essence is "Print Less but Transfer More: Why Central Banks Should Give Money Directly to the People". Yikes! To save you the trouble of rubbing your eyes in complete disbelief, it goes on that "Rather than trying to spur private-sector spending through asset purchases or interest-rate changes, central banks, such as the Fed, should hand consumers cash directly." Giving cash away! It's bread and circuses, alright, in spades! "Here's some money to buy your own food and circus!" Wow! The authors, who are so wrong about so many important things in the article, are nonetheless absolutely right when they say "In the short term, such cash transfers could jump-start the economy"!!! The three concluding exclamation points were added by me, as a clever and clearly dramatic emphasis, to make sure that you completely understood that millions of consumers suddenly spending lots of new, free cash will certainly make the economy go!! Wow! What a boom it would cause! The most laughable part is when they said that giving people cash "wouldn't cause damaging inflation, and few doubt that they would work. The only real question is why no government has tried them." Hahahaha! I told you they were wrong about some things, and here are three at once, because, firstly, it certainly WOULD cause inflation, however you define "damaging". And, contrary to the laughable conclusion of the authors, nobody doubts that it would work! Nobody! Lots and lots of new money continually pouring into an economy would NOT make a boom? Hahahaha! And the reason that no government has tried it is because it is Stupid Writ Large (SWL), as in "No government that tried giving away money to the population lasted long enough to write it down." The authors thought they were so smart to anticipate the Disagreeable Mogambo Naysayer (DMN) loudly objecting "Because terrifying inflation is guaranteed to ensue, you morons, and poor people would be more and more poor and starved, and they will all get testy about their kids crying from hunger, and they can't stay warm in the winter, or get out of the rain, and everything goes downhill pretty fast when people are rioting in the streets, and pretty soon you can't get a good pizza anywhere within miles." Instead of wincing and slinking away in shame at my cruel scorn, they write, hilariously, "Other critics warn that such helicopter drops could cause inflation. The transfers, however, would be a flexible tool. Central bankers could ramp them up whenever they saw fit and raise interest rates to offset any inflationary effects." Hahahahahahaha! Central bankers could give away more and more cash "whenever they saw fit," and yet there will be some glorious time when the Fed sees "fit" to stop giving away money and thus cause an economic slowdown, risking asset-price deflation that is leveraged a 100-to-1? Hahahaha! As Monty Python would say, "Pull the other one!" And raising interest rates to somehow sterilize a tsunami of cash? I care about interest rates when I am receiving more and more cash and price inflation is roaring? Hahaha! I'm busting a gut here! But jocularity and complete stupidity aside, somebody must be expecting some new income, as Chuck Butler of Everbank reports that "July Consumer Credit (read debt) grew by $26 Billion, and June's number was revised upward to $18.8 Billion from $17.2 Billion. But, $26 Billion!" He, as well as I, characterizes it as "off the charts folks, as if 2008 never happened! What the heck is going on around here? Doesn't anyone ever learn lessons?" Dave Gonigam of the 5-Minute Forecast parses it down to "Of that total, $5.4 billion came in credit cards -- a surge previously unseen during the anemic 'economic recovery' these last five years." "Of the remaining $20.6 billion, most of that was in auto loans, very little in student loans." So do these people suddenly have jobs, explaining their spending spree? No. In fact, ever fewer people have jobs. And if you want some bad news on the employment front besides the usual upsetting stories about high unemployment and how jobs are disappearing faster than a pizza at a Super Bowl party, the booklet titled "Pocket World in Figures" from The Economist magazine, has a table titled "Largest Manufacturing Output" which puts the United States at the top of the list, at $1771 billion. This puts us a measly $14 billion ahead of China, which is bad enough, but when you look at the next chart down the page, under "Largest Services Output", the United States is again number one, at $10,574 billion, while the second place is held by Japan at a measly $3,904 billion, and China at a distant $3,172 billion. In short, five times as many US workers are providing services as are employed manufacturing something. Probably has something to do with explaining our $40 billion-per-month trade deficit! Hahaha! But lamenting the gaping trade deficit aside, it is this terrifying kind of weird, economy-distorting "services" thing, and the bizarre thing about giving money away to people, that will almost certainly lead to new fiscal policy accommodating them both, since behavior that was once considered idiotic, suicidal desperation, is now the only way out. Probably connected with a new war, if history is any guide. And when the government starts doling out all that luscious cash, and calling it our patriotic duty to spend all this new cash, it's party time! Par-tay! And if this "give money directly to people" thing plays out even vaguely as proposed, then you will happily have some time left to accumulate lots of gold and silver during the Big Monetary Party (BMP) that will surely follow, and you will have some time to think and idly daydream of what their prices will be at the calamitously inflationary end of the aforementioned Big Monetary Party (BMP), when everything else is ashes and heartache. Astronomic! Whee! This investing stuff is easy! | ||||||||||||||||||||||||||||||||
| 50 Tonnes In Ten Days: Gold Smuggling Overwhelms Government Restrictions In India Posted: 24 Sep 2014 10:32 AM PDT | ||||||||||||||||||||||||||||||||
| Posted: 24 Sep 2014 10:04 AM PDT How Much Gold Is Really Out There? …Not Enough! Author : Bill Holter Published: September 24th, 2014 How much gold is really out there? This is a good question and rather than debate whether the "official" statistics are correct or not I will assume they are. I will make this assumption because even if they... Read more » The post In The News Today appeared first on Jim Sinclair's Mineset. | ||||||||||||||||||||||||||||||||
| J.S. Kim: Don't be misled by the gold and silver paper markets Posted: 24 Sep 2014 09:35 AM PDT 12:35p ET Wednesday, September 24, 2014 Dear Friend of GATA and Gold: J.S. Kim of the SmartKnowledgeU investment letter today details the geopolitical changes he considers likely to push monetary metals prices way up and expose the fraud of the futures markets. Kim's commentary is headlined "Do Not Let Weakness in Gold and Silver Paper Markets Lead Your Wealth Preservation Strategies Astray" and it's posted here: https://smartknowledgeu.com/blog/2014/09/let-weakness-gold-silver-paper-... CHRIS POWELL, Secretary/Treasurer 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: Canadian Investor Conference http://cambridgehouse.com/event/31/canadian-investor-conference-toronto-... New Orleans Investment Conference https://jeffersoncompanies.com/landing/noic2014?IDPromotion=614011014520... Mines and Money London http://www.minesandmoney.com/london/ * * * 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: | ||||||||||||||||||||||||||||||||
| US Government - The World’s Largest Subprime Debtor Posted: 24 Sep 2014 09:22 AM PDT Lehman Brothers filed for Chapter 11 bankruptcy protection six years ago this month. The event has become famous as the spark that ignited the global financial crisis. Since that date, millions have lost their jobs and livelihoods, and countless others have seen their futures evaporate before their eyes, sometimes permanently. At the heart of the crisis of 2008 was a common cause acknowledged by almost all commentators. Borrowers now infamously known as “subprime” (or more politely, “non-prime”) were the main reason behind the meltdown. As financial institutions extended loans to those with less than stable means to repay their debts, the foundation of the financial world was destabilized. | ||||||||||||||||||||||||||||||||
| Venezuela's Gold Appears To Be Still In Venezuela But For How Long? Posted: 24 Sep 2014 09:15 AM PDT ▶ Where is Venezuela's 366 tonnes of gold? ▶ Does Venezuela still control and own unencumbered it’s own gold reserves? ▶ Bank of America economist on visit to Venezuelan central bank last week was allowed to view the bank's gold vault and the gold repatriated by President Hugo Chavez | ||||||||||||||||||||||||||||||||
| Celente - Increased Worldwide Danger To Rock Gold Market Posted: 24 Sep 2014 09:04 AM PDT  As stocks rebound and the U.S. dollar strengthens, today the top trends forecaster in the world spoke with King World News about the continued troubles facing the United States, escalating geopolitical tensions, and warned increased worldwide danger will rock the gold market. Below is what Gerald Celente, founder of Trends Research and the man considered to be the top trends forecaster in the world, had to say in this powerful KWN interview.This posting includes an audio/video/photo media file: Download Now | ||||||||||||||||||||||||||||||||
| Financial media in U.S. are controlled to ignore market manipulation, Murphy says Posted: 24 Sep 2014 07:29 AM PDT 10:30a ET Wednesday, September 24, 2014 Dear Friend of GATA and Gold: Interviewed this week by Dunagin Kaiser for the Reluctant Preppers Internet site, GATA Chairman Bill Murphy emphasizes that the financial news media in the United States are controlled so that they avoid reporting about market manipulation. The interview is posted in two parts at YouTube here: http://www.youtube.com/watch?v=kKakmPBSNLI http://www.youtube.com/watch?v=gO7M_jAR9SM CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Buy metals at GoldMoney and enjoy international storage GoldMoney was established in 2001 by James and Geoff Turk and is safeguarding more than $1.7 billion in metals and currencies. Buy gold, silver, platinum, and palladium from GoldMoney over the Internet and store them in vaults in Canada, Hong Kong, Singapore, Switzerland, and the United Kingdom, taking advantage of GoldMoney's low storage rates, among the most competitive in the industry. GoldMoney also offers delivery of 100-gram and 1-kilogram gold bars and 1-kilogram silver bars. To learn more, please visit: http://www.goldmoney.com/?gmrefcode=gata Join GATA here: Canadian Investor Conference http://cambridgehouse.com/event/31/canadian-investor-conference-toronto-... New Orleans Investment Conference https://jeffersoncompanies.com/landing/noic2014?IDPromotion=614011014520... Mines and Money London http://www.minesandmoney.com/london/ * * * 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: | ||||||||||||||||||||||||||||||||
| Posted: 24 Sep 2014 06:35 AM PDT GOLD PRICES retreated 1.2% on Wednesday from yesterday's short-covering spike, with charts of London quotes dropping near to unchanged for the week so far below $1220 per ounce as world stock market flat-lined with commodities. The US Dollar rose to new 15-month highs vs. the Euro after business sentiment was reported lower on Germany's Ifo index. US Treasury bond prices slipped, nudging 10-year bond yields up to 2.54% per annum – some 11 basis points higher from this time last month. Silver dropped half Tuesday's rally to trade at $17.58 per ounce, barely 20c above Monday's new 4-year low on the Dollar-price chart. "Ongoing ETF outflows [from investors selling shares in trust funds backed by gold] are likely to have prevented any sharper rise in price [Tuesday]," says one commodities desk in a note. Compared to the price of corn, says a chart from trading advisors AgriVisor LLC, gold has never been more expensive since 1975, when US corn futures contracts began trading, pointing to which way "investment money might be channeled." "There's no material change in gold's downward trend," says China's Citics Futures analyst Zhu Runyu to Bloomberg, "even with ongoing geopolitical tensions. "A rise in US interest rates is [only] a matter of time, which will push up the Dollar and weigh on gold." "There's been only one time in the past 30 years," says Dow Jones columnist Mark Hulbert of his proprietary Gold Newsletter Sentiment Index, "when [sentiment against gold] got any lower than it is today. Reviewing trading tips based on gold price charts, "That [low] came in June 2013," says Hulbert. "Within a couple weeks, gold began a rally that by late August had tacked more than $200 on to the price." Looking at gold's price chart, "The $1180 number is approaching again," says UK investment magazine MoneyWeek's Dominic Frisby, where "gold found support twice in 2013" in June and December. "I'm worried it won't hold," says Frisby, "[and] after $1050 the next big levels of price support for gold are $850 and $730. "I would be surprised to see either. But trends can go on much longer than anyone expects – and we're in a downtrend for gold and silver." "Gold's outlook is negative," agrees a new technical analysis of the price charts by Karen Jones at Germany's Commerzbank. "Below $1200 we look for losses to the December 2013 low. It's expected to hold the [first] test, but we favour an ultimate break lower, initially to $1155 [or] 61.8% [Fibonacci] retracement of the entire move from 2008." Fundamentally, meantime, Swiss investment bank and London bullion market-maker Credit Suisse – which declared "the beginning of the end of an era" for gold ahead of the spring 2013 price crash – said in a new analysis Tuesday that Indian consumer demand is set to buoy gold prices as 2014 ends, with the pick-up then continued by Chinese New Year demand. "Sources" tell the Hindustan Times in Mumbai that 30 tonnes of gold have been smuggled into India – the world's largest importer and consumer until 2013's anti-import rules were imposed – in the last 10 days alone, seeking "to cater to a surge in demand for the precious metal in the festive season." With India's "closed" period of Shradh ending on Hindu calendars Wednesday, seasonal gold demand now typically rises until the annual peak of Diwali, the "festival of lights" falling in late October 2014. | ||||||||||||||||||||||||||||||||
| Gold And Silver Voodoo Analysis Price Forecasts Posted: 24 Sep 2014 05:12 AM PDT Both gold and silver have had an uncharacteristic and bad month. Gold and silver usually shine in the month of September. Not the case this year. Quite the opposite really! And I have been no better predicting a rally in both metals. Market 1, myself 0. The markets can be quick to humble and I am certainly not immune. But one key to being successful in this game is being able to drag oneself up from the mat when the chips are down and soldier on. So it is with a clear head and renewed focus that I present where the technicals currently stand as I see them. | ||||||||||||||||||||||||||||||||
| GOLD Bewitching Hour of a Triple Bottom is Upon Us Posted: 24 Sep 2014 04:52 AM PDT Background The last time gold sparkled was in the summer of 2011 when an all-time record of $1900/oz was achieved. Alas since then it has been a torturous journey as gold prices has trekked south arriving at today’s price of $1216/oz, registering a loss of 36%. However, for the year to date gold is still trading above its low of $1180/oz as it grimly hangs on to a modest gain of 3%. The question we face now surrounds gold’s direction; will it test the previous low of $1180/oz and bounce to higher levels or will it penetrate this support level and set the stage for sub $1000/oz gold prices. | ||||||||||||||||||||||||||||||||
| Richard Karn's Advice for Avoiding the Walking Dead Posted: 24 Sep 2014 01:00 AM PDT Starved of cash, nearly 150 mining companies listed on the Australian Stock Exchange went into bankruptcy during the fiscal year that ended June 30, and another 23 have gone under since then. Richard Karn, managing editor of the Emerging Trends Report, believes a fresh wave of failures is expected when the quarter ends September 30, and a major shakeout at some point appears likely. But the situation isn't grim for all the specialty metal companies down under. In this interview with The Gold Report, Karn shares a handful of names with the wherewithal to survive the onslaught. | ||||||||||||||||||||||||||||||||
| Elliott Wave: Extreme Optimism and a Rising US Dollar Signal an Epic Turn Ahead Posted: 23 Sep 2014 11:18 PM PDT Dear Reader, I recently checked in with our friends over at Robert Prechter’s Elliott Wave International. Elliott wave analysis seeks to understand the financial markets using wave patterns based on changing investor psychology as recorded by price movements. It’s an approach different from any other I’m aware of, so I always look forward to hearing their unique perspective. We arranged to share part of Bob’s latest Elliott Wave Theorist, a special double issue, exclusively with Casey Research subscribers. The analysis is packed with charts, figures, and predictions on gold, the US dollar, global stocks, and inflation vs. deflation. The team also gave me an early look at their upcoming Investor Open House, where they’ll throw open the doors to all of their investor services free for a full week. If you like what you read, you can sign up for the event here. Enjoy, Dan Steinhart Extreme Sentiment, Optimistic Predictions, and a Rising US Dollar Signal an Epic Turn AheadThe percentage of bears among advisory services, as tallied by Investors Intelligence, just reached its lowest level of the current bull market: 13.3% (see figure below). This means 86.7% of advisors are bullish on the long-term trend. The percentage of bears hasn’t been lower since 1987, during wave (5) of 3, near the end of the strongest wave in the bull market. That run resolved in the biggest crash since 1929. Study the chart and notice how many times since 2009 the percentage of bears has been below the lowest reading of 2007. Another amazing aspect of this indicator is the persistence of low numbers since 2012. This long run of uninterrupted optimism parallels the plateauing of momentum oscillators in overbought territory. The market hasn’t taken a breath for over two years. When it finally exhales, I think it will collapse at the same time. The long period of optimism has made forecasters aggressively positive on stocks and the economy. An economist and an investment strategist at Morgan Stanley have just predicted that the S&P will rise 50% to 3,000 by 2020, 5.33 years from now. We agree entirely on the 3,000 number. We just disagree on the index. Citibank’s technical team is predicting an even faster gain, projecting the S&P as high as 2,400 by January 2015, four months from now. It even recommends that no one worry about the seasonally weak September-October period this year. At the same time, the chief international economist at Morgan Stanley predicts that the “recovery from the great recession could easily extend another five years,” with growth of 3.5% in 2015 and 3.8% in 2016. He’s not alone. The consensus among economists is that the US will enjoy years of growth at a 3% clip. All these predictions have their bases, but we think one of them is unconscious: the shared optimism of the crowd. Major institutions can afford the smartest economists on the planet. We’re betting against them anyway. Recall that the consensus has also been calling for accelerating growth in Japan and Europe. But Japan has just reported a stunning 7.1% annualized rate of economic contraction for April, May, and June. That’s a depression rate. Meanwhile, Europe is on precipice of deflation, and the US may be as well, as we will discuss next. A Rising US Dollar Will Signal the Triumph of DeflationThe persistence of inflation from 1933 to 2008 and the Fed’s historically aggressive “quantitative easing” program since that year have kept most people bearish on the future value of the dollar. Rarely does anyone mention that the US Dollar Index (the dollar valued against other currencies) has remained above its low of March 17, 2008, a period so far lasting 6.5 years, as shown in the figure below. After making a low in March 2008, the Dollar Index remained in a bottoming process for four months, until July 15, 2008. The Bloomberg index of commodities made its all-time closing high on July 2, 2008. Starting that month, both indexes changed direction and have not seen those extremes since. The Dollar Index tested the 2008 bottom with a daily closing low on April 29, 2011. Silver made its daily closing high for the decade on April 28, 2011. Once again, the Dollar Index remained in a bottoming process for four months, ending on August 29. Gold made a double top at that time, with daily closing highs of $1,898 on August 22 and $1,899.80 on September 5, 2011. These tops are exactly equally spaced from August 29, by one week on either side. Gold, silver, and the dollar changed direction that year and have not seen those extremes since. In other words, bottoms in the US Dollar Index came right when other indexes of inflation were making their all-time highs. Each time, they reversed together. Since 2008, near-term highs and lows in the Dollar Index have coincided with near-term lows and highs in commodities (see next figure) and stocks. Together they are tracking trends in inflation and deflation. As illustrated in the second figure, the joint reversal in the Dollar Index and in commodities in 2008 signaled the time at which decades of persistent inflation yielded to a standoff between inflation and deflation, which has continued ever since. During this period, the swings have been dramatic. Deflation was dominant as all markets fell into March 2009. Thereafter, inflation was dominant until the metals peaked in 2011. Since 2011, the standoff has gotten more balanced, with inflationary tendencies manifesting in the stock market and deflationary tendencies manifesting in the precious metals. Commodities have taken a middle path, rising and falling underneath old highs. Drilling down, we can see that many minor turns in financial markets have also been related to the timing of turns in the Dollar Index. The latest bout of Dollar Index weakness ended on the closing low of May 6. The countertrend rally in the Bloomberg commodity index ended just a week earlier, on April 29. Since then, commodity prices have fallen while the dollar has risen. The Dollar Index has been especially strong since its near-term low of June 30. Not coincidentally, commodities ended their countertrend rally on June 25 and began crumbling hard. Everyone’s favorite commodity—crude oil—has fallen from $107.73 to $91.80 per barrel just since June. Silver, which no one talks about any more, is back in the teens after peaking in 2011 at nearly $50/ounce. Gold has completed a beautiful contracting triangle on July 10 and is about to plunge to a new low for the bear market. We have long stated that when the stock market turns down, it will signal the final triumph of deflation, because then all markets will be reflecting deflation. When will that happen? The wave structures on all financial markets (per the Elliott wave labels in the final figure above, for example) are bearish except one: the US dollar. Investors have hated the dollar for many years, making it sold out on a long-term basis. Near term, the Daily Sentiment Index (trade-futures.com) recently recorded only 4% bulls on the euro, so a countertrend bounce against the dollar is in the offing. But long term, the dollar is probably starting a bull market. If the US dollar has started a major rise, all other markets are doomed. Since the stock market has been holding up in the face of the recently strong dollar, it seems likely that when stocks cave, they will play “catch-up” and cave big. To continue reading the rest of Prechter’s 18-page special double issue, plus all of Elliott Wave International’s latest analysis for US, European, and Asian-Pacific stocks, and the major metals, commodities, and currency pairs, join the free event from September 25-October 1. |
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