Gold World News Flash |
- TROUBLE AHEAD — “I’m buying all the silver I can get my hands on”
- Harvey Organ: Shanghai Drained of Silver, Bullion Banks Are About to Attack the COMEX!
- Gold Market Update
- Hong Kong Stocks Tumble Erase 2014 Gains, Volatility Soars As Protests Freeze City: Full Summary
- SHOCKER: Silver Manipulation Story Held Back By Andrew Maguire??
- Banksters Gut Silver To Protect Fiat Paper Ponzi — Kranzler
- Morgan Stanley warns on Asian debt shock as dollar soars
- The “Only Chart That Matters”, Projected Until 2016
- "The Ingredients Of A Market Crash": John Hussman Explains "Why Take The Concerns Of A Permabear Seriously"
- Events Impacting The Gold And Silver Price In The Week Of September 29th
- The Bells Are Ringing… Are You Listening?
- COT Report Shows JP Morgan Holds Lowest Silver Short Position Since 2008
- The Shot Heard Round The Valley World
- Does Surging Demand For Gold & Silver Coins Signal a Bottom?
- The "Only Chart That Matters", Projected Until 2016
- For one New Jersey candidate, the issue is gold
- Cash Starved Mining Stocks Go Bang
- Bad, Less Bad, and Hated
| TROUBLE AHEAD — “I’m buying all the silver I can get my hands on” Posted: 29 Sep 2014 01:00 AM PDT from Prepper Recon: Fox519 of Radio Free Redoubt joins me on the show today. We talk about the potential for a full scale meltdown in the market, bargain basement silver prices, ISIL, Ebola, the DOD announcement that illegal immigrants will be allowed to join the military and the federal government's Operation Choke Point which is intimidating banks and payment processors to not do business with gun and ammo dealers. |
| Harvey Organ: Shanghai Drained of Silver, Bullion Banks Are About to Attack the COMEX! Posted: 29 Sep 2014 12:00 AM PDT from Silver Doctors: Gold & silver expert Harvey Organ joins us this week for an explosive and power packed show discussing:
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| Posted: 28 Sep 2014 11:20 PM PDT Clive Maund |
| Hong Kong Stocks Tumble Erase 2014 Gains, Volatility Soars As Protests Freeze City: Full Summary Posted: 28 Sep 2014 11:10 PM PDT The Hong Kong protests, which we covered over the weekend, and which took a dramatic turn for the worse overnight when thousands of students camped out and demand universal suffrage on the city streets and were in turn tear-gassed and arrested en masse by the local riot police demanding students disperse or else, and where the leader of the student protest, Joshua Wong - who had been previously arrested and was released on Sunday night - has openly called for the resignation of Hong Kong Chief Executive Leung Chun-ying in an interview with Hong Kong Cable TV, have done the unthinkable: they have impacted financial markets and the "wealth effect" transmission mechanism of the local billionaires. Here as a summary of the latest market activity via Bloomberg:
SECTORS, COMPANIES
PRE-MARKET ANALYST REACTION
In fact, the threat to the wealth effect is so big, the local central bank had to step in. From the FT:
The locals appear undaunted by a possible Beijing crack down. At least undaunted for now:
Finally, while the US was quick to share in its punditry when Ferguson happened in Ferguson, when it moves to China and any word out of place can put US-Sino relations back years, suddenly the White House is all too quiet on the topic of human rights:
Yes, yes, now... how does one say BTFD in Hong-Kongese(sic)? |
| SHOCKER: Silver Manipulation Story Held Back By Andrew Maguire?? Posted: 28 Sep 2014 09:42 PM PDT by Bix Weir, Road To Roota:
My friend Dave Janda has a great interview posted with Bill Cohan where they talk about it here. I have been putting everything on the line for these FACTS to come out for over 10 years. Silver prices are 100% manipulated by computer programs at large banks trading back and forth with each other to set the price. I’ve shown how it started, when it happens, who is doing it and how it will end…and yet the CFTC does NOTHING.
Just read this article I wrote in January 2008 and sent to the CFTC at the time: Who’s the Little Man Behind the Curtain? *Note: EWT, LLC is now called Virtu Financial and had to withdraw their public offering early this year because the NY Attorney General questioned their involvement in COMPUTER MARKET RIGGING… I blew the whistle on Vincent Viola and EWT, LLC 6 years ago when I discovered they were a little known “Authorized Participant” in the iShares Silver ETF!!! I personally emailed all this information to Bart Chilton and Gary Gensler at the CFTC and they did NOTHING. Now we have confirmation from Andrew Maguire and two other traders that the big banks rig the silver price by using secret trading programs that tell their co-conspirators where the prices are going to be set and when. THIS 100% confirms the Road to Roota Theory and can EXPOSE these BASTARDS once and for all yet Andrew Maguire refuses to let Bill Cohan publish his story. WTF Andrew??? Who’s side are you on anyways??? May the Road you choose be the Right Road. Bix Weir PS – I am appalled that Andrew Maguire, Bart Chilton and the CFTC have been sitting on this important information since the CFTC hearings on March 25, 2010. They are now part of the conspiracy and all to blame for these past few years of suffering that honest silver investor have had to endure. Shame on all of you. |
| Banksters Gut Silver To Protect Fiat Paper Ponzi — Kranzler Posted: 28 Sep 2014 09:05 PM PDT
It’s the same old song, silver once again gutted by Bankster cartel paper in order to protect their fiat Dollar Ponzi scheme. Dave Kranzler of Investment Research Dynamics joins us to discuss what’s next and how low silver could go despite the very real demand for PHYSICAL metals throughout Asia. |
| Morgan Stanley warns on Asian debt shock as dollar soars Posted: 28 Sep 2014 09:00 PM PDT Foreign debt in emerging Asia has soared from $300bn to $2.5 trillion over the last decade  This posting includes an audio/video/photo media file: Download Now |
| The “Only Chart That Matters”, Projected Until 2016 Posted: 28 Sep 2014 08:00 PM PDT from ZeroHedge:
… we and quoted none other than JPM that “the current episode of excess liquidity, which began in May 2012, appears to have been the most extreme ever in terms of its magnitude and the ECB actions have the potential to make it even more extreme.” We left it off with the “one chart that should put everything in perspective, and explain why the world has reached a plateau of permanent addiction to monetary liquidity injections, and why nothing else matters. |
| Posted: 28 Sep 2014 05:39 PM PDT Extracted from John Hussman's "The Ingredients of a Market Crash" Why take the concerns of a "permabear" seriously? The inclination to ignore these concerns is understandable based on the fact that I've proved fallible in the half-cycle advance since 2009. That's fine – my objective isn't to convert anyone to our own investment discipline or encourage them to abandon their own. Somebody will have to hold equities through the completion of this cycle, and it's best to include those who have thoughtfully chosen to accept the historical risks of a passive investment strategy, and those who have at least evaluated our concerns and dismissed them. The reality is that my reputation as a "permabear" is entirely an artifact of two specific elements since the 2009 low, but that miscasting may not become completely clear until we observe a material retreat in valuations coupled with an early improvement in market internals. For those who understand and appreciate our work, I discuss these two elements frequently because a) I think it's important to be open about those challenges and to detail how we've addressed them, and b) it's becoming urgent to clarify why we view present conditions as extraordinarily hostile, and to distinguish these conditions from others that – despite an increasingly overvalued market – our current methods would have embraced or at least tolerated more than we demonstrated in real-time. For us, the half-cycle since 2009 has involved the resolution of two challenges. The first: despite anticipating the 2007-2009 collapse, the timing of my decision to stress-test our methods against Depression-era data – and to make our methods robust to those outcomes – could hardly have been worse. In the interim of that "two data sets" uncertainty, we missed what in hindsight was the best opportunity in this cycle to respond to a material retreat in valuations coupled with early improvement in market internals (a constructive opportunity that we eagerly embraced in prior market cycles, and attempted to embrace in late-2008 after a 40% market plunge). The second: I underestimated the extent to which yield-seeking speculation in response to quantitative easing would so persistently defer a key historical regularity: that extreme overvalued, overbought, overbullish market conditions typically end with tragic market losses. Those extremes have now been stretched, uncorrected, for the longest span in history, including the late-1990's bubble advance. My impression is that the completion of the present market cycle will only be worse as a result. The ensemble approach we introduced in 2010 resolved our "two-data sets" challenge, and was more effective in classifying market return/risk profiles than the methods that gave us a nice reputation by 2009, but our value-conscious focus gave us a tendency to exit overvalued bubble periods too early. During the late-1990's, observing that stock prices were persistently advancing despite historically overvalued conditions, we introduced a set of "overlays" that restricted our defensive response to overvalued conditions, provided that certain observable supports were present. These generally related to an aspect of market action that I called trend uniformity. In the speculative advance of recent years, we ultimately re-introduced variants of those overlays to our present ensemble approach. As I observed in June, the adaptations we've made in recent years have addressed both of these challenges. See the section "Lessons from the Recent Half-Cycle" in Formula for Market Extremes to understand the nature of these adaptations. When we examine the cumulative progress of the stock market in periods we classify as having flat or negative return/risk profiles (and that also survive the overlays), the chart looks like the bumpy downward slope of a mountain. Present conditions are worse, because they feature both a negative estimated return/risk profile and negative trend uniformity on our measures. The cumulative progress of the stock market under these conditions – representing less than 5% of history – looks like the stairway to hell, and captures periods of negative market returns even during the bull market period since 2009. The chart below shows cumulative S&P 500 total returns (log scale) restricted to this subset of history. The flat sideways sections are periods where other return/risk classifications were in effect than what we observe today.
Though we've validated our present methods of classifying market return/risk profiles in both post-war and Depression-era data, in "holdout" validation data, and even in data since 2009, there's no assurance they'll be effective in the current or future instances. As value-conscious, historically-informed investors, we remain convinced that the lessons of history are still relevant. Our efforts have centered on embodying those lessons in our discipline. While all of these considerations are incorporated into our approach, we've had little opportunity to demonstrate the impact we expect over the course of the market cycle. Applied to a century of historical market evidence, including data from the present market cycle, we're convinced that the adaptations we've made have addressed what we needed to address. Our concerns at present mirror those that we expressed at the 2000 and 2007 peaks, as we again observe an overvalued, overbought, overbullish extreme that is now coupled with a clear deterioration in market internals, a widening of credit spreads, and a breakdown in our measures of trend uniformity. These negative conditions survive every restriction that we've implemented in recent years that might have reduced our defensiveness at various points in this cycle. My sense is that a great many speculators are simultaneously imagining some clear exit signal, or the ability to act on some "tight stop" now that the primary psychological driver of speculation – Federal Reserve expansion of quantitative easing – is coming to a close. Recall 1929, 1937, 1973, 1987, 2001, and 2008. History teaches that the market doesn't offer executable opportunities for an entire speculative crowd to exit with paper profits intact. Hence what we call the Exit Rule for Bubbles: you only get out if you panic before everyone else does. Meanwhile, with European Central Bank assets no greater than they were in 2008, and more fiscally stable European countries quite unwilling to finance the deficits of unstable ones, the ECB has far more barriers to sustained large-scale action than Draghi's words reveal. Moreover, to the extent that the ECB intends to buy asset-backed securities (ABS), which have a relatively small market in Europe, the primary effect (much like the mortgage bubble in the U.S.) will be to encourage the creation of very complex, financially engineered, and ultimately really junky ABS securities that can be foisted on the public balance sheet. Watch. In any event, even if such monetary interventions continue indefinitely, I have no doubt that we'll have the opportunity to respond more constructively at points where we don't observe upward pressure on risk-premiums and extensive deterioration in market internals. I should be clear that market peaks often go through several months of top formation, so the near-term remains uncertain. Still, it has become urgent for investors to carefully examine all risk exposures. When extreme valuations on historically reliable measures, lopsided bullishness, and compressed risk premiums are joined by deteriorating market internals, widening credit spreads, and a breakdown in trend uniformity, it's advisable to make certain that the long position you have is the long position you want over the remainder of the market cycle. As conditions stand, we currently observe the ingredients of a market crash. |
| Events Impacting The Gold And Silver Price In The Week Of September 29th Posted: 28 Sep 2014 03:09 PM PDT In this article, we summarize the key events of the running week that could have an impact on the price of gold and silver price because of trading in COMEX futures. During the previous week, between September 21st and 27th, both gold and silver remained somehow stable. There was no specific event driven price change. Gold and silver are at a key juncture. Were these price levels to be violated to the downside, then the metals are breaking through a mega support level. gold stocks have been holding up relatively well up until a week ago but, unfortunately, have been weakening lately. Gold bulls would like to see two things going forward; first, current support levels need not to be violated and, second, gold stocks need to hold up well. For the week commencing September 29th, there are some key economic data and the European Central Bank announcement that could impact markets and precious metals.
A key event this week is undoubtedly the ECB rate decision. Below is a more detailed calendar of key economic data in key markets. They are not necessarily driving gold and silver prices, but could cause price volatility:
Note: The primary focus of our website is to report on the different aspects of the gold market: fundamentals, economic and monetary analysis, basic technical analysis. Our view on the real price setting in the gold and silver market differs from the mainstream view. Price changes happen to coincide with events or announcements; mainstream media are used to report a relationship between both. However, we believe that the real price setting for the time being is taking place in the COMEX futures market. Market expert Ted Butler does an outstanding job analyzing the weekly evolution in the COMEX market and how it affects price setting. |
| The Bells Are Ringing… Are You Listening? Posted: 28 Sep 2014 02:49 PM PDT There is a saying that you don’t ring bells at the top.
It’s not really true. Every time the market forms a major peak, at least in the last 15 years, there are usually a preponderance of signs of excessive speculation and leverage.
Today we are seeing bells ringing throughout the markets.
For instance, today, we have:
1) Corporate debt is at 2007 peak levels. 2) Investor bullishness is at extremes not seen since the 2007 top. 3) Margin debt (money borrowed to buy stocks) is closing in on its record high. 4) Over 70% of household net worth is based in financial assets. As ZH has noted previously, every time this has happened historically, asset prices have crashed soon after. 5) The Bank of International Settlements and the IMF have both warned of excessive risk taking and market fragility. 6) Market volume is at an absolute trickle, with most volume coming from HFT firms.
Aside from this, we have countless examples of the “smart money” preparing:
1) Billionaires are sitting on record amounts of cash. 2) Warren Buffett is sitting on over $50 billion in cash. 3) George Soros has taken out a record put position to profit from a market collapse. 4) Carl Icahn has warned of a “big drop” coming in stocks. 5) Jeremy Grantham has commented that we are in a “fully-fledged equity bubble.” 6) Corporate insiders are selling stock at a pace not seen since 2000. 7) Financial institutions as well as hedge funds have been net sellers of stocks since 2014 began.
There are literally bells everywhere today. Does this mean that the market will take a nosedive this week? Not necessarily. Tops can take much longer to form that anyone expects.
However, there are clear signs of excessive speculation, leverage, and the like. And the smart money is heading for the exits.
Are you?
This concludes this article. If you’re looking for the means of protecting yourself from what’s coming, you can pick up a FREE investment report titled Protect Your Portfolio at http://phoenixcapitalmarketing.com/special-reports.html.
This report outlines a number of strategies you can implement to prepare yourself and your loved ones from the coming market carnage.
Best Regards
Phoenix Capital Research
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| COT Report Shows JP Morgan Holds Lowest Silver Short Position Since 2008 Posted: 28 Sep 2014 02:12 PM PDT This is an excerpt from Ed Steer’s latest commentary in his daily gold and silver newsletter (subscribe here). In it, he refers to Ted Butler’s weekly COT analysis which is accessible in Butler’s premium service on www.butlerresearch.com. The Commitment of Traders Report for positions held at the close of Comex trading on Tuesday were about what I was expecting in silver, but rather disappointing in gold. Commitment Of Traders SilverIn silver, the Commercial net short position declined by a hefty 6,792 contracts, or 34.0 million troy ounces. The Commercial net short position is now down to 16,767 contracts, or 83.8 million troy ounces—and within spitting distance of its late May/early June record low.
For a change, it wasn’t the Managed Money traders in the technical fund category going short that caused the decline, as they actually covered 1,638 of their short contracts during the reporting week. It was the small traders [the Nonreportable category] that were involved, as their net long position declined by 4,702 contracts. Ted Butler says that it appears that the Managed Money is all full up on the short side — and all of this week’s improvements came from these Nonreportable futures contract holders, plus Non-Commercial traders other than the technical funds. Ted Butler also mentioned that JPMorgan’s short position in silver is now down to about 11,500 contracts, their lowest short-side corner in the Comex futures market since taking over the silver short position of Bear Stearns in 2008. And not to be forgotten in all of this, is the equally extreme short-side corner in the Comex silver market held by Canada’s Scotiabank. Commitment Of Traders GoldIn gold, the Commercial net short position only declined by 11,924 contracts, or 1.19 million troy ounces. I was expecting around double that amount. The Commercial net short position in that precious metal now stands at 6.43 million troy ounces.
The big changes were in the Manged Money category, as they sold an additional 3,232 long contracts—and bought 6,933 short contracts. The small traders in the Nonreportable category also pitched 4,278 longs in addition to that. Of course, standing there buying all the long positions offered in both metals, was JPMorgan et al. Ted Butler was rather surprised to see that there was no change in JPMorgan’s long-side corner in the Comex gold market, as it remained around the 25,000 contract/2.5 million troy ounce mark. Ted also remarked that the Comex futures market showed major improvements in platinum, palladium, copper and crude oil, as ‘da boyz’ continue to game the technical funds into extreme positions on the short side. The only big exception is the dollar index, where the technical funds are holding monster long positions—and JPMorgan et al are mega short. And, without doubt, we’ve seen more improvements in the internal structure of the precious metals since the Tuesday cut-off—and also without doubt, we’re back at, or below, the record lows set back in late May/early June. And we’ve exceeded those lows in both platinum and palladium, as those two metals have been savaged during the latest engineered price decline. Once again we have to contemplate the subsequent actions of JPMorgan et al, as all these shorts look to cover during the next rally—and in the dollar index, it’s the opposite. Will they let the technical funds off easy once again, or will ‘da boyz’ just put their hands in their pockets? And as Ted Butler and I have said countless times that, and only that, will determine not only how high price rise from here, but how fast they get they get there as well. Nothing else matters. |
| The Shot Heard Round The Valley World Posted: 28 Sep 2014 01:53 PM PDT Submitted by Mark St. Cyr The Shot Heard Round The Valley World The greatest issue facing Silicon Valley is the one thing many newly minted and aspiring entrepreneurs have taken for granted: the money. Many believe this gravy train of a never-ending Venture Capital/Angel Investor class will not only always be there, but the ranks will swell becoming even larger with burgeoning pocketbooks filled with their own newly minted IPO greenbacks. Problem is for a great many, they have never seen the real Jeckyll and Hyde personality of "investor funding." Initial Public Offerings (IPO) has been the rallying cry for many over the last 5 years to the detriment of what it really means to be an entrepreneur. (i.e., creating something that becomes bigger than one's self) The term has now morphed into something akin to: I'm going to push this idea, get it funded, IPO it, and cash out! Rinse – repeat. For I'm a "Trep!" (For those not familiar with the term, it's the newest self-appointed moniker for the person who seems to be following this pattern of entrepreneurship.) For what it's worth, this style of thinking about entrepreneurship from my perspective is very worrisome. The reason? It's only about the "Benjamins." Is there anything wrong with that? Absolutely not. However: If your purpose was to bring a real company, (what ever the field,) run and grow it to its full potential you'll find too your detriment – money alone will not do it. Regardless of how much. And, if your sole focus for your existence hasn't been on sales, customers, and net profit. Or, you've been lackadaisical in any other manner because the dominating thought in your mind is – "I just need to get another round, then I can IPO and be through with this?" Your time is probably up. Come this October the Federal Reserve will make its final tranche of QE available. The amount assumed by many is that it will be 50% larger than what we've seen over these last years. ($15 Billion as opposed to $10) One may see an increased flurry of buying into anything and everything that has even the slightest possibility of making a profit. Or, what Wall Street cares about even more; a growth story that can be perpetuated via financial engineering that sticks during earnings seasons. But, one shouldn't read into this as "confirmation" the risk appetite story is not only alive but growing. For that is all about to change. Once the Fed shuts down the section of QE that has been pumping Billions upon Billions of dollars every month – it's over for a great many of today's Wall Street darlings. Think of it this way: Who is going to fund your next round when they no longer have access to the Fed.'s piggy bank? Let alone pump more money into older start-ups that just haven't produced any real money (as in net profit,) but have produced nothing more than great new employee digs or benefits? Tack along side this the culture shock in what will seem near instantaneous with the shunning that will take place of any business resembling the, 3 employee, menial customer base, Zero if not negative profit margin businesses formed with the implicit intent as to be bought up or "acquired" for Billion dollar pay days. These will be the first to go. That formulation is going way of the now infamous Pets dot-com sock puppet. This will be the first true shock to Silicon Valley culture that hasn't been seen in many years. And it will be far from the only one. Many will point directly at the darling of both Silicon Valley as well as the touchstone of riches for aspiring entrepreneurs; Facebook™ (FB) as proof this line of thinking is off base. And why shouldn't they? The price has never been higher. Yet, what many shield their eyes from and a great deal more turn their heads from entirely is what I and very few others have been arguing: "It's all been possible via the Federal Reserve's interventionist policies." And the greatest source of that inflow of cash made available via "investors" is about to be shut down. Let me go on the record here and point out what I believe will prove my point in the coming weeks and months. Currently Zuck and crew have been lauded over with the prowess in its acquisition choices. You will know everything has changed when the calls to rescind Mark Zuckerberg's authority in having carte blanche via not needing board approval for acquisitions going forward is demanded by Wall Street. And that won't be the only monumental shift coming. Maybe, one at an even faster pace: The meaning of IPO. IPO is not going to have the same term of endearment it now has. I believe it will turn into the last and most dreaded three-letter acronym no one ever imagined in Silicon Valley. The IPO screams of joy will turn into wails of terror when those VC "angels" meet at many "treps" desk and state – they're IPO-ing. No, not getting one set up for the big pay-day. No IPO will mean: "I'm pulling out." i.e., "Have a nice day. Where's the rest of my money?" The once renowned purchases of "Billion dollar babies" will prove out not to be worth two cents in this environment. Valuations will get crushed and people will be shocked at just how fast a company touted across the financial channels and other media as "fantastic buys" are flogged and fleeced when Wall Street comes back for their "investment." If the story or the numbers aren't there – neither will these once darlings of Wall Street. Regardless of size or stature. People will continue pointing at FB and others as proof that this whole idea of what I'm professing is off base. Again, they'll point to the stock prices and say, "Look! During the recent sell off some they went higher! This proves, blah, blah, blah." What it proves is this in my opinion: It's a last gasp effort to have exposure in these companies during this newest round of earnings season. i.e., As to have the possibility (more inline with hope) of any earnings windfall, whether it be real, or financially engineered. Because: There isn't going to be another shot after this one. The money to take these stylized chances will no longer be there. Period. I watched and read many viewpoints on what has now been circulated throughout Silicon Valley as the "tweet storm" unleashed by well-known Silicon Valley sage Marc Andreessen where he ended his views with the word "WORRY." I believe he is spot on. Many in the so-called "know" of any and all related to Silicon Valley pontificate that his alarm bells are a little "over the top." Some have stated in rather condescending tones that "It's not like the current crop of Silicon Valley has never had issues with funding. I mean, it was hard in 2009." Oh yes, it was – for about a week! I would remind everyone to remember what took place in 2009? The birth of QE. Then it was off to the races. Or should I say "coding?" And as of today there has been no need to look back. Until now. This next bout of what I believe to take place will not be limited to just the small-sized, or start-up class. It will be just as abrupt of a sea change for the current crop of Wall Street darlings that have produced what many have seen as "skeptical" results. e.g., FB, Twitter™, Pandora™, LinkedIn™, et al. They are going to face harsh skepticism this earnings release period. Far more, and certainly more harsh or critical than any previous in my opinion. The reasoning is: With no more "free money" pouring in from the Fed. for "investors" to slap around anywhere and everywhere in the hopes of something sticking. They're going to do what anyone would do. Buy Nothing – Sell Anything and everything that isn't making real money. For they are well aware their bankers or margin clerks – don't accept "likes" as legal tender for deposits in their accounts either. One last thing: If you think all this "worry" stuff is just nonsense. Let me leave you with this one line… Yahoo™ just announced it's interested in AOL™. Feel better now? |
| Does Surging Demand For Gold & Silver Coins Signal a Bottom? Posted: 28 Sep 2014 12:29 PM PDT Reports of individuals snapping up gold and silver coins are coming in from around the world:
Individual buyers aren’t the dominant players in precious metals but they do make a difference. And their renewed enthusiasm is matched by some recent national trends:
There’s no guarantee that this buying, encouraging as it seems, is anything more than a blip. But in the aggregate it does seem like a lot of buyers, old and new, are finding current prices to be attractive. That’s how bottoms form and new bull markets begin. |
| The "Only Chart That Matters", Projected Until 2016 Posted: 28 Sep 2014 11:14 AM PDT Three weeks ago, in "A Quick Reminder Of The Only Thing That Matters, In One Chart" we did just that, showing the ever greater amount of global liquidity injected by the central banks, thanks to which they have so far successfully masked the accelerating economic collapse of the world, as shown by cratering "benign" inflation expectations to levels not seen since Lehman: hardly a confirmation of economic stability and growth:
... we and quoted none other than JPM that "the current episode of excess liquidity, which began in May 2012, appears to have been the most extreme ever in terms of its magnitude and the ECB actions have the potential to make it even more extreme." We left it off with the "one chart that should put everything in perspective, and explain why the world has reached a plateau of permanent addiction to monetary liquidity injections, and why nothing else matters."
So, with everyone fearing imminent Fed tightening, what does this chart look like in the coming years? For the answer of what the "only chart that matters" projected until 2016 looks like, we go to Barclays, where we find that absolutely nothing is about to change to the slope of the infinitely fungible, globally interconnected, liquidity excess. In fact, as Barclays puts it best, "central bank balance sheet growth will be broadly unchanged in the next 12-15 months." So much about all those fears of a global rate hike cycle...
In fact, the only difference is that if and when the Fed's QE ends and the US balance sheets declines modestly as a % of GDP, both Europe and Japan will take its place at the forefront of the global monetary firehose.
Of course, the assumption here is that once the Fed ends QE in 1 month, and concerns that a US rate hike is imminent, the market won't crash and thus force the Fed to promptly return to what it does best, CTRL-P. In fact, the €64K question is whether the hand off from the Fed to the ECB and BOJ will be smooth enough to avoid a stock market crash between now and the end of 2016. Everything else is semantics. |
| For one New Jersey candidate, the issue is gold Posted: 28 Sep 2014 07:13 AM PDT By Jeff Mulvihill http://abcnews.go.com/Politics/wireStory/jersey-candidate-issue-gold-258... NEW BRUNSWICK, New Jersey -- Republican Jeff Bell spent three decades in Washington working on policy and wrote a book promoting all aspects of social conservatism. But so far his campaign for the U.S. Senate has centered on just one issue: returning the United States to the gold standard. It's an idea that his opponent, Democratic incumbent Cory Booker, dismisses as "defunct and debunked," which is pretty much how most economists seem to see it. But a group of conservative thinkers pushing for the change is undaunted. ... Dispatch continues below ... 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 "It wouldn't be the first time that the majority of Ph.D. economists were on one side and Jeff was on the other and he turned out to be right," said John Mueller, who runs the economics and ethics program at the Ethics and Public Policy Center, referring to the idea that Bell advanced in the 1970s — that cutting taxes could stimulate the economy. Under the gold standard, the value of the dollar would be fixed to a certain amount of gold. Through much of the U.S. history, that was the case. But since 1971, the U.S. has had fiat money that is not backed by gold or anything else. Bell and other supporters of the gold standard say it would be a way to keep prices stable. He says the current means of controlling prices -- near-zero interest rates from the Federal Reserve -- is making it hard for small businesses to get loans and expand. Bell says that's a major reason that the economy is growing slowly years after the Great Recession. "We are in a situation of stagnation," Bell said earlier this month in a speech to a real estate conference in New Brunswick. "Why don't they let market interest rates return to our economy?" Like other supporters of the gold standard, Bell is an acolyte of Ronald Reagan and Jack Kemp, the late congressman, secretary of housing and urban development and vice presidential nominee who made the call for cutting taxes to stimulate the economy part of a national debate in the late 1970s. Bell, now 70, won the Republican nomination for a New Jersey U.S. Senate seat in 1978 largely by advocating the kind of Reagan-era tax cuts some credit with spurring the economy. Back in 2012, IGM Forum, which surveys academic economists from U.S. institutions including Yale, the University of Chicago and Stanford, asked panelists whether they agree that the gold standard would mean more employment opportunities and price stability for average Americans. Every member who answered the question disagreed or strongly disagreed with the notion. Eric Maskin, a Harvard economist who won a Nobel Prize in 2007, was among them. He told The Associated Press, that most in his field believe a gold standard would take away the Fed's monetary policy tool to increase the money supply during recessions and tighten to check fast growth. He also said that the fluctuating value of gold might cause some instability in the economy. "Non-economists worry about debasement of the currency," he said. "If you're not tied to gold, what prevents a government from printing more and more money and making it worth less? If you have an irresponsible government, that could happen. That's not what our government has been doing." Bell, at the real estate conference, said limited campaign funds leave him lacking "bandwidth" in the election. "I can't get across two or three different ideas," he said. So he's focusing on the gold standard as his main one. It's the main thing he talks about on a radio ad that he earlier this way on his way to winning a four-candidate Republican primary and that he dusted off again this month. In a state where Republicans have not won a U.S. Senate election since 1972, he is seen as a longshot against Booker, a former Newark mayor and fundraising juggernaut. But early polls have shown Bell trailing by about 10 points — close enough that Gov. Chris Christie, a Republican, has said it should be viewed as a real race. Christie has also appeared at a fundraiser with Bell and said national Republican groups should support Bell. Join GATA here: 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: |
| Cash Starved Mining Stocks Go Bang Posted: 28 Sep 2014 03:33 AM PDT Tough times for Australian miners are not letting up... RICHARD KARN is managing editor of the Emerging Trends Report. Speaking here to The Gold Report, he notes how 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. Now Karn believes a fresh wave of Aussie mining stock failures will hit when the current financial quarter ends September 30. A major shakeout at some point appears likely... The Gold Report: When we interviewed you in April, you said the pending demise of zombie companies on the Australian Stock Exchange (ASX) was a good thing because there were too many deadbeats in the specialty metal sector. Has that process worked its way through the system or are there still some "walking dead" making it difficult for investors to pick out the promising companies? Richard Karn: Unfortunately, the latter is still the case. According to the Australian Securities & Investment Commission (ASIC), 146 companies in the mining sector went into administration (bankruptcy) during the fiscal year ending June 30, 2014. As Luke Smith pointed out last month in your publication, yet another 226 resource companies did not have sufficient cash to meet their anticipated expenditures for this quarter. Since then another 23 resource companies have failed, and as of Aug. 25, 2014, 17 more had not paid their listing fees and were suspended from trading on the ASX. So no, we do not think the process is over. TGR: How are companies accessing capital today? Richard Karn: By and large, they're not. We've been picking up on some positive activity in the base and precious metal sectors, but that mostly has yet to trickle through to the specialty metal sector. In the case of specialty metal companies, most are unable to raise money either from the capital markets or from their shareholders. Failed or abysmal uptake of rights issues and the like continue to be common. Many companies are literally being starved of cash. TGR: Can companies sell some of their assets to cover costs on other projects? Richard Karn: Asset sales are difficult in the current environment because so many companies are now so desperate to sell that it has become a buyers' market. That being said, the Chinese have been stepping in to snap up the occasional bargain. TGR: If companies have no more options, how long can they keep the lights on? Richard Karn: Not long. The end of the quarter is September 30, and companies will have to disclose their financial situations. We expect a fresh wave of failures within the next six to eight weeks as more resource companies become insolvent. We don't know what the catalyst will be, but for some time we've been expecting a final selling frenzy that will mark at least an intermediate-term bottom in the specialty metal sector. Some assets are so mispriced that the market appears to be pricing in failure well before the fact. In fact, so sure is the market that a number of these companies will fail that they are trading for less than the cash they have on hand, literally placing no value whatsoever on their resource projects. Final washouts often occur when markets are oversold, and the specialty metal sector remains oversold. The spark for the selloff could be another failed rights issue or poor uptake on an option scheme, either of which would reflect a fundamental lack of confidence in management. It could be some unknown Рperhaps an otherwise meaningless threshold event Рthat "spooks the herd," and shareholders just start selling everything indiscriminately to ensure they recover some of the money they've invested. It could be that it finally dawns on investors that a number of these junior resource companies hold a lot of each other's stock, which they are carrying on their balance sheets at par as a liquid asset when in actuality those shares are so illiquid they could not be sold except at a steep discount Рand could well crash the share price in any case. As I said, we do not know what will spark the selloff Рjust that it is coming. And when the selling has been exhausted, it will constitute at least an intermediate bottom in the specialty metal sector. In the final shakeout, we are anticipating a number of mismanaged companies will deservedly go under Рas, unfortunately, will some quite good companies Рand some very good projects will be picked up very inexpensively. And being able to pick up outstanding assets for very little money always marks the bottom of the cycle, because it increases the odds of success as the cycle turns up again. TGR: What characteristics should investors look for to avoid these doomed ventures? Richard Karn: At the moment I would avoid small-cap specialty metal companies that are carrying any debt, especially if they are not cash-flow positive. If or when their ability to service that debt is called into question, it will likely be too late to get out. In addition to reading financial statements to get a grasp of their financial situations and those circumstances just mentioned, I would look at what managements are actively doing to help their long-suffering shareholders. For example, have they reduced staff, cut expenditures and taken a cut in salary themselves or are they still maintaining a "resource boom" lifestyle at their shareholders' expense? Most important, I would look for either positive cash flow from operations or sufficient cash on hand to sustain operations through to some pivotal event the market has been waiting for, such as commencing production, receiving project funding, permits or approvals, or receiving the results of a bankable feasibility study, etc. Рsomething that will demonstrate management is delivering on its promises. TGR: Could the recent repeal of the mining tax in Australia help all of these companies, or will it only impact large operators? Richard Karn: The Minerals Resource Rent Tax (MRRT) did not apply to the specialty metal end of the resource sector in Australia, so its repeal will have little direct impact on these companies. Indirectly, however, repealing the tax serves returns Australia to the ranks of the safest, most mining-friendly jurisdictions in the world, and at some point that will indeed lead to increased investment flows into the specialty metal sector. What markets fail to fully appreciate is that many, and arguably most, of the technological advances we enjoy today, whether found in consumer electronics or transportation or renewable energy sources or military hardware, rely on secure, uninterrupted supply of a range of specialty metals. With military conflict raging across the Middle East and North Africa; a full-fledged arms race between the countries with claims to the South China Sea, notably China and Japan; and the numerous potential conflicts brewing throughout the world, now more than ever secure supply of these specialty metals should be a very high priority. Should a war erupt, common sense, as well as history, dictates the first victims will be the very notion of globalization, free market economics and "just in time" delivery. If it were in China's strategic interests to stop exporting rare earth elements or tungsten or antimony or graphite, to name just a few of the specialty metal markets China controls, all of which are crucial to a range of military applications, there is absolutely nothing anyone could do about it. Of the 50 specialty metals we track, more than 40 could be mined economically in Australia alone, thanks to its unique geology. We've been writing about this trend for more than six years now, but except for a relatively brief period from mid-2010 through late 2011, in the panicked response to China cutting off supply of REEs to Japan, the aftermath of the global financial crisis has squelched the market's appetite for mining projects in general and specialty metal projects in particular. They require the long-term commitment of capital and a sustained effort to put into profitable production. The flood of liquidity sloshing around the planet since 2008 in search of a return appears to have such a short investment horizon that mining projects are largely off the radar. So nothing has been done. There's been a lot of talk, a lot of bureaucratic posturing and comic sputtering as World Trade Organization complaints are ignored or unfair business practices perpetuated, but nothing has been done. And the longer this continues, the more vulnerable the West becomes. The specialty metal price spike the West suffered in 2010-2011 in panicked response to the Chinese curtailing exports of REEs will be nothing compared to what a "shooting war" would provoke. Thinking otherwise is the height of naivet̩. TGR: Thank you for your insights. |
| Posted: 27 Sep 2014 03:00 AM PDT A hard lesson to learn from the poster-child of the "Rare Earths" hype... A 98% LOSS in three years...writes Steve Sjuggerud in his Daily Wealth. That's what you'd have today if you bought shares of Molycorp near its peak in 2011. You may remember Molycorp as the poster child of the "rare earth element" craze that swept through the investment world a few years ago. Shares of the small mining company went from $14 to $74 in a matter of months...a gain of more than 425%. By late 2010, there were scores of analysts and stock promotions hyping "rare earth" stocks, and mainly Molycorp, as "can't lose" investments. But since hitting a peak in early 2011, Molycorp shares have lost 98% of their value. Fortunately, there's a valuable lesson we can learn from Molycorp's epic collapse. And in a moment, I'll share how we can use this lesson to uncover the next great opportunity in the natural resource market. But first, let's take a quick look back at what happened with Molycorp... As you may remember, "Rare earth elements" is the name given to an exotic group of metals, including strange-sounding members like lanthanum and cerium. These little-known metals are crucial components of electric car batteries, wind turbines, and advanced electronics (like your cellphone or tablet). To this day, China holds a virtual monopoly on the rare-earth industry. And back in 2010, the Chinese had announced a reduction in the amount of rare earths they were willing to ship to other countries. The potential for a supply crunch sent prices for some of these exotic metals soaring thousands of percent. This frenzy pushed shares of Molycorp, one of the handful of non-Chinese rare-earth companies, into the stratosphere. It didn't last long, though... Since the rare-earth mania hit its peak in 2011, investing in Molycorp has produced similar results to lighting your cash on fire. Take a look:  But for investors who did their due diligence, this collapse shouldn't have come as much of a surprise... As early as October 2010, I told DailyWealth readers to steer clear of Molycorp:
As you can see, the valuation of Molycorp was "pie in the sky". But there's a bigger-picture lesson we can take away from the mania in rare earths and Molycorp. Natural resource markets are extremely cyclical. They go through incredible booms...and incredible busts. Investors should only focus on resource sectors that have recently gone through huge busts. Wait for the market to hit a bottom...and in many cases, wait for the cost of production to outpace market prices for an important commodity. Make sure your downside risk is minimized, and wait for the start of a new uptrend. My colleague Steve Sjuggerud calls this concept "bad to less bad." When things are really bad...they don't have to get good for you to make money...they just have to get "less bad". This is the secret to making money in cyclical resource markets...and to avoiding hyped-up story stocks like Molycorp. The only thing Molycorp and the rare-earths market had going for it in 2010-2011 was an uptrend. As I explained above, it wasn't cheap...it hadn't gone through a massive bust...and it certainly wasn't hated. |
Here’s a strange one. It turns out that Andrew Maguire is NOT letting Bill Cohan publish his silver manipulation story!!! This is totally insane and it can’t be tolerated!
from 
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