Gold World News Flash |
- This is What School Lunch Looks Like in Chickasha, Oklahoma
- Russians and Chinese are ditching the dollar as Europeans start using renminbi in their reserves
- These 8 Euro Countries COLLAPSE Into DEFLATION
- Silver Myths Smashed, Pt. 5: The 4 Little Letters Some Use to Dismiss Silver
- Still Concerned About The Gold & Silver Smash – Just Read This
- The IMF And Austrian Theory
- The Gold Price Climbed Over Two Crucial Resistance Levels this Week Closing at $1,238.30
- Forget Ebola - Here's Why US Banks Are Now Extremely Vulnerable
- 5 Things To Ponder: "Buy" or "Run"
- Gold Daily and Silver Weekly Charts - Life During Wartime
- What Happens With The Gold Price If Deflation Wins?
- These 8 Euro Countries COLLAPSE Into DEFLATION!
- The Development and Opening of China’s Gold Market
- Why Malpractice from the Fed Will Undermine Growth
- LBMA gets 8 proposals to replace century-old gold fixing
- China gold production seen falling, prompting more imports
- James Rawles Ebola could trigger Collapse
- Still Concerned About The Gold & Silver Smash - Just Read This
- “Save Our Swiss Gold †- Game Changer For Gold?
- Gold Benefits from Market Uncertainty
- Why J.P.Morgan did not succeed in 1929
- In Praise of Traditional Family Values… Sort of
- Marc Faber: Get Gold, Get Ready for QE99
| This is What School Lunch Looks Like in Chickasha, Oklahoma Posted: 18 Oct 2014 12:00 AM PDT by Michael Krieger, Liberty Blitzkreig:
Oh, but here's the best part… | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Russians and Chinese are ditching the dollar as Europeans start using renminbi in their reserves Posted: 17 Oct 2014 11:00 PM PDT from Sovereign Man:
It's still a safe bet for most, not because the currency is actually strong, but because so many others are already so reliant on it. Between those with reserves in and pegs to the US dollar, many countries have given their allegiance, and now have a vested interest in the health of the currency. Due to this common interest, a sort of unofficial, involuntary alliance has been formed between them all. Together, they're all playing along, pretending that everything is fine. If the dollar collapses, they're all screwed, so they've got to get each other's backs. From the throne of the world's reserve currency, the Federal Reserve, with the power to print the US dollar, feels dangerously omnipotent. They can get away with just about anything. For now. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| These 8 Euro Countries COLLAPSE Into DEFLATION Posted: 17 Oct 2014 10:30 PM PDT from The Money GPS: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Silver Myths Smashed, Pt. 5: The 4 Little Letters Some Use to Dismiss Silver Posted: 17 Oct 2014 08:25 PM PDT Your Strength Gives me Strength from The Wealth Watchman:
I've been inspired by you all, and I salute each and every one of you.
I've had a great many conversations about silver with almost every sort of person you could think of: the hipster, the upper-middle class, the wealthy, kids, the elderly. They all react somewhat differently to silver, because they all have differing ideas about what silver is, and therefore, differing expectations of what it can do for them. Usually, when I'm done talking to someone about silver, there are many thoughtful, intelligent questions that come up, but one particular question about silver, that occurs on a fairly regular basis, is a bit frustrating to hear. In fact, its recurrence is so common, that no silver-myth list would be complete without it. Let's see if you've heard it too: "So that's why it's a good idea to own some silver, there are just too many uncertainties in our world today, and you need something rock-solid that you can rely on." "That's all very good, Watchman, but who do you think will really want silver…." "When the Sh** hits the fan(SHTF)?" Yes! The classic SHTF card: don't leave home without it! It's found in almost as many places as Visa or Mastercard! And for some strange reason, many 'businesses' still accept it! This dreaded cocktail is often meant to negate any and every reasonable argument for buying silver. The Characters Who Play the Card First off, it's important to understand that there are many reasons why this card is played. Not all of them are bad, either! What I've discovered, is that those who usually play this card fall into 3 different categories: The Rainbow Hunters: Far from being a skeptic, these folks are infested with a cynicism so pervasive, that they like to to see if they can poke holes in anything. It's the very air they breathe. You get the feeling with those lonely souls, that they'd be busy mortally wounding rainbows or stabbing lovely sunsets if they could. If you can tell that the person who just played the SHTF card is one of these "rainbow hunters", it's actually best to simply cut them loose, and let them go. There isn't a real conversation to be had with these people, and you'll be wasting your time. The Preppers: These folks maintain a healthy amount of skepticism for the most part. They distrust everything the government, the media, and conventional opinion tells them. I find discussion with this group very easy, and very amiable. They usually play the SHTF card, because they genuinely want to know how silver will help them in their emergency planning. You should always patiently engage these people. The Vault Dwellers: These folks are Preppers on steroids. If you're one of the folks who was "born ready", or chosen, to rise up as a hero in a post-apocalyptic world, and lead the scattered remnants of humanity to freedom after a nuclear fall-out, or over a dreaded robot army, or hordes of flesh-eating zombies….then you might be a "Vault-Dweller". These folks play the SHTF card for generally honorable purposes, and while this category of people might be arguably over-prepared, they can certainly be steered in the right direction regarding silver. Trouble with the Term Remember, the biggest problem with this acronym(SHTF) is that it's so general it can literally mean anything to anybody. SHTF is as broad a term as the word "mother". If I asked each of you what the word "mother" meant to you, I bet you could give me pages of definitions, all good and all having their place, but with each person saying very different things. SHTF could literally mean anything from this: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Still Concerned About The Gold & Silver Smash – Just Read This Posted: 17 Oct 2014 08:00 PM PDT from KingWorldNews:
"The natural remedies, if the credit-sickness be far advanced, will always include a redistribution of wealth: the further it is postponed, the more violent it will be. Every collapse of a credit expansion is a bankruptcy, and the magnitude of the bankruptcy will be proportionate to the magnitude of the debt debauch. In bankruptcies, creditors must suffer." — Freeman Tilden, A World In Debt | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 17 Oct 2014 04:00 PM PDT Submitted by James E Miller via Mises Canada, Back in the early 1960s, financial journalist Henry Hazlitt warned against efforts to create an international system to help facilitate the smooth transfer of currencies. Representatives from the world’s leading governments were attempting to increase liquidity in global markets. They wanted to make sure the banking system and sovereign governments would never had a lack of funds. Hazlitt was not fooled. “In plain English” he wrote, “they are pushing for more world inflation.” His words, though accurate, went unheeded. The International Monetary Fund, which was established decades earlier, was to play a role in facilitating endless inflation. Half a century later, the IMF has overseen a tumultuous business cycle that came to a screeching halt in 2008. Big, overleveraged banks were on the verge of collapsing; millions of people lost their jobs and their homes; governments spent billions of dollars to maintain their welfare safety nets. The end result, which is still ongoing, is stagnant economic growth with dim prospects for recovery. The IMF not only failed to stop the financial crisis from occurring, it encouraged the coordinated credit expansion that allowed housing bubbles in various industrialized countries. But now, the global financing giant appears to be having a “repent thy sinner” moment. In the Fund’s recent bi-annual report, the organization warns that the ultra-low interest policies of central banks is setting the stage for a new bust. According to the Guardian, the IMF says that “more than half a decade in which official borrowing costs have been close to zero had encouraged speculation rather than the hoped-for pick up in investment.” Does this sound familiar? Austrian-minded economic observers have been issuing the same warning for years. In the lead-up to the collapse of Lehman Brothers, mainstream commentators were aglow at the new prosperity. They thought the good times were here to last. Investment expert Peter Schiff was famously mocked on national television for saying that U.S. housing prices were unsustainable. Few economists sensed that anything was amiss, even as the Dow Jones Industrial Average hit historic highs. They were all doing their best Irving Fisher impressions; convinced that the market would never plummet but only keep rising. The housing bubble, of course, came and went. Austrians foretold its bursting and were roundly ignored by most in the econ profession. Brad Delong dismissed the Austrian theory of the 2008 downturn, while calling fear of credit expansion a product of homophobic anti-semitism. Paul Krugman – maintaining his image as an unserious curmudgeon who moonlights as an economist – provided the New York Times with a nice strawman of what constitutes the Austrian explanation of business cycles. Noah Smith recently said Austrians are victims of brain worms. Now the IMF appears to corroborate what Austrians have been saying all along: if you give banks cheap money, they will invest it in endeavors that aren’t always sustainable. This includes commodities and capital goods. Central bank monetary policy pumps up bank balance sheets, providing the incentive to drive up prices in goods that are deemed profitable. Not all of this investment is reflective of consumer demand. Inflation begets inflation, until the money spreads wide enough in the economy to raise prices at the consumer level. Central banks have two choices at this point: keep printing money or cease the expansion. If money keeps flowing into the system, the currency will soon lose all value. Should the central bank stop printing, there will be a recession of sorts. There is no alternative. The Austrian theory of the business cycle has never been a radical premise. It only stipulates that any workaround of the natural cycle of economic growth must come with ensuing costs. It’s a simple law: you can’t get something for nothing. A majority of economists believe the opposite. In other words, they believe in magic. The IMF may finally be waking up to the damage wrought by reckless credit expansion. Its warning couldn’t come at a better time. As Michael Pollaro of Forbes points out, money expansion is decelerating in the U.S. The slowdown in growth could explain the stock market sell-off seen in recent days. When it comes to whacky, out-of-sync monetary policy, a bust is always imminent. When or how the next will occur is unknown; but it will happen. The IMF’s proposed solution fails to fix the core of the problem. The Fund wants new regulations to curb excessive risk-taking and bubble activities. But the answer isn’t tougher regulation or more vigilant supervision. The only way to stop the relentless boom-and-bust cycle is to allow the market to coordinate individual time preferences with the supply of money. Interest rates can form on their own through the voluntary buying and lending of currency. So if the Austrian school was so prescient in predicting the housing collapse, and the international body responsible for supervising the global banking system agrees with its theory, where are the apologies? Why haven’t Paul Krugman and his statist comrades, at the very least, acknowledge some merit in the Austrian argument? The answer is obvious. The second that expansionist, counter-cyclical monetary policy is seen as mere procrastination and not a solution, it will lose all credibility. The big banks will lose their lender of last resort. And sovereign governments will lose their most prominent financier. Ambrose Evans-Pritchard, The Telegraph’s house inflation worshipper, wants permanent, massive money printing to keep the world economy afloat, even as five straight years prove its uselessness. Some people never learn; or won’t let the truth of things interfere with their secondary agenda. Nobody in the economic intelligentsia is implying that the IMF is staffed by paranoid cranks. They continue to ignore and belittle the Austrian school. This pompous and undeserved behavior will go on until it’s too late. In the process, the ivory tower disciples of Keynes will only further prove their intellectual bankruptcy. The average person never trusted them to begin with. And things certainly won’t change now. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The Gold Price Climbed Over Two Crucial Resistance Levels this Week Closing at $1,238.30 Posted: 17 Oct 2014 03:45 PM PDT
This week the GOLD PRICE climbed over two crucial resistance levels, Silver was flat, and the platinum metals posted a sorry week. Today Silver lost 10.6 cents today to $17.282 and the gold price closed Comex down $2.20 at $1,238.30.  :  The GOLD PRICE has painted a kind of V bottom, and conquered resistance at $1,225 and $1,237. So far, so good. All indicators still point toward outer space, but the gold price must pierce $1,260 and then $1,296. Chart on the left:Both silver and gold prices have five day charts that show "ceilings" at $17.60 and $1,245. Once through those ceilings, they'll run. If the Fed gets busy jawboning stocks up next week, that might put a little headwind against gold, but the charts still persuade me that silver and gold prices ended their three year correction with the bottoms on 3 October 2014. I have been buying silver and gold since then, and will buy more as it rises through every resistance level. Not a great week for stocks, but "a friend" or investors came in buying today to undo a modicum of the damage. US dollar index took a big hit. To back up my claim that as soon as the stock market scares them, the Fed will begin again puking out new Quantitative Easing like a 14 year old beer drinker, I point to statements yesterday by the head of the St. Louis Federal Reserve, one James Bullard. In comments on Bloomberg TV he said that he thinks "a reasonable response by the Fed in this situation would be to . . . Pause on the taper at this juncture, and wait until we see how the data shakes out in December." Two days earlier San Francisco Fed President John Williams told Reuters, "If we get a sustained, disinflationary forecast . . Thing I think moving back to additional asset purchases in a situation like that should be something we seriously consider." Pray, y'all, don't be naïve. These apparatchiki NEVER make public statements like this unless told to. This is the famous "jawboning" where they try to TALK markets up or down. Bullard's statement came one day after the S&P500 hit 1820.66, down 10% from the September 2,019.26 high. Were you a fly on the wall in Fed-ville, you would have heard a conversation in which Mother Janet or the others said, "We'll let it fall 10%, then we'll start jawboning." Alas, poor central banking criminals! The flood of a turning market waxeth so strong, its waves rise so high, that it overflows and washes away whatever feckless dikes they build. They might slow the flood slightly, but they cannot stop its covering the market. Lesson? Whatever their jawboning tries to convince you to do, DO THE OPPOSITE. Today the Dow rose 263.17 or 1.63% to 16,380.41 while the S&P500 chugged right alongside, adding 24 points (1.29%) to 1,8876.76. Y'all know that the media throw around big numbers -- like today's stock gains -- to impress your little hick minds, 'cause you ain't from NewYawkSiddy so you'll believe anything. But they ain't used to dealin' with no nat'ral born durned fool from Tennessee, who don't even believe a quarter unless he bites it. So I went and looked at them Dow and S&P500 charts, and LO! And behold! Gains yesterday and today left both the Dow and the S&P500 BELOW (as in, "underneath") their 200 day moving averages. So the patient's temperature has really come down, but it's still 108 degrees. I've checked most stock indices in the US and abroad, and all are below their 200 DMAs and below their last lows. This is a confirmed downtrend, globally.  Dow in silver has also plunged, from a peak at S$1,305.57 silver dollars (1,009.78 oz) to (S$1,200.72 (928.68 oz) today. It is below the 20 DMA, has cracked the upper boundary line it overthrew in September, and is hovering above the 50 DMA. Trend has reversed. Remember that I watch the Dow in Silver and Dow in Gold because they pinpoint not only highs in stocks but also lows in the metals. The US Dollar gained 26 basis points today (0.31%) to 85.29. It has established a downtrend that will run into the former Uptrend line about 84, where the 50 DMA also awaits. No change, trend abideth earthward. Dollar's break has occasioned rallies in the euro and yen, albeit lazy ones. Euro lost 0.38% today to end the day and week at $1.2760, but it should move higher. Yen has backed off the last two days, lost 0.51% today, and closed at 93.57 cents/Y100. Working its way higher. Turmoil in the bond markets this week as investors spooked out of junk bonds and crowded into US government treasuries. (Imagine that: considering US government debt as a "safe haven," after they have defaulted at least three times in the last 200 years.) 10 year treasury yield recovered some yesterday and today, but only to 2.199%. Y'all enjoy your weekend! 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. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Forget Ebola - Here's Why US Banks Are Now Extremely Vulnerable Posted: 17 Oct 2014 02:52 PM PDT Submitted by Simon Black via Sovereign Man blog, For a casual observer of the US economy (most “experts”), you could say that things look pretty good. Unemployment is at its lowest rate in six years. Earnings of S&P 500 companies are higher than ever, while their debt is lower than it’s been in the last 24 years. Nonetheless, rather than getting excited for good economic times, the big commercial banks are all battening down the hatches. They’re preparing for bad times ahead. I often stress the importance of being prepared, so in theory, that should be a great sign. But then, you look at what they are “defensively” investing in, and you see that what they consider as prudence is simply insanity. What banks are stockpiling these days are US government bonds, and they’re not doing this casually, they’re going nuts for them. In just the last month alone American banks increased their holdings of US treasuries by $54 billion, to a record $1.99 trillion. Citigroup, for example, held $103.8 billion worth of bonds at the end of June, up 19% from the end of last year. This is like preparing for an earthquake by running out and buying whole new sets of porcelain dishes and glass vases. All it’s going to do is make things more dangerous, and even if you somehow make it through the disaster, you have a million more shards to clean up. With government bonds you are guaranteed to lose both in the short-term and the long-term. Bonds keep you consistently behind inflation (even the deceptively named TIPS—Treasury Inflation Protected Securities), so the value of your savings is slowly being chipped away. But that’s nothing compared to the long-term threats of the US government not being able to repay the loans. Facing $127 trillion in unfunded liabilities – which is nearly double 2012’s total global output – and with no inclination to reduce those numbers at all, at this point disaster for the US is entirely unavoidable. Never before in history has a government stretched itself so thin and accumulated anywhere close to this amount of debt. So when the day comes, it won’t be a minor rumble. It will be completely off the Richter scale. These facts about the US government are in no way secret. Every bank out there knows it, yet they keep piling in. Why do they keep buying bonds that they know the government will never be good for? Even though people know in their guts that the government has no earthly possibility to ever repay its debt, on paper it’s a no risk investment. The US government’s sovereign debt has an AA+ rating after all. They might not make money off it, but no fund manager and investment banker is going to get fired for investing in “risk-free” US government debt. Under the rather arbitrary Bank of International Settlements Basel capital adequacy rules government debt rated at least AA continues to carry a “zero risk” weighting. Meaning that banks do not need to set aside capital against it. Beyond that, regulations imposed after the last crash to reduce risk require banks to hold $100 billion in liquid assets, which of course includes bonds. Thus, they are not only encouraged, but actually forced to buy government bonds. With a combined position of nearly $2 trillion in US government debt, against which they hold little or no capital buffer, US banks are now EXTREMELY vulnerable to a bond market sell-off. In the aftermath of the meltdown of 2008, banks were made to pay multi-billion dollar fines for having “knowingly sold toxic mortgages to investors”. Will politicians and central bankers ever be held responsible for not only “knowingly selling” their toxic debt to investors, but actually forcing it on the banks? The global economy shivered when the consequences of lending to subprime homebuyers came to fruition. Just imagine how it will quake when the US government – the largest subprime borrower in history – eventually defaults (or hyperinflates) its debt away. There’s nowhere in the world the tremors won’t be felt. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 5 Things To Ponder: "Buy" or "Run" Posted: 17 Oct 2014 01:45 PM PDT Submitted by Lance Roberts of STA Wealth Management, This past week investors took a blow from a sharp selloff in the financial markets. I have spilled quite a bit of ink in recent months discussing the probabilities of such as corrective event as the Federal Reserve’s current liquidity operation came to a conclusion this month. Now that the correction has occurred, at least to some degree, the question that must be answered is simply: “Is it over?” That is the basis of this weekend’s reading list which is a compilation of reads that debate this point. The bulls remain wildly bullish, believing that this is simply a “dip” in the ongoing “bull market.” The more pessimistic crowd sees the opposite. As I have stated previously, it is inherently important to consider both arguments to reduce the cognitive biases that lead to emotionally poor investment decisions. Is the correction over? Maybe. Or this could be a “sucker’s rally” before a deeper decline. A big concern at the moment, as stated above, is the conclusion of the Federal Reserve’s ongoing liquidity intervention program. The liquidity pushed into the markets by the Fed has been the driver behind the markets unbridled advance since its inception in 2012. The same thing occurred in 2011, which led to a topping process as QE2 was coming to an end.
I don’t have the answer, but this is what I will be “pondering” over the weekend.
1) 5 Reasons Why Stocks Are Falling by Steve Forbes via Forbes
He concludes with a bullish view:
Also Read: Could The Liquidity Crisis Be Back by Izabella Kaminska via FT
2) Does Wall Street Know Something We Don’t by Neil Irwin via NYT
Also Read: It’s Beginning To Look A Lot Like 2011 via GaveKal Capital Blog
3) If The Bull Market Has A Savior, This Is It by Christopher Hyzy via MarketWatch
Also Read: Bulls May Be Losing Control Of The Market by Anthony Mirhaydari via CBS MoneyWatch
4) 7 Reasons A Recession Is More Likely Than You Think by Doug Kass via TheStreet.com
Also Read: The Easy Money Stock Market Is Over by Barry Ritholtz via Bloomberg
5) The Potential For 10-years Of Negative Returns by Shawn Langlois via MarketWatch
Also Read: Don’t Buy Into A Rebound Rally by David Weidner via MarketWatch Also Read: 10 Signs The Selling Is Over by Jeff Cox via CNBC Also Read: What A Correction Feel’s Like by Jared Dillian via ZeroHedge
Have a great weekend. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gold Daily and Silver Weekly Charts - Life During Wartime Posted: 17 Oct 2014 01:33 PM PDT | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| What Happens With The Gold Price If Deflation Wins? Posted: 17 Oct 2014 01:05 PM PDT Since writing last month that inflation was on the rise, things have taken an abrupt turn. Look at the deflationary actions that have recently taken place:
Further, just last week the International Monetary Fund cut its global economic growth forecast for the third time this year. Why? It doubts how quickly "rich countries will be able to pull free from high debt and unemployment in the wake of the 2007-2009 global financial crisis." It's hard to argue that high debt levels are deflationary. And with the current expansion based largely on debt, we can't expect sustainably higher economic activity to be generated. So what happens if deflation wins? Even if we eventually get inflation, what happens to our gold investments if we first go through a deflationary bust? There aren't a lot of modern-day examples of deflation. The Consumer Price Index (CPI), as faulty as it may be, has registered only three declines since 2000, and all were short-lived. The CPI fell:
That's it. You can find other fleeting periods further back, but nothing long enough to draw any strong conclusions. The only example we have of true deflation is the Great Depression. The Great Depression SpeaksYou'll recall that the United States was on a gold standard at the time. But there's still a lesson to be learned about gold and deflation… On April 5, 1933, President Roosevelt issued an executive order forcing delivery (confiscation) of gold owned by private citizens to the government in exchange for compensation at the fixed price of $20.67/oz. Less than nine months later, he raised the gold price to $35, effectively diluting the dollar in every wallet 41% overnight and swindling everyone who had turned in gold. So even in the midst of one of the biggest deflations the world has ever seen, the government raised the gold price. We don't know exactly what an untethered gold price would have done during the Depression, but given its distinction in history as a store of value, it's likely to retain its purchasing power in a deflationary setting regardless of its nominal price. In other words, while the price of gold might not rise or could even fall, it would still provide monetary protection against an unstable economic environment, especially when you consider that most other assets would be in decline. The Gold Rush of the Great DepressionPerhaps a more direct example is the miners. It was the only way citizens could effectively own gold after Roosevelt's confiscation. The comparability isn't perfect, but again, there's something to learn. When the stock market crashed in 1929, gold stocks were part of the general wreckage. The market then rallied and recovered almost 50% of its losses by April 1930, with gold shares again tagging along. It's what happened next that gives us another clue about gold and deflation… When the bear market resumed in the summer of 1930, all securities sold off again—except gold stocks. Gold shares stayed basically flat until early 1931, when their appeal to the masses kicked into high gear. Look at how shares of Homestake Mining, the largest gold miner in the US at the time, and Dome Mines, Canada's senior producer, performed during the Great Depression.
During a period of soup lines, crashing stock markets, and falling standards of living, investors fled to the only gold they could own at the time. Yes, volatility was high throughout the Depression, with occasional wild price swings, but after the 1929 crash most of the volatility was to the upside. From Homestake's chart, you get a clear picture of the rush to own gold compared to the market as a whole:
Notice the large spike down in both Homestake and the Dow during the 1929 crash—but then look at Homestake's recovery immediately afterward, returning close to its old high. You'll then notice the stock took almost two years to exceed its old high, but once it broke out, it was off to the races. The stock doubled four times in five years during a seven-year run to its peak after the '29 crash. The conclusion? If history is any guide, gold can hold its own against deflation. Its status as a safe-haven asset during one of the greatest times of economic distress was demonstrated clearly by investors buying the stocks. All this said, the overriding concern is that in a fiat system, any deflation will be met with an inflationary overreaction. And the worse the deflation, the more extreme the overreaction will be. QE5, anyone? There's turmoil ahead, and almost certainly another crisis. The recent decline in the gold price has only served to make our insurance cheaper. Accumulating physical bullion will offset whatever form that crisis may take. The Hard Assets Alliance can help, learn how. This article was published in the October issue of the SmartMetals Investor—a free, monthly newsletter from the Hard Assets Alliance featuring the precious metals news and commentary investors need today. The full issue—including the real reason to own precious metals, why the strong dollar will pass, and what that means for gold, and a silver lining for silver—is available now with free sign up to the SmartMetals Investor. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| These 8 Euro Countries COLLAPSE Into DEFLATION! Posted: 17 Oct 2014 12:36 PM PDT Deflation could destroy a nation rather rapidly. Some deflation however is good when assets prices are overvalued as they are now. Today, deflation is being used as a weapon in Europe against the people, forcing austerity on the citizens, strangling them to poverty. The objective is to create a... [[ This is a content summary only. Visit http://www.GoldSilverNewsBlog.com or http://www.newsbooze.com or http://www.figanews.com for full links, other content, and more! ]]  | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The Development and Opening of China’s Gold Market Posted: 17 Oct 2014 12:27 PM PDT This is a translation of a speech delivered by Xu Luode, Chairman of the Shanghai Gold Exchange, at the LBMA Bullion Market Forum in Singapore on 25 June, 2014. Thank you for inviting me to attend the LBMA Singapore Forum. It's my great pleasure to be here. So now let me give you a brief introduction on our country's gold market. First of all, let us all have a look at China's current gold production. For seven consecutive years, gold production in China has been the largest in the world, with nearly 430 tonnes produced last year. China has the second- largest gold reserves in the world. This is the latest figure. Before that, China had been ranked third.
Next is our consumption of gold. According to the statistics compiled by Mr Zhang Bingnan, gold consumption reached 1,174 tonnes last year, and that is also the largest in the world. I slightly disagree with Mr Zhang, as I think we might have consumed even more than that. I think that it is always a good thing to have a higher figure, rather than a lower one. There are two factors supporting consumption in China's gold market. One of them is jewellery. China has an extremely high level of jewellery consumption. Such growth in jewellery consumption shows that China's level of consumption, as in gold consumption, is in a very healthy state. The other one would be gold bullion, as residents are now allocating gold to their asset allocation, and this volume is currently also high. Next is imports. Data on China's gold imports has not previously been made available to the public. However, gold has historically been imported through Hong Kong, and Hong Kong is highly transparent, disclosing details such as the number of tonnes of gold imported on a monthly basis. Last year, China imported 1,540 tonnes of gold. Such imports, together with the 430 tonnes of gold we produced ourselves, means that we have, in effect, supplied approximately 2,000 tonnes of gold last year. The 2,000 tonnes of gold were consumed by consumers in China. Of course, we all know that the Chinese 'dama' [middle-aged women] accounts for a significant proportion in purchasing gold. So last year, our gold exchange's inventory reduced by nearly 2,200 tonnes, of which 200 tonnes was recycled gold. Seeing such a tremendous market in China last year, many of you are very concerned about what will happen not only this year but also in the future. In my opinion, there will certainly be some differences this year compared to last year. One factor is that the growth rate is slowing down. In the first quarter of this year, gold consumption was still increasing and the import volume remained steady. In terms of the general trend, Mr Albert Cheng from the World Gold Council has estimated that the per capita gold consumption is only 4.5 grams in China whereas it is as high as 24 grams worldwide. The difference of nearly 20 grams represents the potential growth of the physical gold market in China. So I think that China still has a significant growth potential. Many of you are very concerned about the structure of the gold market in China at the moment. China is a country that is undergoing a significant degree of market transformation. China's gold market has only undergone 10 to 12 years of development, but has its own distinctive features. There are differences when compared with the gold markets of some of the developed countries and even with Singapore's gold market. So I call it 'One Body with Two Wings', where 'One Body' refers to our Shanghai Gold Exchange, and 'Two Wings' refers to the sub-market of our commercial banks, as well as the sub-market of our futures exchange. Many of you asked if I have seen ourselves as being too important. Why are we One Body, while others are Two Wings? It is not that I have seen ourselves as too important. I have always held the opinion that any market must have physical commodities as the basis. Be it bulk commodities or other trading markets, transactions are based on physical commodities, and our gold exchange is one based on physical commodities. An exchange with no physical commodities as the basis may grow to a gigantic scale, but there will still be some restrictions when it comes to supporting the physical economy or wielding influence on other aspects of the market. Therefore, I think that as a market trading mainly physical commodities while also trading derivatives, our gold exchange should indeed be playing the role of a central hub in China's gold market. As for the current gold market of our commercial banks, Mr Zhou Ming will be providing an explanation later in his presentation. Our futures exchange is not represented here today, but I can tell all of you that China's futures exchange has also been doing very well in many aspects. Many of you here today are their members. At the SGE, trading of physical commodities accounts for 35% of total transactions, and investment trading, or rather, derivatives trading accounts for 65% of the total transactions. I believe there will still be changes to this ratio in the future, as in the percentage of transactions accounted for by derivatives may increase further. In my opinion, the desired ratio should be something like 20%/80% or 10%/90%. As for our exchange, let me give a brief introduction to all of you as some of you are familiar while others are unfamiliar with it. The SGE was established in 2001 and officially commenced operations in 2002. Chart 2 shows the transaction volumes of the SGE's products since 2009. As at the end of last year, we have traded more than 11,000 tonnes of gold and 430,000 tonnes of silver. Despite relatively large fluctuations in gold prices this year, we have still managed to maintain a 17% growth in our gold trading volume compared to the corresponding period last year. So the momentum is still healthy. Besides, we have established a system for logistics, delivery and distribution, as well as a funds clearing system. It should indeed be said that the development outlook is still promising.
In terms of development opportunities for the entire gold market in China, I have mentioned earlier that there is a tremendous potential for our physical gold market. However, we think that our market as a whole is facing three critical opportunities. The first one is a critical period of strategic opportunities. The keynote speaker, Jeremy East, from Standard Charted, explained this point very well earlier today (Jeremy's speech is reproduced on page 10). He talked about the impact of China on the world economy, the global impact of RMB internationalisation and the global impact of China's gold market. China's economy is developing at a medium to high speed, with an annual growth rate of 7.5%. I think this level of growth is sustainable for many years to come. Therefore, such a rate is a significant factor supporting the development of China's gold market, as well as a fundamental factor supporting the flow of gold from West to East. So in this regard, China's gold market is currently still in a period of strategic development. The second one is a period of accelerated development. With China's investors becoming increasingly mature, participants in China steadily increasing in number and our products getting richer day by day, especially our continually enhanced innovation capabilities, our market is experiencing a period of accelerated comprehensive development. The third is an increasing international presence. Until recently, China's gold market was a closed market. Other than imports, China's gold is invested in by domestic investors and onshore funds. We think that China's gold market has reached a new phase of opening up. It is because the extent of China's economic openness is getting increasingly larger, and our RMB internationalisation is accelerating, especially when we have set up a free trade zone in Shanghai in which free conversion of RMB is possible. Another reason is that China's gold market has now developed to a reasonable size. That is why we think that the time has come for China to open up its gold market to the world. As well, we should have an overall goal for the opening up of China's gold market. Just as Singapore's Minister for Trade and Industry told us today that Singapore has an overall goal and overall plan for its gold market, China also has an overall goal for the opening up of our gold market to the world. First of all, we should leverage the opportunities presented by RMB internationalisation to open up China's gold market gradually to the world. Secondly, we have technically implemented such opening up through the establishment of our Shanghai Gold Exchange International Board. So how do we open up to the world? The international board will help to open the door and invite everyone into China's gold market. Thirdly, we find that we should have a target of serving global investors to create an influential international gold market in China. In other words, China should still have the opportunity to become a prominent gold market, and Shanghai should become a global centre for gold trading. I think we are rather confident about this. This is our goal. So has such a goal obtained the support of the Chinese government, or rather, the support of our regulatory authorities? I am very pleased to say that this is indeed the case. The international board has obtained approval from our central bank, the PBOC, and received support and made the relevant institutional arrangements. Many of you were very concerned about whether you can trade with US dollars or offshore RMB, and how to participate in trading. Let me tell you, we have now completed the design such that you can trade on the international gold board with your offshore RMB and offshore foreign currency through a free-trade account in the free trade zone. One week before I came here, we signed an agreement with the regulatory authorities for the use of free-trade accounts. So what are the specific details of the design of our international gold board? I have thought for a long time about how best to explain this clearly to all of you. It is, in fact, very simple. First of all, who are the participants, as in the ones who can participate in trading on our international board? Well, any foreign legal entity or any legal entity that will be established in the Shanghai Free Trade Zone is eligible to apply to become a member of our gold exchange. Of course, there will be many applications, and there will also be some criteria and qualifications for the admission of members. Similarly, there are strict requirements for those wanting to become members of the LBMA. There would still be some requirements in order to participate. We welcome anyone meeting these requirements to join us. Those who cannot meet our requirements can still participate in trading through any of our future international members who can act as brokers. Secondly, the transactions on our exchange are priced in RMB. I believe that such a design will enrich the international gold market and make it more credible. We have US dollar pricing. We have London gold pricing. And we can also have RMB pricing. Earlier, I have reported on the data that physical gold consumption in China's gold market has, in effect, reached more than 2,000 tonnes last year. All of you here are experts in this industry and are very clear about the percentage accounted for by these 2,000 tonnes of physical gold in the global market. So I think that RMB pricing should enhance the entire price mechanism. After fixing the price in RMB, you can participate in transactions on our international board with your offshore RMB or even offshore foreign currencies. These days, I often have friends asking me whether we have two boards, one called the international board, and the other called the domestic board. We have, in effect, only one board where domestic and foreign investors trade together with onshore and offshore funds based on a single price. So they are, in fact, together, not separate. If that is the case, what is the purpose of setting up the SGEI? It has three main responsibilities. The first one is to serve as an IT system interface enabling international members to trade on our main board. The second role is to implement the clearing of funds. I mentioned earlier that trading would be done through an FT account. Incoming offshore funds should still be subject to regulation, meaning that incoming funds can only be used to invest in the trading of products on our gold exchange. You cannot use these funds to do any other thing, such as to buy properties or stocks in China. So the account is needed for you to place your money in it. This account will be opened in the name of our SGEI. Therefore, it serves the role of the clearing and management of funds. And what is the third role? We have created the role of transhipment trade. Many international gold experts have mentioned that Shanghai could serve as a centre for the transhipment of gold. In other words, countries in Southeast Asia or certain parts of East Asia could import gold through Shanghai. So we have, in fact, adopted this suggestion. As such, we designed an important function on our international board for it to be equipped with the ability to conduct transhipment trade. This is an institutional arrangement. For the purpose of such an arrangement, we have set up a 1,500-tonne gold vault in the Shanghai Free Trade Zone. This can serve as a delivery store for both gold imported into China and transhipped to other destinations. So what is the current status of preparations for the international board? As our market is now transforming from an entirely domestic market to an international market, some of our rules have been adapted. We are also soliciting opinions on this matter from some of our participants, and this is more or less completed. Secondly, the IT system has been built and is now technically online, with the capability to conduct transactions. What we are doing right now is to invite international members to become members of our exchange. Many of the banks, corporations and investment companies or funds that are present here today have established very good relations with us. I might also have sent our invitation to many of you. At this stage, we are only engaging in discussions. We would like to see all of them become members of our exchange, and their responses have been encouraging. They said that they would be very willing to participate in China's market and become a member of our exchange. We expect to launch this international board officially before the end of 2014. Another thing I would like to elaborate on is that, as our international board is priced in RMB, there are many other opportunities involved. As we all know, there is a difference in interest rates between onshore and offshore RMB funds, or between onshore RMB funds and foreign-currencies. Furthermore, as transactions are quoted in RMB, you are, in effect, using RMB during settlement. So there is an exchange rate difference involved here. We all know that China's exchange rate has appreciated continually over the past few years. However, the RMB exchange rate is now fluctuating more flexibly in both directions, sometimes appreciating and sometimes depreciating. The degree of daily exchange rate fluctuations in China was 1%, but it has now relaxed to 2%. If the exchange rate fluctuates by 2% daily, I suppose this is not a small amount. In other words, investing in such a product from our gold exchange would involve gold price fluctuations, as well as interest rate and exchange rate fluctuations. Therefore, it is, in effect, a three- in-one product that provides investors with the potential for profit. I think China's gold market is developing very well. So I am very confident about the launch of our international board. I am also very optimistic about the development of our gold market as a whole. So I would like to take this opportunity to thank all of you for your support and welcome your participation in our market. Together with all of you, we will take our global gold market to greater heights! Thank you for listening. Chairman of the SGE Mr Xu Luode, Bachelor of Economics and senior accountant, is the Chairman of Shanghai Gold Exchange. He is also the Vice Chairman of China Gold Association, the Vice Chairman of China Payment and Settlement Association, the Executive Member of China Society for Finance & Banking and the Executive Member of China Numismatic Society. Before taking the current position, Mr Xu Luode served successively as the Deputy General Director of the General Office in People's Bank of China, the Director General of Payment and Settlement Department in People's Bank of China, and the President of China UnionPay. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Why Malpractice from the Fed Will Undermine Growth Posted: 17 Oct 2014 12:26 PM PDT The Wall Street Journal recently ran a story entitled "Devaluation Gains Currency," which began with this sentence: "The world's export engines are sputtering, putting new pressure on many nations to weaken their currencies to jump-start their economies." That tactic worked so well — NOT — in the early 1930s, when slumping nations desperately engaged in wholesale devaluations, a phenomenon dubbed "beggar thy neighbor" at the time. That miserable experience led to new post-WWII institutions that were created to prevent such a calamity from happening again. We're not about to experience anything on the scale of the Great Depression, but what is unfolding demonstrates the poverty in economic understanding these days. For the Federal Reserve to bellyache about countries weakening their currencies is a hoot… The reason for disappointing sales, whether overseas or domestic, is bad government policies: excessive taxation, job-killing labor regulations, obscene levels of government spending (governments don't create resources; they seize them from the producers of products and services), an expanding scale of government/corporate cronyism, a never-ending blizzard of bewildering rules and edicts and, of course, misbegotten monetary policies. If countries focused on slashing tax rates and stabilizing their currencies, the pulse of commercial activity would quicken overnight, thereby creating conditions — read: pressure — for other growth-creating reforms. Adam Smith in The Wealth of Nations demolished the mercantilist dogma that erecting barriers to imports and subsidizing exports was the way to wealth creation. Trade is not zero-sum; both parties benefit from a transaction. A merchandise trade deficit is not the equivalent of a company's losing money; it's an accounting artifact (with brief exceptions, we have had a merchandise trade deficit for more than 400 years, ever since Jamestown was settled in 1607). For the Federal Reserve to bellyache about countries weakening their currencies is a hoot, considering the U.S. has been a chronic currency manipulator since it blew up the gold-based Bretton Woods system in 1971. The latest bout of monetary policy wrongdoing was created in the early part of the last decade by President George W. Bush's Treasury Department, with the connivance of the Fed. It was decided to gradually weaken the greenback in order to "combat" our trade shortfall. The result has been catastrophic. When a crucial currency is undermined, money races to such hard assets as commodities and houses. Productive investment withers. The price of oil, which had averaged little more than $21 a barrel since the mid-1980s, shot off like a rocket. That surge led many to believe we were running out of the stuff, which was a catalyst (along with the unfounded fear the Earth was about to be fried by the sun) for hundreds of billions of dollars in subsidies for "alternative energies." When monetary policy strays from maintaining a sound currency and dealing decisively with the occasional financial panic, mischief always results. The sobering danger in this is not the lost economic growth but the political consequences that arise when democracies appear to be floundering and the days of progress are perceived to be largely over. These circumstances are a breeding ground for tyrannies. The Federal Reserve is reportedly upset about the dollar's recent strength, fearing this will foil its desire to create a certain amount of inflation and thereby retard economic growth. In the Fed's mind a more muscular greenback will also hurt exports, which will be another growth dampener. The result, the central bank is muttering, may be the postponement of previously hinted-at increases in interest rates, starting in mid-2015. The Fed's new fears are bad news, because acting on them will bring about that which Janet Yellen & Co. is purportedly worrying about: a weaker economy. It never occurs to the central bank that its actions after the 2008-09 panic have been the biggest barrier to a vigorous economic rebound. Credit is critical for commerce, from financing inventories and purchases to expanding existing businesses and starting new ones. The depth and breadth of U.S. capital markets has been a huge advantage in our ability to nurture new companies and provide the lubrication for business' everyday needs. The Fed's unending schemes for "stimulating" the economy — from Operation Twist to all the variations on quantitative easing — have had the unintended consequences of seriously distorting and hindering the functioning of our credit markets and, hence, our economy's ability to expand. Interest rates are the cost of credit. Suppressing these prices clogs the arteries of commerce. The federal government has had easy and cheap access to money (deficits without tears), as have most large companies. For other commercial enterprises, however, the situation has been a lot more difficult and uncertain. The Fed publicly frets over the threat of deflation. But its actions are deflating the economy… For example, the size of credit lines is reduced, the conditions under which money is loaned more stringent and personal guarantees far more frequently demanded. Perversely, bank regulators still cast a gimlet eye over most loans to most non-big businesses. "Strengthen your capital position" is an ongoing regulatory admonishment to banks, which has the effect of suppressing vibrant lending. The Federal Reserve has sucked up vast amounts of cash to finance its purchases of long-term government bonds and mortgage-backed securities. The private sector has been hurt correspondingly. The Fed publicly frets over the threat of deflation. But its actions are deflating the economy, not to mention commodity markets. Speculators long in gold and oil, take note. Our central bank's obese balance sheet has blinded observers to the contractionary effects of the Fed's actions. Yes, bank reserves have proliferated faster than horny rabbits. But thanks to regulatory restraints and the pressure to load up on more capital, as well as the addictive nature of receiving interest on those excess reserves, a corresponding expansion in lending hasn't occurred. The growth in the M2 money-supply number has been anemic, a stunning contrast with the 1970s, when a bulge in reserves far smaller than today's led to an explosion in the cost of living. In those days the Fed bought only short-term Treasurys, regulatory barriers to lending were comparatively mild, and there was no across-the-board suppression of the price of credit. The Federal Reserve did immense harm in the 1970s. It's doing so again now, albeit in a far different manner. Astonishingly, then and now, criticism of the Fed is mostly muted. This ever more powerful and disruptive entity is the ultimate Teflon-coated institution. Regards, Steve Forbes Ed. Note: Few have dared to criticize the almighty Federal Reserve… rebellious sorts, mostly, audacious enough to think the U.S. central bank isn’t infallible. Most find refuge in these daily reckonings. Often times, we’re lucky enough to sit down and have frank discussions with them. Our friend, Steve Forbes, obliged us last week at his office in New York. Our managing editor, Peter Coyne, spoke with him about money… investing… and human nature all in the context of Mr. Forbes’ newest book Money: How the Destruction of the Dollar Threatens the Global Economy – and What We Can Do About It. You can watch the first snippet of that interview right here: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| LBMA gets 8 proposals to replace century-old gold fixing Posted: 17 Oct 2014 11:18 AM PDT By Nicholas Larkin LONDON -- Intercontinental Exchange Inc., the London Metal Exchange, and CME Group Inc. and Thomson Reuters Corp. are among firms shortlisted to develop and run a replacement for the century-old London gold fixing benchmark. Autilla Ltd. (Sapient) and EBS are also on the short list, the London Bullion Market Association said in a statement today. Ten companies submitted eight proposals, some of them joint. The LBMA, which said last week firms will present at a seminar on Oct. 24, expects a market consensus to emerge next month and the chosen method adopted by year-end or early 2015. ... ... For the remainder of the report: http://www.bloomberg.com/news/2014-10-17/lbma-gets-8-proposals-to-replac... ADVERTISEMENT Anglo Far-East is a global market leader and innovator that for more than two decades has provided private purchase, vaulting, security logistics, transport, and liquidation of allocated gold and silver bullion outside of the banking system. AFE clients include individuals, family offices, and institutions like banks and regulated funds. Anglo Far-East: Think Outside the Bank Here's what one of our generationally wealthy clients has to say about AFE: http://www.afeallocatedcustody.com/research/teleconferences/download-inf... To get started, please visit: https://secure.anglofareast.com/ Anglo Far-East: Think Outside the Bank 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: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| China gold production seen falling, prompting more imports Posted: 17 Oct 2014 08:58 AM PDT China Gold Output Growth to Slow to Less Than 1% By 2018, BMI Says By Jan Harvey LONDON -- Growth in gold mine output from No. 1 producer China is set to slow significantly in coming years in the face of declining ore grades and waning profitability, analysts Business Monitor International said on Friday. Lower mine production will pave the way for rising imports to meet persistent strength in demand from Chinese consumers, BMI analyst Xinying Chia said, while domestic mining companies will also look overseas to boost production. ... ... For the remainder of the report: http://www.reuters.com/article/2014/10/17/china-gold-mining-idUSL6N0SC2O... 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: 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: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| James Rawles Ebola could trigger Collapse Posted: 17 Oct 2014 08:47 AM PDT James Wesley Rawles Ebola could trigger collapse James Wesley Rawles is back on the show today. We talk about general preparedness as well as preparing for specific threats like Ebola, economic collapse and grid failure due to cyber attack or solar flares. His new book, Liberators will be out... [[ 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! ]]  | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Still Concerned About The Gold & Silver Smash - Just Read This Posted: 17 Oct 2014 07:56 AM PDT  Today King World News is featuring a piece by a man whose recently released masterpiece has been praised around the world, and also recognized as some of the most unique work in the gold market. Below is the latest exclusive KWN piece by Ronald-Peter Stoferle of Incrementum AG out of Liechtenstein.This posting includes an audio/video/photo media file: Download Now | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| “Save Our Swiss Gold †- Game Changer For Gold? Posted: 17 Oct 2014 05:36 AM PDT We believe that the “Save Our Swiss Gold” campaign has the potential to be a game changer in the gold market - both in terms of the ramifications for the current global monetary system and in terms of higher gold prices. There has been a lack of coverage of this important story and there is therefore a lack of awareness about the possible implications for the gold market. Thus, in the weeks prior to the referendum on November 30th, we are going to analyse the referendum, the important context to the referendum and the ramifications of a yes or a no vote. Mark O’Byrne, Head of Research GoldCore | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gold Benefits from Market Uncertainty Posted: 17 Oct 2014 05:09 AM PDT The outlook for gold is now more positive than it has been for some time. After a prolonged period of low volatility as funds invested in ever-greater risk, markets have snapped and volatility has jumped. In short, we are swinging very suddenly from complacency to reality. Financial markets hit a serious air-pocket this week, with a collapse in US Treasury bond yields in a dash-for-cash, illustrated in the chart below. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Why J.P.Morgan did not succeed in 1929 Posted: 17 Oct 2014 02:16 AM PDT Firstly, from the campaign team in Switzerland, a ‘very warm thank you’ for all contributors thus far to the Swiss Gold Initiative campaign fund.These funds will be fully spent on reaching some 80% of the Swiss population via social media. The national campaign, with door to door leaflets and road side billboards, will officially kick off next week with … Read the rest | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| In Praise of Traditional Family Values… Sort of Posted: 17 Oct 2014 02:09 AM PDT Dear Reader, In a lot of ways, I’m a pretty traditional guy, and I happen to like a lot of the “traditional ways of life.” That said, I’m not a supporter of any family values efforts, and you’ll see why below. I think it’s important to rescue the discussion of values from politics and kneejerk reactions. These are significant subjects, and for a long time, they’ve been almost impossible to discuss. I will not, however, discuss abortion in this issue of The Room. I’ll jump on that third rail some other time. When I’m done, Doug French will explain how the virtue of saving (AKA thrift) has been cut out of the modern world. Let’s get to it. In Praise of Traditional Family Values… Sort ofThe Fed: Strangling the Saving Ethic and ValuesDoug French, Contributing Editor Saving was once drummed into our heads as the prudent thing to do. How many times did you hear, “A penny saved is a penny earned”? Now some argue it’s not worth anyone’s time to pick one up. Blogger Shane of Domain Shane fame gives a number of reasons for not picking up pennies. (He will pick up quarters.) He’s figured out that he earns two cents a second, so stooping down to pick up a penny is a losing proposition. “The time it takes to pick up a penny, I could have kept moving and made double what I put in to it,” writes Shane. The writer is in his 40s and says picking up pennies is bad for your back, writing, “… if I hurt something, it will take 125 years of picking up pennies to pay for the doctor.” Shane also worries about hygiene, complaining that money is dirty. Uncle Sam can’t even turn a profit making the coins, losing millions making pennies that cost 1.83 cents each. If we shouldn’t pick up pennies, what should a person do with a tax refund? Best-selling author John P. Strelecky says don’t save money you overpaid the IRS; spend it on making memories. Live your life for today, says the life coach. Strelecky’s point is the saved money’s not going to grow much anyway. While John Maynard Keynes was worried about people saving too much, I’m always stunned to see articles like “Financial Hoarding: The Downside of Saving Too Much.” Personal finance blogger Connie Mei writes as if saving is a mental defect. You’ve got it bad, she claims, if you feel anxious about spending money and think about ways to save. I don’t think Ms. Mei’s parents grew up during the Great Depression like mine did. She says you should live a little, and besides, your money isn’t earning any interest in a savings account anyway. The idea of “saving for a rainy day” wasn’t about the amount of interest you’d receive on the money. When most of the population worked on a farm, hired hands didn’t work on rainy days and certainly didn’t get paid when they didn't work. Diligent types like my grandfather would work on his equipment when the rain kept him out of the fields, while many of his neighbors spent the day in the local bar. One has to “make hay while the sun shines,” and the prudent farmer made sure his equipment was ready to seize the moment. What’s happened is the Federal Reserve has destroyed the saving ethic that’s as American as apple pie. Around the time Nixon was pulling the plug on what remained of the gold standard, the personal savings rate in America was north of 12.5%. These days, it’s 5.4%, and that’s up from 2.2% in the boom year of 2005. The 2008 crash tightened people’s belts. However, prudence is not bursting out all over. Wall Street Journal reporter Mark Whitehouse says the personal savings rate has increased “in large part because it counts reductions in personal debt, such as mortgages and credit-card balances, as savings.” But most debt reduction, Whitehouse points out, has been driven by defaults, rather than paying back. It’s clear that since the last tethers tying the dollar to gold were cut, money production has soared, and a casualty has been the savings ethic. When the government’s money was gold or tied to it, a worker simply had to exercise the discipline to put some money away every paycheck. Now the dollar earns zip, while its value is eroded by inflation. (Send your thank-you letters to the Eccles Building, Washington, DC.) Janet Yellen (and before her, Ben Bernanke) doesn’t want your money sitting in savings. If you can’t bring yourself to blow it at the mall, Fed chairs want your money in stocks or other risky assets. As Jim Grant, founder of Grant’s Interest Rate Observer, said on CNBC the other morning, “The Fed was wanting us all to get out of savings accounts and into junk bonds and equities.” But there’s a problem with that. In his book, The Ethics of Money Production, Jörg Guido Hülsmann explains: Carpenters, masons, tailors, and farmers are usually not very astute observers of the international capital markets. Putting some gold coins under their mattress or into a safe deposit box saved them many sleepless nights, and it made them independent of financial intermediaries. Hoarding paper money is financial suicide, and savings accounts yielding next to zero are the same thing. So, the average person must become a securities expert, follow financial news, spend time constantly supervising one’s investments, and have a good dose of luck. Even if the average person can do all that, Professor Hülsmann points out, “Inflation forces them to spend much more time thinking about their money than they otherwise would.” Hülsmann continues: Similarly, people will tend to prolong the phase of their life in which they strive to earn money. And they will place relatively greater emphasis on monetary returns than on any other criterion for choosing their profession. Government money creation makes people materialistic. Career, family, and home decisions are driven solely by monetary concerns. “Many of those who tend to be greedy, envious, and niggardly anyway fall prey to sin,” writes Hülsmann. “Even those who are not so inclined by their natures will be exposed to temptations they would not otherwise have felt.” The Fed’s grandiose monetary scheme has taken price fixing to a new level, creating what Grant calls a government-imposed bull market. “Interest rates now are not discovered as one discovers prices in a free market. They are administered and imposed,” he said. These imposed rates create asset bubbles and force common men and women to become gamblers and speculators. Price controls haven’t worked in 4,000 years of government attempts. This government interest-rate imposition doesn’t work either; instead, it distorts the capital structure, the economy, and, most important, people’s values. The result is that a generation of people are being made poorer at the hands of the Fed. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Marc Faber: Get Gold, Get Ready for QE99 Posted: 16 Oct 2014 12:00 PM PDT Tapering QE to zero, if it happens this month, will be temporary reckons Marc Faber... SWISS-BORN and -educated Marc Faber's distinct voice is a common sound on CNBC and Bloomberg TV when it comes to big-picture forecasting in investments, says Sumit Roy at Hard Assets Investor. Publisher of the Gloom, Boom & Doom Report, Faber's views on the markets are highly regarded. Here I spoke to him about the recent moves in stocks, the Dollar and gold. HardAssetsInvestor: What's your view on the stock market? Is the recent volatility a sign of a top or will stocks hit new records by the end of the year? Marc Faber: The likelihood that we have something more serious now is quite high. There has been considerable technical damage in the market, with approximately half of Nasdaq and Russell 2000 shares already down 20% or more from their highs. Combine that with the fact that Treasury bond yields have again declined meaningfully, and it suggests the economy is not on a very sound footing. We are in a period of elevated prices. From real estate to equities to bonds, there is a lot of excess. Going forward, the return on these assets will be very disappointing. HAI: The strength in the bond market has surprised a lot of people. We're seeing record-low interest rates for German and other European bonds. And even in the US, the 10-year yield is now hitting a new low for the year. Why are investors buying these bonds? Marc Faber: The bond market is manipulated by central bank buying of government debt. Yields are lower than they would otherwise be if the Fed and other central banks didn't buy them. Secondly, the decline in yields may be a sign that bonds buyers don't believe in the global recovery story when it comes to the economy. In fact, the low yields on bonds would suggest that we may be entering a period of deflation. HAI: The US Dollar has been rising and hit a four-year high earlier this month. Is the Dollar going to continue to rally from here? Marc Faber: The trade and current account deficit of the US has been coming down because the balance in the energy trade has improved a lot. The US is almost oil self-sufficient. It's become the largest crude oil producer in the world. And even though the US economy is not doing particularly well, it's in a slightly better position than the European economy. Thus, there are some reasons the Dollar should be stronger. That said, based on sentiment figures, everybody is now bullish on the US Dollar. Usually when you have this kind of consensus, what can happen is a powerful contra-move. In other words, the Dollar could weaken for a while. That would be good for stocks and precious metals. Additionally, if the Fed finds that the Dollar is too strong, it can print money. But you just don't know what these academics will eventually decide to do. That's why I recommend investors have a diversified portfolio, because nobody knows what the world will look like five years from now. HAI: The Fed has said it's going to end QE this month and raise interest rates sometime in 2015. Do you believe that will happen? Marc Faber: It won't raise interest rates for a long time. Certainly not in real terms. It's possible that it'll end QE4 and that the asset purchases come to an end. But only temporarily. When it introduced QE1, my view was that it would go to QE99. And I still maintain that view. HAI: You're saying that it'll have to come back and do QE again sometime in the future? Marc Faber: Yes. One of the reasons we have weak growth in the Western world, and in the US, and in Japan, is because of government interventions with fiscal policies. Spending – supported by money printing – has led to an ever-expanding government as a percent of the economy. And the bigger the government is, the slower economic growth will be. The extreme is when the government controls everything in the economy, such as under the socialist/communist planning system. HAI: One way investors can hedge against all these risks is gold. We saw prices reach a low of $1183 last week, but it's bounced back since then. What do you make of gold right now? Marc Faber: I've advocated owning gold since the late 1990s. It is a safe investment in times of monetary uncertainty and monetary inflation. I would keep roughly 25% of my assets in gold. HAI: Do you consider it an investment that's going to stay stable? Or something that can increase in value from current levels? Marc Faber: We had a huge bull market in gold that outperformed just about any other investment between 1999 and September 2011. We're now three years into a correction phase. Can gold drop below $1000 first before it goes up meaningfully? It's possible. Because as you know, there has been some manipulation in the gold market. However, gold will go higher over time. HAI: Do you have any thoughts on oil's big decline? Prices are down $20-25 per barrel since June. Marc Faber: The markets have become quite volatile, largely because of money printing. This concerns not just oil, but all commodities. The price of corn, wheat, soybeans are all down around 50% from the highs. They can be down for a while, but in my view, they will not stay down. |
This has to be a joke. I don't think this is a joke. Please, someone tell me this is a joke.
At present, US dollar accounts for roughly 61% of the world's foreign exchange reserves.
As we finish up this Silver Myth-Smashing series, I'd like to say how I've been amazed over the past several weeks to hear so many personal accounts from folks who've been inspired to buy even more silver. To read account after account from shield brothers, charging headlong into High-Frequency-Traded firestorms, and inflicting even more silver casualties upon our common foe, is a most refreshing thing.
Economists and politicians continue to attempt to lower high debt relative to economic output (debt/GDP), resp. stop its further growth. We think the ratio between the size of the public debt and gross domestic product is not very meaningful. The uselessness of this data can be seen from the fact that the calculation of GDP has recently been changed. An increase in GDP must – ceteris paribus – lower indebtedness relative to GDP. This happened in the US, where overnight GDP was reported to be 3% higher than previously believed, by suddenly including intangible values such as licensing fees and R&D spending in the calculation. As a result, $470 billion. were pulled out of the statistics hat. This is roughly equivalent to the economic output of Belgium.
| You are subscribed to email updates from Save Your ASSets First To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
| Google Inc., 20 West Kinzie, Chicago IL USA 60610 | |
No comments:
Post a Comment