Gold World News Flash

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• The End of the US Dollar Imperium
• Silver Buyers "Not Investing, But Stacking"
• First Majestic CEO wants silver miners to form counter-cartel against futures shorters
• Foreign central banks cut U.S. bond stakes to lowest since May
• First Majestic Silver CEO Calls on Fellow Miners to Form OPEC-Like Cartel & HALT PHYSICAL SILVER SALES to End the Paper Manipulation
• Legend – What Surprise Action To Expect In Gold, Stocks & Oil
• Patrick Barron: The End of the US Dollar Imperium
• Van Hoisington And The Fed's Bubble: "Overtrading" And "Discredit" Always End In "Revulsion"
• Why Gold Is Undervalued
• The Gold Price Closed Down $16.30 Today Closing at $1,228.50
• The Collapse Of America & Mediumship -- Coast To Coast AM - October 22, 2014
• A Furious Albert Edwards Lashes Out At Central Bankers: "Will These Morons Ever Learn?"
• MineWeb's Williams praises GATA consultant Jansen's work on China gold demand data
• It’s a green back for a reason!!
• Total Silver Investment May Increase By One Billion Ounces Over the Next Decade
• How Much Gold is on Loan Worldwide
• What Is The Link Between Gold And QE?
• From Creditopia to Utopia
• Precious Metals vs The Formidable Loss Of Purchasing Power Of The Dollar
• Gold Daily and Silver Weekly Charts - Audacious Oligarchy - Ten Tonnes of Gold Taken Out of JPM?
• Chris Powell: The crucial questions financial journalism won't ask and central banks won't answer
• Why Democracy Won’t Survive the New Depression
• U.S. Government SECRETLY Preventing a Stock Market Collapse!
• Prepare for Global Gold Confiscation and Orwell's 1984, Warns Rickards
• The BIS Paves the Way for Silver and Gold
• Don’t Blame Obama (He Has No Power)
• *Video Update* The Crash of 2014: A Special Briefing for All Casey Subscribers
• Legend - What Surprise Action To Expect In Gold, Stocks & Oil
• Euro, USD, Gold and Stocks According to Chartology
• Your Personal Gold Standard
• Breaking: European Central Banks repatriate gold from USA
• The Better Short: Gold or Silver?
• US Oil & Global Gold

The End of the US Dollar Imperium Posted: 24 Oct 2014 01:00 AM PDT from misesmedia:

Silver Buyers "Not Investing, But Stacking" Posted: 24 Oct 2014 12:55 AM PDT Silver investing analyst "gets why people are buying", forecasts record-high prices...   SILVER INVESTMENT demand has receded since 2011, according to a detailed new report, but it remains "the single most important driver of prices" and is set to return, perhaps with force, over the coming decade.   On "current trends", says the new Silver Investment Demand report from US consultancy the CPM Group – commissioned by the Washington-based Silver Institute –  investors worldwide could grow their aggregate holdings by 50% between now and 2024.   This level of investing "would be expected to push annual average silver prices to a fresh record high further out," says CPM Group's managing director, Jeffrey Christian.   Relaying an overview of silver's historical use as reliable money, notably in China for 400 hundred years to the mid-20th century – as well as across the United States before the 1913 foundation of the Federal Reserve – Christian recounts a modern silver investor's comment to him regarding what many chatrooms call "stacking".   "With due respect," the investor said, "you need to know that we do not invest in silver. We stack it."   What the comment means, says Christian, is that silver investors in the developed West – whose demand has surprised analysts and defied the metal's 60% price-drop since 2011 – "[do] not see silver as an investment, but as a store of wealth, an alternative to holding one's wealth in a nationally issued currency such as the US Dollar."   Instead of viewing silver as a speculative or short-term investment, Christian goes on, these buyers see the metal "as a core part of their long-term assets, the base in some cases of the individual's wealth...much more meaningful and visceral to the owners than shares in a stock or a series of bonds they may hold for a period of time."   Weighing against the silver stackers, however, other more "short-term" investors have driven the metal's sharp price falls since it hit near-all time highs in spring 2011, CPM Group's Silver Investment Demand report explains.   So-called "trend followers", as well as "opportunistic" traders switching into equities, have added to sales from disappointed investors who had "over-blown expectations" that the bull market of 2006-2011 would continue. And because net investing demand shows what CPM Group calls "a strong 59.1% correlation" with real silver prices (after accounting for inflation), this sell-off by shorter-term money drove the crash.   Ultimately, the report for The Silver Institute concludes, future net investment demand "can only be guessed [and] will depend on how investors view the world around them." But investors "may begin to increase their net silver purchases in the years ahead." Because with Western economies failing to redress their financial imbalances since the 2007-2012 crisis, the concerns over inflation and credit-default which "motivated" the surge in demand from 2006-2011 could soon return.

First Majestic CEO wants silver miners to form counter-cartel against futures shorters Posted: 23 Oct 2014 10:14 PM PDT 12:10a CT Friday, October 24, 2014 Dear Friend of GATA and Gold: First Majestic Silver CEO Keith Neumeyer, interviewed by Future Money Trends, argues that silver miners should form a counter-cartel to combat the investment houses selling silver short on futures markets. The interview is 16 minutes long and can be heard at Future Money Trends here: http://www.futuremoneytrends.com/trend-videos/interviews/mining-ceo-seek... CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. 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: Mines and Money London Business Design Centre London, England, U.K. Monday-Friday, December 1-5, 2014 http://www.minesandmoney.com/london/ Vancouver Resource Investment Conference Vancouver Convention Centre West 1055 Canada Place, Vancouver, British Columbia, Cananda Sunday-Monday, January 18-19,2015 http://cambridgehouse.com/event/33/vancouver-resource-investment-confere... * * * 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: http://gata.org/tshirts 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: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16

Foreign central banks cut U.S. bond stakes to lowest since May Posted: 23 Oct 2014 10:07 PM PDT By Richard Leong Reuters Thursday, October 23, 2014 Foreign central banks slashed their holdings of U.S. Treasuries at the Federal Reserve to their lowest level since May, Fed data released on Thursday showed. Analysts said the decline in U.S. government bond holdings likely stemmed from a combination of factors including booking profits on the recent rally in Treasuries, and the dollar which hit a four-plus year peak earlier this month. "Some central banks might be selling dollars to arrest its rise against their currencies. While export-oriented countries typically like a stronger dollar, they don't want it go up too fast because they could make some imports very expensive," said Christopher Low, chief economist at FTN Financial. ... ... For the remainder of the report: http://www.reuters.com/article/2014/10/23/usa-fed-foreigners-idUSL2N0SI3... 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: Mines and Money London Business Design Centre London, England, U.K. Monday-Friday, December 1-5, 2014 http://www.minesandmoney.com/london/ Vancouver Resource Investment Conference Vancouver Convention Centre West 1055 Canada Place, Vancouver, British Columbia, Cananda Sunday-Monday, January 18-19,2015 http://cambridgehouse.com/event/33/vancouver-resource-investment-confere... * * * 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: http://gata.org/tshirts 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: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16

First Majestic Silver CEO Calls on Fellow Miners to Form OPEC-Like Cartel & HALT PHYSICAL SILVER SALES to End the Paper Manipulation Posted: 23 Oct 2014 09:10 PM PDT “We all know the paper market has NO representation to the physical market.” – Keith Neumeyer, CEO, First Majestic Silver Corp. from Vision Victory & Future Money Trends:

Legend – What Surprise Action To Expect In Gold, Stocks & Oil Posted: 23 Oct 2014 08:20 PM PDT from KingWorldNews: Despite today's action, there is no question that gold has made a bottom. Gold recently tested the $1,192 level on the December futures contract. It then popped back above $1,200 again. But gold keeps testing those lows and bouncing higher, and there's really no major news to make the gold market keep doing that. So gold is forming a major bottom. But the interesting thing is how gold keeps trading with the action in the Chinese Shanghai Composite Index. If you look at the action in the Shanghai Index and the action in gold, they are very similar in terms of building a bottom. The Shanghai Index made its low in November of last year. Now the Chinese stock market is trading well even though the economy is growing less than expected. Victor Sperandeo continues @ KingWorldNews.com

Patrick Barron: The End of the US Dollar Imperium Posted: 23 Oct 2014 07:27 PM PDT Jeff Deist and Patrick Barron address the issue of monetary imperialism. How does the US use the dollar as a weapon of economic and cultural power? How long can it last? What might the unprecedented collapse of a worldwide reserve currency look like? And how do the BRIC nations and Asian central... [[ 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! ]]

Van Hoisington And The Fed's Bubble: "Overtrading" And "Discredit" Always End In "Revulsion" Posted: 23 Oct 2014 06:39 PM PDT Excerpted from Hoisington Investment Management's Quarterly Outlook, via Van Hoisington and Lacy Hunt: The U.S. economy continues to lose momentum despite the Federal Reserve's use of conventional techniques and numerous experimental measures to spur growth. In the first half of the year, real GDP grew at only a 1.2% annual rate while real per capita GDP increased by a minimal 0.3% annual rate. Such increases are insufficient to raise the standard of living, which, as measured by real median household income, stands at the same level as it did seventeen years ago. ... Asset Bubbles Historically, in our judgment, the most important authority on the subject of asset bubbles was the late MIT professor Charles Kindleberger, author of 20 books including the one of the greatest books on capital markets Manias, Panics and Crashes (1978). He found that asset price bubbles depend on the growth of credit. Atif Mian (Princeton) and Amir Sufi (University of Chicago) provided confirmation for Kindleberger's pioneering work and expanded on it in their 2014 book House of Debt. Chapter 8, entitled "Debt and Bubbles," contains the heart of their insights. Mian and Sufi demonstrate that increasing the flow of credit is extremely counterproductive when the fundamental problem is too much debt, and excessive debt can fuel asset bubbles. Based on our reading of these two books we would define an asset bubble as a rise in prices that is caused by excess central bank liquidity rather than economic fundamentals. As Kindleberger clearly stated, the process of excess liquidity fueling higher prices in the face of faltering fundamentals can run for a long time, a phase Kindleberger called "overtrading". But eventually, this gives way to "discredit", when the discerning few see the discrepancy between prices and fundamentals. Eventually, discredit yields to "revulsion", when the crowd understands the imbalance, and markets correct. Economists have commented on the high correlation between the S&P 500 and the Fed's balance sheet since 2009. From 2009 to the latest available month, the monetary base (MB) surged from $1.7 trillion to $4.1 trillion. We ran the MB increase against the S&P 500 and found a very high correlation of 0.69. While correlation does not prove causality, the high correlation is certainly not inconsistent with the idea that the Fed liquidity played a major role in boosting stock prices. However, even as the MB has exploded since 2009 and stock prices have soared, the U.S. economy has experienced the worst economic expansion on record. In spite of a further large rise in the base this year, the GDP growth has subsided noticeably and corporate profits after taxes and adjusted for inventory gains/losses (IVA) and over/under depreciation (CCA) has declined 10% in the latest four quarters. Such discrepancy between the liquidity implied by the base and measures of economic performance could indicate the process of bubble formation. Kindleberger's axiom that asset price bubbles depend on excess liquidity may yet face another test. Still Bullish on Treasury Bonds With the nominal growth trajectory extremely soft, U.S. Treasury bond yields are likely to continue working lower as similar circumstances have created declines in government bond yields in Europe and Japan. Viewing the yields overseas, it is evident that ample downside still exists for long U.S. Treasury bond yields, as the higher U.S. yields offer global investors an incentive to continue to move funds into the United States. Another factor suggesting lower longterm U.S. Treasury yields is the strength of the U.S. dollar. In many industries, the price leader for certain goods in the U.S. is a foreign producer. A rising dollar leads to what economists sometimes call the "collapsing umbrella". As the dollar lifts, the foreign producer cuts U.S. selling prices, forcing domestic producers to match the lower prices. This reinforces the prospect for lower inflation as nominal GDP wanes. This creates a favorable environment for falling U.S. Treasury bond yields. Full letter below: Van Hoisington Q3

Why Gold Is Undervalued Posted: 23 Oct 2014 06:10 PM PDT Submitted by Alisdair Mcleod via Peak Prosperity, Gold has been in a bear market for three years. Technical analysts are asking themselves whether they should call an end to this slump on the basis of the "triple-bottom" recently made at $1180/oz, or if they should be wary of a coming downside break beneath that level. The purpose of this article is to look at the drivers of the gold price and explain why today's market value is badly reflective of gold's true worth. First, I think a reminder would be timely. Those who seek to trade gold are at substantial disadvantage: they line themselves up against too-big-to-fail banks which have the implicit backing of the taxpayer to bail them out of their trading positions; furthermore markets have become so manipulated and dangerous that gold should be considered as insurance against systemic risk instead of a punt. Because the majority of market investors don't fully grasp these risks, when the current global financial bubbles eventually burst, there will only be a tiny minority who end up possessing gold -- by which I mean physical gold held outside the fiat money system. Technical Analysis & Gold Using charts has the theoretical advantage of taking the emotion out of trading. So long as there is no significant change in the purchasing power of the currency against which it is traded, prices in the past have relevance to the future, because recent price experience sets an expectation in the human mind. The chart below shows the gold price since the peak in September 2011. The chart shows a potential triple-bottom pattern formed over fifteen months, at just over $1180/oz. We know that the three bottoms were all at quarter-ends, strongly suggestive of price manipulation to enhance bullion bank profits and their traders’ bonuses. In each case, computer-driven traders had near-record short positions evident in this second chart, of Managed Money shorts on Comex: This confirms that $1180/oz appears to be the point of maximum bearishness, in which case our triple-bottom pattern should hold. However, this pattern is rare and should not be the first conclusion we jump to. The definitive work on Dow Theory (Technical Analysis of Stock Trends – Edwards & Magee) describes an unconfirmed triple bottom as “treacherous”. But the characteristics we're seeing in this current formation, with the third low on low volume and the subsequent rise on improving volume, are encouraging. Confirmation of the pattern according to Edwards & Magee requires the gold price to move above $1375, a level worth noting. Once confirmed, a triple-bottom “almost always produces an advance of distinctly worth-while proportions.” The danger of course is non-confirmation. One can imagine a price rally to say, $1300, unwinding the shorts, at which point subsequent bears might then mount a successful challenge on $1180. Additionally, since Edwards& Magee published their work, computers have allowed us to define trends by moving averages, and a commonly accepted indicator is the 200-day MA, which stands at about $1280. If that level is broken and the gold price stays above it long enough to cause the MA to rise, that should trigger computer-driven buying. So any price over $1300 will likely confirm the bullish case, yet it would be a mistake today to be unreservedly bullish on technical grounds alone until this price level is exceeded. Valuing Gold None of this reins in the truly subjective nature of tomorrow’s prices. Instead, we should turn to relative valuations to get a sense of whether gold should be bought today or not. To do this, we need to compare the quantity of gold with the quantity of fiat currency. While we have reasonable estimates of the total amount of above-ground gold stocks over the last few centuries, we really don’t know how much the central banks actually hold, on the basis their figures are for “gold and gold receivables (i.e. leased, loaned or swapped and not in their physical ownership). Equally, the task of assessing the true total amount of the world’s fiat currency and how that has grown over time is too great to be a practical proposition. Instead, I have devised a simple and practical approach, by comparing the increase in the world’s above-ground gold stocks with a measure of the increase in the quantity of USD fiat currency. I've devised a metric called the "fiat money quantity" (FMQ) which reverses the process by which fiat money was originally created. Our forebears’ gold was taken in by commercial banks, which would issue currency notes and record deposits in gold substitutes (dollars payable in our forebears’ gold). When the Fed was created, the Fed took in the same gold from member banks and issued its notes and recorded reserves against that gold in its balance sheet. So FMQ is the total of cash, accessible deposits in the commercial banks and bank reserves held at the Fed, adjusted by temporary factors that affect those reserves such as Repos and Reverse Repos. More details on how FMQ is calculated can be found here. The chart below shows how FMQ has grown since 1959. It shows a steady rate of exponential growth prior to the Lehman crisis, after which it has increased alarmingly: One glance tells us that USD fiat currency is in monetary hyperinflation, which is not reflected in official price inflation statistics (but that's another story). Our objective is to try to get a feel for whether gold is cheap or dear, and the next chart shows how the gold price has progressed from the month before the Lehman crisis (nominal gold price in red, FMQ-adjusted price in yellow): The message could not be made more clear: compared with fiat dollars, in real terms gold has fallen in price since the Lehman crisis despite the increase in its nominal price. With gold at $1200 recently, it has actually fallen by 41% in real terms from July 2008. So to summarize, before the Lehman crisis, investors’ appreciation of systemic risk was relatively low. After the crisis, there were concerns that we faced a deflationary price contraction, so the nominal price of gold dropped (from $918 to $651). When it became clear the Fed would successfully inflate the financial system out of immediate trouble, gold rose to its high-point in September 2011 -- but on an FMQ-adjusted basis the high was considerably less, reflecting the sharp increase in the quantity of new fiat money being issued: gold only rose about 20% from July 2008 on this basis. While there was undoubtedly some froth in the gold price at this point that needed correcting, given the circumstances the price level was otherwise reasonable. The subsequent bear market in gold since has taken it to an extreme undervaluation today. Gold is not alone in having a market value divorced from reality. A bankrupt government such as Greece has had no problem borrowing 10-year money recently at only 6.5%, though this anomaly is beginning to correct. Other insolvent nations, such as Spain and Italy were recently able to borrow 10-year money as low as 2% and 2.2% respectively, though their bond yields have also subsequently risen slightly. Think about this for a moment: the US dollar is the reserve currency and its government bond yields are the benchmark for global fiat money risk-free return. Governments with a demonstrably (much) worse borrowing record have been able to issue bonds at what amounted to a yield backwardation -- significantly lower than the US 10-year Treasury bond. This has never happened before, so far as I’m aware. Key market valuations are totally screwed up in a world of 0% interest rates and manipulated markets. If gold was alone in its extreme undervaluation, without a counterbalancing overvaluation in fiat-currency bond markets, something would probably be wrong with our analysis. The fact that this is not the case offers confirmation that gold is mis-priced and incorrectly valued in markets that have become divorced from reality. Defining the Gold Market It is common knowledge that dealings in paper gold are greater than that in physical bullion. Paper gold includes the following categories: Unallocated gold accounts held with bullion banks. Sight accounts held with central banks on behalf of other central banks. Over-the-counter derivatives and options Forwards on the London market (deferred settlement never intended to settle) Regulated futures markets (Comex, Tocom etc.) Gold ETFs not backed by physical gold. The total of these markets, for which there is no estimate, is simply enormous (by contrast  GoldMoney estimates above-ground stocks of physical bullion total some 162,500 tonnes today, increasing at about 2,800 tonnes per annum.) But we can get an idea of the overall interest in paper gold from numbers released by the Bank for International Settlements covering off-market derivatives, plus outstanding Comex interest. This is shown in the next chart: The last data-point was end-2013, when gold coincidentally sank to $1180 for the second time. A significant portion of these derivatives can be expected to be hedges against bullion-bank liabilities such as unallocated accounts and perhaps positions in regulated futures, so they are a fair reflection of changes in outstanding paper interest. It is clear that over the course of the last thirteen years, in terms of tonnes equivalent, total gold derivatives have declined significantly. Some of this decline has been due to the increase in the gold price so the currency value of these derivatives would not have fallen so much; but from the peak in 2011 from which the gold price has fallen by nearly 40% in USD terms, outstanding paper gold has certainly accelerated gold’s decline. This tells us that, given that their hedge positions are historically low, bullion banks have reduced their outstanding liabilities to customers with unallocated accounts, which would be consistent with the late stages of a bear market. Ironically, the unwinding of unallocated accounts has been hastened by the withdrawal of bullion from the London market redeployed to satisfy Asian demand, because ultimately physical bullion is the basis for the whole market. It is obvious that if the trend outlook for gold improves, given that the decline in outstanding derivatives has not led to reducing leverage on the physical market, liquidity could rapidly become a serious issue. Meanwhile, physical gold goes from West to East. Asian Demand Physical gold features in the family pension fund for the average Asian. We are all familiar with this being the case for Indians, but it is also true for most other countries on the continent. The reason is simple: no Asian government has been able to suppress the ordinary citizen’s interest in gold as a store of wealth, and generally currency issuance has been badly abused by Asian governments. For example, in Turkey accumulating inflation from the 1980s led to six noughts being lopped of the lira in 2004. In India, since the 1960s the rupee price of gold has gone from INR160 to about INR76,000 per ounce today. The history of Asian demand goes back to the oil crisis in the 1970s, when the Middle East suddenly became immensely wealthy from the rise in the price of oil. Naturally, they invested a portion of their new-found wealth in gold. The pace of gold acquisition by Arabs slowed in the early 1990s, because a new western-educated Arab generation began to manage the region’s financial resources, and these youngsters were doubtless discouraged by gold’s prolonged bear market. Instead they turned to equity markets and infrastructure investment. Then in 1990 India repealed the Gold Control Act. This legislation banned Indians from owning gold in bar and coin form, which gave added impetus to smuggling and jewellery manufacturing. Its repeal was part of a process of economic liberation in the wake of a financial crisis which led to market-friendly economic reform. Since then, recorded private sector imports grew from a few hundred tonnes to as much as 1,000 tonnes annually before the Reserve Bank of India reintroduced import controls last year. Predictably the effect has been to restrict officially imported gold and increase smuggling. Turkey is the gateway to Iran and the Moslem world to the east beyond the Caspian Sea. Gold has been actively used as money by this region since time immemorial. According to the Borsa Istanbul, Turkey has imported 3,060 tonnes of gold since 1995. Some of this has gone to Iran and to the east of Turkey, but equally the rest of the region will have had other sources over the decades. Lastly, South-East Asia is populated with a Chinese diaspora, and since its industrialization in the 1990s this region has also been stockpiling significant quantities of bullion. But the big story is China itself, which we investigate in detail in Part 2 of this report Summary (Part 1) When the gold price is being smashed in western capital markets, it's easy to forget that Asia is quietly buying up not only all or most of its own mine and scrap supply, but significant quantities of the above-ground stocks held in western vaults as well. It's a process that dates back to the birth of the petro-dollar in the 1970s and has continued ever since. The three big ownership centers are the Middle East, India and China -- the latter two having in recent years enjoyed high rates of economic expansion, with increasingly wealthy middle-classes with a high propensity to save. We cannot know in truth how much of the world’s above-ground stocks of gold are in the hands of these three centers. But they are only part of the Asian story, with Turkey and its sphere of influence plus the whole of South-East Asia, whose people also regard gold as a prime savings medium. All we can say is that it is likely that significantly more than half the world’s gold is in Asian hands. Importantly, over the last ten years the pace of Asian accumulation has increased, draining the west of its physical liquidity. And in this respect perhaps the most important indicator is the decline in outstanding OTC derivatives shown in the last of the charts above. So not only do we have evidence that the price is based on western paper markets with declining liquidity, but by comparing above-ground stocks with the Fiat Money Quantity of the world’s reserve fiat currency, we can see that gold is extremely undervalued at a time of high, possibly escalating systemic and currency risk. In Part 2:The Case For Owning Physical Gold Now we delve more deeply into the flows of bullion to Asia which will soon create supply shortages in the West, as well as detail the growing systemic and currency risk factors that few asset besides physical gold can offer protection against.  Click here to access Part 2 of this report (free executive summary; enrollment required for full access)

The Gold Price Closed Down $16.30 Today Closing at $1,228.50 Posted: 23 Oct 2014 04:51 PM PDT 22-Oct-14 Price Change % Change Gold Price, $/oz 1,228.50 -16.30 -1.31% Silver Price, $/oz 17.11 -0.07 -0.42% Gold/Silver Ratio 71.78 0.65 -0.89% Silver/Gold Ratio 0.0139 0.0001 0.90% 3 Day Gold Price Chart 30 Day Gold Price Chart 5 Year Gold Price Chart 3 Day Silver Price Chart 30 Day Silver Price Chart 5 Year Silver Price Chart Franklin didn't publish commentary today, if he publishes later it will be available here. 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.

The Collapse Of America & Mediumship -- Coast To Coast AM - October 22, 2014 Posted: 23 Oct 2014 04:51 PM PDT Coast To Coast AM - October 22, 2014 Collapse Of America & Mediumship Date: 10-22-14 Host: George Noory Guests: Alex Jones, Julie Beischel Documentary filmmaker and alternative media activist Alex Jones is passionate about exposing the forces controlling world events and undermining our... [[ 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! ]]

A Furious Albert Edwards Lashes Out At Central Bankers: "Will These Morons Ever Learn?" Posted: 23 Oct 2014 04:21 PM PDT Albert Edwards is angry, and understandably so: almost exactly two weeks after warning readers to "sell everything and run for your lives" and the market was on the verge of its first correction in years, several powerful verbal interventions by central banks from the Fed, to the BOJ to the ECB have staged yet another massive rebound which has nearly wiped out all the October losses. Central-planning aside (and ask how much the USSR would have wished for central planning to indeed have been "aside") we share his frustrations, almost to the point where we would reiterate word for word Edwards' furious outburst, as follows: "Simply put, the central banks for all their huffing and puffing cannot eliminate the business cycle. And they should have realised after the 2008 Great Recession that the longer they suppress volatility, both economic and market, the greater the subsequent crash. Will these morons ever learn?" Obviously, they will never will because their very entire existence is based on the assumption that what they do can impact the business cycle when all it does is merely delay the inevitable. In this case, a recession whose arrival will be so violent, it will crush not only US stocks, but the overall economy, which has for the past 6 years existed purely on the Fed's CTRL-P fumes. Fumes, which by the looks of things, will evaporate at just the worst possible moment: just when half of the world's entire growth in 2015 is expected to come from the US (the other half from China). So what is it that has peeved Edwards so much about the latest mispricing of, well, everything by the Mandarins of Marriner Eccles: The bottom line is that there is far too much over-confidence in the US recovery. Fragile and vulnerable in itself, the US recovery now battles against the rest of the world, which like a horror movie is dragging it down into a hellish Ice Age underworld. The problem is that at, these stratospheric valuations, the market does not need to suffer an ACTUAL recession to see a crash. Like October 1987, just the fear of recession will be enough to trigger a massive market move. Specifically, Edwards looks at implied inflation expectations - remember, this is critical for a recovery in a Keynesian context - and finds none. The problem is that most risk assets, and especially equities and corporate bonds, are very expensive and priced for a long cycle. Meanwhile, this recovery has failed to generate any cyclical upward pressure to inflation - indeed quite the reverse. The global economy resembles a knackered old V8 engine which is now only firing on one cylinder (US). Hence, any data suggesting that the US economy is now also flagging were always likely to cause a meltdown as investors feared the imminent arrival of Japanese-style outright deflation. We note with interest that US 5-year inflation expectations in 5 years' time have not fallen anything like as quickly as 5y expectations (see chart below). This suggests to me a continued misplaced market (over)-confidence about central banks' ability to control events   Sure enough, the events from last week showed just how fast and how violent such a move would be, at least until the central bankers stepped in once again, and with chatter of QE4, made sure bad news if good news again, if only for a few weeks. However, with just one more POMO left, if only in theory, the fears of how the global economy will fare without the Fed's monetary tailwind propping up everything are going to resurface very fast. And it is not just the US where the market is underpricing risk. Look at the chart at the top: that's right, the other place where Edwards is focusing on is China itself. Two key items of Chinese data seem to have escaped close investor attention over the past week – maybe because of the flash crash. While I mentioned last Wednesday, what really surprised me that day was not the reaction in the wake of the US retail sales, but the fact that there was no reaction to the overnight news that China's CPI inflation had slid to only 1.6% in September from 2% - I expected that to trigger a strong US Treasury rally in the European morning. Anyway, we have long warned that CPI inflation would gravitate downwards towards the GDP deflator, and that is indeed what is happening. Along with the 7.3% Q3 GDP data, the GDP deflator was also released showing economy-wide inflation is only around the 1% mark. Clearly, China too remains at a deflationary  precipice.   Source: Datastream Finally, I was also surprised to see that the $100bn decline in China's Q3 FX reserves, the largest quarterly fall ever, drew limited comment. As I have explained, this reflects deterioration in Chinese competitiveness from its excessively strong real exchange rate and a deteriorating of its balance of payments. If we have been warning that slower growth in FX reserves represents monetary tightening, then a decline of this order of magnitude is like a credit crunch! These data will ultimately prove to be more important than last Wednesday's US retail sales. As I said two weeks ago "sell everything and run for your lives".   So if Edwards is right, and the only two sources of growth in 2015 are taken out of the picture, watch how from 4% growth in 2014 the world grinds to an economic halt in the coming year. Which of course, would mean a global recession, if not worse, and this time not all the snows in Antarctica will save the narrative. The only question is Edwards will be right this time, or if the "morons" will once again have the last laugh?

MineWeb's Williams praises GATA consultant Jansen's work on China gold demand data Posted: 23 Oct 2014 03:57 PM PDT 5:53p CT Thursday, October 23, 2014 Dear Friend of GATA and Gold: MineWeb's Lawrence Williams today praises gold researcher and GATA consultant Koos Jansen for getting to the heart of Chinese gold demand data that shows that China's gold offtake is much greater than generally reported. Williams writes: "Once again it has taken Koos Jansen to let the world know what the real figures for Chinese gold demand and gold import figures were for last year. The data was actually published in Mandarin Chinese in September with the release of the 2014 China Gold yearbook by the China Gold Association. Yet none of the mainstream Western media seems to employ anyone who reads Chinese, or at least no one who does who may be asked to cover gold. The yearbook was apparently made available at the Beijing China Gold Congress that month." Williams' commentary is posted at MineWeb here: http://www.mineweb.com/mineweb/content/en/mineweb-gold-news?oid=257520&s... CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. ADVERTISEMENT Free Storage with BullionStar in Singapore Until 2016 BullionStar is a Singapore-registered company with a one-stop bullion shop, showroom, and vault at 45 New Bridge Road in Singapore. BullionStar's solution for storing bullion in Singapore is called My Vault Storage. With My Vault Storage you can store bullion in BullionStar's bullion vault, which is integrated with BullionStar's shop and showroom, making it a convenient one-stop-shop for precious metals in Singapore. Customers can buy, store, sell, or request physical withdrawal of their bullion through My Vault Storage® online around the clock. Storage is FREE until 2016 and will have the most competitive rates in the industry thereafter. For more information, please visit Bullion Star here: https://www.bullionstar.com/ Join GATA here: Mines and Money London Business Design Centre London, England, U.K. Monday-Friday, December 1-5, 2014 http://www.minesandmoney.com/london/ Vancouver Resource Investment Conference Vancouver Convention Centre West 1055 Canada Place, Vancouver, British Columbia, Cananda Sunday-Monday, January 18-19,2015 http://cambridgehouse.com/event/33/vancouver-resource-investment-confere... * * * 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: http://gata.org/tshirts 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: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16

It’s a green back for a reason!! Posted: 23 Oct 2014 03:39 PM PDT Short of China converting to a democracy tomorrow and the European Union becoming the giant that every backpacking teenager wished it could be, the US will remain the currency of choice for Oil, gold, and any other commodity, raw material, and energy available on this pseudo green earth.  Yes, aliens descending from MARS with technologies into the next millennium may make this a less compelling argument.  For the time being, the bet is on the USD.   Take Japan for instance.  In the early nineties numerous economists and analysts were suggesting the Yen will become the currency of choice after the Japanese binge of US assets in the late eighties and early nineties.  The USD was on the "outs".  History proved this notion wrong. Not only did Japan not become the currency of choice, but the Yen became the center of what was commonly referred to as the carry trade of choice.  The Japanese economy is only now hinting at an exit of the stagflation that took place during the 1990's and 2000's.    We know what is happening in Europe.  Does the global economic power really want a currency that is mired in incongruous and possibly debilitating political strife, inefficient diplomacy, lack of sufficient job creation, to be the backing of all materials that contribute to global production and growth?  For the time being, NO. On to China. Yes, the Chinese have grown by leaps and bounds in the last 15 years.  A little known fact, in the year 496 was China had 50% of global GDP.  The Chinese have already surpassed Japan to be the 2nd largest economy.  Even with "slower growth", 7.3% growth per annum is nothing to gloss over. The problem with China, as every analyst, central banker, and hedge fund manager has commented is the reluctance of the Chinese government to reduce controls of the Yuan.  The reason for the control of the currency is the fact that China is a communist regime with capitalist tendencies.  What is the probability that China will see the Western Light and convert to a capitalist democracy?  Clearly, quite low.  Does the G20 feel comfortable in readjusting the entire macro-economic mechanism to step away from the USD as a primary currency?  You know the answer to this answer as well as I do. Given crisis and after crisis, through crashes and market exuberance, the USD and the US treasury market has been the bastion of "perceived" security and caution.  Grounded with the strength of an economy and a political system that by-in-large is able to sustain itself from little geo-political interventions.  What other country and currency is able to offer a bit of security and comfort in a world of contortion, confusion, and malfeasance? Yes.  That's right. As I write this, we are getting word of a possible EBLOA case in NYC. So I am keeping my fingers crossed.   I challenge the central banker, manager, trader, and investors to manufacture and financially engineer a safer and better alternative to the USD. E Pluribus Unum

Total Silver Investment May Increase By One Billion Ounces Over the Next Decade Posted: 23 Oct 2014 03:18 PM PDT Today in our mail bag was a missive from the Silver Insitute with a link to their 50 page report which may be of interest to you. Washington, D.C. – October 22, 2014) – Investors are likely to increase their net silver purchases in the years ahead, largely due to an ongoing weak global economy, for capital preservation and silver’s pedigree as a leading industrial metal, according to a report released today by the Silver Institute. The report, entitled “Silver Investment Demand,” suggests that investors may accumulate as much as one billion additional ounces of silver in

How Much Gold is on Loan Worldwide Posted: 23 Oct 2014 03:00 PM PDT GoldBroker

What Is The Link Between Gold And QE? Posted: 23 Oct 2014 02:58 PM PDT The intuitive response on the question what the link is between gold and QE is that QE (or “money printing”) is devaluing money and, consequently, appreciating the value of gold. That correlation became clear during the first two rounds of QE when the gold price more than doubled in dollar and euro terms in some 3 years and silver went three times higher. However, QE3 resulted in the opposite effect. The chart shows how prices of key assets (stocks, bonds, commodities, gold) evolved between the start of QE3 and the start of tapering. Logically, the end of QE3 should be impacting gold in a positive way. The tapering of QE3 is a long process, which, so far, has resulted in a decrease of the bond and mortgage backed securities supply by the US Fed from 85 billion US dollar per month to 25 billion. December 18th 2013: taper 10 billion to 75 billion US dollar per month January 28th 2014: taper 10 billion March 19th 2014: taper 10 billion April 30th 2014: taper 10 billion June 18th 2014: taper 10 billion July 30th 2014: taper 10 billion The next chart clearly shows how stocks have been suffering as the taper process progessed, while gold has been stable since the start of tapering.   What to make out of this? It is clear that "money printing" as such does not correlate in a one-to-one way with precious metals, although it is, so far, higly correlating with stocks. During all the QE phases, stocks have been performing well, while gold has only benefited from QE1 and QE2 as those periods where associated by the market with inflation. On the other hand, QE3 provided THE ultimate "risk on" trade; because the invisible hand of the almighty central bank was there stimulate endless risk. That is when gold was literally ababonded, at least among Western investors. The interesting part is that gold is today behaving as a "risk off" trade, sort of a "safe haven" trade. What does this mean going forward? That’s hard to say, but the more likely answer is that the "safe haven" trade should continue. With multiple bubbles, including the ones in geopolitical tensions, ebola and currency wars, it is fair to expect a continuing safe haven bid. That would imply that gold investors would be relatively better off compared to silver investors, until inflation expectations return (e.g. because of monetary policy). The next round of QE, whenever it would be announced, should be analyzed closely on the “set of circumstances” of that moment, as well as the resulting effect on market sentiment.

From Creditopia to Utopia Posted: 23 Oct 2014 02:47 PM PDT This post From Creditopia to Utopia appeared first on Daily Reckoning. [Ed Note: This essay was adapted from Richard Duncan's latest book, The New Depression.] The economy has grown dependent on government spending and debt. Therefore, given the current structure of the economy, if the government spends significantly less, the country will remain marred in an economic depression with no visible end in sight. It appears, then, that three options are available to the government. The first is austerity. The government could sharply reduce its spending. The result would be a New Great Depression. This is the least attractive option. The second option is for the government to carry on doing what it does now — that is, the status quo, borrowing and spending to support consumption on. This approach would sustain the economy for at least a decade. Then there would be a U.S. sovereign debt crisis and the world would collapse into a New Great Depression. This option is preferable to option one, but far from ideal. Option three is for the government to borrow and invest in a way that not only supports the economy but actually restructures it so as to restore its long-term viability. This option, rational investment, is the only one of the three with the potential to result in a happy ending. It differs from option two, the status quo, in a very significant way. In option two, the government continues to borrow and spend in a way that boosts consumption in the economy. Spending in that way creates economic growth, but only once. When the money is spent, it is gone. It yields no long-term return. In option three the government would borrow and invest; and the government's investments would yield a return. In fact, given the magnitude of the resources the government has available to invest, the returns that could be generated would be sufficient to restore the government's finances to health — perhaps even making it possible for the government to repay all of its debt within a relatively short period of time. The government could continue spending money on the same things it does now, but on an ever-greater cales as it has for decades; and that would continue to generate economic growth up until the time when its sovereign debt crisis begins. There is literally no limit as to how much the government could spend through Medicare to improve the health of the nation' and there seems to be no limit on the amount that can be spent on national defence. Alternatively, the government could cap its spending on current programs and spend more, instead, on investment programs that could be made to quickly pay for themselves. We built an economy out of $50 trillion of credit over the past 50 years. When credit expands, it creates both an asset and a liability. The sustainability of the entire economic superstructure depends on how that credit is used going forward. If it is used for consumption, then it can generate no return and the superstructure will collapse. That is the mistake that led to this New Depression. if it is invested in projects that will generate a high enough return to pay the interest on the debt, then it will not only support the economic structure now in place, it  will support a larger and more prosperous economy. Our society has failed to understand that our economic system has changed. Therefore, it has not yet grasped the possibilities inherent within this new system. Credit can now be deployed by the government on a scale so vast that it can revolutionize the production potential of this planet. The U.S. government can now borrow money for ten years at a cost of 2 percent interest a year. If it borrows at that rate and invests in projects that yield even 3 percent, Creditopia will survive. If it borrows at that rate and invests on a grand scale in grand projects, precarious Creditopia could be transformed into a sustainable Utopia in which the cost of energy falls 90 percent and life expectancy doubles. There is no doubt that the abandonment of commodity money (gold) created distortions that interfered with the self regulating market economy. The point to grasp, however, is that our global civilization has been built on and around those distortions and that it could very possible collapse into ruin if those distortions are not perpetuated through further credit expansion. That requires the government to borrow and invest. Would that be capitalism? No. We do not have capitalism now, however. Our economic system is not one in which the accumulation and investment of capital drives the production process. It is one in which the creation and expenditure of credit does. The question is not whether we are going to abandon capitalism and replace it with a different kind of economic system. We did that long ago. The question is: Are we going to allow the economic system now in place to collapse? Thus, this economic crisis marks a crossroad for our civilization. Our options are to grasp and fearlessly exploit the immense possibilities inherent in our new credits based economic system or else fail to grasp them and collapse into what could prove to be decades of misery. Regards, Richard Duncan for The Daily Reckoning P.S. For my ongoing forecasts on U.S. debt… what the Fed will do and where I believe asset prices are headed, please subscribe to my quarterly video newsletter Macro Watch. I've created a coupon code for you as a Daily Reckoning reader — simply enter the coupon "daily" to receive a 50% discount. Click here to access it now. The post From Creditopia to Utopia appeared first on Daily Reckoning.

Precious Metals vs The Formidable Loss Of Purchasing Power Of The Dollar Posted: 23 Oct 2014 02:40 PM PDT If you had purchased $100 in gold in 1971, it would be worth over $3,040 in today's dollars. But if you had left your $100 in cash, you would still have only $100 in cash, which today only retains about 17% of its former value. Similar to gold, if you had purchased $100 in silver back in 1971, it would be worth over $1,200 in today's dollars. Because the Federal Reserve continues to print money out of thin air, or inject new dollars into the financial system with mere keystrokes, real gold and silver will continue to rise in nominal dollar price. As the purchasing power of the U.S. Dollar decreases by the year, investors are turning to precious metals. The public has not yet figured out that the dollar’s devaluation is ongoing and that holding physical precious metals rather than cash is an effective way of protecting their purchasing power over time. Grasping the concept of dollar devaluation is difficult for many. One of the most effective methods used to illuminate this concept is through illustrations. Money Metals Exchange, a gold and silver bullion provider, has created a very interesting infographic which summarizes and illustrates all this.

Gold Daily and Silver Weekly Charts - Audacious Oligarchy - Ten Tonnes of Gold Taken Out of JPM? Posted: 23 Oct 2014 01:59 PM PDT

Chris Powell: The crucial questions financial journalism won't ask and central banks won't answer Posted: 23 Oct 2014 01:26 PM PDT Remarks by Chris Powell, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. New Orleans Investment Conference Hilton New Orleans Riverside Hotel New Orleans, Louisiana Thursday, October 23, 2014 For many years this conference has bravely invited GATA Chairman Bill Murphy and me to speak here about the evidence of manipulation of the gold market, particularly manipulation undertaken directly or indirectly by central banks, and every year there has been new documentation to report. This documentation has been compiled at GATA's Internet site, GATA.org, whose home page you can see here -- http://www.gata.org -- with the "Documentation" section noted at the top left, along with a section called "The Basics," which summarizes the documentation as well as the purposes and history of central bank policy of suppressing the price of gold, gold being a currency that competes with government currencies. The last two months have brought confirmation that, as we long have suspected, GATA has outlined only a small part of the surreptitious market manipulation being undertaken by central banks -- that this manipulation is actually comprehensive, that it covers nearly every major market in the world. This confirmation is largely the work of Eric Scott Hunsader, founder of the market data and research company Nanex in Winnetka, Illinois, who publicized, through the Zero Hedge Internet site, documents recently filed with the U.S. government, two of them with the Commodity Futures Trading Commission and one with the Securities and Exchange Commission. ... Dispatch continues below ... ADVERTISEMENT Own Allocated -- and Most Importantly -- Segregated Coins and Bars In Switzerland Zurich, Switzerland, remains an extremely safe location for storing coins and bars of the monetary metals. If you do not own segregated physical coins and bars that you can visit, inspect, and take delivery of, you are vulnerable. International diversification remains vital to investors. GoldCore can accomplish this for you. Read GoldCore's "Essential Guide to Gold Storage In Switzerland" here: http://info.goldcore.com/essential-guide-to-storing-gold-in-switzerland Email the GoldCore team at info@goldcore.com or call our trading desk: UK: +44 (0)203 086 9200 -- U.S.: +1-302-635-1160 -- International: +353 (0)1 632 5010 The first document is a letter to the CFTC, dated January 29 this year, from CME Group, the operator of the major futures exchanges in the United States, and signed by CME Group's managing director and chief regulatory counsel, Christopher Bowen: http://www.gata.org/files/CMEGlobexCentralBankIncentiveProgram.pdf The letter notifies the CFTC of changes to CME Group's discount trading program for central banks. That is, the letter reveals that central banks are getting discounts for trading all futures on CME Group's exchanges, including the New York Commodity Exchange, the major mechanism for "price discovery" in the monetary metals. The CME Group letter argues that letting central banks trade in futures is beneficial because it adds "liquidity" to the markets. But of course "liquidity" here might as well mean the ocean. Anyone trading against the ocean will drown. The second document is another letter from CME Group's Bowen to the CFTC, dated August 28 this year, disclosing that CME Group is enacting rules against certain trading practices that are considered abusive and unfair, specifically "spoofing" and "quote stuffing," the abrupt placing and withdrawal of huge volumes of phony orders to mislead traders about prices: http://www.gata.org/files/CMEGroupManipulativePractices-08-28-2014.pdf The letter's implication is that such manipulative trading practices have been common on CME Group exchanges. The third document is the CME Group's annual report to the Securities and Exchange Commission, its 10-k report: http://www.gata.org/files/CMEGroup-10K-03-03-2014.pdf CME Group's 10-k report reveals on Page 9: "Our customer base includes professional traders, financial institutions, institutional and individual investors, major corporations, manufacturers, producers, governments, and central banks." That central banks and governments are trading both surreptitiously and comprehensively in U.S. futures markets is a transformative development. Since central banks can create and deploy infinite money, this trading means that there are probably no markets anymore in anything, mainly just government interventions. It means that democratic capitalism has been quietly overthrown by a totalitarian coup and that the world has lost the great engine of its economic and democratic progress, free markets -- without even being aware of the loss. And yet what has been disclosed by these documents filed by the CME Group is only what was asserted 14 years ago in an essay written by the British economist Peter Warburton, an essay he titled "The Debasement of World Currency: It Is Inflation But Not As We Know It": http://www.gata.org/node/8303 * * * "What we see at present," Warburton wrote, "is a battle between the central banks and the collapse of the financial system fought on two fronts. "On one front, the central banks preside over the creation of additional liquidity for the financial system in order to hold back the tide of debt defaults that would otherwise occur. "On the other, they incite investment banks and other willing parties to bet against a rise in the prices of gold, oil, base metals, soft commodities, or anything else that might be deemed an indicator of inherent value. Their objective is to deprive the independent observer of any reliable benchmark against which to measure the eroding value not only of the U.S. dollar but of all fiat currencies. "Equally, they seek to deny the investor the opportunity to hedge against the fragility of the financial system by switching into a freely traded market for non-financial assets. "The central banks have found the battle on the second front much easier to fight than the first. Last November [November 2000] I estimated the size of the gross stock of global debt instruments at $90 trillion as of mid-2000. How much capital would it take to control the combined gold, oil, and commodity markets? Probably no more than $200 billion, using derivatives. "Moreover, it is not necessary for the central banks to fight the battle themselves, although central bank gold sales and gold leasing have certainly contributed to the cause. Most of the world's large investment banks have overtraded their capital so flagrantly that if the central banks were to lose the fight on the first front, the stock of the investment banks would be worthless. "Because their fate is intertwined with that of the central banks, investment banks are willing participants in the battle against rising gold, oil, and commodity prices." * * * That is, as the saying goes, the futures markets are not manipulated; the futures markets are the manipulation. As Warburton noted, if a commodity has a futures market, the price of that commodity likely is being manipulated, and probably suppressed, by surreptitious trading by central banks and their agents. As a result most market prices now are probably mere illusions, holograms created in large part in the trading rooms of central banks, like the trading room at the Federal Reserve Bank of New York. But overwhelming as the power to create and deploy infinite money surreptitiously through central banks is, it is not the decisive power of governments. No, the decisive power of governments is the power to stifle or intimidate news organizations. For if people are ever informed that a market is rigged, they won't participate in it and the rigging will lose its usefulness. For 15 years GATA has done a fair job documenting the manipulation of markets by central banks and their agents. But publicizing that manipulation has been part of GATA's work as well, and in that respect we have not succeeded much. We can get on television in Asia and Russia but we strain for the occasional citation by Western news organizations. We have sent the recent CME Group documents to most major financial news organizations and to many financial letter writers, and as far as we can determine, not one has posed any question about them to the authorities or written or broadcast anything about them. As with GATA's other documentation, no one disputes these documents either. They simply cannot be acknowledged. They give the game away. Maybe that will change on Saturday, when this conference will have the remarkable opportunity of questioning Alan Greenspan, who was chairman of the Federal Reserve for more than 17 years, from August 1987 to January 2006. If Greenspan is in a mood to be candid, we may learn a lot without having to interrogate him as a prosecutor would. If Greenspan is not in a mood to be candid, extracting anything useful from him will be tedious, requiring his interrogators to be very specific and to brandish documentation. Of course I suspect that Greenspan may not care to be candid. So let me suggest a few very specific and detailed questions for him. Question 1: Mr. Greenspan, in your testimony to Congress in July 1998, in which you urged Congress not to legislate regulation of derivatives -- http://www.federalreserve.gov/boarddocs/testimony/1998/19980724.htm -- you said: "Nor can private counterparties restrict supplies of gold, another commodity whose derivatives are often traded over-the-counter, where central banks stand ready to lease gold in increasing quantities should the price rise." Did you mean that gold lending by central banks was intended to suppress or control gold's price -- that Congress didn't have to worry about someone cornering the gold market because central banks already had it cornered? With their many years of selling, lending, and swapping of gold, have central banks been underwriting the bullion banking business because it is a mechanism by which governments control the gold price? Question 2: Mr. Greenspan, in recent years right down to the present, have central banks or governments been trading in the gold market and related markets? Are they trading in the gold and related markets now? If so, what has been and is the objective of that trading? Is it to make money, to obtain more gold, or to control gold's price? Question 3: Mr. Greenspan, did central banks and governments trade in the gold market and related markets when you were chairman of the Federal Reserve? How about any agency of the U.S. government -- not just the Fed but the Treasury Department or any other agency? If there was such trading, what was its objective? Was it to control the gold price because gold is a currency competing or potentially competing with government currencies? Question 4: Mr. Greenspan, when you were chairman of the Fed you were also, by virtue of that office, a member of the Board of Directors of the Bank for International Settlements. The annual report of the BIS -- http://www.gata.org/node/12717 -- says the BIS "transacts foreign exchange and gold on behalf of its customers, thereby providing access to a large liquidity base in the context of, for example, regular rebalancing of reserve portfolios or major changes in reserve currency allocations. The foreign exchange services of the bank encompass spot transactions in major currencies and Special Drawing Rights as well as swaps, outright forwards, options, and dual currency deposits. In addition, the bank provides gold services such as buying and selling, sight accounts, fixed-term deposits, earmarked accounts, upgrading and refining, and location exchanges." Additionally, in a presentation to potential central bank members at BIS headquarters in Basel, Switzerland, in June 2008, the BIS advertised, as being among its services to its members, secret interventions in the gold and currency markets: http://www.gata.org/node/11012 Further, in a speech to a BIS conference in Basel in June 2005, the head of the bank's monetary and economic department, William R. White, said that a primary purpose of international central bank cooperation is "the provision of international credits and joint efforts to influence asset prices -- especially gold and foreign exchange -- in circumstances where this might be thought useful": http://www.gata.org/node/4279 So: While you were chairman of the Federal Reserve and a member of the BIS board, did the BIS operate in the gold market on behalf of any of its members to influence the gold price, and, if so, exactly how and for what purposes? Were such operations in the gold market public and announced or were they kept secret? If they were kept secret, why? Question 5: Mr. Greenspan, by virtue of your chairmanship of the Fed, you were also a member of the Board of Governors of the International Monetary Fund. In March 1999, while you were a member of the IMF board, the IMF staff presented the IMF board with a secret report that has been posted on the Internet site of the Gold Anti-Trust Action Committee: http://www.gata.org/node/12016 The secret IMF staff report said central banks objected to the staff's proposal to require them to make a forthright public accounting of their gold swaps and lending. Such a public accounting would have required central banks to distinguish gold in central bank vaults from gold that had been swapped or loaned by central banks. The secret IMF staff report said central banks objected to such a forthright accounting of their gold reserves out of "a desire to preserve the confidentiality of foreign exchange market intervention for a period, in order to enhance its effectiveness." While you were Fed chairman and a member of the IMF board, did the IMF intervene secretly in the gold and foreign exchange markets, and, if so, on whose behalf and for what purposes? Did the Fed, U.S. Treasury Department, U.S. State Department, or any other U.S. government agency advocate or concur with any such intervention? Why was such intervention kept secret? Question 6: Mr. Greenspan, in a letter to the Gold Anti-Trust Action Committee in September 2009 -- http://www.gata.org/files/GATAFedResponse-09-17-2009.pdf -- Fed Governor Kevin M. Warsh wrote that the Fed has secret gold swap arrangements with foreign banks. Did the Fed have such arrangements during your chairmanship? If so, with whom were these arrangements undertaken and what were their purposes? And why must these arrangements be kept secret? Question 7: Mr. Greenspan, during your tenure as Fed chairman, how many markets were the Fed and other U.S. government agencies trading in, directly or through intermediaries? Was such trading by U.S. government agencies for their own accounts or for the accounts of other governments and central banks, or both? And which markets were involved and what was the objective of such trading? Question 8: Mr. Greenspan, do the Fed or other U.S. government agencies have any connection to the huge interest rate derivative positions that, according to the U.S. comptroller of the currency, are held by JPMorganChase, a primary dealer in U.S. government securities? Are these positions really U.S. government positions or the positions of other governments or central banks, undertaken to defeat market forces on interest rates? * * * Of course these questions might be useful for interviewing not just Alan Greenspan but any current or former central banker -- if the world ever gets any financial news organizations willing to put critical questions to central banks. Instead, of course, while surreptitious central bank intervention in the markets is setting the value of all capital, labor, goods, and services in the world, the first rule of financial journalism is that central banks are never to be questioned about anything important. In any case GATA aims to continue its work on behalf of free and transparent markets and limited and accountable government. We're a nonprofit educational and civil rights organization recognized as federally tax-exempt by the U.S. Internal Revenue Service, so financial contributions to GATA are federally tax-deductible. We're also close to broke, so we would be especially grateful for any support from you now. Donations can be made through our Internet site, GATA.org. Thanks for your kind attention. * * * Join GATA here: Mines and Money London Business Design Centre London, England, U.K. Monday-Friday, December 1-5, 2014 http://www.minesandmoney.com/london/ Vancouver Resource Investment Conference Vancouver Convention Centre West 1055 Canada Place, Vancouver, British Columbia, Cananda Sunday-Monday, January 18-19,2015 http://cambridgehouse.com/event/33/vancouver-resource-investment-confere... * * * 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: http://gata.org/tshirts 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. 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Why Democracy Won’t Survive the New Depression Posted: 23 Oct 2014 12:45 PM PDT This post Why Democracy Won’t Survive the New Depression appeared first on Daily Reckoning. People often ask me, “How severe would the New Depression be?” And I think the best way to think about it is to consider what happened with the last Depression. After all, the two occurred for the same reason; a fiat money credit bubble formed when we broke the link between dollars and gold both times. So what happened in the 1930s? Well international trade collapsed and the international banking system collapsed; 1/3 of all the U.S. banks failed and international…so people lost all of the savings they thought they had. Without very aggressive government intervention to save the banks, in other words, if we allow a laissez faire solution, then all the saving in the world would be destroyed and trade barriers would go up as they did in the 1930s, so global trade would collapse. And what would that mean, for instance, for a country like China? China’s economy is entirely dependent on exporting to the United States. If the United States stops taking China’s imports into the United States, China’s economy would not have a recession, it would implode. There would be starvation in the cities and in the countryside. Regardless of what the Chinese government wanted, the starving Chinese would float down the Mekong River and invade Southeast Asia and eat all the rice in Thailand…and how would the government respond to that? With the complete collapse of government revenues, the United States could no longer afford to maintain a string of military bases around the world, so our global economic dominance would evaporate. We also couldn’t afford to continue paying Social Security or Medicare and so, once again the old people in this country would be on the verge of starvation (if not starving) as they were in the 1930s. It would be more or less a collapse of civilization as we know it. Unemployment would be at least 25 percent in this country, I would imagine, and how would those people vote? They would vote for parties that promised to give them money and food. In other words, we would take a very, very hard turn to the left and that may be met with the response from the right that involved a military coup. So it’s not at all certain that democracy could survive this sort of New Depression, and that’s why our government is so keen to make sure that that doesn’t happen. That’s why they’re going to continue supporting the economy with very large budget deficits when necessary and finance those deficits with quantitative easing when necessary. The post Why Democracy Won’t Survive the New Depression appeared first on Daily Reckoning.

U.S. Government SECRETLY Preventing a Stock Market Collapse! Posted: 23 Oct 2014 12:25 PM PDT In 1989, the President's Working Group on Financial Markets was setup. This "Plunge Protection Team" is what keeps the market going. Additionally, there are also the incentive programs for foreign central banks to buy up the shares at a nice discount! It seems that the globalists and bankers are... [[ 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! ]]

Prepare for Global Gold Confiscation and Orwell's 1984, Warns Rickards Posted: 23 Oct 2014 11:13 AM PDT Microchips embedded in the arms of citizens to track their activities, the total destruction of the middle classes and a cashless economy where an authoritarian state can freeze the accounts of dissenting citizens excluding them from all economic activity….. These are all part of the cheery scenario painted by the highly respected author and IMF-insider with connections to the Pentagon, Jim Rickards in his most recent article for Agora Financial.

The BIS Paves the Way for Silver and Gold Posted: 23 Oct 2014 10:53 AM PDT Behind the scenes (or rather, behind the curtain of propaganda) the most influential of the banking class is sending out smoke signals. The Bank for International Settlements (BIS), which is the bank for central banks, has telegraphed the next major world financial downturn. As if you could not see it coming. Recently, the Bank for International Settlement (BIS) warns of 'violent' reversal of global markets.

Don’t Blame Obama (He Has No Power) Posted: 23 Oct 2014 10:13 AM PDT This post Don't Blame Obama (He Has No Power) appeared first on Daily Reckoning. The genius H.L. Mencken put it best when he wrote that "every election is a sort of advance auction sale of stolen goods." We also like the one from P.J. O'Rourke, who wrote… "Don't vote! It just encourages the bastards." And we can't forget Twain's pithy observation… "If voting made a difference," he said, "they wouldn't let us do it." Until now, this area of debate has been reserved only for the fringes. The question of whether or not to vote, that is. Or if voting is actually effective in changing governmental policy (the answer? No). As you'll see in a moment, though, this debate is slipping into the mainstream. And in a very big way. To begin, let's rewind six years… "The voters who put Barack Obama in office expected some big changes," The Boston Globe article begins. "From the NSA's warrantless wiretapping to Guantanamo Bay to the Patriot Act, candidate Obama was a defender of civil liberties and privacy, promising a dramatically different approach from his predecessor. "But six years into his administration, the Obama version of national security looks almost indistinguishable from the one he inherited. Guantanamo Bay remains open. The NSA has, if anything, become more aggressive in monitoring Americans. Drone strikes have escalated. Most recently it was reported that the same president who won a Nobel Prize in part for promoting nuclear disarmament is spending up to $1 trillion modernizing and revitalizing America's nuclear weapons." "It has long been the province of conspiracy theorists," Mickey Edwards writes in a separate article in the Globe, "to claim that the real power of government is not wielded by the obvious practitioners of statecraft — presidents, members of Congress, the judiciary — but by secret or semi-secret entities, real wizards whose hidden machinations send us to war, sell us out to enemies, siphon public treasure into private hands. "Depending on your talk show or paranoia of choice, these are the bankers, oil barons, one-worlders, war profiteers, Bilderbergers, Masons, Catholics, Jews, or Trilateralists. Our formal institutions, in this scenario, are stage sets, Potemkin villages; our officials are puppets; we are an unsuspecting audience." Yes, there are countless ways to say the government is corrupt. But here's the thing… At their core, all these theories have a "shadow government" of sorts running things behind the scenes. And, according to one highly regarded professor, that might not be too far from reality. Enter Michael Glennon and his book National Security and Double Government. "Why," Glennon poses the question, "does national security policy remain constant even when one president is replaced by another, who as a candidate repeatedly, forcefully, and eloquently promised fundamental changes in that policy?" To be sure, Glennon is not a name uttered in conspiracy circles. He's a respected professor of international law at Tuft's Fletcher School. He served legal counsel to the Senate Foreign Relations Committee. And he's a respected academic in several Ivy-League institutions. In his new book, says the Globe, "he catalogs the ways that the defense and national security apparatus is effectively self-governing, with virtually no accountability, transparency, or checks and balances of any kind. He uses the term 'double government': There's the one we elect, and then there's the one behind it, steering huge swaths of policy almost unchecked. Elected officials end up serving as mere cover for the real decisions made by the bureaucracy." The U.S. government is run with, Glennon says, "a bifurcated system — a structure of double government — in which even the president now exercises little substantive control over the overall direction of U.S. national security policy." The result of this double government, he says, is a system that marches relentlessly "toward greater centralization, less accountability, and emergent autocracy." Of course, Glennon didn't come up with the idea of a double government… Glennon's theory (and the theory of nearly every modern conspiracy theorist on Earth) originates with notes from an English scholar named Walter Bagehot back in the 1860s. In his book The English Constitution, Bagehot described the layout of the British government. He outlined two different layers of institutions. One, the "dignified institutions," are those that the public mistakenly believes run the show. The second, the "efficient institutions," are those that actually run the show and set government policy. Yes, it's easy to point the finger…* But, says Glennon, we the public are part of the problem. And the only possible purveyors of a solution. And, he tells us, we're in serious danger of becoming comfortably ignorant as to what the government's role actually should be — and when they're overstepping their bounds. As Glennon notes, "the term Orwellian will have little meaning to a people who have never known anything different, who have scant knowledge of history, civics, or public affairs, and who in any event have never heard of George Orwell. "I think the American people are deluded… that the institutions that provide the public face actually set American national security policy. They believe that when they vote for a president or member of Congress or succeed in bringing a case before the courts, that policy is going to change. "Now, there are many counter-examples in which these branches do affect policy, as Bagehot predicted there would be. But the larger picture is still true — policy by and large in the national security realm is made by the concealed institutions. "The ultimate problem is the pervasive political ignorance on the part of the American people. And indifference to the threat that is emerging from these concealed institutions. "That is where the energy for reform has to come from: the American people. Not from government. Government is very much the problem here. The people have to take the bull by the horns. And that's a very difficult thing to do, because the ignorance is in many ways rational. There is very little profit to be had in learning about, and being active about, problems that you can't affect, policies that you can't change." Speaking of profit, nowhere is there more proof of the double government than in the military-industrial complex… And its clear priority over… well… everything. The latest example is the disproportionate amount of action in the Middle East versus in West Africa. Not that we condone either actions from the government, of course. As we already saw in the case of Firestone, the private sector is much more competent at handling Ebola. And it should be encouraged to do so. And, of course, ISIS is a frankenstein largely of the U.S. military's creation. But the reason Ebola has gotten the shaft over ISIS is obvious: There are no high-dollar contracts to shuffle in the fight against Ebola. Until, of course, Ebola gets completely out of control and the government can justify vaccinating whole populations (cha-ching!). Again, stopping this outbreak could've been as simple as sending bleach, gloves, gowns and goggles to healthcare workers when they needed them. Now it's a little more complicated. All the more reason you should prepare for the worst (more on that in a moment). Unfortunately, nearly 400 Africans have died of Ebola just in the past six days… And those are just the deaths that went reported. It's not spiraling out of control. It's already spun out. It's now completely out of control. The American public is just now catching onto the dangers of an Ebola outbreak in our interconnected world… And the manufacturing plants that create Ebola preparedness kits are already feeling the pinch. "The plants, which make gowns and other protective equipment that medical staff need to treat Ebola patients," The New York Times reports, "have hired extra workers to make sure the machines can run all night. "Some already are." "We are not at our maximum capacity yet," Judson Boothe, senior director of products supply for Halyard Health told the rag. "But we're getting closer every day." Judson also added that they hit max cap during the SARS outbreak — so a supply crunch in the future isn't even close to out of the question. According to Medline spokeswoman Kathryn Cummings, demand for specialized Ebola kits is up tenfold in just the past month. "We receive 30 to 40 calls a day inquiring about our kits," Dant Tisci, president of one of Medline's manufacturing division told the Times. Officials are now saying it could take six months to fully contain Ebola. We're certain we haven't seen the last case in the U.S. Until tomorrow, Chris Campbell for The Daily Reckoning Ed. Note: Laissez Faire just released their Ultimate Pandemic Survival Guide exclusively to their readers. Over 240 hours of research and writing went into this project. It contains everything you need to know about Ebola. Follow the instructions inside, and you'll be armed and ready for anything as soon as this weekend. To receive access to this guide, you need to sign up. Click here to sign up for FREE now. The post Don't Blame Obama (He Has No Power) appeared first on Daily Reckoning.

*Video Update* The Crash of 2014: A Special Briefing for All Casey Subscribers Posted: 23 Oct 2014 10:05 AM PDT Dear Subscribers and Readers, As CEO of Casey Research, I’m issuing an urgent alert: Over the last several months, our team has accumulated significant evidence that a market crash is imminent. Dominick Graziano, our lead technical analyst and contributor to The Casey Report, has been following this movement for months. In August, he warned that “several reliable signals portend a stock market correction, or worse” to come as we reentered trading season. He also correctly predicted oil’s tumble and much more broadly that “the dollar is likely headed much higher, and commodities lower, in the months ahead.” The worrisome setup for these conclusions was a convergence of multiple technical indicators in a way that hasn’t been seen in decadesnot even in 2008. Starting 10 days ago, those same signals intensified, showing that the correction has begun. As the S&P 500 crossed its 200-day moving average for the first time since the last big crash, this crash moved from inevitable to imminent. The chart below shows price action in the Dow Jones Industrial Average, which has completely reversed course after a remarkable 1,120 day bull run, and with remarkable speed: There was another time in history when the Dow ignored fundamental problems, bad financial news, and huge political shifts for many months, only to make a sudden about-face. That was in 1929: (Click to Enlarge Chart) In the wake of that move, the Index lost nearly 50% of its value in a matter of weeks. One chart, of course, does not mean that we’re headed for a 1929-level crash nor are we predicting this one will get that bad. However, this is but one example of several indicators that have changed in such a dramatic way that it’s now clear a serious crash is beginning. As we’ve been warning, the Fed’s actions post 2008 were only effective in kicking the can down the road. This allowed governments to ignore the structural issues undermining any recovery. Instead, the Fed’s zero-interest-rate policy and successive rounds of QE only facilitated bigger debt and asset bubbles. Unfortunately, we’re now emerging from the figurative eye of the storm. As my partner Doug Casey says, it’s likely that it will be much, much worse than even he can imagine. It will make the 2008 correction look like a walk in the park. All of our research points out to a very serious correctiona crash, by a more accurate nameand we think it’s essential that subscribers take emergency measures to prepare. Like preparing for a hurricane, you can hope it won’t hit too hard, or with only minimal cost or inconvenience you can board up the house, head inland for a bit, and be sure you’re safe. Update 1: October 23, 2014 In order to help answer additional questions about why we’re making this call and what the coming crash will mean for your portfolio, we’ve recorded a quick interview with the members of The Casey Report team who put together this critical report. I sincerely believe that all readers should act immediately, and have instructed my team to prepare a special report with much more detailed information on the indicators that have led us to these conclusions, as well as the specific strategies you can use to protect yourself. All active subscribers to Casey Research paid publications have free access to this in depth report, and I encourage you to download it immediately (login required): Access Special Briefing: Prepare for the 2014 Crash Now If you aren’t a subscriber, I still think it’s important for you to know how to deal with this situation, so we’re making the same guidance available for a nominal cost to anyone who wishes to prepare for this crash. Click here for details on accessing the report for nonsubscribers. Time is of the essence. With a little preparation, you can easily weather this storm and significantly reduce any losses. Better yet, you will have assets to deploy on the other side. Like those who saw 2008 coming, it’s an opportunity not just to survive but to thrive in the inevitable recovery on the other end, whatever shape it takes. Sincerely, Olivier Garret, CEO Casey Research

Legend - What Surprise Action To Expect In Gold, Stocks & Oil Posted: 23 Oct 2014 09:19 AM PDT Today a legendary trader and investor spoke with King World News about what surprise action to expect in gold, global stock markets, and oil. Victor Sperandeo has been in the business 45 years, and has worked with famous individuals such as Leon Cooperman and George Soros. Below are the warnings issued by Sperandeo. This posting includes an audio/video/photo media file: Download Now

Euro, USD, Gold and Stocks According to Chartology Posted: 23 Oct 2014 09:13 AM PDT Lets start off the Wednesday Report by looking at several currencies that broke out today. As you know the Eruo has been one of the weakest currencies out there. Today's breakout of a bear flag confirms there is more downside to come. This first chart is a daily look which shows the Euro formed a H&S top in the first half of this year and broke down sharply in late July. The Euro has been chopping out the blue bear flag for most of October which broke down today with a breakout gap.

Your Personal Gold Standard Posted: 23 Oct 2014 07:45 AM PDT This post Your Personal Gold Standard appeared first on Daily Reckoning. There isn’t a central bank in the world that wants to go back to a gold standard. But that’s not the point. The point is whether they will have to. I’ve had conversations with several of the Federal Reserve Bank presidents. When you ask them point-blank, “Is there a theoretical limit to the Fed’s balance sheet?” they say no. They say there are policy reasons to make it higher or lower, but that there’s no limit to the amount of money you can print. That is completely wrong. That’s what they say; that’s how they think; and that’s how they act. But in their heart of hearts, some people at the Fed know it’s wrong. Luckily, people can vote with their feet… I always tell people who say we’re not on the gold standard that, in a way, we are. You can put yourself on a personal gold standard just by buying gold. In other words, if you think that the value of paper money will be in some jeopardy, or confidence in paper money may be lost, one way to protect yourself is by buying gold, and there’s nothing stopping you. The typical rejoinder is, “What’s the point of owning gold? They’re just going to confiscate it, like Roosevelt did in 1933?” I find that extremely unlikely. In 1933, we’d just come through four years of the Great Depression, and Roosevelt was new in office. People talk about the first hundred days, but he closed the banks right after he was sworn in. And he confiscated gold only a few weeks later. And it wasn’t as if Elliot Ness was going door to door, breaking into your house and taking gold. They wanted to get a small number of people who had 400-ounce bars in bank vaults. And they got those people because they were able to close the banks and use them as intermediaries to confiscate that gold. But now, it’s far more dispersed, and there’s far less trust in government. If the government tried to confiscate gold today, there would be various forms of resistance. The government knows this. So they wouldn’t issue that order, because they know it couldn’t be enforced, and it might cause various kinds of civil disobedience or pushback, etc. As long as you can own gold, you can put yourself on your own gold standard by converting paper money to gold. I recommend you do that to some extent. Not all in, but I recommend having 10% of your investable assets in gold for the conservative investor, and maybe 20% for the aggressive investor — no more than that. Those are pretty high allocations relative to what people have. Most people own no gold, and all the institutions combined have an allocation to gold of about 1.5%. So even if you take the low end of this range, you’re still nowhere near 10%. In fact, institutions could not double their gold allocation even to 3%. There’s not enough gold in the world — at current prices — to satisfy that demand. So it’s got this huge upside associated with it. Still, central banks don’t want to go to a gold standard. But if gold is a barbarous relic, if gold has no role in the monetary system, if gold is a “stupid” investment, then why do the Chinese have 5,000 tonnes? Are they stupid? If some scenarios play out, you are going to see the price of gold go up… a lot. And it may go up a lot in a very short period of time. It’s not going to go up 10% per year for seven years and the price doubles. It’s going to chug along sideways, maybe in an upward trend, with a lot of volatility. It will have a kind of a slow grind upward… and then a spike… and then another spike… and then a super-spike. The whole thing could happen in a matter of 90 days — six months at the most. When that happens, you’re going to have two Americas. You’re going to have an America that was not prepared. Paper savings will be wiped out; 401(k)s will be devalued; pensions, insurance and annuities will be devalued through inflation… Because remember, it’s not just the price of gold going up. It’s like putting a thermometer in a patient, getting a 104-degree temperature and blaming the thermometer. The thermometer’s not to blame; it’s just telling you what’s going on. Likewise, the price of gold is not an economic object or aim in itself; it’s a price signal. It tells you what’s going on in the economy. And gold at the levels I’m talking about would mean that you’ve now verged into hyperinflation, or something close to it, because nothing happens in isolation. At that point, you have to give more credence to gold. Now you’ve crossed the threshold. The minute you think of gold and paper money side by side, or having some relationship, you get to these price levels of $7,000-8,000 an ounce. They’re not made up. They’re not there to be provocative. They’re actually the math. Those are the numbers you get when you simply divide the money supply by the amount of gold in the market. People are going to have to pay attention to that. And either the Chinese are dopes — which they’re not — or people will start to get gold, which they will. But if there’s a run on paper currencies (which is entirely possible) and there’s borderline hyperinflation (which is entirely possible), they may have to go to a gold standard… Not because they want to, but because they find it necessary to calm the markets. I suggest you buy your gold at current levels — around $1,220 — and ride the wave up to these much higher levels ($4,000-5,000 an ounce) and then assess the situation. Be nimble. You can’t just write a game plan today and follow it step by step. That’s nonsense. You have to be nimble; you have to be following developments; you have to be prepared to change your mind based on new news. Regards, James Rickards for The Daily Reckoning P.S.: Don't expect to see gold's next big move from a long way off, says our friend and now colleague, Jim Rickards. Once you understand what's going on, you can do something to protect yourself. Don't be dependent on holding dollars when the day of reckoning comes – hold hard assets like gold, and keep informed with a free subscription to Daily Resource Hunter. The post Your Personal Gold Standard appeared first on Daily Reckoning.

Breaking: European Central Banks repatriate gold from USA Posted: 23 Oct 2014 07:19 AM PDT What is this secret repatriation of Gold about? We have heard from one very reliable source that repatriation of gold is secretly taking place at this moment from the USA to Europe. This is October 2014! The information contains details about transported quantities by one of the global security firms being much higher than usual, as well as country of … Read the rest

The Better Short: Gold or Silver? Posted: 23 Oct 2014 06:45 AM PDT The fundamentals for the precious metals are weak. This has been highlighted in recent weeks by the lack of a major rally in gold and the losses in silver despite a spike in volatility to its highest since 2011. Improving economic data, the tapering of QE, and discussion of when the first rate hike will be have resulted in heavy losses over the past two years in the precious metals, and are to blame for the poor performance in the recent risk off market conditions stemming from the Ebola fears.

US Oil & Global Gold Posted: 23 Oct 2014 02:29 AM PDT US oil stocks have soared as shale pushes crude prices down. But gold...?   The UNITED STATES is doing better than it has in years, writes Frank Holmes on his Frank Talk blog at US Global Investors.   Jobs growth is up, unemployment is down, our manufacturing sector carries the rest of the world on its shoulders like a wounded soldier and the World Economic Forum named the US the third-most competitive nation, our highest ranking since before the recession.   As heretical as it sounds, there's a downside to America's success, and that's a stronger Dollar. Although our currency has softened recently, it has put pressure on two commodities that we consider our lifeblood at US Global Investors: gold and oil.   It's worth noting that we've been here before. In October 2011, a similar correction occurred in energy, commodities and resources stocks based on European and Chinese growth fears.    But international economic stimulus measures helped raise market confidence, and many of the companies we now own within these sectors benefited. Between October 2011 and January 2012, Anadarko Petroleum rose 58%; Canadian Natural Resources, 20%; Devon Energy, 15%; Cimarex Energy, 15%; Peyto Exploration & Development, 15%; and Suncor Energy, 10%.   Granted, we face new challenges this year that have caused market jitters – Ebola and ISIS, just to name a couple. But we're confident that once the Dollar begins to revert back to the mean, a rally in energy and resources stocks might soon follow. Brian Hicks, portfolio manager of our Global Resources Fund (PSPFX), notes that he's been nibbling on cheap stocks ahead of a potential rally, one that, he hopes, mimics what we saw in late 2011 and early 2012.   A repeat of last year's abnormally frigid winter, though unpleasant, might help heat up some of the sectors and companies that have underperformed lately.   On the left side of the chart below, you can see 45 years' worth of data that show fairly subdued fluctuations in gold prices in relation to the Dollar. On the right side, by contrast, you can see that the strong Dollar pushed bullion prices down 6% in September, historically gold's strongest month. This move is unusual also because gold has had a monthly standard deviation of ±5.5% based on the last 10 years' worth of data.     Here's another way of looking at it. On October 3, bullion fell below $1200 to prices we haven't seen since 2010, but they quickly rebounded to the $1240 range as the Dollar index receded from its peak the same day.     There's no need to worry just yet. This isn't 2013, when the metal gave back 28%. And despite the correction, would it surprise you to learn that gold has actually outperformed several of the major stock indices this year?     As for gold stocks, there's no denying the facts: With few exceptions, they've been taken to the woodshed. September was demonstrably cruel. Based on the last five years' worth of data, the NYSE Arca Gold BUGS Index has had a monthly standard deviation of ±9.4, but last month it plunged 20%. We haven't seen such a one-month dip since April 2013. This volatility exemplifies why we always advocate for no more than a 10% combined allocation to gold and gold stocks in investor portfolios.   Oil's slump is a little more complicated to explain.   Since the end of World War II, black gold has been priced in US greenbacks. This means that when our currency fluctuates as dramatically as it has recently, it affects every other nation's consumption of crude. Oil, then, has become much more expensive lately for the slowing European and Asian markets. Weaker purchasing power equals less overseas oil demand equals even lower prices.   What some people are calling the American energy renaissance has also led to lower oil prices. Spurred by more efficient extraction techniques such as fracking, the US has been producing over 8.5 million barrels a day, the highest domestic production level since 1986.    We're awash in the stuff, with supply outpacing demand. Whereas the rest of the world has flat-lined in terms of oil production, the US has zoomed to 30-year highs. In a way, American shale oil has become a victim of its own success.     At the end of next month, members of the Organization of the Petroleum Exporting Countries (OPEC) are scheduled to meet in Vienna. As Brian speculated during our most recent webcast, it would be surprising if we didn't see another production cut. With Brent oil for November delivery at $83 a barrel – a four-year low – many oil-rich countries, including Iran, Iraq and Venezuela and Saudi Arabia, will have a hard time balancing their books. Venezuela, in fact, has been clamoring for an emergency meeting ahead of November to make a plea for production cuts.      Although not an OPEC member, Russia, once the world's largest producer of crude, is being squeezed by plunging oil prices on the left, international sanctions on the right. This might prompt President Vladimir Putin to scale back the country's presence in Ukraine and delay a multibillion-Dollar revamp of its armed forces. When the upgrade was approved in 2011, GDP growth was expected to hold at 6%. But now as a result of the sanctions and dropping oil prices, Russia faces a dismally flat 0.5%.   The current all-in sustaining cost to produce one ounce of gold is hovering between $1000 and $1200. With the price of bullion where it is, many miners can barely break even. Production has been down 10% because it's become costlier to excavate. As I recently told Kitco News' Daniela Cambone, we will probably start seeing supply shrinkage in North and South America and Africa.   The same could happen to oil production. Extraction of shale oil here in the US costs companies between $50 and $100 a barrel, with producers able to break even at around $80 to $85. If prices slide even further, drillers might be forced to trim their capital budgets or even shelve new projects.   Michael Levi of the Council on Foreign Relations told NPR's Audie Cornish that a decrease in drilling could hurt certain commodities: "[I]f prices fall far enough for long enough, you'll see a pullback in drilling. And shale drilling uses a lot of manufactured goods – 20% of what people spend on a well is steel, 10% is cement, so less drilling means less manufacturing in those sectors." At the same time, Levi places oil prices in a long-term context, reminding listeners that we've become accustomed to unusually high prices for the last three years. "People were starting to believe that this was permanent, and they were wrong," he said. "So the big news is that volatility is back." On this note, be sure to visit our interactive and perennially popular Periodic Table of Commodities, which you can modify to view gold and oil's performance going back ten years.

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