saveyourassetsfirst3 |
- "Retaliation": The Feds have launched a new attack on the Bundy family
- Hawkish Sounding Fed ends QE
- You won't believe what Alan Greenspan is saying today
- Federal Reserve update: QE is done
- QE is Dead! Long Live QE?
- Gold clings on to gain despite stocks rebound
- Alasdair Macleod: Markets and Reality Disconnected
- Just Blame the Banks
- Gold set to bottom at $1000 and climb to $3000 in three years: Jordan Roy Byrne
- The new London gold ‘fix’ – the battle has commenced
- The BBC is Using Anti-Terror Surveillance to Find Tax Dodgers
- Stewart Thomson on Gold: Minor Weakness Is Nothing To Fear
- Silver bullion flying off the shelf
- Russia buys most gold for reserves since ’98
- Metals market update for October 29
- U.S. Mint Gold Coin Sales Near 60,000 Ounces In October - Swiss Gold Initiative Leading To Increase
- U.S. Mint Gold Coin Sales Near 60,000 Ounces In October – Swiss Gold Initiative Leading To Increase In Demand?
- Gold: India’s Capital Asset through History
- J.D. Alt: Have We Passed the Tipping Point of Biological Collapse?
- Gold in tight range ahead of FOMC
- Bob Moriarty: Flock of Black Swans Points to Imminent Stock Market Crash
- Interview with Palisade Radio
- A Myth Concerning Gold Confiscation
- Airport Trash Bags Go Under the ‘Gold’ Scanner in India
- Sweden's Crown Slides as Riksbank Cuts Rates to Zero
- New London gold benchmark to go live in early Q1/2015 - LBMA
- Airport trash bags go under the 'gold' scanner in India
- Lawrence Williams: Hong Kong gold exports to China pick up strongly but...
- DEAD BANKSTERS & CHINA’S 30,000 TONS OF GOLD — Alasdair Macleod
- Peter Schiff defends his call for $5,000 an ounce gold
- The BIS Paves the Way for Silver and Gold- Telegraphs Next Financial Crash
- Harvey Organ’s Gold & Silver Update: BACKWARDATION!!
- Bo Polny: The 252 Year Stock Market Blackjack 21 Recession/Depression CYCLE!
- Breaking: NASA Rocket Carrying “Classified Crypto Equipment” Explodes on Take-Off
- Investor Alert: Disinflation And Slowing Monetary Growth
- Consumer Confidence Reading Cheers Equity Bulls
| "Retaliation": The Feds have launched a new attack on the Bundy family Posted: 29 Oct 2014 12:28 PM PDT From Paul Joseph Watson at Infowars.com: A federal land grab being imposed under the guise of environmental protection in Southern Nevada has been labeled an act of “deliberate retaliation” by Cliven Bundy, the rancher who was at the center of a standoff between BLM agents and armed militia groups earlier this year. On Sunday, the Bundy family posted a Facebook entry which asserted that, “the federal government is mounting retaliations against the Bundy family and the Southern Nevada people,” after it was announced that the feds intended to designate around 1.8 million acres of land around their Gold Butte range as critical to the environment. The initial dispute between Bundy and the feds, which culminated in an armed standoff between BLM agents and Bundy supporters back in April, centered around more than $1 million in grazing fees which authorities claimed Bundy owed stretching back two decades. The Bundy family asserts that the new draft Resource Management Plan made public by the Bureau of Land Management would place up to 3 million acres of land off limits to recreational use, agriculture or ranching. “They’re trying to surround us by controlling all the land. People should know they’re doing this without the knowledge of the people who use it,” Carol Bundy told the Las Vegas Review-Journal. Days after the standoff came to a head earlier this year, after which the feds were forced to release nearly 400 cattle belonging to Bundy, Nevada Senator Harry Reid labeled Bundy supporters “domestic terrorists” and indicated that the fight was not over. “From near the beginning of history, tyrannical men have sought to oppress through the control of land and resources. ‘Control the land and resources, and you have the power to control the people.’ There is a direct correlation to land and resources with power and wealth. All major powers in world history have gained their power & wealth by conquering the land and controlling the resources,” states the Bundy Facebook post, adding that Areas of Critical Environmental Concern (ACECs) “have been a tool used by the federal government to gain further control of large masses of western lands and the resources.” The BLM’s latest move to seize huge tracts of land surrounding Bundy’s property under the justification of environmental protection suggests that we could witness part two of the ‘Battle of Bunkerville’ sometime over the next few months. The comment period for the BLM’s new proposal ends on January 7th after a series of public meetings set to begin on Monday. Watch footage of April’s armed standoff between Bundy supporters and federal authorities below. |
| Posted: 29 Oct 2014 12:21 PM PDT Well, we got it. By, "it", I am referring to the final end of the tapering process that the Fed began so long ago I cannot even remember but will conclude at the end of this month. Throw on top of that some happy talk about the US economy, in particular the job market (where that came from is unclear) by referring to "solid job gains", and that is all it took to send the US Dollar sharply higher on the crosses. Of course they had to throw in that falling unemployment rate but we all know the reason for the lower number is because the labor participation rate continues to decline. Where they also came up with the phrase, "that labor market slack is gradually diminishing" escapes me as well especially when we stop counting the folks out of work! Perhaps, if you mean by "gradually diminishing", the sort of speed that one can observe when watching a blade of grass grow, then I will happily grant them that. We all know that is a bunch of hooey for if that was true, WAGES would be RISING, and not flat/stagnant as they currently are. That was the major phrase however that got the currency markets all roiled as that phrase was not in the previous releases. As a matter of fact, I seem to distinctly recall the Fed being on record as being concerned about that labor market slack being substantial. Hey - its election time; what more can I say. The Fed boss has to keep her boss, happy, if you know what I mean. TAlk about overdoing it however. Where I come from, the idea that there is "underlying strength in the economy to support ongoing progress towards maximum employment in the context of price stability" is something we feed to mushrooms. Are they kidding me? Regardless, the talk in the market as a result turned to that interest rate hike thing once more. As before there was nothing in this month's release that would give any concrete evidence of a set date for an actual hike. What we got was the same as before - the Fed promised to keep interest rates low for " a considerable time". Where have we heard that before? By the way, regular readers of this site are aware of that TIPS spread chart that I post regularly comparing the change in the spread to the price of gold and using it as a type of forecasting tool for the price of gold. The Fed noted falling inflation expectations as indicated by that spread. They also noted the move lower in energy prices but oddly enough came up with the idea that they did not expect downward pressure on inflation to last. Where did they get that insightful view from? It sure as hell has not been from watching the CRB index or the Goldman Sachs Commodity Index or the Velocity of Money or any other such actual useful data. I guess they just said it because it sounded good! Seriously, I see no data that gives the slightest reason at this point to believe that the downward pressures on inflation is to be of short duration. Then again, maybe they have been watching the slaughter in the grain markets and that has gotten them all revved up about food inflation. This missive will be short for the moment as I am utterly exhausted from trading in the grains, which have become about as bizarre as I have ever seen them. Meal once again led the entire grain floor sharply higher and for now, it looks as if one set of shorts is getting slaughtered each and every day at this point. Margin clerks are having their hands full forcing specs out of those positions and a veritable bloodbath is taking place. At some point the temporary supply deficit in meal will be eliminated and then we will go from nothing to a glut. I am not sure how long it will take to fill the pipeline again but when it goes, it will go with horrible ferocity. While this will not endear me to gold bulls, gold was flattened on the FOMC news and is currently down over 1%. The HUI is a bloodbath having fallen 3.25% at this time while the junior-laden GDXJ is being soaked, down 5.55% at this moment. I honestly believe we going to see some junior miners disappear before this is all done. Be careful what you buy out there if you want to be a "hero contrarian" and start buying junior miners. Take a look at this ratio chart briefly comparing the HUI to the price of gold and creating a ratio. It hit a level that was last seen - are you sitting down as you read this - December 2000! That is FOURTEEN YEARS AGO.  I said this before in a recent post and will say it again now, either the price of gold is too high and needs to fall further or the mining stocks are undervalued against the price of gold and need to move higher. Based on what I am seeing today, I see nothing to persuade me any differently. I still think gold is heading lower. Either that or some of these mining companies are history. Notice on the gold chart that the metal has fallen to the support zone marked near the $1220-$1210 level. It is currently BELOW that level. the way it is trading at the moment ( and of course this could change) it does look as it a test of $1200 is coming. The reason I say that is because the price has fallen well below the middle line of the Bollinger Band indicator with the lower band sitting near $1197.  The ADX is still choppy suggesting that this move is a move back to the bottom of a wide range that has been in place for nearly a month now. However the clear break to the upside of the -DMI (red line) shows near term momentum with the bears. To get out of the mess that they now find themselves in, the bulls are going to have to clear that downtrending 50 day moving average again. That is way up there near $1240 at the moment. Incidentally, it does look as if Mr. "gold will be well north of $2000 before the end of this year and silver north of $50" has struck out once again. I am not trying to rub salt into a wound - I am merely repeating something I have said here repeatedly in an attempt to teach and WARN readers - DO NOT FOLLOW ANYONE who claims to know in advance where a market is going. Here is the truth - THEY DO NOT KNOW in spite of their hubristic and reckless claims to the contrary. Proof is in the price chart for the metals but I can say the same thing about these grains. Most of us who trade the grains for a living all had ideas where we thought the grains were heading. Most of us were also wrong! I will try to get some stuff up later on the bean meal and the grain markets. The action in there has taken on a life of its own and a full-out money game is now what is occurring. Panic buying - despair- forced short covering due to margin calls - blown to pieces and to hell in a handbasket hedges are being obliterated. You name it - it is taking place in there. I can tell you one thing - there are some very angry traders out there right now and some very angry hedgers at what has transpired. This is what happens when techicals take over a market and then take on their own life. Fundamentals are essentially irrelevant when positions are getting blown to hell. About the only thing that matters right now is who has the beans? |
| You won't believe what Alan Greenspan is saying today Posted: 29 Oct 2014 12:00 PM PDT From Zero Hedge: It appears it is time for some Hillary-Clinton-esque backtracking and Liesman-esque translation of just what the former Federal Reserve Chief really meant. As The Wall Street Journal reports, the Fed chief from 1987 to 2006 says the Fed’s bond-buying program fell short of its goals, and had a lot more to add. Mr. Greenspan’s comments to the Council on Foreign Relations came as Fed officials were meeting in Washington, D.C., and expected to announce within hours an end to the bond purchases. He said the bond-buying program was ultimately a mixed bag. He said that the purchases of Treasury and mortgage-backed securities did help lift asset prices and lower borrowing costs. But it didn’t do much for the real economy. “Effective demand is dead in the water” and the effort to boost it via bond buying “has not worked,” said Mr. Greenspan. Boosting asset prices, however, has been “a terrific success.” … He observed that history shows central banks can only prick bubbles at great economic cost. “It’s only by bringing the economy down can you burst the bubble,” and that was a step he wasn’t willing to take while helming the Fed, he said. … The question of when officials should begin raising interest rates is “one of those questions I cannot answer,” Mr. Greenspan said. He also said, “I don’t think it’s possible” for the Fed to end its easy-money policies in a trouble-free manner… “Recent episodes in which Fed officials hinted at a shift toward higher interest rates have unleashed significant volatility in markets, so there is no reason to suspect that the actual process of boosting rates would be any different, Mr. Greenspan said. … “I think that real pressure is going to occur not by the initiation by the Federal Reserve, but by the markets themselves,” Mr. Greenspan he said. And finally, while CNBC’s audience is told what a terrible thing gold is, “The Maestro” − having personally created the financial cataclysm the world finds itself in following a lifetime of belief in fiat, Keynesian ideology and “fixing” one bubble with an even greater and more destructive asset bubble − has suddenly had an epiphany and now has a very different message from the one he preached during his decades as the head of the Fed. Mr. Greenspan said gold is a good place to put money these days given its value as a currency outside of the policies conducted by governments. What Greenspan failed to add is that it is thanks to his disastrous policies (subsequently adopted by Bernanke and Yellen) that gold is the “place to put money.” |
| Federal Reserve update: QE is done Posted: 29 Oct 2014 11:44 AM PDT From Bloomberg: The Federal Reserve said it sees further improvement in the labor market while confirming it will end an asset-purchase program that has added $1.66 trillion to its balance sheet. “Labor market conditions improved somewhat further, with solid job gains and a lower unemployment rate,” the Federal Open Market Committee said today in a statement in Washington. “A range of labor market indicators suggests that underutilization of labor resources is gradually diminishing,” the panel said, modifying earlier language that referred to “significant underutilization” of labor resources. Policy makers maintained a pledge to keep interest rates low for a “considerable time.” While saying inflation in the near term will probably be held down by lower energy prices, they repeated language from their September statement that “the likelihood of inflation running persistently below 2 percent has diminished somewhat.” Stocks extended losses after the Fed announcement. The Standard & Poor’s 500 Index fell 0.8 percent to 1,969.29 as of 2:17 p.m. in New York. The benchmark 10-year Treasury note yielded 2.35 percent, up 5 basis points from yesterday. Chair Janet Yellen is completing two years of bond purchases that started under her predecessor, Ben S. Bernanke, as the Fed nears its goal for full employment. She must now chart a course toward the first interest-rate increase since 2006 while confronting risks from a slowing global economy and declining inflation. The FOMC repeated it will consider a wide range of information in deciding when to raise the federal funds rate, which has been held near zero since December 2008. Most Fed officials expect to raise the rate next year, according to projections released last month. Reinvesting Proceeds The Fed said it will continue reinvesting proceeds from a balance sheet that swelled to a record $4.48 trillion in the course of three rounds of so-called quantitative easing that started in November 2008 during the longest and deepest recession since the 1930s. The latest round was announced in September 2012, with monthly purchases of $85 billion in Treasuries and mortgage-backed securities. The Fed began a step-like reduction of purchases in January 2014, cutting them by $10 billion per meeting. Minneapolis Fed President Narayana Kocherlakota dissented, saying that with low inflation expectations the Fed should commit to keeping rates low “at least until the one-to-two-year ahead inflation outlook has returned to 2 percent and should continue the asset-purchase program at its current level.” As the Fed winds down unprecedented stimulus, the European Central Bank is contemplating its own quantitative easing program to tackle the weakest inflation in five years, and Japan is continuing purchases. Bright Spot “The U.S. is a big bright spot in the world,” said Stephen Cecchetti, professor of international economics at Brandeis International Business School in Waltham, Massachusetts, and a former New York Fed research director. “Europe is still struggling quite a lot, Japan seems to be up and down, and China’s having some growing pains at this point.” A cooling global economy and declining inflation are posing risks to the outlook for the U.S., which saw growth accelerate in the second quarter to the fastest pace since 2011 and unemployment drop to a six-year low last month. A number of officials said the five-year U.S. expansion “might be slower than they expected if foreign economic growth came in weaker than anticipated,” minutes of the Sept. 16-17 FOMC meeting show. Fed Governor Daniel Tarullo said at an Oct. 11 event in Washington that he’s “worried about growth around the world.” Market Volatility The weakness, along with conflicts in Ukraine and the Mideast, sparked global market turbulence that sent the Standard & Poor’s 500 Index (SPX) down as much 7.4 percent from its record close on Sept. 18, the day after the last Fed meeting. Ten-year Treaury notes touched the lowest since May 2013. The S&P 500 has since rallied to recover most of its drop, resuming an advance that has seen the index almost triple since March 2009. The 10-year Treasury note yielded 2.3 percent late yesterday, below its 3.03 percent level at the end of last year. The divergence in major economies has also helped lift the dollar against its major peers, restraining inflation and push ing back expectations for the timing of the first Fed rate in crease. The Bloomberg Dollar Spot Index, which gauges the green back against 10 major currencies, has risen close to 6 percent since July 1. Fed funds rate futures show the probability of a rate increase by the September 2015 FOMC meeting is about 42 percent, compared with 76 percent chance at the end of last month. Balance Sheet Even after purchases end, the Fed’s record balance sheet will provide support to the economy by limiting the supply of government securities and suppressing long-term interest rates. The FOMC has said it expects to stop reinvestments of maturing securities only after it raises the benchmark interest rate. When the third round of large-scale asset purchases was announced, the jobless rate was 8.1 percent, and most policy makers forecast it would fall to 6 percent to 6.8 percent by late 2015. It’s now 5.9 percent. At the same time, weakness remains in some areas of the labor market, such as long-term unemployment. While a 17 percent drop in oil prices this year has helped drive inflation farther below the Fed’s 2 percent target, it’s also giving consumers more to spend on other goods as gasoline prices fall to the lowest level in almost four years. U.S. chief executive officers see reasons for optimism. JPMorgan Chase & Co. CEO Jamie Dimon said last week that the world’s largest economy has “no real weak spot,” while Kenneth Jacobs, chief of investment bank Lazard Ltd., said on an earn ings call that “the U.S. economy continues to be resilient.” |
| Posted: 29 Oct 2014 11:03 AM PDT QE to conclude this month! ZIRP to continue indefinitely Gold & silver plunging Full FOMC statement on the end of QE is below: Did you hear about The Fed? From the FOMC: For immediate release Information received since the Federal Open Market Committee met in September suggests that economic activity is expanding at […] The post QE is Dead! Long Live QE? appeared first on Silver Doctors. |
| Gold clings on to gain despite stocks rebound Posted: 29 Oct 2014 10:14 AM PDT The U.S. Comex gold futures have fallen two dollars this week to $1,229.40 on Tuesday after falling seven dollars the week before. |
| Alasdair Macleod: Markets and Reality Disconnected Posted: 29 Oct 2014 10:00 AM PDT The behavior of financial markets these days is frankly divorced from reality, with value-investing banished. Our dysfunctional markets have become little more than the essential prerequisite, as Louis XIV’s finance minister Colbert might have said, to plucking the goose for the largest amount of feathers with the minimum of hissing. Submitted by Alasdair Macleod, GoldMoney: Markets have […] The post Alasdair Macleod: Markets and Reality Disconnected appeared first on Silver Doctors. |
| Posted: 29 Oct 2014 09:00 AM PDT What we saw in 2008 was a massive containment. The mainstream was taken by surprise. I remember watching it all finally unfold, thinking that this was it. Playing out exactly as expected. The most obvious bubble, housing, was imploding. But something happened that felt strange. The real punishment. The event that should have ended housing […] The post Just Blame the Banks appeared first on Silver Doctors. |
| Gold set to bottom at $1000 and climb to $3000 in three years: Jordan Roy Byrne Posted: 29 Oct 2014 08:50 AM PDT Byrne said that key driver of gold is negative real rates. There is talk of increase in interest rates by US Federal Reserve some time in early 2015. However, since the governments are in huge debt, raising interest rates actually raises the cost of holding such debt. |
| The new London gold ‘fix’ – the battle has commenced Posted: 29 Oct 2014 08:08 AM PDT The replacement process for a new London gold benchmarking solution, expected in Q1 2015, is underway. |
| The BBC is Using Anti-Terror Surveillance to Find Tax Dodgers Posted: 29 Oct 2014 08:00 AM PDT Many commentators, including myself, have been sounding the alarm for many years that only a short-sighted society filled with fearful imbeciles would ever grant government tyrannical powers in the name of fighting an overhyped, outside enemy. As has happened countless times in world history, once these powers are granted they are always eventually used against […] The post The BBC is Using Anti-Terror Surveillance to Find Tax Dodgers appeared first on Silver Doctors. |
| Stewart Thomson on Gold: Minor Weakness Is Nothing To Fear Posted: 29 Oct 2014 07:00 AM PDT I expect that gold could stay under some pressure this week, until Friday's US Employment Situation report is released, at about 8:30 AM on Friday. If gold were to trade in the $1219 area, that would be a rough 50% retracement of the $1183 – $1255 rally. Such pullbacks are perfectly normal after decent rallies. […] The post Stewart Thomson on Gold: Minor Weakness Is Nothing To Fear appeared first on Silver Doctors. |
| Silver bullion flying off the shelf Posted: 29 Oct 2014 06:53 AM PDT The U.S. Mint has sold nearly 60,000 ounces of American Eagle gold coins so far in October due to increased global demand from store of wealth buyers as economic and geopolitical uncertainty increased. |
| Russia buys most gold for reserves since ’98 Posted: 29 Oct 2014 06:48 AM PDT The country expanded its stockpile by 37.2 metric tons in September, according to data on the IMF's website. |
| Metals market update for October 29 Posted: 29 Oct 2014 06:37 AM PDT Gold traded little changed above a two week low in London today despite very robust global demand for physical gold. |
| U.S. Mint Gold Coin Sales Near 60,000 Ounces In October - Swiss Gold Initiative Leading To Increase Posted: 29 Oct 2014 06:02 AM PDT gold.ie |
| Posted: 29 Oct 2014 05:45 AM PDT The U.S. Mint sold 59,500 ounces of American Eagle gold coins so far this month – the most ounces of American Eagle gold coins sold since bullion coin inventory stocking in January.
The U.S. Mint has sold nearly 60,000 ounces of American Eagle gold coins so far in October due to increased global demand from store of wealth buyers as economic and geopolitical uncertainty increased. With only three business days left until the end of October, the U.S. Mint has sold 59,500 American Eagle bullion one ounce gold coins. On a year-on-year basis, U.S. gold coin sales in October are up 21% from 48,500 ounces in October 2013.
Store of wealth silver bullion buyers continue to stack silver at a steady clip. They bought 4.12 million ounces of American Silver Eagle coins so far this month, versus 4.14 million ounces in September. This means that nearly 68 times more silver in ounce terms was bought than gold. Silver buyers continue to see silver as severely depressed with silver below $20/oz and the gold silver ratio at 71 or $1,228/oz divided by $17.24/oz. The gold bullion coin sales from the U.S. Mint are the highest monthly sales since January and are higher than the 58,000 that were sold in September. The 58,000 ounces sold in September was more than double the demand in August, mint data shows
“(Islamic State), Ebola, Putin and Ukraine… There is a litany of these things which have risen in the last year or so which have provided a negative backdrop,” Scott Spitzer of MTB told Reuters. Sales to European buyers rose on the belief that a proposal to prohibit the Swiss National Bank from selling any of its gold reserves and a provision that the SNB may have to have a 20% gold backing to the Swiss franc may lead to increased demand both from the Swiss central bank and from other central banks. It is important to note the following: * Bullion coins are purchased by long-hold collectors and financial insurance buyers Smart money is willing to pay a small premium to own actual coins and bars rather than have the exposure of an ETF or digital gold platform. Prudent diversification into physical coins and bars will again reward those who take a long term view. See Essential Guide to Storing Gold and Silver In Switzerlandhere GOLDCORE MARKET UPDATE Gold in U.S. Dollars – 5 Years (Thomson Reuters) Gold for Swiss storage or for immediate delivery was flat at $1,228.40. Silver for immediate delivery added 0.1% to $17.2285/oz. Platinum rose 0.4% to $1,271.25/oz. Palladium climbed 0.6% to $797.89/oz. It's up for a fifth day in the longest run of gains since August 15. Fed watchers continue to see the Fed's interest rate decision as key to the outlook for gold. It may indeed cause price volatility in the short term. However, global physical demand may again be of more importance to the gold market. This seems likely as interest rates are set to remain low for the foreseeable future. Asian demand remains strong, especially in India and China. Volumes on the Shanghai Gold Exchange's (SGE) benchmark gold bullion spot contract rose to a three week high today. Gold's biggest buyer, China, continues to see very robust demand. Imports of gold from Hong Kong rose to a five-month high in September, data showed this week and even more importantly imports ex Hong Kong remain very high as seen in the withdrawals from the Shanghai Gold Exchange (SGE). Silver in U.S. Dollars – 5 Years (Thomson Reuters) India saw very high demand for gold for the Hindu festival of Diwali, a major cultural and religious gold buying event. Central banks remain net buyers too. Russia and Kazakhstan were among nations that substantially added bullion to their reserves in September, data on the International Monetary Fund website showed today. The U.S. Mint sold 59,500 ounces of American Eagle gold coins so far this month – the most ounces of American Eagle gold coins sold since bullion coin inventory stocking in January (see above). Get Breaking News and Updates on the Gold Market Here |
| Gold: India’s Capital Asset through History Posted: 29 Oct 2014 03:58 AM PDT Mises.org |
| J.D. Alt: Have We Passed the Tipping Point of Biological Collapse? Posted: 29 Oct 2014 03:31 AM PDT Yves here. Readers regularly debate issues of growth, groaf, and sustainability. This post makes an urgent case that we are farther along toward collapse, based on our consumption of biological resources, than most official sources acknowledge. |
| Gold in tight range ahead of FOMC Posted: 29 Oct 2014 01:11 AM PDT Investors await the FOMC meeting scheduled to happen tonight. |
| Bob Moriarty: Flock of Black Swans Points to Imminent Stock Market Crash Posted: 29 Oct 2014 01:00 AM PDT Between a rising U.S. Dollar Index and black swan events around the world, it's looking like bunker time for Bob Moriarty. In his latest interview with The Gold Report, the 321gold.com founder... Visit the aureport.com for more information and for a free newsletter |
| Posted: 28 Oct 2014 11:53 PM PDT Below is our interview with Palisade Radio. We cover our near-term thoughts and share what we expect in 2015.
This week we brought back Jordan Roy-Byrne on the show. Jordan is a well-followed market technician, and he's an expert in all technical aspects of the precious metals markets. Here is what you can expect to learn this week - New low for gold ahead… why Jordan believes $1,000 gold is a strong possibility? Find out why triple bottoms do not exist, at least not in the short term… Short term support for the HUI is at 168, but will that support level actually hold? Jordan says probably not… Jordan has voiced his belief that the GDXJ is a very strong index. But chances are that a new low is in store… Jordan also discusses his Gold Bear Analog Chart, which compares all the historical bear markets in the mining sector to our declining market today. So how does the bear market of 2014 compare to all of the bears of the past century? Also, find out what Jordan's research has told him about what speculators can expect coming out of a new bottom. We'll give you a clue – the returns are huge! And finally the case for $3,000 gold by 2017! The post Interview with Palisade Radio appeared first on The Daily Gold. |
| A Myth Concerning Gold Confiscation Posted: 28 Oct 2014 11:30 PM PDT Silver Analyst |
| Airport Trash Bags Go Under the ‘Gold’ Scanner in India Posted: 28 Oct 2014 11:21 PM PDT "They were still there to put out these fires with "whatever it took"" ¤ Yesterday In Gold & SilverThe down/up/down feature in morning trading in the Far East took a lot of Comex paper to put out---and the vertical spike at the Comex open took some more. But, as dynamic as the gold chart looks, the scale makes it appear more impressive than it really was. The low and high ticks are barely worth the efforts of looking up, as the CME Group recorded them as $1,222.20 and $1,234.40 in the December contract. Gold finished the Tuesday trading session at $1,227.80 spot, up $2.70 from Monday's close. Net volume wasn't overly heavy at 113,000 contracts---and I'd guess that around 25 percent of that amount was expended by JPMorgan et al to cap---and then nullify---the two rallies shown on the chart below. Ditto for silver, although the volumes weren't overly heavy all things considered. The low and high ticks in this precious metal were reported as $17.06 an $17.40 in the December contract, which was an intraday move of 2 percent. Silver closed yesterday in New York at $17.195 spot, up 8.5 cents from Monday. Net volume was 28,000 contracts. Platinum and palladium had similar chart patterns to the other two metals, with 'da boyz' capping the rallies shortly after Comex trading began in New York on Tuesday morning. It's the same old, same old across the board. Here are the charts. The dollar index closed at 85.58 late on Monday afternoon in New York---and then chopped lower hitting its 85.46 interim low shortly after 9:30 a.m. GMT---and two hours later it was at its 85.65 high. Then the index didn't do a lot until the 8:20 a.m. EDT Comex open---and down it went, hitting its 85.29 low minutes after 9 a.m. EDT. From there it chopped quietly higher, finishing the Monday session at 85.41---which was down 17 basis points from Monday's close. In a lot of ways, the dollar index chart pattern on Tuesday was very similar to its chart pattern on Monday. The gold stocks opened in the green, but dipped briefly into the red for about twenty minutes or so starting around 10 a.m. EDT. From there they rallied somewhat unsteadily for the remainder of the day, closing almost on their high tick, as the HUI finished up 1.71%. Here's Nick's chart. The silver equities opened in the black---and at 10:30 a.m. EDT, it was up, up and way for the remainder of the Tuesday session, as Nick Laird's Intraday Silver Sentiment Index closed up 3.69%. The CME Daily Delivery Report showed that 44 gold and zero silver contracts were posted for delivery within the Comex-approved depositories on Thursday. The short/issuer of note was Canada's Scotiabank with 43 contracts and, once again, the big long/stopper was Barclays with 43 contracts in its client account. The link to yesterday's Issuers and Stoppers Report is here. The CME Preliminary Report for the Tuesday trading session showed that gold's open interest fell by 85 contracts down to 44 contracts---and as you can see from the deliveries posted in the previous paragraph for tomorrow, deliveries for October in gold are all done. October o.i. in silver is already zero, as the last two contracts are being delivered into today. There was another withdrawal from GLD yesterday. This time it was 57,675 troy ounces. And as of 9:43 p.m. EDT, there were no reported changes in SLV. The good folks over at Switzerland's Zürcher Kantonalbank updated their website in the wee hours of this morning---and just before I was about to dispatch today's column to Vermont---and here's what they had to say about the activity in their gold and silver ETFs for the week ending on Friday, October 24. Both these ETFs reported declines for the week. Their gold ETF shed 29,029 troy ounces---and their silver ETF declined by 27,154 troy ounces. There was another decent sales report from the U.S. Mint. They sold 1,000 troy ounces of gold eagles---and 250,000 silver eagles. Without question that was Ted's 'Mr. Big' at the trough, as retail bullion sales are still comatose. There was no in/out activity in gold over at the Comex-approved depositories on Monday but, as usual, it was a different story in silver, as 533,326 troy ounces were received---and 359,326 troy ounces were reported shipped out. The link to the action in silver is here. I have fewer stories today than I did on Tuesday, so I hope you can find the time to read the ones you like. ¤ Critical Reads Fed Will Likely Signal No Rate Hike Anytime SoonThe global economy has slumped. Turmoil has gripped financial markets. And the U.S. job market, despite steady gains, still isn't fully healthy. Yet when the Federal Reserve meets this week, few foresee any major policy changes. The Fed is expected to complete a bond-buying program, which was intended to keep long-term interest rates low. And, to support the economy, it will likely reiterate it's in no rush to raise its key short-term rate. The economy the Fed will discuss has been strengthening, thanks to solid consumer and business spending, manufacturing growth and a surge in hiring that's lowered the unemployment rate to a six-year low of 5.9 percent. Still, global weakness poses a potential threat to U.S. growth. The housing industry is still struggling. And Fed Chair Janet Yellen has stressed that while the unemployment rate is close to a historically normal level, other gauges of the job market remain a concern. These include stagnant pay; many part-time workers who can't find full-time jobs; and a historically high number of people who have given up looking for a job and are no longer counted as unemployed. And don't forget that Jim Rickards is on record as saying the interest rates will never rise again. I concur. This short AP story, filed from Washington, appeared on thestreet.com Internet site at 12:31 p.m. EDT on Monday---and I found it in yesterday's edition of the King Report.  U.S. Banks See Worst Outflow of Money in ETF Since 2009The Financial Select Sector SPDR, an exchange-traded fund targeting banks and investment firms, had the biggest withdrawal last week since 2009 amid concern that low interest rates and market swings will hurt profits. Investors pulled $913.4 million from the $17.5 billion ETF, whose top holdings include Berkshire Hathaway Inc., Wells Fargo & Co. and JPMorgan Chase & Co., a shift that turned its flow of funds negative for the year. About 143 million shares of the ETF have been borrowed and sold to speculate on declines, the most since June 2012, according to exchange data compiled by Bloomberg. Banks have waited for years for higher rates and more robust trading to boost revenue from lending and market-making. Weaker-than-expected global growth could prompt the U.S. central bank to slow the pace of eventual interest-rate increases, Federal Reserve Vice Chairman Stanley Fischer said Oct. 11. The severity of market swings this month also boosts the risk that banks will incur losses while facilitating client bets, and it may slow mergers and acquisitions. This Bloomberg article appeared on their website at 10:00 p.m. Denver time on Monday evening---and I thank reader 'David in California' for sending it along.  U.S. Home Ownership Rate Drops to 1983 Levels: Here's WhyThe last time U.S. home ownership declined down to 64.4% (which the Census Bureau just reported is what U.S. home ownership declined to from 64.7% in Q2), was back in the fourth quarter of 1983. It goes without saying that this is just about the most bearish news possible for those few who still believe in the American home ownership dream. Of course, those who have been following real-time rental market trends would be all too aware there is no rebound coming to the home ownership rate. The reason is simple: increasingly fewer can afford to buy, instead having no choice but to rent, which in turn has pushed the median asking rent to record highs. In fact in the past two quarters, the asking rent was just $10 shy of its time highs at $756 per month. This very worthwhile read, along with some first-rate charts, appeared on the Zero Hedge website at 11:18 a.m. EDT on Tuesday morning---and I thank Manitoba reader U.M. for sharing it with us.  Sprott Money Weekly Wrap-Up With Your Humble ScribeSprott Money's Jeff Rutherford and I spent 6:11 minutes talking to each other last Friday, but for technical reasons the audio link wasn't available until yesterday, so here it is now.  Mike Maloney: Did Hillary Really Say That?This is not a democrat or republican issue. This is about the people in Washington being so disconnected from reality that they are dangerous...they don't understand how the economy works. This 21:20 minute audio interview with Mike was posted on the hiddensecretsofmoney.com Internet site on Tuesday sometime---and I must admit that I haven't had time to listen to it yet.  Lloyds Cuts 9,000 jobs and shuts 150 branches as profits leapLloyds has predicted that visits to its branch counters will halve over the next three years after a £1bn investment in digital technology and the closure of 200 high street locations. The bank on Tuesday unveiled a three-year cost-cutting plan that will see 9,000 job losses and its branch estate reduced by 6pc as it unveiled a 35pc rise in operating profits and set aside another £900m related to PPI mis-selling. However, it said customers would benefit from an increase in digital services and committed to shutting branches at a slower rate than its rivals. This article appeared on the telegraph.co.uk Internet site at 3:59 GMT yesterday---and I thank reader 'h c' for sending it. And the 'thought police' over at The Telegraph have given the story a brand new headline, it's now a much softer sounding "Lloyds Bank closures: Branch transactions to halve within three years"  Rampant financial crime in City of London eroding public trust - BoEA top Bank of England (BoE) official warns widespread financial crime in the City of London is eroding public trust. The BoE’s criticism surfaced as it launched a review to tackle market manipulation. In her first public address since adopting the position of BoE Deputy Governor, Nemet Minouche Shafik denounced the actions of UK traders in foreign exchange, currencies and bonds markets, warning financial misconduct in these sectors goes well beyond a few rogue financiers. Referencing LIBOR riggers’ behavior as unacceptable, she suggested fines for such fraudulent activity were inadequate and signified “salt rubbed into the wounds to public confidence in financial markets.” She didn't mention the precious metal markets---and I'm sure that was deliberate. This must read article appeared on the Russia Today website at 7:58 p.m Moscow time on their Tuesday evening, which was 12:58 p.m. EDT in New York. I thank Harry Grant for sliding this into my in-box in the wee hours of this morning.  Life after Libor: bankers to face personal fines for rigging pricesBanks could face a significant new regulatory crackdown on their wholesale market activities as the financial authorities seek to prevent a repeat of the scandals that have destroyed the reputation of the sector in recent years. The Bank of England – in conjunction with the Financial Conduct Authority and the Treasury – yesterday published a wide-ranging consultation document which holds out the possibility of a radical tightening of the supervisory regime for City institutions that trade in the foreign exchange, interest rate derivatives, commodities and also bond and equity markets. The proposals include a beefing up of electronic surveillance tools to monitor traders’ activities and a new regime of fines on employees who breach internal guidelines on abuse. Another bold suggestion is to overhaul the infrastructure of capital markets, forcing open new electronic trading platforms to increase competition in markets that are often dominated by a relatively small number of firms. This story put in an appearance on the independent.co.uk Internet site yesterday sometime---and it's the second offering of the day from reader 'h c'. ECB stress tests vastly understate risk of deflation and leverageThe eurozone’s long-awaited stress test for banks has been overtaken by powerful deflationary forces and greatly understates the risk of high debt leverage in a crisis, a chorus of financial experts has warned. George Magnus, senior advisor to UBS, said it was a “huge omission” for the European Central Bank to ignore the risk of deflation, given the profoundly corrosive effects that it can have on bank solvency. “Most of the eurozone periphery is already in deflation. They can’t just leave this out of their health check. It is a matter of basic due diligence,” he said. The ECB’s most extreme “adverse scenario” included a drop in inflation to 1pc this year, but the rate has already fallen far below this to 0.3pc, or almost zero once tax effects are stripped out. Prices have fallen over the past six months in roughly half of the currency bloc, and the proportion of goods in the EMU price basket in deflation has jumped to 31pc. “The scenario of deflation is not there, because indeed we don’t consider that deflation is going to happen,” said the ECB’s vice-president, Vitor Constancio. This Ambrose Evans-Pritchard commentary was posted on The Telegraph's website at 7:35 p.m. GMT on Monday evening---and it's the third and final offering of the day from reader 'h c'.  U.K. opts out of Mediterranean migrant rescue missionBritain has said it will not support the European Union’s planned search and rescue operations to help migrants left stranded in the Mediterranean Sea, even as Italy prepares to wind down its own rescue missions, which have saved thousands of lives. The U.K.’s Foreign Office argued on Tuesday that the E.U.’s plans to patrol the Mediterranean would only encourage more migrants to attempt the dangerous sea crossing. The operation, codenamed “Triton”, is headed by the European Union border agency Frontex and is set to begin in November. "We do not support the planned search and rescue operations in the Mediterranean," said Baroness Joyce Anelay, a Foreign Office minister. "We believe that they create an unintended ‘pull factor’… thereby leading to more tragic and unnecessary deaths." This news item appeared on the france24.com Internet site yesterday some time---and I thank South African reader B.V. for sending it our way.  Sweden's Crown Slides as Riksbank Cuts Rates to ZeroThe Swedish crown hit a four-year low against the dollar and a four-month trough against the euro on Tuesday after Sweden's central bank surprised investors by cutting interest rates to a record low of zero percent. Most analysts had forecast the Riksbank would lower its main interest rate, the repo rate, to 0.1 percent from 0.25 percent to fight a risk of deflation, and the central bank went a step further by forecasting a lower rate path for the future. Riksbank chief Stefan Ingves said the central bank is ready to take unconventional measures that analysts said could include asset purchases, intervening in the currency market to sell crowns or imposing a cap like the Swiss National Bank. This Reuters article, filed from New York, showed up on their Internet site at 3:25 p.m. EDT on Tuesday afternoon---and I found it embedded in a GATA release. Reader U.M. sent the same story, but this one was from The Telegraph. It's headlined "How low can you go? Sweden cuts interest rates to zero". Despite "Healthy" Stress Test, Deutsche Bank Replaces CFO With Goldman Sachs PartnerDeutsche Bank executives are dropping like flies. Just days after receiving a clean bill of health from Europe's oh-so-stressful stress-tests, Deutsche Bank has decided that longtime finance chief Stefan Krause needs to be replaced. Perhaps most interesting is the bank that faces 'serious f |
| Sweden's Crown Slides as Riksbank Cuts Rates to Zero Posted: 28 Oct 2014 11:21 PM PDT Sweden's Crown Slides as Riksbank Cuts Rates to Zero The Swedish crown hit a four-year low against the dollar and a four-month trough against the euro on Tuesday after Sweden's central bank surprised investors by cutting interest rates to a record low of zero percent. Most analysts had forecast the Riksbank would lower its main interest rate, the repo rate, to 0.1 percent from 0.25 percent to fight a risk of deflation, and the central bank went a step further by forecasting a lower rate path for the future. Riksbank chief Stefan Ingves said the central bank is ready to take unconventional measures that analysts said could include asset purchases, intervening in the currency market to sell crowns or imposing a cap like the Swiss National Bank. This Reuters article, filed from New York, showed up on their Internet site at 3:25 p.m. EDT on Tuesday afternoon---and I found it embedded in a GATA release. Reader U.M. sent the same story, but this one was from The Telegraph. It's headlined "How low can you go? Sweden cuts interest rates to zero". |
| New London gold benchmark to go live in early Q1/2015 - LBMA Posted: 28 Oct 2014 11:21 PM PDT New London gold benchmark to go live in early Q1/2015 - LBMA A new electronic gold price mechanism is expected to be in operation early in the first quarter of 2015, replacing the century-old gold benchmark, the London Bullion Market Association said on Monday. The gold industry group said it has launched a survey to request further feedback from market participants on the proposed solutions. Participants will be asked to confirm which solution they will be willing to participate in, the LBMA said. LBMA said it expects a market consensus will emerge in November after consultation with regulators. In addition, LBMA will undertake testing in December ahead of the launch early next year. Isn't this special, dear reader! China, the biggest gold producing and consuming country is not represented---and neither is India, the #2 user of the metal. Is it just me, or is there something wrong with this picture? This gold-related Reuters article was posted on their Internet site at 3:38 p.m. EDT on Monday afternoon---and once again I thank reader U.M. for sending it. |
| Airport trash bags go under the 'gold' scanner in India Posted: 28 Oct 2014 11:21 PM PDT  Airport trash bags go under the 'gold' scanner in India Customs officials at Karipur Airport, which has emerged as one of the top four hotspots for gold smuggling into the country, now have a new headache in the form garbage gold. With smugglers depositing contraband gold in garbage bags inside flights and retrieving them later, possibly with the help of garbage clearing staff, customs have been forced to take the unprecedented step of conducting X-ray scans on trash bags in flights arriving from the Gulf. Customs officials said Karipur airport could possibly be the only airport in the country where garbage bags and even food trolleys have to be scanned through the X-ray machine for hidden gold. The decision was taken following intelligence inputs, which proved right as officials seized 2 kg of gold from one such bags from an Air Arabia flight last week. This very interesting article, filed from Kozhikode, India, appeared on The Times of India website at 12:27 a.m. IST this morning---and it's the final offering of the day from Manitoba reader U.M., for which I thank her. It's worth reading. |
| Lawrence Williams: Hong Kong gold exports to China pick up strongly but... Posted: 28 Oct 2014 11:21 PM PDT  Lawrence Williams: Hong Kong gold exports to China pick up strongly but... ...that’s only part of the story. SGE withdrawals seem to be going through the roof – and what about India? All indicators suggest that there could indeed be a very large supply deficit building. But the markets seem to pay no attention whatsoever given they are no longer driven by supply/demand factors but by the [COMEX] futures markets involving massive amounts of paper gold. We don’t know what the answer is here, and for how long this imbalance can go on, but it does colour our views as to the long-term gold price. One day gold will surely take off but whether it’s this week, next week, next month, next year or 10 year’s time still remains open to question. It just depends on how long the big money, and perhaps governments, can keep playing the futures markets to keep commodity prices working to their advantage. This must read story by Lawrie was posted on the mineweb.com Internet site yesterday---and I found it all by myself. |
| DEAD BANKSTERS & CHINA’S 30,000 TONS OF GOLD — Alasdair Macleod Posted: 28 Oct 2014 09:00 PM PDT In this excellent interview with SGTReport, Alasdair Macleod discusses the latest banker "suicides" which have all of the hallmarks of intelligence agency 'wet work'. Alasdair also explains how China could easily have acquired 20,000 tons of gold in recent decades – and as SRS Rocco recently pointed out, an additional 10,000 tons of gold in just […] The post DEAD BANKSTERS & CHINA'S 30,000 TONS OF GOLD — Alasdair Macleod appeared first on Silver Doctors. |
| Peter Schiff defends his call for $5,000 an ounce gold Posted: 28 Oct 2014 08:05 PM PDT Over the past few years Peter Schiff has consistently predicted that gold was heading higher, and has consistently been proved wrong. He still thinks he is right and is prepared to stand up to his critics. That unrepentant reply doesn’t sit well with Scott Nations of NationsShares in this CNBC video, who jumps in to ask Schiff: ‘When are you ever wrong? And how do you ever learn if you’re never wrong?’. Mr. Schiffs perhaps not so cool response is that this happened to him before on US housing and the last financial crash. You are wrong until you are proven so right! So how about $5,000 an ounce gold… |
| The BIS Paves the Way for Silver and Gold- Telegraphs Next Financial Crash Posted: 28 Oct 2014 06:00 PM 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. Submitted by Dr. Jeffrey Lewis, Silver Coin Investor: As if you could […] The post The BIS Paves the Way for Silver and Gold- Telegraphs Next Financial Crash appeared first on Silver Doctors. |
| Harvey Organ’s Gold & Silver Update: BACKWARDATION!! Posted: 28 Oct 2014 05:10 PM PDT First: GOFO rates/ We are now in backwardation!! Let's head immediately to see the major data points for today… Submitted by Harvey Organ: Gold: $1229.20 up $0.10Silver: $17.19 up 7 cents In the access market 5:15 pm: Gold $1226.00silver $17.13 The gold comex today had a good notice day registering 55 notices served for […] The post Harvey Organ’s Gold & Silver Update: BACKWARDATION!! appeared first on Silver Doctors. |
| Bo Polny: The 252 Year Stock Market Blackjack 21 Recession/Depression CYCLE! Posted: 28 Oct 2014 05:05 PM PDT US Stock Market is headed down, & both Gold and Silver are headed MUCH higher and soon! Will a Recessionary/Depression CRASH into 2016 occur to complete the game of Blackjack 21? Submitted by Bo Polny: This past week at Cambridge House International Silver Summit in Spokane, Washington I had the privilege of meeting and speaking with […] The post Bo Polny: The 252 Year Stock Market Blackjack 21 Recession/Depression CYCLE! appeared first on Silver Doctors. |
| Breaking: NASA Rocket Carrying “Classified Crypto Equipment” Explodes on Take-Off Posted: 28 Oct 2014 04:44 PM PDT Moments ago and just seconds after launch, NASA rocket Antares carrying 5,000 lbs of supplies, including “classified crypto equipment” headed for the international space station exploded over the Virginia coast. Photos and video’s of the epic explosion are below: Antares moments prior to launch: We’re 4 minutes from launching #Antares to @Space_Station. #Cygnus on […] The post Breaking: NASA Rocket Carrying “Classified Crypto Equipment” Explodes on Take-Off appeared first on Silver Doctors. |
| Investor Alert: Disinflation And Slowing Monetary Growth Posted: 28 Oct 2014 04:34 PM PDT We released earlier this year the minutes of the first two Advisory Board meetings by Incrementum Liechtenstein in these two articles: Will Inflation Make A Comeback In 2014 When The Consensus Worries About Deflation and Outlook for Gold, Stocks, Economy. Incrementum Liechtenstein is running the "Austrian Economics Golden Opportunities Fund," a fund that takes investment positions based on the level of inflation based on their proprietary "Incrementum Inflation Signal." Incrementum Liechtenstein has Ronald Stoeferle, author of In Gold We Trust, as managing partner, and Mark Valek as partner. In the latest Advisory Board which took place earlier in October, the investment landscape driven by the disinflationary forces were discussed. Based on the Incrementum Inflation Signal, it seems that the inflation/deflation-tug-of-war is very intense these days. The signal switched to "neutral" at the beginning of August and then very quickly it indicated "disinflation" once again. A rather dramatic move in the USD, commodities, gold and silver followed. As can be seen on the following chart, the signal works well in real-time. Development of Incrementum Inflation Signal and HUI Mining Index:
The second chart is the Commodity index (based on Incrementum Inflation Signal and Bloomberg Commodity Index):
Growth of monetary inflation is currently slowing down dramatically, as can be seen in the next chart. The bars in the chart represent the combined balance sheets of the Federal Reserve, European Central Bank, Bank of England, Swiss National Bank, People's Bank of China and the Bank of Japan.
One can also see that monetary inflation is losing momentum in the broader monetary aggregates:
Finally, High Yield spreads are actually widening.
These are all signs that this current disinflationary move is fully intact right now. The pace of monetary inflation is cooling down, according to several metrics. Could there be a significant correction/crash looming for asset markets? Heinz Blasnik thinks that, by its very nature, a crash is a very low probability event. However, if we look at what central banks have done since 1987, they have become much more activist and have continually increased the size of their interventions. This means: Not only has the amplitude of asset bubbles increased, but also the probability of crash-like events. The money supply metric that is most important is US money supply. Every other market is – to some extent – following the US. If we look at the broader money supply growth, it has slowed quite a lot recently but it is still historically high. In detail, narrow money supply (AMS) has actually increased recently, as banks have increased their lending, while the Fed has tapered QE. Therefore, US money supply growth is not that negative.
Investor sentiment is extremely bullish. However, we do not have a situation like in 2000 when everyone became a day trader, simply because retail investors have been hurt too much by the bubbles. First, they lost a lot of money in stocks in 2000 and then in stocks and houses combined in 2008. So they are not as easily enticed to invest in stocks anymore. However, investor sentiment amongst professional traders is very positive at the moment. I think this is a very strong warning signal, but definitively not a timing indicator. With regards to leverage of investors, it's at a record high. The likes of margin debt and hedge fund leverage are at record highs. Having a look at the Shiller P/E, valuations are at the 93rd percentile since 1870. In terms of price/sales, the market is the most overpriced ever. Regarding the recent weakness in high yield bonds: central bank policy has led to another yield-chasing rally. These bonds pay interest that is not really rewarding the holders for the risk that is taken. But investors are taking these risks anyway, as according to rating agencies, the expected default rate is at an all-time low! So investors feel that they are actually not taking too much risk. The most important point: banks are no longer making the market anymore, because of legislation, the likes of Frank Dodd, etc. Banks do not do any prop trading in high yields anymore. This means that it has become a very vulnerable market. While there has been a huge amount of issuance, liquidity levels have fallen. This will have a major influence if the market goes down. And the last point; the market internals. Small cap stocks (Russell 2000) have started to underperform and break down and this suggests that market liquidity is not high enough anymore to lift all boats. So, the danger of a severe market correction has increased further. This is clear. When it is going to happen, I am not sure. But it's probably not too far away. Currency wars update in the current disinflationary trend(by Jim Rickards) The market expects interest rates to be raised by mid 2015. This leads to all kinds of dynamic outcomes, including a strong dollar, capital outflows from emerging markets, unwinding of the carry trade, weak commodities and so on. So those are the expectations. We are seeing growing deflationary pressure in the Incrementum Inflation Model and in my own model. From my point of view, the only reasonthe Fed will raise rates is inflationary pressure. We don't have to agree with her opinion, and my opinion is irrelevant, but I try to think like Janet Yellen does. She wants to address the labour issues in the US. If there would be one economic number that is most important for the Fed at the moment, it would be real wages. She looks at real wages as the thermometer of inflation. If labour markets are tight, wage pressure should increase and this would be a leading indicator for the Fed. Right now, real wages are not going up and labour market participation continues to decline. So let us put all that together: the market is discounting that the Dollar will continue to strengthen, deflationary pressure is increasing and the data suggests that the Fed has tightened into weakness. Remember, Janet Yellen didn't start the taper. Ben Bernanke started to taper as he wanted to leave with a legacy. Right now, we have the most hawkish FOMC in a very long time, but in January this will change. The two hawks Fisher and Plosser come off the FOMC and will be replaced by super-doves Evans and Lockhart. So hawks will be replaced by doves among the presidents. Moreover, president Obama will replace the vacancies with Stanley Fischer, who was Janet Yellen's mentor. And, lastly, Yellen will have been in the job for one year in January and she will feel that she's in charge and that it's her board.
So, you have a very hawkish FOMC today and we will have a very dovish FOMC starting in January. So the whole world is set up for a stronger dollar, a strengthening US economy and rising rates. The data and politics are showing deflation, a very weak recovery, a dovish board. So my expectation is that the Fed will launch QE4 in spring 2015 or little later. That will not only be a reversal of policy, but it will come as a shock! This will result in a rally in US stocks and emerging market stocks, a weakening USD and rising commodities. There is no chance that they will raise interest rates in 2015. Tapering has failed twice and it will fail again. For the next four months, I would expect a continuation of the current trend: very weak gold, higher rates, strong dollar, weak emerging markets and further deflationary trend. But at the first meeting in January 2015, the FOMC will signal for the next two or three meetings that they might reverse their strategy. This may come as a shock to the market, as the market will realize that the Fed has no way out. They will not rest until they get inflation. Therefore, they will have to print a lot more, which will be quite positive for gold. Gold updateIf gold goes back to the 1,200 level a fourth time, then it could get dangerous as it might fall to 1,050. This should bring in some major support. But currently gold is still in an ongoing bear market. It is not given that gold has found its bottom yet. There is a seasonal correction. Is it going to develop into a major crash? Fact is, that money is parked, malinvestments are built up and if the economy weakens, then the "magic hand" will come up and help us to some more malinvestments further down the track. So it's a very kaleidoscopic world, where the mixture of technical and fundamentals makes absolute return investors think that having lots of cash is not the worst idea. If you don't find a decent risk-return, don't do it. Read the full transcript
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| Consumer Confidence Reading Cheers Equity Bulls Posted: 28 Oct 2014 01:55 PM PDT The Conference Board released their Consumer Confidence numbers today and surprised a lot of us. The reading for October came in a 94.5, which according to Dow Jones, was the highest reading since 2007. Truth be told I find that number odd given the polling taking place ahead of next week's elections which show voters in a surly mood, the vast majority believing the country is on the wrong track. Trying to square those fairly consistent poll numbers with the Conference's Board happy face, is a feat that I must admit I have not been able to master. Maybe the Conference Board asked about falling gasoline prices instead of overall consumer confidence? who knows. For whatever the reason, stocks liked the number. However, ahead of the FOMC release tomorrow, the sentiment seems to be while the Fed is going to end the QE program, it is going to stand pat on the interest rate front, essentially leaving long term ( and short term) rates near zero for some time. Equities love that environment because quite frankly it makes them the only game in town for anyone who wants to earn more than a pittance on invested monies. As many of you who regularly read here by now, I have long expressed my disgust at what the Fed has done to senior citizens, those on fixed incomes and those looking for SAFE, CONSERVATIVE investment options as they approach their older years. Kiss that mostly goodbye, compliments of the Fed, which lives to service its master known as Wall Street, but more particularly, the big banks. I do not know about some of you but I am filled with disdain when I see elderly friends and family members trying to navigate this bogged-filled financial morass that the Fed has deliberately chosen to create. Oh yes, they will tell us how such things are necessary for the sake of the overall economy. Perhaps that is true, perhaps not, but that is no consolation whatsoever to those who have earned some rest, and some peace and quiet in their golden years who are now forced into spending their afternoons sitting in front of the damned television set staring at one of the cable business channels and wondering if their money will still be there tomorrow. Enough of my mini-rant for now... I am not going to spend any time commenting on gold since quite frankly it is a gigantic bore right now. It is waiting for the magic words from the FOMC anyway. What is much more interesting, and much more havoc wreaking is what continues to take place in the grain markets, particularly the soybeans, which are doing things I cannot remember seeing in my trading career. By that I mean soaring in price in the face of one of the largest harvests on record. What is driving this continues to be the meal - something I have been noting for some time here now. It still comes back to the same old, same ol' at this point - namely historically tight carryover stocks from the 2013-2104 crop year have left many end users/processors scrambling to secure enough beans to crush to meet demand for meal. Toss on top of that the fact that even some of the commercials were caught flat-footed by this squeeze and you have a perfect money flow storm. Shorts have gotten annihilated. What is being reported is that farmers seeing the rally are becoming bulled up ( big mistake in my view) and are holding beans back hoping to get even higher prices. NOTE - it has been my experience that Farmers - as good as they are at growing crops - historically, and with great regularity, are consistently bullish at market tops and bearish at market bottoms. This is exacerbating nearby supply constraints as export commitments clash with the need for meal. However, with the Real sinking to a six year low against the US Dollar, US meal prices, and bean prices, are no longer competitive on the global markets. I suspect we are going to soon be seeing export cancellations as a result. One cannot drive prices higher and higher and higher due to a TEMPORARY supply situation and not expect to produce an expected result - namely, high prices will ration demand. The problem is we are still sitting with a huge crop out there that needs to be moved and the last thing we are going to need is higher prices to move it! Cash flush farmers from back in 2011-2012 farm prices used that money to build lots of shiny new, on-the-farm silos. They can hold the crop while they wait for higher prices, or so they think. Personally I think that any farmer that is not using this meal-driven rally to price some of their new crop is nuts. The meal is pulling the entire grain floor higher but when it finally does top, and top it will, I fear that the entirety of the fund contingent which has been furiously buying, either covering existing shorts or chasing prices with new longs, are all going to head to the exits at the same time with no one to support this market on the way down. the reason I feel so strongly about this is that this temporary tightness in the meal is not going to last indefinitely. It is a short-term phenomenon brought about by the combination of a small crop in 2013-2014 and a delay in the harvest of the 2014-2015 marketing year crop. However, based on what USDA reported yesterday - 70% of the total soybean crop has already been harvested. No matter how you cut it, slice it, dice it or scramble it, that is already a huge amount of beans. There might some areas in parts of the Eastern belt that experience some harvest delays but from what I am seeing at the moment, progress is going to continue into the weekend in general. Remember, there is still a lot of corn that needs to come in and find a home somewhere as well. Farmers have opted to let the go stand and go after the beans first figured the sunny, though cooler and dry weather, will let it dry down some more anyway. But they are going to bring it in eventually and will need to put it somewhere. While they wait, the corn market seems to be keeping a bit of weather related premium in the corn for the moment. Also, soymeal is not a stand alone entity - it does compete with DDG's. My point in this is that when the grains finally exhaust this fund buying binge ( small specs have been destroyed by margin calls as well) and the bids start getting taken and absorbed as commercially-tied hedge pressure begins to ramp up in earnest, we should see some pretty severe moves in the grains. One wild card in all this is the Brazilian weather for their planting season down there. It has been dry in some areas but timely rains are coming and look pretty good overall. That should remove some concerns associated with Brazil. Shifting just briefly to crude oil - the black gold looks like it has found support near $80. It has made two trips down below that level on the chart in the last two weeks, but both times, it rebounded and CLOSED above $80. If, for any reason, crude oil CLOSES below $80, then look out. You would then see a very good likelihood of it falling to $77 and possibly even $75. I am not sure how to take that to be honest. I can make the case that it would actually be friendly for the overall economy as lower energy prices always benefit consumers and some business entities. However, it could also feed into the notion that the economic strength is so weak, that more sluggish growth lies ahead. That would be negative towards more of the key commodities such as copper, which by the way, seemed to like the consumer confidence numbers or something today! It was just a short two weeks ago that copper actually managed to close below the pivotal $3.00 mark. It did however recover the next day and managed to claw its way higher. Today, it just missed hitting $3.10. Copper looks to me to be carving out a trading range as I think one would be hard pressed to come up with a reason, or to point to any concrete data at this time, to justify any sort of sharp rally in the price of the red metal. Economic growth globally is just not strong enough. Remember that Palladium chart I posted last week? Well, that metal has been essentially mirroring the price action in the copper. It has closed higher the last 8 days in the row, after bouncing off of the region near $740-$730. This is an industrialized metal that is very sensitive towards any slowdown in growth, much like copper, so one can read it and see that for the short term, investors seem to have put "growth" concerns on the back burner. I guess so seeing that the VIX or Volatility Index is sinking once more. Back to "What, me worry?". We went from total fear two weeks ago to " I could care less". Astonishing - the entire business cycle has just been completed in half a month! Tell me that our financial markets have not become a nest of idiocy.  |
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