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Wednesday, October 8, 2014

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Demand Explodes, Part 3: Indian War Elephants are Unleashed!

Posted: 08 Oct 2014 11:45 AM PDT

Silver isn't just a bargain in relation to gold's value, it's now a bargain related to gold's tax in India! Thanks in large part to India raising taxes on gold, in 2013, Indian silver demand hit a monstrous 6,125 tonnes! That's just under 200 million ounces of silver!  That means that Indians sucked in nearly […]

The post Demand Explodes, Part 3: Indian War Elephants are Unleashed! appeared first on Silver Doctors.

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FOMC Minutes Spotlight Strong US Dollar

Posted: 08 Oct 2014 11:37 AM PDT

Once upon a time, in a galaxy far, far away, nations used to covet strong national currencies. Such were a vote of confidence in their economy, their political leadership and their fiscal and monetary policy. Not any more!

We live in an era in which monetary officials seem to take turns cursing their own currencies and like Haitian Voodoo quacks, take turns sticking pins into it in order to bring it to its ruin.

Such was effectively the case with the minutes released this afternoon from the Federal Open Market Committee.

In effect, the Fed officials seemed to be casting aspersions on the weak growth in the Eurozone ( they could not help throwing Japan and China in there as well ) as deleterious to their efforts to generate some inflation here in the US all because these "bumbling monetary officials over there ( my take ) "cannot seem to get their ducks together long enough to actually generate some real growth in their respective economies which in turn is causing "our Dollar to keep going up ( again my take)".

"If this keeps up, it will mess up our export markets and thus curb our growth which will in turn cause us to miss our goal of generating 2% inflation".

There you essentially have it in a nutshell. And to think we pay these peoples' salaries!

Immediately, as if on perfect cue, down went the US Dollar, up went the Euro, the Swiss Franc, the British Pound  and even the Canadian Dollar.

What do you think that did to gold? If you answered "it caused it to reverse from its losses and move higher on the day", go to the head of the class because that is exactly what happened.

What the Fed did was to express its fears about the overall slowdown in global growth and the deflationary impact of a strong Dollar. That is being interpreted by the markets as a sort of brake on the timing of any interest rate hike next year as the market had come to expect.

Equities of course LOVED, ADORED, PRAISED, REJOICED in it as it meant more cheap money for a longer period of time - just great for stocks which remain the only place in town where one can expect to invest money and produce any sort of meaningful gain or return on investment.

It is rotten news for savers and those looking for some sort of stable, decent, conservative place to park money. It means more rewarding of debtors and more punishing of savers a bit longer than the market had anticipated yesterday.

That being said, once the reaction from the minutes wears off, I suspect we will go right back to the same trends previously, namely the Dollar will continue to strengthen and commodities will continue to grind lower. After all, if the Fed itself is complaining about slow global growth, why be in a hurry to rush out and load up on sagging commodities, many of which are suffering because of the lack of solid, growth-based demand.

Let's see how the dust settles and then proceed from that point. Personally, I hate these days because of the all the convulsions that the minutes produce in the markets. It makes sense to just get out or lighten up ahead of the release and let the others rip and shred each other to pieces while you watch the chaos blissfully from the sidelines.

I am noting one interesting thing at this point however - crude oil and its products ARE NOT responding to the weaker Dollar, at least at this point. That tells me that the fundamentals are so weak in crude right now on account of the slowing global growth and burgeoning supply, that not even the macro trade in which index and some hedge funds blindly buy a basket of commodities when the Dollar moves lower is not having any impact on that complex. That is not good news for growth nor is it good news for those talking up inflation.

Deflation is the name of the game and has been for the last few years. Those who keep yapping about hyperinflation and currency induced inflation are simply barking up the wrong tree. Maybe they will snap out or their stupor and wise up and listen to what the markets are saying. Then again, maybe they will not!

Here is a chart of the US Dollar. Note that it has been stymied at the resistance zone shown on the chart. With a near vertical move over the last three months, the FOMC minutes has put a cap on the greenback for the current time. Let's see if it holds at 85 on the downside or not. If it does, it will consolidate and meander sideways for a while as it bides its time and garners more strength for what I believe will be a push through 87. It is going to be interesting to see if the Fed now  gets in the same game that Draghi and the ECB were playing back when the Euro was near 1.40.



My guess is that Draghi and company are not happy at all about the FOMC's statement. They do not want their Euro moving higher not when they are dealing with an economy that is stuck in the toilet.

Gold reaches first short term resistance at 1222

Posted: 08 Oct 2014 11:00 AM PDT

Commodity Trader

Commodities price, dollar strength guides gold prices

Posted: 08 Oct 2014 10:35 AM PDT

The U.S. Comex gold futures rebounded almost $20 this week to end at $1,212.40 on Tuesday.

Primary Silver Miner Update: Blood Running in the Streets

Posted: 08 Oct 2014 10:15 AM PDT

The Primary Silver Mining Industry continues to suffer from manipulated low metal prices.  The miners produced 37% more silver only to see their total revenues decline while their adjusted income fell an amazing 88% over the past two-years.  And remember… this was at an average realized price of silver at $19.89. Can you imagine what the […]

The post Primary Silver Miner Update: Blood Running in the Streets appeared first on Silver Doctors.

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Four simple tricks to stretch your "automotive dollar"

Posted: 08 Oct 2014 10:12 AM PDT

From Eric Peters at Eric Peters Autos:

There’s not much we can do about the cost of buying a new car, but I can give you some advice that may help you reduce the cost of owning (and driving) it.

* Be wary of “service advisors”

Often, these are in fact salesmen (and women). That is, they earn a commission on the sale of whatever repair they get you to authorize. While it might be true that the repair urged on you by the service advisor is needed, it is also true he has a financial interest in selling you the service. This strikes me as sketchy. Like a doctor who “suggests” a pill or device (or even surgery) that will earn him a check if you buy in.

How to avoid getting ripped off for repairs your car may not have needed? Like a complete transmission rebuild – when the “problem” was merely that the thing was low a quart of fluid (or there was a loose wire somewhere)?

Get a second – and even a third – opinion from another shop. Especially if the suggested repair is a big ticket repair. Never accept at face value what you’re told by a service advisor unless you trust the guy completely.

And even then, caveat emptor.

* New cars don’t need much service at all

At least, not for a long time.

The ’70s are history – and so are seasonal ignition and fuel system adjustments. Spark plugs are good for 50,000-100,000 miles; the electronics are solid state. Fuel injection needs fresh fuel – and not much else. Even the clutch in a manual-transmission-equipped vehicle no longer needs regular adjusting because modern clutches are self-adjusting.

 

 

If you buy a new car today, you shouldn’t have to worry about more than occasional fluid/filter changes, tire rotations and basic brake work (i.e., replacing pads/shoes) for the first 50,000-75,000 miles. And – despite all the stuff that’s been added to new cars over the past 20 or 30 years – basic maintenance such as oil and filter changes, changing brake pads and tire rotations are still jobs you can do yourself and thereby, save money.

 

Your car’s owner’s manual will tell you exactly what regular service your vehicle needs – and when. Follow its recommendations and you – and your car – will be fine. (As well as covered by the vehicle’s warranty, in the event a problem occurs.) Don’t get tricked into premature maintenance that will do nothing for your car but which will deplete your wallet.

Example: A number of new cars only require an oil change when the car’s computer senses it’s time for an oil change. I’m not referring to the crude mileage-based “change oil” lights that cars used to have. Many new cars have a sophisticated sampling system that monitors the oil’s condition in real time, as you drive – and will only indicate the need to change the oil when it is necessary to change the oil. This can be 10,000 or even 15,000 miles or more – rather than the 3,000 or 6,000 miles that was common in the past. Given that good quality oil sells for $6 a quart these days – and synthetics for more than $10 a quart (and most cars take about 5 quarts, plus the filter) it pays to not change oil before you need to change the oil.

* Re-shoe your car with all-season/general purpose tires

Instead of the “sport” tires that are now very common as factory equipment on even bread-and-butter family sedans. Sport tires tend to wear faster (they rarely make it to 30,000 miles while a good-all season tire can and often will last 50,000 miles or even more).

It’s true they – the sport tires – offer better high-speed cornering grip, sharper steering response and so on. But be honest with yourself about the way you actually drive and ask yourself whether the theoretical increase in high-speed cornering capability is worth the everyday reality of more frequent tire replacement (and more expensive tires, as sport-compound tires tend to cost more than general/all-season tires).

You should also know that everything’s relative – meaning, that the typical all-season “generic” tire of today is superior to the run-of-the-mill tire of 20 or 30 years ago, in terms of such things as traction, ability to dissipate heat, and help your car stop as quickly as possible in an emergency.

Unless you do weekend track days, going from a sport to a standard/all-season tire is not going to degrade your car’s capability or safety in any meaningful way on the street, within the bounds of normal street-driving speeds.

But it could save you a great deal of money.

* Keep your headlights clear

Most cars built within the past 10-15 years do not have glass headlights. Instead, they have plastic-covered headlight assemblies.

Unlike glass, the plastic yellows and becomes increasingly opaque over time as the surface layer of the plastic – exposed directly to UV light – degrades. If the headlights “yellow” too much, they not only look sad, they may cause your vehicle to fail state safety inspection. And replacing these headlamp assemblies can be very pricey.

To avoid this – both the hassle at state inspection time and the potential expense of having to buy a new headlamp assembly – use commonly available (and very inexpensive) cleaner wax to lightly polish the plastic once every year or so. The cleaner wax contains very mild abrasive compounds that will gently remove the yellowed material and maintain the as-new translucent appearance.

There are also complete kits that contain buffer/rubbing compound cleaner to deal with already yellowed headlight plastic. Neither ought to cost you more than $20 or so and some elbow grease – vs. $120 (or more) for a new headlight assembly.

Metals market update for October 8

Posted: 08 Oct 2014 09:18 AM PDT

Gold rose $3.60 or 0.3% to $1,210.60 per ounce and silver fell $0.12 or 0.69% to $17.19 per ounce yesterday.

End of the Empire

Posted: 08 Oct 2014 09:15 AM PDT

If the top 1/100th of 1% crowding airports with their private jets isn’t afraid of impoverished, disenchanted debt-serfs with pitchforks, they should be.

By End of the Empire I refer not to the collapse of American Imperial power but to the excesses and anxieties that characterize the decay of Empire. I have covered the dynamics of Imperial decay before: How Empires Fall (April 17, 2013): 
The imperial tree falls not because the challenges are too great but because the core of the tree has been weakened by the gradual loss of surplus, purpose, institutional effectiveness, intellectual vigor and productive investment.

What I want to address today is the psychological characteristics of Imperial decay: a jaded populace that seeks distraction from their anxieties in excess. 

We know what characterizes empires on the make: a populace that is vigorous, confident, brimming with abilities and more than willing to engage in spirited intellectual debate on key issues.

What characterizes the American populace today? Jaded, unwilling to sacrifice comfort and convenience for long-term gain, incapable of honest debate, brimming with resentful excuses, insecure, anxious, fearful, depressed, distracted, self-absorbed. These last seven are of course the key traits of permanent adolescence, the state of arrested development encouraged by consumerism.

But they also characterize an Empire that has lost its edge, its ability to sacrifice for a common good, its confidence in its leadership and institutions, and its focus on building value rather than consuming.

Longtime correspondent Kevin K. recently submitted a comparison of the cost for a family of four to attend an NFL football game. San Francisco led the pack at $641 per game for average seats and a few drinks/hot dogs. (Scratch the $10 program and the $22 hat and that drops it all the way down to $609.) 
49ers stadium priciest in NFL for a family of four: $641

The cheapest outing in the league came in at $345. I confess I’m frugal (hey I’m a writer, frugality is part of the package), but $345 doesn’t strike me as particularly affordable. That’s two months’ groceries in our abode, and $641 is the cost of a 3,000-mile car-camping trip.

It’s remarkably easy to drop $600 on a dinner for four at a high-end eatery (with wine, of course). It’s almost laughable to look at archived menus of top-end restaurants in the 1960s; even in major bastions of old wealth like San Francisco, the fare at the best restaurants in town in the 1960s would barely pass muster at a decent cafe nowadays in terms of sophistication and complexity.

There is no way to parody current high-end restaurant fare: it is its own parody.Whatever bizarre combination of ingredients you might propose in a parody is on the menu at some fancy bistro–with a straight face and hefty price tag.

You know we’re in trouble when parody has been rendered impossible.

Want to attend a live rock concert with a big name band? $600 might buy you two decent seats–or not. Even lesser names cost in excess of $100.

The median household income in the U.S. is around $51,000. A house in a “nice” neighborhood in many Left Coast cities costs $1,000,000. These are not mansions or the best house in town: these are average homes.

Although I can’t find statistics to verify this, I am fairly confident that this ratio of median income to average houses in “nice” Left Coast neighborhoods (20 to 1) far exceeds the extremes of 1929.

$105,000 income puts a household in the top 20%, and $150,000 puts a household in the top 10%. How many football games (or meals, weekends away, concerts, etc.) at $600 a pop can a household earning $105,000 afford? How many shoulda household indulge in, given the pressing need to save for investment and emergencies?

We all know households that have no business squandering these sums on entertainment do so for two reasons: entitlement and aspirational spending. Imperial populations feel entitled: to bread and circuses (food stamps and 24-hour sports channels), to high-paying, secure jobs where sluggards can’t be fired, to trust funds (so we don’t have to lower ourselves to do work that is not fulfilling), to pills that cure us of ailments we nurtured with our unhealthy lifestyles, etc. etc. etc.

Everyone aspires to look like they belong in the elite. The top 10% want to look like they’re 1%ers, the top 20% want to look like top 5%ers, the top 40% want to look like top 10%ers, and so on.

The absurd excesses of consumerism are driven by one key dynamic: the top slice has never been wealthier or had so much free cash to blow on excess consumption.

The top 1/10th of 1% has never been wealthier, the top 1% has never been wealthier, the top 5% have never been wealthier, and the top 10% have never been wealthier. People wonder why they’re “poor” despite earning $250,000 a year, and yet they seem unaware of where their earnings go because they’re entitled to all the goodies: by golly, we worked hard and we deserve it.

Even if we didn’t work hard, we still deserve it, because we’re special.

One would imagine that the populace of an Empire at its zenith would feel euphoric, confident, secure, fearless: chomping at the bit to go out and do great things not just for themselves but for the Empire.

Instead, we see a populace on anti-depressants, insecure, anxious, burdened by ill health, jaded by 24 hours of everything, every day, distrustful of its corrupt leadership and self-serving institutions, and beneath the rah-rah phony cheer, fearful that the whole rotten contraption might give way before they secure their share of the Imperial swag.

If the top 1/100th of 1% crowding airports with their private jets isn’t afraid of impoverished, disenchanted debt-serfs with pitchforks, they should be. 

Indian investors pass on gold

Posted: 08 Oct 2014 09:06 AM PDT

Indian women may prefer gold as consumption material, but not as a safe investment.

Indian Customs Dept whips up efforts to tackle gold smuggling

Posted: 08 Oct 2014 09:02 AM PDT

Gold seizure at Chennai International Airport during the initial nine months of the current year has touched record highs.

This is How Police Justify Stealing American Citizens’ Money

Posted: 08 Oct 2014 09:00 AM PDT

Police confiscating Americans' hard earned cash, as well as a wide variety of other valuables, without an arrest or conviction is a disturbing and growing practice throughput these United States. Since cops get to keep the seized funds and use the money on pretty much anything they want, the practice is becoming endemic in certain parts of the nation. The […]

The post This is How Police Justify Stealing American Citizens' Money appeared first on Silver Doctors.

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Gold; a Simpleton’s View

Posted: 08 Oct 2014 09:00 AM PDT

Biwii

Silver Showing Some Signs of Bottoming?

Posted: 08 Oct 2014 08:12 AM PDT

I want to stress that the grey metal has NOT YET confirmed this however. It is showing some stability here just above $16.50 as it oscillates around the $17 level.

I have noted two resistance levels that have formed on the chart. The first comes in near $17.50; the latter, and the more formidable, shows up at $18. If the bulls can push the price up past both levels, we will some significant short covering.

The reason for the comments is that Monday's bizarre trading day in which the US Dollar completely erased all of its strong gains from last Friday's jobs report, sent the entire commodity complex soaring higher. That wild day impacted the price charts of many individual commodities ( remember that 30 cent rally in the beans?) and painted some chart patterns that have the pure technically-oriented traders perking up.

Remember, our markets are run by computers and these computers are "pure technicians" in the sense that they do not care, nor do they consult, fundamentals. As such one cannot ignore technical developments in markets.

With the Goldman Sachs Commodity Index continuing to swoon ( it is threatening to take out a 27 month low today!) it is difficult for me to envision silver mounting any kind of sustained rally, especially with copper having trouble near the $3.00 mark. Still, bears will need to be alert to any violations of those upside resistance levels.

I should note that Australia's Perth Mint reported some very strong sales of its silver coin ( 757,000 ounces in September and 819,000 in August). According to Dow Jones that was double what it had been selling a the few previous months.

While that is good news it is not enough to shift the sentiment towards the metal overall at this point. Silver needs a STRONG Economy with lots of industrial demand ( think cell phones, tablets, electronics, etc.) and growth to spur it strongly higher. I know I shall incur the wrath of the silver perma-bulls with this next comment but frankly I do not view silver as a safe haven. It is too bulky and too hard to transport in size. For a store of value in inflationary times however, it can be quite good.



For now, perhaps the market has found a level above which it is comfortable trading with prices having fallen far enough for the time being. Given its 23% plunge in price in three months time,  it is not unreasonable to see some consolidative type trade.

With the FOMC on tap, there is no telling what we will get. The market could make another fresh leg lower or it could take out resistance and move higher. I simply do not know.

One quick comment and chart - Unleaded Gasoline scored a 46 month low in price today! I for one am quite happy to see this and I am sure a whole lotta other consumers are as well.



As I said above, this underscores the deflationary type environment we are seeing in the commodity complex which is why I am a skeptic when it comes to silver. I will say this - if silver does fall below that low from Monday this week and especially below last Friday's low near $16.64, I would not rule out a further fall to near $15.00.

Rick Rule: Reality is on Sale

Posted: 08 Oct 2014 08:00 AM PDT

At the Cambridge House Canadian Investment Conference in June, The Gold Report Publisher Jason Mallin asked a panel of experts picking a portfolio of stocks with upside potential for the 2014 Streetwise Reports Natural Resources Watchlist what they wanted to see in an equity. As always, Sprott US Holdings Inc. CEO Rick Rule, summed up the ideal […]

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Gold Technical Analysis (October 8, 2014): The push higher continues.

Posted: 08 Oct 2014 07:20 AM PDT

forexlive

Ebola and Global Recession Risks Send Stocks Sliding

Posted: 08 Oct 2014 07:00 AM PDT

gold.ie

Metallon targets 500,000 oz gold output in 5 years

Posted: 08 Oct 2014 06:58 AM PDT

Metallon Gold has five mines in Zimbabwe but only four are operating.

The $1,200 Machine For 3D-Printing Guns Has Sold Out In 24 Hours

Posted: 08 Oct 2014 06:30 AM PDT

It appears Americans have a massive pent-up demand for untraceable guns: On Wednesday, Cody Wilson's libertarian non-profit Defense Distributed revealed the Ghost Gunner, a $1,200 computer-controlled (CNC) milling machine designed to let anyone make the aluminum body of an AR-15 rifle at home, with no expertise, no regulation, and no serial numbers.  Since then, he's sold […]

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Asia, West clash over gold price - Phillips

Posted: 08 Oct 2014 06:11 AM PDT

Julian Phillips of the Gold Forecaster steps back and takes a broader view of the gold market in his daily commentary.

Gold climbs on demand from China; platinum gains

Posted: 08 Oct 2014 05:44 AM PDT

Gold futures rose as buyers returned after a one-week holiday in China.

Silver particularly cheap as 'blood on the commodity streets'

Posted: 08 Oct 2014 05:42 AM PDT

Mark O'Byrne says silver presents investors with potentially attractive opportunities after a brutal fall in prices.

Doc Eifrig: If your investments are keeping you up at night, read this now

Posted: 08 Oct 2014 05:00 AM PDT

From Dr. David Eifrig, MD, MBA, editor, Retirement Millionaire: 

Stocks just hit their lowest point in six weeks… oil is crashing… gold stocks are crashing.

If you’re like a lot of people, this has you worried about your investments.

But if you own municipal bonds like I’ve urged you to for years, you’re enjoying stress-free, tax-free income. Today, I’ll explain what’s going on… and why the income will continue…

Regular readers know I’m a big fan of municipal bonds. I don’t know of anyone in the financial industry who has done more to promote the idea of owning muni bonds than I have.

As I’ve written before, municipal bonds are loans made to state and municipal governments. To encourage investment in government projects, interest received from “munis” is exempt from federal income tax and, in many cases, state and local income taxes. This makes them great ways to earn investment income… and keep it all for yourself.

For example, if you earn $1,000 in annual interest in a taxable investment, and you’re in the 28% tax bracket, you’ll pay $280 in taxes to the government… and keep $720. In a tax-free investment, you’d keep all $1,000.

Since $280 is 39% of $720, you end up with 39% more money (and that’s just in the first year).

This simple example shows you how powerful the wealth-accumulating effects of tax-free investing can be.

I began recommending muni bonds to readers of Retirement Millionaire letter in 2008. I emphatically re-recommended them in 2011.

At the time, Wall Street sensation Meredith Whitney had just gone on 60 Minutes and warned of 50-100 “significant” municipal bond defaults that would add up to “hundreds of billions of dollars.” The market panicked.

But as I said at the time:

People believe the risk of default to municipal bonds is much higher than it’s ever been. More than during the Korean War, Vietnam, the 1987 Crash, the S&L crisis, or the tech bubble of 2000. In the past two months, the fear has been so rampant, California bonds are more expensive than Mexican bonds.

Since Whitney’s call three months ago, more than $30 billion have exited municipal bond funds. The pace is slowing a bit… But this is exactly the thing the crowd does at exactly the wrong time. They listen to mostly fear-driven hyperbole instead of simply looking at the numbers.

Another thing that has kept investors away from munis is the fear of rising interest rates. Rising rates decrease the value of fixed-income investments – including muni bonds.

But again, these fears have been overdone. Rates have remained low. As I’ve said all along, I don’t expect rates to rise sharply in the short term. Also, while interest-rate movements are notoriously unpredictable, we’ll have plenty of time to react if we do see them start to edge higher.

In short, the crowd’s misplaced fear of municipal bonds has given us an incredible opportunity to earn huge, tax-free income streams no matter what happens in the stock market.

For many people, that’s a huge benefit…

Take one of my favorite muni-bond funds, for instance… the Invesco Value Municipal Income Trust (IIM).

I began recommending IIM in Retirement Millionaire back in March of 2011. Since then, the share price has made incremental gains – it’s up about 13% in three years.

But each and every month – no matter what stocks have done – IIM has paid out a tax-free yield of more than $0.07 per share. That works out to a yearly income of about $0.90 per share… or 5.89% at today’s prices.

When you consider the tax benefits, it gets even better… You’d have to make more than 9% in a normal investment to match IIM’s post-tax income.

And these funds are STILL cheap… Right now, funds like IIM are trading at 6%-plus discounts to the value of their assets. Mainly because of the fears I mentioned above.

But as I said, these fears are overdone – as they have been for more than three years now.

And you can still take advantage of this misplaced fear to collect some of the largest, safest yields in the market… the kind of yields that will make you forget about stock market volatility like we’re seeing today.

Here’s to our health, wealth, and a great retirement,

Dr. David Eifrig

P.S. There’s another great source of safe income that 99% investors are overlooking. For instance, my latest recommendation should net us 19.1% in as little as four months… for an annualized return of 57%. And this technique has been profitable on 186 out of 188 positions – a 99% success rate. It has been so successful, I recently compiled a book detailing this powerful, safe-money income strategy for all my readers. You can get all the details right here.

Ebola and Global Recession Risks Send Stocks Sliding

Posted: 08 Oct 2014 04:55 AM PDT

All the focus has rightly been on the medical implications of the disease and the tragic human consequences. So far, there has been little attention on the financial and economic consequences of a pandemic.
Global economic growth remains weak and vulnerable and the global financial system remains very fragile. The ebola virus has the potential to be the straw that breaks the proverbial camel's back.
 The outbreak and spread of Ebola is a worrying development and should remind people and companies, the world over, to be aware of the risks and be prepared.

Hardly a day goes by without a headline on the spread of the deadly Ebola virus in West Africa and now in Spain and in the U.S. With more than 3,500 deaths and about 8,000 reported cases, it is one of the most severe disease outbreaks in recent years.

All the focus has rightly been on the medical implications of the disease and the tragic human consequences. So far, there has been little attention on the financial and economic consequences of a pandemic.

Global economic growth remains weak and vulnerable and the global financial system remains very fragile. The ebola virus has the potential to be the straw that breaks the proverbial camel's back.

Stocks and commodities fell globally today due to concerns about the spread of Ebola and declining economic growth. Precious metals bounced from near multi month lows.

The Stoxx Europe 600 Index declined another 0.6% today after the benchmark gauge had slumped 1.5% yesterday as the International Monetary Fund cut its forecasts for global growth and German industrial production contracted the most in more than five years as sanctions on Russia took their toll.


S&P 500 – Jan 1985 to Oct 8, 2014 (Thomson Reuters)

Airlines led the sector lower, having come under pressure from the spread of the Ebola virus to Europe. Shares in travel companies including budget carrier Easyjet, Iberia owner International Airlines Group and cruise company Carnival are down for a second day after a Spanish nurse in Madrid became the first person outside Africa to contract the deadly Ebola virus.

Fears that this could put people off travelling or that travel restrictions could be imposed hit travel companies. EasyJet shares lost nearly 3% this morning, Carnival was down almost 2% while IAG and Tui Travel shed 1.9%.

The DAX Index fell 1% and extended its slump from a record reached in July to a 10% decline. The volume of shares changing hands in Stoxx 600-listed companies was 37% higher than the 30-day average for this time of the day, according to data compiled by Bloomberg.

U.S. stocks fell again yesterday, pressured by a second straight day of weak data out of Germany, the euro zone’s largest economy. German industrial output figures for August plunged a whopping 4%, the biggest fall in 5-1/2 years, a day after industrial orders saw their biggest monthly drop since 2009.

Industrial production in Spain also slowed in August, disappointing economists. Output rose just 0.6% compared with a revised 0.9% gain in July. Production of consumer goods remained flat in August while capital goods and energy fell 4% and 1.4% respectively.

The emergence of Ebola in Madrid, the Spanish capital, will do little for consumer confidence in the struggling Spanish economy.

Similarly, the emergence of Ebola in Texas and Washington risks impacting on the fragile U.S. recovery. The Obama administration is developing additional screening protocols for airline passengers both overseas and in the United States to control infectious diseases like Ebola, the president said Monday.

After meeting with his senior health, homeland security and national security advisors, President Obama told reporters that in the wake of the first Ebola case diagnosed in the U.S., officials would study increasing screening plans. "I consider this a top national security priority," Obama said.

The White House said a ban on travel from West African countries would slow the fight against the virus.

The International Monetary Fund and World Bank are handing out free thermometers as a precaution against the Ebola virus for people attending their annual meetings in Washington this week.

Thousands of finance officials, economists, bankers and representatives of nonprofit groups from nearly every nation are gathering in the U.S. capital to discuss the darkening economic outlook.  That includes officials from the West African nations struggling to contain the deadly outbreak.

Ebola has overshadowed the Middle East respiratory syndrome (Mers). Discovered in 2012, Mers has so far killed around 330 people in Saudi Arabia primarily. More than 850 people worldwide are thought to be infected, with new cases being reported from as far as the U.S. and Europe.

Pandemics can severely affect supply chains, including food supplies, business operations and key government services such as the provision of water, electricity, education and of course health care. Travel restrictions and "stay at home" policies bordering on curfew would greatly curtail economic activity.


Hussman

There is also an element of the "boy who cried wolf" regarding the ebola virus. There have been numerous alarmist campaigns and scaremongering regarding many viruses – bird flu, swine flu, H1N1 et cetera, et cetera.  There have been so many false alarms that when an actual pandemic commences, people may ignore the threat for longer than is wise.

Therefore, the public in many western countries will remain skeptical of the risk of ebola virus until it has been shown to be a real threat. This in itself poses risks as it means that people do not act in a precautionary manner thereby exposing themselves to potentially contracting the virus.

Is Ebola another virus scare story or a real pandemic?

It is too early to tell. However, it looks like it is already impacting stock markets and market sentiment. Unless it is contained in the U.S. and Europe, it will likely soon impact consumer confidence and already fragile economic growth.

The outbreak and spread of Ebola is a worrying development and should remind people and companies, the world over, to be aware of the risks and be prepared. 

RECEIVE GOLDCORE'S AWARD WINNING RESEARCH HERE

GOLDCORE MARKET UPDATE
Today's AM fix was USD 1,220.00, EUR 963.51 and GBP 758.38 per ounce.
Yesterday's AM fix was USD 1,207.50, EUR 957.27 and GBP 751.49 per ounce.


Gold in U.S. Dollars,  1 Year (Thomson Reuters) 

Gold rose $3.60 or 0.3% to $1,210.60 per ounce and silver fell $0.12 or 0.69% to $17.19 per ounce yesterday.

Gold in Singapore climbed from $1,209.00/oz to almost $1,220/oz. Further slight gains were seen in London, prior to gold falling to $1,217/oz.

Gold was boosted by negative economic data from Germany and Europe and the IMF’s third cut this year to its global growth forecast.


Gold in GBP,  1 Year (Thomson Reuters) 

China returned from their Golden Week holiday today and the market had high hopes of a physical related bounce for both gold and silver.

Growth in China’s retail sales during the long “Golden Week” holiday slowed to 12.1% from a 13.6 % rise in the same period last year, data from the Ministry of Commerce showed on Wednesday.


Gold in Euros,  1 Year (Thomson Reuters)

However, Chinese bullion investors are back after their week-long National Day holiday and initial signs are that Chinese demand remains robust.

Gold jewellery sales rose 106% at Hangzhou Department Store, at Tianjin stores gold and silver jewellery sales rose more than 40% according to data from the commerce ministry reported by Reuters. However, there are no overall jewellery sales figures available.

The bounce higher in gold and silver in recent days is encouraging from a technical perspective. Gold may have seen a triple bottom which is a strong technical signal which often signals the reversal of a recent downtrend and can often occur prior to a resumption of a bull market.

It is too early to call the bottom. Prudent buyers will continue to accumulate through dollar cost averaging into bullion.

RECEIVE GOLDCORE'S AWARD WINNING RESEARCH HERE

Desperate Times Call For Desperate Treasuries

Posted: 08 Oct 2014 03:13 AM PDT

I realize this is a bit unconventional.  Using a health scare to restrict hot money flows seems a bit extreme.  Then again using OPM (other people’s money) as a substitute for QE in terms of being as distracting as a Fiddler On The Roof would be TRADITION!…. TRADITION!

How do you take a strong dollar and guarantee that it doesn’t turn into a permanent European vacation from their jobs for Mario Draghi and Mark Carney?  I don’t recall Samuelson’s economic text containing a chapter on global epidemics as a tool of monetary policy.  Then again “When it gets serious you have to lie” wasn’t the introductory line in Adam Smith’s Wealth of Nations.

QEbola… it’s the new QEasing… Dave just calls it QuEasy.  Can you feel it?  Here’s an air sick back.

http://tradewithdave.com/?p=22145

 

Gold Trying to Break Higher, SPX 500 Issues Lowest Close in 2 Months

Posted: 08 Oct 2014 01:10 AM PDT

dailyfx

Gold Price Touched $1183. What Now?

Posted: 08 Oct 2014 01:10 AM PDT

investing

Gold 1240 Lines Up as Resistance

Posted: 08 Oct 2014 01:05 AM PDT

dailyfx

Gold: Trying To Rally To Back Above $1215

Posted: 08 Oct 2014 01:05 AM PDT

investing

Gold and the S&P 500 Index: Sum and Ratio

Posted: 08 Oct 2014 01:05 AM PDT

marketoracle

David Morgan's Secret to Being Grateful, Even at $17 Silver

Posted: 08 Oct 2014 01:00 AM PDT

Manipulation and apathy can't keep silver prices down forever; there is too much demand and too much money sitting on the sidelines. In this interview with The Gold Report, Silver-Investor.com...

Visit the aureport.com for more information and for a free newsletter

Silver Forecast October 8, 2014, Technical Analysis

Posted: 08 Oct 2014 12:50 AM PDT

fxempire

Huge Reversal in USD and Gold - Finally!

Posted: 08 Oct 2014 12:35 AM PDT

marketoracle

Gold Topside Targets Favored on Bullish RSI Break, USD Correction

Posted: 08 Oct 2014 12:35 AM PDT

dailyfx

Can the junk bond party continue for much longer?

Posted: 08 Oct 2014 12:23 AM PDT

Weakness in the junk bond market is a reason to be nervous about global equities. Cheap money is running out or is it? The Fed is not the only central bank printing money these days.

In ‘Bart Chart,’ Bloomberg’s Mark Barton takes a look at the Bloomberg US Dollar high yield corporate bond index and discusses why you should be cautious in this market on ‘Countdown’…

China is maneuvering to get its currency included in IMF's super-currency

Posted: 07 Oct 2014 11:26 PM PDT

China is maneuvering to get its currency included in IMF's super-currency

Protests over democracy in Hong Kong may be preoccupying the Chinese leadership, but a subject of still greater international importance is being played out this week behind closed doors in Washington.

China is bidding to enter the heart of global finance by establishing its currency, the renminbi, as part of an ubiquitous monetary unit used in official transactions around the world.

The issue of whether the Chinese should be part of the International Monetary Fund's Special Drawing Right, the composite reserve currency used in official financing, is highly technocratic, but the political questions at stake go to the core of world money and power -- and will be discussed, in the background, at the annual meetings of the IMF and World Bank in Washington this week.

The decision on a new SDR structure, to be made in the next 15 months, will influence how China and its currency can play a bigger part in driving world trade, investment, and capital flows. The renminbi eventually could challenge the dollar and its pivotal position in world money -- which is why the U.S. government and Federal Reserve are examining this with intense interest.

Whenever the SDR makes its appearance, it will spell the end of the U.S. dollar a reserve currency.  This must read news story put in an appearance on the usatoday.com Internet site at 5:25 p.m. EDT on Tuesday afternoon---and it's something that I found over at the gata.org Internet site.

Jim Rickards: Obama’s Abandoning the Saudis for Iran and Dooming the Petrodollar

Posted: 07 Oct 2014 11:26 PM PDT

Jim Rickards: Obama's Abandoning the Saudis for Iran and Dooming the Petrodollar

Alex Daley, Casey Research's Chief Technology Investment Strategist, sat down with Jim Rickards, author of many best-selling economics and investing books, including his latest, titled The Death of Money. In this exclusive interview, Jim shares his view on the changes in U.S. foreign policy—the newly announced partnership with Iran to help fight ISIS and recent moves away from the petrodollar deal with Saudi Arabia—and what they mean for the dollar, gold, and investment markets in general.

This interview just scratches the surface of the topics Jim covered in his speech at the most recent Casey Research Summit in San Antonio. You can grab a complete recording of that speech, and all 25 of the others, in the Summit Audio Collection, which is on sale with a juicy pre-order discount for just a few more days.

This 21:10 minute video interview, which was posted on the Casey Research website yesterday, certainly falls into the must watch category---and I thank Dennis Mong for pointing it out.

Jim Rickards Double Header: Fundamental U.S. Economy is Very Weak/Financial Panics, the Next Big Crisis

Posted: 07 Oct 2014 11:26 PM PDT

Jim Rickards Double Header: Fundamental U.S. Economy is Very Weak/Financial Panics, the Next Big Crisis

West Shore Group Chief global Strategist Jim Rickards discusses Fed Chair Janet Yellen, gold and concerns over inflation. He speaks on "Market Makers."  There's a lot of talk about gold as well---and one of the talking heads even mentioned 'gold price manipulation' by the central banks  That must be a first for Bloomberg.

This 7:45 minute video was posted on their Internet site on Monday---and is an absolute must watch as well.

The second of two from Jim is a Reuters piece, filed from New York, that appeared on their Internet site at 8:14 a.m. EDT on Monday as well.  It's headlined "The next big crisis? Jim Rickards on financial panics".

Both of these interviews are courtesy of reader Harold Jacobsen---and I thank him for bringing them to our attention.

Mark Hulbert: Opinion---Gold market sentiment takes a big turn for the worse

Posted: 07 Oct 2014 11:26 PM PDT

Mark Hulbert: Opinion---Gold market sentiment takes a big turn for the worse

Gold’s $20 plunge on Friday was accompanied by a big increase in bullishness among gold timers.

That’s just the opposite of what you would expect, since the normal pattern is for gold timers’ bullishness to rise and fall in lockstep with the market.

It’s a bad sign that this normal pattern has been broken, according to contrarian analysis. It suggests that there isn’t yet absolute bearishness that marks a significant bottom.

To be sure, as I wrote two weeks ago, contrarians would turn bearish again if gold timers quickly became bullish at the first signs of market strength. Little did I know that the gold timers were about to become more bullish without any signs of market strength whatsoever.

Mr. Hulbert's opinion is just that---an opinion.  Like Dennis Gartman before him, I've long since stopped taking Mark's gold comments seriously---and I'm posting this for entertainment purposes only.  It's the final offering of the day from Orlando, Florida reader Dennis Mong.

Swiss National Bank Gold Initiative Would Hamper Policy, Government Says

Posted: 07 Oct 2014 11:26 PM PDT

Swiss National Bank Gold Initiative Would Hamper Policy, Government Says

Asking the Swiss National Bank to hold a fixed portion of its assets in gold would hinder monetary policy, the government said today.

Switzerland will vote on the initiative “Save Our Swiss Gold” on Nov. 30 that would force the central bank to hold at least twenty percent of its assets in gold. It would also forbid the sale of any such holdings and require all the gold be held in Switzerland.

“A rigid and unsaleable minimum gold holding would make it difficult for the SNB to fulfill its mandate to ensure price stability and to contribute to the stable development of the economy,” Finance Minister Eveline Widmer-Schlumpf said at a press briefing in Bern today. Both parliament and the government have already recommended voters reject the initiative. Opinion polls will be published later this month.

Well, dear reader, that's the whole objective, as Chris Powell stated in the GATA release of this story.   This Bloomberg piece, filed from Zurich, showed up on their Internet site at 6:08 a.m. Denver time yesterday morning---and I thank reader U.M. for digging it up for us.

Russia, South Africa Seek to Support Platinum Price in Talks

Posted: 07 Oct 2014 11:26 PM PDT

Russia, South Africa Seek to Support Platinum Price in Talks

Russia and South Africa, together holding about 80 percent of the earth’s platinum-group metal reserves, will meet to discuss ways to buoy slumping prices.

Officials from Russia’s central bank and OAO GMK Norilsk Nickel, the world’s biggest producer of palladium, which is part of the precious-metal group, will attend the meeting next month, according to Natural Resources Minister Sergei Donskoi.

“This won’t be a trading agreement, but the main aim of this cooperation is to put together the interests of the two countries in this field,” Donskoi said in an interview last week at Bloomberg’s Moscow office. One option is for the central banks to boost purchases of platinum and palladium, he said.

As you already know, dear reader, platinum is firmly under the thumb of JPMorgan and a few other U.S. bullion banks in the Comex futures market---and until they decide, platinum prices are going nowhere.  This brief Bloomberg news item, co-filed from Moscow and Johannesburg, appeared on their website at 7:10 a.m. MDT yesterday morning---and it's another offering from reader U.M.

Gold prices in India remain stable

Posted: 07 Oct 2014 11:26 PM PDT

Gold prices in India remain stable

According to most recent study conducted by the Associated Chambers of Commerce and Industry of India (ASSOCHAM), the gold prices in India are likely to remain steady in the next six months. The increased gold demand during festive season will support yellow metal prices in the country. Moreover, the extremely low gold prices may trigger buying interest among retail customers in India, the report notes.

The ASSOCHAM report points out that festival and wedding season demand may keep the gold demand steady in the country, despite bearish outlook on international gold prices on account of strengthening greenback. Internationally too, gold is unlikely to lose its safe haven appeal due to rising concerns of geopolitical tensions around the globe, including Iraq, Syria and Russia. The pro-democracy strikes in Hong Kong tend to be the latest among them.

On the domestic front, gold prices are currently ruling at enticingly attractive levels, after having dropped almost 20% from the highest levels two years ago. The extremely low prices of gold are likely to induce lots of buying interest among rural customers, who account for most of the gold purchases, ASSOCHAM states.

This gold-related news item appeared on the resourceinvestor.com Internet site on Monday---and it's the final contribution of the day from Manitoba reader U.M., for which I thank her.

Russia, South Africa Seek to Support Platinum Price

Posted: 07 Oct 2014 11:26 PM PDT

"Will JPMorgan et al let them off the hook easy, or rip them new ones"

¤ Yesterday In Gold & Silver

The gold price traded pretty flat in the Far East on their Tuesday but rallied a bit the moment that London opened.  The rally got capped at that point, as the volume really blew out---and as I feared in my comments in The Wrap in yesterday's column, JPMorgan et al weren't going to let the price do much for the rest of the day, and they didn't.  Once Comex trading closed at 1:30 p.m. EDT yesterday, there was someone standing at the ready to bleed off most of the day's meager gains.

The low and high ticks, such as they were, were recorded by the CME Group as $1,203.00 and $1,214.10 in the December contract.

Gold closed on Tuesday in New York at $1,208.30 spot, up $1.50 from Monday's close.  Net volume was pretty decent at 135,000 contracts, with about a third of it coming before the London a.m. gold fix.

A small rally in silver developed early in afternoon trading in the Far East---but it, too, got cut off at the knees shortly before 9 a.m. BST in London trading.  Within two hours, all those gains plus more, had vanished---and the silver price chopped sideways for the remainder of the Tuesday session.

The low and high were reported as $17.085 and $17.625 in the December contract---and you can tell from the price at the high tick, that the silver price really wanted to fly, but wasn't allowed to.

Silver closed yesterday at $17.19 spot, down 16 cents from Monday's close.  Net volume was 41,500 contracts.

Platinum also rallied, but also ran into 'da boyz' shortly before 9 a.m. BST in London, but it never got sold down after that and traded almost ruler flat for the remainder of the Tuesday session.  Platinum managed to close up 15 dollars on the day.

Palladium had a mind of its own---and its rally began shortly before noon in London, but ran out of gas/got capped shortly before noon in New York---and its price finished up a healthy 23 bucks.

The dollar index closed late on Monday afternoon in New York at 85.77.  It rallied over the 86.00 mark twice during the first part of the Tuesday trading session, the last being around 11:30 a.m. in London.  From there it slid quietly lower for the remainder of the Tuesday session, finishing the day at 85.66---down 11 basis points from Monday's close.

The gold stocks opened in positive territory, but within minutes was in the red---and never looked back.  The HUI got creamed for 3.51%---and finished on its low of the day.

As bad as the gold shares got hit, the silver equities got it worse.  Nick Laird's Intraday Silver Sentiment Index shed another 4.27%.

The CME Daily Delivery Report showed that zero gold and 114 silver contracts were posted for delivery within the Comex-approved depositories on Thursday.  Once again it was Jefferies as the big short/issuer with 103 contracts.  They were also the biggest long/stoppers with 49 contracts, followed by Canada's Scotiabank and R.J. O'Brien with 43 and 21 contracts respectively.  The link to yesterday's Issuer and Stoppers Report is here.

The CME Preliminary Report for Tuesday showed that another 272 gold contracts disappeared out of the October contract---and that brings the total outstanding down to 1,320 contracts.  Open interest in silver went the other way, adding 48 contracts, with the new total outstanding in October now at 337 contracts, from which you have to subtract the 103 deliveries mentioned in the previous paragraph.

There were no reported changes in GLD yesterday---and as of 10:38 p.m. EDT yesterday evening, there were no reported changes in SLV, either.

The good folks over at Switzerland's Zürcher Kantonalbank updated their gold and silver ETFs with the data as of the close business on Friday, October 3---and this is what they had to report:  Both theses ETFs showed big withdrawals.  In gold, there was 187,677 troy ounces withdrawn---and in silver it was a huge 2,743,908 troy ounces.  Ted Butler said that it was probably associated with quarter-end investor book squaring. 

There was no sales report from the U.S. Mint.

Over at the Comex-approved depositories on Monday, there was 6,430.000 troy ounces of gold reported received---200 kilobars---and 32,182.150 troy ounces [1,001 kilobars] were reported shipped out.  With the exception of one kilobar, all the action was at Canada's Scotiabank---and the link to that activity is here.

As always, it was much busier in silver, as 1,201,948 troy ounces were received---and 212,245 troy ounces were shipped out the door.  The link to that action is here.

I have a decent number of stories again today---and the final edit is up to you.

¤ Critical Reads

Stocks plunge: Dow drops 273 points, S&P sinks 1.5%

Selling slammed Wall Street again Tuesday as concern about the European economy and upcoming U.S. corporate earnings reports sent the Dow Jones industrials to its biggest loss in more than three months.

The Dow plunged 272.52 points, or 1.6%, to 16,719.39 for its largest point decline since July 31. Broader indexes suffered too, with the NASDAQ composite down 1.6% to 4385.20 and the Standard & Poor's 500 off 1.5% to 1935.10.

"The Dow took a nosedive out of the gate today, due to escalating concerns about the global economy. Lackluster industrial output data from Germany and a downwardly revised global growth forecast from the International Monetary Fund got the bearish ball rolling," said Andrea Kramer, analyst at Schaeffer's Investment Research. And the ball never stopped rolling downhill.

This story appeared on the usatoday.com Internet site at 5:06 p.m. EDT---and today's first story is courtesy of Casey Research's own Louis James.

What Bubble? Record $924 Billion in 65 Million Auto Loans: 31% of All New Loans Are Subprime

Earlier today, credit agency Equifax piggybacked on Experian's auto loan data, and reported the following:

  • The total balance of auto loans outstanding in August is $924.2 billion, an all-time high and an increase of 10.8% from same time a year ago
  • The total number of auto loans outstanding stands at more than 65 million, a record high and an increase of more than 6% from the same time last year;
  • The total number of new loans originated through June is 12.5 million, an increase of 4.9% from same time a year ago

This article appeared on the Zero Hedge website late on Monday morning EDT---and I found it in yesterday's edition of the King Report.

Pimco's outflow headaches only just beginning

Outflows from Pimco may be far from over as many investors have yet to decide whether to stick with the Newport Beach, California-based asset manager.

Pimco hasn't said how much money has been withdrawn since fund manager Bill Gross quit on Sept. 26 to join Janus Capital. Pimco said its Total Return fund, which Gross had personally managed for 27 years, saw $23.5 billion in withdrawals in September. Morningstar, which analyzes mutual funds and other investments, estimated net outflow from Total Return at $17.9 billion in September, part of $25.5 billion of net outflows across all of Pimco's U.S. open-ended funds in September.

The withdrawals come as broker-dealers are holding fewer bonds, reducing the options for fund companies seeking to sell holdings to raise the money to meet redemption demands. That may cause the performance of some funds - including Pimco's - to lag, as spreads among less-liquid instruments creep higher and investors find themselves forced to choose between moving quickly or getting a fair price for debt they're selling.

This longish Reuters story, filed from New York, appeared on their Internet site at 12:33 p.m. EDT on Tuesday---and I thank West Virginia reader Elliot Simon for sharing it with us.

Big Banks Face Another Round of U.S. Charges

The Justice Department is preparing a fresh round of attacks on the world’s biggest banks, again questioning Wall Street’s role in a broad array of financial markets.

With evidence mounting that a number of foreign and American banks colluded to alter the price of foreign currencies, the largest and least regulated financial market, prosecutors are aiming to file charges against at least one bank by the end of the year, according to interviews with lawyers briefed on the matter. Ultimately, several banks are expected to plead guilty.

Interviews with more than a dozen lawyers who spoke on the condition of anonymity to discuss private negotiations open a window onto previously undisclosed aspects of an investigation that is unnerving Wall Street and the defense bar. While cases stemming from the financial crisis were aimed at institutions, prosecutors are planning to eventually indict individual bank employees over currency manipulation, using their instant messages as incriminating evidence.

The charges will most likely focus on traders and their bosses rather than chief executives. As a result, critics of the Justice Department might view the cases as little more than an exercise in public relations, a final push to shape the legacy of Attorney General Eric H. Holder Jr., who was blamed for a lack of criminal cases against Wall Street executives.

This story, also on the longish side, showed up on The New York Times website at 9:30 p.m. EDT on Monday evening---and I thank reader Ken Hurt for sending it along.

Financial Times: Banks plan to write off derivatives when a counterparty fails

The world's biggest banks have agreed to tear up the rulebook on derivatives to make it easier to resolve a future failing institution like Lehman Brothers.

People familiar with the matter said 18 bank "dealers," ranging from Credit Suisse to Goldman Sachs, have agreed to give up the right to pull the plug on derivatives contracts with a crisis-stricken institution.

Several months of complex talks involved regulators and asset managers but were led by dealers under the umbrella of the International Swaps and Derivatives Association.

US regulators, who have previously condemned the industry's crisis planning as inadequate, had demanded banks come up with a plan to stop their counterparties terminating derivatives contracts in the event of a crisis. The banks portrayed the success of the talks as a rare positive example of industry collaboration.

ISDA is due to announce the agreement to change its "protocols," which govern the $700 trillion market, in the next few days. They will take effect from January 1, 2015.

This commentary from the Financial Times yesterday is definitely worth reading---and it was posted in the clear in a GATA release yesterday.

IMF cuts growth outlook, warns on euro zone, Japan

The International Monetary Fund cut its global economic growth forecasts for the third time this year on Tuesday, warning of weaker growth in core euro zone countries, Japan and big emerging markets like Brazil.

In its flagship World Economic Outlook report, the Washington-based lender cut its global growth expectations to 3.3 percent for this year and 3.8 percent for next year. In July it had expected growth of 3.4 percent in 2014 and 4 percent in 2015.

The IMF has now cut its current-year growth forecasts nine out of 12 times in the last three years as it consistently overestimated how quickly richer countries would be able to pull free from high debt and unemployment in the wake of the 2007-2009 global financial crisis.

It also lowered its expectations for longer-term potential growth, something its chief economist Olivier Blanchard called "the force from the future."

This Reuters article, filed from Washington, put in an appearance on their Internet site at 5:23 p.m. EDT yesterday afternoon---and I thank Orlando, Florida reader Dennis Mong for bringing it to our attention.

France cautions Germany not to push Europe too far on austerity

France has denounced the eurozone’s austerity regime as deeply misguided and issued a blunt warning to Germany and the EU institutions that demands for further belt-tightening may set off a political backlash, endangering European stability.

“Be careful how you talk to the countries in the South, and be careful how you to talk to France,” said the French premier, Manuel Valls. “The adjustment has been brutal and it has turned millions people against Europe. It is putting the European project itself at risk.”

Mr Valls said Europe’s fiscal rules have been overtaken by deflationary forces and a protracted slump. “You cannot enforce the Treaty rigidly in these circumstances. The austerity policies are becoming absurd, and we have to examine the situation,” he told journalists in London.

The reformist French premier said the eurozone’s failure to recover risked leaving the region on the margins of the world economy, stuck in a Japanese-style trap. France had pushed through €30bn of fiscal cuts from 2010 to 2012, and another €30bn since then in an effort to comply with EU deficit rules, only to see the gains overwhelmed by the economic downturn. The deficit will remain stuck at 4.3pc of GDP in 2015. A further €50bn of cuts are coming over the next three years. “If they make us reach a 3pc deficit, the country will be totally on its knees. It’s not possible,” he said.

This Ambrose Evans-Pritchard commentary showed up on the telegraph.co.uk Internet site at 8:30 p.m. BST on their Monday evening---and it's the first offering of the day from Roy Stephens.  Less than an hour after the above story showed up on The Telegraph's website, they posted a story headlined "France's stagnation is tragic to watch"---and that's courtesy of Roy Stephens as well.

Europe's Triple-Dip Recession Arrives: German Industrial Production Crashes Most Since February 2009

A few hours ago we finally got undeniable confirmation that Europe is once again in recession, its third since Lehman, only this one is worse: it is led by the "core" countries, with Germany in the forefront, a Germany which just reported industrial output which suffered its biggest monthly decline in more than five years in August. Specifically, German IP tumbled 4%, led by capital goods which crashed 8.8%; consumer goods sliding 0.4%, and basic goods dropping 1.9%, with the headline plunge far below the consensus of -1.5%, and below even the worst forecast of -3.0%, the biggest drop since February 2009, a result which according to the FT rose "fears that Europe’s biggest economy might be heading for recession and prompting renewed concern about the economic health of the eurozone."

Oh, don't be afraid: the world's largest economic block is now without doubt in a triple-dip recession, which will in turn drag both the US and China down with it.

Output plunged 4.0 per cent from July, data published on Tuesday show, far more than the average 1.5 per cent drop forecast by economists and the largest decrease since February 2009, when the global financial crisis first hit Europe’s factories.

Coming on top of poor August data for industrial orders earlier this week, the numbers indicate that Germany is starting to suffer from a global weakening in demand for its exports due to geopolitical upheavals and slower growth in China.

This article appeared on the Zero Hedge website at 6:08 a.m. EDT on Tuesday morning---and I thank reader M.A. for sending it our way.

Bundesbank Blasts Draghi's QE, Fears "Monetary Policy is Hostage to Politics"

"The concept of an independent central bank clearly focused on price stability is neither old-fashioned nor outdated," exclaimed Bundesbank head Jens Weidmann. As the WSJ reports, he criticized the European Central Bank’s decision to buy private-sector bonds and signaled his fierce opposition to purchasing government bonds, underscoring his reluctance to back additional stimulus measures to combat weakness in the eurozone economy. "There is a risk of monetary policy, especially in the euro area, being held hostage by politics," Mr. Weidmann said.

In an interview with The Wall Street Journal, Mr. Weidmann rejected calls from the International Monetary Fund and within the ECB for Germany to cut taxes or ramp up public spending despite mounting signs that its economy is succumbing to Europe’s downturn. The European Commission should consider rejecting France’s 2015 budget, which exceeds deficit targets mandated by the European Union, he added.

Mr. Weidmann said he stands by the conservative principles that have characterized the Bundesbank throughout its nearly 60-year history: keeping inflation low; protecting the central bank’s balance sheet from risks and strict separation from the financial needs of governments.

This

This One Chart Shows Exactly How Undervalued Gold is Right Now…

Posted: 07 Oct 2014 09:00 PM PDT

Just exactly how undervalued is gold right now around $1200/oz? As the chart below shows, the last time gold was this undervalued relative to US debt, the price of gold quintupled. Submitted by Tim Price, Sovereign Man:  For the benefit of anyone living under a rock these past weeks, Bill Gross, the so-called "Bond King" […]

The post This One Chart Shows Exactly How Undervalued Gold is Right Now… appeared first on Silver Doctors.

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Gold market coming back to life for very good fundamental reasons

Posted: 07 Oct 2014 08:50 PM PDT

The big bullion banks have kicked the gold price hard over the past month with huge manipulation in the paper market. But you can’t keep a good guy down for long.

In February experts speaking at a conference in Dubai predicted a boring year for gold absent a major stock market correction (click here). Yet that may also now be close.

Edmund Moy, chief strategist at Fortress Gold, says factors like renewed demand for physical gold and supply constraints will drive prices higher soon…


Video link click here!

US stock market now very close to another historic crash

Posted: 07 Oct 2014 07:57 PM PDT

US stock markets tumbled again yesterday as the recent sell off gathers speed. Traders note that the markets are now very close to their 200-day moving averages and when those are passed there is every possibility of a major crash for the most overvalued equities in the world whose internal support has been hollowed out over the past year.

After the falls on Tuesday the Dow is under 200 points away from the 200-day moving average trigger line, and the Nasdaq is even closer to this tripwire with 90 points to go. Automated selling could turn into a market panic to get out at this point.

Exhausted rally

The long rally is exhausted. The QE3 money machine is coming to an end. Where are the buyers going to come from now? Besides the small caps have been selling down for ages. This is a hollow shell of a market just waiting for the big guys to join the rout.

It’s also a market exhibiting every sign of the madness of crowd buying, from the all-time high for margin debt to the leveraging of corporate balance sheets to buy back stocks on an epic scale. The most overvalued stock market in the world now faces a global recession and high dollar.

Subscribers to our highly regarded monthly newsletter have been aware of this for some time and will have crash proof portfolios if they have heeded our advice (subscribe here). How well are you positioned for a Black Monday 1987-style of a 2010-vintage Flash Crash?

Inevitable

We are close to the brink now with not a sign of anything on the horizon to alter this inevitable fate.

Have we gotten this sort of prediction right before? Well have a look back at our whacky prediction of a crash back in October 2008 (click here). How was that for timing and accuracy about the level of the fall?

Where to this time round? Dow at 6,000 anybody?

Gold Reaches Strong Support and Cycle Turns

Posted: 07 Oct 2014 07:29 PM PDT

Commodity Trader

Gold & Silver Trading Alert: Huge Reversal in USD and Gold – Finally!

Posted: 07 Oct 2014 05:50 PM PDT

SunshineProfits

BO POLNY: Triple Bottom a Prelude to Runaway Gold & Silver Bull Markets

Posted: 07 Oct 2014 04:30 PM PDT

Gold has placed a triple 2-year chart bottom at $1180 and will NOT break. Gold sits on the rising support line from back from 2000 – 2001 when the Bull Market began. Buying Gold today in the very low $1200 range is equivalent to buying Gold back in 2001 when it was $255. All truth […]

The post BO POLNY: Triple Bottom a Prelude to Runaway Gold & Silver Bull Markets appeared first on Silver Doctors.

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T. Ferguson: 12 Charts That Show a Deflationary Crash is Dead Ahead!

Posted: 07 Oct 2014 04:25 PM PDT

IF I’M RIGHT ABOUT THIS, things are going to get even worse before they get better. Why? Because hardly anyone else is talking about it! By the time the world outside of SD finally figures out what’s going on, the stock market will be crashing, crude will be near $80 and the metals will be even lower, particularly silver. As […]

The post T. Ferguson: 12 Charts That Show a Deflationary Crash is Dead Ahead! appeared first on Silver Doctors.

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  3. The Inflation – Deflation Reality in 2013

Oct 7/GLD remains constant/SLV loses 863,000 /gold and silver rise/Silver OI at comex continues to remain elevated/

Posted: 07 Oct 2014 03:35 PM PDT
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