Gold World News Flash |
- Gold Money or Digital Money?
- Why poor man’s gold may be about to get more investor love
- MOVING TO THE POST-LBMA ERA: GOLD PRICE RESET -– WATCH OUT
- TRIPLE DIGIT SILVER IN 2 YEARS? — CEO, Keith Neumeyer
- 19 Signs That American Families Are Being Economically Destroyed
- East has More Gold, About to Takeover Price Fixing in Gold/Silver – Bill Holter
- China's Stealth Devaluation Continues Despite Lew Blasting "Unacceptable" FX Practices
- The Precious Metals Conspiracy
- Gold and Silver Prices Moving into Position to Rally - Fireworks will Start when Silver Breaches $16, likely tomorrow.
- "The Problems Are Unfixable"
- Donald Trump Holds HUGE Rally in Rochester, NY (4-10-16)
- Former IMF Chief Economist Admits Japan's "Endgame" Scenario Is Now In Play
- Moving to the Post LBMA-Era Gold Price Reset - Watch Out
- Yellen to Dems: “Here I Come to Save the Day!”
- Yes, the Dollar Should Be Backed by Gold…
- Commercial Gold Traders appear to be losing their grip! (Some MUST-SEE charts here).
- Saudia Arabia is it the biggest women's prison in the world
- Japan Needs Stronger Dollar, China Wants Weaker Dollar
- Commercial Gold Traders Appear to be Losing Their Grip!
- Canada "11 People Try Commit Suicide"
- Singapore Moves to #3 Financial Center
- That's how Russian Police deals with Immigrants
- Gold in a World of Negative Interest Rates
- Why Stefan Molyneux Supports Donald Trump 2016 [Best Explanation Yet!]
- Miners union accepts Sibanye Gold's wage offer, cancels strike
| Posted: 11 Apr 2016 11:01 PM PDT Guest Post from Graham Reinders, an intelligent man with vast experience. (slightly edited) What Do We Want From Gold? Roosevelt proved that gold was a political/financial tool, and its value is... {This is a content summary only. Click on the blog title to continue reading this post, share your comments, browse the website, and more!} | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Why poor man’s gold may be about to get more investor love Posted: 11 Apr 2016 10:46 PM PDT
Silver now trading at lowest level relative to gold in seven years. Ranjeetha Pakiam and Eddie van der Walt (Bloomberg) | 10 March 2016 13:47 Silver hasn’t been so cheap relative to gold for more than seven years and with mine supplies forecast to contract this year that may be a sign it’s ready to come out of the yellow metal’s shadow.
Mine production of silver will probably | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| MOVING TO THE POST-LBMA ERA: GOLD PRICE RESET -– WATCH OUT Posted: 11 Apr 2016 10:25 PM PDT The LBMA has next to no visible London gold stocks backing the estimated 11,000 to 19,000 tonnes of spot gold open interest. And bullion banks are now attempting sell their once needed, now empty, London vaults. by David Jensen, SGT Report.com:
Real wealth ultimately flees from markets that give corrupted price signals and this now presents an apparent existential threat to the world’s pre-eminent gold and silver market, the London Bullion Market Association (LBMA), where daily is set the gold and silver reference price (or ‘fix’) for miners, investors, and, crucially, for Western financial markets.
Trading of unallocated gold contracts on the LBMA began in the late 1980s and, according to the LBMA, is now the vast majority of all daily gold trading volume in London. The introduction of unallocated contracts was not a pedestrian matter with Evelyn Rothschild himself allegedly directly lobbying Margaret Thatcher for this change in the gold market. The Rothschilds ran the daily Gold Fix at their bank setting the price at the LBMA from 1919 until 2004 and have been synonymous with gold over the last 150 years. The LBMA states that these unallocated gold contracts have the holder as merely an unsecured creditor for gold and not an owner of gold. That is an important difference. While ownership of real gold can be created only by first securing and transferring the ownership of metal, which is limited, unsecured claims for gold can be created without limit – and we see this in the London gold market unallocated spot contracts that are traded. The daily gross turnover of gold trading on the LBMA spot market is 200 million oz. – twice the world’s annual gold mine production and, according to the LBMA, it is 10x higher than the net settled trade volume totals posted by the LBMA . However, as touched on above, there is an important distinction to make. The vast majority of this daily trading is not gold trading. Instead, the trading is primarily of these unallocated gold contracts representing trading of gold promises and not of gold itself. In effect, the trading of unallocated gold contracts at the LBMA has corrupted gold in this market from exchange of a limited real gold asset to exchange of an unlimited virtual or digital asset. Where are the 10,000+ Tonnes of Gold? Using the typical commodity trading multiplier of 2x to 3x of daily trading volume to calculate the open interest, or total claims, in the market, the daily trading volume in London implies a total open interest of gold claims on the LBMA of 400M to 600M oz of gold in the spot market – claims equivalent to 13,000 to 19,000 tonnes of gold. The LBMA is located in the small ‘square mile’ City of London (a form of quasi-independent city-state operating under its own rules and governance within greater London) and the LBMA does not publish an open interest figure as most raw material or commodity exchanges do. The pension funds, corporate interests, sovereign wealth funds, private interests, etc. that hold unallocated spot gold contracts on the LBMA instead of physical gold are holding a gold substitute with these unallocated spot contracts. This supply of unallocated gold contracts creates ‘gold’ where there is none and the massive volume of gold trading each day can move the price of gold to almost any level as the only limit is the requirement to supply the few who historically have taken delivery of spot physical gold. Leasing-out of sovereign physical gold by central banks and the officers of the gold mining companies of the world who sell their production ultimately through the LBMA via bullion banks also provides fuel to supply this gold pricing mechanism. This has enabled the suppression of the market price of gold against the best interests of mining corporations, society as a whole, and destroying shareholder value in the process. The manipulation of the gold price is not merely negatively impacting shareholders of the miners to the benefit of jewellery or bullion buyers in Asia – the manipulation of gold also contributes to the destabilization of the financial system, as we shall see . Larry Summers Discovers Gold’s Relationship to Real Interest Rates Larry Summers, who served in the 1990s during both Clinton administrations and ultimately as Treasury Secretary, notes in his paper Gibson’s Paradox And The Gold Standard (Summers and Barsky, August 1985, NBER Working Paper No. 1680), that real gold prices (prices in constant dollars, adjusted for inflation) have historically moved inversely with real interest rates – i.e. as real interest rates decline, the price of gold increases reflecting a movement into gold and out of bonds. Summers writes that, for the period from 1973 until the date of the paper, "… we show that the real gold price… ….displays marked negative correlation with the real interest rate…" [pg. 24] and that "…The negative correlation between real interest rates and the real price of gold that forms the basis for our theory is a dominant feature of actual gold price fluctuations. …" [pg. 4]. As seen in the 1970s and early 80s, in a free market, increasingly negative real interest rates are signalled by rapidly rising gold prices necessitating higher real interest rates to draw money back into bonds from gold. Summers paper focuses on the relationship between real interest rates (nominal interest rates minus the inflation rate) and real gold prices (measured in constant, inflation adjusted dollars). So let’s take a look at real interest rates and the real price of gold since the late 1970s. Referencing the important work of Reginald Howe, we can see below how the inverse of the real price of gold (adjusted to constant dollars using the US BLS Consumer Price Index (CPI) ) diverged suddenly from tracking real interest rates in 1987 with the real price of gold. The real price of gold declined thereafter through the year 2000 even as real interest rates became increasingly negative. In August 1987 Alan Greenspan, who had served for 10 years as a Director of JP Morgan, becames Chairman of the Federal Reserve. The late 1980s introduction of unallocated spot gold instruments on the LBMA artificially reducing demand for real gold as well as surreptitious central bank leasing of sovereign gold stocks into the market, already well documented by the Gold Anti-Trust Action Committee (GATA) and numerous other sources, aligns with this divergence of the gold price inflation indicator with real interest rates.
The method of calculating the CPI has been changed several times by the Bureau of Labor Statistics over the years. Holding constant the 1980 method of calculating the CPI (provided by John Williams’ www.shadowstats.com ) to give a uniform constant dollar measure gives an even more stark view of the 1987 break-point of the constant dollar price of gold and real interest rates. It can be seen that the price of gold actually declined even as real interest rates themselves became acutely negative – the inverse of the natural relationship – and we are all too aware of the financial bubbles blown during this period with the loose central bank monetary policies globally.
In summary, by suppressing the price of gold by creating artificial supply with ‘paper’ gold as a physical gold substitute in London, this key warning indicator of negative interest rates and an obstacle to inflationary monetary policy by central banks has been disabled and loose monetary policy has been entrenched globally over the past several decades. The markets and global economy have become secularly distorted by excessively low real interest rates by central banks with the consequent loose-money policies blowing destabilizing, debt-fuelled financial and economic bubbles. According to the Wall Street Journal, debt levels globally now exceed $200 trillion globally representing 300% of global GDP compared to 150% of GDP that was an historically sustainable level in the West. A further indicator of the distortion of the LBMA daily spot gold price is provided by the following graph tracking the lease rate of gold as a proxy for the availability of physical gold in London. The LBMA spot market price of gold started to drop sharply on November 2, 2015 but the over the next two months the lease rate of gold reacted strangely both surging and, notably, the various duration lease rates invert completely from the norm with the 1 week rate surging above the 6 month lease rate reflecting metal shortage in the spot gold market.
(Data source: GOFO (Gold Forward) rate: Commerzbank, LIBOR & LBMA a.m. Gold Fix : St. Louis Fed. Note: during the fall of 2015, posting of GOFO data online was disrupted from late October through late December.) Normal markets don’t work that way. In a typical spot market for limited goods, shortages of an asset cause prices to rise, not to fall. The LBMA is an exchange where gold spot prices are driven down leading to increased demand for physical gold that drives gold shortages in the gold lease market. And this is with spot gold buyers only at the margins taking delivery of physical gold. The majority sit holding their unallocated spot gold contracts. Although the introduction of irredeemable debt-based fiat (paper) currency is predicated on an ultimate currency collapse when the required exponential debt growth to support expansion of the money supply becomes asymptotic, short-circuiting the gold and silver markets over decades has shut down cautionary warning signals in the global gold and debt markets that would force monetary system reform. The distortionary effect of LBMA unallocated gold contracts and surreptitious central bank leasing of their physical sovereign gold holdings into the market have increasingly shown signs of coming undone in recent years and now months. While increasing daily volatility in the LBMA gold market has previously registered merely as increased cooling fan rpm’s in the LBMA’s bullion bank mainframes where their digital gold is created, exchanged, and held, the real gold market is awakening. This awakening is, again, only at the margins but has already had a material effect on the gold market but not yet on the LBMA paper gold price. London’s Gold is Gone According to data analyzed by BullionStar analysts Ronan Manley and Koos Jansen, 2013 saw a run with gold swept out of London vaults leaving empty vaults in London according to Bloomberg reporter Kenneth Hoffman. Recently, the LBMA amended their gold refinery statistics indicating that these London Good Delivery bars had been refined and reformatted in kilo gold bars and shipped primarily to Asia by revising 2013 refining statistics in August 2015 reducing stated 2013 refinery activity by 2,000 tonnes and obscuring this run on London gold ( www.bullionstar.com ). The World Gold Council, financed by mining companies, and GFMS Reuters similarly do not report this run that left an estimated 6 tonnes of gold in London Vaults outside gold held by various ETFs and the Bank of England ( London’s LBMA and New York’s COMEX Gold Markets In Collapse ). The LBMA thus has next to no visible London gold stocks backing the estimated 11,000 to 19,000 tonnes of spot gold open interest. And bullion banks are now attempting sell their once needed, now empty, London vaults. Only one recent vault sale of note has occurred with a Chinese bank buying the new 1,500 tonne vault that Deutsche Bank put on the market with its own departure from the London Daily Gold Fix and market ( China’s Largest Bank Is Mystery Buyer Of Massive 1,500 Ton Gold Vault In London ). ( With major bullion banks abandoning the London market, the question arises whether there has been a quid-pro-quo between the UK and China that China, with its massive gold bullion holdings, would help to try manage the gold crisis developing in London in return for the UK being the first country to support the the China’s AIIB Asian infrastructure bank in 2015 that triggered a rush of Western countries to do the same and also supporting China’s Yuan as a reserve currency ( UK Disses US Dollar While Promoting Gold Yuan ) ). The Post LBMA-Era Price Reset The LBMA appears now to be in an intractable and rapidly degenerating position – with the vaulted gold available outside of the Bank of England and ETF holdings largely gone from London, how do you manage the appearances of a spot gold market with turnover of 200M oz per day and a massive open interest? While gold flow from the miners provides some liquidity and enables the LBMA paper gold market to provide some gold delivery and suppress gold prices, it is obvious that a massive gold event has occurred and that this paper market will not be the same given increased pressure for physical delivery. The London market cannot sustain any material gold withdrawal as occurred in 2013. We now approach an event that may provide the catalyst for the inevitable repricing of gold and expiry of the LBMA paper/digital gold scheme. That event is the April 19, 2016 initiation of a daily spot domestic Gold Fix on the Shanghai Gold Exchange (SGE) that will be followed at a later date for the SGE international gold market. The SGE is very different from the LBMA unallocated paper gold market in that for a standard kilo gold contract to be issued, first a kilo of 99.99% pure gold delivered directly from an approved refinery must be deposited with the SGE. This creates a problem in that a daily spot SGE Gold Fix based on actual gold trading in Shanghai is going to diverge at some point from the LBMA daily Gold Fix trading unallocated paper gold contracts in London. A price premium on physical gold in Shanghai cannot be extinguished with paper gold from London. To date, 10 Chinese banks have announced that they will participate in the benchmark Fix at the SGE but no Western banks have indicated that they will participate. In response to this reluctance, China has threatened that if Western banks do not participate they will loose access to the Chinese gold market ( Foreign banks in China could face curbs if they snub gold benchmark ). This lack of Western bullion bank interest in the new SGE Gold Fix is understandable as it would create a conundrum that a participating bank would have to explain if there were two materially different spot gold prices posted daily that could not be arbitraged away: one price for spot gold on the SGE for physical gold and a second price for spot ‘gold’ in London based upon trading paper. The market will then progressively degenerate into a much higher global price for gold as the LBMA is pushed to the sidelines. Sustained rapidly rising gold prices force up interest rates to draw capital back into bonds. The knock-on effect will be on the global bond market and financial asset prices as exploding gold prices and higher bond market interest rates end the sophism of central bank manipulated interest rates and their serial bubbles. With major banks holdings in interest rate sensitive derivatives market totalling hundreds of trillions of dollars of notional value and with western bank balance sheets that remain highly levered, there will be bank turmoil. In summary, central banks have been running a racket in conjunction with the LBMA and the bullion banks – and the mark for this racket is 99.999% of the population. When Bill Dudley of the NY Fed refuses to answer questions regarding whether there have been any gold swaps of sovereign US gold by the Federal Reserve, then the observer may ask if these actions are illicit (listen to Dudley starting at 50:00 minutes of this link distributed by Chris Powell of GATA https://www.youtube.com/watch?v=2unACzs9Gbo and http://gata.org/node/16341 ). And when we listen to the central bankers speak, we can also understand why they cannot elucidate a rational plan for monetary policy. This group have short-circuited the gold and global debt and financial markets to such an extent that central bankers are now left merely saying that they are "data dependent" and that we should prepare for negative interest rates and a cashless society as their global credit bubble collapses on itself. The end of the LBMA paper spot gold market setting the global reference price of gold is inevitable. As to the timing, keep an eye on the new Shanghai Gold Fix and for further signs that the market realizes that paper gold is faux gold and the LBMA is being abandoned. In closing, a decade ago Christopher Ondaatje commented that he had one more book that he wished to write and that was about the markets and "this age of paper and its abuse that will end with horrific consequences." Watch out, people. ———————- Post Script: 1) This story need not have a catastrophic ending. Hundreds of millions of ounces of gold remain in the hands of citizens and by opening-up mints for striking of citizen gold and silver into sound money units along with an organized restructuring of the bond market, this impending crisis can be averted. Unfortunately, the rule in politics is to "never let a good crisis go to waste". Our politicians and the financial interests who back them invariably use these crises to exert greater control over citizens and the call at this time is for banishing physical cash and expanding government control in society. Creating decentralized sound money and taking away the franchise that government and their banking interest sponsors have to create money from nothing is not aligned with those currently at the nodes of power. It is however in the interests of citizens. 2) When the gold market crisis breaks it will rapidly become apparent that one of the few sources of real gold lies in the hands of miners. When this realization occurs, it will create a hellacious run into gold mining equities of miners that have real gold and silver resources. The question is whether these gold and silver equities traded in financial markets that will be undergoing paroxysms will provide any useful investment haven. London Gold Vaults Are Empty
Dudley Speaks on the Role of the Federal Reserve
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| TRIPLE DIGIT SILVER IN 2 YEARS? — CEO, Keith Neumeyer Posted: 11 Apr 2016 08:50 PM PDT by SGT, SGT Report.com: Keith Neumeyer, the outspoken truth telling CEO of First Majestic Silver and Chairman of First Mining Finance is back to help us dissect the current state of the global silver market. Keith notes that the current silver to gold ratio of 80 to 1 is absolutely unsustainable in a world where physical silver is being mined globally at a rate of 10 ounces of silver for every ONE ounce of gold. “How can you possibly trade at 80 to 1 and be mining at 10 to 1? That relationship cannot last,” Neumeyer says. “I think we’ll see triple digit silver for sure over the next couple of years.” | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 19 Signs That American Families Are Being Economically Destroyed Posted: 11 Apr 2016 08:30 PM PDT Via Michael Snyder's Economic Collapse blog, The systematic destruction of the American way of life is happening all around us, and yet most people have no idea what is happening. Once upon a time in America, if you were responsible and hard working you could get a good paying job that could support a middle class lifestyle for an entire family even if you only had a high school education. Things weren’t perfect, but generally almost everyone in the entire country was able to take care of themselves without government assistance. We worked hard, we played hard, and our seemingly boundless prosperity was the envy of the entire planet. But over the past several decades things have completely changed. We consumed far more wealth than we produced, we shipped millions of good paying jobs overseas, we piled up the biggest mountain of debt in the history of the world, and we kept electing politicians that had absolutely no concern for the long-term future of this nation whatsoever. So now good jobs are in very short supply, we are drowning in an ocean of red ink, the middle class is rapidly shrinking and dependence on the government is at an all-time high. Even as we stand at the precipice of the next great economic crisis, we continue to make the same mistakes. In the end, all of us are going to pay a very great price for decades of incredibly foolish decisions. Of course a tremendous amount of damage has already been done. The numbers that I am about to share with you are staggering. The following are 19 signs that American families are being economically destroyed… #1 The poorest 40 percent of all Americans now spend more than 50 percent of their incomes just on food and housing. #2 For those Americans that don’t own a home, 50 percent of them spend more than a third of their incomes just on rent. #3 The price of school lunches has risen to the 3 dollar mark at many public schools across the nation. #4 McDonald’s “Dollar Menu & More” now includes items that cost as much as 5 dollars. #5 The price of ground beef has doubled since 2009. #6 In 1986, child care expenses for families with employed mothers used up 6.3 percent of all income. Today, that figure is up to 7.2 percent. #7 Incomes fell for the bottom 80 percent of all income earners in the United States during the 12 months leading up to June 2014. #8 At this point, more than 50 percent of all American workers bring home less than $30,000 a year in wages. #9 After adjusting for inflation, median household income has fallen by nearly $5,000 since 2007. #10 According to the New York Times, the “typical American household” is now worth 36 percent less than it was worth a decade ago. #11 47 percent of all Americans do not put a single penny out of their paychecks into savings. #12 One survey found that 62 percent of all Americans are currently living paycheck to paycheck. #13 According to the U.S. Department of Education, 33 percent of all Americans with student loans are currently behind on their student loan debt repayments. #14 According to one recent report, 43 million Americans currently have unpaid medical debt on their credit reports. #15 The rate of homeownership in the U.S. has been declining for seven years in a row, and it is now the lowest that it has been in 20 years. #16 For each of the past six years, more businesses have closed in the United States than have opened. Prior to 2008, this had never happened before in all of U.S. history. #17 According to the Census Bureau, 65 percent of all children in the United States are living in a home that receives some form of aid from the federal government. #18 If you have no debt at all, and you also have 10 dollars in your wallet, that you are wealthier than 25 percent of all Americans. #19 On top of everything else, the average American must work from January 1st to April 24th just to pay all federal, state and local taxes. All of us know people that once were doing quite well but that are now just struggling to get by from month to month. Perhaps this has happened to you. If you have ever been in that position, you probably remember what it feels like to have people look down on you. Unfortunately, in our society the value that we place on individuals has a tremendous amount to do with how much money they have. So if you don’t have much money, there are a lot of people out there that will treat you like dirt. The following excerpt comes from a Washington Post article entitled “The poor are treated like criminals everywhere, even at the grocery store“…
Have you ever seen this? Have you ever experienced this yourself? These days, most people on food stamps are not in that situation because they want to be. Rather, they are victims of our long-term economic collapse. And this is just the beginning. When the next major economic crisis strikes, the suffering in this country is going to go to unprecedented levels. As we enter that time, we are going to need a whole lot more love and compassion than we are exhibiting right now. As a nation, we have made decades of incredibly bad decisions. As a result, we are experiencing bad consequences which are going to become increasingly more severe. The numbers that I just shared with you are not good. But over the next several years they are going to get a whole lot worse. Everything that can be shaken will be shaken, and life in America is about to change in a major way. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| East has More Gold, About to Takeover Price Fixing in Gold/Silver – Bill Holter Posted: 11 Apr 2016 08:00 PM PDT from FutureMoneyTrends: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| China's Stealth Devaluation Continues Despite Lew Blasting "Unacceptable" FX Practices Posted: 11 Apr 2016 08:00 PM PDT "Intervention in foreign exchange markets in order to gain a competitive advantage is unacceptable," proclaims US Treasury Secretary Jack Lew in a strongly worded statement today with regard America's position in the global economy. That we note this comment is only relevant as, despite the apparent "stability" of the Chinese Yuan against the USD, relative to the 13-currency-basket with which China primarily trades, the Yuan has collapsed to 17-month lows - with JPY and EUR appearing to bear the brunt of the pain. The US Dollar has traded within a relatively "stable" band against the offshore Yuan for much of the last six weeks...
But when compared to the collapse of the Yuan "basket" - as PBOC devalued against the rest of the major trading partners - the 'stealth' devaluation is obvious...
Is it any wonder that JPY is surging - despite all of Kuroda's best jawboning efforts?
So the question is - Is it ok to "devalue" your currency against other non-reserve-status currencies? As long as the veil of "stability" is maintained against The USD? | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| The Precious Metals Conspiracy Posted: 11 Apr 2016 07:40 PM PDT by Keith Weiner, Acting Man:
Then there's the change in ETFs, for example the Sprott Physical Silver Fund has had inflows and Sprott bought more silver. And there's currency wars, money printing, negative interest rates, etc. Most of these stories are based in fact (well except the belief that Goldman's research is always wrong). However, they have little to do with the price of gold. The money supply has grown steadily since 2011 while the prices of gold and silver have not. Hell, the money supply has been growing since forever. And the price of gold has gone up as well as down. Something tells us that this effort to draw in buyers is concerted. Certainly there has been an 8.4% increase in silver held in trust for SLV. This is the result of relentless buying of SLV shares. When buyers push up the price of SLV relative to the price of silver, that creates an arbitrage opportunity for Authorized Participants. They buy silver metal, create SLV shares, and sell the newly issued shares. They can do that as much as they want while there's a profit to do so. But of course this pushes down the price of SLV until it is very close to the price of silver. SLV is somewhere between metal and futures. It can be a speculative play on price, but it's bought with less leverage and it can also be a long-term holding for many people. Another sign of increasingly bullish consensus is the discussion last week at Mines and Money in Hong Kong. If everyone agrees that price should go up, then that may indeed occur. The exchange-traded funds are being bought, which further supports a price rally, one that may be a bit more durable than these Yellen announcement rallies. However, keep one thing in mind. The speculators are trying to front-run the hoarders. Speculators need to sell, to take profits or cut losses. What they can drive up, they can drive down ten times as fast. A durable rally can only occur if there is movement of metal out of carry trades sold to speculators, and into the hands of stackers. But who knows? Such a rally could in turn spark hoarders to buy and the fundamentals could develop to support it. We keep saying that the price of the dollar will fall far indeed, it's just that the time hasn't been ripe yet. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 11 Apr 2016 06:52 PM PDT
US dollar index has reached Fish or Cut Bait time. It's at the bottom line of a channel that has long caught it -- since December, and today closed below that bottom boundary. More, it has reached the 92.50 - 93.85 support area that has backstopped it since last May. Here: see what you think, http://schrts.co/QjfYIH If the dollar index falls through this support, nothing will catch it before 80. One expects the loonies at the Federal Reserve wouldn't want markets banged around by a tanking dollar, but who knows what motivates their primitive nervous systems? Yen has climbed so much that it has Japanese Nice Government Men making announcements that they might have to do something if folks don't straighten up and let the yen fall. Rose another 0.13% today to 92.64, highest close of the upmove since December that began at 80.81. Oooooh. Euro rose 0.11% to $1.1410. European stocks today rose as investors bought -- wait for it -- Italian bank shares, on the hope the government bail out would church 'em up. I reckon they'll wake up feeling pretty rough after that drunk. In the United States, Home of the Banks & Land of Big Bank Fees, stocks fared not so well. They kept dropping all day, unable to rise up, and finally ended the day lower. Dow chipped off 20.55 (0.12%) to 17,556.41 but the S&P500 lost more, 0.27% or 5.61, to 2,041.99. Hovering, floating, like Wile E. Coyote before the ZIP! Fall. More to the point are the Dow in Gold & Dow in Silver. Here the DiG chart, http://schrts.co/8Sv0tc After crashing through the uptrend line from the 2011 low the DiG started an upward retracement that corrected less than 50% of the previous fall, topping at 14.574. Since then it has fallen through the 20 DMA, the uptrend line, and today, nearly, that post-2011 uptrend. The 50 DMA also lurks in the same area, 13.84. It won't take more than a puff from a bat's wing to push the DiG through those lines, at which point gravity takes over. Behold, the Dow in Silver, http://schrts.co/bj2Ryj Same pattern as the DiG appears here, long fall from December to February and rallying into 1 April. However, more volatile silver went pas the 61.8% correction level and the 200 DMA, but it the last three days it dove off the high dive. It has cut through the uptrend line, the 20 DMA, the 50 DMA, and the 20 DMA, AND today punched through that uptrend line from 2011. Lower she goes! Before I say anything about silver & gold, ponder a moment on the Gold/Silver ratio, http://schrts.co/kh9gOy It tumbled 2.6% today, gapped down and broke the bottom channel line. Why do I care? Because this signals that silver is leading this rally, & that it has a full head of steam. Now the ratio didn't close below that lower boundary, but right near. Silver's got that mean look in its eye. Today silver rose 59.2¢ (3.8%) to 1597.4¢ but gold rose only 1.1% ($14.20) to 1,256.70. All this only amounts to gold and silver prices moving into position to rally. Fireworks will start when silver breaches 1600¢, likely tomorrow. Unless metals turn smack around 180 degrees & plunge straight down tomorrow, y'all can stop waiting for any further correction or lower prices. REPEAT: Correction has ended, next rally has begun. Y'all will never see silver & gold at these prices again, if I'm right. One at a time. Silver first, and so the chart, http://schrts.co/zsmR7J Price rose on rising volume. MACD, Rate of Change, & RSI are all flapping skywards. Silver already touched its 200 DMA in correction, surely satisfying a correction's requirements. Now it has risen through its 50 & 200 day moving averages. What looms? That 1617¢ high from March. 1600¢ is a brick wall, & to prove silver can knock its way through, it has to run clean through 1617¢. Above that word will get out that silver is flying, and it will attract buyers like free whiskey attracts city voters. On Friday all the major gold stock indices escaped to the upside -- good, they're leading gold. Here's the gold chart, http://schrts.co/fU1zLv Everything's lined up propitiously. Today gold punched through that $1,240-ish resistance that had kept it imprisoned, rising on rising volume. MACD is turning up, as has Rate of Change & RSI. So what? What must gold do to prove its upward intentions? Close above that last peak at $1,272, for starters. Than clear the peak before that, $1,288. Now it's ready to bust a gut running through $1,308 and beyond. I am just reporting what the chart shows. STOP WAITING FOR A CORRECTION. Buy now. Aurum et argentum comparenda sunt -- -- Gold and silver must be bought. - Franklin Sanders, The Moneychanger The-MoneyChanger.com © 2016, The Moneychanger. May not be republished in any form, including electronically, without our express permission. To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $3,130.00; silver's primary is up targeting 16:1 gold/silver ratio or $195.66; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold or 18 ounces of silver. US $ and US$-denominated assets, primary trend down; real estate bubble has burst, primary trend down. WARNING AND DISCLAIMER. Be advised and warned: Do NOT use these commentaries to trade futures contracts. I don't intend them for that or write them with that short term trading outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures. NOR do I recommend investing in gold or silver Exchange Trade Funds (ETFs). Those are NOT physical metal and I fear one day one or another may go up in smoke. Unless you can breathe smoke, stay away. Call me paranoid, but the surviving rabbit is wary of traps. NOR do I recommend trading futures options or other leveraged paper gold and silver products. These are not for the inexperienced. NOR do I recommend buying gold and silver on margin or with debt. What DO I recommend? Physical gold and silver coins and bars in your own hands. One final warning: NEVER insert a 747 Jumbo Jet up your nose. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 11 Apr 2016 05:37 PM PDT Submitted by Howard Kunstler via Kunstler.com, The mystery is at last revealed: why does the field of candidates for president score so uniformly low in trust, credibility, likability? Why are there no candidates of real substance, principle, and especially of real charm in this scrim of political basilisks? (Surely there are many people of substance and principle elsewhere in America — they just don’t dare seek the job at the symbolic tippy-top of this clusterfuck of faltering rackets.) The reason is that the problems are unfixable, at least not within the acceptable terms of the zeitgeist, namely: the secret wish to keep all the rackets going at all costs. This is true, by the way, of all parties concerned from the 0.001 percent billionaire grifter class to the deluded sophomores crying for “safe spaces” in their womb-like “student life centers” to the sports-and-porn addled suburban multitudes stuck with impossible mortgage, car, and college loan debts (and, suddenly, no paying job) to the deluded Black Lives Matter mobs who have failed to notice that black lives matter least to the black people slaughtering each other over sneakers and personal slights. None of these groups really want to change anything. They actually wish to preserve their prerogatives. The interests of the 0.001 percent are obvious: maintain those streams of unearned, rentier, notional wealth as long as possible and convert them as fast as possible into hard assets (Caribbean islands, Cézanne landscapes, gold bars) that will theoretically insulate them from the wrath of history when the center no longer holds. The poor (and ever-poorer) formerly middle class suburban debt serfs, for all their travails, can’t imagine living any other way or putting less of their dwindling capital into the Happy Motoring matrix. The Maoist Social Justice Warrior students are enjoying the surprising power and thrills of coercion, especially as directed against their simpering professors and cringing college presidents anxious to sustain the illusion that something like learning takes place in the money laundering operations of higher ed. The Black Lives Matter crowd just wants to be excused from their failure to follow standards of decent behavior and to keep mau-mauing the other ethnic groups of America for material and political tribute. It must be obvious that the next occupant of the White House will preside over the implosion of all these arrangements since, in the immortal words of economist Herb Stein, if something can’t go on forever, it will stop. So the only individuals left seeking the position are 1) An inarticulate reality TV buffoon; 2) a war-happy evangelical maniac; 3) a narcissistic monster of entitlement whose “turn” it is to hold the country’s highest office; and 4) a valiant but quixotic self-proclaimed socialist altacocker who might have walked off the set of Welcome Back Kotter, 40th Reunion Special. These are the ones left standing halfway to the conventions. Nobody else in his, her, it, xe, or they right mind wants to be handed this schwag-bag of doom. On Saturday, the unstoppable Democratic shoo-in Hillary lost her 7th straight contest to the only theoretically electable Vermont Don Quixote, Bernie Sanders. This was a week after it was reported in The Huff-Po that her campaign crew literally bought-and-paid for the entire 50-state smorgasbord of super-delegates who will supposedly compensate for Hillary’s inability to otherwise win votes the old-fashioned way, by ballots cast. Wonder why that didn’t make nary a ripple in the media afterward? Because this is the land where anything goes and nothing matters, and that’s really all you need to know about how things work in the USA these days. The Republican mandarins are apparently delirious over loose cannon Donald Trump’s flagging poll numbers in the remaining primary states. Should Trump fall on his face, do you think they’ll just hand Ted Cruz the Ronald Reagan Crown-and-Scepter set. (They’d rather lock Ted in the back of a Chevy cargo van with five Mexican narcos and a chain saw.) The GOP establishment insiders are already lighting cigars in preparation for the biggest smoke-filled room in US political history, Cleveland, July 20. But what poor shmo will they have to drag to the podium to get this odious thing done? Who wants to be the guy in the Oval Office when Janet Yellen comes in some muggy DC morning and says, “Uh, sir (ma’am)… that sucker you heard was gonna go down…? Well, uh, it just did.” As for the Dems: they are about to anoint the most unpopular candidate of our lifetimes. The BLM mobs have promised to deliver mayhem to the streets of the party conventions and don’t think they will spare Hillary in Philary, no matter how many chitlins she scarfed down last month in Carolina. The action in Philly will unleash and reveal all the deadly power of President Obama’s NSA goon squads when the militarized police put down the riots, and Hillary will be tagged guilty by association. And that is how Kim Kardashian gets elected president. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Donald Trump Holds HUGE Rally in Rochester, NY (4-10-16) Posted: 11 Apr 2016 05:28 PM PDT Sunday, April 10, 2016: GOP Presidential candidate Donald Trump held a campaign rally in Rochester, NY at JetSmart Aviation.Full Speech: Donald Trump Holds HUGE Rally in Rochester, NY (4-10-16) The Financial Armageddon Economic Collapse Blog tracks trends and forecasts , futurists ,... [[ This is a content summary only. Visit http://www.newsbooze.com or http://www.figanews.com for full links, other content, and more! ]]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Former IMF Chief Economist Admits Japan's "Endgame" Scenario Is Now In Play Posted: 11 Apr 2016 04:16 PM PDT Back in October 2014, just after the BOJ drastically expanded its QE operation, we warned that the biggest risk facing the BOJ (and the ECB, and the Fed, and all other central banks actively soaking up securities from the open market) was a lack of monetizable supply. We cited Takuji Okubo, chief economist at Japan Macro Advisors in Tokyo, who said that at the scale of its current debt monetization, the BOJ could end up owning half of the JGB market by as early as in 2018. He added that "The BOJ is basically declaring that Japan will need to fix its long-term problems by 2018, or risk becoming a failed nation."
Which is why 17 months ago we predicted that, contrary to expectations of even more QE from Kuroda, we said "the BOJ will not boost QE, and if anything will have no choice but to start tapering it down - just like the Fed did when its interventions created the current illiquidity in the US govt market - especially since liquidity in the Japanese government market is now non-existent and getting worse by the day." As part of our conclusion, we said we do not "expect the media to grasp the profound implications of this analysis not only for the BOJ but for all other central banks: we expect this to be summer of 2016's business." Since then, the forecast has panned out largely as expected: both the ECB and BOJ, finding themselves collateral constrained, were forced to expand into other, even more unconventional methods of easing, whether it be NIRP in the case of the BOJ, or the outright purchases of corporate bonds as the ECB did a month ago. * * * Then, in September of 2015, the IMF realized the severity of what our forecast meant for Japan, and released a working paper with the non-pretentious title "Portfolio Rebalancing in Japan; Constraints and Implications for Quantitative Easing", which however had momentous implications because it was a replica of what we had said a year earlier. In the paper, the IMF said that the Bank of Japan may need to reduce the pace of its bond purchases in a few years due to a shortage of sellers. The paper predicted a world in which, just as we cautioned, "the BoJ may need to taper its JGB purchases in 2017 or 2018, given collateral needs of banks, asset-liability management constraints of insurers, and announced asset allocation targets of major pension funds... there is likely to be a "minimum" level of demand for JGBs from banks, pension funds, and insurance companies due to collateral needs, asset allocation targets, and asset-liability management (ALM) requirements. As such, the sustainability of the BoJ's current pace of JGB purchases may become an issue." The paper's shocking punchline was how Japan would survive this inevitable phase shift, or as we rhetorically asked, what happens when the regime shifts from the current buying phase to its inverse: The IMF response: "As this limit approaches and once the BoJ starts to exit, the market could move from a situation of shortage to one with excess supply. The term premium could jump depending on whether the BoJ shrinks its balance sheet and on the fiscal deficit over the medium term. When considering that by 2018 the BOJ market will have become the world's most illiquid (as the BOJ will hold 60% or more of all issues), the IMF's final warning is that "such a change in market conditions could trigger the potential for abrupt jumps in yields." Or as we put last September, "at that moment the BOJ will finally lose control." We even timed it: "But before we get to the QE endgame, we first need to get the interim point: the one where first the markets and then the media realizes that the BOJ - the one central banks whose bank monetization is keeping the world's asset levels afloat now that the ECB has admitted it is having "problems" finding sellers - will have no choice but to taper, with all the associated downstream effects on domestic and global asset prices.
Sure enough, it took the market about 6 months to finally grasp that the BOJ is out of ammo: the result has been a dramatic surge in the Yen coupled with a plunge in the Nikkei, meanwhile Kuroda is left scratching his head what he can do in a world in which the G-20 have specifically prohibited him from easing and making the dollar stronger as that will lead to a return of China's weak currency-driven, capital outflow crisis. As for our other forecast from October 2014 in which we said "expect the media to grasp the profound implications of this analysis not only for the BOJ but for all other central banks: we expect this to be summer of 2016's business" this too was quite prescient. Because while summer is just around the corner, earlier today the mainstream media, in this case the Telegraph's Ambrose Evans-Pritchard, finally caught up with a piece titled: "Olivier Blanchard eyes ugly 'end game' for Japan on debt spiral." In it he cites none other than the IMF's former chief economist, Olivier Blanchard who left the IMF just at the time the IMF's study from last September was made public. The content of Pritchard's piece should be familiar to anyone who has followed our musings on this topic for the past two years. In it, he says that "Japan is heading for a full-blown solvency crisis as the country runs out of local investors and may ultimately be forced to inflate away its debt in a desperate end-game, one of the world's most influential economists has warned." From the article:
That moment in which the illusion dies, is precisely the phase shift which we descibed in September as the moment "market conditions could trigger the potential for abrupt jumps in yields."
Said otherwise, from plummeting deflation Japan would be faced with soaring yields and hyperinflation as the last recourse buyer, the BOJ, is swept aside.
Pritchard here catches up to what we said in October of 2014, namely that the "BoJ is soaking up the entire budget deficit under Govenror Haruhiko Kuroda as he pursues quantitative easing a l'outrance." Incidentally, this is the same Pritchard who several years ago was lauding Japan's QE. He next points out something we have also warned about for year: "the central bank owned 34.5pc of the Japanese government bond market as of February, and this is expected to reach 50pc by 2017." This is us circa last September.
What comes next is the scary part, the part we have been focusing on for years:
After Japan comes Europe:
Perhaps, or the ECB will simply unleash the first helicopter money if it can get over the loud German chorus of disagreement. Although once Europe launches Helicopter money, it will be promptly followed by the US as the global monetary devaluation round enters the final sprint. It is no coincidence that earlier today none other than Ben Bernanke admitted that "Helicopter Money May Be The Best Available Alternative." What shape the final stand of failed monetary policy takes, is irrelevant. What is relevant, is that for the first time, not only is the Japanese doomsday scenario finally in the mainstream press, but it is acknowledged by none other than one of the Keynesian luminaries AEP is so impressed by:
Evans-Pritchard's conclusion:
Actually let's check back in another 7 years, because now that even one of the world's "top theoretical economists" acknowledges that the endgame for trillions in debt ends in a hyperinflationary supernova, and not a deflationary black hole, all those years of sliding interest rates around the globe are about to be flipped on their head. At that point it will be the Germans who are laughing last. Sadly, there will be nothing else to laugh about as the Keynesian "progressive thinkers" will have finally reached the inevitable and disastrous "end-game" of their failed religion. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Moving to the Post LBMA-Era Gold Price Reset - Watch Out Posted: 11 Apr 2016 01:50 PM PDT David Jensen | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Yellen to Dems: “Here I Come to Save the Day!” Posted: 11 Apr 2016 01:42 PM PDT This post Yellen to Dems: "Here I Come to Save the Day!" appeared first on Daily Reckoning. "Yes, Janet Yellen is a bit worried about her meeting with Joe Biden today" announced one Twitter onlooker this morning. The attached image spoke for itself…
Everything seems just peachy this morning. Stocks, gold and oil are all in the green. The S&P 500 is at 2,054, just about where it was 18 months ago. There's been some fun dips and outbursts along the way. Meanwhile, the real economy's continued to deteriorate. "Earnings have been falling sharply and macroeconomic headwinds have been intensifying dramatically," explains our colleague David Stockman. He has more details at his ContraCorner if you're interested. But it's that deteriorating backdrop… yet improving narrative about the economy from Yellen and Obama that led us to wonder last week: Do the insiders in the "oculus rift economy" know how absurd the system they push is, but keep quiet? Or, are they that oblivious? News out today suggests it's the former… For context, two events will have taken place by the time this reaches you:
The first is much ado about nothing. "They won't raise rates this month" said Jim this morning during our live intelligence briefing for paid readers. (All paid-up Strategic Intelligence readers get free access to monthly live conference calls with Jim. It's one of many sweet perks. You can access them, and get a free copy of Jim's new book The New Case for Gold, right here.) "Could it happen? It's possible… but not likely. The last time the Fed changed rates up or down at a meeting that was not a scheduled FOMC meeting, like this morning's, was almost 20 years ago. In the first week of October, 1998." Soon after, Jim would spend his fair share of time at the Fed's New York boardroom, negotiating the terms of the bailout that sixteen Wall Street banks coordinated to keep Long Term Capital Management afloat. Greenspan & Co. acted as facilitators. The Fed cut rates twice in a week's time — first at a scheduled meeting on Sept. 29th. And then again around Oct. 5th at an unscheduled meeting. "But that was extremely rare" explained Jim. "There's no urgency to act like that today. Sometimes these meetings are technical in nature. But as far as I can tell, there's no connection between the unscheduled Fed meeting today… and Obama summoning Yellen to the White House right after. The implications of Yellen going to the White House are important, though. We're about to find out just how independent the Fed really is as the election approaches. Jim has more on that, below. It's well documented that the Fed's been leaned on by President's for political purposes. For example, it's known that Nixon placed intense pressure on Federal Reserve Chairman, Arthur Burns, in 1971. Nixon wanted him to loosen monetary policy in advance of the 1972 presidential election. Here's "Tricky Dick," as recorded in the famous White House tapes: "I've never seen anybody beaten on inflation in the United States. I've seen many people beaten on unemployment… We've got to think of goosing [the money supply] . . . late summer and fall of this year and next year. As you know, there's a hell of a lag." But Burns tried to warn Nixon against the idea: "If interest rates go down further through my actions… the probability as I see it is, they will go up later on in the year and in 1972. Housing, which is recovering very nicely, will go into a tailspin in 1972. Where will we be, as a country, and as a party and me personally?" The tapes further reveal that Nixon threatened Burns' with: leaking negative news about him to the public, appointing easy-money doves to the Fed board; and threats to not reappointed Burns at the end of his term. Ultimately, he caved, reducing the discount rate and accelerating the expansion of the money supply in late 1971 and early 1972. Will Yellen crack the same way? Click here for Jim Rickards’ take… Regards, Peter Coyne P.S. Even though the stock market's more than recovered its losses since the beginning of the year, trouble is afoot. On average, stock returns are terrible in the year before a presidential election. Data going back to 1896 show the four quarters before an election are below average, with the third quarter going negative:
"This is the most uncertain election since Teddy Roosevelt formed the Bull Moose Party in 1912," Jim told us a while ago. Beware… The post Yellen to Dems: "Here I Come to Save the Day!" appeared first on Daily Reckoning. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Yes, the Dollar Should Be Backed by Gold… Posted: 11 Apr 2016 12:51 PM PDT This post Yes, the Dollar Should Be Backed by Gold… appeared first on Daily Reckoning. BUENOS AIRES, Argentina – "What if you were appointed to head the Fed? In your first week on the job, what would you do?" The question was not exactly serious. Neither was the answer. "We'd call in sick." Drying Winds, Hungry CattleWe are on our way to the family ranch in northwestern Argentina. We'll spend a couple of days in Buenos Aires… then fly up to Salta. From there, it's a six-hour drive, up and over the mountains, on dirt roads – stopping by a cattle ranch to inspect some of our animals – until we finally reach la sala, our ranch headquarters. It's been a hard year in the mountains. Normally, we get about 5 inches of rain annually. But this year, the ranch has gotten only half its usual allotment. All of that moisture falls in January and February. Not another drop will drip on the ranch until next year. That leaves another nine months of drying winds and hungry cattle. But that is just the beginning of the bad news… More to come when we report from the ranch later this week. In the meantime, we return to tackling the world's problems. A Return to GoldDrought, old age, traffic congestion, meanness, purple drink, bad taste, rap, suburbs, cancer, government, Hillary Clinton, restaurant music, shorts, Facebook, obesity – there are a lot of things wrong in the world. And most of them are not easily put right. But there are some problems that could be solved overnight. Economic and financial problems, for example, solve themselves… if you let them. Almost all the macro-money wounds suffered by the modern world are self-inflicted. Central banks and treasury departments around the world keep shooting themselves in the foot. But rather than stop manipulating the system… they buy another pair of shoes. If we were miraculously appointed by President Trump to run the Fed, our first act would be to put the gun down. We would announce that, henceforth, anyone waiting for the next rate hike would have to wait a long time. Because we wouldn't be making any rate hikes… or rate cuts either. Instead, interest rates would have to take care of themselves. Lenders and borrowers would set their own rates. But what about if banks got into trouble? Ah… we'd take care of that too. We'd point out that the Fed would no longer lend to them in an emergency. Our announcement: "To any bank that runs out of money: Drop dead." Then, we would put the entire Fed balance sheet – the more than $4 trillion in dodgy bonds it bought over the last eight years – up for sale. And we would send layoff notices to the entire staff… telling them to clean out their desks, admonishing them that henceforth they would have to seek honest employment or try to land a job on Wall Street. Had we the power, we would take one further step: We would declare that Americans could use whatever currency they wanted, that the dollar would once again be exchangeable for a fixed quantity of gold, and that the U.S. Treasury would accept any major currency – including bitcoin – in payment of taxes. See how easy it would be? All of the heavy lifting could be accomplished before lunchtime on our first Monday on the job. Then we would slip out the back of the Eccles Building… with luck, just before posse caught up to us. Solid DollarAnd yet, those simple changes would eliminate most of the money troubles facing the U.S. With no further gas coming in, the debt bubble would deflate. Bad investments, bad business, and overpriced assets would all lose air… and disappear. The dollar would be solid again. It would represent real value, not counterfeit wealth. Borrowing would be based on real savings, not just more hollow credits. And – with only scarce capital to work with (rather than an unlimited supply of phony-baloney credit) – investors and entrepreneurs would be careful about what they did with their investments. They would put capital to work only in projects that increased the real value of America's assets, rather than those that merely shifted wealth from Main Street to Wall Street. Admittedly, this would be a lot for the American people to take in. Most people have no idea how the money system works. The credit dollar is all they know. And they still have faith that the big heads at the Fed know what they are doing. The newspapers and pundits would howl in alarm. Respectable economists would choke on their indignation. Lynch mobs would form. They would call our program "radical" and "irresponsible," unaware that today's system is the most radical, experimental, and irresponsible in history. Our proposals would take the country back to a traditional and sensible money system. People would decide for themselves what kind of money they wanted to use… whether to save it… or spend it… and what price to put on it if they wanted to lend it out. Would it work? We don't know, but we'd like to see someone give it a try. Regards, Bill Bonner P.S. Be sure to sign up for The Daily Reckoning — a free and entertaining look at the world of finance and politics. The articles you find here on our website are only a snippet of what you receive in The Daily Reckoning email edition. Click here now to sign up for FREE to see what you're missing. The post Yes, the Dollar Should Be Backed by Gold… appeared first on Daily Reckoning. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial Gold Traders appear to be losing their grip! (Some MUST-SEE charts here). Posted: 11 Apr 2016 10:02 AM PDT Peter Degraaf | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Saudia Arabia is it the biggest women's prison in the world Posted: 11 Apr 2016 09:00 AM PDT Amazing isn't it how we arm and support this country, while saying less brutal nations like Syria under Assad should be overthrown, so that Islamic State are driving around Syria in trucks the USA sent there. The Financial Armageddon Economic Collapse Blog tracks trends and forecasts ,... [[ This is a content summary only. Visit http://www.newsbooze.com or http://www.figanews.com for full links, other content, and more! ]]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Japan Needs Stronger Dollar, China Wants Weaker Dollar Posted: 11 Apr 2016 07:56 AM PDT This post Japan Needs Stronger Dollar, China Wants Weaker Dollar appeared first on Daily Reckoning. Foreign exchange (FX) is a zero-sum game: if one currency weakens, another must strengthen. Since the value of a currency is relative to other currencies, all currencies can’t weaken together: at least one currency must strengthen as others weaken. That one strengthening currency has been the U.S. dollar (USD) since mid-2014. The USD has strengthened by 20%, while the Japanese yen and the euro weakened by 20%. Many developing-economy currencies (rand, peso, real, etc.) have fallen off a cliff, suffering 40% to 50% (or even more) declines against the U.S. dollar. Why does any of this matter? Simply put, the stock market is a monkey on a leash held by central banks–just give the leash a little tug, and the monkey jumps. Bonds are a gorilla–harder to control, but still manageable–but foreign exchange is King Kong, trading $5 trillion a day and impossible to control beyond short-term manipulations. Currencies set the underlying trend, not just for bonds and stocks, but for entire economies. A weakening currency makes a nation’s exports cheaper in other countries, and the theory is that expanding exports will boost the overall economy–especially if that economy is stagnating or in recession. A weakening currency also makes imports more expensive in the domestic economy, pushing inflation higher–precisely what every central bank in the world desires, on the theory that inflation will make people spend more (since their money is losing value) and reduce the costs of borrowing (which is presumed to stimulate more borrowing and spending). This is why everybody seems to want a weaker currency. But as noted above, every currency can’t go down; if some weaken, others have to strengthen. Which brings us to the current brewing crisis: beneath the propaganda that all is well in the world, the soaring dollar has destabilized the global economy in subtle ways: carry trades have been thrown over, capital flows have reversed, commodities priced in dollars have tanked, and so on. The typical econo-pundit has welcomed the recent weakening of the USD, a reversal of the strong-USD trend:
Japan sought to weaken the yen to boost its exports and inflation. Now the weakening dollar is crushing those plans, as the yen is soaring:
As the yen soars, Japan is being pushed into a self-reinforcing recession. After 20+ years of borrowing to fund fiscal stimulus, money-printing, bond-buying, etc., Japan has run out of options. Weakening the yen was the last best hope to boost exports and inflation. The strengthening yen is an economic crisis for Japan. Meanwhile, the strengthening dollar pushed China into its own crisis. China’s currency, the renminbi (RMB, a.k.a. yuan), is a special case because its relative value is pegged to the USD by Chinese monetary authorities. The peg was about 9 to the USD in 2005, and in the following decade China pushed the yuan up to 6 to the dollar. A currency peg means the pegged currency goes up and down with the master currency. As the dollar soared, it dragged the yuan higher, making China’s exports more expensive. Given the stagnation of China’s debt-bubble dependent economy, the last thing chinese authorities wanted to see was a faltering export sector. As the USD rose, the pressure to devalue the yuan also rose. If you think your money is about to lose 20% of its value due to a devaluation, what can you do to protect your wealth? Get your cash out of the currency that’s being devalued and into a currency that’s strengthening. Just the possibility of a yuan devaluation has sparked an unprecedented capital flight of cash flooding out of China into USD and assets such as homes in British Columbia and chateaux in France. Capital flight is not a sign of a flourishing economy or evidence that the monied class trusts the currency or the economy. Recently, China has taken baby-steps to devalue the yuan: not enough to trigger global panic but more than enough to trigger capital flight and deep unease.
As a result, China desperately wants a weaker dollar, as a weaker dollar will weaken the yuan and relieve the pressure on Chinese exports and demands for devaluation. Many savvy observers have concluded that the recent G20 meeting in Shanghai led to an informal accord to weaken the dollar to prop up the global economy’s shaky foundations–and most acutely, to relieve the pressure on China’s yuan, which threatened to destabilize the faltering global economy. But now the world faces the consequences of a weakening USD: a crisis triggered by a stronger yen. The USD has been yo-yoing in a trading range for a year, as the Federal Reserve has yo-yoed between hawkish declarations of rising rates (which make the USD more attractive and thus stronger) and dovish backtracking (we’re never going to raise rates), which then push the USD lower. No wonder the Fed is wobbling: it can’t please both Japan and China. If the dollar plummets, China is delighted but Japan is pushed into crisis. If the USD continues its march higher, Japan is “saved” but China will be forced to devalue the yuan or watch its export sector decline. As I often note, no nation or empire ever devalued its way to dominance or even prosperity. Rather, the devaluation of one’s currency is the kiss of death, as everyone quickly learns your money is a ball that can quickly lose air or go flat. Here’s my take: Japan has no options left. China, on the other hand, can devalue the yuan as the USD strengthens. Indeed, a very good case can be made that China should devalue the yuan, as a practical adjustment to new global realities. The Fed has a stark choice, and the 2-minute warning just sounded. It can break the informal Shanghai Accord to strengthen the USD to save Japan from the slow-moving catastrophe of a soaring yen, or it can let the USD weaken further to placate China and the commodity-dependent economies. What it can’t do is please everybody. This is the inevitable consequence of manipulating markets: you end up being unable to please anyone, because your constant manipulation has created unsustainable carry trades and speculative gambles. The FX market is about to blow up in the Fed’s face, and there’s nothing they can do about it. What central banks fear most are markets that are not tightly controlled by central banks. The world’s central banks are about to sit down to a banquet of consequences arising from seven long years of relentless manipulation. Regards, Charles Hugh Smith P.S. Ever since my first summer job decades ago, I've been chasing financial security. Not win-the-lottery, Bill Gates riches (although it would be nice!), but simply a feeling of financial control. I want my financial worries to if not disappear at least be manageable and comprehensible. And like most of you, the way I've moved toward my goal has always hinged not just on having a job but a career. You don't have to be a financial blogger to know that "having a job" and "having a career" do not mean the same thing today as they did when I first started swinging a hammer for a paycheck. Even the basic concept "getting a job" has changed so radically that jobs–getting and keeping them, and the perceived lack of them–is the number one financial topic among friends, family and for that matter, complete strangers. So I sat down and wrote this book: Get a Job, Build a Real Career and Defy a Bewildering Economy. It details everything I've verified about employment and the economy, and lays out an action plan to get you employed. I am proud of this book. It is the culmination of both my practical work experiences and my financial analysis, and it is a useful, practical, and clarifying read. The post Japan Needs Stronger Dollar, China Wants Weaker Dollar appeared first on Daily Reckoning. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial Gold Traders Appear to be Losing Their Grip! Posted: 11 Apr 2016 07:52 AM PDT For years the best trading strategy in gold and silver has been to buy when the ‘net short’ position of commercial traders was low, and sell when the numbers were high. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Canada "11 People Try Commit Suicide" Posted: 11 Apr 2016 07:36 AM PDT Aboriginal Community in Canada declares emergency as 11 people try to commit suicide in one night The Financial Armageddon Economic Collapse Blog tracks trends and forecasts , futurists , visionaries , free investigative journalists , researchers , Whistelblowers , truthers and many more [[ This is a content summary only. Visit http://www.newsbooze.com or http://www.figanews.com for full links, other content, and more! ]]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Singapore Moves to #3 Financial Center Posted: 11 Apr 2016 07:33 AM PDT This post Singapore Moves to #3 Financial Center appeared first on Daily Reckoning. And now… today's Pfennig for your thoughts… Good day, and a marvelous Monday to you! This will be a busy week around the world with Central Bank meetings, and data prints, so let’s get buckled in baby you can drive my car! Well, the dollar starts the week mixed, losing ground to some currencies and gaining ground against the rest. As I just said, it will be a busy week around the world, and I don’t think currency traders are all that hip to make a break one way or the other right now. Especially, since today is like the calm before the storm, and even here in the U.S. there isn’t any data, nada, nil, zero, zilch data in the Data Cupboard today. And tomorrow, we’ll begin to start slowly, and then hit full-stride on Wednesday, so go ahead do your gardening today and tomorrow, and then be ready! I can’t believe that I keep talking about Japanese yen like I have, but it is what it is, right? Yen rallied again overnight, and traded to a 107 handle, before a Japanese official reminded the traders that intervention is possible, and that caused some traders to panic at the disco, and lighten up on their position, causing yen to back up to 108. I read a piece on the Bloomberg this morning, that the guy known as “Mr. Yen”, Sakakibara, believes that yen will trade down to 100 by year-end. What, What? Back in the 90’s Mr. Yen was a big market mover with his comments, but that was then ,and this is now. Puff that mighty Magic Dragon, he ceased his fearless roar. Shhh, don’t make a big fuss over this, but gold is within spittin’ distance of $1,250 again this morning. I figure if we attempt to cross the figure quietly, we won’t wake up the price manipulators. What’s the saying, don’t wake a sleeping bear? Or is it baby? HA! Well, anyway, right now we’re only 44-cents from reaching $1,250, so be quiet, and celebrate. I read a piece that was sent to me from the folks over at Stansberry Research, and they are on gold’s bandwagon. And this is far different than when a financial institution issues a buy or sell on something like gold, for they have ulterior motives for doing so. This is a financial analyst and his publication that gets to tell his readers that they need to go long gold or add to positions at this time. I don’t have that luxury, but I sure can hint, wink, and beat around the bush, eh? The Bank of Canada (BOC) meets on Wednesday, The European Central Bank (ECB) meets on Thursday, as does the Bank of England (BOE), and not one of these meetings are expected to shoot off fireworks. As far as the ECB is concerned, they’ve done enough damage don’t you think? I do. ECB President, Mario Draghi, seems to be on a mission to destroy the Eurozone, when just a couple of years ago, he stood on a podium and pronounced to the world that he would do anything to protect the euro. I tell you this, so please hear me now and listen to me later… These Central Bankers all change, when they are given the title of leader of their respective Central Bank. Look at Big Al Greenspan. He was a gold-bug trained economist under the tutelage of Ayn Rand, but he dissed all that when he became Fed Chairman, and opted to be Keynesian. But now that he’s retired from the Fed Chair, guess who’s talking about gold again? On Friday, when I got back from the MRI’s I had done (which wasn’t pleasant I might add!), I was doing some reading and came across two things that I highlighted as things I would talk about today. Then later in the day, Chris Gaffney sent me an email and said that he hoped the two links included in his email would help me get started on Monday with the Pfennig. the links were to the same two things I had highlighted previously! I responded to him and told that great minds must think alike! HA! But thanks Chris, for thinking of me, sitting here, with that proverbial blank piece of paper and a thousand thoughts running through my head without any organization! So, here’s the first item that I thought would be interesting to you. China saw their Foreign Exchange (FX) Reserves increase in March, their first increase since November last year! You probably recall me telling repeatedly, about how the Chinese were spending their reserves in attempts to stimulate their economy, and defend the renminbi against speculators. Their March reserves stood at $3.21 trillion, which is down from the greater than $4 trillion figure they held just last fall. But the thing to think about here is that it’s not all about China slowing their injections into the economy. But a lot of the rise in reserves comes from the weaker dollar, thus the value of the currencies they hold went higher. But either way you cut the bread on this folks, it’s good news for China, and the renminbi was allowed to appreciate overnight in the fixing, as it should have been! And here’s the second item that really caught my attention, as the hazy fog was lifting from my brain on Friday afternoon. “Singapore Edges Ahead of Hong Kong as No. 3 Financial Center” was the title of the article, and since I had just written glowing words about Singapore in the Currency of the Month article that I gave you the link for last week, in case you missed it the first time, I just had to check this out. And it put a smile on my face given what I said about Singapore a month ago. So, Singapore stands behind the New York and London on the Global Financial Centers Index. I had been telling you for the past few years how China was making Singapore the first distribution and warehousing facility for the renminbi, apparently that has gone a long way toward pushing tiny little island nation Singapore to #3 in the world. Pretty amazing, eh? Oh, and the Singapore dollar has really been stealth-like in its recent move higher, but so far this year the S$ is up 5.43%. In Australia this week, their latest labor report will print. In the fourth QTR Aussie employment was better than expected, and so it only makes sense that we could see some cooling off here, but that’s not to say that employment growth will go negative, but more that employment growth will slow. The Aussie dollar (A$) starts the week on a down note, but the downward move is tiny at this point, so no great shakes. Across the Tasman, the New Zealand dollar/kiwi, is stronger this morning, and is the best performer overnight vs. the U.S. dollar. This seems a little backward, as kiwi saw the last rate cut in the land down under, while the A$ saw its rate remain unchanged earlier this month. But, as always, the currencies have little surprises for us. Sometimes they’re good, and sometimes they’re bad. The price of oil jumped higher again, this time to the $39 handle. Could we actually see $40 oil by week’s end? $40 would be outside of the range that oil has traded in for months now. The last time it got up around $40 oil got whacked. I’m afraid of that happening again, as the feeling in the market is that there’s just too much supply glut to warrant a higher price. But hey! The Mexican peso and Russian ruble liked the move as those two petrol currencies have bolted higher this morning. The Norwegian krone is not participating, and the gain in the Canadian dollar/loonie is so small this morning, it’s as if the loonie isn’t participating either! The euro is down just a tiny bit this morning, and has held to just under 1.14 for over a week now. The euro made a brief run above 1.14 last week, but couldn’t hold it very long, and has ever since range traded just below 1.14. The dollar has seemed to back off its recent pace of decent, and so that doesn’t allow the euro to move higher until the dollar resumes its previous pace of decent. A nice gain is in the books for the S. African rand this morning. I don’t get to say that very often, and especially in this past couple of years, as the rand has been hammered repeatedly. But in recent times, the strikes that cripple the economy have dissipated, and some semblance of sanity has returned to S. Africa. And with the U.S. Fed apparently on hold for further rate hikes, the rand gets highlighted again as a currency with a positive rate advantage to the dollar. This currency has always been one that gives me the willies. I used to say that “I wouldn’t touch rand with your ten foot pole”. And there were times where that would have been very wrong, but there were also times when it would be very right! And so it is with this volatile currency. So, I told you above that gold was stronger this morning and knocking at the door to $1,250. I just have to continue to think that all this talk that I’ve been telling you about that wages a war on physical cash, and the negative rates around the world would be pushing people to buy physical gold (and silver of course!). And what is it I’ve always told you would put an end to the paper short trades? If everyone bought physical gold, and I mean everyone! Well, the U.S. Data Cupboard is empty today. And as useless as the G in lasagna! It’s not often that the Data Cupboard doesn’t have anything, not even a worthless data print, so I guess we’ll just move along because there’s nothing here to look at! For What It’s Worth. This article comes courtesy of MarketWatch, and talks about the Student Loan defaults, and how the loans aren’t being paid down. Here’s the link for the article, and here is the snippet:
Chuck again. Makes sense doesn’t it? OK, I’m going to cross the line here and say something that will probably set off a firestorm of comments with some not being so nice, but that’s OK. I’m a big boy. So, here goes. These people with these Student Loans that aren’t getting paid down are the generation that started receiving this whole, “get trophies for participating” group. So, they’re used to getting something for nothing, and so they want to carry it over to their education and not pay their loans. Now that’s a generalization and obviously doesn’t apply to everyone! I know of a few youngsters paying their student loans diligently! But… Oh, I’ve got a whole list of things that have been the unintended consequences of the “get trophies for participating” phenomenon. But that’s for the Butler patio. See you there! That’s it for today. I hope you have a marvelous Monday, and be good to yourself! Regards, Chuck Butler P.S. Be sure to sign up for The Daily Reckoning — a free and entertaining look at the world of finance and politics. The articles you find here on our website are only a snippet of what you receive in The Daily Reckoning email edition. Click here now to sign up for FREE to see what you're missing. The post Singapore Moves to #3 Financial Center appeared first on Daily Reckoning. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| That's how Russian Police deals with Immigrants Posted: 11 Apr 2016 07:24 AM PDT That's how Russian Police deals with Immigrants Within the next 25 years, the white people of Europe will become immigrants themselves, fleeing to russia Russia seems to be the hope of Europe!! The Financial Armageddon Economic Collapse Blog tracks trends and forecasts , futurists ,... [[ This is a content summary only. Visit http://www.newsbooze.com or http://www.figanews.com for full links, other content, and more! ]]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gold in a World of Negative Interest Rates Posted: 11 Apr 2016 07:19 AM PDT SunshineProfits | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Why Stefan Molyneux Supports Donald Trump 2016 [Best Explanation Yet!] Posted: 11 Apr 2016 05:06 AM PDT Why Stefan Molyneux Supports Donald Trump 2016 [Best Explanation Yet!] The Financial Armageddon Economic Collapse Blog tracks trends and forecasts , futurists , visionaries , free investigative journalists , researchers , Whistelblowers , truthers and many more [[ This is a content summary only. Visit http://www.newsbooze.com or http://www.figanews.com for full links, other content, and more! ]]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Miners union accepts Sibanye Gold's wage offer, cancels strike Posted: 11 Apr 2016 03:39 AM PDT By Stella Mapenzauswa and Zandi Shabalala JOHANNESBURG, South Africa -- South Africa's Association of Mineworkers and Construction Union (AMCU) said on Sunday it had agreed to take a new wage offer from Sibanye Gold and had called off a strike. AMCU national treasurer Jimmy Gama said the union hoped to sign an agreement with the mining company, probably this week. "We as AMCU accept Sibanye Gold's new wage offer as voted for unanimously ... by our members today," AMCU said on its official Twitter account after a mass rally. ... ... For the remainder of the report: http://www.reuters.com/article/safrica-sibanye-gold-unions-idUSL5N17D0GR ADVERTISEMENT Buy metals at GoldMoney and enjoy international storage GoldMoney was established in 2001 by James and Geoff Turk and is safeguarding more than $1.7 billion in metals and currencies. Buy gold, silver, platinum, and palladium from GoldMoney over the Internet and store them in vaults in Canada, Hong Kong, Singapore, Switzerland, and the United Kingdom, taking advantage of GoldMoney's low storage rates, among the most competitive in the industry. GoldMoney also offers delivery of 100-gram and 1-kilogram gold bars and 1-kilogram silver bars. To learn more, please visit: http://www.goldmoney.com/?gmrefcode=gata Join GATA here: Mining Investment Asia http://www.mininginvestmentasia.com/ Support GATA by purchasing recordings of the proceedings of the 2014 New Orleans Investment Conference: https://jeffersoncompanies.com/landing/2014-av-powell Or by purchasing DVDs of GATA's London conference in August 2011 or GATA's Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: |
If one were to describe, in a word, the singular quality of gold that gives it value both as money and a wealth preservation asset, that quality is integrity. Physical gold cannot be printed, it cannot be conjured by a central bank or government official, it cannot be credited into existence by a bank. And over a period of four thousand years, the markets have selected gold and silver as money. The replacement of gold and silver sound money with unstable debt-based fiat paper currency by banking interests and their government partners over the past century has been a mere blip in humanity’s monetary history.
or at least a few weeks now, we have noticed a growing drumbeat from a growing corps of analysts. Gold is going to thousands of dollars. And silver is going to outperform. Reasons given are myriad. Goldman Sachs apparently said to short gold, so if one assumes that the bank always advises clients to take the other side of its trades — a tricky and dangerous assumption at best — then one should buy gold.
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