saveyourassetsfirst3 |
- COT Silver Report - September 16, 2011
- JP Morgan Silver Manipulation Names Surface
- Updated silver lawsuit identifies Morgan trading mechanisms, traders, 'spoof'' and 'fake' trades
- More on the European Bank Bailout
- Good Friday Everyone
- Don't Miss Out as Silver Prices Surge to $150 an Ounce
- The Eurozone Will Continue Collapsing: Buy Precious Metals To Profit
- Reduced Dollar Threat From Asian Reserve Management
- Gold Gives Ground As Europe/Germany Decides Its Future
- The Breathing Gold Giant
- Central Banks Pump Money To Prop Up Europe
- Big Miners Cheap Compared to Silver
- Gold is Forming a Bullish Consolidation
- WATCH – Gold and Silver News September 16, 2011
- Amid Market Turmoil, Gold Stocks Find Heavy Accumulation
- Silver Update – “Correction” – BrotherJohnF
- It's time for caution in gold stocks
- “Gold to Fall By 50%” – $555 – $1045 Target
- Ten U.S. housing markets that could collapse this year
- Interesting thing happened on the way to the Apmex site this AM
- Gold Shows High Resilience Even as US Dollar Surges
- Trader Tracks Political And Economic Forecasts Part III
- Silver Default Possible...Miners' Cash Flows Are Parabolic: Rick Rule
- James Turk interviews Reg Howe at GATA's London conference
- Gold-Backed Dollar Puts ‘Fair Value’ at $10,000 an Ounce
- Love the buying opportunity in gold, Leeb tells King World News
- Silver Default Possible...miner's cash flows are parabolic: Rick Rule
- Charles de Gaulle predicted the US monetary crisis back in 1965
- Eurozone debt crisis 'in dangerous new phase' warns IMF chief
- CHART – Bloomberg “Gold's Fair Value Is $10000 An Ounce”
| COT Silver Report - September 16, 2011 Posted: 16 Sep 2011 06:33 AM PDT COT Silver Report - September 16, 2011 |
| JP Morgan Silver Manipulation Names Surface Posted: 16 Sep 2011 05:25 AM PDT Part 88 to be exact. "88. Between 1996 and 2000, Robert Gottlieb, Christopher Jordan and Michael Connolly worked together at the Precious Metals Trading Desk of HSBC and at Republic National Bank of New York, prior to its acquisition by HSBC. 89. In 2006, Jordan began his employment at JP Morgan where, until 2010, he was one of JP Morgan's principal COMEX silver futures and options traders. 90. After a brief stint at Bank of America as a commodities trader, Mike Connolly returned to HSBC in 2007, where he served as Senior Vice President of HSBC's Precious Metals Desk. 91. In March 2008, Robert Gottlieb began his employment at JP Morgan Chase where he presently serves as a Managing Director/Trader. 92. Prior to JP Morgan's acquisition of Bear Stearns in 2008, Mr. Gottlieb had worked for Bear Stearns from January 2006 forward. 93. Bear Stearns, through Robert Gottlieb and others, had developed the previously alleged large Bear Stearns short position in COMEX silver futures prior to March 17, 2008. 94. Contrary to standard antitrust compliance manuals, Mr. Gottlieb regularly spoke to, and communicated and met with HSBC silver trader Mike Connolly from the time that Mr. Gottlieb joined JP Morgan until at least October 2010." Click here...  |
| Updated silver lawsuit identifies Morgan trading mechanisms, traders, 'spoof'' and 'fake' trades Posted: 16 Sep 2011 05:01 AM PDT An updated complaint in the class-action lawsuit against JPMorganChase alleging manipulation of the silver futures market, filed this week in U.S. District Court for the Southern District of New York, details the mechanisms of the manipulation and some of the traders executing it. |
| More on the European Bank Bailout Posted: 16 Sep 2011 04:51 AM PDT Cross-posted from Credit Writedowns Overnight, a group of us were exchanging e-mails on the recent coordinated central bank action to provide European banks the funding being denied them by the markets. I haven't been active on the e-mail chain, but I did find some of the commentary interesting. I had a few comments of note I wanted to address, but here's why I am writing this post:
When I read that I realised it was true. Look at the post yesterday from the BoE, "Additional US dollar liquidity-providing operations over year-end". At the end of that press release, there is a link to the statement of every other central bank participating in the liquidity measure… except the Fed. In fact, I was looking for the Fed statement yesterday and didn't find it. And that's when I went to the BoE and saw they linked out to the other CB statements (sans Fed). I think this is curious messaging because the US Treasury Secretary Timothy Geithner is over in Europe right now banging the table about the need for a Euro TARP. Cullen Roche calls it a Euro TALF. Whatever you call it, its a bailout; the original TALF sure was. Is this why the Fed went all radio silent? I think that's it exactly. The last post I wrote on The European Bank Bailout talks a lot about how unpopular these bailouts are; and since this is effectively a backdoor bank bailout, it makes sense that Ben Bernanke would want to keep mum, "to keep his powder dry" for QE3 as one of my friends e-mailed. Here's what I think is happening:
If Stark and Weber resigned over this, what is the likelihood that the ECB is going to go for a Euro-bazooka $2 trillion TALF? I say it's not going to happen. And that means, European politicians need to get that rabbit out of the hat soon because things will most certainly continue to deteriorate. Comments and insights appreciated
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| Posted: 16 Sep 2011 04:13 AM PDT There has been a lot of talk lately of $25 silver and a major selloff. This same talk that UBS used as their TA guidance in June as they said they would buy the physical metal again at $15/oz. Well that never happened. There are so many possibilities right now, it is literally impossible to say whats next. All I know is that the trend line was penetrated yesterday, people got really short, and now they are getting fed, no lube, and taking a massive loss. I told you this would happen. This is what they do. Shake shake shake, get everyone offside, turn on the buy algo's, and go fuck hookers. Click here... Anyone going into this weekend, let a lone ANY weekend short silver or gold from today till New years day, is gambling. Most gamblers seek treatment after they are broke. Imagine if you turn on the TV Sunday night, and Greece actually has left the EU? Happy Friday, and the countdown begins to Blythe's birthday! March 22nd. Yeah, I'm that guy.  |
| Don't Miss Out as Silver Prices Surge to $150 an Ounce Posted: 16 Sep 2011 03:43 AM PDT If you like Gold, you'll love Silver! |
| The Eurozone Will Continue Collapsing: Buy Precious Metals To Profit Posted: 16 Sep 2011 03:42 AM PDT By Penguin Capital Markets: This week, markets rallied upon news that the ECB was going to extend credit lines to troubled institutions in the eurozone, specifically Greece Complete Story » |
| Reduced Dollar Threat From Asian Reserve Management Posted: 16 Sep 2011 03:37 AM PDT By Tim Clayton: There has been an important shift in Asian currencies over the first half of September with a notable weakening trend after months of almost uninterrupted gains. And this will have important wider dollar implications as one key source of vulnerability is kept in abeyance. There is also the possibility of a much more important shift if key Asian economies are at risk of recession. The Korean won, for example, has retreated to lows near 1110 against the dollar from 1065 at the beginning of the month while the Taiwan dollar has weakened to 29.55 from around 29 with losses for all major regional currencies. The Chinese yuan juggernaut has been halted, at least temporarily, and even the ultra-safe Singapore dollar has weakened to around 1.24 from a historic peak just beyond the 1.20 level. Confidence in the Asian growth outlook has deteriorated as export prospects have weakened and there is Complete Story » |
| Gold Gives Ground As Europe/Germany Decides Its Future Posted: 16 Sep 2011 03:27 AM PDT |
| Posted: 16 Sep 2011 03:19 AM PDT Stupid post alert! Over the past week the giant gold beast has been breathing as if in slumber. (up and down days of $50 or more) Today the beast seemed to stir a bit, as it took a deep breath in (into the $1750's) and then exhaled a tremendous breath, and possibly even slight growl? (back up into $1,813 as I type) So. what are the predictions for this beast now? Will it continue to slumber for a while? Is it starting to stir again? |
| Central Banks Pump Money To Prop Up Europe Posted: 16 Sep 2011 03:10 AM PDT By Daryl Montgomery: Exactly three years after Lehman Brothers filed for bankruptcy and almost brought down the global financial system, central banks in North America, Europe and Asia engaged in a coordinated money pumping operation to prevent the EU banking system from stalling. The move created a sharp stock market rally, especially in financial shares, just as was the case when similar actions took place during the 2008 credit crisis. Complete Story » |
| Big Miners Cheap Compared to Silver Posted: 16 Sep 2011 02:54 AM PDT HOUSTON -- From the Chart Book. A few days ago we posted a chart of the ratio of the large cap miners and gold. Our mail says that people are just as interested in how the mining shares are trading relative to silver. We had to conclude that gold stocks are cheap compared to the price of gold and the chart we posted then pretty much confirms the relative value imbalance. We noted with the gold chart that more and more analysts are coming to the same conclusion - that there has been a colossal disconnect between the price of gold and the price of gold and silver producers. What about silver? Just below is the same chart for silver versus the Philly Gold and Silver Stocks Index (XAU). Yes, it is an imperfect comparison, because the XAU is not a pure or even a predominantly silver miner measuring stick. Nevertheless, we do believe the chart tells a compelling story. Just as gold and silver tend to mirror or echo each other over time we believe that over time the XAU/silver ratio will find or revert to it's mean … regardless of any perceived imperfection. Continued... *** What the chart reveals is that the XAU index compared to the price of silver is near historic lows. Either gold and silver have traveled too high in price and must therefore correct, or the miners must rise in price … for the ratio to revert to its mean, that is. Bear Confirmation or Bull Call to Action? Strong opinions exist on both sides of this issue. On one side are the gold and silver bears who argue that gold and silver are obviously too high in price because the mining stocks have failed to "confirm" the price hikes. They often argue that mining shares "normally" discount higher gold prices in advance, as they did in 2005 and 2006 for example. On the other side are the metals bulls who believe that the price hikes for gold and silver are justified and the miners therefore must (and will) rise in price to "answer" the higher metals prices. They argue that the metals and mining shares trade leading and lagging roles in the evolution of the metals bull market, and that presently the metals are leading the pair trade. The Issue is Confidence We believe that mining shares, which, after all are stocks first, then imperfect proxies for metals (with many more risks than just metals), … are the victim of unprecedented insecurity in the capital and stock markets. The reason that the miners are underperforming metals is simply a lack of confidence. Ironically that same lack of confidence is supportive of gold and silver in many ways exacerbating the gulf between the shares and the metals. So, we believe that the primary reason that mining shares have been underperforming is a lack of buyers and lack of demand borne out of fear and uncertainty about the future. Mining shares are unlikely to strongly outperform gold and silver until investors, traders and portfolio managers have higher confidence in the markets and in the future. November 2012 is One Year Hence Therefore we have to believe that as we get closer to the U.S. elections next year, as it becomes more and more clear that the current cast and crew in Washington is likely to be tossed out on their collective backsides; as it becomes more and more clear that "Obaminations" like Dodd-Frank and Obamacare will indeed be repealed; as it becomes more clear that the tone and the direction in Washington will be reverting from unacceptably anti-business and frighteningly left, back closer to its center; then perhaps we can expect more confidence in the capital markets. Perhaps we can make a compelling case that mining shares will begin to "answer" the metals better going forward then – if, repeat if, the world manages to stay on the edge of, and not fall into, another Panic Abyss. It's dicey looking ahead for sure, and there are never any guarantees in this business, but on a relative value basis gold and silver stocks have rarely, if ever, been so attractively priced relative to the underlying commodities. That's the message the charts tell us. *** Housekeeping: We are in the process of and nearly finished with replacing all of our 30-something technical charts for the Vulture Bargain Candidates of Interest (VBCI) and our Vulture Bargain charts. Vultures can log in and access the new charts, with updated annotations any time on the password-protected subscriber pages. That is all for today, have a good weekend everyone. |
| Gold is Forming a Bullish Consolidation Posted: 16 Sep 2011 02:43 AM PDT This is an important juncture for Gold and let me say the analysts. We are starting to see some disagreement on Gold and that is natural after a strong surge. It is a small part of the reason why Gold is likely to soon replicate its last move. We believe the market is ready for another big move that could leave many on the sidelines. It is somewhat of a contrarian call. After a 25% surge in less than two months its natural to assume its overbought and a correction is needed but the evidence favors another surge higher. First, we've been talking about an acceleration in Gold for months. It finally happened or is happening. We can see that the market has accelerated past the trendline (and also a longer trendline shown in previous charts). The acceleration is bullish but more important is that the market is holding well above this previous resistance which indicates that the acceleration and not the former trend remains in effect. Secondly, Gold has only retraced (the minimum required) 38% of the move. Third, note that in the past two years Gold bottomed about five times at the 150-day moving average. Most recently it bottomed at the 100-day right before the surge. The next day or two could be critical as Gold is likely to test the low near $1750. A strong rebound would solidify that bottom and it would ocurr well above the 100-day moving average and well above previous trendline resistance. See the chart below. Meanwhile the commitment of traders report (COT) is quite encouraging. Over the past two years the commercial short position has ranged from roughly 200K to 300K contracts. As of last Tuesday, the commercial short position was 227K contracts. Now keep in mind this is as of last Tuesday when Gold closed near $1880. In other words, the next reading is likely to be fairly close to 200K contracts. Furthermore, the action in the equities has also been encouraging. The mining equities have held up quite well during this period of weakness in the metals. This includes Thursday's action. Gold closed down 1.7% yet GDX and GDXJ closed down fractionally while forming a bullish reversal pattern. Silver closed down 2% while SIL closed down only 0.8% and also formed a bullish hammer. Moreover, a handful of our favorite silver companies are trading near April high while Silver is more than 20% off its April high. There you have it. Emotion may tell us to worry, be cautious and expect more weakness and a prolonged consolidation. It could happen. I am in the business of managing risk and assessing probabilities. The evidence says otherwise. And by the way, the equities are already showing relative strength. Couple that with a big move higher in Gold and we could see a very strong move the next few months. If you'd like some professional guidance in navigating this upcoming move then we invite you to learn more about our service. Good Luck! Jordan Roy-Byrne, CMT
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| WATCH – Gold and Silver News September 16, 2011 Posted: 16 Sep 2011 02:24 AM PDT
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| Amid Market Turmoil, Gold Stocks Find Heavy Accumulation Posted: 16 Sep 2011 01:48 AM PDT |
| Silver Update – “Correction” – BrotherJohnF Posted: 16 Sep 2011 01:20 AM PDT Brother John on the correction: |
| It's time for caution in gold stocks Posted: 16 Sep 2011 12:49 AM PDT From Gold Scents: I realize that most people who come to this blog are bullish on gold. I myself am definitely bullish long term. That being said, warning signs are starting to build. Since gold is down this morning, there's a good chance that the mining stocks are going to break the intermediate-trend line today. The complete failure to follow through on the move above 600 is also concerning. Usually after an asset has tested an area three times, the breakout occurs with strong follow-through... Read full article (with charts)... More on gold and gold stocks: Gold alert: An alarming update from Europe Why resource guru Sprott is now selling gold Legendary investor Eveillard predicts a gold stock mania       |
| “Gold to Fall By 50%” – $555 – $1045 Target Posted: 16 Sep 2011 12:49 AM PDT In this weeks "Weakly Peak":
CLICK IMAGE TO ENLARGE 
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| Ten U.S. housing markets that could collapse this year Posted: 16 Sep 2011 12:48 AM PDT From LewRockwell.com: The United States real estate market collapse is not over by a long shot. We are experiencing the most unusual financial times in modern U.S. history. If you think it can't get worse… keep reading. The statistics in this article were derived for accuracy purposes from Real Estate on MSNBC.com in an article written by Michael B. Scuter and Douglas A. McIntyre. I've thrown in my own two cents and my practical approach for assimilating information and then creating an action plan. The best guestimate is that real estate values will drop significantly in 10 specific markets over the next year. And I think a few other areas of the country are extremely vulnerable... Read full article... More on housing: America's cheapest real estate U.S. homes have never been more affordable Six ways to dramatically reduce your rent without moving    |
| Interesting thing happened on the way to the Apmex site this AM Posted: 15 Sep 2011 11:18 PM PDT This screen came up. It may be a google over reaction to the cookie that causes the pop up Apmex banners you get everywhere but----   |
| Gold Shows High Resilience Even as US Dollar Surges Posted: 15 Sep 2011 11:00 PM PDT Expect Euro decline, a stronger dollar, and a Gold buy dip. |
| Trader Tracks Political And Economic Forecasts Part III Posted: 15 Sep 2011 09:14 PM PDT "To make a real lasting impact on inflationary psychology and inflation itself, we need drastic cuts in the budget. But these cuts will never be." –Congressman Ron Paul, April, 1981 Since the banksters have not recognized the huge mountain of toxic mortgages and derivatives lurking in dusty back rooms of their banks, they smile and say all is well. Read the next quote that proved so true regarding these folks keeping two sets of books with the tacit approval of the regulators. -Traderrog "A rolling loan gathers no loss." -Andre Sharon quoting a New York banker on the World Debt Crisis, Gold Newsletter, August, 1983. The statements above set the stage for refinement of our next group of forecasts and predictions. The greatest immediate danger is the crashing and burning of the Euro-land, European Consortium of economies related to a German Parliament vote later this month. First it was scheduled on 9-23-11. Now we see the vote is to be posted on 9-29-11. Over this past weekend in Germany, Mrs. Merkle lost a local election in her home province. Bloomberg News reported this was the 6th, similarly lost election. We now forecast and have been saying so for weeks that the parliamentary election might rip-up Euroland and initiate its falling-failure; sliding down a slippery slope toward global bond crashes. The German DAX stock market could fall at least -23% or, more on this event in September or, October. We forecast that in the dissolution of the Euroland and Euro currency, Iceland and Ireland as well as some others (Germany?) will not pay back the mirage ECU banker-bonds- loans. When Euroland begins to break-up, it is going to be every country for them selves. Germany will be hurt badly but can survive. France gets hit harder and probably survives. Greece, Portugal, and even Spain and Italy might not make it economically. The fallout is riots, demonstrations and maybe even revolution in some of those countries. In 2003, we did forecast the Euro and Euro-land idea would fail. The U.K. is badly injured economically and has much worse immigration problem to boot. How do they fair in all of this? By not using the Euro currency they have a better chance but they have entered a major depression, as has most of the world. It is not acknowledged by anyone in authority. Legal and illegal immigrants will create the worst U.K. chaos and troubles. Politically correctness will exaggerate the problems and the violence. Finland and a handful of the former 17 nation-states of Euroland will survive. The majority of Europe descends into the economic abyss. President Obama will make a speech to a joint session of Congress this Thursday evening on 9-8-11. (We are writing this on Labor Day 9-5-11). Rumors have signaled he will order a (2.5%) reduction in long term mortgages (presumably those of the toxic variety held by the Fannie and Freddie); the notorious F&F's. Our years ago forecast was for the F&F's to gather in (buy) all the toxic loans from the crooked bankers and mortgage companies and then file bankruptcy ending the mess once and for all. If the rumors are correct, they first cut the rates and then BK the whole pile down the road. Where does this leave the homeowners? Who owns the properties…the crooked bankers all over again? We previously reported and recommended our traders exit all trades on the GLD and SLV as it is unclear if those markets hold 100% of the metal behind the shares. We say it's very doubtful and a prominent attorney speaker we heard says the same thing. They were fun to trade not own. Now it might be smart not to trade them either. We called the recent silver tops and bottoms perfectly. Current reports tell us unemployment in the USA is 9.1%. The real number is between 22% and 25% and growing worse ever faster. By the end of 2012, it could be as bad as 30%-35%. When this subterranean level is obtained, summer riots and street violence will be common. Fifty Million USA citizens are on food stamps. The primary USA social problems will be food and water. La Nina weather that created so much havoc during 2011 continues its widespread wreckage throughout 2012. Grain prices in 2011 will set new records. In 2012 or near the end of 2011 corn goes into rationing. In 2012, there will be food riots in many nations as people go hungry. A recent report on the rice crop in Asia said there will not be enough. In other growing areas that crop is diminished. A new report says the cash and futures are nearly the same price. We say the crop will be short of demand and this is the grain eaten by half the world's mouths. It is very important in the grand scheme of growers. The Federal Reserve says no more QE3 at least for now. In reality, QE3 has been underway in a stealth manner since June 31, 2011, when QE2 expired. Expiring bonds are being re-purchased and the auctions continue despite a lack of buyers. Several recent auctions had few or no buyers. The Federal Reserve marked them as sold and they were put back on the bond shelf in the FED to be pushed-out somehow later on. The printing of currencies and bonds has reached the point of no return. Now it gets really ugly when this trash cannot be sold in quantity and the bond traders arbitrarily raise interest rates (yield) in response. The end of this game is nigh. In the USA; cities, counties and states are going broke ever faster. Some have taken precautions and are ok. Those would be Alaska with big oil tax revenues, Wyoming with no larger bureaucratic overhead to feed and North Dakota, which has its own state bank and lots of energy revenues and jobs. Those in the worst shape for the shorter term are California, Illinois, Michigan, and Nevada. There are others underwater but not to the degree as those we just mentioned. The sun-belt states of California, Nevada, Arizona, and partially New Mexico have been traditionally a home for legal and illegal immigrants from Mexico. Now, however, those economies have been hard hit and the flow of illegal immigrants looking for USA work has considerably subsided. They cannot find USA work and seek work back in Mexico leaving the USA or, are staying in Mexico in the first place. Most of the Middle East is on fire with riots and revolts or, about to go that way. Much of this has been encouraged by the bad guys the USA is fighting in Iraq and Afghanistan. Those wars are spreading to Yemen, Syria and of course are underway in Libya. This has been encouraged and supplied by Russia, interested in up-setting the old status quo held by the Middle Eastern dictators, to take over all energy. The Saudis have maintained order by throwing several billion at their Sheeple herd on the street. Their leaders are tiny in number and have all the money and control. How long does this last? If this one goes under, crude oil could be $300 a barrel and gasoline might be $15-$20 per gallon in the states. World War III is coming in 2013-2014 after the global markets crash in the fall of 2012. The war will be fought over energy and the two top players will be Russia and the USA. The War's outcome might decide the longer term future of the world. President Obama will be a one term president. The Nasdaq stock market is the leading indicator for all the stock indexes. We forecast the Nasdaq is once again in a big bubble and will crash at least -62% from recent highs and might fall -90% one year from today or sooner. Later on, the Dow will be under 5,000, down from its highs. Commodities are in a longer term bull market. Normally, they historically last from 13 to 17 years. We are in the 11th year of the current commodities run and we see base metals and some softs' markets tapering-off and falling down when the major stock markets crash. Gold and silver will last longer as they are in the category of precious metals-currency-cash-money. Precious metals are viewed as the last bastion of survival safety and considered a true currency. While these markets can take a hit too, just like post Lehman, this time we think they fall to a lesser amount and do a quicker bounce pivot rebound. They are they last safe place we can go for retention of value like food and farmland. We have been trying to figure out how USA authorities can maintain control in rough social events. Small disturbances can be quickly put-down but if a few hundred thousand people go over the edge, it goes out of control and martial law would be declared. What would the armed forces do? Would they turn on the citizens or, the governmental authorities or, both? We cannot even guess. Once a strongly negative event occurs like a stock market crash, apparent food shortages, or social problems go out of control or, something equally dire, where is law and order? It doesn't matter where in the world this happens; people will generally react the same way. We think Japan would probably have a lesser case of riots or violence because those things are not in their civilian DNA to behave that way. What would happen in Europe or the United States? Watch Greece for clues. China is supposed to be the leading economy of the world. Hidden beneath their fancy exterior we see crumbling water and food supplies, and thousands of empty new cities, homes and malls. We also see falling exports sent to a failing USA and others. There's a massive shortage of electric power despite one new coal-fired power plant coming on-line each week. A newer negative event is the NYC big money boys selling China shares. We see recognition of banker shenanigans not unlike the USA's. Canada will come out of this mess better than most as their banks do not own toxic derivative paper and real estate loans that we see in the USA and Europe and other places. Further, they are a commodity economy with lots of natural resources, oil, gas, and water. Their negatives are found in Ontario and Quebec manufacturing where autos and parts are produced along with similar industries. Canadian real estate is peaking in some regions but, for those not overbuilt, stability should be better. The US Dollar might not disappear but we forecast a (50%) devaluation from the index norm at 80.00. Our technical lows might be 40.00 to 46.00. On the other hand, the Euro is a goner. Trillions and billions of bonds will go valueless. Among the first to crash are junk bonds and those of municipals. This fallout could create unemployment off the charts. Communities are cutting out thefat while some face more dire cuts like fire and police. Without police, criminals will run wild in herds. With all the printing of new and valueless currencies and bonds, inflation takes hold this fall and throughout the world. In China, it is well underway with 35% real estate inflation in Hong Kong and a primary overall nation number of 15% or, higher. Three recent quarters were reported running at 4%-6% inflation per month. When inflation reaches a rate of 50% or more per year; the definition is hyperinflation. Yet, some things remain in deflation with little or, no pricing power. Most of those things are durables having a longer life. Today, food and energy are the primary inflators. As negative as all of this stuff sounds, its not the end of the world but a world getting rougher.         This posting includes an audio/video/photo media file: Download Now |
| Silver Default Possible...Miners' Cash Flows Are Parabolic: Rick Rule Posted: 15 Sep 2011 09:14 PM PDT ¤ Yesterday in Gold and SilverThe gold price started out in slightly positive territory early in the Far East trading day on Thursday...but at 9:00 a.m. Hong Kong time, the selling began. However, the gold price was down less than five bucks by the time the London a.m. gold fix was in at 10:30 a.m. BST...which is 5:30 a.m. Eastern. Then the real selling started, with gold's low price tick coming a couple of minutes past 11:00 a.m. Eastern time. Once the selling pressure disappeared, gold rose slowly but steadily...and by 3:15 p.m. Eastern had gained back about $18 from its morning low. The gold price then proceeded to trade sideways for the rest of the electronic trading session in New York. Gold finished down $31.30 spot on the day...and net volume was a pretty chunky 200,000 contracts, give or take. The silver price was under quiet pressure through most of the Far East and early London trading session, with the real selling beginning shortly before Comex trading began at 8:20 a.m. Eastern. The low of the day...$39.24 spot...came about fifteen minutes before Comex trading ended at 1:30 p.m. From that low, the silver price recovered nicely...and 'only' finished down 84 cents. Net volume was a healthy 45,000 contracts, or thereabouts. From its Wednesday close of $40.75 in New York on Wednesday afternoon...to it's low tick of $39.24 yesterday afternoon...silver was down $1.51 spot. The gold and silver stocks gapped down at the open...with the low for the HUI coming at the low for gold, which was about one minute after 11:00 a.m. Eastern time. From there, the gold stocks climbed back to close a hair higher than when they opened. Considering the price action in the metal itself, this performance by the shares was incredible...but fits precisely into the pattern of what's been going on with the strong hands/deep-pocket buyers that have been gobbling up all the precious metal shares they can for the last three weeks. The HUI only finished down 0.79% on the day. The silver shares got hit pretty hard earlier in the day, but closed well off their lows...and Nick Laird's Silver Sentiment Index finished down only 1.37%. (Click on image to enlarge) The CME's Daily Delivery Report showed that 86 gold and 52 silver contracts were posted for delivery on Monday. Jefferies was the big short/issuer in both metals...and JPMorgan, Bank of Nova Scotia and Merrill were the long/stoppers. The link to the action is here. There were no reported changes in either GLD or SLV yesterday...and the U.S Mint's sales report showed that they sold another 42,000 silver eagles. Wednesday was another busy day over at the Comex-approved depositories. They reported receiving 1,256,037 troy ounces of silver...and didn't ship any out. Most of the action was at HSBC USA and Scotia Mocatta. The link to that action is here. Here's an interesting graph that Australian reader Wesley Legrand sent me a few days back...and it requires no further embellishment from me. Mercifully, I have very few stories for you today. There's no way that the bullion banks can get a willing party [or parties] to take over their 17+ million ounce short position in gold...and their 210+ million ounce short position in silver. Ain't going to happen. Love the buying opportunity in gold: Stephen Leeb. Charles de Gaulle predicted the US monetary crisis back in 1965. The $2 Billion UBS Incident: 'Rogue Trader' My Ass: Matt Taibbi ¤ Critical ReadsSubscribePeter Schiff's testimony to the Congressional hearing on JobsHere are two video clips of Peter Schiff at these hearings. They run about 15 minutes apiece. And, as the introduction at economicpolicyjournal.com says..."Watch these clips and you'll learn more about sound economics than you would ever get from a full semester sitting in a Paul Krugman class at Princeton." I agree totally. I also thank reader Tariq Khan for sending them along..and the link is here.  China to 'liquidate' US Treasuries, not dollarsThe debt markets have been warned. A key rate-setter for China's central bank let slip – or was it a slip? – that Beijing aims to run down its portfolio of US debt as soon as safely possible. "The incremental parts of our of our foreign reserve holdings should be invested in physical assets," said Li Daokui at the World Economic Forum in the very rainy city of Dalian – former Port Arthur from Russian colonial days. "We would like to buy stakes in Boeing, Intel, and Apple, and maybe we should invest in these types of companies in a proactive way." "Once the US Treasury market stabilizes we can liquidate more of our holdings of Treasuries," he said. This Ambrose Evans-Pritchard blog posted over at The Telegraph yesterday is courtesy of reader Roy Stephens...and it's certainly worth the read. The link is here.  UBS Has $2B Loss; Man Arrested in LondonSwitzerland's biggest bank, said it may be unprofitable in the third quarter after a $2 billion loss from unauthorized trading at its investment bank. London police arrested Kweku Adoboli, a UBS employee, in connection with the loss, according to a person with knowledge of the situation who requested anonymity. City of London police and UBS declined to identify the man. UBS management aims to "get to the bottom of the matter as quickly as possible, and will spare no effort to establish exactly what has happened." This story broke before I posted my Thursday column in the wee hours of yesterday morning...but I didn't have a useable link...and I already had too many stories as it was. This Bloomberg piece was sent to me by reader Jon Schroeder...and the link is here.  The $2 Billion UBS Incident: 'Rogue Trader' My Ass: Matt TaibbiWell, the UBS incident sure got Rolling Stone writer Matt Taibbi's knickers in a twist....and you should be warned [and the headline should give you a clue] that this blog is written in his usual 'pithy prose'. I thank Roy Stephens for sending us our first must read piece of the day...and the link is here.  Germany and France: eurozone will not force out GreeceOn Wednesday night, both Germany and France were forced to insist that Greece would not be pushed out of the eurozone amid new warnings that the single currency was poised to "explode". Chancellor Angela Merkel of Germany and President Nicolas Sarkozy of France held a conference call with George Papandreou, the Greek prime minister. Following the call, the three leaders insisted that Greece, which is still struggling to pay its debts, would not be forced to leave the single currency. But beyond telling Greece to stick to the austerity measures imposed on it by the European Union and the International Monetary Fund, the German and French leaders announced no new measures to support the eurozone. This is another Roy Stephens offering from yesterday's edition of The Telegraph...and the link is here.  Eurozone debt crisis 'in dangerous new phase' warns IMF chiefInternational Monetary Fund chief Christine Lagarde has warned that a "vicious circle is gaining momentum" in Europe and the US that could wreck attempts at a recovery and undermine rescue operations for Greece and other indebted EU countries. She said "political dysfunction" was feeding policy indecision in a "dangerous new phase of the crisis" that could make a delicate situation harder to resolve. Her comments, most of which were directed at eurozone's chief policymakers, came as the world's major central banks agreed to provide unlimited dollars to European banks to prevent a rerun of the Lehman Brothers collapse three years ago. This article was posted in yesterday's edition of The Guardian...and is Roy Stephens last offering of the day. The link is here.  Charles de Gaulle predicted the US monetary crisis back in 1965In February 1965, former French President General Charles de Gaulle predicted, during a press conference, the monetary crisis that the USA has brought the world today. At the end, he asked for the return to a gold standard. Here's the 1:52 youtube.com video clip of that portion of the press conference. If you haven't seen it before, it's an absolute must watch. I remember the day it happened, because our history teacher brought it up in class the next day. I thank Washington state reader S.A. for sharing it with us...and the link is here.  Silver Default Possible...miner's cash flows are parabolic: Rick RuleHere's a Rick Rule blog that Eric King slid into my in-box very late last night. The headline pretty much tells all...and I'd guess that what he has to say is a must read. The link to the King World News blog is here.  |
| Gold-Backed Dollar Puts ‘Fair Value’ at $10,000 an Ounce Posted: 15 Sep 2011 09:14 PM PDT  The "fair value" for gold exceeded $10,000 an ounce in June, according to calculations by Dylan Grice, a global strategist at Société Générale. That value is based on the price at which each dollar in the U.S. monetary base would have been backed by an ounce of the precious metal. The formula shows gold has the potential to jump more than fivefold as its price catches up with the surging amount of money in the U.S. economy. This Bloomberg piece was sent to me by reader Matthew Nel in the wee hours of this morning...and the link is here. |
| Love the buying opportunity in gold, Leeb tells King World News Posted: 15 Sep 2011 09:14 PM PDT  Fund manager Stephen Leeb today told King World News yesterday that he's unfazed by gold's decline. The paper money world is falling apart, he says, and the lower gold goes, the more it's a buying opportunity. All the same, a few more buying opportunities like this won't make gold investors quite as happy as Leeb seems to be. Maybe he wouldn't be quite as happy about gold's prospects if his thinking encompassed surreptitious intervention by central banks. |
| Silver Default Possible...miner's cash flows are parabolic: Rick Rule Posted: 15 Sep 2011 09:14 PM PDT  Here's a Rick Rule blog that Eric King slid into my in-box very late last night. The headline pretty much tells all...and I'd guess that what he has to say is a must read. The link to the King World News blog is here. |
| Charles de Gaulle predicted the US monetary crisis back in 1965 Posted: 15 Sep 2011 09:14 PM PDT  In February 1965, former French President General Charles de Gaulle predicted, during a press conference, the monetary crisis that the USA has brought the world today. At the end, he asked for the return to a gold standard. Here's the 1:52 youtube.com video clip of that portion of the press conference. If you haven't seen it before, it's an absolute must watch. I remember the day it happened, because our history teacher brought it up in class the next day. I thank Washington state reader S.A. for sharing it with us...and the link is here. |
| Eurozone debt crisis 'in dangerous new phase' warns IMF chief Posted: 15 Sep 2011 09:14 PM PDT  International Monetary Fund chief Christine Lagarde has warned that a "vicious circle is gaining momentum" in Europe and the US that could wreck attempts at a recovery and undermine rescue operations for Greece and other indebted EU countries. She said "political dysfunction" was feeding policy indecision in a "dangerous new phase of the crisis" that could make a delicate situation harder to resolve. Her comments, most of which were directed at eurozone's chief policymakers, came as the world's major central banks agreed to provide unlimited dollars to European banks to prevent a rerun of the Lehman Brothers collapse three years ago. |
| CHART – Bloomberg “Gold's Fair Value Is $10000 An Ounce” Posted: 15 Sep 2011 09:03 PM PDT Gold has the potential to jump more than fivefold as the precious metal's price catches up with the surging amount of money in the U.S. economy, according to Dylan Grice, a global strategist at Societe Generale SA. CLICK IMAGE TO ENLARGE The bottom panel tracks the value of U.S. gold holdings, based on the spot price, as a percentage of the monetary base for the 50-year period. August's proportion was 18 percent of the $2.66 trillion in the economy. The latter figure was more than triple the amount three years earlier, reflecting efforts by the Fed to spur economic growth. "There is a demand for an honest currency," Grice wrote. "The last time honesty was perceived to be so scarce — in the 1970s gold mania — the dollar was over-backed by gold. If it happened then, why not again?" U.S. gold holdings peaked at 131 percent of the monetary base in January 1980, when spot gold climbed to $850 an ounce after a more than 14-fold advance in the preceding decade. The high equals about $2,330 an ounce in today's dollars, according to a Labor Department calculator. Read more @ Bloomberg |
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