Gold World News Flash |
- Import Products Made In China? Do You Have To Fill A Whole Container? – YouTube
- Make Money Online With International Trade – YouTube
- Tax Havens – The Moral Case for Tax Havens – YouTube
- Tax Slave or Sovereign Individual? – YouTube
- Ambrose Evans–Pritchard beats about the bush
- The Secret to Making Money by starting a small business. – YouTube
- Small Business Tips : How to Open a Small Business – YouTube
- How to Open a Business Bank Account Online – YouTube
- Why To Use IncNow to Form Your Delaware Corporation or LLC – YouTube
- Visualizing Silver As An Investment
- Gold or a gold ETF?
- High Margin Requirements Are Killing The Silver Market
- Europe Is Still Broken: Evidence & Commentary
- Jim's Mailbox
- Any Questions As To WHY Germany Wants Its Gold?
- Where Did All The Jobs Go?
- Without asking a single question, The Economist is sure that gold does nothing
- As Silver Shortage Intensifies, More Retail Products Disappear
- 80% of 14 Commodities Rose in 2012 but 1 Tumbled 17% ? Guess Which One
- 80% of 14 Commodities Rose in 2012 but 1 Tumbled 17% – Guess Which One
- Presenting The S&P500's 50 Point Surge Courtesy Of The Illegal "Geithner Leak"
- CNBC analysts start wondering if central banks still have their gold
- Keiser Report examines Germany's gold repatriation
- Rising Gas Prices Threaten Economy Again, Obama Needs to Thwart Evil Speculators with SPR Release
- 50 Reasons to Seriously Consider Becoming a Prepper – Financially or Otherwise
- Guest Post: Is The Gold Price Dependent On China?
- Three Popular Delusions for 2013
- Buying Silver at $100 and the Rebirth of Counterfeiting
- The Trillion Dollar Coin: What You Really Need to Know
- WE DON'T HAVE A SPENDING PROBLEM
- This Past Week in Gold
- How Can The Gold Price Drop In A Matter Of Milliseconds?
- Buba’s Gold
- Gold and Silver Bullion Are On the Move
- German Gold Lessons for Private Investors
| Import Products Made In China? Do You Have To Fill A Whole Container? – YouTube Posted: 19 Jan 2013 10:04 PM PST Check our website daily at... [[ This is a content summary only. Visit http://www.figanews.com for full Content ]]  | ||||||||||||||||||||||||
| Make Money Online With International Trade – YouTube Posted: 19 Jan 2013 10:02 PM PST Check our website daily at... [[ This is a content summary only. Visit http://www.figanews.com for full Content ]]  | ||||||||||||||||||||||||
| Tax Havens – The Moral Case for Tax Havens – YouTube Posted: 19 Jan 2013 09:45 PM PST Check our website daily at... [[ This is a content summary only. Visit http://www.figanews.com for full Content ]]  | ||||||||||||||||||||||||
| Tax Slave or Sovereign Individual? – YouTube Posted: 19 Jan 2013 09:42 PM PST Check our website daily at... [[ This is a content summary only. Visit http://www.figanews.com for full Content ]]  | ||||||||||||||||||||||||
| Ambrose Evans–Pritchard beats about the bush Posted: 19 Jan 2013 09:30 PM PST by Hugo Salinas Price, Gold Seek:
In the article he refers to the "(old) Gold Standard dynamic at work with all its destructive power, and the risk of sudden ruptures always present." I take it that he refers to the pre-WW I Gold Standard, and the financial chaos that broke out in 1930, to which he refers as "the destructive power" of the Gold Standard. That chaos should not be attributed to the Gold Standard as it existed, but to the previous expansion of credit in violation of the rules of the Gold Standard. The pain of the 1930's was the correction which the Gold Standard imposed upon the financial diddling with credit expansion which the Powers had adopted; what was "destructive" was their policy of credit expansion beyond savings. If you stick your finger in the fire, don't blame fire for its "destructive power"; just refrain from doing that. | ||||||||||||||||||||||||
| The Secret to Making Money by starting a small business. – YouTube Posted: 19 Jan 2013 09:14 PM PST Check our website daily at... [[ This is a content summary only. Visit http://www.figanews.com for full Content ]]  | ||||||||||||||||||||||||
| Small Business Tips : How to Open a Small Business – YouTube Posted: 19 Jan 2013 09:12 PM PST Check our website daily at... [[ This is a content summary only. Visit http://www.figanews.com for full Content ]]  | ||||||||||||||||||||||||
| How to Open a Business Bank Account Online – YouTube Posted: 19 Jan 2013 09:08 PM PST Check our website daily at... [[ This is a content summary only. Visit http://www.figanews.com for full Content ]]  | ||||||||||||||||||||||||
| Why To Use IncNow to Form Your Delaware Corporation or LLC – YouTube Posted: 19 Jan 2013 09:03 PM PST Check our website daily at... [[ This is a content summary only. Visit http://www.figanews.com for full Content ]]  | ||||||||||||||||||||||||
| Visualizing Silver As An Investment Posted: 19 Jan 2013 08:35 PM PST from Zero Hedge:
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| Posted: 19 Jan 2013 08:30 PM PST from Gold Money:
It is always important to use the correct tools for the work you intend to accomplish. That reliable adage is true whether you are building a house or an investment portfolio. There are many tools available to buy gold, which is the bedrock of any portfolio. These include coins, bars, futures contracts, certificates, options, and what has recently perhaps become the most popular instrument of all, the gold exchange-traded fund – the so-called ETF. But which of these many tools is the right one for you? The answer to this question begins by first determining your objective. In other words, it is necessary to identify the reasons you want to own gold. Once these are clearly understood, the right tools can then be chosen to enable you to meet the objective you intend to accomplish by owning gold, of which there are two. | ||||||||||||||||||||||||
| High Margin Requirements Are Killing The Silver Market Posted: 19 Jan 2013 07:36 PM PST
By EconMatters The CME raising margins for Silver Futures to such a degree that relative to market price, futures multiplier, and physical demand by consumers is just too high has basically killed the silver market. Throw in the fact that many brokerages have even higher margins than the exchange margins, and outside of a fed announcement, the silver market has all but dried up, when compared to the much more active physical market for silver.
The Silver contract which closed Friday at $31.93 an ounce has an initial margin of $16,940 with an overnight margin of $11,000 at a typical brokerage.
Now I know this market went through a very volatile trading phase, and with all the turmoil regarding Europe and central bank decisions around the world, it was probably a good idea to raise margins beyond normal percent driven formulaic metrics, until things settled down given the number and magnitude of the trading losses experienced at many brokerages.
As in, when brokerages institute higher margins than exchanges this tells you how many accounts were blown out with the crazy gyrations in the silver market when it was having 20% swings in a week.
I know margins have come down from the $21,000 to $26,000 level as the precious metals markets have settled into the new monetary landscape, but silver margins are still too high relative to the volatility and price in the contract.
How do I know this? The reason is that the silver futures market is not reflective of the actual demand in the physical silver market where at times the silver physical market is priced higher than the futures market.
Furthermore, consumers just cannot get enough of those American Eagle silver coins. I reference the fact that the mint has sold out of silver coins again.
In addition, with Platinum surging, at a higher price than Gold for a brief period this week due to mining concerns and stronger economic data of which is important due to the industrial use for the metal.
Well, silver plays the happy medium ground in being a store of value more than Platinum, but more of an industrial metal than Gold.
I believe the Silver market is mispriced relative to the price of Gold, Platinum, and the market dynamics in the physical space regarding Silver demand by the consumer.
Therefore, what is a fair price for Silver? What price do you think it should be trading at if margins were the right amount? First of all, I think the correct margins for the silver futures contract should be $9000 per contract with the overnight maintenance amount of $7200.
And given this margin level, and a healthier participation level, I envision silver trading around $42 to $45 dollars an ounce. Moreover, the brokerages need to have the same margin levels as the exchanges.
There are other ways to manage risk for the clients and the brokerages through comprehensive liquidation procedures and account monitoring.
As it is always bad when electronic markets are so constrained that they don`t adequately reflect the demand in the physical market.
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| Europe Is Still Broken: Evidence & Commentary Posted: 19 Jan 2013 06:42 PM PST Over the past few months, the perception has been that the risk of a meltdown in Europe (characterized by the loss of market access for Spain and Italy) has grown increasingly remote. The relative calm comes courtesy of the ECB which conventional wisdom has it, began acting "like a real central bank" in September when it announced it was willing to throw eurozone taxpayers' wallets behind theoretically unlimited purchases of Spanish and/or Italian bonds. This promise of course, was meant to discourage so-called "bond vigilantes" (otherwise known as investors who know a bad deal when they see it) from "speculating" on rising periphery bond yields. As it turns out, the effect of the as yet untested Draghi put has been dramatic. Spanish and Italian 10s have tightened by a ridiculous 240 basis points since late July. The problem is that a theoretical promise to purchase unlimited amounts of bonds in the secondary market does absolutely nothing to fix the bloc's myriad and endemic structural problems. As Diapason's Sean Corrigan recently noted, "...nothing much has been done there beyond persuading traders that the line of least resistance lies in not calling Draghi's bluff when he insists that sovereign spreads must not widen." All of this of course ignores the fact that widening sovereign spreads are the market's way of punishing the fiscally irresponsible in the same way short sellers serve as a kind of check on corporate recklessness. In any event, the gullible investing public gets duped by headlines touting "successful" Greek debt buyback programs and "robust" Spanish bond auctions (nevermind the foreboding CACs) and as such, the eurozones ever-present laundry list of problems has been papered over. Make no mistake, the crisis is still alive and well. In Greece for instance, it should have been abundantly clear from the time the recent debt buyback was proposed, that the program put the country's banks in an absurd situation: if they participated, they would lose the future stream of interest payments on the government bonds they owned, but if they didn't participate, they risked jeopardizing the program and, in the process, their own recapitalization by throwing a veritable monkey wrench in the long-delayed next tranche of international aid. Sure enough, earlier this month, Ekathimerini reported that as a result of the buyback, the country's four systemically important banks are facing a capital shortfall 1.5 billion euros greater than would otherwise have been the case were it not for the buyback scheme. Relatedly, Reuters said Saturday that the IMF now expects that between 2015 and 2016, Greece will need somewhere between 5.5 billion and 9.5 billion euros to avoid bankruptcy. The problem: as usual, no one knows where the money is going to come from. Elsewhere, the ECB's policies have failed to correct the myriad disparities between the core and the periphery, a point made clear in a recent presentation from a Goldman conference in London. For instance, while the ECB's policies have succeeded in increasing the money supply (M3), lending volumes to the private sector have failed to respond: Similarly, monthly flows data shows corporate borrowing is especially weak: More specifically, the following charts show a persistent divergence between the core and Spain/Italy in terms of both overall financial conditions (a combination of real 3-month interest rates, real long-term rates, and real trade-weighted value of the exchange rate and equity market capitalization of GDP) and interest rates on business loans: Lastly, note that Germany is still funding the periphery as illustrated by the fact that TARGET 2 (everyone's favorite bailout mechanism masquerading as a settlement system) claims of the Bundesbank on the rest of the euro have begun to rise again after a brief respite. All in all, the ECB has failed to correct or really to even amerliorate the deep, persistent imbalances that are so pervasive across the currency union. Don't expect this situation to improve anytime in the near future. It would seem that a broken monetary policy transmission channel may turn into an EMU mainstay, hindering credit expansion and generally curtailing Mario Draghi's ability to effectively arrest the crisis for the foreseeable future. If you still have doubts as to the intractable nature of the crisis, just look at Goldman's projections for GDP contraction in Spain and Italy in 2013: -1.7% and -.08% respectively. Ignore the parroting of the mainstream financial media... nothing is fixed in Europe. Charts: Goldman | ||||||||||||||||||||||||
| Posted: 19 Jan 2013 04:35 PM PST Dear Jim, Have a nice weekend, Lars Schall
Jim, Since January 20th falls on a Saturday this year, The Central Bank of the Russian Federation updated their website with December's data yesterday. It showed that they added 600,000 ounces of gold to their official reserves during that month. If my back-of-the-envelope math is Continue reading Jim's Mailbox | ||||||||||||||||||||||||
| Any Questions As To WHY Germany Wants Its Gold? Posted: 19 Jan 2013 02:36 PM PST [The Bundesbank] isn't getting what they want, the Federal Reserve is telling them what they can have. The fact that they're doing it over 7 years instead of 7 weeks, to me, is just an indication that that gold probably isn't in the Federal Reserve and the Federal Reserve doesn't want to have to go out and buy it overnight to fulfill the German demand. They are trying to stretch it out as long as possible in order to keep gold prices controlled. James Turk on King World NewsYou can listen to the above interview here: LINK (highly recommended). Mr. Turk's viewpoint echoes that of many of us who have studied the gold market for quite some time, including the paper vs. physical issue which is at the heart of the topic. With that said, the debate is now getting into the mainstream media. I was quite shocked to see that CNBC enabled this very debate to air on its programming, especially given that CNBC had GATA's Bill Murphy on in February 1999 - only to never invite him back again after he discussed some of the issues in the video below from yesterday: One thing that has taken me by surprise are the sudden and unexpected developments that have instantly thrust the physical vs. paper issue into the forefront. The Bundesbank event followed by the U.S. Mint announcement has made a much wider audience more open minded about the issues surrounding credibility of bullion bank gold/silver depositories and the ability to verify whether or not the gold/silver that is supposed to be in those depositories can be fully accounted for on an allocated basis. Certainly the circumstances surrounding the Bundesbank's decision and the length of time being given to fulfill it's request adds credibility to the view that western Central Bank and bullion bank depositories do not have the amount of gold they are supposed to be holding on behalf of others... | ||||||||||||||||||||||||
| Posted: 19 Jan 2013 02:06 PM PST Over the last decade, the economy (and implicitly the jobs of US citizens) have suffered significant swings. The chart below, however, clarifies exactly where the 'missing' jobs have gone (and with a slight silver-lining) where we have gained jobs. As is clear, the Oil & Gas industry has seen its total number of employees rise over 40% in the last ten years - while Manufacturing and Construction industries have each lost around 20% of the total employees. Of course, net net, given the precipitous drop in labor force participation, the US is losing the 'employed' dramatically over this period as the incentive (as we noted here) to work and demand for work (in a cost-cutting ZIRP environment) remain negligible.
While the boom in Oil & Gas jobs that is so clear in the chart above, it would appear that whether through regulation, market pricing, or 'over-fishing' the growth in rig-counts (as proxied by Baker Hughes below and noted by Reuters late last year) is now falling year-over-year (though well counts are rising) - it seems we need another 'price' boom in Oil and NatGas to get things going again - but of course that will hurt the consumer and implicitly the mainstay of the US economy.
and in case it was not clear where all those jobs went (if not swallowed up by productivity enhancing robots) - the following chart should make things clear (over 200 years of manufacturing shifts around the world)...
Charts: Goldman Sachs and Bloomberg | ||||||||||||||||||||||||
| Without asking a single question, The Economist is sure that gold does nothing Posted: 19 Jan 2013 01:50 PM PST 12:56p PT Saturday, January 19, 2013 Dear Friend of GATA and Gold: For journalistic arrogance and disinformation it is always hard to top The Economist, which never asks questions but rather simply presumes that, by definition, it knows. Such was the case again this week as the magazine's M.C.K. commented obliviously on the Bundesbank's attempt to repatriate a little of its gold vaulted abroad. In a little essay headlined "Monetary Economics with a Vengeance" -- http://www.economist.com/blogs/freeexchange/2013/01/central-bank-gold-re... -- The Economist recalls the 1995 movie "Die Hard with a Vengeance," which involves an attempt to loot and pretend to destroy the gold held at the Federal Reserve Bank of New York. "To understand why the threat to destroy the gold was meaningless," The Economist writes, "it helps to understand what the inert metal was doing before it was stolen (basically nothing). Yesterday's statement from the Bundesbank tells you all you need to know: "'With this new storage plan, the Bundesbank is focusing on the two primary functions of the gold reserves: to build trust and confidence domestically, and the ability to exchange gold for foreign currencies at gold trading centres abroad within a short space of time.' ... Dispatch continues below ... ADVERTISEMENT How to profit in the new year with silver -- Future Money Trends is offering a special 16-page silver report with our forecast for 2013 that includes profiles of nine companies and technical analysis of their stock performance. Six of the companies have market capitalizations of less than $800 million and one company has a market cap of only $30 million. The most exciting of these companies will begin production in a few weeks and has a market cap of just $150 million. Half of all proceeds from the sale of this report will be donated to the Gold Anti-Trust Action Committee to support its efforts exposing manipulation and fraud in the gold and silver markets. To learn about this report, please visit: http://www.futuremoneytrends.com/index.php?option=com_content&id=376&tmp... "Gold reserves are a relatively convenient way to maintain access to foreign currency in a pinch, but their value is mostly symbolic. For better or worse, contemporary fiat currency systems do not require bullion in order to function. What they do require is faith. 'Credit' and 'credible' come from the same root word, after all. The Bundesbank's decision suggests that some in Germany are worried about the public's continued trust in the euro as a currency suitable for conducting transactions and making investments. That would be a serious problem, to put it mildly. Moving hundreds of tonnes of a shiny, rust-resistant metal from a vault in Paris to a vault in Frankfurt could be a worthwhile decision if it helps secure German acquiescence to Mario Draghi's monetary policies." Yes, just trust the Bundesbank to calm the great unwashed; nothing to see here; please move along. Except, of course, Western central bank gold reserves have not been doing "basically nothing" and their value is far more than "mostly symbolic." Rather gold's value is the value of all capital, labor, goods, and services in the world, because gold determines those valuations. Even when central bank gold reserves have been seemingly just sitting around in their vaults they long have been surreptitiously leased, swapped, collaterized, hypothecated and rehypothecated, and used for secret intervention in the currency markets, of which the gold market is a big part, in order to rig those markets in support of currencies and government bonds and to suppress interest rates. In these arrangements central bank gold reserves likely have been, to put it politely, overpledged as they have backstopped the Western fractional-reserve gold banking business. Gold ideologues like to say that "governments can't print gold," but in fact they have printed probably thousands of tonnes of it and much of the world has been ready to accept paper claims to gold that doesn't actually exist. Conversion of paper claims to metal that has been overpledged is likely the story behind the Bundesbank's tiptoeing away from the gold price suppression scheme. But The Economist doesn't have to rely on GATA's account of this scheme. The magazine could always attempt journalism and make its own inquiries. The magazine could ask Western central banks for an accounting of their gold swaps and leases and an inspection of their gold accounts at the Bank for International Settlements, whose main function seems to be to intervene in the gold market on behalf of its members and which even advertises its gold market intervention services: http://www.gata.org/node/11012 Or The Economist could query Western central banks about the confidential 1999 memorandum prepared by the staff of the International Monetary Fund reporting that Western central banks object to disclosing their gold swaps and leases because doing so would impair their secret market interventions: http://www.gata.org/node/12016 Each central bank could be asked whether that memorandum applies to it and whether in the interest of transparency it will make all its gold-related records available to the public. Of course The Economist will attempt none of that. It knows everything without having to ask questions. That's why it's The Economist. CHRIS POWELL, Secretary/Treasurer Join GATA here: Vancouver Resource Investment Conference * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: 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: ADVERTISEMENT GoldMoney adds Singapore vaulting option In addition to its precious metals storage facilities in Hong Kong, Switzerland, Toronto, and the United Kingdom, now with GoldMoney you can store gold and silver in Singapore in a high-security vault operated by Brink's Singapore Pte Limited. To celebrate the launch of this storage option, GoldMoney is offering a discount on buy and exchange fees at this vault for any orders above US$10,000 (or the equivalent) until January 31, 2013. Tthe gold buy rate is 0.98%, while the silver rate is 1.99%. Metal exchanges into Brink's Singapore will also be discounted for this period and will be charged at 0.78% for gold and 1.75% for silver. Simply place your order online and the above rates apply automatically until January 31, 2013, 15.00 UK time. To find out more about the new vault, please visit: http://www.goldmoney.com/singapore?gmrefcode=gata GoldMoney customers can take delivery of any number of gold, silver, platinum, and palladium bars from any GoldMoney vault, as well as personally collect their bars stored in the Hong Kong, Switzerland, and U.K. vaults. It's easy to open an account, add funds, and liquidate your investment. For more information, visit: http://www.goldmoney.com/?gmrefcode=gata | ||||||||||||||||||||||||
| As Silver Shortage Intensifies, More Retail Products Disappear Posted: 19 Jan 2013 01:42 PM PST  Today 41-year veteran Bill Haynes told King World News the silver shortage is becoming more evident and it is now impacting premiums of retail silver products his company sells. Haynes stated, "... what we're seeing in the premium action suggests that (silver) is going into short supply." Haynes also said it is causing inventory at wholesalers in the silver market to dry up. He went to discuss what the unprecedented buying will mean going forward. Here is what Haynes had to say: "It seems this week we had existing clients adding to their positions. It's amazing, these are people that (already) own gold at $300, $400, silver below $10, and they are still adding to their positions at these levels." This posting includes an audio/video/photo media file: Download Now | ||||||||||||||||||||||||
| 80% of 14 Commodities Rose in 2012 but 1 Tumbled 17% ? Guess Which One Posted: 19 Jan 2013 01:24 PM PST [B][COLOR=#0000ff][U]Register [/B][/U]to[B] "Follow the [U]munKNEE"[/U] [/B][/COLOR]and automatically receive all articles posted Our ever-popular Periodic* Table of Commodity Returns has been updated through 2012. It shows a decade of results across 14 different* commodities, providing strikingly rich information in a very insightful format. So writes Frank Holmes ([url]www.usfunds.com[/url]) in edited excerpts from his original article* entitled 4 Sensational Facts About Gold Investing That You Might Not Know. [INDENT]This article is presented compliments of [B][COLOR=#ff0000]www.FinancialArticleSummariesToday.com [/COLOR](A site for sore eyes and inquisitive minds) and [COLOR=#ff0000]www.munKNEE.com[/COLOR] (Your Key to Making Money!) and may have been edited ([ ]), abridged (…) and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. Please note that this paragraph must be included in any article re-postin... | ||||||||||||||||||||||||
| 80% of 14 Commodities Rose in 2012 but 1 Tumbled 17% – Guess Which One Posted: 19 Jan 2013 01:11 PM PST Register to "Follow the munKNEE" and automatically receive all articles posted Our ever-popular Periodic Table of Commodity Returns has been So writes Frank Holmes (www.usfunds.com) in edited excerpts from his original article* entitled 4 Sensational Facts About Gold Investing That You Might Not Know.
Holmes goes on to say in further edited excerpts: 11 Commodities Rose in Value Last year, 11 commodities rose in value, with wheat rising as the top crop after seeing a significant decline in 2011. It was a similar rags-to-riches story for the next few leaders: lead, zinc, natural gas and platinum all climbed double digits in 2012 after falling in 2011. 3 Commodities Declined in Value
As you can see from the Periodic Table of Commodity Returns, commodities often have wide price fluctuations from year to year given the many factors affecting supply and demand, such as government policies, union strikes, and currency volatility. When it comes to commodities and commodity producers, many investors "leave the driving" to active money managers who understand these specialized assets and the global trends affecting them. Take gold and gold companies, for example. After investing in the mining industry for decades, we've taken note of several facts about gold that continue to surprise our investors. Here are four of the latest: 1. Gold Has Been A Consistent Performer Over The Decade While gold did not shoot the lights out in 2012, its bull rally goes on. It ended the year up 7%, making it a phenomenal 12th year in a row that gold…[has risen] in value. In a special gold bar version of the Periodic Table below, you can easily see gold's rotation among the commodities from year to year. What's fascinating is the three-year rising pattern relative to other commodities that emerges when you focus on the bars. Over the past 10 years, gold has risen in position compared with the others for three years in a row, then fallen in relative position in the fourth year before repeating the cycle. Will it follow the same pattern and be in the top half of the Periodic Table in 2013? 2. Gold Should Remain A Hot Commodity In 2013 Considering the global easing cycle and the continuous running of monetary printing presses, I believe the Fear Trade will continue to be a driver of gold over the next several months. Take a look at the projected rise in the balance sheets as a percent of GDP from the European Central Bank, the Bank of Japan, the Federal Reserve and the Bank of England over 2013. The ECB is estimated…[that it will] have a balance sheet that is nearly 50% of its GDP by the end of the year. The Bank of Japan is right behind the ECB, with its balance sheet projected to be nearly 35% of GDP. As Mike Shedlock of Mish's Global Economic Trend Analysis said, "The race is on to see which central bank can load up its balance sheet with the most garbage the fastest." Ian McAvity also summed it up well in his Deliberations on World Markets: "Gauging from the panicky actions of the major central banks, I would still prefer to own gold than their paper." With the monetary printing presses warm and real interest rates in the red, gold will likely glimmer for another year. 3. Gold Is The Least Volatile Commodity On The Table Given the fact that every gold move is analyzed and dissected by the media, it may surprise you that this precious metal was actually the least volatile of the 14 commodities. Its rolling 12-month standard deviation (sigma) over the past 10 years has been 14%, compared to the most volatile commodity, (nickel), which has a rolling 12-month sigma of nearly 60%. Here's another way to look at the surprisingly low volatility of gold. Take a look at the frequency of 10% moves up or down over any 20 trading days. The metal is only slightly more volatile than the S&P 500. Gold companies, crude oil and the MSCI Emerging Markets Index have all experienced more up and down moves than gold.
Whereas card counting at a Blackjack table can get you booted from casinos and barred for life, as an investor, you are allowed to take full advantage of counting the 10% moves. Over 2013 you can count on gold moving in either direction, so even if the metal experiences extreme volatility to the downside, regardless of what the headlines report, any dip in price offers potential buying opportunities. Keep in mind though, that it's prudent to invest only 5 to 10 percent of your total portfolio in gold and gold stocks. 4. The Last 4 Years Were Better Than You Thought …As you can see below, the NYSE Arca Gold BUGS Index (HUI) experienced quite a gain, increasing 52.1% on a cumulative basis since the beginning of 2009. While excellent it pales in comparison to the 89.9% in Gold it…considerably outperformed the iShares Core Total US Bond ETF which realized only 22.4% during the same period.
*http://www.usfunds.com/investor-resources/investor-alert/4-sensational-facts-about-gold-investing-that-you-might-not-know/
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3. Grantham: Paradigm Shift Taking Place In Commodity Prices
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6. The "Ins" and "Outs" of Investing in Commodities
7. Certain Hard Commodity Prices Will Drop By As Much As 50% By 2015 – Here's Why
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9. Interested In What Oil Prices Will Be In 2013 – and Why? Then This Article Is For You
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| Presenting The S&P500's 50 Point Surge Courtesy Of The Illegal "Geithner Leak" Posted: 19 Jan 2013 01:09 PM PST Yesterday we broke the news of what is prima facie evidence, sourced by none other than the Federal Reserve's official August 16, 2007 conference call transcript, that then-NY Fed president and FOMC Vice Chairman Tim Geithner leaked material, non-public, and very much market moving information (the "Geithner Leak") to at least one banker, in this case then Bank of America CEO Ken Leiws, in advance of a formal Fed announcement - an act explicitly prohibited by virtually every capital markets law (and reading thereof). It was refreshing to see that at least several other mainstream outlets, including Reuters, The Hill and the NYT, carried this story which is far more significant than Season 1 of Lance Armstrong's produced theatrical confession and rating bonanza. It is notable that Richmond Fed's Jeff Lacker who made the inadvertent (or very much advertent) disclosure has not backed down from his prior allegation and told the NYT yesterday that "My understanding was that President Geithner had discussed a reduction in the discount rate with these banks in connection with these initiatives." What, however, the mainstream media has not touched upon, yet, is just how profound the market response to the Geithner Leak was, and by implication, how much money those who were aware of what the Fed was about to do made. Perhaps, it should because as we show below, the implications were staggering. But perhaps what is even more relevant, is why the Fed's previously disclosed details of Mr. Geithner's daily actions at the time, have exactly no mention of any of this. Backstory Before we get into the prime of today's narrative, a quick detour. For those who may not remember, early August 2007 was a very tumultuous time in the markets. On one hand, it marked the all time highs of the S&P. On the other, August is when the cracks in the facade started to become apparent to all, even the Fed, following what is now known as the quant meltdown, in which quantitative strategies suddenly stopped working and led to a brief but notable market crash, one which caught the Fed's attention. The immediate result of this major market swoon was not one, but two ad hoc FOMC conference calls, the first on August 10, and the second on August 16. The first one was more of a brainstorming session held at 8:45 am on Friday, in advance of a 9:15 generic market supporting statement by the Fed (full text here), whose purpose was, in the words of Chairman Bernanke, that "we're just saying that we are here, we are going to try to maintain the fed funds rate at 5¼ percent, we will provide adequate reserves, and we're going to try to work against any remaining stigma associated with borrowing at the discount window." What is important about the first call is where Bernanke left it, namely with a direct preview of what was about to come next. To wit:
That point came a few days later, when the disturbance in the markets continued and when the Fed felt compelled to hold yet another conference call not a week later, in which the Bernanke proposal to cut the discount rate spread to the fed funds rate was enacted, and the margin was cut in half from 100 bps to 50 bps. The formal announcement of the decision to do this took place at 8:00 am on August 17 and was worded as follows:
The statement was the result of the previous day's (August 16, 2007) conference call deliberations which took place at 6:00 pm Eastern. And while the 37 page transcript provide much color in terms of the Fed's misreading of what was happening in the markets (in this case several computers going haywire, a faux pas that would only be matched by the January 21 2008 unprecedented and unscheduled 75 bps cut in response to Jerome Kerviel's overnight futures trading fiasco, what is particularly relevant to this story is a statement by then Fed governor Donald Kohn who said...
... as well as a statement by none other than Tim Geithner who explained how the banks and other "market participant" institutions are acting and thinking at this troubled time, as follows:
What these two extracts confirm is that it was expected and well-known, after all it was "obvious", that the banks can not have advance knowledge of what the Fed would announce in just 12 short hours. Yet it is the latter that is of particular attention, and we are certain the Department of Justice and the SEC, are clearly ahead of us here, because it comes from none other than the person who it now is clear was the source of the leak. The Geithner Leak Those who happened to have the misfortune of trading stocks on August 16, 2007, and especially those who were short the stock market just because they saw the writing on the wall - writing that would crush the S&P to 666 in one and a half short years and lead to the failure or consolidation of half of America's banking system - remember that day very well. What happened on August 15, and continued through the 16th was an aggressive bout of selling, that took the S&P from 1390 to 1360 at the close of the prior day trading day, and subsequently sent it lower by another 30 points to 1330 at just about 2 pm Eastern. What happened next would have otherwise remained a mystery, if not for yesterday's declassification of the Fed's 2007 transcripts. Because suddenly, out of nowhere, an unprecedented bout of buying started with no news to serve as a catalyst. The buying sent the S&P soaring by some 50 points (!) in the span of an hour. Once again - there was no market-moving news to explain this move. At least no publicly disclosed market-moving news. Now we know whose job it was to unleash the buying spree at precisely 2:00 pm on that Thursday. His name: Timothy Franz Geithner. And we know this because Jeffrey Lacker knows this. From the August 16 transcript:
This exchange took place some time after 6:00 pm on Thursday, and some time after the 50 points ES ramp had taken place "out of nowhere." In other words, not only did the leak that many FOMC members (including, humorously, Tim Geithner) were concerned about take place, but it was none other than the Geithner Leak to at least Ken Lewis, and who knows how many other bank CEOs, which we also now know made the rounds among those bank trading desks who were privy to its confidential and illegal market moving content at just after 2:00 pm on that day. For those who need a visual reminder of just what happened on August 16 2007, here it is: Many shorts ended up being carted out of the front door that day, unsure what has just happened. Sure enough, the next day at 8:00 am the Fed did what it had decided the previously it would do, and announce the 50 bps cut to the discount rate to fed funds rate spread. The market response was just as blistering as the rest of the market piggy backed: To summarize what happened for all those who were too stunned from the day's rapid events, the S&P futures moved from a low of 1320 (and 1330 at the 2:00 pm moment that the market saw a mysterious "invisible hand" pushing it higher), all the way to well over 1410 the next day: an unprecedented 90 ES point move in a few hours! The reason: the Fed's market moving announcement, as well as the Geithner Leak at just around lunch time on August 16th. The Fed's Records We now know what the illegal catalyst was for the massive market surge on the afternoon of August 16: Tim Geithner leaking what the Fed was about to do to the rest of his banker colleagues: a leak that breaches every possible law and rule. So in an attempt to cement this fact with concrete official evidence, we went to the source: the New York Fed's own calendar of what Tim Geithner was supposedly doing on August 16th. We have access to this thanks to an April 2009 FOIA request by the New York Time's Gretchen Morgensen. What the FOIA revealed to the NYT and the world, was 658 pages of daily events that Tim Geithner was engaged in, in the period from 2007 to 2009. Supposedly, this was a complete list of his daily events, and phone calls. What the daily schedules show is that between August 8 and August 20, 2007 Tim Geithner was supposed to go on vacation to Cape Cod, from where he participated telephonically on at least the August 10 conference call. It appears that Geithner ended his vacation prematurely, and was back in the office at 33 Liberty on August 13: We fast forwarded to that fateful day - August 16 - when Tim was holding all these phone calls with Ken Lewis, and who knows who else, to see what, according to the Fed's official records, Tim Geithner was doing. We find... ... nothing! Actually no, we learn that at 5:30 am Geithner spoke on the telephone to then-BOJ Governor Toshihiko Fukui. And that was the only direct telephonic conversation Geithner had that day, at least according to the Fed's own internal records. Between the 8:30 am "teleconference with Board of Governors" and the 4:00 pm "Markets Status Meeting", Tim Geithner apparently did exactly nothing. We now know that is not the case, as we know that he spoke to at least one Ken Lewis in the day(s) before the August 17th announcement. We certainly don't know who else he spoke to, to leak material, non-public and market moving information. Perhaps it is time for a stronger FOIA request, maybe this time from someone like Bloomberg. Because we are 100% certain that if Bloomberg's Mark Pittman was still alive he would be all over this. We are confident at least one reporter at the Bloomberg newsroom is willing to carry on the Pittman legacy and find out why the New York Fed has no official records of what is arguably the most important time block of Tim Franz Geithner's daily calendar: his daily leaks of material Fed information to Bank CEOs. Or perhaps this particular conversation was on Geithner's cell phone. Maybe it is time not for Bloomberg, but for the DOJ to step in and request Mr. Geithner's cell phone record: who knows - one just may find undisclosed conversations between the soon to be former Treasury Secretary and CEOs such as Ken Lewis, Lloyd Blankfein, Jamie Dimon, and all those others who it appears were worthy of knowing what the Fed would do almost one full day ahead of everyone else, and as a result make billions in illegal profits as a result of frontrunning the announcement of the world's most important central bank? And perhaps it is time for all those who were short the market on the afternoon of August 16 to form a group and actually sue the Federal Reserve for not only breaching its responsibility to the US taxpayers, but for illegally enriching bank CEOs even more than it has to date? * * * Maybe there is a reason why the Fed has a 5 year delay in disclosing full transcripts. Because something tells us the statute of limitations on pursuing Fed inside information disclosure charges against the soon to be ex-Treasury Secretary will have just expired. Of course, when the Fed's attempts to delay the inevitable convergence between stock markets and reality finally fails with a collapse that makes the August 2007 market moves seem like a joke, we are quite confident that the statue of limitations on that other form of justice, vigilante, will be the last thing the general public which has been betrayed by the Fed over and over and over, whose sole purpose is solely to make the rich even richer, will be the last thing on anyone's mind. h/t Manal | ||||||||||||||||||||||||
| CNBC analysts start wondering if central banks still have their gold Posted: 19 Jan 2013 12:30 PM PST 11:25a PT Saturday, January 19, 2013 Dear Friend of GATA and Gold: Max Keiser has posted on his Internet site a video excerpt from CNBC's "Fast Money" program Thursday in which the financial news analysts begin to acknowledge that central banks act surreptitiously in the gold market with their gold reserves and that the Bundesbank's attempt to repatriate some of its foreign-vaulted gold raises the question of whether all central bank gold is really available. If this stuff keeps up, demand for hats could run the price of tin foil above platinum. The video excerpt is 4 minutes long and it's posted here: http://maxkeiser.com/2013/01/18/hilarious-cnbcs-head-explodes-why-doesnt... CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT GoldMoney adds Singapore vaulting option In addition to its precious metals storage facilities in Hong Kong, Switzerland, Toronto, and the United Kingdom, now with GoldMoney you can store gold and silver in Singapore in a high-security vault operated by Brink's Singapore Pte Limited. To celebrate the launch of this storage option, GoldMoney is offering a discount on buy and exchange fees at this vault for any orders above US$10,000 (or the equivalent) until January 31, 2013. The gold buy rate is 0.98%, while the silver rate is 1.99%. Metal exchanges into Brink's Singapore will also be discounted for this period and will be charged at 0.78% for gold and 1.75% for silver. Simply place your order online and the above rates apply automatically until January 31, 2013, 15.00 UK time. To find out more about the new vault, please visit: http://www.goldmoney.com/singapore?gmrefcode=gata GoldMoney customers can take delivery of any number of gold, silver, platinum, and palladium bars from any GoldMoney vault, as well as personally collect their bars stored in the Hong Kong, Switzerland, and U.K. vaults. It's easy to open an account, add funds, and liquidate your investment. For more information, visit: http://www.goldmoney.com/?gmrefcode=gata Join GATA here: Vancouver Resource Investment Conference * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: 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: ADVERTISEMENT How to profit in the new year with silver -- Future Money Trends is offering a special 16-page silver report with our forecast for 2013 that includes profiles of nine companies and technical analysis of their stock performance. Six of the companies have market capitalizations of less than $800 million and one company has a market cap of only $30 million. The most exciting of these companies will begin production in a few weeks and has a market cap of just $150 million. Half of all proceeds from the sale of this report will be donated to the Gold Anti-Trust Action Committee to support its efforts exposing manipulation and fraud in the gold and silver markets. To learn about this report, please visit: http://www.futuremoneytrends.com/index.php?option=com_content&id=376&tmp... | ||||||||||||||||||||||||
| Keiser Report examines Germany's gold repatriation Posted: 19 Jan 2013 12:20 PM PST 11:20a PT Saturday, January 19, 2013 Dear Friend of GATA and Gold: This week's edition of "The Keiser Report" on the Russia Today television network with Max Keiser and Stacy Hebert reviews their disclosure back in 2009 that much of Germany's gold was held in New York, a disclosure that led to the political controversy in Germany and the Bundesbank's decision last week to repatriate some of the gold. "The Keiser Report" also interviews market analyst Doug Casey about the issue. The program is 28 minutes long and is posted at YouTube here: http://www.youtube.com/watch?v=8lnslMWhOTw CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Opinion Around the World Is Changing When Deutschebank calls gold "good money" and paper "bad money". ... http://www.gata.org/node/11765 When the president of the German central bank, the Bundesbank, pays tribute to gold as "a timeless classic". ... http://www.forbes.com/sites/ralphbenko/2012/09/24/signs-of-the-gold-stan... When a leading member of the policy committee of the People's Bank of China calls the gold standard "an excellent monetary system". ... http://www.forbes.com/sites/ralphbenko/2012/10/01/signs-of-the-gold-stan... When a CNN reporter writes in The China Post that the "gold commission" plank in the 2012 Republican platform will "reverberate around the world". ... http://www.thegoldstandardnow.org/key-blogs/1563-china-post-the-gop-gold... When the Subcommittee on Domestic Monetary Policy of the U.S. House of Representatives twice called on economist, historian, and gold standard advocate Lewis E. Lehrman to testify. ... World opinion is changing in favor of gold. How can you learn why and what it will mean to you? Read the newly updated and expanded edition of Lehrman's book, "The True Gold Standard." Financial journalist James Grant says of "The True Gold Standard": "If you have ever wondered how the world can get from here to there -- from the chaos of depreciating paper to a convertible currency worthy of our children and our grandchildren -- wonder no more. The answer, brilliantly expounded, is between these covers. America has long needed a modern Alexander Hamilton. In Lewis E. Lehrman she has finally found him." To buy a copy of "The True Gold Standard," please visit: http://www.thegoldstandardnow.com/publications/the-true-gold-standard Join GATA here: Vancouver Resource Investment Conference * * * Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: 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: ADVERTISEMENT Fred Goldstein and Tim Murphy open All Pro Gold Longtime GATA supporters Fred Goldstein and Tim Murphy have brought their many years of experience in the precious metals and numismatic coins to All Pro Gold as metals brokers who specialize in the delivery of gold and silver bullion bars and coins as well as numismatic gold and silver coins. Fred and Tim follow these markets closely and are assisted by a team of consultants in monitoring market trends. All Pro Gold offers GATA supporters competitive pricing on all bullion products and welcomes inquiries. Tim can be reached at 602-299-2585 and Tim@allprogold.com, Fred at 602-799-8378 and Fred@allprogold.com. Ask about their ratio strategy and the relationship of generic $20 dollar gold pieces to 1-ounce gold bullion coins. Visit their Internet site at http://www.allprogold.com/. | ||||||||||||||||||||||||
| Rising Gas Prices Threaten Economy Again, Obama Needs to Thwart Evil Speculators with SPR Release Posted: 19 Jan 2013 11:46 AM PST
By EconMatters History of Bubble Creation Everyone on Wall Street are a bunch of evil speculators, paying off ratings agencies to rate garbage mortgage backed securities triple A, so they could resell them, pushing up worthless companies beyond ridiculous valuations like CROX and many others only to leave a trail of carnage on the downside, the tech bubble, apple stock, the various oil bubbles, the silver bubble, cotton, coffee, corn you name it and Wall Street will try to manipulate up far beyond the fundamentals. If you bought a car from Wall Street, they would juice it up to $200,000 for a Honda Civic, and you think you have a depreciating asset now.
Gas Prices Going Higher Again Despite Abundant Supply Well gas prices are going up again due to those evil speculators even as the economy shows signs again of recovery, the economy is threatened once again by lowering disposable income in order to pay for exorbitant gas prices. This cycle just keeps on repeating itself over and over again. The economy starts to pick up, the evil speculators juice up gas prices, consumers can`t afford these prices, the economy goes back near to recession levels as consumers and small businesses pull back discretionary spending.
When are we ever going to learn in this country, and protect essential commodities from the evil speculators by instigating physical delivery? Physical delivery will ensure that when the economy is strong enough to actually support a given price, demand will be there to support higher prices.
But what we have is paper demand screwing consumers once again due to the over zealous evil speculators in the oil market, and not true demand, so this Wall Street Gas Tax, just throws the economy back into recession territory. The average American cannot afford to fill up there gas tank for $65 every week without taking money out of some other money basket items in their budget. They usually charge up their credit cards, cut back on eating out or entertainment options, and some much worse scenarios for meeting these out of whack fuel costs.
Further Reading - When Natural Gas Replacing Diesel in Frac Jobs
Driver 1: Ben Bernanke & the Federal Reserve The drivers of the oil market for the evil speculators on Wall Street are several; one of them is supported by your own government in the branch of the Federal Reserve. When Ben Bernanke and the fed switched from concentrating on mortgages with their previous QE program which didn`t give banks the extra juice for the commodity markets and equities, and then started again with another 45 billion per month of treasury purchases; well we have seen how that juices markets from past QE treasury buying. Buying mortgages doesn`t juice up asset prices like buying treasuries that is clear as day!
So the federal reserve is again helping those who have stocks in their portfolio, at the expense of the entire country who now has to pay higher gas prices than the fundamentals would dictate because 45 billion dollars is being injected into financial markets, and big banks are using this liquidity to juice up asset prices including oil and gas.
Concentrate on mortgages Ben Bernanke I thought you finally learned something and were focusing on concentrating your liquidity programs where they could minimize the negatives of the easing program and still provide some overall positives to the economy.
However, the fed slipped back to the old give on one hand; take on the other hand bi-polar monetary policy which just does more harm than good to the overall economy. Driver 2: Japanese Prime Minister Shinzo Abe The other is good old Japan, and their new policy of bringing the country inflation at all costs, by considerably weakening the Yen, this has not only raised Japanese gas prices, but their currency is used as a major carry trade funding currency. So weakening the yen just provides juice to all financial markets, not just Japanese markets. Traders take this weak Yen, and fund their other trades, and you guessed it juice up risk assets like oil, which then juices up gas prices. So you can thank the new Japanese Prime Minister Shinzo Abe for your higher gas prices as well.
Driver 3: Wall Street Levered to the Hilt once again Wall Street is again using leverage, with margin at its highest point in five years as all the banks and hedge funds are levering up for the bullish first quarter, and this increased leverage is juicing up all asset prices, including oil and gas. So as Wall Street banks and traders juice up their returns, again the American consumer is footing the bill via higher gasoline prices at the pump. Too bad they don`t give consumers a cut of those big fat bonuses. But somebody has to pay, again the powerful take from the poor.
Driver 4: Fear Mongering over "Potential" Supply Disruptions The other long standing trick on Wall Street is to use fear mongering to push up the oil markets, so any even remote pipeline leak, or incident in the Middle East is used to scare up the market. The latest is Algeria with a Natural Gas plant hostage situation. I know it doesn`t matter if it is not even related to oil infrastructure, it doesn`t matter.
There has been no real supply disruption in the last 30 years with all kinds of flare ups in the Middle East, and requisite hype run-ups in oil markets. Never one major supply disruption where actual supply in the oil markets was scarce over the past 30 years!
Why because everybody needs money, and it doesn`t matter if you're a terrorist, a dictator, an insurgent, you're going to sell oil because this is what supports the entire region. So whoever is in charge is going to protect the oil fields at all cost, and they are for the most part, the most secure assets in the world. Safer than your Gold in a safety deposit box!
These incidents are used to hype markets and push up prices regardless of actual legitimate threats to supply disruptions where oil would actually be a scarce commodity.
Strategic Petroleum Reserves is crucifix for Evil Speculators It's all a money game on Wall Street, and without a physical deliverable market, the only solution to thwarting these evil speculators in the oil markets is the tool of the SPR release.
It worked last year as these speculators started pushing oil up, yeah it doesn`t matter if supplies are booming right now, and President Obama threatened to release the SPRs and this turned around the market and sent it back down.
You see this is highly effective as the speculators need to make money like crack addicts, so once they realize that the game is over to the upside, they get out of the market, and look for other markets they can juice up.
This threat and actual release of the SPRs is the only thing that has thwarted the evil speculators in the oil markets the last two years. If it was left to their own devices we would all be paying for $150 oil, and 5 dollar gasoline. They don`t care who they hurt in the process of getting their fat trading bonuses.
So once again, as oil markets are rampant with excessive speculation, President Obama needs to bring out the old SPR Release Hammer and send these evil speculators back to juicing up penny stocks on the OTC markets or Netflix to $400 a share.
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| 50 Reasons to Seriously Consider Becoming a Prepper – Financially or Otherwise Posted: 19 Jan 2013 11:37 AM PST Register to "Follow the munKNEE" and automatically receive all articles posted [While] I am not a prepper in the traditional sense of stockpiling food, So says Monty Pelerin (www.EconomicNoise.com) in edited excerpts from his introduction* to the following 50 questions via Before It's News entitled Prepping.
Pelerin goes on to say in further edited comments: Many [questions do not] have to do with what I call financial prepping, but many financial considerations [do] develop as a result of underlying non-financial conditions [so it is understandable why such questions are included. While] the list has not made me a conventional prepper it sure hasn't altered my thinking regarding financial prepping [- not in the least]. The list is as follows: "The following are 50 shocking questions that you should ask to anyone that is not a prepper yet:
Please share this article with as many people as you can. It only takes a few moments to share an article, but the person on the other end that reads it might have their life changed forever."
*http://www.economicnoise.com/2013/01/18/prepping/
Related Articles: 1. A Practical Assessment of the U.S. Debt Problem Shows It to Be Absolutely Absurd
2. Crisis Phase Beginning: U.S. Economy to Go Into a Severe Recession By End of 2013! Here's Why
4. The U.S. Economy is Going to Collapse…It is Unavoidable…It's a Mathematical Certainty…Here's Why
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| Guest Post: Is The Gold Price Dependent On China? Posted: 19 Jan 2013 11:04 AM PST Submitted by John Aziz of Azizonomics blog, China now buys more gold than the Western world: Does that mean, as some commentators are suggesting, that future price growth for the gold price depends on China? That if the Chinese economy weakens and has a hard landing or a recession that gold will fall steeply? There's no doubt that the run-up that gold has experienced in recent years is associated with the rise in demand for gold from emerging markets and their central banks. And indeed, the BRIC central banks have been quite transparent about their gold acquisition and the reasons for it. Zhang Jianhua of the People's Bank of China said:
Indeed, this trend recently led the Telegraph's Ambrose Evans-Pritchard to declare that the world was on the road to "a new gold standard" — a tripartite reserve currency system of gold, dollars and euros:
The countries driving the movement toward gold as a reserve currency by building their gold reserves is that they are broadly creditor nations whose dollar-denominated assets have been relatively hurt by over a decade of low and negative real interest rates. The idea that gold does well during periods of falling or negative real rates held even before the globalisation of U.S. Treasury debt. The blue line is real interest rates on the 10-year Treasury, the red line change in the gold price from a year ago:
The historical relationship between real interest rates and the gold price shows that it is likely not "China" per se that has been driving the gold price so much as creditors and creditor states in general who are disappointed or frustrated with the negative real interest rate environment. What a slowdown in the Chinese economy (or indeed the BRICs in general) would mean for the gold price remains to be seen. While it is widely assumed that a Chinese slowdown might reduce demand for gold, it is quite plausible that the opposite could be true. For instance, an inflationary crisis in China could drive the Chinese public and financial into buying more gold to insulate themselves against falling or negative real rates. Of course, this is only one factor. There are no hard and fast rules about what drives markets, especially markets like the gold market where many different market participants have many different motivations for participating — some see gold as an inflation hedge, some (like the PBOC) as a hedge against counterparty risk and global contagion, some as a buffer against negative real interest rates, some as a tangible form of wealth, etc. And with the global monetary system in a state of flux — with many nations creating bilateral and multilateral trade agreements to trade in non-dollar currencies, including gold — emerging market central banks see gold — the oldest existing form of money — as an insurance policy against unpredictable changes, and as a way to win global monetary influence. So while emerging markets and particularly China have certainly been driving gold, while U.S. real interest rates remain negative or very low, and while the global monetary system remains in a state of flux, these nations will likely continue to gradually drive the gold price upward. | ||||||||||||||||||||||||
| Three Popular Delusions for 2013 Posted: 19 Jan 2013 10:56 AM PST
Three popular delusions to be aware of for 2013: Popular Delusion #1: The investment world believes China will engage in another massive round of stimulus. This will not be the case. China’s new ruling party has stated point blank that the country will not be engaging in rampant stimulus (for the obvious reasons of rising inflation): This may sound like an oxymoron, but China‘s new Communist government is turning away from financial stimulus to help its slow-?moving economy. During the party’s two-?day Central Economic Work Conference this weekend, party leader Xi Jinping said the country would essentially not be pursuing high growth rates through stimulus. That doesn’t mean that Beijing has turned sour on fixed asset investments on things like roads, bridges and subways. They’re still going through with major urbanization projects. But whenever the economy is slowing, the new leaders say they will be less likely to prime the pump. http://www.forbes.com/sites/kenrapoza/2012/12/17/reform-?minded-?chi...? shuns-?stimulus/ China’s market has rallied over 16% in the last month on the belief that China will engage in another large-?scale stimulus plan... despite China’s leaders stating they will not. This has the makings of a very nasty correction. We’ll be on the lookout for when it hits and will issue a trade alert when it’s time to go short. Popular Delusion #2: Japan’s new leadership will be able to kick of even more aggressive monetary intervention. Truth be told, Japan is on the cusp of the mother of all debt implosions. Case in point, Japan’s Yen is thought to be a safe haven. With that in mind, it’s critical to note that when the EU Crisis hit in mid-?2012, the Yen fell. Popular Delusion #3: The US bond bubble will not burst in 2013.
It’s become increasingly common to see calls for the US bond bubble and economy to implode this year. To be clear, the US’s financial situation is terrible. But it is nothing compared to the financial situation in Europe, Japan, and China. Europe has not recapitalized its banks. Many of its countries’ entire banking systems are insolvent. The EU banking system as a whole is leveraged at 26 to 1 (Lehman was at 30 to 1 when it went bust). Even Germany’s banking system is in worse shape than the US’s (the US recapitalized its banks following the 2008 crisis. Europe. including Germany, has not). China’s true Debt to GDP is over 200%. Already in a hard landing, the country is now facing several major problems, namely looming water and agriculture crises, food inflation and accompanying civil unrest, and the potential of armed conflict with Japan. Moreover, the belief that China will shift over to a consumer economy is misguided. Consumption has increased by 9% per year in China for 30 years now. The China consumer is not somehow dormant. And as more and more manufacturing firms leave China for more stable markets (Apple, Ford, GE, Bridgestone, have all announced they are moving facilities back to the US), China will be facing rising unemployment. Finally, and most critically, financial institutions are desperate for high-?grade collateral in the form of quality sovereign bonds. Say what you will about the US, it remains the most liquid market for debt in the world. And if you had a choice between lending money to the US, Japanese, any European, or the Chinese Government, the US is the obvious answer. This is not to say the US is in great shape. Instead, we would argue that the US is the least ugly of the major debt markets. The US bond bubble will burst at some point. But it will likely not do so in 2013. Buckle up, 2013 is going to be an “interesting” year.
With that in mind, smart investors are taking advantage of the market rally to position themselves for what’s coming… much as they did in late 2007.
We offer several FREE Special Reports designed to help them do this. They include:
Preparing Your Portfolio For Obama’s Economic Nightmare
What Europe’s Crisis Means For You and Your Savings
How to Protect Yourself From Inflation
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| Buying Silver at $100 and the Rebirth of Counterfeiting Posted: 19 Jan 2013 09:18 AM PST The debate about buying silver rounds, “junk silver” or silver Eagles goes on and on. Although better prices may be available on silver rounds, investors continue to worry about the “China scare” and rumors of counterfeit silver coins. | ||||||||||||||||||||||||
| The Trillion Dollar Coin: What You Really Need to Know Posted: 19 Jan 2013 09:04 AM PST Recently a novel idea began circulating in the Washington Beltway that the government could print a $1 Trillion coin and use that to fund its operations in the absence of an agreement on the raising of the debt ceiling. This idea certainly sounds like it came from fantasyland, but if one follows it carefully through to its logical conclusion, it will shine a light on our current monetary system and how it is fundamentally unsustainable. The floating of the $trillion coin has inadvertently opened up a window not just to reform, but to transform our monetary system. The resulting transformational consequences would be welcomed by all political perspectives. | ||||||||||||||||||||||||
| WE DON'T HAVE A SPENDING PROBLEM Posted: 19 Jan 2013 07:50 AM PST The courageous, honest words of a man who will be inaugurated this weekend as the President of the United States. With wisdom like this, how could the country go wrong? The spending won't matter until it matters. The entire world has watched the United States add $10 trillion of debt in the last 12 years through money creation, interest rate manipulation, currency debasement, inflation and accounting fraud without destroying ourselves. YET. Now Japan, Europe, China and other countries around the world are simultaneously attempting the same solutions. It will not end well. So we will keep spending, borrowing and printing until the entire Ponzi scheme collapses in a giant implosion. Then our beloved leader will use his emergency powers to save us. Now hand over your guns. Federal spending is limitless and lawlessFriday, January 18,2013 "We don't have a spending problem." Those soothing words are apparently none other than President Barack Obama's. As the Wall Street Journal's Stephen Moore reported, House Speaker John Boehner says that Obama insisted to him that America has a problem with healthcare, not federal expenditures. Maybe the spendaholic-in-chief is missing something. America is being tortured by a free-spending federal government that acts irresponsibly on good days and illegally on bad ones. In just the first quarter of fiscal year 2013, Washington dug Americans $293 billion deeper down the hole, the Congressional Budget Office announced Jan. 8. That pace likely will make this the fifth consecutive year with a federal deficit exceeding $1 trillion. This was obscene enough when President George W. Bush botched the 2008 financial meltdown. Since then, Obama gleefully has frolicked in red ink. Also, federal welfare spending is set to increase 80 percent through fiscal year 2022 and total $11 trillion. What fuels this explosion in the dole? According to a Jan. 15 analysis by Senate Budget Committee Republicans, bureaucrats use "aggressive outreach to those who say they do not need financial assistance." Also, "recruitment workers are even instructed on how to 'overcome the word "no"' when individuals resist enrollment." This week, the Republican-led House approved $33 billion in Hurricane Sandy assistance. This sum, atop another $17 billion, includes such non-sequiturs as $10 million for FBI paychecks, $50 million to plant trees around America, $150 million for fisheries and $2 billion for interstate highways. Enough wobbly Republicans joined spend-happy Democrats to save these and other slabs of pork. Republicans should have used this legislation as a tutorial on limiting disaster relief to relieving disaster, not opening the vault to those with the stickiest fingers. Meanwhile, Washington's record-shattering profligacy may be less frightening than its burgeoning lawlessness. Legal, schmeagle. Washington does whatever it wants. - Senate Budget Committee Republicans report that the departments of Agriculture and Homeland Security "have promotions to increase the number of immigrants on welfare despite legal prohibitions on welfare use among those seeking admittance into the United States." - Congressman Tom McClintock, R-Calif., complains that Congress routinely spends tax dollars on programs whose legal authorization has expired. This is like using a company credit card years after you were fired. Last year, McClintock tried to cut about $250 million from the International Trade Administration. "The ITA's authorization lapsed in 1996 — 16 years ago," McClintock marveled. "It has not been reviewed or authorized by Congress since then, but we still keep shoveling money out the door." The 1985 Balanced Budget Act requires that authorizing legislation "be in place before the regular appropriation bills can be considered" by Congress. Nonetheless, the CBO confirmed last year that "Congress has appropriated about $261 billion for fiscal year 2012 for programs and activities whose authorizations of appropriations have expired." These included $3 billion for Community Block Grants, $24 billion for No Child Left Behind and $31 billion for the National Institutes of Health. These and other initiatives may have merit. If so, Congress must reauthorize them, so that they are rooted in the law, rather than inertia. - For its part, the Democratic-run Senate is a crime scene. The Congressional Budget and Impoundment Control Act of 1974 compels senators and representatives to pass a budget each year by April 15. Whatever. The Senate has not enacted a budget since April 29, 2009. (The GOP House did so in 2011 and 2012.) Too bad this law is toothless. Rather than huddle with Republicans to rescue America from this mess, Obama is as petulant as ever. He refuses to bargain with Republicans, saying they simply should raise the debt ceiling without restraining spending. Obama said he would not "have that negotiation with a gun at the head of the American people," presumably with GOP fingers on the firearm. What vulgar rhetoric, post-Newtown. Finally, what about the national debt of $16,456,185,258,774 and counting? Like Old Man River, it just keeps rolling along. New York commentator Deroy Murdock is a nationally syndicated columnist with the Scripps Howard News Service, a Fox News contributor and a media fellow with Stanford University's Hoover Institution on War, Revolution and Peace. | ||||||||||||||||||||||||
| Posted: 19 Jan 2013 07:50 AM PST Summary: Long term - on major sell signal. Short term - on buy signals. Gold sector cycle - down as of Oct 13. COT data - currently not supportive of a new up cycle, caution is advised. Read More...  | ||||||||||||||||||||||||
| How Can The Gold Price Drop In A Matter Of Milliseconds? Posted: 19 Jan 2013 07:25 AM PST Gold Silver Worlds received a great question from one of its readers:
There are plenty of examples of this; it occurs multiple times per week. Here are a couple of charts from the past weeks. Although these are standard Kitco charts that don't show a millisecond timeframe it is quite clear what these charts would show when zooming in. The last of the three charts, however, is the perfect example. Interestingly, this move in the charts was erased by Kitco the same day but registered by SilverDoctors. We reached out to one of the true experts in this matter: Dimitri Speck. He is a seasoned mathematician, the author of the best-selling book "Geheime Goldpolitik" (only in German available, the English version is being prepared) and chief financial engineer of Staedel Hanseatic. He runs SeasonalCharts.com, offering a wealth of intraday trend charts. The short version of the answer to the above question is the following: Sharp drops are often (but not always) caused by intervention of the large bullion banks who are working closely together with the central banks. Think JP Morgan, Citigroup, Goldman Sachs, and the like. They are designed to cause stop loss selling and to demotivate other market participants. The drops are the ultimate proof of systematic market interventions. The tools used by Dimitri Speck, for instance, are the intraday averages. It appears that as of 1993, these price anomalies occurred frequently to a similar extent on specific times. Before the start of these interventions in August 1993 those statistical anomalies were simply not there. The detailed version of the answer is to be found in an earlier interview between Gold Silver Worlds and Dimitri Speck. Entitled "Gold Price Manipulation Proven On The Intraday Charts" Dimitri Speck concludes that central banks and their affiliated bullion banks started to influence systematically the price of gold as of August 1993. His conclusion comes in particular from his intraday statistics, where he observed several anomalies. First, since 1993, the price has been falling systematically during the trading session of COMEX in NY. Another trading anomaly is that during the PM fix the price systematically tends to drop significantly. The following chart is the result of some 16 years of recording intraday data. The sudden price drops are so sharp and systematic that it can only point to intervention. In addition, we wrote about the same topic in a more recent interview with John Rubino:
The interview with Dimitri Speck revealed even more insights. For instance, it appears that the manipulation in the futures market (visible in the COT reports) comes on top of the revelations on the intraday charts. The interventionists significantly increased their activities in the futures gold markets in May 2001, what is visible in the COT report. Before that, the price was more suppressed through selling and leasing of gold. As soon as the futures markets got into play, an increasing number of price shocks have appeared with an increasing intensity. Obviously those price changes were mostly drops rather than increases. It becomes clear on the following chart. As of May 2001, the "climate has changed" because of the futures market, which is clearly an anomaly. The decline in the lower part of the chart, that started at that given point in time, shows the net positioning of commercials as a share of total positions. The line is significantly lower, proving that commercials are more on the short side. As a sidenote, Dimitri Speck adds that short positions are not the only condition for price suppression. Before 2001, similar price drops did occur. Shorts are just one of the many influencing factors. For sure they do have an effect as we saw for instance in the silver market starting 14 months before the peak of May 2nd 2011. During that period, central banks temporarily scaled down their interventions as clearly shown by the intraday charts. It led to the gigantic bull run. | ||||||||||||||||||||||||
| Posted: 19 Jan 2013 07:00 AM PST Buba wants her money back. (Her real money, that is.) Earlier this week, Germany's central bank, the Bundesbank, announced it would commence repatriating its vast offshore gold reserves, the second-largest stockpile in the world after that of the United States. Gold rose a bit after the news, but not much. It's up about $20 for the week, still comfortably within medium-term trading range. Really, gold? We expected more… This is big news, after all. The folks over at ZeroHedge have been all over this story. Here's Mr. Tyler Durden, putting things in perspective: "[T]his is a momentous development, one which may signify that the regime of mutual assured and very much telegraphed – because if the central banks don't have faith in one another, why should anyone else? – trust in central banks by other central banks is ending." Officially, Germany claims 3,396 tons of the shiny yellow metal…though only a third of that total currently rests within its own borders. Almost half (45%) of the stash is vaulted some 80 feet beneath the streets of Lower Manhattan; roughly one tenth (11%) lies under the Banque de France. But now Buba wants it back. The Bundesbank will make a 300 ton withdrawal from its deposit in New York and a 374 ton, complete withdrawal from its holdings in France. Just to reiterate that last point…Germany will withdraw ALL of its gold currently held in France. All. (of.) Its. Gold. Now, what possible reason could the German government have for wanting to keep its hard asset currency close to home? Does it know something about the future of the euro that we don't? Or the future of the dollar? Why has Buba fallen out with the Feds and the Frogs? Back in October of last year, the Bundesbank was enthusiastically making the case for keeping gold abroad, arguing that: Gold stored in your home safe is not immediately available as collateral in case you need foreign currency. Take, for instance, the key role that the US dollar plays as a reserve currency in the global financial system. The gold held with the New York Fed can, in a crisis, be pledged with the Federal Reserve Bank as collateral against US dollar-denominated liquidity. So, there's no reason to doubt the security of Germany's gold deposits? Or to question the "key role that the US dollar plays as a reserve currency in the global financial system"? And certainly there's no reason to make any large, sudden withdrawals, right? Again, from the Bundesbank's October statement: There was never any doubt about the security of Germany's gold. In future, we wish to continue to keep gold at international gold trading centres so that, when push comes to shove, we can have it available as a reserve asset as soon as possible. Indeed, as recently as last November, Andreas Dobret, a member of the Executive Board of the German Bundesbank, could be heard yapping about the "excellent relationship between the Bundesbank and the U.S. Fed." In a speech given that month to the Federal Reserve Bank of New York's Bill Dudley, Mr Dobret responded to what he called "the bizarre public discussion we are currently facing in Germany on the safety of our gold deposits outside Germany," by calling it "a discussion which is driven by irrational fears." What happened to those "irrational fears," Mr. Dobret? Did they suddenly become uncomfortably rational? German gold reserves peaked out at about 4,000 ounces back in 1968, three years before Richard Milhous Nixon unilaterally terminated convertibility of the Greenback to gold and five years before the Bretton Woods currency exchange markets closed (only to be opened as a "floating currency regime" shortly thereafter). A piece in the New York Times this week noted that, "The end of Bretton Woods in 1973 eliminated some, though not all, of gold's importance as a universal currency." It's certainly true that pointy-headed academics were talking individuals out of their gold long before the Nixon snip…and that folksy billionaires have continued to do so since. Nevertheless, we have a feeling gold is about to get a whole lot more important. Again. Historically, gold has proved itself a reliable insurance against the corruptibility of men in positions of power…positions of power that routinely attract and promote corruptible men. Has anything really changed? Buba is grabbing her gold. Perhaps we should too. Joel Bowman Buba's Gold appeared in the Daily Reckoning. Subscribe to The Daily Reckoning by visiting signup for an Agora Financial newsletter.        | ||||||||||||||||||||||||
| Gold and Silver Bullion Are On the Move Posted: 19 Jan 2013 02:23 AM PST The price movement of gold and silver often attract much attention. When prices make a noticeable increase, it regularly leads to permabulls calling for the next great explosion in precious metals. On the other hand, any dips or corrections lead to critics calling for an end to the 12-year bull market. Both sides are debatable, but there is no denying that physical bullion made impressive moves this past week. | ||||||||||||||||||||||||
| German Gold Lessons for Private Investors Posted: 19 Jan 2013 02:16 AM PST The Bundesbank's announcement contained little news for the market. But for private investors...? The GERMAN Bundesbank is rightly famed as the world's least stupid central bank. |
To argue with Ambrose Evans-Pritchard is risky. He is well-informed, he has travelled much, writes well and has a sharp intellect. Yet, I must affirm that he is mistaken in some of the opinions expressed in his recent article at "The Telegraph" www.telegraph.co.uk "A new Gold Standard is being born" January 17, 2013.
Silver is like gold in many ways; both are precious metals with long histories as currencies. They are malleable, lustrous, ductile, resilient, and rare. However, as Visual Capitalist illustrates in this spectacular infographic, silver investors should be aware of the three main differences between silver and gold. From silver's relative volatility and correlation to industrial demand, track record, diversification benefits, and the three ways to get exposure to silver, this colossal image provides everything you need to know in one place.
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