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• Turkey’s central bank raises gold reserve coefficients
• Is Gold Losing Its Shine?
• India plans to mobilise ETF gold through deposit scheme changes
• Gold needs to break $1,700 for momentum to continue
• Bank of Japan Rally
• Nichols muses on gold past, present and future
• How far up could silver go?
• Precious Metals and Stocks poised to ramp higher in 2013
• Are Higher Interest Rates The End of the World?
• India once again increases tax on gold
• Indian Jeweler Becomes Billionaire as Gold Price Surges
• The Ultimate Platinum & Palladium Infographic by Sprott Asset Management
• An Important Video You Should Watch
• New Record-Highs Everywhere with Stocks—Gold Almost Ready to Move
• Bank of America Foreclosure Reviews: Whistleblowers Reveal Extensive Borrower Harm and Orchestrated Coverup (Part I – Executive Summary)
• Fundamentals and future of the silver market
• Balmoral starts 2013 drill program at Detour
• Corvus Gold drills 72.4 m of 1.74 g/t Au at Bullfrog
• CNBC's Guy Adami: German Gold Repatriation Could Be Start of Gold Bank Run!
• Commodity Online launches new online E Gold, E Silver platform
• FIRST-HAND ACCOUNT OF GOLD & SILVER MANIA IN CHINA- BLACK FRIDAY STYLE MOBS SCRAMBLING FOR BULLION
• President Obama Inaugurated – Precious Metals To See Similar Returns As First Year Of Pr
• Andrew Craig on how to win at investing
• Gold Trades Near One-Month High as BOJ Announces Stimulus
• India's NSEL to promote E Gold trade among women
• India Scrambles To Make Gold Purchases Ever More Difficult: Hikes Import Tax And Duties Again
• Misunderstanding Gold Demand
• Tajikistan buys 1.1 tons of Gold in 2012
• How Do I Choose What to Write About
• Stewart Thomson: Gold's Tactical Assault On $1800
• Will precious metals see similar returns in Obama’s second term?
• Iran arrests 40 people over Gold markets manipulation
• Gold’s bull market called into question by bank analysts
• $20 or $70 Silver for 2013?
• Nord Gold output falls in 2012, to gain in 2013

Turkey’s central bank raises gold reserve coefficients Posted: 22 Jan 2013 01:54 PM PST The bank raised its reserve option coefficients for gold by 0.1 points, a move which will boost the central bank's gold reserves.

Is Gold Losing Its Shine? Posted: 22 Jan 2013 12:31 PM PST By Ed Liston: Gold has historically been a safe hedge against inflation. It would always be seen as an investment asset which is a safe hedging bet against other investment categories like stocks, bonds or real estate. The demand for gold is being mainly driven by consumer end demand to hold gold in physical form like jewelry or coins; or the demand could be from investment in instruments related to gold like ETFs or stocks of gold mining companies. Historical gold Price Movement Since the 2008 financial crisis, gold prices have doubled as gold is perceived to provide a crisis hedge when all other assets fail. Earlier to this Bull Run the world gold rates had risen at more or less a moderate rate over the years. If we see the prices of gold since 1970 we see that prices have been more or less constant with minor movements every 4-5 years. Complete Story »

India plans to mobilise ETF gold through deposit scheme changes Posted: 22 Jan 2013 12:17 PM PST India's government announces steps to unfreeze gold physically held by mutual funds under gold exchange traded funds (ETF), by allowing them to invest in gold deposit schemes of banks.

Gold needs to break $1,700 for momentum to continue Posted: 22 Jan 2013 12:11 PM PST U.S. dollar gold prices hovered above $1,690 an ounce Tuesday morning in London, close to one-month highs, while prices in yen quoted on Tokyo's gold futures market set a new record.

Bank of Japan Rally Posted: 22 Jan 2013 12:10 PM PST The big news today is the long-awaited but pretty much expected response by the Bank of Japan to engage in further stimulus measures by basically committing to open-ended purchases of government securities and setting an inflation target of 2%. The idea is to stave off the deflationary funk that has gripped Japan for well over a decade and more with the deliberate intent to further suppress the value of the Yen on the foreign exchange markets. Because the purchase commitment seems to have been pushed into 2014 before it begins in earnest, speculators did the exact opposite of what the new government was attempting; they shoved the Yen higher shortcircuiting its steady downward trend. Now we will have to wait and see what happens next if the Yen continues appreciating instead of depreciating as they had hoped for. If the specs defy the intent of the powers-that-be in Japan and refuse to get on board with the program, my guess is that we will see a public response by the Japanese monetary authorities as their political bosses, not to mention INDUSTRY LEADERS, will pressure them to undercut any Yen strength. Traders outside of the forex markets are looking at the move by the Japanese as highly inflationary elsewhere which is perhaps the main reason behind the mvoe higher in both gold, silver, copper, platinum and palladium today. It is ironic however to see the Yen moving higher over disappointment that the Japanese did not adopt an AGGRESSIVE enough policy to induce further yen weakness and by consequence higher inflation while at the same time the metals, both precious and base, were moving higher on expected inflation coming down the road. Throw in one more weird day in the long bond as interest rates actually moved lower even while the equity markets continue with their giddiness. Nothing fazes the bulls on Wall Street right now and I do mean, nothing. Paper asset inflation is alive and well. I wanted to show you a weekly chart of the Silver market over at the Comex to give you an indication of where this thing is in the larger scheme of things. Notice that the pattern shown continues to constrict with an upward bias to it. Can you see how significant that the region beginning from $34.50 up to $35.00 has become? Silver is currently attempting to make up the losses it incurred in December of last year. It began that month near $33.50 and then fell down below $30 hitting a low near $29.25 before rebounding slightly to end the year. It is currently about $1.20 lower than from where it started December 2012. If talk about silver shortages to the extent that are being rumored is true, then this market will CONFIRM those rumors by launching a breakout on this technical chart and that means, at a bare minimum, a solid breach of $35.50 on a weekly closing basis. For now the chart bias is not wildly bullish but it is friendly as the market is in a consolidation pattern with a slightly higher bias. As stated previously, higher platinum and palladium prices are tending to reinforce momentum based buying in the silver market. It also aids the cause of the metal that the soybean market is responding to some potential weather issues in South America with prices moving higher over at the CME group futures. A very large crop is expected from down that way this year so traders will be monitoring any indication that the weather might impact yields and thus overall supply. Rising grain prices tend to keep upward pressure on the Continuous Commodity Index ( CCI ) and thus helps silver as traders buy on the expecation of inflation pressures at the wholesale level.

Nichols muses on gold past, present and future Posted: 22 Jan 2013 11:58 AM PST After 40 years of gold analysis, Jeff Nichols still feels positive about the short and medium term prospects for the yellow metal, even though he avers he is a gold bull but not a gold bug.

How far up could silver go? Posted: 22 Jan 2013 11:54 AM PST As it turned out, the end of 2012 was not the end of the U.S. economy and the "fiscal cliff" was a mere scarecrow and not the doom of the financial markets. A rally began. Will it be the long-awaited rally that could bring precious metals to their new all-time...

Precious Metals and Stocks poised to ramp higher in 2013 Posted: 22 Jan 2013 11:42 AM PST David Banister- www.MarketTrendForecast.com  Jan 22 2013 It's been a long drawn out corrective affair with the precious metals since the August-September 2011 top that seems so long ago right now. During that last spike period where Gold rallied to just over $1900 per ounce, we had mentioned many times in articles and to our subscribers that GOLD was likely peaking in a wave 3 of excitement and high powered bullish sentiment. The "tells" were the articles, the CNBC mentions, the daily "CNBC GOLD" ticker at the top of their screen, and the cover of a major magazine. Since that time, we believe GOLD has been consolidating in what we term a "wave 4" correction, which is a milder version than some others.  This is part and parcel of a 5 wave rally pattern and wave 4 is necessary to cool the engines of overbought sentiment and public love of the metals.  These wave 4 patterns can take many forms and shapes, but this one appears to be an irregular ABC Version which we have outlined below on the weekly chart views.  The length of period of time is nearing 18 months in total, but the lows in the 1550's were already marking price bottom territories, and now it seems more of a matter of time before we see wave 5 up really take off. This means that Gold and Silver Exploration stocks are very cheap as well, because the senior producers are seeing their stockpiles whittled away while their grades deteriorate at the same time. Once GOLD pops over $1750 per ounce we should see a rally in all the Gold Stocks, but especially in the exploration plays, which are historically undervalued here.  Take a look at our GDJX Junior Exploration Stocks chart at the bottom of this article as well. It will need some help to break the downtrend, but again we think the odds are in the savvy investors favor to speculate on a select few in this sector. Consider joining us for free weekly reports or a discount subscription at www.MarketTrendForecast.com

Are Higher Interest Rates The End of the World? Posted: 22 Jan 2013 11:38 AM PST It's amazing what you can get used to if it just goes on long enough. Everyone with a family has experienced this personally, but it's also true at the societal level, where one decade's impossibility becomes the next's normal. Not so long ago, for instance, interest rates signified the amount by which a bank CD or bond would increase your wealth each year. But today's rates are so low that most fixed income instruments are now functionally the same as a checking account, simply a place to park your spare cash until you need it – not an investment that will grow with time. Zero interest rate policy (ZIRP) has created a depressing, in some cases impoverishing "new normal" for savers and retirees. But the opposite is true for governments, for whom borrowing used to lead to higher interest expense, which in turn widened budget deficits. That's no longer the case. In recent years, rolling over existing paper as rates have fallen has actually lowered the interest expense of investment-grade countries. Consider the following two charts. The first shows US government debt nearly tripling since 2000. The second shows how much its interest expense has risen: Not at all. After a decade of massive deficits and rising debt, Washington's interest expense remains modest because each new bond issue (and each rollover of existing paper) has been at lower rates. If you're getting a Ponzi-like vibe, you're right. This game can only go on as long as interest rates keep falling. So how does it end? Possibly like this: First, US interest rates stabilize  –  which has to happen pretty soon because the average interest rate on new borrowing, at around 2%, is about as close to zero as it's possible to get when 20 and 30-year bonds are in the mix. So this year's $1 trillion-plus deficit will begin to add noticeably to interest expense, as will subsequent-year borrowings. At some point, the markets will notice the new trend and seek a higher interest rate on new government bonds to compensate for rising risk. This will require the next few trillion of maturing debt to be rolled over at higher rates, which will kick interest cost expansion into overdrive. And that's the end of the game. Or the Fed will be forced to buy up all the bonds the government issues at below-market rates, which will, one has to believe, accelerate the dollar's loss of purchasing power, with the same result: it gets harder and more expensive to borrow. Unless Japan Blows Up First But it won't come to this because Japan is almost certain to enter a debt spiral first. The short version of the story is that Japan responded to bursting real estate and stock market bubbles in the 1990s by borrowing huge amounts of money financed with domestic savings at minuscule rates, and has now accumulated government debt that dwarfs that of the US as a percent of GDP. Its economy is stagnant and debt continues to accumulate, so its newly-elected (and almost comically desperate) leader has demanded that the Bank of Japan create enough new yen to get inflation up to 2%. But here's the catch: Japan's current average interest rate is far lower than 2%, and if inflation picks up, so will interest rates, especially now that the country has used up all its domestic savings and has to borrow from foreign sources. According to hedge fund manager Kyle Bass' calculations, if Japan's average rate rises to just the US average of 2%, its interest cost will exceed the government's  total tax revenue. Here again, game over, and potentially in the next year or two, says Bass. See here and here. …Or Derivatives The idea that the world's first and third biggest economies might soon enter a post-Ponzi debt crisis is scary enough. But it get worse. Turns out that of the $638 trillion notional value of derivatives now outstanding, $434 trillion, or 77%, are linked to interest rates. Let rates start rising, and tens of trillions of dollars of hedges will be activated, forcing the handful of big banks that are on the hook to…never mind. There's no need to explain that the banks can't meet those obligations so taxpayers, as in 2009 with credit default swaps, will be on the hook for another multi-trillion dollar bailout. Which will cause deficits and interest expense to go up. There really is no way out. The only upside is that savers might finally start earning a decent return on their savings.

India once again increases tax on gold Posted: 22 Jan 2013 11:33 AM PST Over the past year or so we've reported on the clear policy by the Indian government to stop the people from buying physical gold. It all started with a 4% tax on gold imports in India back in March... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]

Indian Jeweler Becomes Billionaire as Gold Price Surges Posted: 22 Jan 2013 11:22 AM PST Indian Jeweler Becomes Billionaire as Gold Price Surges T.S. Kalyanaraman has become a billionaire as a 12-year rally in gold prices fails to damp demand in India, the world's largest consumer of the precious metal. He owns 44 stores in … Continue reading →

The Ultimate Platinum & Palladium Infographic by Sprott Asset Management Posted: 22 Jan 2013 11:08 AM PST Our friends at Sprott Asset Management have released an infographic on the platinum and palladium markets.  Sprott now offers exposure to platinum and palladium through its ETF's SPPP & PPT.U.  The infographic breaks down platinum and palladium sources of demand, production, ore grades, supply/demand imbalances (and the net supply deficit, as in silver), and historical [...] Check out these similar articles: Sprott Asset Management Files Prospectus With SEC for $1.5 BILLION PSLV Follow-On Sprott Asset Management Discusses The Greatest Trade of All Time The Ultimate Gold Infographic: The World's Gold Reserves & Supply

An Important Video You Should Watch Posted: 22 Jan 2013 10:15 AM PST Tweet READ THE FULL NEWSLETTER Here is a link to the Money News' latest report on the collapse of the dollar: This 'Third War' Will Be the Most Destructive in History, Warns Pentagon Adviser James Dale Davidson, Jim Dines, The Weiss group and others have written about this event.  In fact, I published an article by Davidson on this topic last fall. I think you should watch the above video, all of it, and think it through. Look, everyone is involved in this to make a living and Money News is selling "advice," but that doesn't make their message any less valid.  Silver (and gold) are the number one and two performing assets over the last 10 years, so owning, or buying gold stands on its own merit.  But, you also get the best form of financial insurance possible, in addition to an investment that holds its own against all comers.  Here is a chart published by Jim Dines that proves the point. So, my suggestion for today is to watch the video – Jim Rickards is the real deal.  He is one of Gerald Celente's key contributors on the economy.  Take him seriously.  I do.  You will be in good company – Jim Rickards, James Dale Davidson, James Dines, Martin Weiss, Jim Willie and Miles Franklin are all in agreement on this scenario.  Truth be told, so is Jim Sinclair – or else, his "gold way above $3500" would never come to pass.  You cannot afford to be wrong about this.  You really need to be aware of the already-in-process attack on your dollar holdings! One of our most in tune readers, and a long-time friend of Miles Franklin sent the following to us.  His comments were, "About as direct and succinct a description of our economic folly as can be.  BUY GOLD."  I am not trying to be "political" here, but the FACTS speak for themselves.  Like Bill Holter often says, "It's a mathematical impossibility!"  It's tragic our President, with the help of this Liberal Congress, can't add one plus one and come up with two.  We will ALL pay the price for this naiveté. Sincerely, David Schectman Miles Franklin ________________________________________________________ The Wages of Obama's Sins – StansberryResearch.com By Porter Stansberry   We begin 2013 in awe of what's happened to our country… Since 2008, when President Obama was elected, the official, net public debt of the U.S. federal government has increased by $5.5 trillion. That's more than double the size of the total net public debt of the U.S. in 2007, the year before Obama was elected ($5.03 trillion). These additional new debts have swollen the total net debt of the federal government to more than $11 trillion, or roughly 80% of GDP. These overwhelming public financial obligations are completely unprecedented in the history of our country, outside of the two major global wars we fought in the 20th century. But even these incredible figures don't tell the real story. Or even half of it. You see, these are merely the debts that we, federal taxpayers, are actively paying interest on right now. These don't include any of the additional $4.8 trillion in debts held by various government agencies (but which still cost us interest every year). Nor do they include any of Fannie Mae's or Freddie Mac's obligations, two private companies that were taken over by the federal government during 2008 and whose total obligations stand at a little more than $5 trillion. We've paid nearly $200 billion in interest for these obligations, though they remain completely off the federal balance sheet. Nor do these numbers include any of the trillions of dollars in additional Federal Reserve assets that have been created out of thin air to manipulate the market rate of interest lower during this period of rapidly growing demand for federal debt. When you add these other, genuine, federal obligations that exist right now, today, you come up with a total debt figure that's much more than $20 trillion. Far more than half of these debts were assumed under President Obama. Subscribe to Stansberry Research to read the full article. Similar Posts: None Found

New Record-Highs Everywhere with Stocks—Gold Almost Ready to Move Posted: 22 Jan 2013 10:08 AM PST By Mitchell Clark, B.Comm. for Profit Confidential There are a lot of stocks that are doing well in this market. Because there is no uniformity to business conditions in both the U.S. economy and the rest of the world, I'm making a conscious effort to attribute less weight to the major stock market indices and more to individual companies and their specific business conditions. I hate to say it, but the main stock market indices can be quite misleading, and one company can skew the index (like Apple Inc. [NASDAQ/AAPL] when it was at its high). The way I look at the stock market and the economy today is with very low expectations. If U.S. gross domestic product (GDP) can grow faster than the rate of inflation, then that's a good accomplishment. I hope the Federal Reserve is right with its prediction of 2.5% in U.S. GDP growth in 2012 and 3.5% in 2013. Of course, these forecasts change all the time, so it doesn't mean much. So, while the S&P 500 index is trading around its five-year high, plenty of stocks are doing much better than the index. (See "Earnings Picture Starts off Bright with Oracle.") 3M Company (NYSE/MMM) just hit an all-time record high on the stock market. This stock has had a few down years, but it has basically been going straight upward since 1982. Consider Johnson & Johnson (NYSE/JNJ). This position just hit an all-time high on the stock market. It was kind of slow over the last 12 years, only doubling not including dividends. The stock is up seven-fold since 1994, not including dividends. The Speed Retirement Hyper-Compounding Strategy Then there's my favorite, Colgate-Palmolive Co. (NYSE/CL). This stock is very close to breaking its all-time stock market high that it set last October. As is usually the case with this stock, it was worth buying when it was down the last few months. The company's stock chart is below: Chart courtesy of www.StockCharts.com There's lots of great action in this market; don't let the main stock market indices fool you. But now, if you would allow me to change topics, the one thing that's been on my mind a lot lately isgold. I can't escape this gut feeling that gold is almost ready to move. On the stock market, gold stocks have mostly done terribly over the last 12 months, even though the spot price only retreated somewhat. We've been in a major gold price consolidation for about a year and a half, which is about the same duration as the last two big price consolidations. Goldman Sachs recently lowered its gold price target for this year and next. But a lot of Wall Street analysts are still talking about $2,000-an-ounce gold sometime this year. I am one of them. A large part of the poor stock market performance from gold stocks (both large and small) over the last year is because costs have been going up—way up, in fact, and margins are much thinner. It was only a few years ago that anything over $1,000 an ounce was pure gravy for most gold producers. The latest industry-wide cash cost analysis I read suggested that $1,400 was the average breakeven point, so this doesn't leave a lot of room for exceptional earnings. And this is just one of the big risks with resource investing. There is just so much beyond your control as a stock market investor. Which is why, right now, in the environment we have for gold, I think investors wanting to play gold should consider trading right off the spot price, rather than individual gold stocks. The sovereign debt crisis in Europe still exists, demand for gold in India and China is strong, and gold production is about to get squeezed, due to costs. We're not there yet, but gold prices are almost ready for a major breakout. Gold Report Sign Up Below

Bank of America Foreclosure Reviews: Whistleblowers Reveal Extensive Borrower Harm and Orchestrated Coverup (Part I – Executive Summary) Posted: 22 Jan 2013 09:50 AM PST On January 7, ten servicers entered into an $8.5 billion settlement with the Office of the Comptroller of the Currency and the Federal Reserve, terminating a foreclosure review process which was set forth in consent orders issued in April 2010. Borrowers who had had foreclosures that were pending or had completed foreclosure sales in 2009 and 2010 could request an investigation by independent reviewers, selected and paid for by the servicers but subject to approval by the OCC. Some experts argued that the 2009 and 2010 time range was too narrow and excluded many borrowers who had been treated improperly. These professionals also questioned whether the investigators would operate independently and fairly. Nevertheless, the reviews were touted as delivering a measure of justice to abused homeowners, since any found to be have suffered wrongful foreclosures were to receive sizable monetary awards, and smaller payments would be made to those who experienced other forms of abuse. As HUD Secretary Shuan Donovan proclaimed: For families who suffered much deeper harm — who may have been improperly foreclosed on and lost their homes and could therefore be owed hundreds of thousands of dollars in damages — the settlement preserves their ability to get justice in two key ways. First, it recognizes that the federal banking regulators have established a process through which these families can receive help by requesting a review of their file. If a borrower can document that they were improperly foreclosed on, they can receive every cent of the compensation they are entitled to through that process. Second, the agreement preserves the right of homeowners to take their servicer to court. Indeed, if banks or other financial institutions broke the law or treated the families they served unfairly, they should pay the price — and with this settlement they will. Yet the foreclosure investigation was halted abruptly, with the OCC and the Fed failing to identify any methodology for how the portion of the settlement allotted to cash awards, $3.3 billion, would be distributed to homeowners who might have been harmed in 2009 to 2010, an astonishing lapse that will almost certainly result in small payments being made to large numbers of borrowers, irrespective of whether they deserved vasty more or nothing at all.* But except from its hamhandedness, this outcome was no surprise to astute observers. The OCC consent orders had been launched in an unsuccessful effort to render the ongoing 50 state attorney general/Federal negotiations moot. Critics described how these orders were regulatory theater, with Georgetown law professor Adam Levitin comparing them to promising in public to spank a child, then taking him indoors and giving him a snuggle. Leaks during the course of the reviews confirmed these concerns, revealing deep-seated conflicts, limited competence among the review firms, half-hearted efforts to reach eligible homeowners, and aggressive efforts by the banks to suppress any findings of harm. As grim as this sounds, the conduct was worse than the leaks suggested. After extensive debriefing of Bank of America whistleblowers, we found overwhelming evidence that the bank engaged in certain abuses frequently, in some cases pervasively, in its servicing of delinquent mortgages. This is particularly important because Bank of America has been identified in previous settlements as far and away the biggest mortgage miscreant, paying over 40% of last year's state/federal mortgage settlement among the five biggest servicers. This settlement, as intended, was yet another significant bailout to predatory servicers. As we will demonstrate over our upcoming series of posts, conservative estimates of damages due to borrowers under the consent order who suffered improper foreclosures from Bank of America exceed $10 billion. That contrasts with the cash portion of the settlement amount for Bank of America of $1.2 billion.** The amount owing for other abusive practices would have increased this total further. The OCC gave two rationales for shutting down the reviews. The first was that they were costly to Bank of America and other serivcers, potentially diverting funds from borrowers. This argument is spurious. Those expenses were always contemplated as being in addition to compensating borrowers for the considerable damage they suffered. Moreover, as we will demonstrate, the high price tag for undertaking the reviews was due not only to fragmented and poorly documented borrower records and the servicers' long-standing disregard for legal requirements, but significantly to an inefficient, poorly designed review process. The fees to the major firms engaged to conduct the reviews are so patently out of line that Caroline Maloney, a senior member of the House Financial Services Committee, has launched an inquiry. Professional service firm clients, particularly ones as powerful as major banks, when faced with such egregious levels of cost overruns, would normally demand significant reductions in the bills from their vendors. Instead, the Fed and the OCC let Bank of America make its cost problem their cost problem. The second reason given for shutting down the reviews is that the regulators claim few borrowers were harmed by impermissible foreclosure practices. An American Banker article last week quoted Morris Morgan of the OCC, who was overseeing the reviews from the regulators' side: "Do I think there were a significant number of people who were foreclosed on where the banks did not have a legal right to foreclose on them? At this point in time I don't think that was a significant number," he said. "But I would go further to say a very few number, and you could even argue one of those, is too many." This is both disingenuous and as we will demonstrate over our series, patently false. Borrowers could suffer wrongful foreclosures due to predatory or negligent foreclosure practices for reasons well beyond the servicer not having the "legal right to foreclose". Moreover, the servicers were ordered to look well beyond that issue. The whistleblowers saw ample evidence of abuses of that could and typically did result in the loss of home within the scope of the reviews they performed. Moreover, they also presented evidence of persistent, sometimes pervasive impermissible conduct at Bank of America which was simply not addressed in the tests or captured in related information gathering, yet clearly fell within the scope of the consent orders. As we will discuss, some of these abuses would likely result in an impermissible foreclosure or serious borrower harm. Turn the issue around: why would the banks be willing to down the reviews if indeed they were finding so little in the way of damage to borrowers? They would be well served to spend a few billion dollars to be able to say that with a fair and exhaustive process, hardly any borrowers were harmed. If this claim was true, the costs of finishing the reviews still would have been lower than the cost of the settlement plus the expenses of the reviews to date. The settlement is also a bailout for the "independent" foreclosure reviewer, Promontory Financial Group, which also played this role for Wells Fargo and PNC. Promontory occupies a unique role in Washington, DC. The firm, headed by former Comptroller of the Currency Gene Ludwig, is heavily staffed with former senior and middle level banking and securities regulators. For instance, former OCC chief counsel Julie Williams (who Ludwig hired when he was at the OCC) has just joined Promontory, and her replacement, Amy Friend, came directly from Promontory. As we will demonstrate in later posts in this series, even making the most generous interpretation possible of the role played by Promontory, Promontory's review at Bank of America completely omitted significant categories of borrower harm that were explicitly discussed both in the OCC consent order and Promontory's engagement letter with Bank of America. Scope of Our Investigation We interviewed five contract workers at the largest site Bank of America site where the foreclosure review work took place, Tampa Bay, Florida. All had worked on the project from relatively early on, and all had considerable knowledge of mortgage and foreclosure processes and documentation, with the least experienced having worked five years as a paralegal in small real estate-focused law firm. The majority had over ten years of relevant experience. Together they performed significant tests on over 1600 borrowers in a "live" mode, and ran preliminary versions of the tests on hundreds of additional borrower files (actual customer records from Bank of America systems, not dummied-up data) in the attenuated start-up phase. The reviewers also provided comprehensive documentation from some of the major tests designed by Promontory and operated on its CaseTracker software program as well as other documents provided by Bank of America. We provide a brief overview of the various roles in the Tampa Bay and other Bank of America locations at the end of this post, in Appendix I, and a description of the major tests in Appendix II. We have reviewed the information and documents presented by the whistleblowers with recognized legal experts in foreclosures and securitizations, and have also reviewed relevant OCC materials and Bank of America disclosures. Overview of Findings The foreclosure reviews showed persistent, widespread efforts by Bank of America to avoid any finding of borrower harm. These efforts were supported and enabled by Promontory. The whistleblowers, all of whom told their role would be to act as investigators and help borrower get compensation they deserved, described the review process as seriously flawed. Yet even with those obstacles, they saw abundant evidence of serious damage to borrowers. We asked our five whistleblowers to estimate the amount of borrower harm they saw for the borrowers whose cases they reviewed, and what portion of that was serious harm (all reviewers will be described as male irrespective of gender): Reviewer A: 90% harmed, with 30% to 40% suffering serious harm Reviewer B: 30% harmed, including instances of serious harm; described multiple instances of serious harm of on other tests performed on his borrowers but could not readily quantify Reviewer C: 67% harmed on his test; like B, saw multiple instances of serious harm in the borrower history not captured on his test as harm; could not readily quantify but specific examples cited during interviews alone exceed 10% Reviewer D: 95% harmed, with 30% to 40% suffering serious harm Reviewer E: 80% sufferd serious harm This level is consistent with the findings of a never-published GAO report on the foreclosure reviews that the rushed settlement appeared intended to terminate. The GAO review selected a random sample of foreclosure files and found an 11% error rate. The files the reviewers saw came (depending on the reviewer) at least 80% and in most cases 100% from borrower requests for review through the IFR process or an executive request for review. One would expect to see a markedly higher level of serious problems in these files. As we will describe in detail, these estimates considerably understate the actual harm suffered due to defects in the test design, active efforts to suppress findings of harm, and major gaps in Bank of America records. As one reviewer stated: I really kind of went into it very naively, I guess, as a lot of us did, that we were actually there to do good and were being welcomed there to do good for people….I mean, I had gone from pretty gung ho to, "Hey, you guys need to knock this crap off. You guys are just – you're, just, you're turning this into a sham." Note that Bank of America and Promontory are likely to claim, as the did late last year when ProPublica published an article questioning the independence of the foreclosure reviews, that Promontory was doing the reviews and the contractors employed in Tampa Bay and other locations were simply doing document retrieval. We will discuss in later posts in depth that this claim is ludicrous in light of how the organization was structured, how Bank of America managers interacted with the reviewers, and how the tests were designed and the reviewers were trained. Overwhelming evidence of widespread, systematic abuses . No interviewee estimated harm as occurring in less than 30% of the files they reviewed; one put serious harm at 80%. The interviewees did not simply describe individual borrower suffering in graphic terms (as one put it, "I saw files that would make your stomach turn.") Multiple interviewees would describe widespread, sometimes pervasive patterns of impermissible conduct. The reviews confirm what both servicing experts and foreclosure defense attorneys have seen since the crisis: Bank of America's servicing standards were poorly designed and thus unable to handle the deluge of troubled borrowers (suspense accounts, modifications, bankruptcy, etc.). In addition, BofA had a low level of competence in their servicing area and, as a result, the problems with their servicing was made worse. For instance, reviewers gave examples of types of behavior where Bank of America practices were clearly contrary to the law, yet the banks' personnel confidently maintained that they were proper OCC's badly flawed review structure compounded by complex, chaotic, and undermanaged implementation by Promontory. By delegating so much of the review process to "independent" firms (many of whom had little or no experience with servicing and foreclosure), the OCC doubled down on the same incompetence and poor standards that Bank of America and the other servicers already had in their servicing departments. Many of the flaws in the review process (compartmentalized reviews, conflicted supervisors, poor senior review for issues or disputes) were mirror images of the problems at the servicer. These problems were made worse by a bizarre management structure and frequent changes to test content and directives. Concerted efforts to suppress finding of harm. The organizational design, the way the reviewers were managed, the elimination of areas of inquiry, and evidence of records tampering with Bank of America records all point to a multifacted, if not necessarily well orchestrated, program to make sure as much damaging information as possible was not considered or minimized. To give one example: state law issues were eliminated from the in G test, which covered loan modifications (see Appendix II below), reducing it over time from 2200 questions to 500. Dubious role of Promontory. Promontory was a poor choice to perform the review. It had virtually no internal expertise in serivcing, provided little or no supervision, and, either by design or incompetence, managed to politicize the review process rather than make it independent. Promontory's recent accomplishments include telling MF Global's board that it had "robust enterprise-wide risk management" five months before it failed and finding only $14 million of Standard Chartered wire transfers in a money laundering investigation to be out of compliance, when the bank eventually admitted the amount was $250 billion. That is no typo, that is an over four order of magnitude difference. Why does Promontory prosper despite such implausible, indeed, embarrassing performances? It's because financial firms are eager buyers of extreme management-flattering positions that are seldom subjected to scrutiny thanks to Promontory's roster of former regulators. Indeed, Promontory occupies a position no firm holds in any other heavily regulated space, that of being the dominant shadow regulator. As we will demonstrate in later posts, the claims made by Promotory about the review process as to its independence and completeness are at odds with considerable evidence on the ground. We will present the evidence supporting each of the findings in successive posts in this series. Bank of America Foreclosure Review Appendix I by Bank of America Foreclosure Reviews Appendix II by –––––––––– * While the OCC maintains that some borrowers may still receive the maximum payment under the foreclosure reviews, $125,000, the abrupt termination of the foreclosure reviews at Bank of America and other banks and the dismissal of trained staff indicate that not further investigation will be made. That, in combination with the efforts we will describe to show how evidence of harm was not considered, minimized, or suppressed, suggest that the only people who might receive that level of payout will be ones that suffered not just egregious but easily identified harm and were also fortunate enough to get through the review process before the settlement was finalized. ** We attribute very little value to the "required other amount of assistance" of $1.6 billion, which Bank of America can satisfy by extremely low cost actions, such as writing off deficiency judgments on foreclosed borrowers. A deficiency judgment occurs when, after a foreclosure, the borrower is still liable for the difference between the amount owed on the mortgage when it exceeds the amount recovered in the foreclosure sale. People who undergo foreclosures are almost always under severe financial stress (we have discussed elsewhere that the incidence of "strategic defaults", ex on second homes, is greatly exaggerated). Banks historically have not pursued deficiency judgments; the cost of going after the borrower greatly exceeds what they might collect. At best, Bank of America might be able to sell them to debt collectors for a few cents on the dollar.

Fundamentals and future of the silver market Posted: 22 Jan 2013 09:50 AM PST When it comes to precious metals, most investors are dazzled by gold. The issue with gold, though, is that for many, it is expensive to afford and cannot be used as money. Silver, with price at the moment around $30, is more accessible to investors of all budgets and has...

Balmoral starts 2013 drill program at Detour Posted: 22 Jan 2013 09:17 AM PST Balmoral Resources Ltd. has commenced the 2013 drill program on the company's wholly owned Detour gold trend project in central Quebec. The principal focus of the 2013 winter drill program will be the further delineation and expansion of the known zones on the Martiniere property. During 2012, the company successfully continued the expansion of the high-grade Martiniere West zone on the Martiniere property. In addition, exploration drilling led to the discovery of several new high-grade gold zones along and proximal to the Bug Lake fault, approximately 600 metres to the northeast of the West zone. The Bug Lake discoveries are associated with a second major gold-bearing structure on the property — significantly enhancing the overall potential of the gold system in the Martiniere area. All known zones remain open for expansion at shallow depths. Initial drilling will target a number of high-priority exploration targets outside the known gold zones within the broader Martiniere property prior to commencement of expansion work on the known zones. This sequencing will allow for additional testing of any new discoveries following receipt of assays during the current winter program. Balmoral anticipates completing at least 14,000 metres of drilling during this phase of testing, with additional drilling already planned for the spring-summer season. The company is fully financed to complete its 2013 objectives. "With the exceptional success of our summer/fall 2012 drill programs in expanding the known zones of mineralization and making new discoveries in the Martiniere area, we have high expectations for our work on the Detour gold trend project in 2013," said Darin Wagner, president and chief executive officer of Balmoral Resources. Balmoral has also commenced a ground geophysical program, which will include the completion of at least 50 line kilometres of induced-polarization surveying on the company's Doigt and Harri properties. The two properties are located northwest and due east of the Martiniere property. Neither of these properties has been drill tested by the company to date and both represent fertile ground for the discovery of new gold and/or base metal systems similar to those currently being delineated by the company. Quality control and assurance Darin Wagner, PGeo, president and chief executive officer of the company, is the non-independent qualified person for the technical disclosure contained in this news release and has approved the disclosure herein. Mr. Wagner has supervised the initial work programs on the properties and visited the properties on multiple occasions.

Corvus Gold drills 72.4 m of 1.74 g/t Au at Bullfrog Posted: 22 Jan 2013 09:16 AM PST Highlights in NB-12-184: 58.0 metres of 1.7 g/t gold with 33 g/t silver, including: 3.8 metres of 4.1 g/t gold with 151 g/t silver, 4.4 metres of 6.9 g/t gold with 50 g/t silver, and 4.1 metres of 4.3 g/t gold with 25 g/t silver Vancouver, B.C……..Corvus Gold Inc. ("Corvus" or the "Company") – (TSX: KOR, OTCQX: CORVF) announces the latest assays from the final drill holes of the Phase II, 2012 Yellow Jacket drill program at the North Bullfrog Project, Nevada. The four hole program has now extended and further delineated the trend of the bonanza grade feeder system identified earlier in 2012. Best result to date was NB-12-138 which returned 72.4 metres @ 1.74 g/t gold and 98.7 g/t silver including 4.3 metres @ 20.0 g/t gold and 1,519 g/t silver (Table 1). The Yellow Jacket high-grade target area is located directly north of the currently delineated Sierra Blanca deposit. Results to date have not been incorporated in the current North Bullfrog estimated resource and updated preliminary economic assessment. Subsequent drilling is expected to add to the overall gold resource at North Bullfrog, and a global resource update, incorporating the Yellow Jacket target results, is planned for late 2013. The most recent result, Hole NB-12-184, intersected 58 metres @ 1.7 g/t gold and 33 g/t silver including 3.8 metres @ 4.1 g/t gold and 151 g/t silver, 4.4 metres @ 6.9 g/t gold and 50.4 g/t silver and 4.1 metres @ 4.3 g/t gold and 25 g/t silver (Table 1). The Yellow Jacket high-grade, fault controlled, gold and silver mineralization has been encountered over a strike length of approximately 700 metres and remains open on strike and at depth. 3D IP imaging has now linked the Yellow Jacket discovery to a large master fault system which extends for over 2 kilometres in length and could have significant potential for additional high-grade mineralization. In addition, recent detailed mapping, which utilized the new geophysical data, has now highlighted a number of other structural zones with similar signatures to the Yellow Jacket discovery and possible high-grade potential. Aggressive follow-up drilling of the Yellow Jacket system and several other targets is expected to commence early 2013. The most recent program, which commenced in October 2012, hit significant vein mineralization with broad zones of gold and silver mineralization hosting within it bonanza grade ore shoots which remain open on strike and at depth (Table 1). All vein intersections to date are within 150 metres of the surface (representing potential open pit mining depths) with quartz veins widening at depth (Figure 2), and none of these have been included in the current North Area estimated resource. The silver to gold ratio of mineralization in these veins is distinctly higher than the overall North Bullfrog resource estimate and could represent a major new silver discovery in the district which could significantly benefit the overall project. The Yellow Jacket target area is emerging as a significant new high-grade zone adjacent to the North Area deposit which could have a major impact on mining economics as a starter pit zone within the overall deposit, operating at a much higher grade with significant silver credits. Jeff Pontius, Corvus CEO, stated: "The near surface, high-grade Yellow Jacket zone not only offers an immediate positive impact on the North Area mine plan as a potential higher value starter phase, but also potential to evolve into a major new high-grade deposit in its own right. We believe the exploration potential for expanding the Yellow Jacket system and discovering new yet to be tested systems is high with our new understanding of the District. We at Corvus are very excited as we kick off our aggressive 2013 exploration and mine development program which will focus on expanding the high-grade and heap leach potential of the North Area as well as moving our Mayflower project through permitting and into planned development." Evolution of the Yellow Jacket Vein System Discovery The Yellow Jacket vein system represents a completely blind discovery of a large, previously unrecognized, high-grade gold and silver system in the North Bullfrog District (Figure 1). Prior drilling in this area was focussed to the east in an area of historic prospect pits along the Liberator and Yellow Jacket Faults, with RC hole NB-10-63 intersecting 10.7 metres @ 7.5 g/t gold and 6.5 g/t silver and core hole NB-12-126 intersecting 11.4 metres @ 4.9 g/t gold and 7.0 g/t silver. Core hole NB-12-127 (7.7 metres @ 2.4 g/t gold and 11.31 g/t silver) was designed to follow up on an interesting intersection in RC hole NB-11-91 (9.1 metres @ 2.07 g/t gold and 2.32 g/t silver) which was the first time quartz vein related mineralization was encountered. These results were used to target the hotter boiling zone part of the quartz vein system which lead to the Yellow Jacket discovery in hole NB-12-138 (72.4 metres @ 1.74 g/t gold and 98.7 g/t silver including 4.3 metres @ 20 g/t gold and 1,519 g/t silver). In the just completed 4 hole program, Hole NB-12-181 targeted the down dip projection of the veins in NB-12-138. However, structural displacements related to a NE-trending fault (now known as the Mai Fault) made it difficult to correlate the geology of the two holes (Figure 1, Table 1). Hole NB-12-182 was drilled approximately 50 metres south of NB-12-138/181 with the objective of better defining the location and nature of the NE-trending structure encountered in NB-12-181. This hole encountered stockwork veining with low-grade gold over significant intervals (Table 1) and succeeded in defining the Mai fault (Figure 1). Delineation of the Mai Fault allowed the plunge of the intersection of the Mai and Blind faults to be calculated and holes NB-12-183 and NB-12-184 were designed to drill perpendicular to the plunge of that intersection and successfully hit the target which appears to have an expanding vein system at depth that could hold the real potential of the system intersected to date (Figure 2). Figure 1: Plan of the Yellow Jacket zone showing the major structures and the drill holes related to the discovery of the high-grade vein system. Figure 2: Drill section in the plane of NB-12-183 and NB-12-184 showing how the geology and assays compare between holes (Table 1). Table 1 Significant Intercepts* from Yellow Jacket South Quartz Vein System Hole ID From (metres) To (metres) Interval (metres) Gold (g/t) Silver (g/t) Comments NB-12-138 59.6 132.0 72.4 1.7 98.7 Veined interval including 89.4 93.7 4.3 20.0 1518.8 Vein 1 complete including 91.7 93.7 2.1 33.0 2870.3 Vein 1 internal including 107.8 109.9 2.1 5.4 152.5 Vein 2 including 124.1 128.5 4.4 1.8 2.6 Vein 3 NB-12-181 84.0 167.8 83.7 0.2 5.1 including 108.6 110.4 1.8 1.9 6.0 Vein 1? including 127.5 131.6 4.1 0.7 50.8 Vein 2? NB-12-182 126.7 163.0 36.3 0.3 1.9 including 138.8 163.0 24.1 0.5 2.4 NB-12-183 69.5 141.1 71.6 1.4 28.9 Veined interval including 91.9 100.8 8.9 5.4 129.2 Vein 1 complete including 99.1 100.8 1.7 12.8 548.9 Vein 1 internal including 119.5 125.9 6.3 3.5 84.6 Vein 2 including 137.4 138.8 1.4 1.2 2.8 Vein 3 NB-12-184 86.2 144.0 57.8 1.7 32.6 Veined interval including 86.2 96.0 9.8 2.0 71.8 Vein 1 complete including 90.4 94.2 3.8 4.1 151.2 Vein 1 internal including 108.1 137.5 29.3 1.8 34.0 Vein 2 complete including 133.1 137.5 4.4 6.9 50.4 Vein 2 internal including 139.9 144.0 4.1 4.3 24.6 Vein 3? *Intercepts are approximate true width and calculated with 0.2 g/t gold cut-off and up to 0.7 metres of internal waste. About the North Bullfrog Project, Nevada Corvus controls 100% of its North Bullfrog Project, which covers approximately 68 km² in southern Nevada just north of the historic Bullfrog gold mine formerly operated by Barrick Gold Corporation. The property package is made up of a number of leased patented federal mining claims and 758 federal unpatented mining claims. The project has excellent infrastructure, being adjacent to a major highway and power corridor. The Company's independent consultants completed a robust positive Preliminary Economic Assessment on the existing resource inDecember 2012. The project currently includes numerous prospective gold targets, with four (Mayflower, Sierra Blanca, Jolly Jane and Connection) containing an estimated Indicated Resource of 15 Mt at an average grade of 0.37 g/t gold for 182,577 ounces of gold and an Inferred Resource of 156 Mt at 0.28 g/t gold for 1,410,096 ounces of gold (both at a 0.2 g/t cutoff), with appreciable silver credits. Mineralization occurs in two primary forms: (1) broad stratabound bulk-tonnage gold zones such as the Sierra Blanca and Jolly Jane systems; and (2) moderately thick zones of high-grade gold and silver mineralization hosted in structural feeder zones with breccias and quartz-sulphide vein stockworks such as the Mayflower and Yellow Jacket targets. The Company is actively pursuing both types of mineralization. A video of the North Bullfrog project showing location, infrastructure access and 2010 winter drilling is available on the Company's website athttp://www.corvusgold.com/investors/video/. Qualified Person and Quality Control/Quality Assurance Jeffrey A. Pontius (CPG 11044), a qualified person as defined by National Instrument 43-101, has supervised the preparation of the scientific and technical information (other than the resource estimate) that form the basis for this news release and has approved the disclosure herein. Mr. Pontius is not independent of Corvus, as he is the CEO and holds common shares and incentive stock options. Mr. Gary Giroux, M.Sc., P. Eng (B.C.), a consulting geological engineer employed by Giroux Consultants Ltd., has acted as the Qualified Person, as defined in NI 43-101, for the Giroux Consultants Ltd. mineral resource estimate. He has over 30 years of experience in all stages of mineral exploration, development and production. Mr. Giroux specializes in computer applications in ore reserve estimation, and has consulted both nationally and internationally in this field. He has authored many papers on geostatistics and ore reserve estimation and has practiced as a Geological Engineer since 1970 and provided geostatistical services to the industry since 1976. Both Mr. Giroux and Giroux Consultants Ltd. are independent of the Company under NI 43-101. The work program at North Bullfrog was designed and supervised by Russell Myers(CPG 11433), President of Corvus, and Mark Reischman, Corvus Nevada Exploration Manager, who are responsible for all aspects of the work, including the quality control/quality assurance program. On-site personnel at the project log and track all samples prior to sealing and shipping. Quality control is monitored by the insertion of blind certified standard reference materials and blanks into each sample shipment. All resource sample shipments are sealed and shipped to ALS Chemex in Reno, Nevada, for preparation and then on to ALS Chemex in Reno, Nevada, or Vancouver, B.C., for assaying. ALS Chemex's quality system complies with the requirements for the International Standards ISO 9001:2000 and ISO 17025:1999. Analytical accuracy and precision are monitored by the analysis of reagent blanks, reference material and replicate samples. Finally, representative blind duplicate samples are forwarded to ALS Chemex and an ISO compliant third party laboratory for additional quality control.

CNBC's Guy Adami: German Gold Repatriation Could Be Start of Gold Bank Run! Posted: 22 Jan 2013 09:00 AM PST As SD readers are likely well aware, the Bundesbank last week announced the repatriation of over 600 tons of Germany's gold reserves held at the NY Fed and the Bank of France. The "gold conspiracy theories" have now gone mainstream with a CNBC Market Mystery segment discussing the Bundesbank's gold repatriation over the weekend, which [...] Check out these similar articles: German Calls for Gold Repatriation Intensify As Fed Refuses to Allow Inspection The Doc & T. Ferguson Discuss PM Price Action & German Gold Repatriation Germany's Gold Repatriation and Brown's Bottom

Commodity Online launches new online E Gold, E Silver platform Posted: 22 Jan 2013 08:55 AM PST Speaking on the occasion, George Iype, Managing Director and CEO, said Indian households possess 15,000 tonnes of gold. Bullion and metal products could add value to retail investors.

FIRST-HAND ACCOUNT OF GOLD & SILVER MANIA IN CHINA- BLACK FRIDAY STYLE MOBS SCRAMBLING FOR BULLION Posted: 22 Jan 2013 08:31 AM PST silverdoctors.com / By THE DOC / January 22, 2013 With the recent claims from an Apple contractor that a Chinese silver shortage is the culprit for the production delay in the new I-Macs, an SD reader who has recently moved to China has given SilverDoctors a MUST READ first-hand account of the retail gold and silver mania underway in mainland China. With the Chinese New Year less than a month away, Ichban describes Chinese demand for gold and silver in Beijing as a tidal wave, and states that the demand for gold and silver is more intense than Thanksgiving/ Black Friday mobs in the US, despite the nearly 60% premiums retail dealers are asking for silver bullion!! Ichban gives readers a glimpse of what to expect when the mania stage of the gold and silver bull markets finally reaches the US, as he describes the scene at Chinese retail bullion stores: Despite these high premiums, I have never seen such frenzied buying in my life! I am a young adult male and 40 year old Chinese women are shoving me out of the way because they are trying to buy some gold and silver! Ichban's full first-hand account of China's gold and silver mania below: READ MORE Gold Report Sign Up Below

President Obama Inaugurated – Precious Metals To See Similar Returns As First Year Of Pr Posted: 22 Jan 2013 08:28 AM PST gold.ie

Andrew Craig on how to win at investing Posted: 22 Jan 2013 08:27 AM PST

Gold Trades Near One-Month High as BOJ Announces Stimulus Posted: 22 Jan 2013 08:26 AM PST bloomberg.com / By Nicholas Larkin & Glenys Sim / Jan 22, 2013 9:02 PM GMT+0800 Gold traded near the highest price in a month in New York as investors weighed planned stimulus by the Bank of Japan against higher import duties in India. The BOJ said today it will buy about 13 trillion yen ($146 billion) in assets per month from January 2014 and set a 2 percent inflation target. Investors expected bolder action now, said Greg Gibbs, a senior currency strategist at Royal Bank of Scotland Group Plc. India raised taxes on gold imports yesterday to reduce a record current-account deficit and moderate demand. "This is seen as mildly bullish for gold, but has been mooted for a while and is fairly discounted," David Govett, head of precious metals at Marex Spectron Group in London, wrote in a report, referring to the BOJ stimulus. "India has been a big buyer of gold in the past month, ahead of this announcement, and I doubt it will affect the market in a big way," he said, referring to the increase in duty. READ MORE Gold Report Sign Up Below

India's NSEL to promote E Gold trade among women Posted: 22 Jan 2013 08:25 AM PST E-gold remained the only commodity in India with the same price pan and is cheaper by 10-15 per cent than the prices quoted for the yellow metal by jewellers and banks

India Scrambles To Make Gold Purchases Ever More Difficult: Hikes Import Tax And Duties Again Posted: 22 Jan 2013 08:23 AM PST zerohedge.com / By Tyler Durden  Three weeks ago it became clear that in its fight to curb consumer thirst for gold products, India, whose population is the largest single source of gold consumer demand (at least for now, soon to be replaced with China) is losing said fight, after its finance minister made it very clear that "demand for gold must be moderated" leading to a hike in import taxes to 4%. Needless to say, there is no more certain way to increase demand for a given commodity (or gun, ahem US government) than to hint that the government will make its procurement problematic. Sure enough India blamed its record current account deficit on precisely this: the soaring imports of gold as locals revert to a currency far more appreciated and respected than paper, a topic further explained when we showed theexponential surge in gold-backed loans outstanding in India. Indeed, at least in this country, there is one safe and abundant collateral product which, contrary to the US, is as good as money – gold – whose consumer demand in just India and China is shown in the chart below. The Speed Retirement Hyper-Compounding Strategy Combined India and China consumer amount to some 35% of total gold demand, and 55% for just jewelry. And while we have tracked the relentless gold gross import surge into China, we have not done the same with India, because we assumed these were implied. READ MORE

Misunderstanding Gold Demand Posted: 22 Jan 2013 08:20 AM PST Robert Blumen This article is a short version of the paper at the bottom of the page! Most gold market research is based on the premise that the supply side of the market can be characterized by the quantity supplied and demand side by the quantity demanded.  The specific cause and effect relationship between these two variables and price is often unstated; and perhaps rightfully so: is it not obvious that a greater quantity demanded is the cause of a higher price, and that a greater quantity supplied is responsible for a lower price? No! This article will show that market forecasts based on quantities of gold are meaningless.  Widespread statements like "Gold demand was up by 15% in 2012" are true but only if they are understood in a misleading sense.  The supply and demand sides of the market consist of supply and demand schedules, not quantities.  A price forecast based on quantities is a non sequitur because there is no causal connection from the quantities to the price.  This error has side-tracked the majority of analysts into an obsessive focus on quantities while ignoring the actual drivers of the price. This article does not entirely stand alone; it builds upon other articles that I have written about the gold market, and on the marginal price theory of the Austrian School.  Some parts of this article will not make sense unless you are familiar with some of these concepts.  I chose to do this partly to avoid repeating ideas that I have already published, and partly to control the length.  I have linked to backup material that I believe is relevant. This article contains the key insights and principles of the paper at the bottom of the page. The paper elaborates each section in some more detail and has a detailed analysis on the CPM Group's Model. The Usual Explanation First, let's look at the examples. Most published analysis of the gold market is concerned with supply and demand numbers. From the UK Telegraph, under the headline, Gold demand increases 15pc: As the gold price increases, demand for gold and other precious metals has continued to grow. Demand for gold has continued to grow in 2012 and is predicted to increase further next year.  Research by Source, a provider of exchange traded products, shows that inflows into European gold ETPs have reached $6.8bn this year to date, constituting a staggering 15.4pc growth The World Gold Council's web site contains the following: Since 2003, investment has represented the strongest source of growth in demand. The last five years to the end of 2011 saw an increase in value terms of around 534%. In 2011 alone, investment attracted net inflows of approximately US$82.9bn. My third example cites CPM Group's 2012 Gold Yearbook Press Release: Investment demand, the key driver for gold prices, remained at historically high levels last year. Net additions to private investor gold holdings declined to 34.3 million ounces in 2011, down 5.8% from 2010 levels. Even though net additions to private investor holdings slipped lower in 2011, a year in which prices touched a record high, the decline had followed two years of double-digit growth from already high levels of net additions to investor holdings. (p2) Gold fabrication demand rose 0.6% to 72.9 million ounces in 2011, slower than the 2.3% growth in 2010 due to higher gold prices. Despite higher prices, many consumers sought to purchase more gold jewelry, specifically in developing countries, as a hedge against inflation and form of savings. Developing countries' demand for gold in the form of jewelry rose to 50.2 million ounces, up from 49.6 million ounces. (p3) Market Sectors and Flows Most gold analysts divide the market into sectors.  This section will discuss how this is done and what the quantities mean in relation to the sectors.  A typical sector breakdown is: mines, industry, jewelry, investors, and the official sector (central banks).  Some writers break the investment sector down into bars, coins, and ETFs.  The choice of sectors is not critical to the points that follow; none of the conclusions would change if, instead of these sectors, flows between countries were used instead.  Some reports combine the two approaches, dividing the developed world market into sectors and treating the rest of the world on a country or regional basis.  Any of these breakdowns would serve equally well. Below is a list of the sectors, their buying, and their selling: Inter-sector Flows and Quantity Balance The quantity balance between sectors is at the core of most market analysis.  The quantity balance is an equation relating all of the flows in the market to each other.  (A flow is the quantity bought and sold, while a stock is a quantity held by someone over time).  Quantity balance is the requirement that every movement of gold must be accounted for on the buy side and the sell side.  It is similar to the way that double-entry bookkeeping works.  This section will derive the quantity balance equation.  The following section will discuss its significance. Over a one-year period, every trade that takes place between a buyer and a seller is counted in the following way: the quantity of gold bought (and sold) is added the buying sector's gross quantity bought and to the selling sector's gross quantity sold. At the end of the year, net flows for each sector are calculated.  The definition of the net flow for a single sector is: sector net flow = sector total buying – sector total selling Sector net flow can be a positive number, meaning that the members of the sector bought more than it sold; or a negative number, indicating that the members of that sector sold, in aggregate, a greater quantity of gold than they bought. Assuming that mines sell all of their production, which is nearly always true, mine sector net flow is always a negative number. mine net flow = mine buying – mine selling = 0 – mine selling = – quantity mined For every trade, the quantity bought is equal to the quantity sold.  This means that the sum of all sector net flows is zero.  By the rules of algebra, this arithmetic identity can be rearranged in several ways: (1) quantity mined + net industry + net jewelry + net investor + net official = 0 (2) net industry + net jewelry + net investor + net official = quantity mined The CPM Group uses a different sector breakdown than I have used here, so their quantity balance is a little bit different.  They use the following market sectors: total supply (mine plus scrap), fabrication demand (industry plus jewelry), official sector and investment.  Their quantity balance in their partitioning is summarized in equation (3), below.  (3) quantity mined + industry sold + jewelry sold = industry bought + jewelry bought + net official + net investor In this breakdown, official and investor sectors have a net flow on the right side of the equation but the jewelry and industry sectors have gross purchases on the left of the equation and gross sales on the right. The preceding equations are all saying the same thing: all the gold that comes out of mines ends up as net inflow into one or more market sectors.  These identities all follow directly from the laws of arithmetic.  They contain no new information.  They are only a restatement of the original assumptions, namely, that miners sell all of their production, and that no gold is destroyed during a trade.  The mine sector net flow is always negative but the other sector net flows could be positive, negative or zero. The False Logic of Quantities I believe that the error of attributing gold price moves to quantities is based on the following invalid thought process on the demand side (with similar thoughts on the supply side not shown here): The gold price is driven by supply and demand Supply and demand are quantities Looking at the demand side, more demand implies a higher price, less demand a lower price. More supply means a lower price, less supply a higher price. The key to forecasting the gold price is therefore measurement of gold supply and demand. The main problem with this view, as I will show in the next section, is that there is no cause and effect relationship between the quantities and price. Flows not the Cause of Price The financial media commonly reports that buying is the cause of the price going up.  Stories in the financial media usually report only one side or the other side of the market.  For example, an increasing number of small investors buying coins is often cited as the cause of gold price strength.  However, the same story could equally well have been written as a bearish report about the increasing number of investors willing to sell their coins.  Either story would be true, at least from a quantitative standpoint and both would be wrong in attributing the movement in the gold price to one side of the market only. If the reporter accurately described a large volume of coin buying and an equal volume of coin selling, then what conclusion about the price should the reporter draw?  Exactly none.  Buying as such is not the cause of the higher gold price, nor is selling the cause of price declines.  If buying could take place without selling or selling without buying, then one or the other could be an independent cause of price moves.  But neither can occur without the other.  Buying and selling occur always in equal quantities, and, at the same time.  For every purchase of gold by a buyer, an equal quantity is sold by the seller.  The quantity of buying, which is always the same as the quantity of selling, is not the cause of the gold price. While everyone agrees that the gold price is driven by supply and demand, not everyone who voices agreement means the same thing.  The correct version is: the gold price is driven by supply schedules and demand schedules.  Most analysis of the gold market is based on an incorrect interpretation of the statement, namely, the gold price is driven by the quantity supplied and the quantity demanded.  An increase in gold demand is the cause of a higher price if an increase in demand, means a change in the preference rankings of coin buyers for more gold/less cash.  In that case, all other things equal, transactions would occur at a higher price. The quantity balance equations are logically valid at all times, but they are accounting identities, not statements of cause and effect. The quantity bought and sold is not an explanation of why the price moved.  All inter-sector flows must balance, but flow is not the cause of the price; it is a summary quantity of gold traded, at whatever price.  Any combination of positive, negative, or net inflows or outflows into any one or more sectors could occur during a year where the gold price was higher, lower, or unchanged. Suppose during the last year that net investor inflow is a positive number and net official inflow is negative.  This indicates that over one year, investors purchased gold from central banks.  But this fact is an arithmetic identity, not a cause of the gold price movements during this year.  If, the following year, central banks on net purchased gold from investors, we are still no closer to knowing at what price the gold was purchased, and whether that price is higher or lower than the current price. The True Cause of the Gold Price: Marginal Preferences Each investor strives to maintain their desired holdings of all potential assets, including cash (i.e. one or more national currencies such as the US dollar or euro).  As their preferences change, and as market prices change, investors adjust their portfolio holdings, at the margin, to bring them in line with their preferences.  The price of an asset emerges as investors balance, bid for assets they wish to hold more off and offer assets they prefer to hold less of. Supply and demand as they contribute to the price must be understood not as quantities but as schedules.  Market prices balance the aggregated supply and demand schedules of the entire market.  These aggregated schedules are also known as the more widely used supply and demand curves.  In the standard micro-economic presentation, the supply and demand curves intersect at a point, marking the price and the quantity. I have written about the application of supply and demand schedules to the gold market in Does Gold Mining Matter?  There I explain that the supply schedule for gold (in dollar terms) is dominated by the owners of the world's existing stockpile of gold, and that mined gold during any one year period has a relatively small impact on the supply schedule.  The price is set primarily by the reservation demand schedules of the owners of the existing gold.  In the same piece,I show that the quantity mined, which many analysts incorrectly believe is "the supply", has little influence on the gold price. The quantity balance constraint cannot be a cause of the gold price because balance equations contain only quantities.  The gold price is the quantity of money exchanged for the quantity of gold.  Any explanation of the gold price must contain some reference to the quantity of money involved.  Equilibrium price theory provides a complete theory of the cause of the gold price, taking into account the gold and money sides of the market. If the gold price is higher now than it was at some point in the past, that can only be due to a shift in preference schedules.  One of the following must be true: 1) either buyers valued the gold more highly and thus were willing to pay higher price, or 2) sellers valued their gold more highly and were only willing to part with it at a higher price.  Historical net flows provide a summary of where in the market were the buyers who valued gold the most highly, and the sellers who valued it the least. Up to this point I have argued that the quantities supplied and demanded are not the cause of the gold price.  The true causal relationship between price and quantity is nearly in the opposite direction.  Transactions occur in the market because there are some investors whose mix of cash and gold holdings is not consistent with their preferences.  Trading will occur until everyone has adjusted their portfolios, at the margin, to their preferred holdings.  If no one changed their preferences after this moment, and no new gold were mined, then no more trading would occur. Trading continues because people are always changing their minds about what they want to own.  Individuals who did not previously consider themselves gold investors enter the market; others no longer consider gold a good investment and sell out.  The more individual investors that have changed their preference rankings since the last market price, the greater the disequilibrium in the market, and the more change in the ownership of gold and cash is necessary in order for investors to reach their desired holdings.  The volume of trading reflects the extent that holdings of some individuals no longer reflect their preferences. Demand Schedules Not Measurable So far I have argued that the gold price is an outcome of the preference schedules of investors.  A preference schedule is not a number.  It is a spiky curve representing a range of quantities and prices.  Schedules are not directly measurable in the way that quantities are, because they include hypothetical quantities that would be supplied and demanded at prices above and below the market.  In order to have the complete supply and demand schedules, the analyst would have to know how much gold would be sold and purchased at every price.  When gold trades, we know only that the quantity supplied and demanded at one price. While I have spent most of this article discussing demand, the supply side of the market works the same way.  Supply schedules and demand schedules together drive the gold price. Supply schedules are immeasurable as are demand schedules. Conclusion The main point that I have tried to show is that the demand numbers used in most gold market reports do not measure the demand side of the price formation process.  The same could be said about the supply number.  These two numbers are connected through the quantity balance constraint but they are not the cause of the gold price. Gold market analysts have a tougher job than other financial analysts.  In Value Investors Hate Gold, I argue that it is more difficult to analyze the yellow metal than equities because quantitative measures such as yield, cash flows, balance sheet leverage, and growth rates provide a fundamental basis for analysis. Gold has none of those things. The fundamentals of gold are the current purchasing power of money; expectations about the future purchasing power of money; the growth rates of various national money supplies; the volume of bad debts in the system; expected growth rates of bad debts; the attractiveness of other available investments; and the investor's preference for consumption rather than investment.   These factors do not act directly on the gold price.  Instead, they are focused through the prism of investor preferences, which are not measurable.  The price is the ultimate measurement of how investors view these factors.  The paradox of gold is that which drives the price cannot be measured, that which can be measured does not drive the price. Full paper: Misunderstanding Gold Demand

Tajikistan buys 1.1 tons of Gold in 2012 Posted: 22 Jan 2013 08:17 AM PST The former soviet state's total gold reserves climbed to 11 tons with the purchase of 1.1 tons of gold in 2012.

How Do I Choose What to Write About Posted: 22 Jan 2013 07:43 AM PST Tweet Many people have asked me, "How do choose what to write about?"  This is easy to answer, I usually watch CNBC in the morning and usually after only 5 or 10 minutes I hear something that is blatantly false and point my finger at the TV and call "BULL."  Many times I will read Drudgereport and see an article of interest and "think forward" as to its true meaning or what it could lead to.  Other times I will read a piece of news and know that "that can't be," something else is going on behind the scenes and what is being reported is what "they" "want us to see." Several people in the finance business have told me that they can't believe I can come up with a topic every day.  Again. this seems to be quite easy.  In fact it seems to be getting easier because as each day passes, more and more news, opinions and forecasts just don't add up.  This I guess is the politically correct way to say that lies, falsehoods and misdirection have become the norm.  I have written a couple of times that the very first page of the first book that I cracked in college was a Keynesian economics book.  After reading "We don't know why the Great Depression happened but we do know that it can never happen again" I viewed nearly everything from a skewed, skeptical standpoint.  Yes I was young, only 18 years old at the time but I knew that this didn't make sense. This epiphany led me to "dig" for the truth.  Not the truth as seen by the masses but the logical truth.  Not the "convenient" and status quo truth (accepted because it always was the "truth").  No, I always wanted to know "why."  Just like the little 5 year old constantly asking "why," I always questioned everything and wanted to know "why."  I also would compare "truths" and find out that if one thing was the truth, another "truth" that was logically incompatible with the first one didn't add up… so one or the other was wrong.  I must say that the advent of the Internet has been a wonderful tool of information and made "digging" much easier than it otherwise would have been. Today, "truth" is almost synonymous with "consensus."  If everyone believes something… then it must be true, right?  WRONG!  But this is what it has boiled down to.  "Perception" is everything… or at least 90% of the battle.  This concept is very important to understand because if you cannot you will never really understand what is in fact happening.  This concept is not new by any means, just think about the use of the bullish/bearish consensus.  When everyone gets to one side of the boat, contrarians position themselves in reverse because they know that the buying or selling is about to end because there are no "masses" left to continue the trend.  Or on a far grander scale, think of how "perceptions were managed" by people prior to dictatorships being set up. Think about where we are today, perception is everything and without it we would live in total chaos.  I could go down a list that would never end but at the core of managed perception is that the world's completely unbacked currencies have value… they don't other than the fact that they still spend.  The perception has been "planted" that Gold and Silver are "risky," they are not.  In fact they ARE money, money that competes with all of this unbacked global currency.  The "printers" have done a wonderful job of planting and cultivating this idea as evidenced by less than 1% of Americans having any ownership at all when this is exactly what will protect them.  Think of where we were just a few years ago.  The perception was that real estate could never, EVER go down… so much for that "truth."  Or how about "deficits don't matter?"  Well, they didn't…until they did and now we know that the Treasury's ability to borrow is not unlimited no matter how high Congress raises the debt ceiling. Several people have asked me "why" I write.  I write for several reasons.  First, I write because what I see coming is going to be very dangerous and many good and unsuspecting people will be ruined.  Through logic and common sense I hope that some will (have) figure(d) it out and move to protect themselves and their family.  Another and I guess you could say "selfish" reason is that I wanted be on the record.  Back in late 1997 or so I began a big push to get my clientele some ownership in metals because the prices of Gold and Silver were below the cost of production (a no brainer if you will).  But the reaction to my logic was mind boggling.  I was called crazy, stupid, ignorant, a conspiracy nut, a barbaric thinker, mentally unstable and even "dangerous"… because everyone just knew that Gold was a bad investment.  So after retiring from retail brokerage where I was nearly completely "muted" because of "firm" (Wall Street) policy, I couldn't tell the truth!  I could speak it, I could position clients correctly (with many and numerous questions from the compliance dept. as roadblocks)… but I couldn't put what I believed to be the truth "in writing."  Too much liability they said and my view was not the "policy" of the firm.  By the way, I never got better than a C+ in any English class and owe a debt of gratitude to my wife Kathy for "adjusting" me.  Though my writing is still not technically or grammatically correct it is leaps and bounds better than what it was back in late 2006. So there it is, "what and why."  The "what" part is so easy because spin, propaganda and generally illogical bullcrap has reached all time highs and choosing topics are like picking low hanging fruit.  I wish it weren't this way but it is.  It would be wonderful if we lived in a peaceful world where truth was cherished and a man's word was his bond but we don't.  We live in a world where contracts and the rule of law are no longer which is why you must do everything you can to protect yourselves! Similar Posts: There Are Always A Few People Who Get Angry If I Write Something That They Disagree With 'Gold as Money' and What to Do Now to Protect Yourself Before It's Too Late 'Gold as Money' and What to Do Now to Protect Yourself Before It's Too Late

Stewart Thomson: Gold's Tactical Assault On $1800 Posted: 22 Jan 2013 07:40 AM PST Submitted by Stewart Thomson: This morning the BOJ doubled their inflation target, to 2%, and announced they would begin open-ended QE in 2014.  Of even greater importance, they announced the bank would begin a new era of coordinating policy with the Japanese government. Jens Weidmann, head of the German central bank, sounds particularly vocal, in [...] Check out these similar articles: Stewart Thomson: Unsterilized QE to Turn $1800 into Here to Stay Floor for Gold Stewart Thomson: Key Gold Breakout Stewart Thomson: $1800 Gold- 3 Taps & Out?

Will precious metals see similar returns in Obama’s second term? Posted: 22 Jan 2013 07:39 AM PST One month after Obama was inaugurated in 2009, gold had risen to $992.90/oz and silver to $14.44/oz. Thus, in the 30 days subsequent to the inauguration, gold rose nearly 16% and silver by more than 27%.

Iran arrests 40 people over Gold markets manipulation Posted: 22 Jan 2013 07:26 AM PST According to country's Judiciary spokesman, indictments have been issued against the suspects and 20 other suspects are being held in custody.

Gold’s bull market called into question by bank analysts Posted: 22 Jan 2013 07:20 AM PST Analysts at Citigroup and Goldman Sachs have scaled back gold price forecasts, especially in the longer-term, as the underpinnings of its bull market are being called into question.

$20 or $70 Silver for 2013? Posted: 22 Jan 2013 06:58 AM PST Tweet Andy Hoffman speaks of his predictions for silver in 2013: Andy Hoffman: $20 or $70 Silver for 2013? Similar Posts: AltInvestors Hangout Round Table Podcast All The Dishonest Truth That's Not Fit To Print Interview with Max of the Reason Silver Channel

Nord Gold output falls in 2012, to gain in 2013 Posted: 22 Jan 2013 06:43 AM PST For 2013 it expects production to be in the range of 770,000 to 850,000 ounces with an expected to gain between 7.4%-18.5%.

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