Gold World News Flash |
- Silver: What Happens Next?
- 60-Year Market Veteran’s Predictions On Gold, Silver & Stocks
- John Embry: SLV May Be Empty Because of Global Silver Demand
- Stunning Interview From Market Legend On Gold, Oil & Stocks
- It’s Currency War! – And Japan Has Fired The First Shot
- The Gold Price Lost $2.00 to Close on the Comex at $1,167.40
- Refuting The (Consensus) Bull Case
- Somebody wants gold shares at distress prices
- 1,001 Nights Of Stock Market Stories
- Dave Kranzler: Proof that gold is manipulated using paper gold
- Anatomy Of A Failing State: Japan's Budgetary Nightmare
- Goldman Shows "Equity Bust" Risk Highest Since 2008
- Is The Swiss Gold Referendum Impacting The Price Of Gold
- Gold Daily and Silver Weekly Charts - Pause Ahead of Elections and Non-Farm Payrolls
- A GREAT Model to Understand Gold Price Swings
- We’re Close To One Of The Most Dramatic Reversals In History
- The Difference Between Currency Wars and Financial Wars
- Why the Political Elite Really Need You to Vote
- The Real Reason Your Stockbroker Hates Gold
- Yen Massacre & Gold Muscle
- Gold Confiscation & Its Consequences | Mike Maloney & James Turk
- Gerald Celente - Forecast 2015 Mideast, US military, Palestinians and Israelis
- No Ebola Quarantine, Greenspan says Buy Gold, Obama Care Update
- 60-Year Market Veteran’s Predictions On Gold, Silver & Stocks
- Silver Price What Happens Next?
- Understanding Global Monetary Policy: And How to Profit From It
- Play the Health Care “Earnings Catalyst” for Double-Digit Gains
- A Silver Primer - Where Are We Now?
- Gold and U.S. Dollar
- Sunny Silver Price Forecast - Low Price Today Means High Price Tomorrow
- Gold Buyers Drop 19%, Sellers Rise 9%
- Silver: What Happens Next?
- Is US Shale Oil a Ponzi Scheme at $75 per Barrel?
- Study: Long-Term Rise in the Dollar Does Not Bode Well for Gold
| Posted: 05 Nov 2014 12:00 AM PST by Gary Christenson, Deviant Investor:
What now? 1. More of the same. Both silver and gold fall further. The High Frequency Traders and central banks have plenty of "dry powder" and can push prices lower. From the perspective of the Asians who are buyers, what is not to like? Or, 2. Both rally from here, flop around, and then fall further. Or, 3. Both build a base at these prices and maybe collapse again, but the "longs" stand for delivery and the COMEX is forced to default and "cash settle." Or, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 60-Year Market Veteran’s Predictions On Gold, Silver & Stocks Posted: 04 Nov 2014 10:00 PM PST from KingWorldNews:
Silver Once the final breakout takes place, the rise in silver should take the metal to new all-time highs. In all likelihood the rise in the price of silver will be quite violent. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| John Embry: SLV May Be Empty Because of Global Silver Demand Posted: 04 Nov 2014 09:40 PM PST from WallStForMainSt: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stunning Interview From Market Legend On Gold, Oil & Stocks Posted: 04 Nov 2014 09:02 PM PST  Today a legendary trader and investor, who recently called the bottom in the U.S. stock market with remarkable precision, gave King World News a stunning interview about what surprise action to expect in gold, global stock markets, and oil. Victor Sperandeo has been in the business 45 years, and has worked with famous individuals such as Leon Cooperman and George Soros. Below are the warnings and predictions issued by Sperandeo.This posting includes an audio/video/photo media file: Download Now | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| It’s Currency War! – And Japan Has Fired The First Shot Posted: 04 Nov 2014 07:15 PM PST by Michael Snyder, The Economic Collapse Blog:
Without a doubt, the Japanese are desperate. Their economic decline has lasted for decades, and their debt levels are off the charts. In such a situation, printing more money seems like such an easy solution. But as history has shown us, wild money printing always ends badly. Just remember what happened in the Weimar Republic and in Zimbabwe. At this point, the Bank of Japan is already behaving so recklessly that it is making the Federal Reserve look somewhat responsible in comparison. The following is how David Stockman summarized what just happened…
The Japanese are absolutely destroying the credibility of their currency in a last ditch effort to boost short-term economic growth. So why would they want to devalue their currency? Well, there are too main reasons why nations do this. One reason is that it makes it easier to pay off debt. The government debt to GDP ratio in Japan is approximately 250 percent at the moment, and the total debt to GDP ratio is approximately 600 percent. When you have lots more money floating around, servicing crippling levels of debt becomes more feasible. Secondly, nations like to devalue their currencies because it makes their products less expensive on the world stage. In other words, it helps them sell more stuff to other people. But in the process, this hurts other exporters. For example, what the Bank of Japan just did is already having serious consequences for South Korean automakers…
This is why I said that there are winners and there are losers in every currency war. If you boost your exports by devaluing your currency, you take away business from someone else. And ultimately other nations start devaluing their currencies in an attempt to stay competitive. That is why they call it a currency war. For now, the Japanese are celebrating. On Friday, Japanese stocks surged almost five percent for the day and reached a seven year high. Investors tend to love quantitative easing, and they were very pleasantly surprised by what the Bank of Japan decided to do. But of course rising stock prices are not always a good thing. As Kyle Bass recently explained, wild money printing caused Zimbabwe’s stock market to skyrocket to unprecedented heights as well and that turned out very, very badly…
And just like we have experienced with quantitative easing in the United States, Japan’s money printing has done very little to help the real economy. Here is more from David Stockman…
So up to this point Japan’s experiment in crazy money printing has been a dismal failure. Will printing even more money turn things around? | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The Gold Price Lost $2.00 to Close on the Comex at $1,167.40 Posted: 04 Nov 2014 05:47 PM PST
Before I launch in to hopeful signs for metals, here's a little explanation. Bollinger Bands are a technical indicator that measure a market's volatility. The lines are marked usually at one standard deviation on either side of a moving average. (Standard deviation measures variability, leave it at that.) In a normal distribution of readings, 68% of all readings fall within two standard deviations of an average, plus or minus. So if Bollinger Bands cover two standard deviations around a moving average, they should contain about 2/3 of all possible readings (or prices, in this case). Hence the Bollinger Bands' value as a technical indicator: Whenever a market leaps outside those bounds, it is surpassingly low or surpassingly high. An article today brought to my attention today GOLD PRICE performance against its Bollinger Bands: day before yesterday it punched out the bottom. Even if you expand the BB to four standard deviations, which covers 95% of what you expect to see, it just about touched that. First point is, that makes gold way oversold. Second point is, that when the gold price punches that line, it usually turns around in a few days. Let's pile up a third point. The RSI is monstrously oversold & the full stochastic is turning up. And volume has dried up on the downside moves. Don't misunderstand me. There are signs the gold price is about to turn up, but even if it rises, it might merely stage a corrective rally, then drop more. We have to see yet what gold makes out of any rally. To this picture silver adds dropping downside volume and an oversold RSI. More, that premium on US 90% silver coin keeps rising, a harbinger of higher silver prices. But whenever the last bottom comes, it draweth nigh, I believe. Well, I feel better today. After all, ain't none of us getting out of here alive, so we might as well enjoy it while we're here. Also, I got to thinking about that silver & gold & it may not look so hopeless after all. US dollar index, measure of the ineffable because immaterial value of the US dollar against other immaterial currencies, "fell" today 25 basis point (0.29%) to 87.16. That does nothing to disturb the working technical hypothesis that it's going higher. Did y'all ever wonder what would happen if we all stopped pretending the US dollar had value? Euro rose 0.51% to $1.2546, but don't know no more about rallying than a cat knows about integral calculus. Judging from now, euro'll be lucky if it don't fall below $1.00. But the euro ain't near about as sick at the yen. It rose 0.28% today to 88.02 cents/Y100. Since its high on 15 October, the yen has lost 7.4% to its lowest level since January 2008. Nothing to catch it above 80.55. Stocks slept again today. Dow added 17.6 (0.1%) to 17,383.84 but the S&P500 lost 5.71 (0.28%) to 2,012.10. They will rise further. The Fed by extending this artificial rally has only guaranteed the eventual decline will be more catastrophic. Dow in Gold skootched down 0.14% to G$307.60 gold dollars (14.88 oz). It's nearly as overbought as it has been at any time in the last five years. The MACD is high, rate of change enormous, and stochastics ready to turn down. It is beginning to appear that its next big move will be down, not up. Dow in silver rose 0.82% to end the day at S$1,403.87 silver dollars or 1,085.81 troy ounces. Everything I said about the Dow in Gold goes for the Dow in Silver, only more so. Sounds nuts, but we may look back here and ask, "Why in the world couldn't we see that was a bottom?" Aurum et argentum comparenda sunt -- -- Gold and silver must be bought. - Franklin Sanders, The Moneychanger The-MoneyChanger.com © 2014, The Moneychanger. May not be republished in any form, including electronically, without our express permission. To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $3,130.00; silver's primary is up targeting 16:1 gold/silver ratio or $195.66; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold or 18 ounces of silver. or 18 ounces of silver. US $ and US$-denominated assets, primary trend down; real estate bubble has burst, primary trend down. WARNING AND DISCLAIMER. Be advised and warned: Do NOT use these commentaries to trade futures contracts. I don't intend them for that or write them with that short term trading outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures. NOR do I recommend investing in gold or silver Exchange Trade Funds (ETFs). Those are NOT physical metal and I fear one day one or another may go up in smoke. Unless you can breathe smoke, stay away. Call me paranoid, but the surviving rabbit is wary of traps. NOR do I recommend trading futures options or other leveraged paper gold and silver products. These are not for the inexperienced. NOR do I recommend buying gold and silver on margin or with debt. What DO I recommend? Physical gold and silver coins and bars in your own hands. One final warning: NEVER insert a 747 Jumbo Jet up your nose.  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Refuting The (Consensus) Bull Case Posted: 04 Nov 2014 05:41 PM PST Excerpted from Elliott Management's Paul Singer letter to investors, The consensus (bull) case:
The opposite case is basically a refutation of every element above and compels us to look to history for clues about the next market, financial and economic environment.
An understanding of history, context, the incentives of policymakers and the fundamentals of the economy is very useful, even essential, for survival, in order to develop a sense of humility and an appreciation for how broad the range of outcomes can be. To start with, we believe that any period of real deflation (however unlikely to occur in the first place) cannot continue for long, because of the alertness of policymakers to such an event and their oft-repeated determination to throw monetary policies at any hint of declining prices. Conversely, regardless of whether serious inflation is possible or on the horizon, a bond market collapse is always possible in a system that is not sound. * * * We cannot possibly make the following statement any more clearly or strongly:
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Somebody wants gold shares at distress prices Posted: 04 Nov 2014 05:17 PM PST Petropavlovsk Shares Jump on Consortium's Rescue Bid By Ashley Armstrong Shares in Peter Hambro's Russian mining business jumped by almost 20 percent after it emerged that a consortium fronted by Oleg Deripaska's right-hand man was attempting to gatecrash its rights issue plans. The London-listed gold miner Petropavlovsk, set up as Peter Hambro Mining in 1994, is the second biggest gold producer in Russia but has suffered as the price of the yellow metal has tumbled, dragging the company's share price down 65 percent so far this year. Petropavlovsk announced in September that it was in discussions with lenders about a restructuring and rights issue to service an expensive debt pile taken on at the peak of the gold boom. If the company fails to do so, it could breach its banking covenants next month and $310 million worth of convertible bonds would mature, which could lead to its going bust. ... ... For the remainder of the report: http://www.telegraph.co.uk/finance/newsbysector/industry/mining/11208973... ADVERTISEMENT Buy precious metals free of value-added tax throughout Europe Europe Silver Bullion is a fast-growing dealer sourcing its products from renowned mints, refiners, and distributors. Because of a legal loophole that will close soon, you can acquire the world's most popular bullion coins free of value-added tax throughout the European Union. You can collect your order in person at our headquarters in Tallinn, Estonia, or have it delivered in any of the 28 EU countries. Europe Silver Bullion is owned and operated by North American and European experts in selling, storing, and transporting precious metals. We have an extensive product inventory of silver, gold, platinum, and palladium, and our network spans the world. Visit us at www.europesilverbullion.com. Join GATA here: Mines and Money London http://www.minesandmoney.com/london/ Vancouver Resource Investment Conference http://cambridgehouse.com/event/33/vancouver-resource-investment-confere... * * * 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: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1,001 Nights Of Stock Market Stories Posted: 04 Nov 2014 05:13 PM PST Submitted by Nicholas Colas of Convergex 1,001 Nights Of Stock Market Stories There is an old Wall Street chestnut that goes, "It's not a stock market; it's a market of stocks." Fair enough, but we'll take a different approach today to complete this aphorism: "It is a market of stories." Yes, it is stories that vie for our attention, define our realities, and spur us to action. Recent academic work on the subject reveals that the right narrative – ideally one with a strong human element – physically changes how we process information and make us more likely to empathize with and ultimately believe the stories we hear. Too fluffy a concept for you? The research we cite was partially funded by the U.S. Department of Defense's Advanced Research Projects Agency (DARPA), and when they have an interest in something, rest assured it has a very serious purpose. As for applications in the world of investing, recognizing powerful stories earlier than the pack is pretty much the job description for analysts and portfolio managers alike. Just be aware that it is all too easy to fall for one as well. As a child, my parents would tell me stories out of the "1,001 Nights", a collection of Middle Eastern tales that (in Western form, anyway) include Aladdin's Lamp, Ali Baba and the Forty Thieves, and Sinbad the Sailor. Only in adulthood did I read the actual translations, which makes HBO's Game of Thrones look like a 1950s "Archie" comic book. Even the framing of the stories is pretty nasty. At the beginning of the first book we read about a king who, betrayed by his first wife, now chooses a young woman from his kingdom to wed every night. And then early the next morning he has them killed. "It's not you, it's me, but follow the man with the ax anyway"… This goes on until the Vizier's own daughter, Scheherazade, decides to put an end to the serial killing of the country's maidens. She marries the king, but on their wedding night asks that her sister might visit for a few hours before the executioner comes at daybreak. The sister asks for a story, and Scheherazade obliges. The climax of the tale comes just as the sun rises, and by this point the King is so involved in the story that he grants Scheherazade a second day of life just to hear its conclusion. The next night she starts a new story, and the same thing happens at daybreak. Fast forward 1,001 nights of stories (2 ¾ years) and the King has fallen love with Scheherazade and they live happily ever after. If you think this is just old-time storytelling with no place in a modern "Rational" society, consider that the U.S. Department of Defense funds research on how humans process stories through its Defense Advanced Research Projects Agency (DARPA). These are the same folks that brought you highly advanced drone technology, cutting edge night vision systems, micro-sized GPS for people and munitions, and, well, the Internet (original name: ARPANET). Their interest in storytelling is entirely pragmatic, as you can see from this 2011 posting on FedBizOpps (www.fbo.gov):
One of the researchers involved in this work is Paul Zak, a Claremont Graduate University professor, researcher, and popular TED conference speaker. In a Harvard Business Review blog posting last week, Dr. Zak outlined his recent research. Here is a quick synopsis with link to the whole post below:
Storytelling clearly matters a lot more than just being entertained or enlightened. An attention-grabbing story about relatable people triggers an actual biological response which, in turn, drives us to action. In thinking through what this means for investors, I arrived at the following list:
Sources: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dave Kranzler: Proof that gold is manipulated using paper gold Posted: 04 Nov 2014 04:54 PM PST 7:54p ET Tuesday, November 4, 2014 Dear Friend of GATA and Gold: Echoing the work of GATA's late board member Adrian Douglas from 2010, market analyst and fund manager Dave Kranzler of Investment Research Dynamics in Denver today published a chart showing that gold almost always rises when the Asian physical markets are open and falls when the London and New York paper markets are open. Douglas' study of the dichotomy is posted at GATA's Internet site here: Kranzler's chart and commentary, headlined "Proof That Gold Is Manipulated Using Paper Gold," is posted at the Investment Research Dynamics Internet site here: http://investmentresearchdynamics.com/proof-that-gold-is-manipulated-usi... CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Buy metals at GoldMoney and enjoy international storage GoldMoney was established in 2001 by James and Geoff Turk and is safeguarding more than $1.7 billion in metals and currencies. Buy gold, silver, platinum, and palladium from GoldMoney over the Internet and store them in vaults in Canada, Hong Kong, Singapore, Switzerland, and the United Kingdom, taking advantage of GoldMoney's low storage rates, among the most competitive in the industry. GoldMoney also offers delivery of 100-gram and 1-kilogram gold bars and 1-kilogram silver bars. To learn more, please visit: http://www.goldmoney.com/?gmrefcode=gata Join GATA here: Mines and Money London http://www.minesandmoney.com/london/ Vancouver Resource Investment Conference http://cambridgehouse.com/event/33/vancouver-resource-investment-confere... * * * 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: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Anatomy Of A Failing State: Japan's Budgetary Nightmare Posted: 04 Nov 2014 04:17 PM PST Submitted by Charles Hugh-Smith of OfTwoMinds blog, Once the global economy rolls over into contraction, the tide will recede and Japan's fiscal and monetary bankruptcy will become painfully apparent. What do you get after 25 years of stagnation and Keynesian Cargo Cult monetary stimulus? A failing state, that's what. The intellectually bankrupt ruling Elites of Japan have no solution for Japan's slow stagnation, as real reform would diminish their wealth and power. So their only "solution" is to double-down on monetary stimulus: flood the enfeebled Japanese economy with more credit and fiscal stimulus, a.k.a. building bridges to nowhere: Japan's Monetary Pearl Harbor. But reality isn't as immobile as failed policies. While Japan's ruling Elites fiddled away the past 25 years propping up sclerotic cartels and phantom loans, Japan's population has aged and its primary sources of wealth creation have atrophied. We can see these trends in Japan's national budget. Before we dig into the numbers, we need to note that Japan's Ministry of Finance routinely announces an austerity budget for the next fiscal year around 92-95 trillion yen (TY), and then supplemental spending during the fiscal year pushes actual expenditures up to 100 TY. According to Highlights of the Budget for FY2013/2014, the initial 2013 budget was 92 trillion yen, while the actual 2013 spending came in 10 trillion yen higher, at 102 trillion yen. According to Japan's government looks to trim budget deficit, the national budget has hovered around 100 trillion yen for years. So we have to take these 2013 spending estimates as lowball estimates that are 5%-10% below actual spending. REVENUES: 92.6 trillion yen Tax revenues: 43.0 TY Other revenues: 4.0 TY Government Bond Issues (borrowing): 42.8 TY EXPENDITURES: 92.6 TY National Debt Service (interest & bond redemptions): 22.2 TY Social Security: 29.1 TY Other: 41.2 TY Debt service and Social Security are 120% of tax revenues. In other words, tax revenues don't even cover debt service and Social Security. An astonishing 46% of the governments budget is borrowed money. Even with near-zero yields on Japanese government bonds (about 1%), 51% of tax revenues in 2013 were spent on national debt service. The 2014 increase in the national consumption tax rate from 5% to 8% is expected to raise an additional 6 trillion yen of revenue in 2014, but that remains to be confirmed. If history is any guide, increases in national consumption taxes (a.k.a. value-added taxes or VAT) fail to generate the expected windfall of additional revenue, as consumers spend less. Since Japan's GDP fell an astounding 6.8% after the tax increase took effect in April, it seems likely the revenues will disappoint official expectations. Even if this new revenue comes in as expected, the amount being borrowed to fund government spending will only drop a modest amount, from 42.8 trillion yen to 41.2 trillion yen. Yee-haw. Meanwhile, national debt service is expected to rise from 22.2 trillion yen to 23.2 TY. It's difficult to see the tax increase as a panacea, as borrowing barely declines and debt service costs actually increase. For context, we need to look at Japan's tax revenues, borrowing and spending over the past decade. Only then can we see why Japan is a failing state: tax revenues are as stagnant as the real economy, while spending rises as Japan's population of retirees soars. In the decade since 2005, tax revenues actually declined slightly while annual borrowing increased by 8 trillion yen and expenditures rose by 10 TY. Virtually all of this increased spending comes from higher Social Security costs, which rose from 20 TY to 30 TY as the demographics of Japan's aging population inexorably pushes retirement and healthcare costs up.  You see what's happening: tax revenues are unchanged while interest and Social Security costs keep rising. A relatively modest increase in the consumption tax triggered a major meltdown in Japan's gross domestic product, and the planned increases in this tax from 8% to 10% are attracting criticism: Next consumption tax raise painting Abe into a corner. If it turns out that the tax hike generates little additional revenue, Japan's path to failed-state will be set: a stagnant economy generating stagnant tax revenues, a central state that funds half its spending with new debt, and rapidly rising social welfare and debt service costs that are already consuming all the tax revenue and then some. Can Japan continue down this path indefinitely? Many believe the answer is "yes," but we cannot base the next 10 years on the previous 25 years. Since Japan's financial bubble popped in 1989, the Internet and China greatly boosted global growth, enabling Japan to live off its well-oiled export and debt machinery. But the engines of global growth have reached diminishing returns, and a prolonged global recession looms just ahead. Playing games such as devaluing Japan's currency and monetizing Japan's ballooning debts with freshly issued money does nothing to fix the rot beneath the bright neon lights of superficial wealth. Once the global economy rolls over into contraction, the tide will recede and Japan's fiscal and monetary bankruptcy will become painfully apparent. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Goldman Shows "Equity Bust" Risk Highest Since 2008 Posted: 04 Nov 2014 03:53 PM PST With the equity market back to near-historical highs, Goldman Sachs' Jan Hatzius revisits his analysis of the predictability of asset price busts. The main predictors of busts are past asset price appreciation and past credit growth, followed by a rising investment/GDP ratio. Hatzius warns that their model says that the further US equity price gains of 2014 have pushed the risk of an equity bust back up - as the chart below shows to levels not seen since 2008/9. Goldman's "equity bust" model is back at levels last seen in 2008/9 - though obviously well off the peak levels, as the main factor holding down the risk of another bust, especially in the housing market, is the weakness of credit growth since the crisis.
The Goldman "Bust" Model
* * * Jan Hatzius is careful end with somewhat of a silver lining though...
* * * | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Is The Swiss Gold Referendum Impacting The Price Of Gold Posted: 04 Nov 2014 01:50 PM PST The "Save our Swiss Gold" referendum is currently making headlines around the world. For those who haven't followed this story, here's a short recap [you may jump to the charts below if you are already up to date]: the Swiss will vote on the 30th of November to force the Swiss national Bank (SNB) 1. into increasing Gold reserves to 20% of its balance sheet, 2. to forbid it from selling any of its Gold in the future and 3. to force it to hold all these Gold reserves within the country. What the referendum is really after is to curb the SNB's rapid expansion of foreign currency reserves (now totalling almost U$500bn, or more than 80% of its balance sheet or circa 75% of the Swiss economy's national output). In a world of central bank balance sheet expansion and concerns over "fiat" money, this goal may seem a reasonable one. Now consider the historical context. These reserves started to accumulate in the wake of the 2008 financial crisis and during the subsequent Eurozone debt crisis as the SNB attempted to mitigate the Swiss Franc's "Save haven" status and its rapid appreciation vs the Euro by buying foreign denominated securities. Indeed, from 2007 to 2011 EUR/CHF had dropped almost 40% from 1.60 to near parity pushing Switzerland into recession and deflation (the Eurozone is Switzerland's largest trade partner representing more than 45% of its exports and 65% of its imports). In August 2011, the SNB introduced a 1.20 floor level on EUR/CHF committing to defend it and triggering a further acceleration of foreign denominated asset purchases. If this intervention cannot go on for ever, it is widely accredited for having put Switzerland back on the growth path. Now, the latest polls are tight with 44% in favour of the referendum, 39% against, with 17% still undecided. The Swiss National Bank is voicing aggressively against it (a rare event in Swiss politics) and to be fair, we would agree with it, as passing this referendum will significantly reduce its ability to defend the floor with dire economic consequences if it were to break. Analysts do believe the bill has limited chances of making it through as most major parties are against it and historically, the undecided do end up voting against what they don't understand. Accept our apologies for this long introduction, but isn't it a dream come true for many gold bugs out there? In a recent study, a large US investment bank estimates that in order to comply with the referendum (the initial 20%), the SNB would need to buy circa 1'500t of gold, spread over 5 years (300 t/year) and that "while gold liquidity should be efficient to accommodate these purchases, this dynamic would reinforce a firm floor at $1'200/oz, with price potentially rallying to $1'350/oz in the intermediate aftermath of a possible referendum". Although low probability, anticipation of the referendum should at least have some impact on the market discounting machine. Let's look at the charts (they are quite unilateral for now). This Investor's View of Gold (a Weekly, Daily, Hourly chart combination) is labelled a "Potential Continuation downtrend". Our Weekly charts, which have been negative for almost 2 years, still show some downside potential in price and time with our possible target range between $1'175 and $961 (or an $1068 mid point possibly towards late this year, 1st half next year). On our Daily charts, the lower range of our targets seem to lead towards 1'130 over the next few weeks (the $1'160 mid point has just been achieved and the trend is still heading down). On our Hourly chart, impulsive targets are fulfilled, but our time targets are still outstanding (red timing sphere still outside of the chart) and our risk index is not yet oversold. No sign of any Swiss Gold referendum anticipation yet. Now let's turn to the Trader's View of Gold, a 60min, 15min and 4min combination: It is also in a "Potential continuation downtrend", although targets have been reached on all three frequencies. This may point to some exhaustion in the recent acceleration. What is more interesting in our view is what triggered the latest acceleration: the more hawkish than expected FOMC Statement on Wednesday 29th of October. Not much of a Swiss referendum influence there. The breakdown was triggered by the expectation of timely interest rate hikes next year (and the related Dollar strength), or the cost of holding gold in an improving economy. Finally, we will look at an Investor's View showing the relative chart of the HUI Gold Bugs Index to the GLD –SPDR Gold Trust (HUI/GLD or Gold Mines vs Gold): Over the last ten years, this relative chart has often accelerated up in the early stages of any bullish Gold move: mid 2005 to early 2006, end 2008 to end 2009, mid 2012 and to some extend earlier this year (naturally mines are leveraged to the price of Gold). At present, it is still showing some downside potential on all three frequencies. It is interesting to note that Gold's recent bounce off $1'200 earlier this month, did not produce much of a reaction. We will however be watching this pair closely over the following months for any earlier indications of a sustainable reversal (linear fall for now on our Daily charts). So is the Swiss referendum having any influence? From our selection of charts, the dynamics seem to be elsewhere. Gold is still sought as a protection and with the US economy on the road to normalization (growth and expected interest rates hikes) and the S&P flirting with new highs, the cost of holding it is increasing everyday. Now, Bear markets don't last forever and this one does recall the one on Gold between end 1974 and late 1976 (a drop from circa $195 to $103 before resuming its secular uptrend). Our Weekly charts on Gold, although still in a descent, are getting closer to their targets in price and time. As for the referendum, the recent drop in the price of Gold may help the SNB convince voters that holding 20% of its reserves in non-saleable Gold isn't that good an idea after all. One last chart for the road, an Investor's view (Weekly, daily, Hourly) on Brent vs Gold: The relationship came close to breaking into downside Impulsive territory on our Weekly charts earlier this month (only corrective down for now), the Daily chart did reach their downside targets and our Hourly charts are starting their correction up. This chart is extraordinarily similar to the one we presented last week (SPY vs TLT) and in a way, may reflect the same thing, an uptake in inflation expectations and sustained growth in the economy. Let's hope this relation holds and reinitiates its Daily and Weekly uptrends.
Have a great weekend, J-F Owczarczak (@fingraphs) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gold Daily and Silver Weekly Charts - Pause Ahead of Elections and Non-Farm Payrolls Posted: 04 Nov 2014 01:15 PM PST  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| A GREAT Model to Understand Gold Price Swings Posted: 04 Nov 2014 01:05 PM PST What do the last three chairs of the U.S. Federal Reserve have in common? Well, it's not their taste in structured black blazers. It's the fact that they all see gold as a kind of Winston Churchill-like nesting doll -- a riddle wrapped in a mystery inside an enigma. July 2013: Then Fed chairman Ben Bernanke told Congress he doesn't "pretend to understand gold prices... nobody does." | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| We’re Close To One Of The Most Dramatic Reversals In History Posted: 04 Nov 2014 01:05 PM PST  Today an acclaimed money manager told King World News that we are very close to seeing one of the most dramatic reversals in any market in history. Stephen Leeb also spoke about China, Russia, and the West, and said the next leg of the bull market in gold will take the price above $10,000.This posting includes an audio/video/photo media file: Download Now | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The Difference Between Currency Wars and Financial Wars Posted: 04 Nov 2014 12:52 PM PST This post The Difference Between Currency Wars and Financial Wars appeared first on Daily Reckoning. Ed. Note: It’s easy to confuse “currency wars” with “financial wars”… But as Jim Rickards explains in the following interview with Henry Bonner, there is one major difference people often overlook… and it’s the one reason we’re more likely to see a currency war than a financial one. Read on… Henry Bonner: Hi Jim. You have recently published Currency Wars and now The Death of Money. Are you expecting a global collapse of every currency? And if so, a collapse relative to what? Jim Rickards: I expect a collapse in the value of currencies relative to real goods, real assets and real services. This will happen to all currencies, not just the dollar. I don't expect a world where people lose confidence in the dollar and the euro does really well. On a relative basis, I've been bullish on the euro for some time. In the endgame, however, if people lose confidence in the dollar this will be inflationary in all countries around the word and I don't think that any currency will be able to withstand it. When I say 'the death of money' what I really mean is the loss of confidence in the purchasing power of money. That's very likely to be a global phenomenon not confined to any particular country. Henry Bonner: Is a widespread loss of confidence in paper currencies the end result of a currency war that you see happening? In a currency war, it's not that you want to destroy the other currencies, it's that you want to cheapen your own currency… Jim Rickards: Currency wars are part of the picture because the way you fight a currency war is by cheapening the currency, cutting rates and quantitative easing. We saw that recently with the announcement of more quantitative easing from Japan, which took the markets by surprise and caused the Japanese Yen to fall by over 2 percent in a single morning. That is a huge move in the currency markets. Another big factor in currency wars is the question of paying sovereign debts. It's the sovereign deficits that are really the problem and the question is how to deal with them. One way to deal with them is through inflation, which, of course, is the goal in a currency war. The problem is that not everybody can devalue against everybody else all at once. You have to take turns. So it goes back and forth and back and forth. That's what happened in the 1920s and 1930s and it's happening again today. Henry Bonner: Is the purpose of the different factions in a 'currency war' to destroy other currencies? Or is the 'currency war' simply a byproduct of each country trying to get out from its debt obligations? Jim Rickards: In a currency war, it's not that you want to destroy the other currencies, it's that you want to cheapen your own currency; that actually means you're strengthening the other currencies. You want to import inflation through higher import prices. You're right — it is a policy and not something that just happens randomly or because of other actions. Countries have policies with regards to interest rates and taxes, and they have policies with regards to exchange rates. It is very much a deliberate policy; it doesn't just happen. Henry Bonner: You have said that China may secretly be selling the dollar and buying gold. If they're trying to devalue their own currency why do this? Shouldn't they buy the dollar and sell the yuan? Jim Rickards: You're confusing two different things. You're mixing up currency war with financial war. I have discussed financial war, which is different from currency war. Currency war is an economic policy countries use to fight deflation and encourage inflation by cheapening the currency and creating inflation in the form of higher import prices. It's a way of creating monetary easing. It's an age-old economic policy, used most famously in the late 1920s and 1930s in what became known as 'beggar they neighbor.' Countries were stealing growth from each other by debasing their currencies, trying to import inflation and improve their trade balances by causing cheaper exports to foreign buyers and more expensive imports for domestic buyers. That combination was seen to bolster growth. Financial war is different. Financial war involves countries that are traditional rivals or even enemies, for instance the US, Russia, and China, with competing interests everywhere from Eastern Europe to the South China Sea. Countries have fought wars in the past using traditional kinetic methods — armies, navies, air forces, missiles, submarines and so forth. We now live in an age where, thinking about warfare, you have to look at asymmetric forms of warfare — not just traditional forms — like chemical, biological, radiological weapons, guerrilla warfare, terrorism, and financial warfare. So the scenario I was discussing that involves China buying gold and selling the dollar was not a currency war; it was a financial war. There you are trying to destroy the economy of your opponent, which is a very different situation. Henry Bonner: Is it correct to say you were very involved with the bailout of Long Term Capital Management? Jim Rickards: Yes. There is a book about it — When Genius Failed, by Roger Lowenstein — that discusses my role, along with others', obviously. I was general counsel of Long Term Capital Management from start to finish, and I negotiated the bailout in 1998. Henry Bonner: Alan Greenspan, the former Chairman of the Federal Reserve, has blamed the financial models used by the Fed for his missing the financial crisis. Does this remind you of what happened at LTCM? Do you think the Fed has gotten any better at predicting crashes since then? Jim Rickards: No. I think you're exactly right. The models that LTCM was using in the 1990s were the same models that Wall Street was still using in the early 2000's and, for that matter, the same models being used today. They are called 'dynamic stochastic general equilibrium models' and also risk management models like 'value at risk' or VaR models. They were the ones that we used in the '90s and have continued to use for the last 16 years. They're still being used now. They do not correspond with how markets actually work or to actual human behavior. They have failed in the past and they will fail again. If you have the wrong model, you will get the wrong policy and you will be negatively surprised by results every single time. Henry Bonner: According to Greenspan, the Fed expanded its balance sheet not to boost the economy or to keep inflation moving higher. It was because the Federal government had such large expenditures that it would have 'crowded out' private borrowers if the Fed had not increased the size of its balance sheet. Do you think that's true? Is the Fed directing the economy? Or just reacting to the capital demands of the US government? Jim Rickards: I think both things are true. I think Greenspan is right that we are seeing monetization of debt. This is what Frederick Mishkin, the former member of the Federal Reserve board of governors refers to as 'fiscal dominance.' Yes, I think Greenspan is right about that but it's also true that they're trying to fulfill the dual mandate of price stability and creating jobs. As between the two, the Fed is willing to tolerate higher inflation if they can create more jobs. They don't talk about 'fiscal dominance' and they don't explicitly say they're monetizing the debt. In fact they deny that they're monetizing the debts. Greenspan's right. When the credit demands of the Federal government are that great, you either have to accommodate the demands or somebody is going to be crowded out. I think that the result would be deflationary. Governments cannot tolerate deflation. So rather than choose between stimulus from monetary ease and monetization of debt, I think that they are doing both. Henry Bonner: When you look at the bank bailouts or LTCM bailout, do you think the Fed achieves economic stability by bailing out these institutions? Or do you think that they end up with a more fragile system after the bailouts? Jim Rickards: Both. I think that in the short run, they did in fact prevent a bigger collapse. If LTCM had not been bailed out there would have been a worse collapse in 1998. If Goldman Sachs had not been bailed out there would have been a worse collapse in 2008. In the short run, Fed policies did prevent a worse collapse and a worse economic downturn, but it came at a very high cost. Probably the long run costs will be greater than the short-term gains. A lot of the short-term disruption might have produced a more stable system on a going-forward basis, with more of an emphasis on organic growth as opposed to financial engineering. …central bankers can't tell the truth or what they really think because the market impact would be too great. I think that the bailout worked but only in the short-run to prevent worse events at the time. In the long run they're just creating larger bubbles and large potential collapses that have not emerged yet but probably will in the next year or so. Henry Bonner: You've said the 'stress tests' done by the Treasury on the big banks were junk. Does that tie into the idea that the system is actually more unstable now? Jim Rickards: The answer is yes. If you look at the balance sheets, bank capital is larger now; regulators would say that the system is more stable as a result. But that's not how I see things. I look at things in terms of the gross national value of derivatives, the inter-connectedness of major financial institutions, and the concentration of assets in the largest banks. Putting all those things together, the system is a lot more complex and more inter-connected on a much greater scale now; that's a recipe for larger financial collapse. Going back to what I said earlier, if you have the wrong model you're going to pursue the wrong policy and get the wrong results. The system is more unstable, but when the Fed regulators look at it, they would probably say the system is more sound. Henry Bonner: One last question: Are you at all surprised or alarmed by Greenspan's comments that gold and interest rates would go higher? Jim Rickards: No. If you look at Greenspan's record, before he became Chairman of the Federal Reserve he said many positive things about gold. Since leaving the chairmanship, he's said positive things about gold on numerous occasions — for instance at the Council on Foreign Relations this week. He has a history of looking on gold favorably but during the entire 20 years that he was Chairman of the Federal Reserve, he never had a good thing to say about gold. I think it says more about the constraints on central bankers; in other words, central bankers can't tell the truth or what they really think because the market impact would be too great. I think that Greenspan is reverting to saying things today that he was saying 40 years ago but could not say when he was Chairman of the Fed. Regards, Henry Bonner and Jim Rickards Ed. Note: As the newest addition to Agora Financial’s stellar list of financial editors, Jim Rickards has become a regular figure in The Daily Reckoning email edition… and his comments have already raised a few eyebrows. Get the full story — including exclusive opportunities to take advantage of real, actionable stock picks — by signing up for The Daily Reckoning, for FREE, right here. This interview originally appeared at Sprott Global, here. The post The Difference Between Currency Wars and Financial Wars appeared first on Daily Reckoning.       | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Why the Political Elite Really Need You to Vote Posted: 04 Nov 2014 11:20 AM PST This post Why the Political Elite Really Need You to Vote appeared first on Daily Reckoning. “Hi, this is Michelle Obama…” You hear the most amazing things on the streets of Baltimore. On Election Day, a loudspeaker mounted on a white van makes its way up and down the streets with a recorded message. As near as we could make out, Mrs. Obama was urging grown-ups to vote. As they say on Wall Street, she was “talking her book.” The political elite needs the voting masses like a tractor-trailer needs diesel fuel — to get where it is going. In the Wall Street Journal last week our spirits were buoyed when we realized that we had more life left than we thought. New figures show a man who reaches age 65 will likely live to be 86.6 years old — a full two years more than the last forecast. Two more years? What will we do with them? The public merely votes for whichever candidates have done the best job of hoodwinking it. Run for public office? Learn a foreign language? Rob a liquor store and serve 24 months in jail? Wait. There must be a cloud to go with this silver lining. “The new estimates [...] could eventually increase retirement liabilities by roughly 7%,” says the Journal. The last time we looked, the US was already so far underwater it was almost sure to get the bends. According to GAAP accounting, Washington owes about $212 trillion — most of it in money it doesn’t have — to pay pensions and health care benefits. If people are living longer, those liabilities must increase. Let’s see, 7% of $212 trillion… Hmmm… You can do the math as well as we can. The new total should be about $15 trillion more. And if that is so, what does it mean for government pension and health care systems throughout the developed world? What it means is that they are all going broke. Led by those aging pacesetters: the Japanese. Yes, in the race to see which modern, debt-funded social welfare state will go broke first, Japan is in the lead. As longtime readers already know, the essence of government is armed robbery. Coaxed to the polls by Michelle, voters may fantasize that they set the course for the United States of America. But it is the elite who are in the driver’s seat. That is our observation… and the conclusion of two university studies reported recently in these pages. The public merely votes for whichever candidates have done the best job of hoodwinking it. Then the elite use the police power of the state to transfer wealth and power from the voters to themselves. Which is why the paramilitary buildup of local police forces is so alarming: It suggests they are going to strong-arm us all. In the old days, they were unapologetic about it. Even as late as the 19th century, Napoleon’s army stomped over Europe with Liberty, Equality and Fraternity on its lips. But larceny was in its heart. The soldiers of the Grande Armée stole everything they could cart away. Modern government demands more fraud than force. Capitalism depends on complex, trusting relationships and long-term fixed investments. Stealing things outright disrupts it. Output goes down. Nations that have no respect for the requirements of capitalism have weak economies. And weak economies can’t afford much firepower. That was what led China and Russia to abandon their Communist creeds in the late 20th century. Command economies are weak economies, and weak economies can’t compete militarily. After the French Revolution, almost all major countries found they needed to make the common people feel that they were in charge of government. And after Bismarck, political parties found they needed to offer the voters some form of social welfare. Otherwise, they faced a “revolt of the masses.” That is what turned today’s governments into huge kleptocratic insurance companies. They run grossly inefficient health care and pension programs; the elites steal a large part of the cash flow (sugar subsidies, QE, Fannie Mae, pharmaceuticals, bailouts, etc.). This model has worked reasonably well for the last 150 years. Capitalists added more meat to the average man’s diet and more leisure to his time. Wealthier, he demanded… and was able to support… increasingly ambitious insurance programs. But Bismarck’s model reached its peak in the last half of the 20th century. In Europe and the US, substantial real income gains ended in the 1970s. The old Fords and Rockefellers were gone. And the new capitalists were so fettered with taxes, rules and regulations that they found it hard to move ahead. The wolves outnumbered the lambs at the polling stations; the dinner menu was a foregone conclusion. Debt and demography, too, reduced growth rates. But people still wanted more benefits. They looked to the government and the credit industry to supply them. Presidents Johnson and Nixon cut the dollar loose from gold in 1968 and 1971 — making it possible to go deeper into debt than ever before. As benefits rose, the more important they became to the people receiving them… and the more costly they became to the governments. Politicians found they could not raise taxes or cut benefits. All they could do was borrow more. As is recounted superbly by former Reagan budget adviser David Stockman, in the fight for balanced budgets in the early 1980s the Republican Party took a dive. Thereafter, there was no serious opposition to deficits. By early in the 21st century, more than half of the voters were receiving support from the government. The wolves outnumbered the lambs at the polling stations; the dinner menu was a foregone conclusion. In the US, cutting military spending could still finance social welfare spending. But the security industry too has been turned into a giant part of the insurance complex — with millions of wolves relying on jobs, contracts, health care and retirement benefits. And now — with graying populations, falling birthrates, heavy debt and slow growth — claims rise. The insurance company model is headed for a bust. The good news from last week’s life expectancy numbers is that we have a good chance of living long enough to see it. Regards, Bill Bonner Ed. Note: Rather than simply living through the busts and downturns that are sure to come, you deserve the opportunity to prosper in spite of them. That’s why each day in The Daily Reckoning email edition, readers are treated to a handful of actionable investment opportunities, relayed by some of the biggest names in the industry — names like Jim Rickards, Chris Mayer and Byron King… not to mention Daily Reckoning co-founders Addison Wiggin and Bill Bonner. Don’t miss another issue or your chance at another real profit opportunity. Click here now to sign up, completely free of charge. This article originally appeared in Diary of a Rogue Economist, here. The post Why the Political Elite Really Need You to Vote appeared first on Daily Reckoning.     | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The Real Reason Your Stockbroker Hates Gold Posted: 04 Nov 2014 11:05 AM PST Submitted by Money Metals Exchange.
Gold is a touchy subject on Wall Street. It has been ever since FDR drove Americans and their gold apart 80 years ago. Although gold bullion ownership has been legal in the U.S. since 1974, a relentless government campaign to dampen the gold price has left gold trailing in public popularity and perception. Gold is money. No one knows that better than Wall Street. But it prefers to keep matters of gold to itself. Wall Street doesn’t want you owning gold or even thinking about gold, and treats you shabbily if you do. As an individual investor, you will probably never come face to face with the masterminds on Wall Street. But you might meet a representative on Main Street, your local stockbroker. He adopts Wall Street’s disdain for gold, whether consciously or in response to institutional incentives for him to push financial products only. To understand, we looked at how stockbrokers are trained and managed by their Wall Street employers. We spoke to several brokers and regular clients. The brokers insisted on anonymity, as you’ll see. Stockbrokers Are Steeped in Establishment ThinkingOur hat is off to stockbrokers for the hard work it takes to earn that license. Their basic education revolves around a tough exam called the Series 7, considered by some as difficult as the bar exam. It’s a computer-generated, timed test of 250 questions lasting 7 hours, taken under government supervision. One study guide shows 8,000 possible test questions. No two exams are identical, which eliminates cheating. The material covers regulations, laws and taxation involved in trading common securities like stocks, bonds, and mutual funds. It also covers government-mandated "ethics" training, supposedly meant to protect clients and their money from unfair practices. That includes understanding diversification, which requires evaluating a client’s total assets, tolerance for risk, and ways of spreading risk around among many types of investments. One test for risk tolerance is whether the client can sleep at night with his broker’s recommendations. The ethics rules also mean brokers are heavily regulated in what they can say or put in advertising to influence clients. One told us even the "Christmas cards to clients have to carry a disclaimer." Brokerage firms designate "compliance officers" to make sure the rules are followed. Brokers get surprise visits in person, and must open all records to inspection, including personal checkbooks. Even commenting for this article would have required a compliance officer’s approval, had we bothered to ask. Brokers attend annual, mandatory continuing-education classes. But despite covering almost every aspect of investing and wealth known to mankind, nowhere in your stockbroker’s training, testing or continuing ed is there discussion of owning physical gold in your possession. Mainstream Brokers Try to Steer You Away from GoldBrokers must follow Wall Street’s lead. One told us, "I don’t like gold, but if I did, I couldn’t talk to you about it. I’d lose my license." He added, "You’re not using names for this article, right?" While they can recommend and sell plenty of paper gold (gold mining shares, mutual funds, etc.), brokers can’t sell physical gold. Also, they don’t actually know any more about gold than most Americans, which is very little. So, they rely on Wall Street’s mantra dismissing gold as a murky investment and will do their level best to talk you out of buying even a single ounce. Wall Street’s vast public relations and advertising empire, known previously as America’s free press, gladly backs them up, spreading lies about gold and scorning gold owners. The exceptions on Wall Street are the mega-players quoted as owning gold and believing in gold. We firmly believe some local stockbrokers are secretly gold and silver stackers, but could never say so. We uncovered one brokerage’s secret to dealing with physical gold. When a valued client insisted on buying bullion, the brokerage quietly introduced the client to – a bullion dealer! Doing so satisfied the client (who would otherwise have lost confidence in the firm), and it kept the brokerage a long arm’s length from any heavily regulated discussions of gold. Individual investors we spoke to revealed a lot about investing confidence among the public. Most investors in securities are honest in admitting they don’t know exactly what their stock market dollars bought. "My investments are in an IRA" is too often the reply. Stock investors rely heavily on their advisers, telling us they need to believe their advisers have extensive knowledge of securities, which clients admit they themselves don’t have. They also express a need to believe their brokers have their best interests at heart, and many are satisfied. Gold and silver investors see confidence differently. They trust self-confidence. Precious metals buyers have no massive financial machinery pared with a complicit media to champion gold and silver, except for free-market forces. Self-reliance emerges as a character trait for metals owners, who just don’t get a lot of hand holding. Which brings us to perhaps the most important reason Wall Street hates gold. Precious metals in your possession have no counterparties and no continuing fees and commissions, unlike the thousands of investments brokers sell. Once you own gold, that part of your wealth and your future is out of Wall Street’s hands. Decades ago, Wall Street routinely recommended a gold allocation of 5% for any portfolio — a standard footnote to every financial analysis. Can you imagine the shock waves in markets today if a mere 5% of trillions of investment dollars suddenly went from stocks and bonds into physical gold and silver? By pretending gold and silver are not legitimate stores of wealth, and by belittling those who own metals, Wall Street does a two-faced kabuki dance around its own ethics code of clear communication and client diversification. Wall Street and its complicit business media go against their own advice to diversify, revealing a fraudulent – dare we say inconvenient – tale of true wealth.
By Stefan Gleason, President of Money Metals Exchange, a national precious metals deal with over 35,000 customers. Mr. Gleason is a seasoned business leader, investor, political strategist, and grassroots activist. Gleason has frequently appeared on national television networks such as CNN, FoxNews, and CNBC, and his writings have appeared in hundreds of publications such as the Wall Street Journal, Washington Times, and National Review.
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 04 Nov 2014 10:20 AM PST Graceland Update | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gold Confiscation & Its Consequences | Mike Maloney & James Turk Posted: 04 Nov 2014 10:00 AM PST In this video Mike Maloney of GoldSilver.com tells James Turk his thoughts on the likelihood of the US confiscating gold again. [[ This is a content summary only. Visit http://www.newsbooze.com or http://www.figanews.com for full links, other content, and more! ]]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gerald Celente - Forecast 2015 Mideast, US military, Palestinians and Israelis Posted: 04 Nov 2014 09:45 AM PST Gerald Celente Summary : Cold War 2.0 is the most likely outcome of the Ukraine / Russia showdown - the ideal diversion to redirect attention away from the imploding global economy. Expect inflation to climb sharply, sending gold higher, but this time, officials... [[ This is a content summary only. Visit http://www.newsbooze.com or http://www.figanews.com for full links, other content, and more! ]]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| No Ebola Quarantine, Greenspan says Buy Gold, Obama Care Update Posted: 04 Nov 2014 09:03 AM PST "Health System Not Prepared for Ebola" is a headline from the AP, and that is in stark contrast to what we have been told. "Small clusters could overwhelm the system" is what the article says. So, this begs the question of why no quarantine? Some governors in places like New Jersey, New York... [[ This is a content summary only. Visit http://www.newsbooze.com or http://www.figanews.com for full links, other content, and more! ]]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 60-Year Market Veteran’s Predictions On Gold, Silver & Stocks Posted: 04 Nov 2014 09:01 AM PST  Today a 60-year market veteran sent King World News three absolutely incredible charts as we head into the end of 2014, and he also discussed his predictions for the major markets, including stocks, gold, and silver. Below is six-decade market veteran Ron Rosen's remarkable piece.This posting includes an audio/video/photo media file: Download Now | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Silver Price What Happens Next? Posted: 04 Nov 2014 08:59 AM PST Disclosure: I expected the triple bottom in gold and silver to hold. It did not! Silver crashed lower (from $19.28 on August 28 to $17.26 on October 29 to under $16 on October 31) and then gold plunged below $1179 to about $1160. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Understanding Global Monetary Policy: And How to Profit From It Posted: 04 Nov 2014 08:40 AM PST To say that the last month as been turbulent in markets would be a drastic understatement. We saw the biggest intraday range in US bond yields in 16 years, equities nosedive then whipsaw right back to new highs, VIX hit the highest levels since 2011 whilst gold, silver and oil hit multi year lows. With such volatility around the theme of uncertainty is rife across financial markets, therefore it is important to reassess ones views of the market and properly understand the underlying drivers of market action. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Play the Health Care “Earnings Catalyst” for Double-Digit Gains Posted: 04 Nov 2014 07:52 AM PST This post Play the Health Care “Earnings Catalyst” for Double-Digit Gains appeared first on Daily Reckoning. The financial media is still busy yapping about October's market swoon… the oil crash… and the gold meltdown. So you might have forgotten that we're about to wrap up earnings season. Why do we give a rat's behind about earnings? Because a quarterly earnings report can make or break a stock — and your trades. Great numbers can vault a company's stock to new highs, while disappointing earnings can send it reeling. At least in the short-term… That's why you have to know exactly where to put your money as companies are tossing their numbers around this month. Already this season, companies beating earnings expectations have seen their stocks spike almost 3% after two days. On the other hand, those coming up short have dropped 0.6% over the same period. And as a trader, you don't want to be holding a stock about to cough up a bad earnings report. One bad earnings report can blow up your entire trade. But a good one can make you look like a genius. Today, we're going to play a powerful "earnings catalyst" that should push one select group of stocks to new heights as the year winds down. Act on it today and your buddies might be calling you Einstein by New Year's Day. I'll explain what it is — and how you can play this earnings catalyst for double-digit gains by trading a simple ETF — in just a moment… But first, you should know that earnings have been kicking serious butt this season. FactSet reports that so far, 78% of companies have beaten Wall Street earnings consensus this quarter. That's the highest earnings beat rate since early 2010. And according to Bespoke Investment Group, the average stock reporting this season has gained 1% on the day of its report. Bottom line: it's been a darn good season for earnings. And you have a great opportunity to book some gains on this trend heading into the holiday season… If you're looking to play the earnings game, you can't just throw darts at the overall market and expect to win. No sir, you need to put your money on the sector that's beating expectations. And what sectors are showing the best earnings today? Hint: They're not Energy and Basic Materials. The chart says it all. Avoid these doggies. Your longer-term trading dollars heading into the end of the year should be in health care. That's right, health care. Take another look at the chart. Health care companies are beating the stuffing out of earnings estimates from any other major sector. And as FactSet reminds us, investors are more prone to rewarding those beats than punishing misses. In other words, a stock coming in one thin dime ahead of expectations can shoot up dramatically. And we should be seeing a lot of that in the healthcare sector this season. Health care has been a beast of a trade all year long. The sector is up more than 22% year-to-date, while the S&P 500 has gained only 9%. And the best part? I don't see a change in this trend on the horizon. So we're sticking with the strong earnings hand heading into the holiday season. And that's health care. Regards, Greg Guenthner Ed. Note: Health care isn’t the only sector I see making huge gains through the end of the year… And I was happy to share the rest of my findings with my Rude Awakening readers. It’s just one small benefit of being a Rude Awakening subscriber. Don’t miss the next great “earnings catalyst” set to make you huge profits. Click here to sign up for FREE, right now, and discover the best stocks the market has to offer before anyone else. The post Play the Health Care “Earnings Catalyst” for Double-Digit Gains appeared first on Daily Reckoning.     | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| A Silver Primer - Where Are We Now? Posted: 04 Nov 2014 04:20 AM PST Jeffrey Lewis | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 04 Nov 2014 01:58 AM PST Gold continued weak in its performance during September. The yellow metal’s price dropped almost 5.5% from $1286.50 to $1216.5 (London PM Fix). In the last Market Overview we came to the conclusion that the real interest rate is one of the main drivers of the gold price. Although the negative relationship between real interest rates and gold prices does not always hold, the recent medium-term declines (including the last month) were probably, to a large extent, caused by the rise in the long-term real interest rates. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sunny Silver Price Forecast - Low Price Today Means High Price Tomorrow Posted: 04 Nov 2014 01:17 AM PST Solar power has been the next big thing in energy for as long as most people have been alive. But it was always too expensive to be anything more than a niche technology, attractive more for its coolness than its efficiency. That has changed, in a big way. According to a report by Deutsche Bank, generating electricity from sunlight is now as cheap as getting it from coal in most US states when current subsidies are included. Extrapolate the inexorably-falling cost of solar just a few more years, and the subsidies won’t be necessary. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gold Buyers Drop 19%, Sellers Rise 9% Posted: 04 Nov 2014 01:03 AM PST Gold Investor Index shows "fatigue" as Fed halts QE, price hits 4-year low... GOLD BUYERS still outnumber and outweigh sellers amongst private investors, writes Adrian Ash at BullionVault. But after September's jump in sentiment towards gold, October reversed that move on our Gold Investor Index. The Gold Investor Index measures the balance of people adding to their gold holdings on BullionVault – the world-leading gold and silver exchange online – over those choosing to reduce their position during the month. The index jumped to a 7-month high in September as prices fell hard. Because the trend to bargain-hunting amongst private investors continued, extending to nearly 18 months from the start of spring 2013's price crash. October however brought first a test and then – after the US Federal Reserve halted the last of its monthly quantitative easing – a break below gold's 2013 Dollar-price lows at $1180 per ounce. Rather than unleashing new demand, the Gold Investor Index erased its prior jump, falling at the fastest pace since May 2013.  The Gold Investor Index hit a series peak at 71.7 in September 2011. This June it fell to 51.2, the lowest level since February 2010. A reading of 50.0 would indicate a perfect balance of net buyers and sellers across the month. And last month it retreated from 53.4 to 51.9 as the gold price in Dollars broke new 4-year lows. To repeat: Self-directed investors choosing to buy gold continue both to outnumber and outweigh sellers. But after 18 months of bargain hunting starting with the 2013 crash, bullishness is showing fatigue. Last month saw the number of net gold buyers on BullionVault drop 19% from September's 6-month high, while the number of sellers rose by 9%. This wouldn't be surprising without the previous move to buy the dips. The Fed has finally halted QE, and the US stock market is setting new all-time highs. Gold and the stock market have now been going in different directions for more than two years, the longest stretch since gold began its decade-long bull market during the Tech Stock Crash of 2000-2003. So while gold offers financial insurance to private portfolios, getting that cover in place is plainly not seen as urgent. Which may prove unwise. The stockmarket has never been more expensive. Gold, on the other hand, is trading at a four-year discount. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 03 Nov 2014 11:01 PM PST Disclosure: I expected the triple bottom in gold and silver to hold. It did not! Silver crashed lower (from $19.28 on August 28 to $17.26 on October 29 to under $16 on October 31) and then gold... {This is a content summary only. Click on the blog title to continue reading this post, share your comments, browse the website, and more!}    | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Is US Shale Oil a Ponzi Scheme at $75 per Barrel? Posted: 03 Nov 2014 10:18 PM PST This was a question my dear friend and mentor Rick Rule of Sprott asked the Energy Panel at the New Orleans Investment Conference. A good question, I think, because there’s a lot of misinformation in the media about shale, and for many years in these missives I have been trying to bring the facts to light. For example, on August 6, 2013, in an article titled “The Coming Shale Writedowns,” I wrote: Not all shales are equal. Some shales are deeper than others; and some are dry gas, while others are gas with liquids. In North America, billions of dollars have gone into developing all types of shale formations to extract as much natural gas, natural-gas liquids, and oil as possible. .... Remember, not all shale formations are the same, similar to how not all gold deposits are the same. The growth of US and Canadian oil production from shale has been very impressive. To put it in context, the graph below, using data from the US Energy Information Administration (EIA), shows how important it’s been for the two countries. However, the oil price has averaged US$87.50 per barrel since 2009, which fueled the exploration and production of many shale formations. I’m a big believer in technology, and it’s been advancing in the oil patch at an extraordinary rate—such that today’s unconventional extraction methods will be considered conventional tomorrow. So back to the question: is shale oil a Ponzi scheme at $75 per barrel? My answer is no. Though there are some shale formations that don’t work at such a low oil price, there are formations—and specific sections within those shale formations—that are very profitable even at $75/bbl. The best companies in the field use advanced technologies to unlock the oil from the shale and increase their margins, and that’s where the growth seen in the above chart comes from. Super Pads and Super FracsFor example, have you ever heard of “Super Pads?” If you haven’t, you will soon. They are real, and being used now. The above picture was taken from the Seven Generations Energy prospectus. At the Super Pad, the drilling, fracking, and completions take place, and afterward, the natural gas is collected and compressed. The compression occurs at a very high temperature; then the gas is dehydrated, and if hydrogen sulfide (H2S) is present, it is separated. This all happens so the company can get a higher price for its natural gas liquids (NGLs) and condensates (pentanes plus). Another term you’ll hear more about is “Super Frac.” Actually, the sector is evolving and advancing so fast that what was a super frac two years ago is now a baby frac. Companies are drilling down deeper and longer and are able to conduct more multiple-stage fracs, where the longer fissures release more oil, NGLs, condensates, and natural gas from the underground formations than ever before. Now I have no doubt that many oil and gas companies will crumble at an oil price of $75/bbl due to the pressure of their debt, but many of those companies have management teams that lack financial prudence to succeed in the long run anyhow. The smart ones will not only survive but thrive in the current oil-pricing environment. For the last four years, we’ve used $75/bbl for our base case here at Casey, and avoided any company that couldn’t return a fair IRR at those prices. It appears that even the $75 level will be tested, but that’s a good thing for the sector because ultimately, the strong management teams will consolidate the assets that the inferior management teams lose. Hence, shale oil is NOT a Ponzi scheme at $75 per barrel. What the market is not discussing is what shale oil has produced a glut of. I would be very wary of companies that use “barrels of oil equivalent” (boe) in their marketing material. I’ve been talking about the boe scam for years. The BOE ScamOn March 20, 2012, I wrote an article on “barrels of oil equivalent” as a classic energy investment trap, stating: Most oil wells produce some natural gas and natural gas wells often produce some oil, so most energy companies produce both kinds of fuel. To simplify reporting, producers have long lumped quantities of the two into one calculation: the “barrel of oil equivalent” (BOE). The BOE is a unit of energy, defined as the energy released when one barrel of crude oil is burned. Since different grades of oil burn at different rates, the value is an approximation, set at 5.8 x 106 BTU or 6.12 x 109 joules. The BOE concept then lets us combine different fuels according to energy equivalence. Barrels of oil equivalent are most commonly used to combine oil and natural gas: one can say that one barrel of oil is equivalent to 5,800 cubic feet of natural gas because both produce approximately the same amount of energy on combustion. It is understandable that companies want to distill their production or reserve information down into a single number that summarizes the situation for investors. The problem is that details are lost during the distillation process—and they are important details. See, the BOE concept would be great if we valued companies based on the energy contained in their reserves, but we don’t. We care about the money they can earn from those reserves; that valuation depends on the market prices for oil and gas, which are just a tad bit different. One barrel of oil is equivalent in energy to 5,800 cubic feet of natural gas, but the difference in value is very significant—and that is the trap. Using an oil price of US$80 per barrel and a natural gas price of US$3.50 per thousand cubic feet (the spot price is currently US$3.57 per thousand cubic feet) we can calculate the value of a BOE of natural gas priced as gas: Unfortunately, a barrel of oil is not worth US$20.30, but rather is currently worth more than US$80 per barrel. Yet a BOE with 100% gas is worth is only worth US$20.30. Those two valuations are nowhere close to equivalent! The barrel of oil is actually worth almost four times more than the supposedly equivalent “barrel” of natural gas. Certain companies purposely use this misleading concept because they want to value their gas reserves at more than seven times their actual value. As an investor, when you see a company’s production in terms of BOEs you need to ask yourself: “What percentage of production is oil versus natural gas and NGLs?” That is definitely a value trap that every investor wants to avoid. But something the mainstream media are totally missing is the glut, or oversupply, the industry in North America is currently experiencing because of “wet” gas. “Wet Gas”—A Shady Deal?Wet gas is called wet because NGLs and condensates can be separated from the natural gas. NGLs are ethane (C2), propane (C3), and butane (C4). Condensates are pentanes plus (C5 and higher). Now, this is where things get shady with certain companies. We spend a lot of time going through the financials of companies, and we know who’s being naughty and who’s being nice. The naughty ones lump all the liquids together with the natural gas and report everything as boe. But we can look at their cash flows, so they’re not fooling us. The good guys separate the NGLs by category and break down the pricing. We like them because they have nothing to hide and make our lives easier. It’s the bad boys you want to stay away from. Since wet gas was worth so much more than dry gas, the exploration and production (E&P) sector focused on wet-gas formations, and now we have a glut of NGLs in North America. In fact, there’s such a glut of ethane that we now see “ethane rejection,” where the companies leave the ethane with the gas stream and sell it as natural gas. They don’t even bother separating it. It’s like flaring the gas at the oil well—it’s not worth the hassle right now. We’ve also caught a few companies overstating their future projections on NGL price projections. They link it to WTI on a WTI/boe basis, when in fact the average market price for NGLs is half that of oil. Energy: Why It’s So Important to Know What You’re Investing InEnergy investing is a very rewarding but tricky business, because few other commodity sectors are so heated up politically. In my new book The Colder War, I cover many aspects of the geopolitics of energy… especially the battle between Russia and the US to control the world’s energy trade. You see, while America and the West weren’t looking, Vladimir Putin has been orchestrating a takeover of the energy sector. Now, I’m not saying Putin is an evil, Darth Vader-type mastermind. He merely does what’s in his country’s best interest. Under Bush and Obama’s watch, Putin has transformed Russia from a crumbling communist state into an energy powerhouse. Russia is now:
Russia is quickly becoming the only source for countries desperate to secure long-term supplies of energy—giving Putin more power and more leverage than ever before. Europe, Africa, and China all depend on Russian energy. And Putin won’t stop until he takes down the only thing standing in his way of turning Russia into a superpower: the US. In The Colder War, you’ll discover how Putin is working to break the monopoly of the US dollar in the global energy trade. He’s set in motion an ingenious yet devastating plan to do it. If he’s successful, he could destroy the US economy and Americans’ standard of living. If you think the recent pullback in oil prices will cripple Putin, you’re wrong, and I show you why. Preorder your copy of The Colder War today. I promise it will change your view of the world and the global markets. You might even want to call your broker the next morning—because the US has never been more vulnerable, and the stakes have never been higher. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Study: Long-Term Rise in the Dollar Does Not Bode Well for Gold Posted: 03 Nov 2014 04:00 PM PST How strong is the negative correlation between gold and the dollar? What should we expect gold to do should the dollar rise further? How do the two trade during times of panic?              |
Disclosure: I expected the triple bottom in gold and silver to hold. It did not! Silver crashed lower (from $19.28 on August 28 to $17.26 on October 29 to under $16 on October 31) and then gold plunged below $1179 to about $1160.
This long, disheartening, dismaying, giant correction in gold is just about over. There have already been four bull moves in this secular bull market in gold, and each time that the price of gold touched the quarterly rising trend-line, the subsequent bull move was greater than the previous one.
This is the big problem with fiat currency – eventually the temptation to print more of it when you are in a jam becomes too powerful to resist. In a surprise move on Friday, the Bank of Japan dramatically increased the size of the quantitative easing program that it has been conducting. This sent Japanese stocks soaring and the Japanese yen plunging. The yen had already fallen by about 11 percent against the dollar over the last year before this announcement, and news of the BOJ’s surprise move caused the yen to collapse to a seven year low. Essentially what the Bank of Japan has done is declare a currency war. And as you will see below, in every currency war there are winners and there are losers. Let’s just hope that global financial markets do not get shredded in the crossfire.
| You are subscribed to email updates from Save Your ASSets First To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
| Google Inc., 1600 Amphitheatre Parkway, Mountain View, CA 94043, United States | |
No comments:
Post a Comment