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Tuesday, November 4, 2014

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Gold at Accelerated Decline Occurs Under the Median Line

Posted: 04 Nov 2014 12:04 PM PST

UPDATE: The latest on the Ukrainian crisis

Posted: 04 Nov 2014 11:42 AM PST

From Kim Iskyan, editor, S&A Global Contrarian: 

Late last week, Russia and Ukraine signed a deal – brokered by the European Union – that will keep the lights and heat on in Ukraine and Europe this winter.

As regular readers know, Russia and Ukraine have been in conflict since March. And the conflict has marked a low point in relations between Russia and the West. The U.S. and Europe have imposed economic sanctions on Russia… and Russia has retaliated with sanctions of its own.

Russia also turned off the gas taps to Ukraine in June because the country owed Russian state gas company Gazprom $4.5 billion in back payments. Around 40% of Ukraine’s energy comes from natural gas, much of which is imported from Russia.

As I told you two weeks ago, Russian President Vladimir Putin also warned that Russia could reduce gas supplies to Europe. (Russia must run its gas through pipelines located in Ukraine to get to Europe.) Around one-third of Europe’s gas comes from Russia.

That would make already-poor relations between Russia and the West deteriorate further. And it would be a disaster for politicians throughout Europe… regardless of who’s to blame, voters don’t reward leaders who let them shiver in the dark.

So the deal is great news… and it helped Russian markets rise 5.2% last week in dollar terms. But it’s far from the end of the story…

Ukraine can only pay its gas bill now because the International Monetary Fund, which bails out countries in economic trouble, lent it $17 billion. Russia also compromised on the price it’s charging Ukraine for gas.

But Ukraine’s economy has still been shattered by the conflict with Russia. It will shrink 9.5% in 2014, according to local investment advisory SP Advisors. The country’s per capita gross domestic product in dollar terms will fall 25% this year. And the Ukrainian hryvnia (the local currency) is down 57% this year against the U.S. dollar.

Meanwhile, the Russian economy will be lucky not to shrink this year. As I said earlier, the U.S. and Europe have also imposed a wide range of economic sanctions on Russia in an effort to force it to stop destabilizing Ukraine. The Russian ruble is down 26% this year so far. And the Russian stock market is down 24% in dollar terms this year. With a price-to-earnings ratio of just under five, it is the cheapest stock market in the world.

As I told you last week, the recent sharp decline in the price of oil has also hurt Russia’s economy. The energy sector accounts for around a quarter of Russia’s total economic output.

And relations between Russia and the West seem to be deteriorating…

Sanctions are, if anything, making Russia more aggressive. The number of times the North Atlantic Treaty Organization (NATO), a Western military alliance, has had to scramble fighter jets to counter Russian aircraft close to NATO airspace has increased three-fold this year.

“Russia is actively preparing for war,” the headline of an article in Business New Europe magazine read last month. Putin also recently gave a speech that was one of his most critical ever about U.S. policies, which foreshadows a further worsening of relations with the West.

“Russia’s… hard line position [on Ukraine] reinforces our view that peace is not at hand,” political-risk consulting company Eurasia Group said… adding that the West may impose more sanctions on Russia later this year.

In short, we haven’t seen the end of the conflict yet. I’ll continue to keep an eye on both markets.

Bitcoin ~ The First Quantum Currency

Posted: 04 Nov 2014 11:10 AM PST

From all appearances, Bitcoin will be the first Schrodinger simultaneous cool cat/hot cat currency.  As Chairman Bernanke explained that gold is a tradition, the CFTC will show how Bitcoin is a transition.

Bitcoin can and will BE a commodity and NOT a commodity at the same time.  As long as you behave, then your transactions are not only private, your Bitcoins are fungible.  Misbehave, or be anti-social, and your Bitcoins will hunt you down like a honey badger at a farmer’s market.

As we are gleaning from Money 20/20 and Bitcoin World conference in Las Vegas, what happens in transition… stays in transition… Windhover Transition.

http://tradewithdave.com/?p=22565

Gold: More than a dollar hedge

Posted: 04 Nov 2014 11:06 AM PST

Gold continued weak in its performance during September.

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 Thinking

Our 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 Gold

Brokers 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.

 

Safe Haven Bids Limiting Gold's Losses

Posted: 04 Nov 2014 10:47 AM PST

Gold is down slightly as I type these midday comments but trading in the upper part of its daily range at this point. With the equities lower this morning, bonds are getting a bid once more as the safe haven trades are in evidence. We know this because along the higher bonds, the Yen is also a bit higher. The risk aversion is bringing some mild buying into the yellow metal.

Unfortunately for the bulls, two things are working against it at the moment. The first is the mining shares. They are doing what they seem to be doing best these days and that is sinking lower. A research note from RBC notes concern about excessively high levels of debt in both Tier I and Tier 2 producers. It cites headwinds these companies are having to deal with at gold $1200 and expresses concerns over the necessity for dividend cuts and other cost cutting measures at $1100.

The second drag on the metal today is a plunge in the various commodity indices. The Goldman Sachs Commodity Index is being dragged lower once more by sharply lower crude and energy prices along with weakness in the grains.

Here is a chart:



As you can see, we are now talking about a 50 month low in overall commodity prices. That is hardly the stuff out of which inflationary concerns, much less hyperinflationary events, are born.

Switching briefly, for the sake of time, to the grains, especially the beans. The meal spreads have been very erratic reflecting the nature of the concerns over soymeal logistical jams. Informa came out with their crop estimates for this year during the morning trade confirming that both the corn and the bean crops will be the largest in history. They did however slightly lower their final yield estimates from 176.4 bushels to 174.4 in the corn and from 48.5 in the beans to 47.9. There was some movement in the beans in particular as the estimates become more widely disseminated but it seems any impact was rather fleeting at this time. Most traders are trying to get their hands around information dealing with the much-toted ( and highly overrated in my view) logistical concerns due to transportation problems.

The meal bear spreads were reversed near mid-morning with the result that the December meal is once again pulling the beans off of their worst levels of the session. As volatile as this market has been however, especially at the close, anything is possible at this point.

Silver has managed to pop its head back above the $16.00 level once more. It looks like it, along with gold, are consolidating its recent losses with some sideways trade.

What more can I say about crude oil that I did not say already yesterday. It remains under strong selling pressure from continuing fallout over the Saudi price cut to the US. Unleaded gasoline is down yet another 4 cents at the NYMEX (CME).

Crude oil is sitting just atop chart support near the $75/bbl level. If it cannot hold there, and that is a pretty significant support zone, it appears headed for a test of the $72 - $71 region. To repeat from yesterday.... are we going to see a "1" handle in front of unleaded gasoline? WOW...

I will try to get some more up later on today as time permits...

For my fellow American readers - don't forget to get out and vote. Act as if your country's future depended upon it, because it does!

Ebola Is Now ‘Aerostable’ And Can Remain On Surfaces For 50 Days

Posted: 04 Nov 2014 10:45 AM PST

When it comes to Ebola, the story that the government is telling us just keeps on changing. At first, government officials were claiming that it was very difficult to spread the Ebola virus.  Some of them were even comparing it to HIV.  We were given the impression that we had to have "direct contact" with […]

The post Ebola Is Now 'Aerostable' And Can Remain On Surfaces For 50 Days appeared first on Silver Doctors.

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CHINESE GOLD DEMAND: Twice As Much As Official Reported Figures

Posted: 04 Nov 2014 09:30 AM PST

Chinese gold investment demand increased more than five times in 2013 compared to 2008, yet even the chart below doesn't represent the true increase. If we assume that total Chinese gold demand in 2013 was double the figure put out by  World Gold Council, we can assume that physical gold bullion investment demand was probably more […]

The post CHINESE GOLD DEMAND: Twice As Much As Official Reported Figures appeared first on Silver Doctors.

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Who really runs our country? The answer might surprise you.

Posted: 04 Nov 2014 09:03 AM PST

From Bill Bonner, Chairman, Bonner & Partners:  An old friend responds to our recent comments about war:

I can tell you that I fully agree with your points about the war. It was particularly interesting to me to read your thoughts, as I was born and lived in Leningrad, where everyone remembered the blockade during 1941-1944. 

When I was a teenager, I went to the famous Piskaryovskoye Memorial Cemetery, where, in a small museum, the Savicheva diary [the diary of a Russian girl who endured the Siege of Leningrad] is displayed.

Have you been there too? I still remember reading it, like it was yesterday. Very emotional stuff, indeed. Now, we are having over 3,000 dead in Ukraine. What a pity! And what for?

Another reader (a German immigrant to Canada) adds:

My dad was near Leningrad, and he was very fortunate that he was wounded. That was the only way he was able to escape the carnage. Since at that time wounded soldiers were sent back by airplane to the nearest hospital.

He survived but did not return to our hometown of Berlin until the end of 1946. My mother and I assumed he was dead. The stories my dad told me later on did not make pleasant reading.

I was also fortunate that I was not hurt during the war years in Berlin. Although there were many times my mother and I had to walk over dead or dying people to escape shelters that were bombed.

 War Is Hell What we’ve been reaching for in these last few entries is a way of understanding why governments do what they do – even when it is unproductive, expensive, and dangerous. “War is hell,” William Tecumseh Sherman told the graduating class of the Michigan Military Academy in 1879. But governments go to war. Sometimes because they have to. But often because they want to. The Siege of Leningrad was particularly hellish. It left 3 million dead. Those who survived lived with appalling memories: of war, cannibalism, frostbite and starvation. And now, people who’ve never missed a meal in their lives are calling for more war. Why? As Michael Glennon, a professor of international law at Tufts University, showed us yesterday, there are two parts to a modern democracy. There are the voters. And there are the elites. Each operates in a completely different way. The elites figure out what is best for them… and plan how to get it. The voters respond emotionally… with no real knowledge of what is going on. The voters don’t have time to deconstruct the backstory. They can barely keep up with the front-page headlines. They have real lives, nagging wives or layabout husbands, football games, drug problems and funerals. They can’t parse the conflicting claims or disentangle motives. And it would be a waste of their time to try; they have little influence over public policy. The best they can do is to use their instincts – using brains that evolved over millions of years in entirely different circumstances. All they know is what they want… and what they fear. A Fabricated Enemy? More health care spending? You bet! They can’t follow the money and see that most of it goes to the insurance and health care industries. What politician stands up and tells them he is opposed to giving them more free education? The voters can’t see how the system is rigged so that the additional spending goes into the elites’ pockets. And pity the poor president who is seen as “weak” in defending the nation. The voter can’t tell a real enemy from a fabricated threat. He can’t know when it makes sense to intervene in a country he’s never heard of… and when it makes sense to butt out. And how is he to know where the money ends up? Elites calculate. The masses react. But if you want to understand why our government does what it does, follow the money. For example, voters are told that the Fed helped protect them from another Great Depression. Who could be against that? The Fed bought roughly $4 trillion of bonds with newly created dollars and bank reserves. “QE?” asks the voter. “What’s that?” Good luck explaining it! And where did it go? Did you get some, dear reader? We didn’t. Not directly. Neither did the typical voter. It’s been the weakest recovery in the postwar period. Since 2008, US GDP grew at only a third of the average rate during the 20th century. And average household income fell! But a few people made a killing. The financial industry has been in high clover for the last six years. Stocks, bonds, real estate – everything floated higher on a flood tide of new money. And practically every major central bank joined in, increasing their balance sheets more in the last five years than in the last 100 years combined. The typical guy might have less in his bank account, but the world’s filthy rich are filthier than ever. Stocks alone added about $22 trillion to their wealth. “Why use the $4 trillion relief fund to hoover up financial assets held by the financial elite instead of simply crediting the bank accounts of all Americans?” asks Dutch investment adviser Jaap Westerling in a recent letter to the Financial Times. Ah… Mr. Westerling, that’s not how it works, is it? Regards, Bill Crux note: Bill has done something he’s never done before… In his latest book, he explains in detail the simple secret that’s allowed him to build a near-billion dollar fortune… and turned 50+ of his employees into millionaires. If you’re looking to build real, lasting wealth for your family, this is required reading. Click here now to get your copy.

Recommended Links

An Interview of Ted Butler

Posted: 04 Nov 2014 08:45 AM PST

Chris Martenson does great work on his site, Peak Prosperity. Late last week, he posted a podcast with silver analyst Ted Butler, who rarely does public interviews. Needless to say, this 45-minute presentation is well worth your time.

read more

How The Stock Market Performs Without The Fed’s Monetary Heroin

Posted: 04 Nov 2014 08:15 AM PST

Mark October 29th on your calendars.  The Dow is at 16974, the S&P 500 is at 1982 and the NASDAQ is at 4549.  From this day forward, we will be looking to see how the stock market performs without the monetary heroin that the Federal Reserve has been providing to it.  From The Economic Collapse Blog: […]

The post How The Stock Market Performs Without The Fed's Monetary Heroin appeared first on Silver Doctors.

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Turd The Wet Blanket

Posted: 04 Nov 2014 08:05 AM PST

Though there is NO ONE on the planet more excited by the prospect of Comex default and end of fractional bullion banking, I think it's time for everyone to chill and relax a bit. Otherwise, you're likely just setting yourself up for tremendous disappointment.

read more

Why commodities are getting crushed today

Posted: 04 Nov 2014 07:50 AM PST

From Sean Goldsmith in The S&A Digest: 

The dollar staged a strong rally following the Fed’s announcement that it would end quantitative easing… And commodities, once again, got crushed.

The dollar and commodities have an inverse relationship… As the dollar goes up, commodity prices generally go down, and vice versa.

The main reason for this relationship is simple: Commodities are priced in dollars. A stronger dollar means it takes fewer dollars to a buy a given commodity. Likewise, when the dollar rises against a basket of foreign currencies, foreign buyers have less buying power.

The dollar’s recent parabolic move has crushed gold and silver. Gold and, to a lesser extent, silver are particularly vulnerable to dollar fluctuations. As we saw during the subprime crisis, gold prices soared as the world feared a collapse in the dollar.

Take a look at this chart of the dollar versus gold and silver over the past four months…

Gold stocks are in the doldrums. Gold stocks – as measured by the Market Vectors Gold Miners Fund (GDX) – recently hit their lowest point since the crisis in October 2008…

Even with the massive selloff in gold stocks, is it time to buy? We asked S&A Resource Report editor Matt Badiali for his thoughts…

Citing geology expert Brent Cook’s presentation at the recent New Orleans Investment Conference, Matt noted that all-in gold production costs for major developers are more than $1,400 an ounce today. Meanwhile, the price of gold is less than $1,200 an ounce. Gold companies are selling every ounce of gold at a large loss… And miners are trying to stop the bleeding by cutting exploration and development costs. Think about that for a minute…

The only way these mining companies make money is by selling gold. Today, they’re cutting spending on finding and building new gold deposits. Their shortsightedness today will ensure that when the market finally moves higher, they will have little gold to sell on the upswing. It’s the classic commodities cycle.

Brazil is getting crushed… And so is one of our favorite short candidates…

For many years, Brazil has been one of the world’s most popular emerging markets. It’s the largest economy in South America. It has vast resource wealth and tremendous potential growth ahead of it.

That’s why Brazil is included in the popular “BRICS” club… which is an acronym that describes the major emerging-market economies of Brazil, Russia, India, China, and South Africa. When investors talk about countries with massive potential in the 21st century, Brazil is always mentioned.

Brazil is heavily dependent on commodities like iron ore, oil, and agriculture, which have been crushed due to a rising dollar and decreasing demand. The selloff is also putting downward pressure on Brazil’s economy.

And one stock in particular is selling off harder than most: state-run oil company Petrobras. The $71 billion company operates more like a socialist enterprise than a business.

Longtime readers shouldn’t be surprised at our skepticism in investing in companies run by government officials. Our most recent warning came from Editor in Chief Brian Hunt in yesterday’s DailyWealth essay titled “A Timeless Lesson on Investing With the Government“…

The bureaucrats running government agencies are not incentivized to produce profits. They are not incentivized to improve the long-term value of a business. Bureaucrats are incentivized to spend their entire budgets and grow larger. This allows them to acquire more power… and bigger budgets for next year… which allows them to acquire more power and bigger budgets for the year after that.

Compare this to an entrepreneur who has his own money on the line. He’s going to do his best to keep costs down, instead of intentionally blowing his budget. He’s going to do his best to hire only employees he needs… rather than hire as many people as possible. He’s going to keep a close eye on his cash flow or he’ll go broke.

Petrobras is sitting on huge oil discoveries… But the oil is far offshore and super-deep. In fact, some of the technologies necessary to extract oil from those levels haven’t even been invented yet.

An abundance of deepwater oil means it’s expensive (if not impossible) for Petrobras to extract it. The company announced a nearly $240 billion, five-year capital expenditure plan in 2012. Petrobras plans to produce 5.7 million barrels per day by 2020.

Of course, oil being below $80 a barrel today crimps those plans.

Perhaps this is why Petrobras’ oil production has flattened out. In 2013, it averaged 2.7 million barrels per day… the same levels it produced three years ago.

We’re not the only ones skeptical of Petrobras. Renowned short-selling hedge-fund manager Jim Chanos has been short since 2012. He’s skeptical of the company’s ability to produce its deepwater oil… And he doubted investors would benefit even when oil went for more than $100 a barrel. (Today, it’s around $79 a barrel.)

Meanwhile, Petrobras is generating about $26 billion in cash flow a year… But it’s spending $45 billion. So it has to borrow money to cover its $19 billion shortfall.

Porter brought up a similar point at the New Orleans Investment Conference. He presented the following chart, showing Petrobras’ mounting debt and falling cash flow.

In addition to cash flow problems, Brazil refuses to let Petrobras raise domestic fuel prices in line with world prices. Thanks to the government, gasoline in Brazil sells for close to 25% less than the cost of importing it. That boosts domestic demand, but crushes Petrobras’ earnings potential.

Shares of Petrobras were down as much as 16% on Monday. They’ve fallen more than 40% since the beginning of September.

Crux note: Right now, you can get one of the most comprehensive guides to resource and commodity investing Stansberry Research has ever published – Secrets of the Natural Resource Market. In it, resource-investing experts like Matt Badiali, Rick Rule, and Brian Hunt teach you the essential tools you’ll need to make big, safe returns for decades… how to make commodity investing nearly risk-free… and much more.

Whether you’re just starting out in resources or looking for ways to reduce your risk while increasing your profits… this is the must-have guide. Click here to claim your copy today.

The calm after the storm for gold

Posted: 04 Nov 2014 07:40 AM PST

Gold prices did not too much of anything today to begin the new trading week. Following recent volatility seen in the yellow metal, a period of consolidation and some back and fill trade would come as no surprise.

Germany resorts to selling gold amid euro frustration

Posted: 04 Nov 2014 07:20 AM PST

Disillusionment with Europe's single currency continues to grow with the cracks beginning to show in its heartland, Germany, where the third largest political party is now selling gold coins and bars to raise funds.

New Indian gold deposit scheme could increase circulation

Posted: 04 Nov 2014 07:15 AM PST

The Indian state-backed refiner MMTC-Pamp has proposed changes to the existing gold deposit scheme which they think could easily unlock tons of household gold stockpiles.

Ray McGovern, CIA Analyst for 27 Years, is Arrested and Roughed Up in NYC for Trying to Protest Retired General Petraeus

Posted: 04 Nov 2014 07:00 AM PST

The following post should serve as a serious red flag to all of you who currently mindlessly serve the state in some capacity: Submitted by Michael Krieger, Liberty Blitzkrieg: First off, here's a little background on Ray MacGovern. His bio on Wikipedia starts off with: Raymond McGovern (born August 25, 1939) is a retired CIA officer turned political activist. McGovern was a […]

The post Ray McGovern, CIA Analyst for 27 Years, is Arrested and Roughed Up in NYC for Trying to Protest Retired General Petraeus appeared first on Silver Doctors.

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Metals market update for November 4

Posted: 04 Nov 2014 06:32 AM PST

Gold fell $5.50 or 0.47% to $1,166.90 per ounce yesterday and silver remained unchanged at $16.16 per ounce.

Indian gold bullion imports hit 17-month high

Posted: 04 Nov 2014 06:27 AM PST

In accordance with the latest official trade data, the gold bullion imports by India's Northern state of Gujarat touched highest levels in seventeen months during the month of October 2014

Harvey Organ: GOFO Rates Head Deeper into Backwardation!

Posted: 04 Nov 2014 05:51 AM PST

GOFO rates headed deeper into backwardation Monday as the physical gold market continues to tighten from physical shortages.  Let's head immediately to see the major data points for today: Submitted by Harvey Organ: Gold: $1169.30 down $1.70 Silver: $16.17 up 10 cents In the access market 5:15 pm: Gold $1165.00 silver $16.17 The gold comex […]

The post Harvey Organ: GOFO Rates Head Deeper into Backwardation! appeared first on Silver Doctors.

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The LAST Move Before Checkmate…

Posted: 04 Nov 2014 05:46 AM PST

When the Shanghai exchange runs dry out of silver, they will use the event as a legitimate checkmate excuse to revalue both silver and gold.  This ties in with Dr. Jim Willies "GRAND GOLD SHOCK EVENT" prediction.  China's physical gold holdings will go up in value all while they rake in their paper shorts on the other side.  This will cause shockwaves to the gold, silver and the FOREX derivative markets!
Without the Shanghai physical drain on silver supplying the mints, the COMEX and LBMA would have defaulted by now.  This is no accident.  China created the loophole like a Trojan horse targeting the Achilles' heel of the financial system.  Silver is the sacrificial pawn.
Wall Street took the arbitraged silver bait and it's almost time to back up the truck and go ALL-IN!  Gold and silver are about to slingshot out of the station!  The game ends when Shanghai runs out of real silver!
A PLANNED CHECKMATE IS NOW IN FULL VIEW.

Click here for more on the planned Shanghai Checkmate:

Gold rises for first time in 5 days as EU cuts growth estimates

Posted: 04 Nov 2014 04:40 AM PST

Silver pared losses.

Germany’s Third Largest Political Party Sells €1.6 Million of Gold In Two Weeks

Posted: 04 Nov 2014 04:02 AM PST

gold.ie

Germany’s Third Largest Political Party Sells €1.6 Million of Gold In Two Weeks

Posted: 04 Nov 2014 03:58 AM PST

Germany's Third Largest Political Party Sells €1.6 Million of Gold In Two Weeks

Disillusionment with Europe’s single currency continues to grow with the cracks beginning to show in it’s heartland, Germany, where the third largest political party is now selling gold coins and bars to raise funds.

 

In a poll in September Alternative for Germany (AfD) were found to be Germany’s third most popular party. The rise of the Alternative for Germany (AfD) party saw it receive 10.6% of the vote in Thuringia and 12.2% in Brandenburg on 14 September. Two weeks earlier it secured its first regional government seats in Saxony.

AfD are not anti-EU per se and have distanced themselves from other eurosceptic parties. They see a future for Germany in the EU and embrace common markets but wish to see the European Monetary Union (EMU) and the euro itself wound up and a return to the Deutschmark.

In the past two weeks, in a bid to gain as much state funding as possible they have entered the gold bullion market with quite a degree of success. In Germany, the federal government will match, up to a value of €5 million, any funds raised privately by a political party. In a bid to get the full allocation of state funding, AfD have started to sell gold bullion online.

In the two weeks since the scheme was announced they have sold gold coins and bars worth a sizable €1.6 million.

There has been strong, broad based demand for precious metals in Germany in recent weeks and months due to concerns about the Eurozone, the Euro, the conflict with Russia and global uncertainties.

AfD have managed to sell a large volume of bullion bars and coins despite being unable to undercut the well established bullion dealers with whom they have been competing. This indicates that their customers are motivated to buy gold from them specifically because they support the party and it’s policies.

“I have always warned that we can not compete with the prices of the competition,” federal executive of the party Konrad Adam told Spiegel newspaper.  “People should not feel deceived by our offer.”

The smash on silver and gold on Thursday and Friday of last week played into the AFD's hands as it saw German people, both investors and savers, entering the market in droves to take advantage of the low prices.

Gold brokers across Germany described the manner in which demand for precious metals exploded last week as “a run.”  Many have seen a sharp increase in demand and found their inventories insufficient to meet demand according to Goldreporter.

Germans have become more knowledgeable vis-a-vis precious metals in the last few years and indeed have a cultural affinity for gold due to the hyperinflation and to Hitler's banning of gold ownership.

The benefits of owning a tangible, divisible asset that cannot be printed at will by a government is strong in the folk memory. The lack of a response of the Merkel government following the scandal which arose when the Federal Reserve refused Germany’s request to have it’s sovereign gold repatriated has also motivated many Germans to take matters of wealth protection into their own hands.

They, like many people in the world today, are electing to become their own central bank.

The prudence and patience for which Germans are admired are worthy of emulation in these times. It is wise to do ones own research into owning precious metals and if one does take a position in gold  - be sure to own coins and bars in segregated, allocated vaults in safe jurisdictions such as Switzerland

Trust in one's decision and your judgement and view the volatility of the market with equanimity.

The fragile global financial and monetary system is teetering on the edge of collapse and serious inflation and stagflation is very possibly on the cards.

In the event of a crisis it will be there to help protect you which may not necessarily be the case for paper money and digits on a computer screen.

Gold was gold at the dawn of time and will continue to be.

Get Breaking News and Updates on the Gold Market Here 

MARKET UPDATE
Today's AM fix was USD 1169.25, EUR 933.91 and GBP 730.55 per ounce.
Yesterday's AM fix was USD 1,170.75, EUR 936.90 and GBP 731.90 per ounce.

Gold fell $5.50 or 0.47% to $1,166.90 per ounce yesterday and silver remained unchanged at $16.16 per ounce.

Importantly, for European buyers, gold has remained quite robust in euro terms and seen only slight falls in recent days. Gold in euros remains up 8% for the year so far. Given the problems in the eurozone – it looks very well supported above the €900 level.

Gold in Euros – Year to Date 2014 (Thomson Reuters)

Gold inched up higher today in London, as the U.S. dollar retreated from multi year highs and alleviated recent pressure on the yellow metal.
Bullion traded below a key support level of around $1,180 an ounce on Friday as investors weighed the Fed's announcement of the end of QE and the news that the Bank of Japan vastly increased increased its money printing and debt monetisation experiment in a surprise move, lending strength to the dollar.

This downward pressure on gold triggered stop loss selling and sent gold down to $1,161.25, its lowest since July 2010. Traders are now awaiting the U.S. non-farm payrolls report on Friday for its impact on the dollar and ramifications for monetary policy.
Technical analysts show support for gold at $1,155 an ounce, the 61.8% retracement of gold’s rally from its 2008 lows to its 2011 record high at $1,920.30, and $1,180.
Unusually, Chinese buyers who normally buy on the dips did not appear to do so yesterday as measured by local premiums – an indicator of demand –  which have failed to pick up in any big way.

Shanghai Gold Exchange premiums had fallen to a discount to the global price on Monday but recovered to a premium of $1-$2 an ounce today showing a pickup in demand. They are still far short of the $50 plus premiums seen last year but demand remains very robust with 60 tonnes taken delivery of on the SGE last week. Chinese gold demand alone is heading for some 2,000 metric tonnes again this year.

See Essential Guide to  Storing Gold and Silver In Switzerland here

Gold trades near 4-year low as Fed weighed with demand outlook

Posted: 04 Nov 2014 02:18 AM PST

Silver headed for the longest run of losses this year.

Changing global silver fix was just the beginning

Posted: 04 Nov 2014 01:37 AM PST

'It's not about dividing up the Asia pie, it's about trying to grow that market' - Ruth Crowell.

Gold & Silver Trading Alert: HUI to Gold Ratio at Its 2000 Low

Posted: 03 Nov 2014 10:18 PM PST

SunshineProfits

Dr. Marc Faber: More Americans `Can't Afford' to Buy Homes

Posted: 03 Nov 2014 10:15 PM PST

Dr. Marc Faber: More Americans `Can't Afford' to Buy Homes

Marc Faber, publisher of the Gloom, Boom & Doom Report, talks about Japan's bond-buying program, the global and U.S. economies, and gold and oil prices. He speaks with Trish Regan on Bloomberg Television's "Street Smart."

The video clip from Monday morning EST runs for 17:18 minutes, which is a very long time for a main stream media outlet.  I thank reader Ken Hurt for sending it our way---and he says that it's one of Marc's best interviews in a long while.

Sprott's Thoughts: Jim Rickards interview---the Fed basically still uses LTCM's financial models

Posted: 03 Nov 2014 10:15 PM PST

Sprott's Thoughts: Jim Rickards interview---the Fed basically still uses LTCM's financial models

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?

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 word 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.

This interview appeared on the sprottglobal.com Internet site yesterday---and it's worth reading, especially his last comment on Greenspan and gold.

Marin Katusa: Startling Rise of 'The Colder War'

Posted: 03 Nov 2014 10:15 PM PST

Marin Katusa: Startling Rise of 'The Colder War'

Daily Bell: Marin, The Colder War is a great book. I took it with me as a companion on a long flight, and I'm glad I did. It's full of geopolitical history and insight, and it's a joy to read.

For the benefit of readers who haven't yet read The Colder War, please tell us what the war is about.

Marin Katusa: Vladimir Putin and his inner circle have set about to restore Russia's influence in the world, perhaps to the point of preeminence. That necessarily entails an attack on US economic and political power.

Like a pincer, Putin's Colder War strategy has two parts. First, exploit Russia's vast natural resources to achieve dominance in all aspects of the energy markets, including production, processing and transport of oil, natural gas and uranium. Make the world, especially Europe and Asia, so reliant on Russia for energy that no country will want to confront Russia about anything.

Second, undermine the U.S. dollar's position as the world's reserve currency. Control of world energy markets would get Putin more than half way to success in dethroning the dollar (which I call the petrodollar, because for the last 40 years it has been the nearly exclusive means for settling international trading in oil). Complete success in dethroning the dollar would be like attacking the U.S. with a financial nuclear weapon.

This extensive interview with Marin, which is definitely worth reading, ties in perfectly with the 'New World Order' story posted prior to this one. It was posted on thedailybell.com Internet site on Sunday---and my thanks go out to Rob Bentley for finding it for us.

Koos Jansen interviewed on German TV about Chinese gold demand

Posted: 03 Nov 2014 10:15 PM PST

Koos Jansen interviewed on German TV about Chinese gold demand

China gold researcher and GATA consultant Koos Jansen, market analyst for Bullion Star in Singapore, was interviewed for 10 minutes this week by the German financial news network DAF, discussing China's interest in gold and noting that Chinese gold demand is actually twice what is reported by the World Gold Council.

The interview was posted on the bullionstar.com Internet site on Friday---and I found it over at the gata.org Internet site on Saturday.

Mike Kosares: The reinvention of Alan Greenspan

Posted: 03 Nov 2014 10:15 PM PST

Mike Kosares: The reinvention of Alan Greenspan

The gold-friendly and central banking-critical comments of former Federal Reserve Chairman Alan Greenspan over the last month -- from Foreign Affairs magazine to the New Orleans Investment Conference to the Council on Foreign Relations -- should be noted by investors, according to Mike Kosares, proprietor of USAGold in Denver.

Kosares writes: "This is an individual who actually sat at the controls of the most important central bank of the world. As such he saw first-hand how the monetary system operates the good, the bad, and the ugly. For him to graduate from that experience a proponent of gold reveals more about the efficacy of central banks than perhaps those institutions would like to be known."

Kosares' commentary is headlined "The Reinvention of Alan Greenspan" and it appeared on the USAGold.com Internet site on Friday---and it's another article I found in a GATA release on Saturday.

Chinese gold demand insatiable, Jansen reports; in Germany, a run on silver

Posted: 03 Nov 2014 10:15 PM PST

Chinese gold demand insatiable, Jansen reports; in Germany, a run on silver

Chinese gold demand continues to be huge, insatiable, and largely ignored or underestimated by the Western financial news media, Bullion Star market analyst and GATA consultant Koos Jansen reports yesterday.

And the Goldreporter.de Internet site in Germany reports today that there is a run on silver coins in that country.

Both these precious metal-related stories appeared in a GATA release yesterday morning---and I thank Chris Powell for wordsmithing the above paragraphs of introduction.

Germany's euroskeptic party sells gold bars and coins to raise funds

Posted: 03 Nov 2014 10:15 PM PST

Germany's euroskeptic party sells gold bars and coins to raise funds

Germany's rising eurosceptic party, riding high following its recent electoral successes, has branched out in a somewhat surprising direction -- and entered the gold-trading market.

The Alternative for Germany (AfD) has started selling gold bars and coins online to raise funds for its operations.

The AfD, which is not so much anti-EU as anti-euro, has built its success on a central platform of getting rid of the common currency -- but its latest move is not some hare-brained attempt to return to the gold standard. Instead it is a somewhat elaborate scheme to get around Germany's party-funding laws.

This article showed up on the telegraph.co.uk Internet site at 3:36 p.m. GMT on Monday---and it's another news item I found over at the gata.org Internet site.

What kind of financial journalism doesn't care and doesn't ask questions?

Posted: 03 Nov 2014 10:15 PM PST

What kind of financial journalism doesn't care and doesn't ask questions?

With his sneering at GATA today, commodity letter writer Dennis Gartman inadvertently signifies what's wrong about Western financial journalism -- its fear of committing journalism.

Gartman writes: "The 'gold bugs' shall apparently never give up. They are as convinced now that the gold market is rigged as they were in years past. They are confident that they are right in their belief that the central banks are selling gold at every opportunity and that if only this 'manipulation' is brought to everyone's collective attention and exposed, then gold shall rally and rally and rally some more"

"We shall argue simply that we do not care a whit about manipulation, for if it is there or if it is not it is unimportant to the battles that we have to face."

The rest of Gartman's comments, along with Chris Powell's rebuttal, appeared in this GATA release from yesterday.

Where Is Swiss Gold? – Location, Location, Location

Posted: 03 Nov 2014 10:15 PM PST

Where Is Swiss Gold? – Location, Location, Location

The Swiss National Bank's evasiveness and dissembling about the location and disposition of Switzerland's gold reserves is explored in detail in GoldCore's daily gold market commentary, written yesterday by Ronan Manley.

I found this story at the goldcore.com Internet site---and I thank Chris Powell for writing the above paragraph in his GATA dispatch about it.

Support for Swiss gold referendum falls in latest poll

Posted: 03 Nov 2014 10:15 PM PST

Support for Swiss gold referendum falls in latest poll

Support for a proposal to prohibit the Swiss National Bank from selling any of its gold reserves has waned, according to a poll published on Friday by the free Swiss newspaper 20 Minuten.

The poll showed 38 percent of respondents were in favour of the initiative, down from support of 45 percent in a poll in the paper last week. Some 47 percent of those survey opposed the proposals, while 15 percent remained undecided.

The authors of Friday's poll said the survey was conducted online on Oct. 27 with 12,491 voters. Results were then weighted by voter demographics, geography and other political variables in order to better represent the Swiss voting population.

This Reuters story appeared on the dailymail.com Internet site at 11:21 GMT last Friday---and it's another gold-related news item I found on the gata.org Internet site.

Chris Martenson Interviews Silver Analyst Ted Butler: Silver Nightmare will be over soon

Posted: 03 Nov 2014 10:15 PM PST

Chris Martenson Interviews Silver Analyst Ted Butler: Silver Nightmare will be over soon

Hallowe'en couldn't have been more terrifying for silver investors. The gray metal cracked under $16/oz on Friday, a price not seen for nearly half a decade.

For years now, it has seemed like silver has been beaten down so badly its price couldn't go lower. But then it has.

Why has silver seen such a gut-wrenching price decline? (now down 2/3 compared to its high in late 2011). And will it ever see brighter days again?

This past weekend, Chris had a long discussion with silver expert Ted Butler on the real culprit behind the wild price slams that have plagued silver: unfairly concentrated positions within the derivatives market.

This 45:42 minute audio interview was posted on the peakprosperity.com Internet on Saturday---and certainly falls into the absolute must listen category.  I thank reader 'h c' for being the first person through the door with in on Sunday.

Chris Martenson Interviews Silver Analyst Ted Butler

Posted: 03 Nov 2014 10:15 PM PST

"There was some serious bottom fishing going on"

¤ Yesterday In Gold & Silver

Gold got hammered right out of the gate at 6 p.m. on Sunday evening, hitting a new low for this move down in the spot market at 8 a.m. Hong Kong time.  It rallied from there, hitting its high tick at the noon silver fix in London---and that was it for the day, as the price got sold down progressively lower during the New York trading session.

The low and high ticks were reported by the CME Group as $1,173.40 and $1,161.00 in the December contract.

Gold was closed at $1,165.30 spot, down $7.60 on the day.  Net volume was very much on the lighter side at  108,000 contracts, with 30,000 of those coming before the London open.

Silver got taken to the woodshed at the Sunday night open---and was down almost 45 cents at its low, which came around 8:30 a.m. Hong Kong time. [This appeared to be a new low tick to the downside in silver, but the 6-month silver chart in The Wrap indicates otherwise.] From that point, silver rallied slightly into positive territory in a rather choppy fashion until the price got capped starting shortly before 1 p.m. EST.  It got sold down a bit at that point---and back into negative territory---before trading sideways in the 5:15 p.m. close.

The low and high tick were recorded as $16.22 and $15.74 in the December contract, which was an intraday move of more than 3 percent.

Silver finished the Monday session at $16.145 spot, down 3 cents from Friday's close.  Net volume was very decent at 37,000 contracts, of which 9,000 or so came before the London open.

Here's the New York Spot Silver [Bid] chart on it own so you can see the rather questionable price 'action' around 1 p.m. EDT.

Platinum followed a similar pattern, with the low tick coming about 8:30 a.m. in Hong Kong, followed by the high of the day which came at the noon silver fix in London [1 p.m. Zurich time]---and from there it traded quietly lower in the close.  Platinum was closed up 3 dollars on the day.

Palladium had a tiny down/up move on Sunday night as well, but from there it traded almost ruler flat until shortly before 10 a.m. in Zurich.  From there it rallied to its high at the noon silver fix in London [1 p.m. Zurich time]---and from there it sold off a few bucks going into the London p.m. gold fix---and then traded ruler flat once again into the 5:15 p.m. EST close.  Palladium finished the Monday trading session right on the $800 the ounce mark, up 9 bucks from Friday.

The dollar index closed late on Friday afternoon in New York at 86.91---and then rallied in fits and starts up until its 87.40 high that came about ten minutes before the 1:30 p.m. close of Comex trading.  From that point it chopped a few basis points lower into the close, finishing the Monday session at 87.29---up another 38 basis points.

The gold stocks traded around either side of unchanged until about 11:45 a.m. in New York---and then chopped higher into the close, with the HUI finishing the Monday trading session up 2.68%.  Here's Nick's chart.

It was the same story for the silver equities up until 10:45 a.m.---and then they took off as well, but rallied much more convincingly, with most of their gains coming by 1 p.m. EDT, which is the point at which the silver price  ran into "all the usual suspects".  From there they traded flat into the close, as Nick Laird's Intraday Silver Sentiment Index closed up a very decent 4.82%.

The CME Daily Delivery Report for Day 3 of the November delivery month showed that zero gold and 22 silver contracts were reported for delivery within the Comex-approved depositories on Wednesday.  The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for the Monday trading session showed that gold open interest in November is now 65 contracts, up ten contracts from yesterday's report.  Silver's November o.i. increased by 14 contracts to 133 contracts, minus the 22 contracts posted for delivery tomorrow.

There were no reported changes in GLD yesterday---and as of 7:36 p.m. EST yesterday, there were no reported changes in SLV, either.  But when I was editing this column at 3:55 a.m. EST, I was amazed to see that an authorized participant had added another 1,150,108 troy ounces.

As I sort of expected, there was another big sales report from the U.S. Mint to start off the new month.  They sold 12,000 troy ounces of gold eagles---2,500 one-ounce 24K gold buffaloes---and 625,000 silver eagles.  If I had to bet ten bucks, I'd bet on the fact that these sales were made on Friday, but were shoved into the new month.  If they'd been included in October sales, they would have pushed silver eagles sales well over the 6 million mark---and further into record territory---and that would just never do, would it?

There were no reported in/out movements in gold over at the Comex-approved depositories on Friday but, once again, there was very decent in/out activity in silver, as 592,820 troy ounces were reported received---and 912,591 ounces were shipped out the door.  Virtually all of the activity was at the CNT Depository and Canada's Bank of Nova Scotia.  The link to the silver activity is here.

Here are the 2-minute tick charts for the October intraday price movements for both gold and silver.  Once you average out all 23 trading days in October, the underlying price pattern becomes obvious and, as is always the case, they both have 'shape' to them.   A freely-traded commodity in anything would not have a chart pattern that looked like this.

In gold, the low came exactly an hour after the 6 p.m. open in New York---and the high tick of the day came a minute or so after 12 o'clock noon Hong Kong time/midnight EDT in New York.

In silver, the October low tick came at 11:15 a.m. EDT---and the high tick was at shortly after 1 p.m. Hong Kong time/1:00 a.m. EDT.

But the most important takeaway from these charts, besides the fact that the prices are being actively managed, is that there are no spike lows at any of the daily fixes---the two in gold and one in silver---to be found on either chart.  It was the same in September as well.

'Da boyz'---having been caught with their fingers in the cookie jar at the p.m. fix---have changed tactics, which is more than obvious in these charts.

Taking a trip down memory lane, here's what the 5-year moving average for gold used to look like before that Barclay's trader got caught banging the p.m. gold fix a year or so ago.  As you  can see, this pattern has been replaced by something new---but the 'fix' is still in.

And just for curiosity sake, here are the gold charts for the 23 trading days in October, with a different colour for each day---"rainbow spaghetti soup" is what Nick called it.  It's hard to believe from looking at the multicoloured mess below, that when the 2-minute ticks from each trading day are averaged out over the entire October trading month, that the price management scheme is laid bare---but it is.  And it's even more obvious in the 60-month/5-year rolling chart above.

I have a very decent number of stories for you today, so I hope you have the time to read the ones that interest you.

¤ Critical Reads

JPMorgan faces U.S. criminal probe Into currency trading

JPMorgan Chase & Co. said today it faces a U.S. criminal probe into the firm's foreign-exchange business and increased the upper end of its "reasonably possible losses" related to legal matters.

The lender is cooperating with a criminal investigation by the Department of Justice as well as inquiries by the Commodity Futures Trading Commission and regulators in Britain and elsewhere, the New York-based company said in its quarterly regulatory filing. Reasonably possible losses could be as much as $5.9 billion, the bank said, an increase of $1.3 billion since the end of June.

"These investigations are focused on the firm's spot FX trading activities as well as controls applicable to those activities," according to the filing. JPMorgan "continues to cooperate with these investigations and is engaged in discussions with DOJ and various regulatory and civil enforcement authorities about resolving their respective investigations."

This Bloomberg article was posted on their website at 4:14 p.m. Denver time on Monday afternoon---and I found it embedded in a GATA release.

NYSE Margin Debt Drifts Higher Again in September

The New York Stock Exchange publishes end-of-month data for margin debt on the NYXdata website, where we can also find historical data back to 1959. Let's examine the numbers and study the relationship between margin debt and the market, using the S&P 500 as the surrogate for the latter.

Unfortunately, the NYSE margin debt data is about a month old when it is published. Following its February peak, real margin declined sharply for two months, -3.9% in March -3.2% in April and was flat in May. It then jumped 5.7% in June, its largest gain in 17 months. July saw a 0.9% decline, but number has drifted higher the two subsequent months, up 0.6% in August and 0.2% in September. It is now only is 1.8% below the February peak.

This commentary was posted on the advisorperspectives.com Internet site last Wednesday---and the charts make it worth the trip.  I thank reader U.D. for passing it around on Sunday.

Dr. Marc Faber: More Americans `Can't Afford' to Buy Homes

Marc Faber, publisher of the Gloom, Boom & Doom Report, talks about Japan's bond-buying program, the global and U.S. economies, and gold and oil prices. He speaks with Trish Regan on Bloomberg Television's "Street Smart."

The video clip from Monday morning EST runs for 17:18 minutes, which is a very long time for a main stream media outlet.  I thank reader Ken Hurt for sending it our way---and he says that it's one of Marc's best interviews in a long while.

Sprott's Thoughts: Jim Rickards interview---the Fed basically still uses LTCM's financial models

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?

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 word 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.

This interview appeared on the sprottglobal.com Internet site yesterday---and it's worth reading, especially his last comment on Greenspan and gold.

Jim Rickards interviews on Russia Today's Boom Bust

This Russia Today program showed up on the youtube.com Internet site on Friday sometimes---and Jim's interview starts at the 3:55 minute mark---and runs for about 7.5 minutes.  I thanks Harold Jacobsen for sending it our way.

Brazil Builds Internet Cable to Portugal to Avoid NSA Surveillance

Brazil is building a cable across the Atlantic to escape the reach of the U.S. National Security Agency (NSA). The move is one of many ways the Brazilian government is breaking ties with American technology companies -- but it won’t come cheap.

The 3,500-mile fiber-optic cable will stretch from Fortaleza to Portugal, with an estimated cost of $185 million, Bloomberg reported.  Of course, none of this will go to American vendors.

Last year, Edward Snowden leaked documents that showed the NSA was accessing personal information of Brazilian citizens, including listening to phone calls of President Dilma Rousseff, its embassies and the state-owned oil company Petrobras.

"As many other Latin Americans, I fought against authoritarianism and censorship and I cannot but defend, in an uncompromising fashion, the right to privacy of individuals and the sovereignty of my country," Rousseff said at the U.N. that year.

This news item was posted on the ibtimes.com Internet site on Saturday evening---and I thank reader M.A. for sending it.

Lingering slump in real U.K. house prices outside London belies bubble fears

British house prices have fallen 35pc in real terms since the peak in 2007 and remain stuck at levels last seen at the start of the century once London is excluded, according to hard data from the Land Registry.

“We are not in a bubble or anywhere near it. We’re still climbing out of a trough. The number of mortgages as a share of all homes is the lowest in almost thirty years,” said Michael Saunders from Citigroup.

A study by consultants London Central Portfolio said average prices for the country as a whole were £133,538 in September, if London is stripped out. They are down from a peak in £158,494 in 2007.

This is a 16pc fall in nominal terms but the full scale of the correction has been disguised by accumulated inflation over these years, deliberately engineered by the Bank of England to avoid a debt-deflation trap. Prices in absolute terms are back to 2004 levels.

This Ambrose Evans-Pritchard commentary put in an appearance on the telegraph.co.uk Internet site at 3:49 p.m. GMT yesterday afternoon---and it's the first offering of many on the day from Roy Stephens.

HSBC sets aside $1.8 billion for forex probe, misconduct

HSBC's profits fell short of expectations in the third quarter after the bank set aside $1.8 billion for misconduct settlements and compensation for customers, including a potential fine for rigging currency markets.

The provision and a jump in HSBC's everyday compliance costs show the impact of regulators' increasing efforts to clamp down on bad behavior in the global banking industry that contributed to the financial crisis.

HSBC said on Monday it had spent $700 million more this year on compliance and risk than a year ago, and that level of expense looked set to stay, meaning it would miss one of its main cost targets.

"The cost base of a global bank like ourselves is higher than it was before, because ... it includes a significantly higher compliance and regulatory cost than historically the banks had invested in," Chief Executive Stuart Gulliver said.

"Invested in?"---excuse-moi!  Are they being kind to themselves, or what?  When you're a crook of this magnitude, the licensing fees/fines start eating into profits after a while.  It would be cheaper just cart the lot of them off to jail.

This Reuters story, filed from London, showed up on their Internet site at 12:52 p.m. EST yesterday---and it's courtesy of reader 'h c'.

Germany ready to accept British exit from Europe: P.M. warned he is reaching 'point of no return' in plan to reform free movement rules

Germany would rather see Britain leave the E.U. than allow David Cameron to tear up its rules on free movement of labour, Angela Merkel has said.

The Chancellor warned the Prime Minister that he is reaching a ‘point of no return’ by pushing for reform of the bloc’s sacred free movement system.

The threat has forced Mr. Cameron to tone down his ambitions for any deal to curb EU immigration.

The pair clashed at a summit in Brussels last month, German magazine Der Spiegel said. Citing senior officials, it said Mrs. Merkel told Mr Cameron he was nearing a ‘point of no return’ with plans to introduce quotas for the number of E.U. workers who can come to Britain. She threatened to abandon her efforts to keep Britain in the E.U. unless he backed down.

This article from the Daily Mail was posted on their Internet site at 12:39 p.m. on Sunday, but has been completely rewritten since.  The original headline read "David Cameron forced to tear up plan to cap E.U. migration after Merkel's warning".  I thank South African reader B.V. for sending it.  There was a story from the euobserver.com website about this as well---and it's

Is the rise and rise of the US dollar the coming trade or the end of a four-year trend?

Posted: 03 Nov 2014 09:55 PM PST

Currency markets are the most difficult to get right, and that’s why would-be online forex traders lose so much money. Everybody likes to jump on board a rising trade and that’s just fine until everybody is actually on board. Then a trend will begin to sink and fail, if for no other reason than that there are no more buyers left.

The dollar index has just broken out of its 30-year downtrend line as the Fed closes down its QE program, US consumer spending hits a five-month low and stock market bullishness picks up after an October slump. These are confusing times indeed.

Why so strong?

Does the strength of the US dollar just reflect the relative strength of a near stagnant US economy – with housing and consumer spending now in retreat again – against an even faster deteriorating global economy that is depressing the price of oil and industrial commodities?

HSBC currency supremo David Bloom say a ’seismic change’ is under way in the US dollar and that may result in a 20 per cent advance in the greenback over the next year. Note the word ‘may’ in the last sentence. Nothing is ever for sure in currency trading.

The problem with this position is that currency market price bullish scenarios into exchange rates in nano-seconds, and this does sound like a bullish extreme from the currency strategist of one of the world’s biggest banks. To say much more would put him in the loony bin camp of forex advisors.

Extreme bullishness?

So does this mark a trading extreme for the US dollar? You may come to that conclusion or you may not. What could reverse the dollar’s advance?

A stock market crash and a derivatives blow-up, or a global geo-political accident that destabilizes financial markets? You could hardly argue that after the unprecedented volatility of last month the status quo is suddenly returned to one of stability.

The balance of probability definitely favours more instability. Will that be good for the US dollar as a safe haven? It may be, then again it may not. And if the dollar bulls have this wrong then the goldbugs will soon be back counting their gains. The 2011-vintage downtrend for gold is also looking a bit old.

The LAST Move Before Checkmate…

Posted: 03 Nov 2014 09:00 PM PST

When the Shanghai exchange runs dry out of silver, they will use the event as a legitimate checkmate excuse to revalue both silver and gold.  This ties in with Dr. Jim Willies “GRAND GOLD SHOCK EVENT” prediction.  China’s physical gold holdings will go up in value all while they rake in their paper shorts on the other […]

The post The LAST Move Before Checkmate… appeared first on Silver Doctors.

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Silver Analyst Who Predicted Silver’s Crash to $15 Three Years Ago Says Massive Rally to $1,000/oz Next!

Posted: 03 Nov 2014 08:00 PM PST

Nearly 3 years ago, with silver trading near $40/oz and gold near all-time nominal highs, SD gold & silver analyst Marshall Swing shocked the PM community by warning that silver would crash to $15/oz, then rocket past $1,000/oz as fiat collapses!  Fast forward to Oct 31st, 2014, and silver has indeed crashed to a $15 handle. […]

The post Silver Analyst Who Predicted Silver’s Crash to $15 Three Years Ago Says Massive Rally to $1,000/oz Next! appeared first on Silver Doctors.

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‘Vomiting camel’ formation in the charts has goldbugs nervous about a price plunge

Posted: 03 Nov 2014 07:14 PM PST

FM trader Brian Kelly dissects the performance of gold over the last year and compares its pattern to that of a ‘vomiting camel’. Combined with other technical indicators this could mean a downward spike in the gold price of the sort not seen since the collapse of 2008. That of course was followed by a tremendous rally in the gold price to the all-time high of $1,923 of 2011.

This humourous analysis has a serious point though with financial markets as unstable as they have been recently you could just as easily get a price spike in the opposite direction….

Oil prices falling because of a weakening global economy and that’s bad for the Gulf Oil States too warns Marc Faber

Posted: 03 Nov 2014 06:53 PM PST

Marc Faber, editor and publisher of ‘The Gloom, Boom & Doom Report’, spoke with Bloomberg TV’s Trish Regan today. He commented on Bill Gross’ remarks about deflation and explained why he thinks Japan is engaged in a Ponzi Scheme. He also spoke on oil prices and the midterm elections.

REGAN: Marc, let's talk a little bit about crude oil as we talk about some of these commodities here. You just told me you thought gold won't necessarily be going higher any time soon, but over the long run a good investment. We've got crude oil now closing below $80 for the first time since June of 2012. Is there any floor in site here for oil or do you expect the slide to continue?

FABER: Well basically if oil falls below $75 to $70, I don't think it will stay there because a lot of production will be cut and exploration will be cut, and actually some companies will get into serious trouble financially. The oil price decline is not necessarily very good for the United States. It helps the consumer to some extent, but a lot of capital spending has gone into oil and natural gas, and some of these companies are already today cash flow negative. So if oil prices went lower, it may actually have an adverse impact on the US economy.

REGAN: Do you think to a certain extent – and I actually wrote about – I wrote about this in – in my column in USA Today this week. I wonder to what extent, Marc, OPEC actually enjoys seeing lower prices right now because of the success of drilling in the US. In other words, it makes it far less attractive for drillers in the US to be investing in that sector.

FABER: Except too much of a good thing may not be very good for Saudi Arabia and the other oil producers. You can extract oil in Saudi Arabia at very low cost, but you have to understand the population of Saudi Arabia has now reached I think 25 million. So the social cost is very large. They need an oil price of around $80. If oil prices went down – and let me remind you oil hit a high in July 2008 at $147 and within six months it dropped to $32, but it didn't stay there. It rebounded. And I think Saudi Arabia and most oil producers would be in trouble if the oil price went below $70 and stayed there.

REGAN: But you don't anticipate that it will stay there. It's – it's supply and demand ultimately, and if it goes to $70 you see less investment and drilling and thus less supply here in the US. So $70 is the floor in your view?

FABER: Not necessarily the floor, but it won't stay low for a very long time. I think it's – at the present time, farmers are by and large losing money because the price of corn, wheat, soybeans has collapsed by around 50 percent from the highs and the costs are up substantially. I don't think oil would stay down for very long because I live in an emerging economy. I can see one thing. The demand for oil in the regions of the emerging world where 80 perent of the population of the world lives is going up still from very low per capita consumption levels compared to say the European economy or the US.

So I think the long-term trend for demand is up, but obviously the decline of oil prices, some people blame it on Saudi Arabia and some other blame it on the US and who knows what, the fact is maybe the decline in oil prices tells you that the global economy is not recovering as all the bullish analysts think, but actually it's weakening, yes, weakening. But some countries benefit from lower oil prices, particularly India.

REGAN: So in fact you see the global recovery as not really happening, that we are in an increasingly weak global environment as you look around. And certainly we see some poor data that indicates that out of Asia and Europe.

FABER: Yes. I think that in Europe we have essentially a flat (inaudible) economy. Now maybe a year they will grow at 1 percent and the next year they'll contract at 1 percent, basically you can't expect much growth from Europe. In China, we have now obviously – and this is well documented – a meaningful slowdown in economic growth. As a result, China also buys less resources from the resource producers in the world, from Argentina to Brazil, over (inaudible) Asia, central Asia, Russia (inaudible) and so on. And this has all an impact on these countries' economies, and so they themselves are buying less goods from the Western world and you have the potential of a downside spiral.

Japan’s Monetary Pearl Harbor

Posted: 03 Nov 2014 05:53 PM PST

Trying to “fix” a sclerotic, inefficient state-cartel economy by boosting inflation–the ultimate goal of Japan’s Monetary Pearl Harbor– is a self-liquidating path to destruction.

The Bank of Japan’s surprise expansion of financial stimulus strikes me as the monetary equivalent of Pearl Harbor –not in the sense of launching a pre-emptive war (though the move does raise the odds of a global currency war), but in the sense of a leadership pursuing a Grand Strategy to the point of self-destruction because they have no alternative within their intellectual and political framework.

In the years before Japan’s December 7, 1941 attack on Pearl Harbor, the Imperial government’s Grand Strategy was simple: bring the entire Asian-Pacific region under the control of the Japanese Empire.

That this Imperial Project would necessarily lead to conflict with the United States was baked into the project from the moment of its inception.

 

The Japanese military had embraced the notion of the Decisive Battle as its core war-fighting doctrine. The goal is to draw the opponent’s main force into a battle where that force could be decisively destroyed. With their military power shattered, the opponent would be forced to sue for peace.

Just as the logic of Imperial expansion made the attack on Pearl Harbor inevitable, the logic of the Decisive Battle led to the crushing defeats at the Battle of Midway and Leyte Gulf.

It is this stubborn allegiance to a self-destructive strategy that reminds me of Imperial Japan’s devotion to expansion. In the 25 years since the 1989 apex of Japanese credit-bubble triumphalism, these same policies–monetary easing, zero interest rates and fiscal deficits to fund Bridges to Nowhere–have only exacerbated the stagnation of Japan’s economy and social adaptability.

If this massive expansion of debt is the Decisive Monetary Battle that is supposed to defeat deflation and stagnation, it will inevitably result in defeat and capitulation.

What is needed is structural reform of the real causes of that stagnation–real political and financial reform that dismantle the structural causes of Japan’s failure. But such a strategy is not even discussed, much less actively considered, because it would upend the powerful elites and vested interests who benefit from the status quo Grand Strategy.

As John Kenneth Galbraith observed: “People of privilege will always risk their complete destruction rather than surrender any material part of their advantage.”This describes Japan’s Status Quo of cartels and central state technocrats perfectly. Unfortunately, everybody else gets destroyed along with the Elites when the system implodes.

The political resistance in Japan to meaningful reform is immense. The inflexible sclerosis of Japan’s economy is described in Voodoo Abenomics: Japan’s Failed Comeback Plan (Foreign Affairs):

To lift productivity, Japan needs serious structural changes to promote creative destruction, the process of replacing decaying firms with vibrant ones. The sectors of Japan's economy that face international competition, such as the auto industry, enjoy high productivity. But the lion's share of the economy is domestically oriented, and much of it is shielded from both international and domestic competition by domestic regulations and cartel-like business practices.

Japan's milk market isn't even open to domestic competition. The powerful farm cooperative known as Japan Agriculture uses its stranglehold on distribution to protect inefficient farmers in the main part of Japan by hindering shipments of milk from the larger, more efficient farms in the northern island of Hokkaido. Tokyo turns a blind eye because Japan Agriculture is a powerful electoral ally of Abe's political party and because rural voters are disproportionately represented in the Diet. A real reformer would scrap Japan Agriculture's exemption from the Antimonopoly Act, a law passed in 1947 designed to encourage competition, and use the act to crack down on such practices.

The net result of protecting cartels and fiefdoms by lowering interest rates to zero and flooding the financial sector with “free money” is social depression, characterized by the erosion of employment, and a hollowing out of the economy’s core strengths:

Since Japan's rigid labor laws make it nearly impossible to lay off permanent employees in downtimes, companies now tend to fill open slots with part-time or temporary workers, and they typically pay them a third less. Today, 17 percent of Japanese men aged 25 to 34 hold such second-class jobs, up from four percent in 1988. Low-paid temps and part-timers now make up 38 percent of Japanese employees of all ages and both sexes — a stunning figure for a society that once prided itself on equality.

Trying to “fix” a sclerotic, inefficient state-cartel economy by boosting inflation–the ultimate goal of quantitative easing and the Monetary Pearl Harbor– is a self-liquidating path to destruction:

Since 1997, wages in Japan have fallen by nine percent in real terms. They are expected to continue falling, despite highly advertised wage hikes by a few hundred giant firms whose profits from overseas sales have been artificially boosted by the weaker yen. Abe claims that wages will rise once workers and firms come to expect inflation. In reality, deflation is not the cause of Japan's problems but a symptom. Trying to cure Japan's malaise by generating inflation is like trying to cure a fever by putting ice on the thermometer.

The same devotion to a self-destructive Grand Strategy characterized Japan’s Imperial High Command: dissent was suppressed, lest the truth step on powerful toes. And so the voices of experience within the Establishment who recognized the enormous risks of the Grand Strategy were ignored or silenced.

Admiral Yamamoto, architect of Pearl Harbor and Japan’s early victories in the Pacific, provided one such voice of caution: “In the first six to twelve months of a war with the United States and Great Britain I will run wild and win victory upon victory. But then, if the war continues after that, I have no expectation of success.”

Despite his reputation and rank, his influence within the Power Elite was limited. The Grand Strategy of self-destruction played out with all the hubris and inevitability of a classic tragedy.

Now the Bank of Japan is pursuing its own self-destructive tragedy, and all the world can do is watch from afar and hope the eventual collapse of this Grand Strategy doesn’t take the entire global financial system down with it. 

It’s Currency War! – And Japan Has Fired The First Shot

Posted: 03 Nov 2014 04:06 PM PST

Currency War - Public DomainThis 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.

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...

This is just plain sick. Hardly a day after the greatest central bank fraudster of all time, Maestro Greenspan, confessed that QE has not helped the main street economy and jobs, the lunatics at the BOJ flat-out jumped the monetary shark. Even then, the madman Kuroda pulled off his incendiary maneuver by a bare 5-4 vote. Apparently the dissenters——Messrs. Morimoto, Ishida, Sato and Kiuchi—-are only semi-mad.

Never mind that the BOJ will now escalate its bond purchase rate to $750 billion per year—-a figure so astonishingly large that it would amount to nearly $3 trillion per year if applied to a US scale GDP. And that comes on top of a central bank balance sheet which had previously exploded to nearly 50% of Japan's national income or more than double the already mind-boggling US ratio of 25%.

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...

In Seoul, shares of auto makers Hyundai Motor and Kia Motors fell 5.9% and 5.6%, respectively, on Monday.

South Korean and Japanese companies often compete head-to-head in the same product groups in global markets, notably cars and electronics goods.

From the Bank of Japan's standpoint, "you're giving your industry a head start relative to someone else's," said Markus Rosgen, regional head of equity strategy at Citi in Hong Kong. "The perception in the equity market will be that they [South Korea] will have to take a hit from the lack of competitiveness versus the Japanese."

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...

Amid the euphoria... Kyle Bass provided a few minutes of sanity this morning in an interview with CNBC's Gary Kaminsky. Bass starts by reflecting on the ongoing (and escalating) money-printing (or balance sheet expansion as we noted here) as the driver of stock movements currently and would not be surprised to see them move higher still (given the ongoing printing expected).

However, he caveats that nominally bullish statement with a critical point, "Zimbabwe's stock market was the best performer this decade - but your entire portfolio now buys you 3 eggs" as purchasing power is crushed. Investors, he says, are "too focused on nominal prices" as the rate of growth of the monetary base is destroying true wealth. Bass is convinced that cost-push inflation is coming (as the velocity of money will move once psychology shifts) and investors must not take their eye off the insidious nature of underlying inflation - no matter what we are told by the government (as they will always lie when its critical). Own 'productive assets', finance them at low fixed rates (thank you Ben)...

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...

Notwithstanding the massive hype of Abenomics, Japan's real GDP is lower than it was in early 2013, while its trade accounts have continued to deteriorate and real wages have headed sharply south.

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?

We shall see, but I wouldn't hold your breath.

Meanwhile, there are reports that the European Central Bank is getting ready for more quantitative easing.  Central banks all over the planet are becoming increasingly desperate for answers, and the temptation to print, print and print some more is extremely strong.

Nobody is quite sure how this currency war will play out, but I have a feeling that it isn't going to be pretty.

Ted Butler: The Silver Nightmare Will Be Over Soon

Posted: 03 Nov 2014 03:00 PM PST

Last week was downright horrific for precious metals owners.  Hours after silver broke below $16/oz, Peak Prosperity’s Chris Martenson recorded this MUST LISTEN interview with silver expert Ted Butler on the causes of the prolonged abuse in the the precious metals sector, and how close we may be to its end. Butler zeroes in on […]

The post Ted Butler: The Silver Nightmare Will Be Over Soon appeared first on Silver Doctors.

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What’s Next For Silver?

Posted: 03 Nov 2014 02:16 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 plunged below $1179 to about $1160.

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,
  4. Both rally from here because breaking lower support was merely a consequence of the political and financial elite boosting the stock market and the dollar index prior to the US elections. Markets have a history of making unusual moves prior to elections. Or,
  5. Both rally from here and make new highs, probably in 2015.

Does it really matter?

  • Yes. These prices will force the mining industry to consolidate. There will be casualties. Eventually supply of gold and silver will decline and prices will rise.
  • Yes. The more gold and silver fall the more "weak hands" will bail out and move to cash or buy something they hope will move up. Eventually gold and silver will rally and the spike up will be as powerful as the crash down.
  • Yes. Large traders and others who have positioned themselves to profit from the take-downs and the subsequent rallies can book huge profits. Buy low and sell high, or sell short high and buy low. It is much easier when a trader has the inside track knowing when the paper market take-downs will occur, or if the trader can actually create the take-downs.
  • No. Because you were wise enough to walk away from the financial casino and the sharks on Wall Street and safely stack your silver and gold in a private vault.

What do I think? When the data does not confirm the expectation, it is time to revisit the plan. Gold and silver crashed below support. So, back to basics….

  1. US official national debt is increasing roughly $1 Trillion per year. It will increase. More debt means more currency in circulation. Over the past 100 years more currency in circulation has created higher prices for gold, silver, food, energy, cigarettes, beer, Wall Street bonuses, and payoffs to legislators.
  2. The Fed and other central banks will do almost anything to avoid deflation in stocks, bonds, and most consumer prices. Expect more "money printing" and higher inflation.
  3. Stocks and bonds can be levitated but not forever.
  4. Gold and silver can be crushed, but not forever. After all, they are real money.
  5. Asian demand for gold and silver is strong and expected to remain strong. It seems that western vaults are being emptied, gold is sent to Switzerland, recast into 1 kilo bars, and shipped to China, India, and Russia. It will probably continue until no more gold can be shipped from west to east. Price rises will occur.
  6. Wars are inflationary as more currency is borrowed and printed to pay for bombs, jets, bullets, military contractors, and soldiers. More wars are on the horizon.
  7. There are 100 other reasons why silver and gold will eventually rise substantially. They include more QE, Ponzi finance, Japanese QE, bond and currency market bubbles, massive debt, demographics, delusions, and deflationary forces.

But WHEN will gold and silver prices rally? I don't know. Ask the HF Traders, but US elections are Tuesday and that might be important.

What do the charts show? Obviously they show silver and gold prices falling, almost relentlessly since 2011. Prices have collapsed, technical indicators are deeply "oversold" on quarterly, monthly, weekly and daily charts. Expect prices to rise when they are finally ready to/allowed to rise. When? Ask the HF Traders. But oversold conditions are usually corrected with rallies. The more "over-sold" the more likely a strong rally will develop. Not inevitable – just likely.

Conclusion:

Debt is rising. Prices will eventually follow. Demand for gold coins, silver coins, and gold bars is strong. Yet prices fall. Strange!

More wars and larger wars are on the horizon. Currencies will be devalued and printed to finance the wars. Some investors will buy gold, silver, art, land, and real estate for protection from the inevitable inflation and devaluing currencies. Higher prices for gold and silver are coming.

Darryl Robert Schoon is correct when he says "buy gold, buy silver, have faith." And yes, stacking now is a good idea. For more information on higher gold prices, read my book: "Gold Value and Gold Prices From 1971 – 2021."

 

For important and astute analysis read:

Bill Holter Has China Played Possum?

Mish Will These Central Bank Morons Ever Learn?

Ted Butler The Silver Nightmare Will Be Over Soon

 

Gary Christenson | The Deviant Investor

Deepcaster: Spikes & Opportunities Impending

Posted: 03 Nov 2014 02:00 PM PST

Major Geopolitical, Economic and Financial Events will occur beginning this November. And certain of these will generate Mega-Moves in Key Sectors. And Legendary Investor Julian Robertson has correctly identified one of them — The Great Bubble Event which will end in "a very bad way". Indeed, the Jaws of Death and Hindenberg Omen Technical Signals […]

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