MISH'S
Global Economic
Trend Analysis
Amazingly, smack in the midst of deal to save Greece from bankruptcy, the ECB not only insists on taking no losses on Greek bonds its holds, it wants a profit on them because it bought them at what seemed at the time to be a substantial discount. The discount was imaginary. The bonds were trading at 7% at the time.
Uncomfortable Days for ECB
The Financial Times reports Uncomfortable days for ECB
The ECB started buying Greek bonds in May 2010, when the eurozone debt crisis first erupted. The objective of Jean-Claude Trichet, president, was to stabilise financial markets. The assumption was that bonds bought at market prices would be held until maturity, when the ECB would book a tidy profit.
Having taken action when the private sector held back, it justifiably feels it should not have to pay a price now, said Erik Nielsen, chief economist at UniCredit. “In an emergency, the fire brigade goes in – but the deal is that it is protected.”
Economists estimate that a 70 per cent “haircut” on the face value of the ECB holdings could leave a loss of more than €20bn – a significant but not disastrous sum given the size of the reserves held by the ECB and eurozone national central banks. But the ECB’s resistance to accepting losses is not just principled. Agreeing to take a loss could be viewed as providing financial assistance to Greece – and in violation of the European Union’s ban on central banks funding governments.
26 January 2012
Gold, Silver, $HUI React to Bernanke Pledge to Hold Rates near Zero "At Least" through Late 2014; Hello Stephanie, Ben Promises More of the Same
MISH'S
Global Economic
Trend Analysis
In a press statement regarding today's FOMC meeting, the Fed announced that economic conditions would "likely warrant exceptionally low levels for the federal funds rate at least through late 2014".
If It Doesn't Work, Keep Doing It
As noted in Premature Dollar Obituaries and Mainstream Economists' Monetary Insanity; Keynes-Inspired Great Depression; Lessons Not Learned, this policy decision is highly unlikely to accomplish what Bernanke wants.
Bernanke's policy now boils down to "if it doesn't work, we'll keep doing it until it does". Those on fixed incomes have been crucified by the Fed's policies and will continue to be crucified by the Fed's policies until low interest rates work.
Reaction of Gold, Silver, $HUI to FOMC Statement
Global Economic
Trend Analysis
In a press statement regarding today's FOMC meeting, the Fed announced that economic conditions would "likely warrant exceptionally low levels for the federal funds rate at least through late 2014".
If It Doesn't Work, Keep Doing It
As noted in Premature Dollar Obituaries and Mainstream Economists' Monetary Insanity; Keynes-Inspired Great Depression; Lessons Not Learned, this policy decision is highly unlikely to accomplish what Bernanke wants.
Bernanke's policy now boils down to "if it doesn't work, we'll keep doing it until it does". Those on fixed incomes have been crucified by the Fed's policies and will continue to be crucified by the Fed's policies until low interest rates work.
Reaction of Gold, Silver, $HUI to FOMC Statement
JP Morgan: "Operation Silver Slam"
I must admit that I've been watching JP Morgan pull the same manipulation stunts over and over again for years. And it's not just in the silver markets. On November 18, 2005 when natural gas prices were skyrocketing to near $15 due to the ravaging of hurricanes Katrina and Rita the Federal Reserve announced that they had approved JP Morgan to trade in natural gas. That announcement can still be found on the Federal Reserve website here:
http://www.federalreserve.gov/boarddocs/press/orders/2005/20051118/default.htm
At the time I told all my subscribers invested in natural gas to "run for the hills" as it felt like there was something afoot. In less than 1 year JPM had trashed natural gas down to what everyone thought was a floor of around $6 and the "smart money" had loaded up for what they thought was going to be a nice ride up...But JPM was not done and went for the final "Choke Out" driving the price down below $5 and holding it there destroying Amaranth in their wake then buying up the pieces to make at least $750M but many suspect over $2B.
Here's the price graph to see what happened after Nov 2005.
http://www.federalreserve.gov/boarddocs/press/orders/2005/20051118/default.htm
At the time I told all my subscribers invested in natural gas to "run for the hills" as it felt like there was something afoot. In less than 1 year JPM had trashed natural gas down to what everyone thought was a floor of around $6 and the "smart money" had loaded up for what they thought was going to be a nice ride up...But JPM was not done and went for the final "Choke Out" driving the price down below $5 and holding it there destroying Amaranth in their wake then buying up the pieces to make at least $750M but many suspect over $2B.
Here's the price graph to see what happened after Nov 2005.
Silver Price Forecast 2012:I Stand By $140 Silver Price In 2012
Silver Price Forecast 2012:
There is a well-established relationship between how silver and gold trade. They often trade similar in the same time period, but also at similar milestones, although those milestones are sometimes reached at different times. This can cause silver or gold to be the leading indicator, depending on the particular milestone.
I have previously used this relationship to predict how silver will trade. Below, is an extract of that update:
There is a well-established relationship between how silver and gold trade. They often trade similar in the same time period, but also at similar milestones, although those milestones are sometimes reached at different times. This can cause silver or gold to be the leading indicator, depending on the particular milestone.
I have previously used this relationship to predict how silver will trade. Below, is an extract of that update:
SilverDoctors: Citigroup sued for fraud over $1 billion of CDOs
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SilverDoctors: "Fed Euphoria" Sees Gold Touch 7-Week High as 0% R...
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SilverDoctors: Portuguese 10 Year Yield Passes 15%!
SilverDoctors: Portuguese 10 Year Yield Passes 15%!: The Portuguese 10 year yield passed 15% today for the first time , as Portugual has now officially morphed into Greece. The banking system ...
25 January 2012
Fed To Markets: Buy Gold And Silver
by John Rubino on January 25, 2012
The Fed just spoke. Here’s a slightly edited transcript:
The Fed just spoke. Here’s a slightly edited transcript:
Blah blah blah … the economy has been expanding moderately … blah blah blah boilerplate inanity blatant lie … the Committee seeks to foster maximum employment and price stability ….
To support a stronger economic recovery and to help ensure that inflation, over time, is at levels consistent with the dual mandate, the Committee expects to maintain a highly accommodative stance for monetary policy. In particular, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions–including low rates of resource utilization and a subdued outlook for inflation over the medium run–are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.
European turmoil /Portugal/Illinois/
Good evening Ladies and Gentlemen:
Today we had the risk is off trade as Europe is in turmoil due to the lack of progress in dealing with
Greece and other PIIGS nations. They announce a deal for the new mechanism for funding yet no deal can be found written anywhere. These will be discussed in the body of the commentary but first let us head over to the comex.
The price of gold closed at the comex at $1664.20 for a loss of 13.80. The price of silver also fell by 32 cents to $31.93. Tonight is the state of the Union message and always the bankers want to make Obama look good so they bomb the precious metals so to make the paper dollar supreme. Options are expiring on Thursday and tomorrow Bernanke deliveries his FOMC two day statement, so again the bankers have their fingers on the sell button.
The total gold comex OI fell by 1800 contracts or so to 436,642 with gold advancing by 14.00 dollars yesterday. We had some banker liquidation. The front options delivery month of January saw its OI fall from 42 to 14 for a loss of 28 contracts. We had 29 delivery notices yesterday so we gained 1 gold contract or 100 oz of additional gold standing. We are now exactly one week away from first day notice and here the OI fell by 9000 contracts as most rolled into April. The new OI for February rests tonight at 139,274 which is on the low side. Of course, we will have to see how many resolute longs we will have willing to take on the likes of the bankers and Blythe Masters. Will they be tempted with bonus fiat dollars to roll or take physical delivery. The estimated volume at the gold comex today came in at 163,849 which is very low for a rollover period. The confirmed volume yesterday was slightly better at 171,616. There is no question that much business has been taken away from the comex to other jurisdictions probably due to the crookedness of the bankers and of course, the MFGlobal scandal.
Gentlemen, Start Your Printing Presses!
By Eric Fry
01/25/12 Laguna Beach, California – Whoops!…Oh dear!…It looks like Ben fell off the wagon again!
Such a shame. He had been doing so well ever since he put that bottle of “Old Q.E.” back on the shelf last June… and got sober. But a few weeks back, he tripped up on his 12-step program and started nipping at the bottle again. Slowly at first… then to excess.
Yes, it’s true, dear reader, Federal Reserve Chairman Ben Bernanke, is printing money again. That’s bad enough. But this time, after he prints it, he sends it over to Europe. Crazy, but true. The chart below tells the tale. It shows the quantity of currency swaps on the Fed’s balance sheet.
What are these things?
Technically, they are an exchange of one currency for another currency. Functionally, they are a loan.
Such a shame. He had been doing so well ever since he put that bottle of “Old Q.E.” back on the shelf last June… and got sober. But a few weeks back, he tripped up on his 12-step program and started nipping at the bottle again. Slowly at first… then to excess.
Yes, it’s true, dear reader, Federal Reserve Chairman Ben Bernanke, is printing money again. That’s bad enough. But this time, after he prints it, he sends it over to Europe. Crazy, but true. The chart below tells the tale. It shows the quantity of currency swaps on the Fed’s balance sheet.
Technically, they are an exchange of one currency for another currency. Functionally, they are a loan.
Fiat currency system meltdown has huge implications for gold and silver - Embry
Author: Geoff Candy
Posted: Wednesday , 25 Jan 2012
While not something he wants to see happen, Sprott Asset Management's John Embry says, he can't see the global financial situation improving, which has bulilsh implications for gold.
GRONINGEN -
The 12th year of gold's bull cycle could well be the best to date for the yellow metal, if Sprott Asset Management's John Embry is correct.
Speaking on Mineweb.com's Gold Weekly podcast, Embry said, "If the economies are as damaged as I think they are, particularly in Europe, (I don't think they are as good in China or the US as they are trying to crack them up to be).... I think gold and silver prices could conceivably see the biggest percentage gains this year that they've had in the entire bull market"
He says, although he doesn't want to be right, he can only see two realistic scenarios - both of which are bullish for gold. If the world stops supporting the debt in the system, the global financial system will face a hard deflation event, or he says, the continued creation of debt will result in mounting inflation down the road.
Posted: Wednesday , 25 Jan 2012
While not something he wants to see happen, Sprott Asset Management's John Embry says, he can't see the global financial situation improving, which has bulilsh implications for gold.
GRONINGEN -
The 12th year of gold's bull cycle could well be the best to date for the yellow metal, if Sprott Asset Management's John Embry is correct.
Speaking on Mineweb.com's Gold Weekly podcast, Embry said, "If the economies are as damaged as I think they are, particularly in Europe, (I don't think they are as good in China or the US as they are trying to crack them up to be).... I think gold and silver prices could conceivably see the biggest percentage gains this year that they've had in the entire bull market"
He says, although he doesn't want to be right, he can only see two realistic scenarios - both of which are bullish for gold. If the world stops supporting the debt in the system, the global financial system will face a hard deflation event, or he says, the continued creation of debt will result in mounting inflation down the road.
SilverDoctors: No QE3- ZIRP to Continue Through 2014- Gold & Silv...
SilverDoctors: No QE3- ZIRP to Continue Through 2014- Gold & Silv...: No QE3 today folks, but zero interest rate policy (ZIRP) will now continue through 2014, and TWIST (QE by another name) will be continued ...
The Demise of the Petrodollar
Rumors are swirling that India and Iran are at the negotiating table right now, hammering out a deal to trade oil for gold. Why does that matter, you ask? Only because it strikes at the heart of both the value of the US dollar and today's high-tension standoff with Iran.
Marin Katusa
Chief Energy Investment Strategist
Casey Research
The official line from the United States and the European Union is that Tehran must be punished for continuing its efforts to develop a nuclear weapon. The punishment: sanctions on Iran's oil exports, which are meant to isolate Iran and depress the value of its currency to such a point that the country crumbles.
But that line doesn't make sense, and the sanctions will not achieve their goals. Iran is far from isolated and its friends – like India – will stand by the oil-producing nation until the US either backs down or acknowledges the real matter at hand. That matter is the American dollar and its role as the global reserve currency.
The short version of the story is that a 1970s deal cemented the US dollar as the only currency to buy and sell crude oil, and from that monopoly on the all-important oil trade the US dollar slowly but surely became the reserve currency for global trades in most commodities and goods. Massive demand for US dollars ensued, pushing the dollar's value up, up, and away. In addition, countries stored their excess US dollars savings in US Treasuries, giving the US government a vast pool of credit from which to draw.
We know where that situation led – to a US government suffocating in debt while its citizens face stubbornly high unemployment (due in part to the high value of the dollar); a failed real estate market; record personal-debt burdens; a bloated banking system; and a teetering economy. That is not the picture of a world superpower worthy of the privileges gained from having its currency back global trade. Other countries are starting to see that and are slowly but surely moving away from US dollars in their transactions, starting with oil.
If the US dollar loses its position as the global reserve currency, the consequences for America are dire. A major portion of the dollar's valuation stems from its lock on the oil industry – if that monopoly fades, so too will the value of the dollar. Such a major transition in global fiat currency relationships will bode well for some currencies and not so well for others, and the outcomes will be challenging to predict. But there is one outcome that we foresee with certainty: Gold will rise. Uncertainty around paper money always bodes well for gold, and these are uncertain days indeed.
Marin Katusa
Chief Energy Investment Strategist
Casey Research
Tehran Pushes to Ditch the US Dollar
The official line from the United States and the European Union is that Tehran must be punished for continuing its efforts to develop a nuclear weapon. The punishment: sanctions on Iran's oil exports, which are meant to isolate Iran and depress the value of its currency to such a point that the country crumbles.But that line doesn't make sense, and the sanctions will not achieve their goals. Iran is far from isolated and its friends – like India – will stand by the oil-producing nation until the US either backs down or acknowledges the real matter at hand. That matter is the American dollar and its role as the global reserve currency.
The short version of the story is that a 1970s deal cemented the US dollar as the only currency to buy and sell crude oil, and from that monopoly on the all-important oil trade the US dollar slowly but surely became the reserve currency for global trades in most commodities and goods. Massive demand for US dollars ensued, pushing the dollar's value up, up, and away. In addition, countries stored their excess US dollars savings in US Treasuries, giving the US government a vast pool of credit from which to draw.
We know where that situation led – to a US government suffocating in debt while its citizens face stubbornly high unemployment (due in part to the high value of the dollar); a failed real estate market; record personal-debt burdens; a bloated banking system; and a teetering economy. That is not the picture of a world superpower worthy of the privileges gained from having its currency back global trade. Other countries are starting to see that and are slowly but surely moving away from US dollars in their transactions, starting with oil.
If the US dollar loses its position as the global reserve currency, the consequences for America are dire. A major portion of the dollar's valuation stems from its lock on the oil industry – if that monopoly fades, so too will the value of the dollar. Such a major transition in global fiat currency relationships will bode well for some currencies and not so well for others, and the outcomes will be challenging to predict. But there is one outcome that we foresee with certainty: Gold will rise. Uncertainty around paper money always bodes well for gold, and these are uncertain days indeed.
Belarus Gold Reserves Rise to 1.21 Million Ounces in December 2011
By Esther Tanquintic-Misa: Subscribe to Esther's RSS feed
January 25, 2012 12:37 AM EST
Gold reserves by the Republic of Belarus in the last month of 2011 have grown to 1.21 million ounces from 1.028 million ounces in November 2011, data from the Web site of the International Monetary Fund said.
This, as the World Gold Council (WGC) expects gold buying of central banks could have breached another record in 2011.
The Natsionalny Bank Respubliki Belarus bank on its Webs ite reported it holds 1.2 million ounces of gold for December.
"Gold reserves are replenished as a result of the central bank purchasing gold," Mikhail Zhuravovich, a spokesman for the Natsionalny Bank Respubliki Belarus, said in Bloomberg News. The conversion into gold of interest payments received also supplemented to the increased numbers, Mr Zhuravovich added.
When asked if the country plans to buy more gold purchases in the immediate future, Mr Zhuravovich declined to comment.
January 25, 2012 12:37 AM EST
Gold reserves by the Republic of Belarus in the last month of 2011 have grown to 1.21 million ounces from 1.028 million ounces in November 2011, data from the Web site of the International Monetary Fund said.
This, as the World Gold Council (WGC) expects gold buying of central banks could have breached another record in 2011.
The Natsionalny Bank Respubliki Belarus bank on its Webs ite reported it holds 1.2 million ounces of gold for December.
"Gold reserves are replenished as a result of the central bank purchasing gold," Mikhail Zhuravovich, a spokesman for the Natsionalny Bank Respubliki Belarus, said in Bloomberg News. The conversion into gold of interest payments received also supplemented to the increased numbers, Mr Zhuravovich added.
When asked if the country plans to buy more gold purchases in the immediate future, Mr Zhuravovich declined to comment.
Gold & Silver: Why governments want much, much higher prices soon?
By Arnold Bock
That governments will want - and will NEED - much, much higher Gold and Silver prices in the future is counter intuitive, given that they have done everything within their power till now to throttle back and to keep a lid on bullion prices. Let me explain why.
Although we have seen eleven consecutive years of gold bullion price rises, such increases have been incremental, measured and at levels which make the remainder of the commodities and equities markets look volatile. Governments have used their preferred bullion banks as agents in the paper futures markets and their central banks, in conjunction with their respective Treasury bureaucracies, to limit the inexorable rise in precious metals prices as much as possible to keep gold - the only 'real money' - from drawing unfavorable attention to their own failing fiat currencies and uncontrolled sovereign debt.
Recently central banks have become net purchasers of gold bullion after many years being net sellers. In 2011 central banks purchased 430 tonnes of gold, five times more than in 2010 and the highest since 1964. Much of this new demand has come from 'emerging markets' central banks like Mexico, Russia, Turkey, South Korea and of course China and India.
This causes one to speculate as to why governments would suddenly, however quietly, turn into buyers rather sellers of gold.
--Could it be that gold is the only 'real money' in a world comprised of paper money backed up only by faith and confidence, or lack thereof?
--Are 'paper money bugs' losing their confidence and swagger?
--Are governments positioning themselves for a period when paper money loses its value faster than they can create additional digital versions of it?
That governments will want - and will NEED - much, much higher Gold and Silver prices in the future is counter intuitive, given that they have done everything within their power till now to throttle back and to keep a lid on bullion prices. Let me explain why.
Although we have seen eleven consecutive years of gold bullion price rises, such increases have been incremental, measured and at levels which make the remainder of the commodities and equities markets look volatile. Governments have used their preferred bullion banks as agents in the paper futures markets and their central banks, in conjunction with their respective Treasury bureaucracies, to limit the inexorable rise in precious metals prices as much as possible to keep gold - the only 'real money' - from drawing unfavorable attention to their own failing fiat currencies and uncontrolled sovereign debt.
Recently central banks have become net purchasers of gold bullion after many years being net sellers. In 2011 central banks purchased 430 tonnes of gold, five times more than in 2010 and the highest since 1964. Much of this new demand has come from 'emerging markets' central banks like Mexico, Russia, Turkey, South Korea and of course China and India.
This causes one to speculate as to why governments would suddenly, however quietly, turn into buyers rather sellers of gold.
--Could it be that gold is the only 'real money' in a world comprised of paper money backed up only by faith and confidence, or lack thereof?
--Are 'paper money bugs' losing their confidence and swagger?
--Are governments positioning themselves for a period when paper money loses its value faster than they can create additional digital versions of it?
David Franklin Sprott Asset Management January 23, 2012 Recorded by: TheSilverWatch
David Franklin of Sprott Asset Management speaks at the Vancouver Resource Investment Conference January 23, 2012. Recorded by: TheSilverWatch
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SilverDoctors: Scotia Mocatta Adjusts 209,144 Ounces of Silver in...
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24 January 2012
Gold and Silver advance/Euro breaks to the upside/No Greek deal
Good evening Ladies and Gentlemen:
Today's commentary is will short as I have arrived home late today.
The price of gold rose by $14.30 to $1678. Silver also rose by 59 cents to $32.24.
I would like to caution you that we have the FOMC meeting results on Wednesday and Thursday is the dreaded options expiry. So be careful as our bankers surely raid around these events.
Let us head over to the comex and assess trading, inventory movements and of course amounts of gold and silver standing.
The total gold comex OI fell by 2833 contracts from 441,320 to 438,487. Because gold had a good day on Friday we must have seen some liquidations probably by our banker friends. The front options expiry month of January saw its OI fall from 53 to 42 for a loss of 11 contracts. We had 11 delivery notices on Friday so we neither gained nor lost any gold and thus no cash settlements. The next big delivery month for gold is next week as first day notice is next Tuesday the 31st of January. Here the OI fell from 156,621 to 148,308 and this movement to a futures month is on schedule. Nothing earth shattering here. The estimated volume at the gold comex came in at 147,018 which is very mild. The confirmed volume on Friday with a big rise in gold came in at 153,683 which is also tame. Due to the confiscation with respect to the MF GLobal fiasco fewer players are playing the comex casino.
The total silver comex OI rose in contrast to gold. The new Oi rests tonight at 104,406. In gold we had liquidation but in silver we had accumulation of the metal by stronger hands. The front options expiry month of January saw its OI fall from 152 to 108 for a loss of only 44 contracts despite 114 delivery notices on Friday. We thus gained 70 contracts of additional silver standing (350,000 oz) and lost nothing to cash settlements. The next big delivery month is March and here the OI rose from 51,351 to 53,024. We are still quite away from first day notice which is Feb 28.2012 for March delivery. The estimated volume at the silver comex was very light at 42,910. The confirmed volume on Friday was also light at 46,146.
Exposing Silver Mythology, Part I
Written by Jeff Nielson Monday, 23 January 2012 00:12
Advanced economic analysis involves high-level mathematics at least as complex as the realms of physics or engineering, accompanied by equally convoluted jargon. As a result, it is virtually incomprehensible to the ordinary person.
Conversely, the basic principles of economics are very straightforward. Indeed they could be summarized as little more than a combination of common sense and simple arithmetic. As a result, fundamental economic analysis is highly accessible to the ordinary person – because of its relative simplicity.
What then are we to make of the fact that the self-described (mainstream) “experts” on the silver market; the quasi-official sources for data on the silver market; and the primary regulator of the silver market all regularly and consistently demonstrate complete ignorance of even the most elementary of economic principles? Are we to attribute this to gross incompetence, inherent bias, or an intentional attempt to deceive?
I will leave it up to readers to reach their own conclusions. This piece will simply lay out the positions of these individuals and entities (past and present), lay out what little reliable data is available to us; and then apply the simple, common sense principles of economics to this data. It will focus on the three most basic aspects of any market: supply, demand, and inventories.
First, however, I will refer readers to some previous, elementary economic analysis. As I established with simple numbers (and logic), in any market shorting always “consumes” while investing always “conserves”. In other words, in any market which is dominated by shorting we will see a substantial increase in consumption, and (over time) a radical decline in inventories/stockpiles. On the other hand, in any market dominated by investors (who are invariably mis-labeled as “speculators”), we will see consumption decline and inventories swell – due to the rising prices generated by increased investor-buying.
Meanwhile, the entities/individuals mentioned previously do not merely regularly engage in analysis which is wildly erroneous, but in many cases is totally perverse. It is with respect to this last point where it becomes more difficult to ascribe this behavior to mere incompetence and rather more likely that there is some degree of malice involved.
Advanced economic analysis involves high-level mathematics at least as complex as the realms of physics or engineering, accompanied by equally convoluted jargon. As a result, it is virtually incomprehensible to the ordinary person.
Conversely, the basic principles of economics are very straightforward. Indeed they could be summarized as little more than a combination of common sense and simple arithmetic. As a result, fundamental economic analysis is highly accessible to the ordinary person – because of its relative simplicity.
What then are we to make of the fact that the self-described (mainstream) “experts” on the silver market; the quasi-official sources for data on the silver market; and the primary regulator of the silver market all regularly and consistently demonstrate complete ignorance of even the most elementary of economic principles? Are we to attribute this to gross incompetence, inherent bias, or an intentional attempt to deceive?
I will leave it up to readers to reach their own conclusions. This piece will simply lay out the positions of these individuals and entities (past and present), lay out what little reliable data is available to us; and then apply the simple, common sense principles of economics to this data. It will focus on the three most basic aspects of any market: supply, demand, and inventories.
First, however, I will refer readers to some previous, elementary economic analysis. As I established with simple numbers (and logic), in any market shorting always “consumes” while investing always “conserves”. In other words, in any market which is dominated by shorting we will see a substantial increase in consumption, and (over time) a radical decline in inventories/stockpiles. On the other hand, in any market dominated by investors (who are invariably mis-labeled as “speculators”), we will see consumption decline and inventories swell – due to the rising prices generated by increased investor-buying.
Meanwhile, the entities/individuals mentioned previously do not merely regularly engage in analysis which is wildly erroneous, but in many cases is totally perverse. It is with respect to this last point where it becomes more difficult to ascribe this behavior to mere incompetence and rather more likely that there is some degree of malice involved.
SilverDoctors: Japan Gold Buying on TOCOM Again Supports
SilverDoctors: Japan Gold Buying on TOCOM Again Supports: Investors are waiting on the outcome of a 2 day Federal Reserve meeting which ends on Wednesday. Here they are following any signs that ...
SilverDoctors: S&P Warns Greek Event Would Qualify as a Default
SilverDoctors: S&P Warns Greek Event Would Qualify as a Default: If the Greek default is labeled as such, 5 large American TBTF banks will be vaporized over their derivative exposure. Why do you think the...
Exclusive – Marcus Grubb: “Gold Becoming More and More A Part of The Fabric of The [Global] Financial System”
January 23, 2012 | By Tekoa Da Silva |
I had the spectacular opportunity last week to speak with Marcus Grubb, Managing Director of Investment with the World Gold Council. It was an exciting interview to say the least, as the World Gold Council is the world’s preeminent gold organization whose member companies represent nearly 70% of global gold production.
During the interview, Marcus shared his thoughts on the changing global perception of gold by investors, governments, and central banks, efforts by the World Gold Council to catalyze global gold demand and delivery systems, as well as the future of gold in the world’s financial system.
Beginning the discussion with the mandate of the World Gold Council, Marcus said,“The World Gold Council is the market development organization for the world gold industry. It represents the mining producers; something close to 70% of mine production is represented by members of the World Gold Council…We have programs to promote gold demand on a worldwide basis, we produce research on the gold market, and we also invest in developing and creating new channels and new products to make gold more accessible, whether it be in jewelry, investment, technology, and we also speak to and lobby on official use of gold and communicate regularly with the central banks.”
I had the spectacular opportunity last week to speak with Marcus Grubb, Managing Director of Investment with the World Gold Council. It was an exciting interview to say the least, as the World Gold Council is the world’s preeminent gold organization whose member companies represent nearly 70% of global gold production.During the interview, Marcus shared his thoughts on the changing global perception of gold by investors, governments, and central banks, efforts by the World Gold Council to catalyze global gold demand and delivery systems, as well as the future of gold in the world’s financial system.
Beginning the discussion with the mandate of the World Gold Council, Marcus said,“The World Gold Council is the market development organization for the world gold industry. It represents the mining producers; something close to 70% of mine production is represented by members of the World Gold Council…We have programs to promote gold demand on a worldwide basis, we produce research on the gold market, and we also invest in developing and creating new channels and new products to make gold more accessible, whether it be in jewelry, investment, technology, and we also speak to and lobby on official use of gold and communicate regularly with the central banks.”QE3 may come in April, says Credit Suisse
Source: BI-ME with Bloomberg , Author: Posted by Bi-ME staff
Posted: Tue January 24, 2012 11:35 am
INTERNATIONAL. The Federal Reserve may implement a third round of quantitative easing this spring to bolster the economy, according to Credit Suisse Group AG’s Ira Jersey.
“We do think the Fed is going to do another round of asset purchases later in the quarter, probably aiming for April,” Jersey, director of U.S. rates strategy at Credit Suisse in New York, said today in a radio interview on “Bloomberg Surveillance” with Tom Keene and Ken Prewitt. “We are growing, we just don’t feel prosperous. It is a part of the job of the Fed to assure prosperity, one of the ways to do that is to kick- start housing,”
The policy-making Federal Open Market Committee meets January 24-25. The central bank is forecast to keep its target for the federal funds rate at zero to 0.25 percent. The target has been at that level since December 2008 and the Fed has pledge to keep it there until mid-2013.
The central bank has purchased US$2.3 trillion of mortgage and government bonds in two rounds of so-called QE. In September, it announced plans to sell US$400 billion of short-term debt and use the proceeds to buy an equal amount of longer- maturity securities, in a program as nicknamed Operation Twist after a similar action in 1961 designed to contain borrowing costs for companies and consumers.
India to pay gold instead of dollars for Iranian oil. Oil and gold markets stunned
DEBKAfile Exclusive Report January 23, 2012, 5:57 PM (GMT+02:00)
India is the first buyer of Iranian oil to agree to pay for its purchases in gold instead of the US dollar, debkafile's intelligence and Iranian sources report exclusively. Those sources expect China to follow suit. India and China take about one million barrels per day, or 40 percent of Iran's total exports of 2.5 million bpd. Both are superpowers in terms of gold assets.
By trading in gold, New Delhi and Beijing enable Tehran to bypass the upcoming freeze on its central bank's assets and the oil embargo which the European Union's foreign ministers agreed to impose Monday, Jan. 23. The EU currently buys around 20 percent of Iran's oil exports.
The vast sums involved in these transactions are expected, furthermore, to boost the price of gold and depress the value of the dollar on world markets.
India is the first buyer of Iranian oil to agree to pay for its purchases in gold instead of the US dollar, debkafile's intelligence and Iranian sources report exclusively. Those sources expect China to follow suit. India and China take about one million barrels per day, or 40 percent of Iran's total exports of 2.5 million bpd. Both are superpowers in terms of gold assets.
By trading in gold, New Delhi and Beijing enable Tehran to bypass the upcoming freeze on its central bank's assets and the oil embargo which the European Union's foreign ministers agreed to impose Monday, Jan. 23. The EU currently buys around 20 percent of Iran's oil exports.
The vast sums involved in these transactions are expected, furthermore, to boost the price of gold and depress the value of the dollar on world markets.
$58-60 silver price by September says Dubai silver trader
Pop down to the Old Gold Souk in Deira, part of the modern city of Dubai and the hottest selling item is a 1kg bar of silver these days.
Karachi Jewellers told ArabianMoney yesterday they are selling 600 to 700 of these $1,300 bars each month with a 4.1 per cent profit margin.
‘We get a lot of passing tourists who buy 1kg silver bars. I was born in Dubai and spent most of my professional life in London but business is better here now. Even a modest shop in this souk does well.’
Karachi Jewellers told ArabianMoney yesterday they are selling 600 to 700 of these $1,300 bars each month with a 4.1 per cent profit margin.
More profitable than gold
‘It is far more profitable to trade silver than gold where the margin is much smaller,’ said director Ejaz Ilyas in a video to be broadcast on this website tomorrow. ‘We get a lot of passing tourists who buy 1kg silver bars. I was born in Dubai and spent most of my professional life in London but business is better here now. Even a modest shop in this souk does well.’
More QE on the Way
By Scott Silva
Editor, The Gold Speculator
Editor, The Gold Speculator
There is an old saying around Wall Street: “So goes January, so goes the year.” Many traders believe that if the stock market is up in January, then the stock market will finish for the year in the black. Actually, there is some truth to the old saying. Data collected on the S&P 500 over the 65 year period of 1940-2004 show that the broad market closed higher for the year 69% of the time when stocks were up in January. Well, that’s better than flipping a coin, but it is hardly a basis for a successful trading strategy.
Fortunes are made by selecting the best investment compared to others. We have seen, for example, in 2011, stocks fared poorly compared to precious metals, investors in Treasurys lost capital and real estate values continued to decline. Many investors simply gave up and retreated to cash, which turned out to be a losing proposition as inflation cut into purchasing power of every dollar stashed away.
But there seems to be a change in sentiment in the air now. Despite massive debt, political gridlock, numbing high unemployment and turmoil abroad, there are some faint signs of optimism. The manufacturing indices have ticked up a bit, productivity has improved and even wages have inched up a bit. Consumer confidence is improving, and corporate profits may bring good news as the earnings season unfolds.
Even the Fed appears to be more optimistic. Last week, the Fed signaled it would hold off on new bond buying (QE3) for now, even though it trimmed its estimates for GDP growth for the New Year.
But not everyone is so sanguine about Fed restraint. Most traders and some economists believe the Fed will step in with another round of Quantitative Easing (QE3) in the first half of 2012. This round would be huge, as much as $1 Trillion and targeted to support the ailing housing market. Under QE3, the Fed would purchase Mortgage Backed Securities (MBS), the derivative instruments that bundle thousands of home mortgages into a single, collateralized package. Many MBS’s were considered “toxic” assets because they contained subprime mortgages that defaulted, making them very difficult to price in secondary markets. When enough MBS’s failed to fetch a bid, mark-to-market rules rendered them worthless, which destroyed many bank balance sheets and created the financial meltdown of 2008.
Silver Sales Up As Supply Slips
For the first time in history, Silver Eagle & Maple Leaf sales will surpass domestic silver production in the U.S. and Canada in 2011
Steve St. Angelo| January 23, 2012 - 4:52pm
The demand for American Silver Eagles and Canadian Maple Leaf coins has increased tremendously over the past several years. 2011 will be the first year in which official coin sales will surpass domestic silver production in both countries.
Even though each country has seen declines in their domestic silver production over the past decade, U.S. silver production declined a whopping 30% yoy (year over year) in October. According to the USGS in their most recent Silver Mineral Industry Survey, silver production fell to 81,400 kilograms in October— compared to 117,000 kilograms the same time last year.
Steve St. Angelo| January 23, 2012 - 4:52pm
The demand for American Silver Eagles and Canadian Maple Leaf coins has increased tremendously over the past several years. 2011 will be the first year in which official coin sales will surpass domestic silver production in both countries.
Even though each country has seen declines in their domestic silver production over the past decade, U.S. silver production declined a whopping 30% yoy (year over year) in October. According to the USGS in their most recent Silver Mineral Industry Survey, silver production fell to 81,400 kilograms in October— compared to 117,000 kilograms the same time last year.
China tiptoes to petrodollar recycling - China & UAE skips the US dollar and trade in Yuan
The currency swap agreement between China and the United Arab Emirates [UAE] signed during Premier Wen Jiabao’s tour of the Persian Gulf region ending today, will raise eyebrows in the western capitals, especially London and Washington. The list of countries with which China has such deals is slowly and steadily lengthening and this is the first such deal with a Gulf Cooperation Council [GCC] state.
The deal with the UAE is worth $5.5 billion — bilateral trade was $36 billion last year with Chinese exports accounting for two-thirds — and aims at “strengthening bilateral financial cooperation, promoting trade and investments and jointly safeguarding regional financial stability”, according to the Chinese central bank. China is, in essence, providing ’seed money’ so that businessmen wouldn’t need to convert every transaction into dollars, thereby lowering the foreign exchange costs.
The cool reasoning here is practical convenience but its shadows inevitably fall on other domains. Clearly, the Middle East is being ’sensitized’ about the renminbi’s role. To be kept as reserve currency in the UAE vaults enhances renminbi’s prestige. For the UAE, keeping the mighty yuan is one of the safest thing they ever did in the world of high finance, as the appreciation of the Chinese currency in value is a near-certain happening in the future.
Beyond all that, the swap deal calls attention to China’s rapidly-growing economic links with the GCC region. It is a political statement of intent by China to boost ties with the UAE, which has been a ‘pocket borough’ of Britain, historically, in the Middle East. From the dhows, they are calling, ‘Yo, ho, Chinese are coming!’
The deal with the UAE is worth $5.5 billion — bilateral trade was $36 billion last year with Chinese exports accounting for two-thirds — and aims at “strengthening bilateral financial cooperation, promoting trade and investments and jointly safeguarding regional financial stability”, according to the Chinese central bank. China is, in essence, providing ’seed money’ so that businessmen wouldn’t need to convert every transaction into dollars, thereby lowering the foreign exchange costs.
The cool reasoning here is practical convenience but its shadows inevitably fall on other domains. Clearly, the Middle East is being ’sensitized’ about the renminbi’s role. To be kept as reserve currency in the UAE vaults enhances renminbi’s prestige. For the UAE, keeping the mighty yuan is one of the safest thing they ever did in the world of high finance, as the appreciation of the Chinese currency in value is a near-certain happening in the future.
Beyond all that, the swap deal calls attention to China’s rapidly-growing economic links with the GCC region. It is a political statement of intent by China to boost ties with the UAE, which has been a ‘pocket borough’ of Britain, historically, in the Middle East. From the dhows, they are calling, ‘Yo, ho, Chinese are coming!’
23 January 2012
Sprott Physical Silver Trust Announces Completion of its Follow-on Offering of Trust Units
TORONTO, Jan. 23, 2012 /PRNewswire/ - Sprott Physical Silver Trust (the "Trust") (NYSE: PSLV / TSX: PHS.U), a trust created to invest and hold substantially all of its assets in physical silver bullion and managed by Sprott Asset Management LP (the "Manager"), today announced that it has completed its follow-on offering of 26,450,000 units of the Trust ("Units") at US$13.20 per Unit for gross proceeds of US$349,140,000 (the "Offering"). This includes the exercise in full by the underwriters of their over-allotment option. Purchasers in the Offering included Sprott Inc. and the Sprott Foundation, which are affiliates of the Manager.
The Trust will use the net proceeds of the Offering to acquire physical silver bullion in accordance with the Trust's objective and subject to the Trust's investment and operating restrictions described in the prospectus related to the Offering, and as of January 23, 2012 has contracted to purchase a total of approximately 10.57 million troy ounces of physical silver bullion. Once the Trust has taken delivery of all the silver bullion, it will publish the serial numbers of all bars held by the Trust on its website. The net proceeds of the Offering per Unit were greater than 100% of the most recently calculated net asset value per Unit of the Trust prior to, or upon determination of, pricing of the Offering, as required under the trust agreement governing the Trust.
Auditing the FED's Gold
by Gary North
I have posted a video of something I thought I would never see: all five of the Republican candidates for the U.S. Senate verbally demanding an audit of the Federal Reserve System. You can see it here.Bernanke is facing what no Federal Reserve chairman has ever faced: public awareness of the Federal Reserve System. From late December 1913, when an almost deserted Senate voted for the Federal Reserve Act, until 2008, when the recession confirmed Ron Paul's warning in late 2007, there was almost no public awareness or even a vague understanding of the Federal Reserve System. The genie is now out of the bottle, where it had been corked since 1913. Ron Paul has uncorked it.
From the November 1910 secret meeting at Georgia's Jekyll Island until Ron Paul's 2007 candidacy for the Republican nomination for President, The Federal Reserve had received a free ride from Congress. There had never been much oversight. That's because FED regulation was an oversight. (The same word is used to convey opposite meanings.)
The Texas Leftist-populist Democrat Wright Patman had been a critic. He had been the chairman of the House Banking Committee until 1975, a year before Paul arrived in Congress. He was a Greenbacker: a believer in a zero-interest economy that achieves this Utopian goal through the use of fiat paper money. Patman was not able to generate much interest in the FED.
Patman did inflict one major wound on the FED. He and California Congressman Jerry Voorhis, another Greenbacker, in the early 1940s persuaded Congress to pass a bill, which Roosevelt signed, that forbids the Federal Reserve from keeping the interest payments from the government bonds it has counterfeited fiat money to purchase. Today, the FED must return to the Treasury all of this money beyond its operating expenses. For 2011, the FED will pay back $77 billion.
A full-scale audit of the FED, if it ever comes, must include an audit of the gold every year. The auditors must see if the gold is in the two vaults. The first vault, at Ft. Knox, is more famous. The more important vault is located at 33 Liberty Street, New York City: the privately owned Federal Reserve Bank of New York. This is the "Die Hard III" vault.
The auditors must do two things. First, they must determine whether there is the same amount of gold as is listed on the FED's books at the fake price of $42.22 per ounce. Second, the auditors must follow the paper trail of ownership. They must make sure that the gold in the vaults is still legally in the possession of the FED.
| |
[Note to auditors: pursue this phrase in the FED's statements: "deep storage gold." As to why, read this.]
The European Union banned imports of oil from Iran & Banned Iran From Trading Gold and Silver on Monday and imposed a number of other economic sanctions, joining the United States in a new round of measures aimed at deflecting Tehran's nuclear development program.
By Justyna Pawlak and Hossein Jaseb
BRUSSELS/TEHRAN | Mon Jan 23, 2012 8:16am EST
In Iran, one politician responded by renewing a threat to blockade the Strait of Hormuz, an oil exporting route vital to the global economy, and another said Tehran should cut off oil to the EU immediately.
That might hurt Greece, Italy and other ailing economies which depend heavily on Iranian crude and, as a result, won as part of the EU agreement a grace period until July 1 before the embargo takes full effect.
A day after a U.S. aircraft carrier, accompanied by a flotilla that included French and British warships, made a symbolically loaded voyage into the Gulf in defiance of Iranian hostility, the widely expected EU sanctions move was likely to set off further bellicose rhetoric in an already tense region.
EU officials said they also agreed to freeze the assets of Iran's central bank and ban trade in gold and other precious metals with the bank and state bodies.
BRUSSELS/TEHRAN | Mon Jan 23, 2012 8:16am EST
In Iran, one politician responded by renewing a threat to blockade the Strait of Hormuz, an oil exporting route vital to the global economy, and another said Tehran should cut off oil to the EU immediately.
That might hurt Greece, Italy and other ailing economies which depend heavily on Iranian crude and, as a result, won as part of the EU agreement a grace period until July 1 before the embargo takes full effect.
A day after a U.S. aircraft carrier, accompanied by a flotilla that included French and British warships, made a symbolically loaded voyage into the Gulf in defiance of Iranian hostility, the widely expected EU sanctions move was likely to set off further bellicose rhetoric in an already tense region.
EU officials said they also agreed to freeze the assets of Iran's central bank and ban trade in gold and other precious metals with the bank and state bodies.
Raid on gold and silver rebuffed/silver rises above $32.00 in access market/No deal on Private Greek debt
Good morning Ladies and Gentlemen:
Before commencing we finally witnessed 3 banks enter the banking morgue. The FDIC holiday for the boys is now over.
Here are the latest entrants;
1. American Eagle Savings Bank of Boothwyn PA
2. First State Bank of Stockbridge GA
3. Central Florida State Bank, Bellview FL.
may they rest in peace.
end
I wrote to the CFTC last night suggesting to them that a probable raid was forthcoming on Friday. You could tell from the weak equity shares traded on Thursday despite gold bouncing off the $1650 level 4 times. The high OI is causing concern to the bankers as they are witnessing a large number of option holders standing for delivery in both gold and silver.
Wait to you see what happened inside the comex vaults.
Gold finished the comex session at $1663.70 for a gain of $9.60 on the day even though the bankers decided that another raid was in order. They drove the price of gold to around the $1645.00 level and immediately it started to rise above the $1650 level. Another push down had no effect and finally gold zoomed to finish the session at $1663.70. Silver however was the bright star refusing to buckle at any cost.
It finished the comex session at $31.65
In the access market, gold and silver continued its northern trajectory. Here are the final closing access market prices:
gold: $1667.00
silver: $32.20
Let us head over to the comex and assess trading, position limits, inventory levels and amounts of metal standing. Friday was an extremely busy day for the boys.
The total gold comex OI rose again by 2930 contracts and again this was fodder for the bankers.
Probably they hit gold due to silver's strong advance of late. The raid had no effect on silver as this poor man's gold showed no interest in the bankers antics. The total OI for gold rests this weekend at 441,320 contracts. The front options expiry month of January again mysteriously advanced 37 contracts today despite zero delivery notices yesterday. We thus gained another 3700 oz of gold oz standing. The next big delivery month is February which is a little over a week to go before first day notice, on Tuesday Jan 31.2012. Here the OI fell from 160,113 to 156,621 which is a little light on the rollovers. The estimated volume at the gold comex on Friday was quite tame at 152,745 if you consider some of the rolls. The confirmed volume on Thursday was a little better at 166,269 contracts.
The total silver comex OI again saw its OI fall from 102,870 to 102,055. The bankers are just refusing to supply any non backed paper. With very little non backed silver paper supply, it was easy for silver to rise above $32.00 yesterday.
The front options expiry month of January saw its OI fall from 175 to 152 for a loss of 23 contracts. We had exactly 23 delivery notices yesterday so neither gained nor lost any silver oz standing and thus no cash settlements either. The next big delivery month is March and here the OI fell by close to 2000 contracts from 53,240 to 51,351 contracts. It looks like the Sprott purchase of 10 million oz of silver (300million dollars) is scaring the dickens out of our bankers. The estimated volume at the silver comex on Friday came in at 45,753 which is a little higher than what we have been witnessing lately. The confirmed volume on Thursday was very weak at 35,826.
The USS Abraham Lincoln transits Hormuz. Scene set for US-Iranian talks
DEBKAfile Special Report January 23, 2012, 3:17 AM (GMT+02:00)
Three weeks after Tehran threatened action against any US aircraft carrier entering the Strait of Hormuz, Washington made two moves: US Defense Secretary Leon Panetta disclosed Sunday, Jan. 22, that the USS Enterprise Carrier Strike Group would steam through the strategic strait in March; a few hours later, the US Navy sent the USS Abraham Lincoln carrier through the strategic strait without incident, accompanied by British and French warships.
debkafile: Defusing the Hormuz crisis set the scene for resumed nuclear negotiations leading up to which several messages were exchanged through back channels between the Obama administration and Tehran in recent weeks - amid Israeli preparations to strike Iran's nuclear facilities.
These developments deepened the breach between the US and Israel. Two days earlier, on Friday, Jan. 20, Gen. Martin Dempsey, Chairman of the Joint US Chiefs of Staff, visited Israel and with Israeli leaders emphasized the cooperation between Washington and Jerusalem on the Iranian threat. The Netanyahu government complained that action against Iran had been postponed for years on one pretext on another, and the same thing was happening to effective sanctions against Iran's oil exports and central bank. Israel was therefore compelled to exercise its military option against the mortal peril of a nuclear Iran, said the Israeli prime minister, before it was too late.
Defense Secretary Leon Panetta aboard the USS Enterprise
debkafile: Defusing the Hormuz crisis set the scene for resumed nuclear negotiations leading up to which several messages were exchanged through back channels between the Obama administration and Tehran in recent weeks - amid Israeli preparations to strike Iran's nuclear facilities.
These developments deepened the breach between the US and Israel. Two days earlier, on Friday, Jan. 20, Gen. Martin Dempsey, Chairman of the Joint US Chiefs of Staff, visited Israel and with Israeli leaders emphasized the cooperation between Washington and Jerusalem on the Iranian threat. The Netanyahu government complained that action against Iran had been postponed for years on one pretext on another, and the same thing was happening to effective sanctions against Iran's oil exports and central bank. Israel was therefore compelled to exercise its military option against the mortal peril of a nuclear Iran, said the Israeli prime minister, before it was too late.
QE-Cating
Submitted by ilene on 01/23/2012 01:43 -0500
Excerpts from this week's Stock World Weekly
Good week for the bulls - the major indexes were all up between 2.0% and 2.8%, capping the third consecutive week of gains. Investors saw some powerful signs of positive activity in the economy. For example, initial unemployment claims dropped a stunning 50k in one week. Conversely, the fact that this earnings season has seen the lowest percentage of companies beating expectations since Q3 2008 supplied some powerful ammunition for the bears, although the bulls still had it. (Earnings beats falling behind previous quarters)
We ended last week’s newsletter, “Cracks in the Facade” discussing the possibility of additional easing by the Fed, which would likely prove bullish for the markets. Quoting Phil, “It seems like a lot, but we're back to 760 on the RUT, which was our test line going the other way last week, and we still haven't filled the gap up from Monday's close, about another 1% down. Let's keep it in perspective though – we're up from 1,200 to almost 1,300 on the S&P in less than a month. So a 20-point pullback to 1,277 would not be very bearish in a longer-term trend and, if we get volume and hold it, it's actually a bullish confirmation...
Excerpts from this week's Stock World Weekly
Good week for the bulls - the major indexes were all up between 2.0% and 2.8%, capping the third consecutive week of gains. Investors saw some powerful signs of positive activity in the economy. For example, initial unemployment claims dropped a stunning 50k in one week. Conversely, the fact that this earnings season has seen the lowest percentage of companies beating expectations since Q3 2008 supplied some powerful ammunition for the bears, although the bulls still had it. (Earnings beats falling behind previous quarters)
We ended last week’s newsletter, “Cracks in the Facade” discussing the possibility of additional easing by the Fed, which would likely prove bullish for the markets. Quoting Phil, “It seems like a lot, but we're back to 760 on the RUT, which was our test line going the other way last week, and we still haven't filled the gap up from Monday's close, about another 1% down. Let's keep it in perspective though – we're up from 1,200 to almost 1,300 on the S&P in less than a month. So a 20-point pullback to 1,277 would not be very bearish in a longer-term trend and, if we get volume and hold it, it's actually a bullish confirmation...
Gold-market rigging has many whistleblowers; they're just always ignored
By: Chris Powell, Secretary/Treasurer, GATA
Remarks by Chris Powell
Secretary/Treasurer, Gold Anti-Trust Action Committee Inc.
Vancouver Resource Investment Conference
Vancouver Convention Center West
Vancouver, British Columbia, Canada
Sunday, January 21, 2012
Many people ask why, if there really is a gold price suppression scheme -- a scheme of currency market intervention to support the dollar and other currencies against the true international reserve currency, gold -- some whistleblowers haven't come forward to expose it.
In fact, the whistle has been blown on the gold price suppression scheme many times over the years, and by the highest authorities. They just haven't yet been recognized as whistleblowers by the news media and financial analysts.
Many of you may have heard of Federal Reserve Chairman Alan Greenspan's famous remark about gold in his testimony to Congress in July 1998: "Central banks stand ready to lease gold in increasing quantities should the price rise."
That is, Greenspan contradicted the usual central bank explanation for leasing gold -- supposedly to earn a little interest on a dead asset -- and admitted that gold leasing is all about suppressing the price. Greenspan's admission is still posted at the Fed's Internet site:
http://www.federalreserve.gov/boarddocs/testimony/1998/19980724.htm
And at GATA's:
http://www.gata.org/files/GreenspanTestimony-07-24-1998.htm_.txt
But the official whistleblowing goes far beyond that.
Remarks by Chris Powell
Secretary/Treasurer, Gold Anti-Trust Action Committee Inc.
Vancouver Resource Investment Conference
Vancouver Convention Center West
Vancouver, British Columbia, Canada
Sunday, January 21, 2012
Many people ask why, if there really is a gold price suppression scheme -- a scheme of currency market intervention to support the dollar and other currencies against the true international reserve currency, gold -- some whistleblowers haven't come forward to expose it.
In fact, the whistle has been blown on the gold price suppression scheme many times over the years, and by the highest authorities. They just haven't yet been recognized as whistleblowers by the news media and financial analysts.
Many of you may have heard of Federal Reserve Chairman Alan Greenspan's famous remark about gold in his testimony to Congress in July 1998: "Central banks stand ready to lease gold in increasing quantities should the price rise."
That is, Greenspan contradicted the usual central bank explanation for leasing gold -- supposedly to earn a little interest on a dead asset -- and admitted that gold leasing is all about suppressing the price. Greenspan's admission is still posted at the Fed's Internet site:
http://www.federalreserve.gov/boarddocs/testimony/1998/19980724.htm
And at GATA's:
http://www.gata.org/files/GreenspanTestimony-07-24-1998.htm_.txt
But the official whistleblowing goes far beyond that.
'Gold and silver advances on inflation concerns'
By Eric McWhinnie
On Thursday, Gold and Silver prices were essentially unchanged. Despite positive economic data being released, gold prices settled at $1,654, while silver closed at $30.51. Newly released inflation data from the Bureau of Labor Statistics shows that the prices consumers paid in December were roughly the same as they paid in November. However, investors are still showing a growing concern for inflation.
The monthly Consumer Price Index for all Urban Consumers survey shows a zero percent change on “All Items” on a seasonally adjusted basis, but a drop in energy commodities (-1.9 percent) helped to dampen the numbers. The inflation picture is somewhat clearer when using annual comparisons between 2010 and 2011.
As a result, some turn to Gold and Silver for inflation protection, even central banks, as they became net purchasers of gold for the first time in 20 years in 2010. Unlike current fiat currencies, both precious metals have survived thousands of years of global turmoil. Due to monetary policies over the past decade, gold prices have climbed from $250 to $1,660 per ounce today. Meanwhile, silver prices have surged from $4.50 to over $31.
Even though gold and silver have experienced a remarkable move, it comes at the cost of the U.S. dollar. As nations continue to struggle with a global insolvency crisis, central banks continue to provide stimulus measures that devalue fiat currencies. A growing consensus of economists predict that the Federal Reserve is likely to inject another $1 trillion worth of easing to stimulate the economy. Such a move, will provide yet another blow to the U.S. dollar, and another catalyst for higher gold and silver prices.
On Thursday, Gold and Silver prices were essentially unchanged. Despite positive economic data being released, gold prices settled at $1,654, while silver closed at $30.51. Newly released inflation data from the Bureau of Labor Statistics shows that the prices consumers paid in December were roughly the same as they paid in November. However, investors are still showing a growing concern for inflation.
The monthly Consumer Price Index for all Urban Consumers survey shows a zero percent change on “All Items” on a seasonally adjusted basis, but a drop in energy commodities (-1.9 percent) helped to dampen the numbers. The inflation picture is somewhat clearer when using annual comparisons between 2010 and 2011.
As a result, some turn to Gold and Silver for inflation protection, even central banks, as they became net purchasers of gold for the first time in 20 years in 2010. Unlike current fiat currencies, both precious metals have survived thousands of years of global turmoil. Due to monetary policies over the past decade, gold prices have climbed from $250 to $1,660 per ounce today. Meanwhile, silver prices have surged from $4.50 to over $31.
Even though gold and silver have experienced a remarkable move, it comes at the cost of the U.S. dollar. As nations continue to struggle with a global insolvency crisis, central banks continue to provide stimulus measures that devalue fiat currencies. A growing consensus of economists predict that the Federal Reserve is likely to inject another $1 trillion worth of easing to stimulate the economy. Such a move, will provide yet another blow to the U.S. dollar, and another catalyst for higher gold and silver prices.
Limits of Voluntary Deal Hit as Greek Bondholders Draw Line in the Sand; Separating Fact from Fiction in Selective Reporting
MISH'S
Global Economic
Trend Analysis
The bickering over a half percentage point reduction on the discount rate continued over the weekend as Greek Bondholders Draw Line in the Sand
Private owners of Greek debt have made their “maximum” offer for the losses they are willing to accept, the bondholders’ lead negotiator has said, implying that any further demands could kill off a “voluntary” deal and trigger a default.
One banker said Friday’s demand by official creditors, led by the International Monetary Fund, for a further interest rate cut of 50 basis points on new long-term bonds to be swapped for existing Greek debt “may have put a voluntary deal out of reach”.
Mr Dallara said the IIF’s position tabled with Greek authorities on Friday night – believed to include a loss of 65-70 per cent on current Greek bonds’ long-term value – was as far as his side was likely to go.
Global Economic
Trend Analysis
The bickering over a half percentage point reduction on the discount rate continued over the weekend as Greek Bondholders Draw Line in the Sand
Private owners of Greek debt have made their “maximum” offer for the losses they are willing to accept, the bondholders’ lead negotiator has said, implying that any further demands could kill off a “voluntary” deal and trigger a default.
One banker said Friday’s demand by official creditors, led by the International Monetary Fund, for a further interest rate cut of 50 basis points on new long-term bonds to be swapped for existing Greek debt “may have put a voluntary deal out of reach”.
Mr Dallara said the IIF’s position tabled with Greek authorities on Friday night – believed to include a loss of 65-70 per cent on current Greek bonds’ long-term value – was as far as his side was likely to go.
Italy and Spain call for eurozone rescue fund booster
By Ambrose Evans-Pritchard, International business editor
8:52PM GMT 22 Jan 2012
Political leaders in Italy and Spain have called for a massive boost to the EU rescue fund and a blast of monetary stimulus by the European Central Bank (ECB), putting them on a collision course with Germany over the handling of the eurozone crisis.
Italy's premier Mario Monti has told Berlin that the new European Stability Mechanism (ESM) must be doubled to €1 trillion (£828bn) to restore investor confidence in southern European debt, according to Der Spiegel.
The move comes days after Mr Monti warned German Chancellor Angela Merkel that austerity fatigue is growing in the debtor states and there will be a "powerful backlash" unless the creditor powers led by Germany do more to correct North-South imbalances and lower borrowing for the whole eurozone.
In what appears to be a coordinated move by the Latin bloc, Spanish foreign minister José Manuel García-Margallo y Marfil backed the plan for a bigger rescue fund. He called for an EMU debt union and sweeping changes to the structure of the eurozone.
Mr García-Margallo exhorted the ECB to step up bond purchases in a fully-fledged campaign of quantitative easing, implicitly suggesting a blitz of up to €2 trillion on top of the unlimited credit already provided to banks at 1pc for three years.
"The European Central Bank can do much more than it has done: it has bought European debt equal to just 2pc of GDP while the Bank of England has done 20pc," he said.
8:52PM GMT 22 Jan 2012
Political leaders in Italy and Spain have called for a massive boost to the EU rescue fund and a blast of monetary stimulus by the European Central Bank (ECB), putting them on a collision course with Germany over the handling of the eurozone crisis.
Italy's premier Mario Monti has told Berlin that the new European Stability Mechanism (ESM) must be doubled to €1 trillion (£828bn) to restore investor confidence in southern European debt, according to Der Spiegel.
The move comes days after Mr Monti warned German Chancellor Angela Merkel that austerity fatigue is growing in the debtor states and there will be a "powerful backlash" unless the creditor powers led by Germany do more to correct North-South imbalances and lower borrowing for the whole eurozone.
In what appears to be a coordinated move by the Latin bloc, Spanish foreign minister José Manuel García-Margallo y Marfil backed the plan for a bigger rescue fund. He called for an EMU debt union and sweeping changes to the structure of the eurozone.
Mr García-Margallo exhorted the ECB to step up bond purchases in a fully-fledged campaign of quantitative easing, implicitly suggesting a blitz of up to €2 trillion on top of the unlimited credit already provided to banks at 1pc for three years.
"The European Central Bank can do much more than it has done: it has bought European debt equal to just 2pc of GDP while the Bank of England has done 20pc," he said.
SilverDoctors: Consulting Firm Running Kodak Bankruptcy Has Stron...
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SilverDoctors: Weekend Animated Metals Update
SilverDoctors: Weekend Animated Metals Update: The RNN Weekend Report examines the move in Silver late last week and speculates about what might be causing it, (We visit the JP Morgan com...
22 January 2012
My Money Where My Mouth Is
I am more bullish about silver today, than I have been at any other time since I have been involved in the silver market. As many of you know, I sold my house in 2005 to invest in gold, silver and oil stocks. I paid the penalty and sold my 401k to buy more silver. I sold my silver 4dr Wrangler this past summer to buy more silver. I have gone through the house looking for anything that I can sell to buy more silver. (To think that I sold a old DVD player for the equivalent of an ounce of silver…) Today I am announcing today that I have not only divested myself of all paper assets, I have traded my last tubes of gold for Constitutional Silver at a 57 to 1 last week. (The Gold American Eagles had a higher premium.) I am now 100% invested in physical silver.- It is tough not having a computer screen assuring me that everything is “ok” in my bank.
- It is tough leaving a job with insurance and a steady income to do this.
- It is tough putting out the amount of educational material, because I still feel there is time to save people.
- It is not easy to ween your self off of the fiat junk, but it is worth it.
Vincent Browne v The ECB
MISH'S
Global Economic
Trend Analysis
The video below is from a European Central Bank press-conference in Ireland. Journalist Vincent Browne demands that the ECB representative explain why the ECB required the Irish people to bail out a bank's uninsured creditors. The bureaucrat mouths bland reassurances, then asserts (despite all appearances to the contrary) that the question has been answered. Browne doesn't let up.
Global Economic
Trend Analysis
The video below is from a European Central Bank press-conference in Ireland. Journalist Vincent Browne demands that the ECB representative explain why the ECB required the Irish people to bail out a bank's uninsured creditors. The bureaucrat mouths bland reassurances, then asserts (despite all appearances to the contrary) that the question has been answered. Browne doesn't let up.
Nuclear Iran is past its point-of-no-return, yet oil sanctions remain on paper
DEBKAfile Exclusive Report January 21, 2012, 3:07 PM (GMT+02:00)
Israeli Prime Minister Binyamin Netanyahu advised visiting Chairman of the US Joint Chiefs of Staff, Gen. Martin Dempsey Friday, Jan.20 that the time for action against Iran was now, for two reasons: First, the conviction that Iran has passed the point of no return for developing a nuclear weapon; and second, the diminishing prospects for a US-led embargo on Iranian oil to catch on before it is too late.
The Obama administration disputes the Israeli prime minister on both points, insisting there is still time for tough sanctions to incapacitate the Iranian economy and stop Tehran before it reaches the point of no return in its drive for a nuke. Israel insists that this pivotal point was reached four years ago in 2008.
Gen. Dempsey was exhaustively briefed on the Israeli position during his whirlwind interviews Friday with President Shimon Peres, Defense Minister Ehud Barak and three conversations with Chief of Staff Lt. Gen. Benny Gantz, one with key General Staff officers.
Israeli Prime Minister Binyamin Netanyahu advised visiting Chairman of the US Joint Chiefs of Staff, Gen. Martin Dempsey Friday, Jan.20 that the time for action against Iran was now, for two reasons: First, the conviction that Iran has passed the point of no return for developing a nuclear weapon; and second, the diminishing prospects for a US-led embargo on Iranian oil to catch on before it is too late.
The Obama administration disputes the Israeli prime minister on both points, insisting there is still time for tough sanctions to incapacitate the Iranian economy and stop Tehran before it reaches the point of no return in its drive for a nuke. Israel insists that this pivotal point was reached four years ago in 2008.
Gen. Dempsey was exhaustively briefed on the Israeli position during his whirlwind interviews Friday with President Shimon Peres, Defense Minister Ehud Barak and three conversations with Chief of Staff Lt. Gen. Benny Gantz, one with key General Staff officers.
Silver’s Surge
By: Warren Bevan
Fundamental Review
This past week we saw US 10-year treasuries dip below 2% briefly. It is amazing how low the yields have gone. Even more amazing is that people actually accept that rate. It’s not even above the official rate of inflation!
Why they don’t seek out dividend yields much higher as we do, I just don’t understand. We get between 10% and 20% annually with our select dividend stocks. Now that is a return.
We saw three banks fail this past Friday after the close and kick off this years list of biggest losers. It’s been over a month since we saw a bank fail so it’s nice to get back on track.
While this week it was revealed that Newt Gingrich had asked his ex-wife for an open marriage, he himself is open to and open currency. He is calling for a review on how the US can return to a hard currency status, one which is backed by gold. Whether he’s serious or just trying to capture some of Ron Paul’s supporters is debatable though and I try to steer clear of politics for the most part.
The high and volatile cost of nickel is forcing Canada to transition to using brass coated steel to produce their $1 and $2 coins, otherwise known as a loonie and a toonie.
Iran is hoping to increases their gold production by 350% in an attempt to better their dire economic condition right now which is hefty inflation and many sanctions, neither of which are good, but gold is money and they know that and it will be accepted in trade, period.
And for fun here are all the Texas republican candidates agreeing that we need to audit the Federal Reserve. Whether it would ever actually happen is another story and one I won’t believe until I see it.
Please sign up to receive my free weekly letter along with any relevant info or articles I write, and if you like what I have to say and think I can help you make some money, and I know I can, then consider subscribing to our daily updates and trading alerts.
Until next week take care and thank you for reading.
Warren Bevan
In my free, nearly weekly newsletter I include many links and charts which cannot always be viewed through sites which publish my work. If you are having difficulties viewing them please sign up in the left margin for free at http://www.preciousmetalstockreview.com/ or send an email to warren@preciousmetalstockreview.com with “subscribe” as the subject and receive the newsletter directly in your inbox, links and all. If you would like to subscribe and see what my portfolio consists of please see here.
If you found this information useful, or informative please pass it on to your friends or family.
Free Service
The free weekly newsletter “Precious Metal Stock Review” does not purport to be a financial recommendation service, nor do we profess to be a professional advisement service. Any action taken as a result of reading “Precious Metal Stock Review” is solely the responsibility of the reader. We recommend seeking professional financial advice and performing your own due diligence before acting on any information received through “Precious Metal Stock Review”.
Fundamental Review
This past week we saw US 10-year treasuries dip below 2% briefly. It is amazing how low the yields have gone. Even more amazing is that people actually accept that rate. It’s not even above the official rate of inflation!
Why they don’t seek out dividend yields much higher as we do, I just don’t understand. We get between 10% and 20% annually with our select dividend stocks. Now that is a return.
We saw three banks fail this past Friday after the close and kick off this years list of biggest losers. It’s been over a month since we saw a bank fail so it’s nice to get back on track.
While this week it was revealed that Newt Gingrich had asked his ex-wife for an open marriage, he himself is open to and open currency. He is calling for a review on how the US can return to a hard currency status, one which is backed by gold. Whether he’s serious or just trying to capture some of Ron Paul’s supporters is debatable though and I try to steer clear of politics for the most part.
The high and volatile cost of nickel is forcing Canada to transition to using brass coated steel to produce their $1 and $2 coins, otherwise known as a loonie and a toonie.
Iran is hoping to increases their gold production by 350% in an attempt to better their dire economic condition right now which is hefty inflation and many sanctions, neither of which are good, but gold is money and they know that and it will be accepted in trade, period.
And for fun here are all the Texas republican candidates agreeing that we need to audit the Federal Reserve. Whether it would ever actually happen is another story and one I won’t believe until I see it.
Please sign up to receive my free weekly letter along with any relevant info or articles I write, and if you like what I have to say and think I can help you make some money, and I know I can, then consider subscribing to our daily updates and trading alerts.
Until next week take care and thank you for reading.
Warren Bevan
In my free, nearly weekly newsletter I include many links and charts which cannot always be viewed through sites which publish my work. If you are having difficulties viewing them please sign up in the left margin for free at http://www.preciousmetalstockreview.com/ or send an email to warren@preciousmetalstockreview.com with “subscribe” as the subject and receive the newsletter directly in your inbox, links and all. If you would like to subscribe and see what my portfolio consists of please see here.
If you found this information useful, or informative please pass it on to your friends or family.
Free Service
The free weekly newsletter “Precious Metal Stock Review” does not purport to be a financial recommendation service, nor do we profess to be a professional advisement service. Any action taken as a result of reading “Precious Metal Stock Review” is solely the responsibility of the reader. We recommend seeking professional financial advice and performing your own due diligence before acting on any information received through “Precious Metal Stock Review”.
Greek Debt Talks Stall, More Negotiations "By Phone" Later Today; IMF Germany Think 4% Coupon Too High; Greek Haircut Calculator
MISH'S
Global Economic
Trend Analysis
For weeks we have been hearing "agreement soon" on Greek bond haircuts. The theme for the day today as it was yesterday and as it was a week ago is "tomorrow".
One problem with all of these "deal is close" announcements is none of them have included an agreement from those who stand to benefit if there is a credit event. Until those CDS holders are made whole, or at least the CDS holders are satisfied, there is no deal, just noise.
The Wall Street Journal reports UPDATE: Greek Debt Talks Appear To Stall Saturday
Talks between Greece and its private sector creditors over a debt writedown plan appeared to stall Saturday as the banks' top negotiator left Athens amid signs of fresh disagreements over how much Greece would pay its bondholders in the future.
Global Economic
Trend Analysis
For weeks we have been hearing "agreement soon" on Greek bond haircuts. The theme for the day today as it was yesterday and as it was a week ago is "tomorrow".
One problem with all of these "deal is close" announcements is none of them have included an agreement from those who stand to benefit if there is a credit event. Until those CDS holders are made whole, or at least the CDS holders are satisfied, there is no deal, just noise.
The Wall Street Journal reports UPDATE: Greek Debt Talks Appear To Stall Saturday
Talks between Greece and its private sector creditors over a debt writedown plan appeared to stall Saturday as the banks' top negotiator left Athens amid signs of fresh disagreements over how much Greece would pay its bondholders in the future.
21 January 2012
Gold may remain bullish, but don't rule out silver in 2012
NEW YORK (Commodity Online): Gold may remain bullish in 2012, but don't rule out Silver and keep an eye on stocks for good value investments, says David Skarica, editor of The Gold Stock Adviser.
According to David Skarica, the United States will likely roll out more extraordinarily loose monetary policies such as quantitative easing, not solely due to necessity, but also to keep the dollar competitive with a weaker euro.
According to David Skarica, the United States will likely roll out more extraordinarily loose monetary policies such as quantitative easing, not solely due to necessity, but also to keep the dollar competitive with a weaker euro.
Italy Faces 2-Year Recession says IMF; European Recession Neither Mild Nor Short
MISH'S
Global Economic
Trend Analysis
Slowly but surely global growth estimates have been ratcheted down. Courtesy of Google Translate from an Italian news site, please consider IMF estimates two years of recession for Italy
Deep red for the Italian economy in the next two years. Against the background of a global recovery stalled, slowed by the crisis in the eurozone in particular, Italy is preparing to reach out to two years of recession in 2012 and 2013. The cold shower comes from the International Monetary Fund put in hand as usual to their predictions gave a general scissor kick to the estimates of growth around the world.
Last update at the World Economic Outlook that the Ansa news agency is able to anticipate its spread before the official next Tuesday, the IMF finds in the euro area's main patient who staggers a little and infects all international economies. "The global recovery is threatened by the growing tensions in the euro area," considered the "main reason" the deterioration of economic prospects.
Global Economic
Trend Analysis
Slowly but surely global growth estimates have been ratcheted down. Courtesy of Google Translate from an Italian news site, please consider IMF estimates two years of recession for Italy
Deep red for the Italian economy in the next two years. Against the background of a global recovery stalled, slowed by the crisis in the eurozone in particular, Italy is preparing to reach out to two years of recession in 2012 and 2013. The cold shower comes from the International Monetary Fund put in hand as usual to their predictions gave a general scissor kick to the estimates of growth around the world.
Last update at the World Economic Outlook that the Ansa news agency is able to anticipate its spread before the official next Tuesday, the IMF finds in the euro area's main patient who staggers a little and infects all international economies. "The global recovery is threatened by the growing tensions in the euro area," considered the "main reason" the deterioration of economic prospects.
SilverDoctors: Silver COT Report 1/20/12
SilverDoctors: Silver COT Report 1/20/12: The commercials increased their naked short silver positions by a net 1,320 additional contracts (6.6 million ounces) in the week ending 2/1...
SilverDoctors: Is Sprott Making a Dent into Silver Prices?
SilverDoctors: Is Sprott Making a Dent into Silver Prices?: UBS analyst Edel Tully, finally caught wind yesterday that Sprott was making a huge purchase which "may" have an impact on silver prices. T...
20 January 2012
Peter Schiff: U.S. Will Never Pay Off Debt
Posted by Brittany Stepniak - Friday, January 20th, 2012
See how one of America's most popular video bloggers, Peter Schiff – stock broker, economist and author – uses humor in a critical commentary of the U.S. government, debt, and China.
In his argument, he explains how foolish China was for lending to such a debt-ridden nation.
Does anyone truly believe we intend, and will succeed, in paying off our $15+ trillion in debt? Here's what would have to happen for that far-fetched fairytale to actually come to fruition...
See how one of America's most popular video bloggers, Peter Schiff – stock broker, economist and author – uses humor in a critical commentary of the U.S. government, debt, and China.
In his argument, he explains how foolish China was for lending to such a debt-ridden nation.
Does anyone truly believe we intend, and will succeed, in paying off our $15+ trillion in debt? Here's what would have to happen for that far-fetched fairytale to actually come to fruition...
QE3, $2,200 Gold, and the Trillion Dollar Bazooka
January 20, 2012
By Peter Krauth, Global Resources Specialist, Money Morning
It's the beginning of a new year, and there's no shortage of big headlines...
Europe is on the financial brink, Iran is a powder keg, and precious metals like gold have retreated.
It's also a time when there is no shortage of financial forecasts.
Even though these kinds of predictions about the future can be tough to make, I'll admit it's kind of fun to look forward and see what the future may hold.
Like in December 2010, when I said I expected gold to reach $1,900/oz in 2011. Some people thought that I was crazy. At the time, gold was trading for just $1,390/oz.
But just nine months later, that turned out to be a pretty good call as gold hit a new high of $1,923/oz. before eventually pulling back.
Better yet, in January 2010, I even said gold would eventually top $5,000. Of course, most people thought that call was preposterous.
Now, even Standard Chartered bank's analysts expect gold to climb to $5,000.
By Peter Krauth, Global Resources Specialist, Money Morning
It's the beginning of a new year, and there's no shortage of big headlines...
Europe is on the financial brink, Iran is a powder keg, and precious metals like gold have retreated.
It's also a time when there is no shortage of financial forecasts.
Even though these kinds of predictions about the future can be tough to make, I'll admit it's kind of fun to look forward and see what the future may hold.
Like in December 2010, when I said I expected gold to reach $1,900/oz in 2011. Some people thought that I was crazy. At the time, gold was trading for just $1,390/oz.
But just nine months later, that turned out to be a pretty good call as gold hit a new high of $1,923/oz. before eventually pulling back.
Better yet, in January 2010, I even said gold would eventually top $5,000. Of course, most people thought that call was preposterous.
Now, even Standard Chartered bank's analysts expect gold to climb to $5,000.
Nomi Prins: Bailouts + Downgrades = Austerity and Pain
Tuesday, January 17, 2012 at 5:07PM
The markets (read: traders with big books at mega financial firms and hedge funds) weren’t particularly shocked by last week’s wave of heavily pre-broadcast S&P sovereign debt downgrades. For months, the question wasn’t ‘if’, but ‘when.’ True to form, just as with the US downgrade, S&P’s reasons skated the surface of prevailing wisdom – governments have too much debt, and not enough income. That’s only a fraction of the story.
Nowadays, when any sovereign (including the US) gets downgraded by a rating agency, it's not just because its debt repayment ability is questionable (the publicized logic of rating agencies), but because it incurred more expensive debt to float its banking system. It chose to subsidize banks over people.
The S&P likes moving on Friday nights. It was on a Friday night that it downgraded US debt to AA+ from AAA. On Friday night, January 13, 2012, it downgraded France and Austria from AAA to AA+, and 7 other European countries, too; Cyprus, Italy, Portugal, and Spain by two notches; Malta, Slovakia, and Slovenia, by one notch. Portugal, Cyprus, Ireland and Greece are at junk status. Germany’s AAA rating is intact.
Nowhere in S&P’s statement about “global economic and financial crisis”, did it clarify that sovereigns were hit due to backing their largest national banks (and international, US ones) which engaged in half a decade of leveraged speculation. But here’s how it worked:
The markets (read: traders with big books at mega financial firms and hedge funds) weren’t particularly shocked by last week’s wave of heavily pre-broadcast S&P sovereign debt downgrades. For months, the question wasn’t ‘if’, but ‘when.’ True to form, just as with the US downgrade, S&P’s reasons skated the surface of prevailing wisdom – governments have too much debt, and not enough income. That’s only a fraction of the story.
Nowadays, when any sovereign (including the US) gets downgraded by a rating agency, it's not just because its debt repayment ability is questionable (the publicized logic of rating agencies), but because it incurred more expensive debt to float its banking system. It chose to subsidize banks over people.
The S&P likes moving on Friday nights. It was on a Friday night that it downgraded US debt to AA+ from AAA. On Friday night, January 13, 2012, it downgraded France and Austria from AAA to AA+, and 7 other European countries, too; Cyprus, Italy, Portugal, and Spain by two notches; Malta, Slovakia, and Slovenia, by one notch. Portugal, Cyprus, Ireland and Greece are at junk status. Germany’s AAA rating is intact.
Nowhere in S&P’s statement about “global economic and financial crisis”, did it clarify that sovereigns were hit due to backing their largest national banks (and international, US ones) which engaged in half a decade of leveraged speculation. But here’s how it worked:
SilverDoctors: Inflation: The Only Tool Left
SilverDoctors: Inflation: The Only Tool Left: The global financial crisis continues without solution and unending series of moderate calamities the Greek Govt Bond default appears to b...
Fed Expected to Enact $1-Trillion-Worth of Easing
Posted by Brittany Stepniak - Thursday, January 19th, 2012
In order to stimulate our economy, it sounds like the Fed plans to pump-it-up with a $1 trillion easing project.
And it could happen as early as this month...
CNBC reports:
"There seems little point in waiting to implement further easing, and to do so could confuse the message the Fed is trying to deliver at a point in time when it is trying to make its communication with the public clearer," he said.
Next week, the Fed's Open Market Committee will meet to discuss matters further. Meanwhile “expectations are rising that the languishing housing market will drive the central bank to buy up mortgage-backed securities.”
The aim of those purchases will be to push interest rates even further and to indirectly induce confidence that there are more “monetary tools” that can revive the economy.
In order to stimulate our economy, it sounds like the Fed plans to pump-it-up with a $1 trillion easing project.
And it could happen as early as this month...
CNBC reports:
"There seems little point in waiting to implement further easing, and to do so could confuse the message the Fed is trying to deliver at a point in time when it is trying to make its communication with the public clearer," he said.
Next week, the Fed's Open Market Committee will meet to discuss matters further. Meanwhile “expectations are rising that the languishing housing market will drive the central bank to buy up mortgage-backed securities.”
The aim of those purchases will be to push interest rates even further and to indirectly induce confidence that there are more “monetary tools” that can revive the economy.
Price Manipulation: Look for Motive
The Silver Arbitrageurs
In the 1970's Alan Rosenberg, a coin dealer, sold dollar bills that were silver certificates to a firm called Metals Quality. At the time, the Federal Reserve converted dollar silver certificates to a set amount of silver. Before the Fed finally discontinued the conversion, the converted silver was worth more than a dollar. The difference became great enough that it paid to buy up the certificates for slightly more than a dollar, convert the certificates to silver, and sell the silver for a profit. This is one of the rare instances of a true arbitrage.
Not everyone wanted to go through the trouble of handling the conversion, so people like Rosenberg collected certificates and sold them for more than one dollar each, but for less than the price of the silver represented by the certificate. It was worth it to Rosenberg to have someone else do the work of squeezing out the last bit of value.
That's where Metals Quality came in. It bought certificates from coin dealers and currency exchanges and handled the conversion to silver and sold the silver for a profit. Metals Quality paid Rosenberg for his silver certificates based on the first Comex price of silver for the day (less something for the trouble of the conversion and some profit). It made no difference whether the first price of the day was based on one contract or 100 contracts. Each contract represents 10,000 ounces of silver.
In the 1970's Alan Rosenberg, a coin dealer, sold dollar bills that were silver certificates to a firm called Metals Quality. At the time, the Federal Reserve converted dollar silver certificates to a set amount of silver. Before the Fed finally discontinued the conversion, the converted silver was worth more than a dollar. The difference became great enough that it paid to buy up the certificates for slightly more than a dollar, convert the certificates to silver, and sell the silver for a profit. This is one of the rare instances of a true arbitrage.
Not everyone wanted to go through the trouble of handling the conversion, so people like Rosenberg collected certificates and sold them for more than one dollar each, but for less than the price of the silver represented by the certificate. It was worth it to Rosenberg to have someone else do the work of squeezing out the last bit of value.
That's where Metals Quality came in. It bought certificates from coin dealers and currency exchanges and handled the conversion to silver and sold the silver for a profit. Metals Quality paid Rosenberg for his silver certificates based on the first Comex price of silver for the day (less something for the trouble of the conversion and some profit). It made no difference whether the first price of the day was based on one contract or 100 contracts. Each contract represents 10,000 ounces of silver.
Gingrich Goes for Gold
Editorial of The New York Sun | January 18, 2012
The call by Newt Gingrich for the creation of a commission on gold to examine how America can return to a system of hard money is a step forward for him and the Republican Party as we go into the most formative months of the campaign. The former speaker issued his call at Columbia, South Carolina, at a policy forum on American global leadership. He used the phrase “hard money” to speak of a gold standard of the kind the Founders of America had in mind. It would mean, he said, “you can’t just hide from your problems. You’ve got to solve them.”
The call by Newt Gingrich for the creation of a commission on gold to examine how America can return to a system of hard money is a step forward for him and the Republican Party as we go into the most formative months of the campaign. The former speaker issued his call at Columbia, South Carolina, at a policy forum on American global leadership. He used the phrase “hard money” to speak of a gold standard of the kind the Founders of America had in mind. It would mean, he said, “you can’t just hide from your problems. You’ve got to solve them.”
Vampire Hedge Funds Are Sucking Greece Dry
If Goldman Sachs is a vampire squid, as Matt Taibbi so aptly named it, then hedge funds are like piranhas or sharks, eager to strip the financial carcass to the bone.
Who are the real villains on Wall Street? When it comes to institutionalized greed and corruption, nothing tops the too-big-to-fail banks like JP Morgan Chase, Bank of America and Goldman Sachs. But these financial giants form only one part of the financial oligarchy. Lurking in the shadows are aggressive hedge funds that are just as lethal to our economic well being. If Goldman Sachs is a vampire squid, as Matt Taibbi so aptly named it, then hedge funds are like schools of piranhas or sharks, eager to strip the financial carcass to the bone.
Who are the real villains on Wall Street? When it comes to institutionalized greed and corruption, nothing tops the too-big-to-fail banks like JP Morgan Chase, Bank of America and Goldman Sachs. But these financial giants form only one part of the financial oligarchy. Lurking in the shadows are aggressive hedge funds that are just as lethal to our economic well being. If Goldman Sachs is a vampire squid, as Matt Taibbi so aptly named it, then hedge funds are like schools of piranhas or sharks, eager to strip the financial carcass to the bone.
The Intrinsic Value of the Dollar and Gold
By: Michael Pento
If you ask most investors what is the main driver for the price of gold they are likely to tell you that it’s the direction of the U.S. dollar. Therefore, the only due diligence most investors perform is a perfunctory glance at the Dollar Index (DXY). While it is true that the purchasing power of the dollar is a key metric to judge the direction of gold prices, the DXY will only tell you what the dollar is doing against a basket of 6 other flawed fiat currencies.
The main component of the Dollar Index is the Euro Currency, which represents a 58% weighting in the basket of currencies. It logically follows, if the Euro is tanking, the Dollar Index could increase regardless of the fundamental condition of the U.S. dollar. In order to truly access the intrinsic change in the value of the dollar you must first determine; the level and direction of real interest rates, the rate of growth in the money supply and the fiscal health of the government. When analyzing the dollar using those metrics, it is clear that the intrinsic value of the dollar is eroding in an expedited manner.
If you ask most investors what is the main driver for the price of gold they are likely to tell you that it’s the direction of the U.S. dollar. Therefore, the only due diligence most investors perform is a perfunctory glance at the Dollar Index (DXY). While it is true that the purchasing power of the dollar is a key metric to judge the direction of gold prices, the DXY will only tell you what the dollar is doing against a basket of 6 other flawed fiat currencies.
The main component of the Dollar Index is the Euro Currency, which represents a 58% weighting in the basket of currencies. It logically follows, if the Euro is tanking, the Dollar Index could increase regardless of the fundamental condition of the U.S. dollar. In order to truly access the intrinsic change in the value of the dollar you must first determine; the level and direction of real interest rates, the rate of growth in the money supply and the fiscal health of the government. When analyzing the dollar using those metrics, it is clear that the intrinsic value of the dollar is eroding in an expedited manner.
Netanyahu: Iran has decided to become a nuclear state. Action needed before it is too late.
DEBKAfile Exclusive Report January 19, 2012, 6:56 PM (GMT+02:00)
Prime Minister Benjamin Netanyahu declared Thursday night, Jan. 19 that Iran had decided to become a nuclear state. He urged action before it was too late to stop Iran completing the construction of a nuclear weapon. His statement at the end of a visit to Holland gave Gen Martin Dempsey, on his first visit to Israel as Chairman of the US Joint Chiefs of Staff, the message he will be asked to take back to President Barack Obama. It also contradicted Defense Minister Ehud Barak's statement that Tehran had not yet decided to go nuclear.
On Dec. 22, 2011, debkafile first revealed Tehran had reached a decision to go ahead and build a nuclear weapon.
Netanyahu has kept the Iranian cards close to his chest. His statement therefore caught wrong-footed the Israeli officials, including Defense Minister Ehud Barak, who in the last 48 hours had asserted that Iran had not yet decided whether to build a nuclear bomb and there was still time for US-led sanctions to work.
Prime Minister Benjamin Netanyahu declared Thursday night, Jan. 19 that Iran had decided to become a nuclear state. He urged action before it was too late to stop Iran completing the construction of a nuclear weapon. His statement at the end of a visit to Holland gave Gen Martin Dempsey, on his first visit to Israel as Chairman of the US Joint Chiefs of Staff, the message he will be asked to take back to President Barack Obama. It also contradicted Defense Minister Ehud Barak's statement that Tehran had not yet decided to go nuclear.
On Dec. 22, 2011, debkafile first revealed Tehran had reached a decision to go ahead and build a nuclear weapon.
Netanyahu has kept the Iranian cards close to his chest. His statement therefore caught wrong-footed the Israeli officials, including Defense Minister Ehud Barak, who in the last 48 hours had asserted that Iran had not yet decided whether to build a nuclear bomb and there was still time for US-led sanctions to work.
China to aid Saudi Arabia in nuclear power development
INTERNATIONAL. Ever since the end of World War Two, the U.S. has come to regard Saudi Arabia as almost its exclusive oil producing enclave.
In February 1945, after the Yalta Conference with Soviet General Secretary Iosif Stalin and British Prime Minister Winston Churchill, on his way home U.S. President Franklin Delano Roosevelt and King Ibn Saud met aboard the New Orleans-class heavy cruiser U.S.S. Quincy in the Suez Canal's Great Bitter Lake.
During the meeting, instigated by Roosevelt, he and Ibn Saud concluded a secret agreement in which the U.S. would provide Saudi Arabia military security, including military assistance, training and a military base at Dhahran in Saudi Arabia, in exchange for secure access to supplies of oil.
Sixty-seven years later, my, how things have changed, as China is now muscling into the Kingdom.
On 15 January Visiting Chinese Premier Wen Jiabao and Saudi Arabian King Abdullah bin Abdul Aziz agreed to make concerted efforts to enhance bilateral relations.
In February 1945, after the Yalta Conference with Soviet General Secretary Iosif Stalin and British Prime Minister Winston Churchill, on his way home U.S. President Franklin Delano Roosevelt and King Ibn Saud met aboard the New Orleans-class heavy cruiser U.S.S. Quincy in the Suez Canal's Great Bitter Lake.
During the meeting, instigated by Roosevelt, he and Ibn Saud concluded a secret agreement in which the U.S. would provide Saudi Arabia military security, including military assistance, training and a military base at Dhahran in Saudi Arabia, in exchange for secure access to supplies of oil.
Sixty-seven years later, my, how things have changed, as China is now muscling into the Kingdom.
On 15 January Visiting Chinese Premier Wen Jiabao and Saudi Arabian King Abdullah bin Abdul Aziz agreed to make concerted efforts to enhance bilateral relations.
Moody’s Warns of Further Downgrades: Big Banks
By Moran Zhang: Subscribe to Moran's RSS feed
January 19, 2012 5:55 PM EST
Moody's Investors Service warned Thursday that many European banks and global investment banks are likely to see their credit ratings further downgraded by the agency.
"The expected decline of bank ratings reflects the acceleration of interrelated pressures on the banking sector since the second half of 2011," said Greg Bauer, Moody's global banking managing director, in a statement.
"These pressures most immediately affect global capital markets intermediaries and European banks," Bauer said.
January 19, 2012 5:55 PM EST
Moody's Investors Service warned Thursday that many European banks and global investment banks are likely to see their credit ratings further downgraded by the agency.
"The expected decline of bank ratings reflects the acceleration of interrelated pressures on the banking sector since the second half of 2011," said Greg Bauer, Moody's global banking managing director, in a statement.
"These pressures most immediately affect global capital markets intermediaries and European banks," Bauer said.
Will China unleash more stimulus and boost gold, silver prices?
By Eric McWhinnie
China reported GDP growth of 8.9 percent in the last quarter of 2011 on Tuesday, which is the slowest growth increase in more than two years. Although analysts were only expecting growth of 8.7 percent, the slowdown gave investors hope that the world’s second largest economy will inject more stimulus into its economy to fuel growth. As a result, Gold jumped $24 to climb above $1,650 per ounce, while Silver surged 60 cents to settle above $30 per ounce. However, investors should reign in expectations of more stimulus being unleashed in China during the early part of 2012.
The last time China experienced a significant slowdown was towards the end of 2008. Over the next two years, China provided four trillion yuan ($586 billion) in stimulus money to boost growth. While investors may be expecting another replay of stimulus, China is indicating that the current slowdown is not significant enough, and inflation is still a concern. On Wednesday, the China Securities Journal said the nation has no reason to slash interest rates in the first quarter of 2012, because real interest rates remain negative. The journal explains, “Any change in China’s interest rates will come at a more appropriate time window, when inflation eases further and when economic growth slows down further.”
China reported GDP growth of 8.9 percent in the last quarter of 2011 on Tuesday, which is the slowest growth increase in more than two years. Although analysts were only expecting growth of 8.7 percent, the slowdown gave investors hope that the world’s second largest economy will inject more stimulus into its economy to fuel growth. As a result, Gold jumped $24 to climb above $1,650 per ounce, while Silver surged 60 cents to settle above $30 per ounce. However, investors should reign in expectations of more stimulus being unleashed in China during the early part of 2012.
The last time China experienced a significant slowdown was towards the end of 2008. Over the next two years, China provided four trillion yuan ($586 billion) in stimulus money to boost growth. While investors may be expecting another replay of stimulus, China is indicating that the current slowdown is not significant enough, and inflation is still a concern. On Wednesday, the China Securities Journal said the nation has no reason to slash interest rates in the first quarter of 2012, because real interest rates remain negative. The journal explains, “Any change in China’s interest rates will come at a more appropriate time window, when inflation eases further and when economic growth slows down further.”
Greece and a report on the PSI/IMFGlobal/Bank of America earnings farce
Good evening Ladies and Gentlemen:
Gold closed down today to the tune of $5.40 dollars finishing the comex session at $1654.10 Silver finished down 4 cents to $30.48.
Today the raid was a no brainer on behalf of the bankers as we witnessed a huge run up in open interest and that is fodder for these crooks. Gold bounced off the $1650 price level four times today. The weak gold and silver shares today probably foreshadows another raid. Let us head over to the comex and assess trading, open interest positions, inventory movements and amounts of metal standing.
The total comex gold open interest rose by 5552 contracts to rest tonight at 438,390. Please remember that we are always 24 hours back with respect to OI so in reality the closing figure of 438,390 OI is in reality the official OI for yesterday. The front options expiry month of January saw its OI fall from 31 to 16 for a loss of 15 contracts. We had 7 delivery notices filed yesterday so we lost 8 contracts or 800 oz to cash settlements. The next big delivery month is February as first day notice is less than 2 weeks away. Here the OI fell by 4000 contracts to 160,113 contracts. The estimated volume at the comex today was very weak coming in at 145,097. The confirmed volume yesterday was a touch better at 186,277 despite many rollovers on both days.
The total silver comex OI fell by 798 contracts to 102,870. Silver is trading differently these past few weeks and we are witnessing this through the OI. It appears that all the silver OI is in strong hands.
The front options expiry month of January mysteriously saw its OI rise from 81 to 175 for a gain of 94 contracts. We had 12 delivery notices yesterday so we gained 106 silver additional contracts standing for delivery or 530,000 oz. Someone was in great need of physical silver today. The next big delivery month is March and here the OI fell by 1200 contracts to 53,240 contracts. The estimated volume today was a very weak 30,713. The confirmed volume yesterday was also weak at 46,029. Leverage in silver has disappeared as business is leaving the comex to other jurisdictions.
How will China's Pan Asian Gold Exchange Revolutionize Gold and Silver Trading?
Commodities / Gold and Silver 2012 Jan 18, 2012 - 02:45 AM
PAGE which stands for Pan Asian Gold Exchange was set up in 2011 and has already begun operations with local Chinese buying and selling of gold through the internet. PAGE is located in Kunming, the capital city of Yunnan Province located in South Western China and is also the major gateway to South East Asia.
This gold exchange will enable ordinary Chinese buy/sell gold using a Renminbi account with a bank or broker. Currently there are two banks that are authorized to process the transactions or settlements and they are the Agriculture Bank of China and The Fudian Bank of Yunnan. The 10 ounce mini contracts will be known as T+D and the price is RMB 30,000 for 1 lot and it is fully backed by the Chinese government.
Also on offer is the Silver contract which is a five hundred ounce silver mini contract.
PAGE is not something that can be taken lightly as it is part of China’s 12th five year plan to catapult China to be the Global Superpower in Economics, Politics and Military.
Currently Shanghai Gold Exchange and Shanghai Futures Exchange are the only avenues for an ordinary Chinese citizen to buy gold. With the PAGE, now they will be able to buy gold through their computers online. Initially the scheme will be open to the 320 million customers of the Agriculture Bank of China.
Eventually foreigners will also be able to trade the International Spot Contracts on PAGE and hence this will help increase the liquidity of the market and certainly will have a big impact on both the LBMA and COMEX . With PAGE the purchaser will receive a 90 days International Spot Contract with the actual title bearing the name of the purchaser. All transactions initiated either by a local or foreigner will be denominated in RMB. Investors are given a choice to take physical delivery or get paid in RMB.
By: Sam_Chee_Kong
This gold exchange will enable ordinary Chinese buy/sell gold using a Renminbi account with a bank or broker. Currently there are two banks that are authorized to process the transactions or settlements and they are the Agriculture Bank of China and The Fudian Bank of Yunnan. The 10 ounce mini contracts will be known as T+D and the price is RMB 30,000 for 1 lot and it is fully backed by the Chinese government.
Also on offer is the Silver contract which is a five hundred ounce silver mini contract.
PAGE is not something that can be taken lightly as it is part of China’s 12th five year plan to catapult China to be the Global Superpower in Economics, Politics and Military.
Currently Shanghai Gold Exchange and Shanghai Futures Exchange are the only avenues for an ordinary Chinese citizen to buy gold. With the PAGE, now they will be able to buy gold through their computers online. Initially the scheme will be open to the 320 million customers of the Agriculture Bank of China.
Eventually foreigners will also be able to trade the International Spot Contracts on PAGE and hence this will help increase the liquidity of the market and certainly will have a big impact on both the LBMA and COMEX . With PAGE the purchaser will receive a 90 days International Spot Contract with the actual title bearing the name of the purchaser. All transactions initiated either by a local or foreigner will be denominated in RMB. Investors are given a choice to take physical delivery or get paid in RMB.
SilverDoctors: Brink's Magically Adjusts 140,248 Ounces of Silver...
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Keiser Report: Scam On Epic Scale (E238)
In this episode, Max Keiser and co-host, Stacy Herbert, discuss 419 scams and Tim Geithner's gimp. In the second half of the show, Max talks to financial blogger and semi-retired Wall Street executive Warren E. Pollock about MF Global, wealth confiscation and bank holidays.
SilverDoctors: Anonymous Takes Down DOJ, FBI, Numerous Media Site...
SilverDoctors: Anonymous Takes Down DOJ, FBI, Numerous Media Site...: Apparently Anonymous is not taking the SOPA legislation and yesterday's strong-arm tactics by the Fed's against Megaupload without a fight. ...
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