As for silver, not only is production inexorably declining, but in addition to its long-standing usage as MONEY, silver is the second most utilized commodity on Earth, trailing only crude oil. Silver is indispensible to countless industrial processes due to unique properties such as strength, malleability, and ductility, and is rapidly emerging as a key component to the inelastic medical industry. Thus, unlike gold, silver is consumed.
Consequently, less than a billion ounces of above-ground silver remain on Earth, worth less than what the Federal Reserve prints every few hours. The U.S. Geologic Service (USGS) forecasts silver to be the first extinct element due to its gaping supply/demand gap, but do not account for monetary demand, which in my view will ultimately dwarf industrial demand by a factor of 1,000 or more. As for attempting to calculate silver’s “monetary value,” simply utilize the money supply metrics above and take your best guess.
At a bare minimum, I expect gold to reach $15,000-$20,000/ounce, and the gold/silver ratio to fall to between 5:1 and 15:1 (yielding a silver price projection of $1,000-$4,000/oz), in TODAY’S (non-hyper-inflated) dollars, pounds, Euros, Yen, and Yuan, of course.
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10 February 2012
Greece/Iran and Indian Rice/Banks get big break with a $26 billion foreclosure settlement
Good evening Ladies and Gentlemen:
Gold closed higher by $9.70 to $1739.00. Silver also rebounded nicely rising by 21 cents to $33.88.
Gold jumped immediately at comex opening and remained positive until London was put to bed and that is when the crooked bankers sold their paper metals to drive the price down.
Let us head over to the comex and assess trading today.
The total gold comex OI fell by 3,914 contracts as the raid had a little effect forcing some of the weaker longs to pitch their contracts. The front delivery month of February saw its OI rise by 4 contracts despite 35 delivery notices yesterday. We thus gained 39 notices or 3900 additional gold ounces standing in this delivery month. The next big delivery month is April and it is here that some the biggest contraction from 240,326 contracts to 236,981 for a loss of 3345. The estimated volume today was quiet at 147,155. The confirmed volume yesterday, the day of the raid came in at 162,522 as the bankers supplied all of their non backed gold paper fire power.
The total silver comex OI fell slightly by 676 contracts from 106,008 to 105,332 as raids seem to have no effect on our silver leaves as they refuse to fall from the tree. The front options expiry month of February saw its OI fall by 1 contract despite 41 delivery notices yesterday. We thus gained another 40 contracts or an additional 200,000 oz of silver. We are now 20 days away from first day notice for the March contract.
Here the OI fell from 43,383 to 40,979 which is normal as we witness some rollovers into May. The estimated volume today came in at 46,867 which is becoming the new norm. The confirmed volume yesterday, the day of the raid came in at 69,549. The bankers are throwing a temper tantrum that they cannot force the liquidation of silver longs.
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China's Rebalancing Should Be Good for Gold Demand
By: Ben Traynor | Thu, Feb 9, 2012
The next stage of China's development could give gold buyers a boost...
There is an old saying: "Nobody rings a bell at the top or bottom of a market."
Having said that, anyone reading about the stampede for gold during last month's Chinese New Year celebrations might have heard a faint ringing in their ears.
Here are a few quotations from various press sources:
- "Some customers just walk in and buy a bunch of 100g gold bars all at once...Companies come in too to buy gold bars for presents." -branch manager, Industrial and Commercial Bank of China.
- "Some companies are giving out gold instead of cash to their employees" -Jia Zhihong, jeweler, Wuhan.
- "With customers crowding and rushing in, we did not even have time to eat and drink." - gold counter sales clerk.
- "People seem crazy about gold, snatching it up more like a cheap cabbage than such a precious metal...You have to quickly decide whether to make a purchase, or it will be taken away by others." - Beijing shopper
- "Think of it like investing in the stock market...Gold maintains its value much better than stocks." - sales clerk, China Gold store.
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BrotherJohnF Is All About Freedom And Silver--02-09-2012
"Brother John F of BrotherJohnF.com is an amazingly popular blogger who's site regularly attracts many thousands of visitors. Through his YouTube Channel and his site, he's become a go to source of information about what's really going on in the economy. And we both agree, it ain't pretty. Declining employment rates, declining standards of living, and political instability are all indications of where the state of our nation and our economic prospects are headed.
However, John believes that you can avoid much of the economic deluge that is currently hitting our shores by the judicious purchase of silver. While the Financial Survival Network sometimes may appear to be a gigantic echo chamber, it is virtually impossible to get opposing viewpoints to go on the record. Perhaps they know something and don't want to leave a record behind. So folks like Brother John are left to spread the word and help us prepare."
ORIGINAL SOURCE
However, John believes that you can avoid much of the economic deluge that is currently hitting our shores by the judicious purchase of silver. While the Financial Survival Network sometimes may appear to be a gigantic echo chamber, it is virtually impossible to get opposing viewpoints to go on the record. Perhaps they know something and don't want to leave a record behind. So folks like Brother John are left to spread the word and help us prepare."
ORIGINAL SOURCE
There Will Be No End to Quantitative Easing
By Detlev Schlichter Feb 9th, 2012
The Bank of England is expected today to announce another round of debt monetization, called “quantitative easing”. A majority of economists polled by Dow Jones Newswire earlier this week expected the central bank’s policy committee to agree “to £50 billion ($79 billion) of additional bond purchases using freshly created money to underpin demand and ensure its 2% inflation target is met. Some expect it to go for £75 billion.”
Official inflation is over 4 percent in the UK, so how printing more money is going to help meet a 2 percent inflation target is a bit difficult to grasp, but let us not quibble over such details. What counts is that the Bank of England is the undisputed champ of QE. After the next round of money printing, the BoE will have created new money to the tune of 20 percent of GDP, and will fund more than a quarter of all outstanding government debt via the printing press.
£275 billion of QE so far have not solved the crisis — the economy last year grew by less than 1 percent — but have lifted inflation and thus squeezed real incomes. At the same time, this policy has kept the government’s borrowing costs low and the banks from shrinking and in certain cases from collapsing. As with any policy of monetary debasement, the direct beneficiaries are the state and the banks.
This has tradition behind it. The Bank of England was founded in 1694 for the specific purpose of financing the Crown, which at the time was in low standing with its creditors. From its inception the Bank of England enjoyed numerous legal privileges that cemented its dominant position in the nascent but growing British banking system. Among them was the privilege to issue money against obligations of the Crown — a form of early ‘debt monetization’. Of course, the gold standard was a hindrance to unlimited money creation, so whenever the state needed more funds, usually at times of war, the Bank of England was conveniently absolved of any of its contractual agreements to redeem in specie, and kindly asked to fund the state through the creation of new money.
Gentlemen, start your printing presses!
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The Bank of England is expected today to announce another round of debt monetization, called “quantitative easing”. A majority of economists polled by Dow Jones Newswire earlier this week expected the central bank’s policy committee to agree “to £50 billion ($79 billion) of additional bond purchases using freshly created money to underpin demand and ensure its 2% inflation target is met. Some expect it to go for £75 billion.”
Official inflation is over 4 percent in the UK, so how printing more money is going to help meet a 2 percent inflation target is a bit difficult to grasp, but let us not quibble over such details. What counts is that the Bank of England is the undisputed champ of QE. After the next round of money printing, the BoE will have created new money to the tune of 20 percent of GDP, and will fund more than a quarter of all outstanding government debt via the printing press.
£275 billion of QE so far have not solved the crisis — the economy last year grew by less than 1 percent — but have lifted inflation and thus squeezed real incomes. At the same time, this policy has kept the government’s borrowing costs low and the banks from shrinking and in certain cases from collapsing. As with any policy of monetary debasement, the direct beneficiaries are the state and the banks.
This has tradition behind it. The Bank of England was founded in 1694 for the specific purpose of financing the Crown, which at the time was in low standing with its creditors. From its inception the Bank of England enjoyed numerous legal privileges that cemented its dominant position in the nascent but growing British banking system. Among them was the privilege to issue money against obligations of the Crown — a form of early ‘debt monetization’. Of course, the gold standard was a hindrance to unlimited money creation, so whenever the state needed more funds, usually at times of war, the Bank of England was conveniently absolved of any of its contractual agreements to redeem in specie, and kindly asked to fund the state through the creation of new money.
Gentlemen, start your printing presses!
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SilverDoctors: CME Slashes Initial & Maintenance Margins for Gold...
SilverDoctors: CME Slashes Initial & Maintenance Margins for Gold...: In an obvious sign that the CME is suffering from a massive exodus of investors in the wake of the CME refusing to make MF Global clients w...
09 February 2012
Greece/S and P threatens USA with another downgrade/
Good evening Ladies and Gentlemen:
As promised gold and silver languished today with gold falling by $17.10 to $1729.30
Silver fell by 50 cents to $33.67. It was quite clear that the bankers orchestrated their raid starting yesterday. The signal was sent yesterday morning as gold/silver equity shares were pummeled despite the rising price of the metal. The crooks covered many of their shorts today on the equities as the metal fell due their massive supply of non backed paper. These crooks have been performing this collusive trading for almost a decade now and it is getting monotonous. It works quite well when you have the regulators in your back pocket.
Let us head over to the comex and assess the damage today.
The total gold comex OI rose by a tiny 459 contracts despite the huge runnup in the gold price yesterday.
The new total OI rests tonight at 436,061. The front delivery month saw its OI fall from 1063 to 814 for a loss of 249 contracts. Yesterday we had 262 delivery notices filed so for the first time this month we did not have any cash settlements and we gained additional gold ounces standing. The next big delivery month is April and here the OI rose by a little over 2,000 contracts to 240,326. The estimated volume today was luke warm at 144,390. The confirmed volume yesterday was very good at 173,983.
The total silver comex OI continues to rise ever so slowly but firmly in strong hands. Today it rests at 106,008 a gain of 570 contracts from yesterday. The front options expiry month of February saw its OI fall from 53 to 35 for a loss of 18 contracts. However we had 41 delivery notices filed yesterday so we again gained 23 contracts or 115,000 additional silver oz standing. We are now less than 3 weeks away from first day notice in the March silver contract. Here the OI fell slightly down around 1400 contracts to rest tonight at 43,333. No doubt we lost some March players who rolled into the future month of May. The estimated volume at the silver comex today came in at 58,340 contracts. The confirmed volume yesterday registered 64,605 contracts.
Even though HFT players are huge in the silver comex, it looks like we have a few more players playing and quite possibly standing for delivery in the March contract.
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As US and Israel dicker over Iran strike, American airlifts strength to the Gulf
DEBKAfile Special Report February 9, 2012, 5:20 PM (GMT+02:00)
As the US and Israel carried on bickering over the right time to strike Iran's nuclear sites, their war preparations continued apace. debkafile's military sources report that flight after flight of US warplanes and transports were to be seen this week cutting eastward through the skies of Sinai on their way to Gulf destinations, presumably Saudi Arabia, at a frequency not seen in the Middle East for many years.
The three International Atomic Energy inspectors who spent the last three days of January in Tehran had asked to meet the hitherto invisible head of Iran's nuclear bomb program, Mohsen Fakhrizadeh, 50, a general of the Revolutionary Guards. The Iranians pretended to be deaf. They also kept the inspectors away from any nuclear installations. A senior Obama administration official termed the visit "foot-dragging at best and a disaster at worst."
debkafile's intelligence and military sources note that without talking to Fakhrizadeh or any of the 600 nuclear engineers and scientists working under him, unless one of them defects, there is no way the West can determine what exactly is going on in Iran's nuclear program stands and which installations have been moved to underground facilities.
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US Air Force airlift over Sinai to the Gulf
The three International Atomic Energy inspectors who spent the last three days of January in Tehran had asked to meet the hitherto invisible head of Iran's nuclear bomb program, Mohsen Fakhrizadeh, 50, a general of the Revolutionary Guards. The Iranians pretended to be deaf. They also kept the inspectors away from any nuclear installations. A senior Obama administration official termed the visit "foot-dragging at best and a disaster at worst."
debkafile's intelligence and military sources note that without talking to Fakhrizadeh or any of the 600 nuclear engineers and scientists working under him, unless one of them defects, there is no way the West can determine what exactly is going on in Iran's nuclear program stands and which installations have been moved to underground facilities.
MORE
Iran Using Gold, Oil to Pay for Grain
By Valerie Parent and Michael Hogan
February 9, 2012 11:30 AM EST
(REUTERS) -- Iran is seeking to close grain purchases using gold and oil as payment, and has paid in yen for a large volume of wheat in its first deal since western sanctions against Tehran started choking imports of food staples, European wheat exporters said.
Iran bought at least 200,000 tonnes of soft wheat on the world market last week for prompt delivery from private sellers - mostly of Australian origin - but some traders said the United States could possibly account for part of the volume.
New financial sanctions imposed since the beginning of this year to punish Tehran over its nuclear programme have ended up playing havoc with Iran's ability to buy imports and receive payment for key food items.
The sanctions have drastically cut its ability to obtain euro and dollar denominated financing, forcing Tehran to find alternative ways to pay for its imports.
Traders believed the Iranian government had used companies based in Switzerland capable of financing themselves in Asia, and used yen-based contracts to finance the 200,000-tonne deal.
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February 9, 2012 11:30 AM EST
(REUTERS) -- Iran is seeking to close grain purchases using gold and oil as payment, and has paid in yen for a large volume of wheat in its first deal since western sanctions against Tehran started choking imports of food staples, European wheat exporters said.
Iran bought at least 200,000 tonnes of soft wheat on the world market last week for prompt delivery from private sellers - mostly of Australian origin - but some traders said the United States could possibly account for part of the volume.
New financial sanctions imposed since the beginning of this year to punish Tehran over its nuclear programme have ended up playing havoc with Iran's ability to buy imports and receive payment for key food items.
The sanctions have drastically cut its ability to obtain euro and dollar denominated financing, forcing Tehran to find alternative ways to pay for its imports.
Traders believed the Iranian government had used companies based in Switzerland capable of financing themselves in Asia, and used yen-based contracts to finance the 200,000-tonne deal.
MORE
Ingredients for Inflation: Stirring the Pot
By Dock Treece
Before we begin, a quick note that this week’s article is largely a continuation of musings from last week, entitled Ingredients for Inflation. In that article – which was widely circulated around the internet – we wrote about the coming wave of inflation that will result when the velocity of money accelerates in the US and all the new money printed by the Federal Reserve begins to circulate.
As many are aware, and as we discussed last week, the Federal Reserve has greatly expanded its monetary base over the past several years – mostly in an effort to shore up this nation’s banking sector in response to the financial crisis sparked in 2008.
However, despite the rampant printing of growth – which usually leads to inflation – the impact has been relatively small to date because all this new money has failed to permeate our economy. New dollars haven’t been used to buy houses or TVs or gasoline; but has instead been sitting in the Fed’s digital vault, supporting banks’ weakened balance sheets.
In other words, velocity – or a lack thereof – has kept inflation from running rampant. To borrow a phrase from one of last week’s readers: “If it doesn’t circulate, it can’t inflate.”
Before we begin, a quick note that this week’s article is largely a continuation of musings from last week, entitled Ingredients for Inflation. In that article – which was widely circulated around the internet – we wrote about the coming wave of inflation that will result when the velocity of money accelerates in the US and all the new money printed by the Federal Reserve begins to circulate.
As many are aware, and as we discussed last week, the Federal Reserve has greatly expanded its monetary base over the past several years – mostly in an effort to shore up this nation’s banking sector in response to the financial crisis sparked in 2008.
However, despite the rampant printing of growth – which usually leads to inflation – the impact has been relatively small to date because all this new money has failed to permeate our economy. New dollars haven’t been used to buy houses or TVs or gasoline; but has instead been sitting in the Fed’s digital vault, supporting banks’ weakened balance sheets.
In other words, velocity – or a lack thereof – has kept inflation from running rampant. To borrow a phrase from one of last week’s readers: “If it doesn’t circulate, it can’t inflate.”
Keiser Report - Episode 247
In this episode, Max Keiser and co-host Stacy Herbert discuss the latest discoveries of black holes in the financial universe and the populations growing permanently poorer as a result. In the second half of the show, Max talks to Dr. Yanis Varoufakis about financial horror, a currency from which you can’t escape and the Greek situation.
SilverDoctors: S&P to Downgrade US Again in 6 Months if No Debt R...
SilverDoctors: S&P to Downgrade US Again in 6 Months if No Debt R...: S&P's John Chambers today warned that S&P is likely to downgrade the US further from AA+ in the next 6-24 months depending on the outcome of...
SilverDoctors: S&P Downgrades CME Group to AA- Over MFG Risk
SilverDoctors: S&P Downgrades CME Group to AA- Over MFG Risk: After threatening to downgrade the US again in the next 6-24 months earlier today, S&P tonight downgraded the CME Group from AA to AA-, ou...
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