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PM News articles, Analysis and Commentaries

Re: PM News articles, Analysis and Commentaries

Postby silvermotor on Sat Aug 04, 2012 11:08 am

http://www.bloomberg.com/news/2012-08-0 ... choes.html



How an Act of Congress Killed Off the U.S. Gold Market
Echoes: August 2

http://www.bloomberg.com/image/i1I5Bxq9VEpo.jpg
Photograph of the black board in the New York Gold Room, September 24, 1869, showing the collapse of the price of gold. Source: Library of Congress Prints and Photographs Division


By Kenneth D. Ackerman Aug 2, 2012 4:59 PM ET

When President Abraham Lincoln acted in December 1861 to suspend the national gold standard -- the legal right to convert paper money into gold coin or “specie” -- he wasn’t trying to start a fight with financial speculators in New York.

Lincoln had a bigger headache at that moment: trying to finance his rapidly growing Union Army in its fight against the South.

Within three years, though, Lincoln’s decision would bring a defining moment that would shape the federal government’s relationship with Wall Street. It came in June 1864 when Congress passed the Gold Act -- the single time in U.S. history that Congress used its power to directly close a major financial market in the middle of active trading. It was such a failure that Congress never tried again.

The Gold Act was Washington’s response to a case of extreme profiteering during one of the bloodiest periods of the Civil War. After Lincoln had suspended the gold standard in 1861, he immediately asked Congress to float about $450 million in paper currency for the government to pay its bills. These steps created a temporary dual-currency system: paper “greenbacks” as legal tender for domestic debts, and gold coin as the currency of the world, needed for foreign trade, tariffs and custom duties.

Confederate Victories

Without government backing, the value of paper floated freely against gold. Within a few weeks, there was a brisk market on Wall Street for trading between gold and dollars. Each Confederate military victory sent gold prices soaring.

Speculators, stock traders, rebel and Union sympathizers, and government officials soon dominated the market, far outnumbering the bankers, exporters, importers and other commercial gold users. Daily price fluctuations affected the national war effort because rising gold prices directly eroded the value of the federal Treasury.

A Philadelphia banker, Jay Cooke, called the New York gold traders “General Lee’s left flank.” The New York Stock Exchange agreed; it considered gold trading disloyal and refused to allow it under its roof. This forced gold speculators to form a separate Gold Exchange on nearby William Street.

Gold prices spiked in June 1864 to $200 in paper -- a 50 percent devaluation of the nation’s paper currency. That spring marked the culmination of General Ulysses Grant’s “Wilderness campaign,” a particularly bloody set of encounters as the Army of the Potomac pursued Confederate General Robert E. Lee across Virginia toward the Confederate capital of Richmond. Casualties on both sides were enormous, about 40,000 killed and wounded for the Union and another 70,000 for the Confederacy.

Gold prices peaked just as Grant’s army reached Petersburg, Virginia, to begin a desperate seven-month siege. The spectacle of New York financiers profiting from this carnage particularly outraged the public, and Congress decided it had to act.

The result was the Gold Act, passed with little debate on June 17, 1864. It was designed to close the Gold Exchange immediately and thereby end the speculative bubble in prices. To the surprise of senators and Treasury officials, however, it did nothing of the kind.

In fact, closing the Gold Exchange only made matters worse, by encouraging hoarders and fueling a panic. Kinahan Cornwallis, a British-born writer working in New York during the war as a reporter for the New York Herald, described how “the real holders of gold were thus isolated,… and purchasers had to run from office to office, inquiring the price at which holders were willing to sell … The whole country was alarmed by the rocket- like ascent of the [gold] premium, including Congress, amazed and rebuked by the advance.” Finally, he wrote, “Leading merchants and bankers, who had urged upon Congress this prohibitory legislation, now wrote and telegraphed to Washington, imploring the repeal of the Gold bill.”

Price Spikes

Gold prices would touch almost $300 before Congress would finally reverse course, repeal the Gold Act, and reopen the Exchange on July 2 -- barely two weeks after the law was passed. Even after the Gold Room reopened, chaos continued with further corners and price spikes. Only the capture of Atlanta by General William T. Sherman in August 1864 finally broke the bull market in gold. By the time Lee surrendered to Grant at Appomattox Courthouse on April 9, 1865, the gold price was $144, less than half its wartime high.

In the 148 years since the Gold Act, Congress has developed extensive systems to regulate Wall Street --including the Securities and Exchange Commission, the Commodity Futures Trading Commission, the Federal Reserve, and the latest additions under the Dodd-Frank law, the Consumer Financial Protection Bureau and Financial Stability Oversight Council -- but never again has it shut an actively trading market. Closing a market can turn excitement into fear and transform a bubble into a panic.

The Gold Act episode taught a simple lesson. In a crisis, politicians and financial regulators should follow the same rule as physicians: First, do no harm.

(Kenneth D. Ackerman is the author of four books, including the recently published The New York Gold Room: Wall Street’s Big Gamble on the Civil War,” a new release of Kinahan Cornwallis’s original account of the 1864 Gold Act episode. The opinions expressed are his own.)


Read more from Echoes online.
To contact the writer of this post: Kenneth D. Ackerman at kackerman@ofwlaw.com
To contact the editor responsible for this post: Max Berley at mberley@bloomberg.net.
Three cheers for BS where we pile it higher and deeper!- Bring the Gold
 
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Re: PM News articles, Analysis and Commentaries

Postby silvermotor on Tue Aug 07, 2012 7:49 am

Please follow link for charts, graphs, pictures and links to other articles.

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http://www.caseyresearch.com/gsd/home



Financial Times Says CFTC to Drop Silver Investigation: Bart Chilton Has a Few Things to Say About That

"You have to wonder what is going on behind the scenes in the PM market that us mere mortals don't know anything about."


¤ Yesterday in Gold and Silver

Net volume was shocking light yesterday...around 85,000 shares...and on the basis of that, I wouldn't read much of anything into Monday's gold price action. Gold closed at $1,611.60 spot...up a whole $8.00.

The silver price action was a bit more interesting, but only just. The rally de jour started just before the Comex open...and ended the moment that the price got above the $28 spot mark...and it made several attempt to break through that price barrier after that, but could not. Then it got sold off a bit into the electronic close.

Silver's high tick of the day...$28.11 spot...came shortly before 11:30 a.m. in New York.

Silver finished the Monday trading session at $27.88 spot...up a whole 8 cents. Net volume was around the 22,000 contract mark, which was very light.

The dollar index didn't do much, either. It hit its low of the day [around 82.10] shortly after Monday trading began in the Far East. From there it rallied to its high of the day [around 82.56] about 9:20 a.m. in London.

Then the dollar index spent the next seven hours falling back to its 82.10 low...before rallying a bit into the close. It finished the day around the 82.31 mark, basically unchanged from Friday's close.

The gold stocks gapped up a bit at the open...and then climbed almost to their highs of the day by 11:00 a.m. Eastern time. From there the stocks traded pretty flat, until they got sold off a bit in the last thirty minutes of trading in the New York equity markets. The HUI finished up a respectable 2.48%...and quite a few gold stocks did better than that.

Despite the fact that the silver price only finished up 8 cents...a lot of the silver stocks were on fire yesterday. Nick Laird's Silver Sentiment Index closed up a very respectable 3.43%.



The CME's Daily Delivery Report showed that 109 gold...and 1 lonely silver contract were posted for delivery in the Comex-approved depositories on Wednesday. As of this morning's preliminary volume report from the CME, there are still 2,843 gold contracts posted for delivery in August.

There were no reported changes in GLD yesterday, but an authorized participant withdrew 533,170 troy ounces of silver out of SLV.

The U.S. Mint had a sales report. They sold another 1,000 ounces of gold eagles...and 585,000 silver eagles. Four business days do not a month make, but as of yesterday, the silver/gold sales ratio for August at the U.S. Mint was a bit over 117:1. I sure do hope you are getting your share, dear reader.

There was a lot of activity at the Comex-approved depositories on Friday. They reported receiving 3,084,421 troy ounces of silver...and shipped 1,778,163 troy ounces out the door. The action is definitely worth checking out...and the link is here.



It was a busy weekend for stories...and I have a lot. I hope you find the time to read the ones that interest you.

¤ Critical Reads

Knight Capital gets $400 million rescue, shares tumble

A group of investors rescued Knight Capital Group Inc in a $400 million deal that keeps the embattled leader in U.S. equities market-making in business, but comes at a huge cost to existing shareholders.

There were immediate signs the Jefferies Group-led rescue gave Knight back some of the market confidence it had lost, as two large brokerages resumed routing orders through the company and new data showed volumes picking up from last week.

Blackstone Group LP, rival market maker Getco and financial services companies TD Ameritrade Holding Corp, Stifel Nicolaus, Jefferies and Stephens Inc purchased preferred shares for what works out to be a 73 percent stake in the company, Knight said.

This Reuters story showed up on their website last evening...and it's courtesy of Roy Stephens. The link is here.


As Libor Fault-Finding Grows, It Is Now Every Bank for Itself

Major banks, which often band together when facing government scrutiny, are now turning on one another as an international investigation into the manipulation of interest rates gains momentum.

With billions of dollars and their reputations on the line, financial institutions have been spreading the blame in recent meetings with authorities, according to government and bank officials with knowledge of the matter. While acknowledging their own wrongdoing, institutions are pointing out actions at other banks that they believe are worse — and in some cases, extend to top executives.

One official involved in the case said that banks are emphasizing that “we’re not as bad as the next guy.”

The Swiss bank UBS, which has a history of regulatory run-ins, has shared e-mails, instant messages and other information suggesting it had colluded with traders at Deutsche Bank, HSBC and the Royal Bank of Scotland to manipulate key interest rates, according to court documents and bank employees. In talks with authorities, HSBC is providing its own account of the activities, according to a lawyer briefed on the matter. Citigroup has also detailed rate manipulation with other banks.

This story was posted on The New York Times website late Sunday evening...and I thank Phil Barlett for sending it. The link is here.


Debt crisis threatens to break up Europe

Tensions within the eurozone over how to resolve the debt crisis are turning countries against each other and threatening to rip Europe apart, Italian Prime Minister Mario Monti has warned.

Resentment in Italy is growing against Germany, the European Union and even German chancellor Angela Merkel herself, he said, adding that “the pressures already bear the traits of a psychological break-up of Europe”.

Mr. Monti told German news magazine Der Spiegel that he was “concerned” about the deepening divisions and said governments “must work hard to contain it”.

His words were released as Greece pledged further economic reforms to avert bankruptcy at a meeting with the bail-out “troika” of the European Commission, European Central Bank and International Monetary Fund.

This story was posted on the telegraph.co.uk Internet sit on Sunday evening as well...and I thank Roy Stephens for bringing it to my attention. The link is here.


'Attack on Democracy' - Monti Comments Enrage German Politicians

With his appeal in a SPIEGEL interview for national leaders to be given greater independence from parliaments in euro bailout decisions, Italian Prime Minister Mario Monti has sparked intense anger in Germany. Members of both Chancellor Angela Merkel's government and the opposition have labelled Monti's demands "undemocratic."

Italian Prime Minister Mario Monti is concerned that the euro zone is inflicting serious damage on Europe. In an interview with SPIEGEL published on Monday, he said: "The tensions that have accompanied the euro zone in recent years are already leading to a psychological dissolution of Europe." The 68-year-old warned that if the euro were allowed to become a factor in Europe drifting apart, "then all the foundations of the European Project will be destroyed."

But one statement in his interview in particular has sparked a contentious debate. Monti said that European leaders needed to defend their freedom to act against parliaments. "If governments allow themselves to be entirely bound to the decisions of their parliament, without protecting their own freedom to act, a break up of Europe would be a more probable outcome than deeper integration."

This story was posted on the German Internet site spiegel.de yesterday...and I thank reader Donald Sinclair for sending it along. The link is here.


Euro elites should say if they could ever view single currency as a failure

In this last column before my summer break, I cannot resist returning to this year's leitmotif, the euro. Greece is due to run out of money on August 20 and the potential official providers of funds are dragging their feet. Quite understandably. Although the new Greek government agreed to the current bail-out package, it has failed to stick to the conditions. Surprise, surprise.

I suspect that the euro-establishment is ready to cut Greece adrift, perhaps in the next few weeks. Historically, September has been the month for crises. Lehman Brothers collapsed in September 2008; the Northern Rock crisis hit us in September 2007; the ERM crisis happened in September 1992; and the UK left the Gold Standard in September 1931.

Last week, the President of the European Central Bank, Mario Draghi, again failed to deliver the "big bazooka". Of course, he said: "The euro is irreversible". But what else could he say? That it was reversible?

He also used the word "modalities". That got me really worried. I remember when in 1992 the British Chancellor, Norman Lamont, said that he wanted to remove any "scintilla" of doubt that the pound would remain in the ERM. It was out within a month. I resolved that if ever I heard anyone using that word again I would believe the opposite. You can believe in Mr Draghi's "modalities" if you like, but I've heard enough. Draghi is in an impossible position. He is nobly trying to find sticking plaster solutions for gaping wounds.

This is another story that appeared on The Telegraph's website on Sunday evening...and I thank reader Iain Doherty for finding it. The link is here.


'Greece Should Leave' Patience with Athens Nearing an End in Germany

The good news is that Greece is not going to go bankrupt -- at least not this month. Despite Athens facing a €3.2 billion ($3.96 billion) bond repayment in August and rapidly running out of cash, the European Central Bank (ECB) last week rubber-stamped a request from the Bank of Greece, allowing it to boost the amount of money it can loan to the Greek government. The move should keep the country's head above water at least until September.

After that, though, all bets are off. The country's international creditors, represented by the troika of the European Commission, the ECB and the International Monetary Fund, left Athens on Sunday, but not before getting the government of Prime Minister Antonis Samaras to agree to push forward far-reaching reforms and further savings measures -- all of which promise to be difficult to push through in the face of increasing weariness on the part of Greek voters.

Furthermore, there are new indications that the euro zone's biggest paymaster, Germany, is rapidly losing its appetite for footing the bill and that Chancellor Angela Merkel will have difficulties keeping her coalition together in the face of difficult currency challenges to come.

This is another offering from reader Donald Sinclair from yesterday's spiegel.de website...and the link is here.


Shell 'pulling cash out of Europe on eurozone fears'

The company's chief financial officer, Simon Henry, told The Times that Shell is cutting back its exposure to European credit risk in the worst-hit economies and putting a higher price on doing business with the region's peripheral nations.

"There's been a shift in our willingness to take credit risk in Europe. The crisis has impacted our willingness to afford credit," Mr Henry is quoted as saying.

Asked whether Shell regarded risk as different in Germany compared with some of the eurozone’s southern and heavily indebted members, he said: “We differentiate between different credit risk.”

Mr Henry is cited as saying that the Anglo-Dutch oil major would rather deposit $15bn of cash in non-European assets, such as US Treasuries and US bank accounts.

The firm is forced to keep some money in Europe to fund its operations, but is keeping the bulk of its reserve liquidity out of the eurozone to avoid growing macroeconomic risk, the report said.

This story was posted on the telegraph.co.uk Internet site early yesterday morning...and I thank Roy Stephens for bringing it to our attention. The link is here.


Regulator Says British Bank Helped Iran Hide Deals

Using its New York-based operations, a major British bank schemed with the Iranian government for nearly a decade to launder $250 billion, leaving the United States financial system vulnerable to terrorists and corrupt regimes, New York’s top banking regulator charged on Monday.

The New York State Department of Financial Services accused Standard Chartered, which the agency called a “rogue institution,” of masking more than 60,000 transactions for Iranian banks and corporations, motivated by the millions of dollars it reaped in fees.

Senior management at the 150-year-old bank used the New York branch “as a front for prohibited dealings with Iran — dealings that indisputably helped sustain a global threat to peace and stability,” according to a regulatory order sent to the bank. The order requires the bank to explain the apparent violations of law in a hearing later this month and justify why its license to operate in New York shouldn’t be revoked.

The bank said Monday night that it “strongly rejects the position and portrayal of facts” by the agency.

This 2-page story showed up in The New York Times on Monday...and I thank Scott Pluschau for digging it up on our behalf. The link is here.


Another Glitch: This Time It's The Tokyo Stock Exchange, Derivatives Trading Grinds To A Halt

The Tokyo Stock Exchange has halted trading in derivatives due to a system error, Bloomberg reports.

This includes trading in TOPIX and JGB futures contracts.

Stocks are trading normally. The Nikkei 225 index is up 0.5%.

Earlier during Europe's Monday trading session, the Spanish stock market was shut down for hours due to glitches.

It seems to be an odd coincidence.

You just read the entire 5-paragraph story that was posted on the businessinsider.com Internet site last night...and it's another contribution from Roy Stephens. The link to the hard copy is here.


Eight King World News Blogs/Interviews

The first is with John Embry...and it's headlined "Expect Squeeze in Gold, Price Headed Multples Higher". The next is with Rick Rule. It's entitled "We're at Risk of a Spectacular Collapse of Confidence". Here's a blog with Michael Pento that's headlined "This Is The Next Destructive Move By Central Planners". Next is BMO's Don Coxe with a blog entitled "Get Ready: Gold to Re-enter the Financial System". Next is Dan Norcini...and his interview bears the headlined "This is Why Gold & Oil May Explode Higher in August". The first audio interview is with Egon von Greyerz...and the second audio interview is with James Turk.
http://kingworldnews.com/kingworldnews/ ... _News.html


Commodity Super-Cycle will last at least a decade-Coxe

Copper miners and gold miners with high-quality reserves in the ground in politically secure regions are becoming more and more valuable, said BMO Capital Markets' Don Coxe in his August edition of Basic Points.

"The commodity story is essentially a scarcity story," said Coxe. As global living standards improve, the problem will be finding and producing enough metals and minerals to sustain economic progress.

Noting that gold was priced below $1,000 an ounce as recently as three years ago, Coxe observed that analysts "are agreed that nearly all gold companies now need at least $1,250 an ounce to make any money on current production when the costs of new capex are factored in."

This story was posted on the mineweb.com Internet site yesterday...and I thank Donald Sinclair for finding it for us. The link is here.
http://www.mineweb.com/mineweb/view/min ... pid=110649


Bullion banks shedding shorts ahead of price explosion, Turd Ferguson says

Interviewed for GoldMoney by the economist Alasdair Macleod, gold and silver market letter writer Turd Ferguson remarks that recent declines in gold and silver have been manufactured to help relieve bullion banks of their short positions, a development he thinks will soon will lead to an explosion in prices.

While recommending continuing acquisition of the monetary metals -- real metal in hand -- Ferguson warns against short-term trading in the metals because their markets are so manipulated.

Ferguson believes that "the great Keynesian experiment" in fiat money is ending and will be replaced with some form of gold backing for currencies. I borrowed this headline and the introduction from a GATA release on Saturday. The interview is 27 minutes long and is posted in audio format at the goldmoney.com Internet site here.
http://www.goldmoney.com/podcast/turd-f ... fcode=gata


Jay Taylor: Canada's BNN doesn't want GATA mentioned on the air

Few financial newsletter writers work harder than Jay Taylor, editor of J. Taylor's Gold, Energy, and Tech Stocks newsletter. Taylor not only provides weekly analysis from a hard-money point of view but also produces an Internet radio interview program on which GATA Chairman Bill Murphy and your secretary/treasurer have appeared and speaks on financial television and radio programs and at financial conferences around the world. Last week Taylor was appearing on Business News Network in Canada and his latest letter describes how he was urged not to mention GATA on the air.

This is a change of attitude for BNN, as for years, under the editorship of Jim O'Connell, the network was glad to inquire into gold market manipulation and let GATA be part of the discussion. But O'Connell died five years ago, perhaps taking BNN's courage with him.

Taylor's letter about BNN and GATA is posted over at the gata.org Internet site...and the link is here.
http://www.gata.org/node/11635


BNN's ban on GATA noted at MineWeb, SilverGoldBull

MineWeb's Lawrence Williams today takes note of newsletter writer Jay Taylor's admonition by a producer for Business News Network in Canada not to mention GATA on the air...and also taking note of it is Jeff Nielson of SilverGoldBull.com. The GATA release containing both items is linked here. Both commentaries are worth the read.
http://www.gata.org/node/11637


Is a Strong Dollar Trouble for Gold? - Casey Research

This was the headline to Monday's edition of Casey's Daily Dispatch. The commentary by Vedran Vuk includes some interesting graphs...and it's worth reading if you have the time. The link is here.
http://www.caseyresearch.com/cdd/strong ... ouble-gold


Peter Brimelow: Gold fizzles -- or gold fixed?

But gold fizzled even before it became clear that the Fed and the ECB were not going to make reflationary, gold-stimulating moves. Measured by the active December CME contract floor close, the metal lost 0.54% on the week, while the NYSE Arca Gold Bugs Index was down 1.07%.

To be sure, this involved a considerable recovery from the alarming lows of mid-week.

But the damage done was still very severe. The thoughtful website The Golden Truth published an essay on Friday titled “Chart Porn: Value Play Of The Decade,” featuring a chart from 1984 comparing the PHLX Gold/Silver Index against gold. Gold shares have fallen to a new low: 2012 has been ghastly. From the peak in 1996, the ratio is down 70%.

The Golden Truth annotated its chart: “Are mining companies going out of business …or absurdly cheap?”...and there is unusual division among what I call the “Radical Gold Bugs” as to what is happening.

This marketwatch.com item, which I found in a GATA release from yesterday, is a must read, especially towards the end where it talks about gold imports for July in South Korea, Turkey...and China. The link is here.
http://www.marketwatch.com/story/gold-f ... 2012-08-06


Gold Trove Found at Israel Castle Reveals Crusaders’ Forex Moves

Gold coins discovered last month in an ancient crusader castle that lies in what is now Israel provide surprising information on how economic transactions were made about 1,000 years ago.

“The scientific value is unprecedented,” Oren Tal, director of the excavation and chairman of Tel Aviv University’s Department of Archaeology and Ancient Near Eastern Cultures, said in an e-mailed statement. Crusaders “were not afraid to use older coins to complete large transactions and run large- scale businesses,” he added.

The hoard, which contains mostly dinars dating back to the Fatimid Period that predated the crusaders, was discovered in an excavation of the Arsur castle, also known as Apollonia.

The site was a stronghold between the ancient ports of Jaffa and Caesarea and served as a trading center for industrial and agricultural goods from 1241 until its destruction in 1265, when it was attacked by Egyptian Sultan Baybars and conquered after a 40-day siege.

This Bloomberg item was posted on their website late Monday afternoon...and I thank Washington state reader S.A. for sending it. The link is here.
http://www.bloomberg.com/news/2012-08-0 ... moves.html


What a surprise: FT says CFTC to drop silver investigation

A four-year investigation into the possible manipulation of the silver market looks increasingly likely to be dropped after US regulators failed to find enough evidence to support a legal case, according to three people familiar with the situation.

The Commodity Futures Trading Commission announced that it was investigating "complaints of misconduct in the silver market" in September 2008, following a barrage of allegations of manipulation from a group of precious metals investors.

In 2010, Bart Chilton, a CFTC commissioner, said that he believed there had been "fraudulent efforts" to "deviously control" the silver price.

This subscriber-protected story shows up in the Financial Times on Sunday...and it's posted in the clear in this GATA release. I asked Ted Butler what he thought of the story...and he said that "It's clearly a trial balloon designed to gauge reaction." I thank U.K. reader Tariq Khan for being the first person through the door with this...and the link to this absolute must read story is here.
http://www.gata.org/node/11634

There was also a Zero Hedge story on this on Sunday evening that was headlined "Libor May Be Manipulated, But Silver Is Not, CFTC To Conclude"...and I thank Elliot Simon for that item.
http://www.zerohedge.com/news/libor-may ... c-conclude


CFTC's Chilton contradicts Financial Times report on silver probe

Silver Doctors today quotes U.S. Commodity Futures Trading Commission member Bart Chilton as criticizing yesterday's Financial Times story reporting the end of the commission's investigation of the silver market. The FT report, Chilton is quoted as saying, is "premature" and "inaccurate." And Chilton today repeats his belief that there have been improprieties in both the silver and gold markets.

The extensive commentary by Chris Powell, plus the link to the silverdoctors.com story is embedded in this GATA release...and I consider it a must read. The link is here.
http://www.gata.org/node/11638


More support for CFTC Commissioner Chilton's work against market manipulation

More support for U.S. Commodity Futures Trading Commission member Bart Chilton comes from financial writer Christopher Barker, who observes that suspicion of U.S. government manipulation of the gold and silver markets is growing throughout the world. Barker's commentary is headlined "CFTC Commissioner Bart Chilton Comments on the Silver Investigation". It's posted over at the Motley Fool website...and the link is here. It's definitely worth reading.
http://www.fool.com/investing/general/2 ... e-sil.aspx


¤ The Funnies

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¤ The Wrap

The popular adage of democracy being “two wolves and lamb voting on what’s for lunch” is undeniably accurate. A system where one group of people can vote its hands into another’s pockets is not economically sustainable. Democracy’s pitting of individuals against each other leads to moral degeneration and impairs capital accumulation. It is no panacea for the rottenness that follows from centers of power. True human liberty with respect to property rights is the only foundation from which civilization can grow and thrive. - James E. Miller: Editor in Chief, Ludwig von Mises Institute of Canada


The big story this past weekend was that silver story in London's Financial Times on Sunday...and it was interesting to see CFTC Commissioner Bart Chilton's immediate response saying that the story was "premature" and "inaccurate". Not only did Bart say that, but he also reiterated his previous comments about their being nefarious goings-on in the silver [and now gold] market. You have to wonder what is going on behind the scenes in the PM market that us mere mortals don't know anything about. It's a given that something is going on.

Since Ted was prominently named in the FT story, I'm sure he'll have something to say about it in his Wednesday commentary to his paying subscribers...or maybe sooner. And if I know Ted, it will also be something that will be posted in the public domain in rather short order I would think. Ted is correct in saying that it seems strange that since he has been the primary force behind all three CFTC silver investigations, that he hasn't been approached by the CFTC to hear what he has to say. Well, dear reader, there's probably a very good reason for that...and it's because they already know what he's going to say. He's got 'em by the short and curlies...and they know it. So do I...and so do you.

Although I'm not a prophet, I would guess that from hereon in, it will be interesting times for the precious metals...and that the 'summer doldrums' are about to end...with that FT article, and Bart Chilton's comments, being the first shot across the bow.

All we can do at the present moment is pop the top off a cold one and await developments.

Today, at the close of Comex trading, is the cut-off for this Friday's Commitment of Traders Report...along with the monthly Bank Participation Report...and I will comment on both in Saturday's column.

Not much happened in Far East trading during their Tuesday...and volumes were the lowest I can remember...only about 6,000 contracts in gold...and just over 1,000 is silver. Now that London has been open for a couple of hours, both gold and silver have popped a bit...and it remains to be seen how long these rallies last, or are allowed to last. Of course volumes are up as well, but only just. The dollar index isn't doing much.

That's more than enough for today...and I'll see you here tomorrow.
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Three cheers for BS where we pile it higher and deeper!- Bring the Gold
 
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Re: PM News articles, Analysis and Commentaries

Postby silvermotor on Wed Aug 08, 2012 7:36 am

Please follow link for charts, graphs, pictures and links to other articles.

SM

http://www.caseyresearch.com/gsd/home



Russia Today's 'Capital Account' Interviews GATA Secretary/Treasurer Chris Powell

"Could JPMorgan et al engineer a price decline at this juncture. Sure. They can do it anytime they want."


¤ Yesterday in Gold and Silver

Gold didn't do much during the Far East trading session on Tuesday, but a smallish rally began shortly after 3:00 p.m. Hong Kong time around the $1,609 spot price mark. The high of the day [$1,619.50 spot] came minutes before 9:00 a.m. in New York...and from there it got sold off to its low of the day [$1,607.70 spot] at 10:00 a.m. Eastern...the time of the London afternoon gold 'fix'. From that time onwards, it didn't do much.

Once again, net volume was pretty light...around 93,000 contracts...and gold closed at $1,612.30 spot...up the magnificent sum of 70 cents.

Silver began to rally at the same moment as gold...and really took off to the upside about 1:00 p.m. in London...about twenty minutes before the Comex open. Silver's high point of the day, like gold, came about 8:50 a.m...and that price was $28.34 spot Silver got sold off about two bits going into the 5:15 p.m close of electronic trading.

Silver finished the Tuesday session at $28.10 spot...up 22 cents on the day. Gross volume was pretty chunky, but once the roll-overs out of the September contract were removed, the net volume was very light...around 19,000 contracts.

The dollar index didn't do much at the Far East open...but rallied a bit going into the Hong Kong afternoon. The high tick [82.38] came shortly after 3:00 p.m. Hong Kong time...and the low tick [82.07] came about 8:30 a.m. in New York. From that low, the index rallied back and closed at 82.35...virtually unchanged from Monday.

The rallies in both gold and silver coincided perfectly with the moves in the dollar index yesterday.

The gold stocks opened up...and stayed up...and this time there was no last half-hour sell-off going into the close. The HUI finished up 1.38% on the day.

After Monday's big price-run up, the silver shares had another decent day yesterday...and Nick Laird's Silver Sentiment Index closed up another 1.56%.



The CME's Daily Delivery Report showed that 76 gold and 4 silver contracts were posted for delivery on Thursday within the Comex-approved depositories.

There were no reported changes in either GLD or SLV...and no sales report from the U.S. Mint, either.

There was a huge amount of activity in silver for the second day in a row over at the Comex-approved depositories. On Monday they reported receiving 225,034 troy ounces of silver...and they shipped 2,523,686 troy ounces out the door.

On Friday and Monday combined, these five depositories received 3.31 million ounces of silver...and shipped 4.30 million ounces out the door. This is almost two days of world silver production coming in the door...and more than two days of world silver production going out the door. One has to wonder the reason behind this frantic in-out activity that's occurring on a weekly basis. Ted Butler says that in a 'normal' week, it's only about 2 million ounces in and out. So with the week still very young, it will be interesting to see if this level activity continues.

The link to Monday's activity is here...and it's worth a quick look.



It's been a busy week for stories...and today's column is no exception. I hope you have time to skim them all.

¤ Critical Reads

Record Penalties for Fraud, Few Charges for Executives

Pharmaceutical companies, military contractors, banks and other corporations are on track to pay as much as $8 billion this year to resolve charges of defrauding the government, analysts say — a record sum and more than twice the amount assessed last year by the Justice Department.

But while the collections are a boon to the government and taxpayers, they are resurrecting questions about the relative lack of charges against executives at the companies that are getting the stiffest penalties.

“A lot of people on the street, they’re wondering how a company can commit serious violations of securities laws and yet no individuals seem to be involved and no individual responsibility was assessed,” Senator Jack Reed, Democrat of Rhode Island and chairman of a subcommittee that oversees securities regulation, said at a recent hearing.

This story appeared in The New York Times yesterday, but now bears the title "Corporate Fraud Cases Often Spare Individuals". I thank Phil Barlett for sending it...and the link is here.


In the Financial Industry, a Less Scrupulous Class of Lawbreaker

A bailiff calls out names and charges: disorderly conduct, possession of marijuana, violating a park curfew. Men and women shuffle forward, heads hung low, and listen as a prosecutor offers more or less the same deal — whatever time they have already served in a sweaty lockup and a fine.

The judge poses a final question to each defendant: Do you acknowledge guilt?

Do you?

An hour passes, and I hanker for a more ambitious, not to mention less repentant, class of wrongdoer. Enough with the teenage mother who smoked a joint, the jewelry salesman who loitered past midnight in a park or the multiply pierced young woman who stole a ham to pay for a heroin fix.

I board the No. 4 train and ride north to a gorgeous Beaux-Arts building with a mansard roof on the corner of 40th Street and Fifth Avenue. This is the American headquarters for HSBC.

The rest of the story shows that there are two kinds of justice...one for the rich, powerful and 'too big to fail'...and then there's the justice for the rest of us. This story was posted in The New York Times on Monday...and it's Phil Barlett's second offering in a row on this issue. The link is here.


Labour MP John Mann attacks anti-British bias by US regulators in call for money laundering inquiry

Mr. Mann, who is a member of the Treasury Select Committee, said he was concerned about the scale of money laundering, and also about an increasing anti-British bias by US regulators and politicians, which he said was shifting financial markets from London to New York.

In a statement on Tuesday, he said: “I have no truck whatsoever with British banks profiteering from Iran and Burma, nor with US banks profiteering from drug and illegal arms money or the private accounts of world dictators.”

“The British Parliament should instigate an unbiased and far reaching investigation into money laundering in Britain, involving British banks and endangering the well-being of British interests and the British people.”

Standard Chartered has rejected US claims that it “schemed” with Iran to conduct secret transactions worth $250bn (£160bn), insisting that "99.9pc of the transactions" complied with regulations.

This story showed up early yesterday afternoon BST on the telegraph.co.uk Internet site...and I thank Roy Stephens for his first offering in today's column. The link is here.


Americans Chip Away at Credit Card Debt

U.S. consumer credit posted its weakest growth in eight months in June as Americans reduced credit card debt, a potentially negative sign for an economy that has struggled to create jobs.

Consumer credit grew by $6.46 billion in June, the Federal Reserve said on Tuesday. That was well below the $11 billion advance Wall Street economists had forecast in a Reuters poll.

The Fed also said credit climbed slightly less during May than originally thought.

Credit has been expanding since late 2010 as the country recovered from the 2007-2009 recession. The expansion in June, however, was the smallest since October 2011.

This Reuters piece was posted on the CNBC Internet site yesterday afternoon...and I thank West Virginia reader Elliot Simon for sharing it with us. The link is here.


Bank of England to cut growth forecast to zero

The Bank of England will slash its growth forecasts close to zero [today] as the double-dip recession deepens and the eurozone storm closes in on UK shores.

Governor Sir Mervyn King is expected to indicate no growth for 2012 in the Bank's quarterly inflation report, compared with 0.8 per cent predicted three months ago and 2 per cent a year ago.

As the sluggish economy weighs on prices, inflation forecasts are likely to be cut as well, with the consumer price index dipping below the Government's 2 per cent target by the end of the year.

This story showed up on the independent.co.uk website yesterday...and I thank U.K. reader Tariq Khan for bringing it to our attention. The link is here.


Siena's Financial Fiasco: Downfall of a Tuscan Paradise

Monte dei Paschi di Siena, the world's oldest bank, took five centuries to accumulate its wealth -- and three years to gamble it away. Its fall from grace is a disaster for its home city of Siena, which relied on distributed profits from the bank. Now the picturesque Tuscan city is trying to come to terms with the new reality.

The bank's fall from grace can be dated to 2007. It was a time of mergers, and it was widely believed that small banks no longer stood a chance on the global financial markets -- not even a bank like MPS, which has been in business since 1472 and was lending money when Columbus was still learning how to sail.

This 2-page essay was posted on the German Internet site spiegel.de yesterday...and is a very interesting read. I thank Donald Sinclair for being the first person through the door with this story...and the link is here.


Italy sinks deeper into recession as Monti’s problems swell

Italy’s economy contracted by 0.7 per cent in the second quarter, data showed on Tuesday, compounding the difficulties for Mario Monti’s technocrat government as it grapples with a debt crisis that threatens the whole euro zone.

The 0.7 per cent fall in gross domestic product was the fourth consecutive drop for an economy mired in recession since the middle of last year, with the rate of contraction easing only marginally from a 0.8 per cent decline in the first quarter.

Official statistics agency ISTAT reported that GDP was down 2.5 per cent year-on-year after a fall of 1.4 per cent in the first quarter, posting the steepest fall since the end of 2009.

Italy has been the euro zone’s most sluggish economy for more than a decade, fuelling investor concerns about its ability to bring down public debt of around 123 per cent of output.

This Reuters story showed up on the globeandmail.com Internet site yesterday...and I thank Donald Sinclair for finding it. The link is here.


'Les Riches' in France Vow to Leave if 75% Tax Rate is Passed

The call to Vincent Grandil’s Paris law firm began like many others that have rolled in recently. On the line was the well-paid chief executive of one of France’s most profitable companies, and he was feeling nervous.

President François Hollande is vowing to impose a 75 percent tax on the portion of anyone’s income above a million euros ($1.24 million) a year. “Should I be preparing to leave the country?” the executive asked Mr. Grandil.

The lawyer’s counsel: Wait and see. For now, at least.

“We’re getting a lot of calls from high earners who are asking whether they should get out of France,” said Mr. Grandil, a partner at Altexis, which specializes in tax matters for corporations and the wealthy. “Even young, dynamic people pulling in 200,000 euros are wondering whether to remain in a country where making money is not considered a good thing.”

This story was posted on The New York Times website yesterday...and also sports a new headline that reads "Indigestion for ‘les Riches’ in a Plan for Higher Taxes". This is another story courtesy of reader Phil Barlett...and the link is here.


Venetian cunning of Draghi-Monti master plan may save euro for now

So we enter the treacherous market month of August with Europe in limbo. The actors wait upon each other. World finance held hostage to a fiendishly complicated game of diplomatic chess.

The European Central bank will not move until Spain requests a full sovereign rescue from the EU bail-out fund (EFSF), and cedes yet more ground to EU commissars.

Spain in turn will not move until the ECB lays out the exact terms of any deal, and until the Teutonic bloc signals whether it intends to crush Spain into abject humiliation - a la Grecque - or seek a fraternal outcome.

Madrid has no bond auctions in August. It can in theory hold out until October, if it is willing to let contagion spread to the last redoubts of corporate solvency.

Global markets were surprised by Mario Draghi's refusal to deliver instant ECB salvation last week. They should not have been.

This essay by Ambrose Evans-Pritchard was posted on The Telegraph's website late on Sunday evening...and I just didn't have the space for it in Tuesday's column, so here it is now. I thank London reader Iain Doherty for sending it...and the link is here.


Greek exit from euro is 'manageable’ says Jean-Claude Juncker

A Greek departure from the eurozone would be “manageable” said a top Brussels policy-maker, as figures showed that its major economies are in painful slowdown.

Jean-Claude Juncker, the Luxembourg prime minister who leads the eurozone’s finance ministers group, yesterday addressed the prospect of that Greece’s exit from the currency bloc - making it the first country to do so.

“From today’s perspective, it would be manageable but that does not mean it is desirable,” he said. “Because there would be significant risks, especially for ordinary people in Greece.”

Asked if he could rule out a Greek eurozone exit, he said: “At least until the end of the autumn. And after that, too.”

His comments to a German broadcaster will raise expectations that Brussels now is braced for Greece to abandon the shared currency.

This story was posted on the telegraph.co.uk Internet site late yesterday afternoon BST...and I thank Roy Stephens once again. The link is here.


James Kunstler: Here's The Scary Scenario We're Sleeping Walking Into

A great orgasm shuddered through the money world last week when Mario Draghi paused between scamorza con arugula tidbits to remark that the European Central Bank (ECB) would stop at nothing to keep the financial blood of Europe circulating. Of course you wonder how many pony glasses of Campari he knocked back before that whopper came out. The markets squirmed with glee. I suppose it feels good to have quantities of smoke blown up your fluffy.

This is the last month of the Great Pretending over on that lovely continent of exquisitely preserved towns and the corniche winding down to the crashing green sea, and the lunch table under the grape arbor... I mean, compared to, say, the universal slum vista of tilt-up, strip-mall America along the deafening highways, with the wig shops, tattoo dens, pawn shacks, dollar stores, parking lot swap-meets, and supersized citizens waddling through the greasy 100-degree heat of a new climate regime. When things blow, as you may be sure they will, at least the Europeans will sink amid all that loveliness while the American experience will be more like getting flushed down a toilet.

Wow! No shades of grey here. This piece was posted on the businessinsider.com Internet site on Monday afternoon...and is certainly worth reading. The link to this Roy Stephens offering is here.


The Fiat Currency Bubble seals the euro’s fate

Money should always be separated from politics. Germany learned this lesson the hard way, and the Allies wanted to make sure for everyone’s sake that history didn’t repeat.

So when the Allies established in March 1948 the predecessor to the Bundesbank, the Bank deutscher Länder, it was completely independent of all German political bodies and influence. As Wikipedia makes clear: “After the negative experience with a central bank subject to government orders, the principle of an independent central bank was established.” A central bank should be attuned to markets, not government dictates.

The Bank deutscher Länder introduced the Deutsche Mark in June 1948, and so began Germany’s economic miracle. Following the sound money policies of its predecessor, the Bundesbank after its creation in 1957 made the Deutsche Mark one of the world’s most valued currencies. As a result of this achievement, the Bundesbank became the most respected central bank through the end the 20th century. Importantly, the principle aim of the Allies was achieved; politics and money were kept separate.

This short essay by James Turk was posted over at his fgmr.com website yesterday...and is worth reading as well. The link is here.


Five King World News Blogs/Interviews

The first blog is with Jean-Marie Eveillard...and it's headlined "Gold & The Brutal Reality Of The Current Cycle". The second one is with Dr. Stephen Leeb. It's entitled "We're Headed Into Massive Inflation & A Major Gold Spike". Next is this blog with Robert Fitzwilson, founder of The Portola Group. It bears the title "If The World Is Ending, Here Is What Smart Money Is Doing". The first audio interview is with Egon von Greyerz...and the second audio interview is with John Embry.
http://kingworldnews.com/kingworldnews/ ... _News.html


Indian siblings celebrate festival with gold

Instead of the regular sacred thread tied around the brother's wrist, this rakhi festival, consumers opted for gold bracelets and coins to mark the occasion.

The festive occasion of Raksha Bandhan, a thread-tying ceremony between siblings, celebrated in India on August 2, has set the cash registers ringing at jewellery stores across the country. As the country celebrated the festival of Raksha Bandhan, buying and gifting of gold appears to have dominated the changing trends.

Gold retailers recorded a jump in sales ranging from 30% to 70%, with most retailers hoping the jump in sales on one day could make good the losses incurred in the past few months due to a slump in the market.

The old sentiment of buying sweets or gifting chocolate boxes on this day has been replaced by buying gold or silver. ``In most homes, it is now the norm to gift a gold band or bracelet to be tied on the brother's wrist, instead of a traditional rakhi (decorative thread),'' said Nandlalbhai Kedia, of MBS Jewellers.

This story was filed from Mumbai on Monday...and posted on the mineweb.com Internet site...and I thank Donald Sinclair for his last contribution in today's column. It's an educational read...and worth it if you have the time. The link is here.
http://www.mineweb.com/mineweb/view/min ... &pid=92730


Gold "Popular Again" Despite Worries Over Indian Monsoon, But Overall Market "Lacking Conviction"

This is the London gold market report from Ben Traynor over at the Bullion Vault. I don't agree with everything that's in it, but there are a few 'nuggets' that are worth noting. Roy Stephens slid this into my in-box in the wee hours of this morning...and it's his final offering of the day. It's posted over at the goldseek.com Internet site...and the link is here.
http://news.goldseek.com/BullionVault/1344344842.php


Gold rush in India? Government steps in again

The Indian government is at it again. Worried that the flow of savings is moving towards investment in gold, India's Finance Minister P Chidambaram has said there is a need to spread financial literacy to encourage people to invest in market instruments and not bullion.

This was followed by the Prime Minister, Manmohan Singh, laying down policy decisions to direct the shift of investment towards insurance and mutual fund schemes.

In the first two months of 2012, gold purchases in India jumped 35%, impacting investments in other instruments like the stock market, mutual funds and property. The government has said it would prefer savings to be invested in ``more productive assets'' that would help boost the growth rate.

This story was filed from Mumbai earlier today...and is posted over on the mineweb.com Internet site. I thank Donald Sinclair for sending this in the wee hours of this morning as I was doing the final edit on this column. It's a must read...and the link is here.
http://www.mineweb.com/mineweb/view/min ... &pid=92730


Russia Today's 'Capital Account' interviews GATA secretary Chris Powell

Chris was interviewed at surprising length on yesterday's installment of the "Capital Account" program with Lauren Lyster on the Russia Today television network. Video of the program is about 28 minutes long and is posted at youtube.com. Reader André Gouin sent me the clip even before Chris had the chance to dispatch it himself. It's an absolute must watch from one end to the other...and the link is here.
http://www.youtube.com/watch?v=T0jpso4jDC4


¤ The Funnies

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¤ The Wrap

There are no markets anymore...only interventions. - Chris Powell, GATA


Like Monday, I wouldn't read a whole heck of a lot into Tuesday's price action, either. Prices basically followed the dollar index...and it was just "another day off the calendar" as Ted Butler is wont to say.

Yesterday, at the close of Comex trading, was the cut-off for August's Bank Participation Report...and the new Commitment of Traders Report. Just eye-balling the price patterns over the reporting week, I'd say that we'll see an improvement in the Commercial net short position in both gold and silver...but I wouldn't bet a huge amount of money on that.

Could JPMorgan et al engineer a price decline at this juncture. Sure. They can do it anytime they want. They could hit gold for around sixty bucks or so...and silver for a dollar or more. But will they? Don't know. September is a big delivery month for silver...and the roll-overs out of the September contract have just started...and there's no reason to think that they couldn't fix the markets so that all these options/futures contracts close out-of-the-money on or before expiry day.

When they smashed the precious metals last week, they started on Wednesday morning in London...and had the deed done by the time the job numbers came out on Friday morning in New York. There's no reason why they couldn't do it again if that's their plan. We'll just have to wait it out.

Nothing worth mentioning happened in the Far East on their Wednesday...and nothing much is happened in London during the first two hours of their trading day. Volumes continue to be vapours...and the dollar index isn't doing a thing, either. Will the rest of the Wednesday session be just "another day off the calendar"...or something more exciting? We'll find out soon enough.

Enjoy what's left of your day...and I'll see you here tomorrow.
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Three cheers for BS where we pile it higher and deeper!- Bring the Gold
 
Posts: 3188
Joined: Mon Jul 13, 2009 1:23 pm
Location: South Florida

Re: PM News articles, Analysis and Commentaries

Postby silvermotor on Thu Aug 09, 2012 8:13 am

Please follow link for charts, graphs, pictures and links to other articles.

SM

http://www.caseyresearch.com/gsd/home



Marshall Auerback: Get Ready For the Gold Rebound Before it is Too Late

"We seem to be in a holding pattern of sorts...losing ground in the London market...and then gaining it all back in New York, or vice versa."


¤ Yesterday in Gold and Silver

The gold price was under light selling pressure during most of the Far East trading day on Wednesday...and this pressure intensified shortly before 10:00 a.m. in London...and the low of the day...$1,603.40 spot...came about 1:15 p.m. BST...or about five minutes before the 8:20 a.m. Eastern time Comex open.

From that low, the gold price tacked on a quick fifteen bucks by 9:40 a.m. Eastern time, which may or may not have been an early London p.m. gold fix. But from that high tick...which was $1,617.90 spot...either the price got capped, or the buyer disappeared...and the gold price chopped lower into the 5:15 p.m. close of electronic trading in New York.

Net gold volume was ultra-light once again...around 91,000 contracts...and gold closed up 30 cents from Tuesday...and an even dollar from Monday's close. You have to wonder if a trader for JPMorgan et al is winning some sort of prize for getting those three days of closes so close together.

Silver's price pattern was virtually the same as gold's, but with more 'volatility'. The only major difference being the timing of the high tick of the day...which was $28.37 spot. That came around 11:35 a.m. Eastern...almost two hours after gold's high. From that high, silver got sold off more than a percent going into the close. The low tick in New York came right at the New York open...and that was $27.67 spot, so silver had quite a trading range...2.5% to be exact.

Net volume was very light once again...around 23,000 contracts...and silver closed at $28.04 spot, down a nickel from Tuesday.

The dollar index chopped higher in a fairly narrow range...with the high tick of the day [82.77], such as it was, coming at 9:00 a.m. Eastern time right on the button. From that high, the index rolled over...and hit its New York low [82.52] shortly after 11:00 a.m...which was silver's low tick of the day.

From there it rallied a bit until precisely 2:00 p.m. Eastern...and then slid lower in the close, finishing Wednesday just about where it closed on Tuesday...and Monday as well....around the 82.30 mark.

The stocks rose about a percent...and then traded sideways in a narrow range right up until 2:00 p.m. in New York. Then a sell-off began...and the stocks got sold down and the HUI closed the trading day almost on its low...down 0.68%.

With the odd exception, the silver stocks finished down across the board, but not by a whole lot. Bu the stocks that mattered finished higher on the day...and Nick Laird's Silver Sentiment Index close up 0.55%.



The CME's Daily Delivery Report showed that 283 gold and zero silver contracts were posted for delivery in the Comex-approved warehouses on Friday. The biggest short/issuer by far was the Bank of Nova Scotia with 207 contracts...and the two biggest stoppers were HSBC USA and Deutsche Bank with 162 and 92 contracts respectively. The link to yesterday's Issuers and Stoppers Report is here.

There were no reported changes in either GLD or SLV...and no sales report from the U.S. Mint.

The Comex-approved warehouses had more activity to report on Tuesday. They received 209,675 troy ounces of silver...and shipped 654,826 ounces of the stuff out the door.



Happily, I don't have that many stories today...and a lot of the ones I do have are precious metal related, so I hope you at least have time for those.

¤ Critical Reads

High Frequency Traders Are “Parasites” That Erode Investor Confidence: Polcari

It was inevitable. No sooner had word gotten out that Knight Capital had managed to find a way to survive, and the focus of debate has changed to something more sinister. As stupid or careless as Knight's admitted software glitch or mistake was, it would never have happened had it not been for the legion of computer-assisted, high-speed traders who prowl the markets in search of opportunities exactly like this - then pounce. Knight's blunder was their bounty.

Whether you call them high frequency traders, H-F-T's or algos (shorthand for algorithmic or computerized trading programs), by any name they are "parasites" says Kenny Polcari, Managing Director at ICAP.

"When you sit down and look at really what is the role that high frequency traders play, it's frustrating," Polcari says in the attached video. "What are they really here for? They're buying and selling 100 share lots, up and down for pennies all day long."

This 4:53 video, along with the story itself, was posted on the finance.yahoo.com Internet site early on Tuesday morning...and it's well worth watching. I thank West Virginia reader Elliot Simon for sending it...and the link is here.


From Chicago To New York And Back In 8.5 Milliseconds

Back in 2009 when the world wasn't filled with HFT 'experts', we deconstructed the topic of High Frequency Trading on a daily basis, and predicted not only the flash crash, not only debacles such as the Knight trading fiasco, not only the death of capital markets as a fund raising vehicle for companies who wish to go public (i.e. the FaceBook IPO fiasco), but much more.

HFT is so embedded in markets that un-rooting it would result in a complete reboot of "fair" stock valuation: imagine what would happen to stock prices if Knight and its "buy everything" algos were no longer present. Mass hysteria as the realization that vacuum tubes are now TBTF.

This story was posted on Zero Hedge yesterday...and I thank reader U.D. for sharing it with us. The link is here.


Bernanke’s Nightmare Audit Pushed for Romney’s Platform

As they look to their national convention starting in Tampa on Aug. 27, Republicans are considering including a plank in their party platform calling for a full audit of the central bank.

Prodded by the failed primary bid of longtime Fed critic Ron Paul -- and the grassroots enthusiasm the Texas congressman’s cause inspired among bail-out weary Tea Party activists and small government advocates -- Republicans are entertaining a prospect that has long made them and some of their financial supporters cringe.

Paul, in an interview, warned that if Romney’s backers resist the effort, it could result in a politically distracting and messy fight in front of the national media. “It’s good economics and it’s good legislation, but it’s also good politics, because 80 percent of the American people agree with it,” Paul said. If Republican leaders “exclude it, I would think some of my supporters would be annoyed and feel strongly enough to take it to the floor under the rules.”

This Bloomberg story was posted on their website early on Tuesday morning...and I thank Washington state reader S.A. for bringing it to our attention. The link is here.
http://www.bloomberg.com/news/2012-08-0 ... tform.html


Standard Chartered begins fightback on Iran allegations

Cowboy local regulator or the exposer of lax federal bureaucrats?

That's the key question being asked about New York banking regulator Benjamin Lawsky after his explosive charge that London's Standard Chartered bank abetted $250 billion of money-laundering transactions with Iran.

Standard Chartered won help Wednesday from Britain's central bank governor, who portrayed Lawsky as marching to his own tune, and marching out of step with federal regulators in Washington. "One regulator, but not the others, has gone public while the investigation is still going on," the Bank of England's Mervyn King said at a news conference in London.

Meanwhile, the U.S. Treasury Department, in a letter responding to a request for clarification from British authorities, said it takes sanctions violations seriously.

Damage control is in full swing. I'll bet that the powers that be make this story disappear very quickly. This Reuters piece was posted on the finance.yahoo.com Internet site early yesterday evening...and I thank Phil Barlett for digging it up on our behalf. It's certainly worth skimming...and the link is here.


Euro founder admits some nations may be forced to leave

One of the founding fathers of the euro admits that some states may be forced to abandon the single currency, but insists Germany would be better off staying in.

Otmar Issing, a former European Central Bank chief economist, warned that the eurozone could be heading towards fracture in a book called How we save the euro and strengthen Europe published this week .

"Everything speaks in favour of saving the euro area. How many countries will be able to be part of it in the long term remains to be seen," said Mr Issing in the book, which is written as a conversation between an economist and a journalist.

At no point did he explicitly refer to Greece, but the debt-stricken country has been hovering perilously close to default and an exit from the eurozone as it makes harsh spending cuts and tax hikes to appease the EU and ECB after receiving billions in bail-out payments.

This story was posted on the telegraph.co.uk Internet site late Wednesday afternoon BST...and I thank Roy Stephens for his first offering of the day. The link is here.


Printing Money The European Central Bank's Discreet Help for Greece

The European Central Bank is now taking risky measures to help save Athens from its acute financial emergency. Increasingly, euro-zone leaders are pushing the dirty work on the ECB. In the end, though, they will likely have no choice but to pay Greece the next tranche of its bailout package.

"There is no time to lose," Jean-Claude Juncker warned just a few days ago. Leaders must use "all means at their disposal" to save the currency union, the head of the Euro Group said. But one thing is becoming clear: Politicians are increasingly pushing the dirty work on to the European Central Bank (ECB).

Take Greece, for example, where liquidity is becoming scarce. The government in Athens needs to repay a maturing bond worth €3 billion ($3.7 billion) to the ECB by Aug. 20. The solution to that problem seems paradoxical: The ECB itself is pumping money into Greece, so that the country can in turn repay the ECB.

It's a controversial plan, because the central bank is prohibited from financing governments directly. As a result, no one is talking openly about the absurd flows of money. The ECB has only hinted that it will extend a helping hand to Greece.

Nigel Farage was right. You couldn't make this stuff up! This story was posted on the German Internet site spiegel.de yesterday...and is Roy Stephens second offering in a row. It's definitely worth reading...and the link is here.


France heading back towards recession

France is headed back into recession for the second time in three years, its central bank warned Wednesday in a setback for the recovery prospects of the stricken eurozone.

In a downbeat survey of the outlook for Europe's second biggest economy, the Bank of France predicted a 0.1 percent contraction in gross domestic product (GDP) for the third quarter of this year.

If that outcome is confirmed it would follow a similar fall in output for the three months to June and zero growth in the first quarter of 2012.

France is also grappling with a trade deficit running at close to record highs, despite shrinking in the first half of the year.

This AFP story showed up on the france24.com website yesterday...and it's also courtesy of Roy Stephens. The link is here.


John Mauldin: Keep Your Capital Intact

It's a sure sign of economic trouble when even the perma-bulls acknowledge pain is coming down the pike. That is exactly what John Mauldin of Mauldin Economics sees, as he told David Galland in an interview at our Spring Summit, Recovery Reality Check. Watch the video - or read the transcript if that's your preference - to learn why John thinks the period through 2013 is vitally important for the US economy and what he thinks the number-one priority for investors is during that time frame.

This 20-minute video interview was imbedded in yesterday's edition of Casey's Daily Dispatch...and is well worth watching. The link is here.


Three King World News Blogs

The first is with market veteran Richard Russell...and it's headlined "Has a Massive and Historic Bubble Popped?". The second blog is with Citi's Tom Fitzpatrick. It's entitled "Have You Seen These Absolutely Shocking Charts Of Inflation?" And lastly is this one with Peter Schiff. It's headlined "Gold & The Perfect Storm That Will Lead To Collapse".
http://kingworldnews.com/kingworldnews/ ... _News.html


Small change sparks fights in coin-starved Zimbabwe

Shouting matches and even physical fights break out each time a mini-bus pulls up to drop off passengers at a crowded bus stop in downtown Harare. It's all about not getting short-changed.

Hyperinflation forced Zimbabwe to trash its worthless local currency three years ago in a move that brought much needed relief to the crippled economy but created a surprising new headache: a lack of coins.

"Change is a big problem, and at the same time passengers are impatient with us. I have been slapped a few times for not having change for them," said a bus conductor Walter Chakawata.

The US dollar and the rand from neighbouring South Africa are Zimbabwe's main adopted currencies. The dollar, however, is preferred and all prices are pegged to it.

But there is not enough US small change in circulation. The result is that prices are either rounded off -- making goods and services more expensive -- or customers brace themselves for a fight to get their change.

I ran a story about this quite a long time ago, so it seems that nothing has changed in the interim. This AFP story was filed from Harare yesterday...and was posted on the mysinchew.com website. I thank Elliot Simon for finding this story...and the link is here.
http://www.mysinchew.com/node/76322?tid=10


Indian buyers going for smaller gold items

Gold has climbed above the psychological $542.94 (Rs 30,000) mark in India, but with the festive season starting and the marriage season set to kick off later this month, Indian consumers continue to buy gold despite the high price.

Retailers say some consumers are buying smaller items of jewellery and smaller gold rings, as an investment option with the fear that prices will go up further. ``People do make their annual jewellery purchases at this time. There is an innate tendency among many investors to secure investment in times of uncertainty, especially with the stock markets tanking and unattractive interest rates,'' said Madhukar Jha, precious metal and diamond retailer.

"Most buyers fear that prices will go up in the short term and are making small purchases as a hedge at this point. Marriage season will soon be here and the high gold price will not stop purchases,'' said Jha, whose retail outlet has floated a new scheme for equated installments.

Reader Donald Sinclair sent me this mineweb.com story in the wee hours of yesterday morning, but I'd already filed, so it had to wait until today. It was filed from Mumbai early yesterday morning local time...and the link is here.
http://www.mineweb.com/mineweb/view/min ... pid=110649


Whether it's up or down, central banks are manipulating markets in secret

This rather large GATA release contains lots of links regarding gold...and the quiet plans that the world's central banks may have for it. There are links to commentaries from the likes of Izabella Kaminska, the brilliant financial writer and researcher at FT Alphaville, Peter Millar, Jim Rickards...and others.

How absurd and tragic that journalists, when compelled, usually resentfully, to report about gold, seek interviews with investment house analysts and newsletter writers but never, ever with the primary sources, central banks themselves. That the central banks wouldn't say anything -- that they have to be sued for such basic information -- is no excuse, for such unaccountability itself then becomes the story.

Of course it's not just journalism that is at fault; it is also entire political systems. Elected agencies of government may decide every trivial question but the valuation of all currency, capital, labor, goods, and services in the world is left to be determined in secret by a few dozen people, as if this is the natural order of things.

It is not. It is the destruction of democracy.

GATA's secretary/treasurer Chris Powell has lots more to say in the extensive preamble to this essay...and it's a must read. It's posted over at the gata.org Internet site...and the link is here.
http://www.gata.org/node/11645


Centennial's Peter Grant: Gold technicals portend impending breakout

Another well-charted forecast of a gold price breakout comes from Peter Grant, market analyst for Centennial Precious Metals in Denver, whose special report, "Gold Technicals Portend Impending Breakout," is posted at Centennial's Internet site, USAGold.com.

I found this item posted in a GATA release from early this morning...and I thank Chris Powell for the headline and the introductory paragraph. The essay has some most excellent charts...and the entire piece is worth the read...and the link is here.
http://www.usagold.com/publications/2012augsp.html


Gold will hit new highs in 2013 and beyond - Blanchard

In seven of the past 10 years, gold has seen double digit percentage growth between end July and December. Blanchard analysts see this happening again this year and are looking for new price records ahead.

The price pattern of late has also suggested the market is poised for an uplift with strong resistance from falls seen in the upper $1500s. Gold has fallen back several times now on disappointments - notably from Bernanke, the Fed and most recently Mario Draghi - none of whom have actually committed to the anticipated additional monetary easing. But on each successive occasion the fall back has been less and the most recent time gold only fell below the $1600 level for a couple of days - and that following the double whammy of immediately consecutive disappointments from the FOMC and Draghi.

With the potential for a $2,300 price tag - the equivalent of the 1980 record high for gold - $1,600 still represents a good value entry point with strong potential upside, Doyle says, particularly as the strong seasonal investment period just has begun.

Gold aficionados will hope he is correct.

This is another story that was posted over at the mineweb.co.za website on Tuesday...and I dug it up all by myself. The author of the piece is Mineweb's General Manager and Editorial Director, Lawrence [Lawrie] Williams...and the link is here.
http://www.mineweb.co.za/mineweb/view/m ... pid=102055


Marshall Auerback: Get Ready for the Gold Rebound Before It Is Too Late

While timing exactly when the rebound will happen is impossible, Marshall Auerback, director of Pinetree Capital, believes now is the time to pay the gold market renewed attention. In this exclusive Gold Report interview, he explains why the gold market is more interesting than in the recent past and shares what he would do if he were chairman of the Federal Reserve.

You don't get much gold-related information out of Marshall...and if there is, it never shows up on the Internet anywhere. I consider this interview a must read for sure. It was posted over at theaureport.com website site yesterday...and the link is here.
http://www.theaureport.com/pub/na/14066 ... 2015:01:42


¤ The Funnies

Image
Image

¤ The Wrap

With volumes as low as they were yesterday, I'm not prepared to read a lot into what happened in gold and silver during the New York trading session, although it was rather mysterious to see the rallies in both gold and silver come to a screaming halt before they got much above their Tuesday close. These rallies only involved gold and silver. Both platinum and palladium were unaffected.

As I've mentioned on several occasions over the summer, we seem to be in a holding pattern of sorts...losing ground in the London market...and then gaining it all back in New York, or vice versa. Sort of two steps back and then two steps forward...and any semi-serious gains are conveniently sold off after the high tick of the day is in, in New York. I wouldn't have to use more than half the fingers on one hand [not including my thumb] to count the number of times that either gold or silver have closed on their high tick of the day in the New York Access Market this year, as it just ain't allowed to happen.

As per usual, there was no price activity in either silver or gold during the Far East trading session on their Thursday...and little is happening now that London has been open a couple of hours. Volumes, once again, are vanishingly small...and the dollar index is comatose.

The "dog days" of summer are such a pain when you're waiting for events to unfold. I think I'll pour myself a glass of wine...and then change the batteries in my belly button lint brush.

See you on Friday.
Image
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Re: PM News articles, Analysis and Commentaries

Postby silvermotor on Thu Aug 09, 2012 8:16 pm

http://www.silverseek.com/commentary/cf ... estigation



The CFTC Silver Investigation
Theodore Butler

August 9, 2012 - 9:30am

There has been an explosion of interest and commentary these past few days as a result of a front page story in Monday’s edition of the influential Financial Times (of London). The story stated that the CFTC was set to drop its four year investigation into alleged silver price manipulation due to insufficient evidence to bring charges, according to three unnamed sources. I went to sleep Sunday evening when the story first appeared prepared to wake up to similar and confirming stories in other publications. Instead, there were no other stories confirming the case was set to be dropped; only strong statements that the FT was story was “premature” and “inaccurate in many respects” by a named source, Commissioner Bart Chilton of the agency.

The CFTC’s silver investigation is a hot button issue and the FT story, as well as Commissioner Chilton’s response to it, set off an outpouring of emotion and conjecture in the precious metals world. And for good reason, as this is an extremely important issue. There can be no greater concern than whether a market is manipulated in price. The issue of a silver manipulation is also a divisive matter, even within the CFTC itself; otherwise there likely wouldn’t have been leaks that the investigation was over and the immediate response of not so fast. As is usually the case with extremely divisive issues (like politics and elections), emotions take hold and the real issues can get distorted.

Let me try to frame the picture in an unemotional manner. Admittedly, that’s no easy task since I was the prime initiator behind this silver investigation and the two prior CFTC silver investigations in 2004 and 2008. (Too bad there’s no Olympic event for initiating government investigations). However, the truth is that four years ago I was not trying to get the Commission to investigate, as they had just completed a few months earlier, in May 2008, their second silver investigation in four years. By then, I knew where the Commission stood on whether silver was manipulated and it was pointless to ask them to investigate again. I had a different motive in mind when I urged readers to write to the CFTC about the now-infamous Bank Participation Report of August 2008. That was the report that showed that one or two US banks held an obscenely large and concentrated short position in COMEX silver futures that amounted to 20% of world production and 30% of the entire COMEX silver market. No major market had ever been that concentrated. I knew that this short position was so concentrated that, in and of itself, it proved silver was manipulated because the price would be radically higher in its absence. That is always the litmus test for manipulation, namely, what would the price most likely be if a concentrated position did not exist?

As a result of the August 2008 Bank Participation Report and subsequent CFTC correspondence to US lawmakers, I also learned at that time that JPMorgan was the big silver short, as I speculated on in this article. http://www.investmentrarities.com/ted_b ... 02-08.html This is when and where the precious metals world came to learn that the big silver short was JPMorgan.

I asked readers to write to the CFTC not to investigate silver anew, but for the agency to simply explain how a big bank holding such a large percentage of the market would not be manipulation. This is a question that the Commission should have answered immediately since it was so basic to commodity law. The last thing I intended was for the agency to embark on a multi-year phony investigation as a delaying tactic for not being able to answer a basic regulatory question. Because the Commission could not explain the legitimacy of JPMorgan’s concentrated short position, they continued to drag out resolution by pretending to investigate. But four years is an extraordinarily long time for any government investigation, phony or otherwise, and it appears that the CFTC has to confront the issue soon; hence the FT article.

While the FT article was disappointing (at least it mentioned my name in a non-derogatory manner) and Chilton’s response was encouraging, the reality is that it is unlikely that the investigation will be resolved much differently than the version leaked to the paper. For one thing, nobody likes admitting they had royally screwed up and if the Commission were to bring manipulation charges now in silver, it would be admitting that it missed the wrongdoing for the previous two decades, despite continuous and documented warnings from 1986. How likely is that?

More importantly, were the agency to charge JPMorgan with manipulation of the silver price (as it should) that could set off a series of events that could easily grow out of control. One thing that makes the silver manipulation so potentially profound is that the core allegation is of a crime in progress. The CFTC has never busted up a manipulation that was in force; like most government agencies, it only reacts after the fact. Don’t take that solely as a complaint, but more as an observation that governments are more reactive than proactive. Because the silver manipulation is very much in force, were it to be terminated by CFTC actions against JPMorgan and/or others, it would be a “live” event for the first time. History shows that all manipulations end violently. In the case of silver, since it has been depressed in price by a downward manipulation, its termination would necessarily cause prices to explode higher. Any charge brought by the CFTC would send a clear signal to the world that silver had been depressed in price and was undervalued and, therefore, should be purchased. This would cause a flood of buying and discourage new selling, causing the price to truly explode, most likely in disorderly market conditions. Do you find it likely that the CFTC would wish to cause that disorderly pricing that could lead to further unsettled conditions in other markets?

If JPMorgan (and perhaps the CME Group) were found to be the main culprits in the silver manipulation and the CFTC brought charges against them, the repercussions to JPM and the CME could be a threat to them as going concerns. It was never a case that JPMorgan couldn’t financially afford to buy back its concentrated silver short position; it was always a case that should JPM ever move to buy back aggressively to the upside that would prove conclusively that it had been manipulating the price of silver all along. That would set JPMorgan (and the CME) up for a legal holocaust, both civil and criminal. There has been talk of a civil litigation nightmare for those banks deemed guilty in the developing Libor manipulation; but determining damages will be difficult because the Libor rates were allegedly manipulated both up and down, making the damages unclear and hard to prove. Were there to be findings of a downward manipulation in silver, those damaged, from investors to producing companies and countries could easily demonstrate the damage. Back in the Hunt Bros silver manipulation of 1980, one of the successful litigants was Minpeco, the government producer organization from Peru, who I remember collected more than $100 million. That would be chicken feed compared to the consequences of the much longer downward silver manipulation of today by JPMorgan. And this says nothing of potential criminal liability.

JPMorgan is perhaps the most important and influential US bank and for the CFTC to move against them in a matter as important as basic market manipulation could lead to unintended consequences that could threaten the world’s financial system. Do you think the CFTC would dare challenge the supremacy of JPMorgan considering that potential financial fall-out? Besides, as I have written previously, JPMorgan is too big to sue, at least matched up against the CFTC. The matter of the bank manipulating any market is something that JPMorgan would defend against to the death, as for it to be found guilty could possibly end the bank in its current form. JPMorgan would certainly spend $5 billion (only one quarter’s net profits) to fight any charges in connection with a silver manipulation and, at a minimum, delay a legal resolution for decades. On the other hand, the CFTC is struggling to fund the whole agency on $200 to $300 million annually. This is most likely the reason behind the leak to the FT about the silver investigation being dropped, namely, the CFTC is no match for JPMorgan and the agency knows it. This has nothing to do with law, or justice, or doing what is right; it is simply a case that the crooks at JPMorgan (and the CME) can bully anyone they chose, including the US Government. The most plausible alternative explanation, of course, is that the Treasury Dept ordered the CFTC to keep its hands off JPMorgan. Either way, it stinks.

The truth is that the silver investigation was a ruse from the start in that the CFTC could never have moved against JPMorgan or the CME in any circumstance. The proof of that is evident in the many other specific instances of price manipulation in silver that have occurred after the soon to be dropped investigation began. The most obvious instances were the two separate 30% and 35% price smashes in a matter of days that occurred in silver in 2011. There never were such blatant price declines in such a short time in any world commodity in history, to say nothing about there being no obvious supply/demand changes to account for the declines.

In other words, the CFTC started their third silver investigation four years ago as a way of avoiding having to explain how JPMorgan could be allowed to hold a clearly manipulative concentrated short position and then ignored the two greatest manipulative price events in commodity market history while the phony silver investigation was under way. Think of how devious and dishonest the CFTC has been; it announces a formal silver investigation to avoid having to answer bedrock regulatory questions, then ignores the two most manipulative prices events in history claiming it can’t comment on them because there is an active investigation under way. If government officials could ever be horse-whipped for malfeasance and for failing to protect the public interest, surely the CFTC’s performance in silver would permit it.

I realize that what I have written to this point paints a picture that is not optimistic for the resolution of the silver investigation that most would favor. I am sorry about that, but I try to be an analyst and not an entertainer. That said I’d like to spend some time explaining why the outcome of a dropped case may not matter much and that the net result is good for silver. More than anything, this FT leak was likely a trial balloon for the CFTC to gauge public reaction to it dropping the case. If so, the reaction couldn’t be clearer; even I was taken aback by the near universal condemnation of the agency for proposing to drop the case. I think what got to people the most was the suggestion that the agency would walk away without bothering to explain the concentration and the two historic price drops of 2011, to say nothing of the almost daily beatings in silver as a result of crooked High Frequency Trading. If anything, the FT article may have given legs to the silver manipulation allegations.

While it was a mainstream media publication that leaked the story, the silver manipulation is surely not a mainstream media issue. The silver story is an Internet and private publication issue that grew despite being ignored in the mainstream media. As such, any declaration that the matter is now closed will not close it anywhere outside the MSM, where it was never accepted to begin with. It’s not just that the silver manipulation was never accepted by the MSM, it was more a case of it never being allowed to be openly discussed. But legitimate questions of undue market concentration and historic and unjustified silver price movements are matters worthy of transparent examination that MSM censorship has been unable to stifle.

Not only is the matter not going away, the leak to drop the case may bring greater attention to it. Such attention could prove to be the death knell for the silver manipulation, as the last thing the silver manipulators want or need is a fully transparent examination of the facts. One of my longest held beliefs has been that as time rolls on more would become aware of the real silver story and once they did, more investment demand in silver would result. That has occurred and any new attention brought to silver as a result of a dropped investigation will likely accelerate the process. The truly amazing thing is in how slowly the real silver story has spread in the ranks of super big investors. Aside from Eric Sprott, very large investors have overlooked the silver story completely. I am as certain as I can be that these very large investors just haven’t taken the time to look objectively at silver. I think it’s a case of silver being such a universally known item that most people assume they already know all the facts because they know what silver is. This includes very large investors who, in addition, may actually be turned off that so many smaller investors have invested in silver. It’s a common human failing to dismiss something because others thought to be less knowledgeable got there first. In the long run, however, very large investors are more concerned with superior returns, so the key is getting them to look at silver objectively. The dropping of the silver manipulation may be that key.

Perhaps the most amazing thing of all, at least to me, is the glaring fact that even after four years of non-stop public allegations about involvement in the silver manipulation, JPMorgan still remains the big short. It is hard for me to comprehend how such a large and powerful financial organization (as well as the CME) could silently tolerate the obvious reputational damage which is accruing. While JPMorgan’s short COMEX silver position is in the lower range of what it has been since the Bear Stearns takeover of March 2008, it remains shockingly large and concentrated. After last week’s big increase of 3000 contracts, JPM’s short position, at 18,000 contracts (90 million oz), is still more than three and a half times the proposed position limit in silver.

The most plausible explanation for why JPMorgan has not rid itself completely of this manipulative short position is because it can’t do so easily. This is particularly true if JPMorgan tried to buy back its silver short position on rising prices. It would be a shock to the silver market system if the biggest short seller of last resort suddenly turned buyer. In essence, this is the root problem with concentrated positions in general – they cannot be unwound without market upheaval. For JPMorgan to turn to the silver buy side would beg the question – who would sell to them and at what price? The problem with the sharply higher silver prices that JPMorgan would cause if it turned silver buyer is that it would confirm that the bank was, in fact, manipulating the price of silver all along. To my mind, this means JPMorgan is trapped. They can’t run and they can’t hide. This is precisely the conclusion that any large investor would reach if that investor took the time to study silver closely. I can’t see how that won’t happen in time and a more bullish set up is hard to imagine.

Of course, I would be the happiest guy in the world to be proven wrong about what the CFTC will do with the ongoing silver investigation. But the potential of the likely greater exposure of the real issues in silver that a dropped investigation would bring is plenty good. With silver, it’s always been about getting people to learn the real facts.

Ted Butler

August 8, 2012

For subscription info, please go to http://www.butlerresearch.com
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Re: PM News articles, Analysis and Commentaries

Postby silvermotor on Thu Aug 09, 2012 8:19 pm

http://www.bloomberg.com/news/2012-08-0 ... mulus.html


Gold Bulls Strengthen on Outlook for Additional Stimulus
By Nicholas Larkin - Aug 9, 2012 7:01 PM ET


Gold traders are the most bullish in five weeks as investors expanded their bullion holdings near a record on mounting speculation that central banks will have to do more to bolster economic growth.

Fifteen of 30 analysts surveyed by Bloomberg said they expect prices to rise next week and eight were bearish. A further seven were neutral, making the proportion of bulls the highest since July 6. Investors bought about $850 million of gold through exchange-traded products this month, taking the total of 2,411.7 metric tons to within 0.1 percent of the all- time high set July 5, data compiled by Bloomberg show.

China’s industrial-production growth weakened in July and U.S. and European manufacturing contracted. The Federal Reserve pledged to do more if needed on Aug. 1 and the European Central Bank promised last month to do “whatever it takes” to preserve the euro. Lower interest rates increase the allure of gold, which generally earns investors returns only through price gains. Bullion rose 70 percent as the Fed bought $2.3 trillion of debt in two rounds of quantitative easing through June 2011.

“More stimulus or money printing is almost certain given the levels of debt out there which is slowing down economic growth,” said Mark O’Byrne, the executive director of Dublin- based GoldCore Ltd., a brokerage that sells and stores everything from quarter-ounce British Sovereigns to 400-ounce bars. “That should be supportive of gold prices.”

Gold’s Rally

Gold rose 3.2 percent to $1,617.40 an ounce on the Comex in New York this year, extending 11 consecutive annual gains. That compares with a 2.6 percent gain in the Standard & Poor’s GSCI gauge of 24 commodities and a 7.9 percent advance in the MSCI All-Country World Index of equities. Treasuries returned 1.9 percent, a Bank of America Corp. index shows.

The 16.3 tons purchased through ETPs this month increased the value of total holdings to about $125.4 billion. Investors bought 55 tons since the start of January. Buying should reach 250 tons this year and 150 tons in 2013, Barclays Plc predicts.

U.S. manufacturing unexpectedly contracted in July for a second month, the Institute for Supply Management’s factory index showed Aug. 1. The Fed has held interest rates at a record low since 2008. Boston Fed President Eric Rosengren said in an Aug. 7 interview with CNBC that the central bank should pursue an “open-ended” easing program of “substantial magnitude.”

Growth Forecast

The International Monetary Fund cut its 2013 global growth forecast to 3.9 percent on July 16, from an April projection of 4.1 percent, citing Europe’s debt crisis. The euro-area’s economy will contract 0.3 percent this year, from a previous estimate of 0.2 percent, according to an ECB economist survey published in the central bank’s monthly bulletin yesterday.

Some investors have favored the dollar and government bonds as a store of value instead of gold. The U.S. Dollar Index, a measure against six major trading partners, reached a two-year high July 24. The 30-week correlation coefficient between the dollar and bullion is at -0.61, from -0.24 in September, with a figure of -1 meaning the two move inversely. Germany, the U.K. and France sold debt at the lowest yields ever in July.

Hedge funds cut bets on higher prices by 51 percent in the past five months, U.S. Commodity Futures Trading Commission data show. While the net-long position rose 35 percent in the week ended July 31, it is still near the lowest since 2008. Volumes traded on the Comex slipped to a 17-month low in July, bourse data show. Open interest, or contracts outstanding, tumbled 26 percent since September, when gold reached a record $1,923.70.

Coin Demand

Demand for gold coins is weakening, with sales of American Eagles by the U.S. Mint dropping 49 percent to 30,500 ounces last month, the lowest since April. The mint sold 4,000 ounces so far in August, data on its website show.

While gold is still trading 16 percent below the September record, it has averaged about $1,643 this year. Should that be sustained through the end of December, it would be the most ever. Goldman Sachs Group Inc. is predicting a price of $1,785 in three months.

In other commodities, 12 of 33 traders and analysts surveyed by Bloomberg expect copper to rise next week and the same amount predicted a drop. The metal for delivery in three months, the London Metal Exchange’s benchmark contract, fell 0.6 percent to $7,555.50 a ton this year.

Seven of 13 people surveyed said raw sugar will climb next week and six predicted declines. The commodity slipped 10 percent to 20.89 cents a pound since the start of January on ICE Futures U.S. in New York.

Food Prices

World food prices surged the most since 2009 in July as droughts damaged crops from the U.S. to Russia, according to a United Nations’ Food & Agriculture Organization index. (MXWD) Drought covers almost 63 percent of the contiguous U.S., which suffered the hottest month on record in July, the National Oceanic and Atmospheric Administration said Aug. 8.

Seventeen of 31 people surveyed anticipate higher corn prices next week and eight were neutral, while 15 of 32 said soybeans will increase and eight predicted little change. Corn jumped 28 percent to $8.25 a bushel in Chicago this year after reaching a record $8.2975 yesterday. Soybeans set an all-time high July 23 and are up 33 percent this year at $16.11 a bushel.

“More quantitative easing will be certainly beneficial to commodities,” said Colin O’Shea, the head of commodities at Hermes Investment Management Ltd. in London, which manages about $2 billion of raw-material assets. “Do you need more QE to drive the market higher? Probably not. The demand side of the equation has been pretty robust.”

Gold survey results: Bullish: 15 Bearish: 8 Hold: 7
Copper survey results: Bullish: 12 Bearish: 12 Hold: 9
Corn survey results: Bullish: 17 Bearish: 6 Hold: 8
Soybean survey results: Bullish: 15 Bearish: 9 Hold: 8
Raw sugar survey results: Bullish: 7 Bearish: 6 Hold: 0
White sugar survey results: Bullish: 7 Bearish: 5 Hold: 1
White sugar premium results: Widen: 3 Narrow: 8 Neutral: 2

To contact the reporter on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net
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Re: PM News articles, Analysis and Commentaries

Postby silvermotor on Thu Aug 09, 2012 8:21 pm

http://www.mineweb.com/mineweb/view/min ... &sn=Detail


Gold rush in China could see it sweep past India

With inflation hitting a 2.6 year low and the central bank eager to do more to stimulate the economy. Gold buying is growing in China and its gold producers are getting in on the act


Author: Shivom Seth
Posted: Thursday , 09 Aug 2012

MUMBAI (MINEWEB) -

China may have overtaken India as the world's top consumer of gold in the first quarter of 2012, but the country is not resting on its laurels. By buying gold mines, and accumulating the produced gold before it hits the international market, China is able to purchase gold below the spot gold price.

In the first successful example of a Chinese company taking over a large-sized gold mine that is in production, Zijin Mining Group Co, China's top gold producer by output, said a subsidiary has bought more than 50% of Australia-listed Norton Gold Fields.

Jinyu International Mining, the fully owned subsidiary of Zijin Group, made a $190 million cash takeover offer in May for the Australian gold mine and then set about obtaining approval from Australian regulators.

In a statement, the company said the acquisition was in line with its international development strategies. Last month, news agencies in China announced that the company had received a notice from Australia's Foreign Investment Review Board that it had no objections to the purchase by Zijin or its subsidiaries of all issued shares of Norton Gold.

Zijing has also obtained approval for the deal from China's National Development and Reform Commission, which is one of the country's top regulatory bodies.

Zijin already holds 16.98% of Norton Gold Fields, which has mining rights covering an area of 693 square kilometers with total gold reserves of 185 tonnes. Last year, it produced 4.7 tonnes of gold.

From its open cut and underground operations at Paddington, near Kalgoorlie in Western Australia, Norton reportedly produced 152,000 ounces of gold. Recently, it added two new mining operations, the Homestead underground mine and the Navajo Chief open cut, to supply ore to its processing facility.

Zijin, which is listed in Shanghai and Hong Kong, has a market capitalisation of over $12 billion and has interests across commodities including gold, copper, zinc, lead, tungsten and iron ore. The company is likely to refine 50 metric tonnes of gold in 2012.

In 2011, Zijin bought 60% of Kazakhstan-based miner Altynken, which has access to a gold mine in Kyrgyzstan.

Not all have been success stories though. Zijin shelved a proposed $545 million offer for Australia-based Indophil Resources, following delays in approval from the Chinese government.

On its part, Zijin has moved the country a step closer to cementing its position in the world market as a top consumer. Though China and India together make up about 54% of the world's gold purchases, the latter has long been number one. The dynamics are set to change this year.

While gold demand in China is set to jump by as much as 30%, to between 900 and 1,000 metric tons in 2012 from 769.8 metric tonnes last year, India's usage may fall to 700 to 800 metric tonnes, from 933.4 metric tonnes.

In the first three months, demand in China totalled a record 255.2 tonnes as compared to 232.5 tonnes a year ago. China actually replaced India as the world's top gold consumer at the end of 2011.

In the first 2 quarters of 2012, China's gold inflows from Hong Kong also increased six times. China's gold imports from Hong Kong were 65% higher in April than March, the third consecutive monthly rise according to Commerzbank.

Data also suggests China's new rich are turning to gold to protect their wealth amidst worries over property market curbs. Though China's inflation dipped to a 30-month low in July, as reported on August 9, inflation has slowed dramatically, freeing China's central bank to do more to stimulate the economy. Gold buying is clearly set to surge in the Asian country.
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Re: PM News articles, Analysis and Commentaries

Postby silvermotor on Fri Aug 10, 2012 8:00 am

Please follow link for charts, graphs, pictures and links to other articles.

SM

http://www.caseyresearch.com/gsd/home



Ted Butler: JPMorgan is Screwed Even if CFTC Drops Silver Investigation

"Like it has been all week, you can't read too much into this price activity when volume is this light."


¤ Yesterday in Gold and Silver

It was another basically 'nothing' day in the gold market on Planet Earth on Thursday. But, like Wednesday, gold hit its low of the day just a few minutes before the Comex open in New York.

From there, the gold price rallied...if you want to dignify it with that name... right up until a few minutes before the Comex close. The high tick of the day, around 1:25 p.m. Eastern time, was $1,619.50 spot...up about twenty bucks off its 8:00 a.m. Eastern time low. From there it traded sideways into the 5:15 p.m. electronic close.

Net volume was pitiful once again...around 75,000 contracts...and gold closed the trading day at $1,617.00 spot...up $4.40.

It was pretty much the same price path for silver, except the high print [$28.31 spot] on the silver price came just a few minutes before 11:00 a.m. in New York, which was just a few minutes before London closed for the day at 4:00 p.m. BST.

And also like Tuesday, the silver price got sold off about two bits into the close of electronic trading in New York.

Silver closed the Thursday session at $28.14 spot...up a dime...gaining back Wednesday's loss and more! I'm underwhelmed. Net volume was a microscopic 16,000 contracts, give or take.

Platinum and palladium were obviously trading on another planet yesterday, as there are almost no signs of these shenanigans in their respective price charts, which are here...and here. Thursday's price action is the red trace.

The dollar index opened around 82.30 in Far East trading...and hit its low around 1:00 p.m. Hong Kong time. From that point a rally worthy of the name developed...and that hit its zenith at the 82.79 mark about 11:40 a.m. in New York. After that it got sold down to, and closed at, the 82.60 mark.

Just eye-balling the gold and silver charts above, it would certainly be hard to make a case that the activity of the dollar index had much of a bearing on what was happening in any of the four precious metal markets yesterday...especially during the New York session.

The gold shares sold off a hair at the open, but found their feet about fifteen minutes later...and by shortly after 11:00 a.m. Eastern, the stocks had pretty much hit their highs of the day...and only sold off a bit in the last half hour of trading. The HUI finished up 1.37%.

With the odd exception, the silver equities had a very decent day as well...and Nick Laird's Silver Sentiment Index closed up 1.81%.



For the second day in a row, there was a pretty decent Daily Delivery Report from the CME. They reported that 269 gold contracts were posted for delivery within the Comex-approved depositories on Monday. The two biggest short/issuers were the Bank of Nova Scotia and JPMorgan out of its client account...with 180 and 88 contracts respectively. The big long/stoppers were HSBC USA and Deutsche Bank with 155 and 88 contracts respectively. One lonely silver contract was also posted for delivery at the same time.

For the second day in a row there were no reported changes in either GLD or SLV...and for the third day in a row there was no sales report from the U.S. Mint.

On Wednesday, the Comex-approved depositories reported receiving 168,218 troy ounces of silver...and didn't ship any out. The link to what little action there was, is here.



I have the usual number of stories again today...and a lot of them are worth reading. But, as always, the final edit is up to you.

¤ Critical Reads

U.S. Will Not Press Criminal Charges Against Goldman Sachs

Neither Goldman Sachs Group Inc. nor its employees will face U.S. criminal charges related to trades they made during the financial crisis that were highlighted in a 2011 U.S. Senate report, the Justice Department said on Thursday.

The unusual announcement not to prosecute criminally came in an unsigned statement attributed to the department.

Few expected the bank to face criminal charges, but in April 2011, U.S. Senator Carl Levin asked for a criminal investigation after the subcommittee he leads spent years looking into Goldman.

Levin's subcommittee held televised hearings as part of its inquiry, which centered on a subprime mortgage product known as Abacus. He said Goldman misled Congress and investors.

As everyone knows already. There are two kind of laws...one for the rich and powerful...and one for the rest of us. The story was posted on the foxbusiness.com Internet site late yesterday...and I thank California reader Ron Hanna for sending it. The link is here.


A Common-Sense View of the Stock Market

Common sense leads us to the "obvious" conclusion that the U.S. stock market is a rigged skimming operation that is essentially a form of legalized, officially sanctioned fraud.

As regular folks continue to pull their money out of the market, either tiring of losses and volatility or recognizing it is rigged to their disadvantage, trading volumes have declined, making official but "secret" intervention both cheaper and easier.

Just as the U.S. stock market now depends on high-frequency trading, it also depends on official intervention to stop any decline.

How is it legal for HFT computers to skim profits that are unavailable to human traders? Clearly, this is legalized fraud, or if you prefer, embezzlement.

This excellent article by Charles Hugh Smith was posted on this oftwominds.com Internet site yesterday...and it's certainly worth the read. I thank reader U.D. for bringing it to our attention...and the link is here.


Treasury used secretive Exchange Stabilization Fund cash to insure money-market funds

Details about a secretive government program to bail out money-market mutual funds are finally coming to light.

Acting without any explicit congressional authority, the U.S. Treasury guaranteed in excess of $2.4 trillion of money market funds after the giant Reserve Primary Fund "broke the buck" following the bankruptcy of Lehman Brothers. The program, which ended on Sept. 18, 2009, seems to have prevented a panicked run by money-market fund investors.

But until now the Treasury has kept the identities of the funds that received government backing and the amounts guaranteed secret. It was not clear how many funds obtained backing or for how much taxpayers were on the hook during the program's duration.

The data from the Treasury show that taxpayers were backing in excess of $2.4 trillion through the mutual fund program. Hundreds of funds participated in the program, amounting to almost 99 percent of the total money-market mutual fund assets.

This story showed up on CNBC's website early yesterday morning...and I thank Scott Pluschau for being the first one through the door with it. The link is here.


Used Vehicle Prices Plunge Signaling End Of Auto Party

As channel-stuffing shifted from the US to China and Europe, so the new vehicle sales data has disconnected from a number of realities. Whether it is economic growth or Ford's share price, things look a little over-cooked in the land of if-we-build-it-the-government-will-buy-'em.

However, there is one index that tends to see through all the unreality much more clearly than our analysis above, that is the Used Vehicle Price index. Each time this index has dropped and broken below its two-year average, the auto industry has tended to fade rapidly.

This very short Zero Hedge article contains an extraordinary graph...and is well worth the 1-minute of your life it will take to read this. I thank Casey Research's own David Galland for sending it around to the Casey Research Discussion Group yesterday...and the link is here.


Horrible News for Bond Investors

That "hissing" sound you hear is the air leaking out of the bond market bubble.

No one seems to notice – or, rather, no one seems to care – that interest rates have spiked over the past two weeks...

The yield on the 10-year Treasury note bottomed at an historic low rate of 1.4% two weeks ago. Yesterday, it closed at 1.62%. That's a 15% increase in borrowing costs. And it likely signals an intermediate reversal in the direction of interest rates.

This short read [with an excellent graph] was written by Jeff Clark over at Stansberry & Associates...and was posted on their growthstockwire.com website yesterday. I thank Nitin Agrawal for sending it along...and it's definitely worth running through. The link is here.


In Laundering Case, a Lax Banking Law Obscured Money Flow

The list of global banks that have been accused in recent years of laundering foreign transactions totaling billions of dollars has been growing — Credit Suisse, Lloyds, Barclays, ING, HSBC — and now Standard Chartered.

The details in each case are different, with the international banks suspected of using their American subsidiaries to process tainted money for clients that included Iran, Cuba, North Korea, sponsors of terrorist groups and drug cartels.

What the cases have in common is that the accused banks took advantage of a law that was not changed until 2008 and that allowed banks to disguise client identities and move their money offshore. The cases, including one filed this week by New York’s banking regulator against Standard Chartered, also cast a harsh light on just how much activity with Iran was permitted in the years leading up to 2008 and whether the practices had violated the spirit, if not the letter, of the law.

This very interesting read was posted on The New York Times Internet site on Wednesday...and I thank Phil Barlett for finding it for us. The link is here.


In London, Censure of an Elite Bank Draws Harrumphs

Now that a state regulator in New York has accused Standard Chartered, one of London’s most reputable banks, of colluding with Iran, Britain seems to be drawing a line against what many here consider American overreaching.

On Wednesday, even Mervyn A. King, the central bank governor who has been one of the industry’s harshest scolds, seemed to defend Standard Chartered against the New York allegation that it had schemed with the Iranian government to launder billions of dollars for the potential support of terrorist activities.

“All that the U.K, authorities would ask is that the various regulatory bodies that are investigating a particular case try to work together and refrain from making too many public statements until the investigation is completed,” Mr. King said at a news conference. “That seems to me the appropriate time to make clear what the judgment is and what the punishment is.”

As I said in this space yesterday, the large international banks make a lot of money working the shady and outright criminal side of the street...and it wouldn't surprise me if this Standard General story was made to disappear in short order. It showed up in The New York Times on Wednesday as well...and I thank Donald Sinclair for sending it along. The link is here.


World’s Oldest Shipping Company Closes in Industry Slide

The world’s oldest shipping company sold its last vessel and is going out of business, according to the liquidator.

Stephenson Clarke Shipping Ltd., started in 1730, has been placed into liquidation, according to a statement from accounting firm Tait Walker. The Newcastle-Upon-Tyne, England- based shipper, which employed nine people, sold off its final vessel in July, according to the statement.

This Bloomberg story was filed from London yesterday early yesterday morning Eastern time...and I thank reader Scott Pluschau for his second offering in today's column. The link is here.


More than half young Greeks are unemployed

Greek youth unemployment figures released on Thursday (9 August) by the Hellenic Statistic Authority marked another record high at 54.9 percent in May compared to around 41 percent to the same period last year.

“It is indeed a matter of deep concern for the commission and the unprecedented level of unemployment in Greece, in particular for youth unemployment,” European Commission spokesperson Olivier Bailly told reporters in Brussels.

Bailly said the ‘troika' - the EU, European Central Bank and International Monetary Fund (IMF) - along with the Greek authorities will need to address the rising unemployment issue among its youth.

This story, filed from Brussels, showed up on the EUoserver.com website yesterday afternoon local time...and I thank Roy Stephens for sending it. The link is here.


Hard landing for China as factory prices fall and deflation looms

Factory gate prices in China fell at an accelerating rate of 2.9pc in July as the economy flirted with industrial recession, prompting calls for further stimulus to head off Japanese-style deflation.

“Severe deflation pressures are rippling across the country,” said Alistair Thornton and Xianfeng Ren from IHS Global Insight. “Deflation, not inflation, is the greatest short-term threat to the Chinese economy.”

“The hard landing has happened,” said Charles Dumas from Lombard Street Research. “We don’t believe official data. We think GDP slowed to a 1pc rate in the second quarter.”

A blizzard of weak data has caught policy-makers off guard, though shares rallied in Shanghai on hopes for monetary loosening from China’s central bank after consumer price inflation (CPI) fell to 1.8pc.

This story showed on the telegraph.co.uk Internet site late yesterday evening...and is another offering from Roy Stephens. The link is here.


It starts: first Asian bank mulls British exit from the EU

Japan's biggest bank Nomura has issued an 11-page study evaluating the likelihood that the UK will leave the European Union entirely or partly.

Events could accelerate as soon as this autumn if eurozone woes force the Government to commit to a firm date for a BRIXIT referendum.

"The effect a looser relationship with the EU would have on the UK economy in general and on the financial services sector in the UK in particular is not clear at this time, even though British eurosceptics argue that being freed from EU regulation would be a booster. However, the prospect is, in our view, bound to raise concerns – indeed, is doing so already in the City."

The core point is that the eurozone may have to take drastic steps in integration (fiscal union, etc) to save the euro, making it nigh impossible for a fully sovereign state to remain part of the Project.

This long Ambrose Evans-Pritchard blog was posted on The Telegraph's website yesterday...and I thank Roy Stephens for sending it. The link is here.


Niall Ferguson: Lights Out in India

The British—slightly less than a thousand of them—used to govern India. Without air-conditioning.

Conan O’Brien was not the only one who watched the London Olympic opening ceremonies with amazement. “Hard to believe my ancestors were conquered by theirs,” he tweeted. Every Indian watching must have been thinking the very same.

Until their TVs went dark.

The recent power outage in India interested me more than the Olympics. (I had a very British reaction to the opening ceremonies: I found them excruciatingly embarrassing.) The Indian blackout was surely the biggest electricity failure in history, affecting a staggering 640 million people. If you have ever visited Delhi in the summer, you will have some idea what it must have felt like.

“Every door and window was shut,” Rudyard Kipling recalled of summer in the scorched Indian plains, “for the outside air was that of an oven. The atmosphere within was only 104 degrees, as the thermometer bore witness, and heavy with the foul smell of badly-trimmed kerosene lamps; and this stench, combined with that of native tobacco, baked brick, and dried earth, sends the heart of many a strong man down to his boots, for it is the smell of the Great Indian Empire when she turns herself for six months into a house of torment.”

This is a very interesting and worthwhile read. It was posted on thedailybeast.com website on Monday...and I thank David Galland at Casey Research once again for his second story in today's column. The link is here.


UN agency: Global food prices up sharply in July

International food prices rose sharply in July after three months of decline, driven by a spike in grain and sugar prices, a United Nations report said Thursday.

Severe drought gripping the U.S. Midwest has sent corn prices soaring by almost 23 percent and expectations of worsened crop prospects in Russia because of dry weather sent world wheat prices up 19 percent.

The United States is the world's No. 1 exporter of corn, soybeans and wheat and the price hikes are expected to be felt across the international marketplace, hurting poor food-importing countries, said a study by British charity Oxfam issued on the eve of the U.N. report.

The Rome-based U.N. Food and Agriculture Organization said in its monthly price report on Thursday that its index climbed 6 percent in July although it was well below its peak reached in February 2011.

This AP story was filed from Rome early yesterday morning...and was picked up by the finance.yahoo.com Internet site. I thank reader Scott Pluschau for his third and final offering in today's column...and the link is here.


Three King World News Blogs/Interviews

The first is with Ben Davies...and it's headlined "There is a Massive Buyer in the Gold Market". The second blog is with Bill Haynes. It's entitled "We Are Now Seeing Huge Orders For Physical Gold & Silver". And lastly is this audio interview with Peter Schiff...and according to Eric, he covers gold quite a bit.
http://kingworldnews.com/kingworldnews/ ... _News.html


Dimitri Speck: A high-frequency attack on gold

Market analyst and GATA consultant Dimitri Speck posted a study on the safehaven.com Internet site yesterday...a study of what he concludes was a high-frequency trading attack on the gold futures market on June 7th that drove the price down $20 in two minutes. Speck concludes:

"Although in the past central banks repeatedly intervened in the gold market, it is unlikely that this action was done by a central bank. In the field of high-frequency trading, the technical complexity and the necessary level of experience and specialization are probably too high. Therefore, a private financial institution must have done the high-frequency price manipulation to achieve a trading profit. This was a well-defined incident in thin trading, limited to a short time period and to a single market. These conditions make it ideal for a successful investigation by the regulatory authorities."

The rest of the preamble by Chris Powell, along with the link to the story itself, is contained in this GATA release. It's posted over at the gata.org Internet site...and the link is here. I thank reader U.D. for being the first to alert me to this story.
http://www.gata.org/node/11649


John Hathaway: Importance of holding physical gold as part of portfolio

Tocqueville's John Hathaway says as more investors realize that capital safety is the real reason to own gold, safe storage is more important than ever.

The Gold Report: John, you predicted $2,000/ounce (oz) gold prices. After rising to $1,900/oz last fall, the price has hovered at $1,500-1,600/oz much of 2012. What will cause it to take the next leg up?

John Hathaway: There are several factors that I think will drive gold higher. On the monetary side, central bankers and treasury secretaries are bobbing and weaving, making it up as they go. They lack a comprehensive solution to the sovereign debt crisis in Europe, to the forces that are pulling the Eurozone apart or to the stagnation in the world's key economies. Ultimately, all of this will further debase the value of paper currency.

More quantitative easing may also be on the table, and I have read a good deal about taking nominal rates to less than zero. That would mean people who have money in savings accounts would be charged a fee for keeping the money, as opposed to earning interest. It would not surprise me to see that evolve as a way to get all of these free reserves in the banking system into the economy.

This interview with John was posted over at The Gold Report late Wednesday. Donald Sinclair sent it to me in the wee hours of yesterday morning, but Thursday's column was already bursting at the seams, so it had to wait until today's column...and here it is now. This copy of it is posted over at the mineweb.com Internet site...and the link to this must read interview is here.
http://www.mineweb.com/mineweb/view/min ... &pid=92730


At the top of China's government, a plan for getting gold

China's interest in obtaining gold, as planned at the highest levels of the government, is recounted in a couple of postings at Centennial Precious Metals' USAGold.com Internet site.

The first posting is here...and the second is here. I borrowed them from a GATA release yesterday...and both are must reads.
http://www.usagold.com/cpmforum/2012/08 ... en-people/


Ted Butler: Morgan is screwed even if CFTC drops silver investigation

Yesterday, silver market analyst and market manipulation exposer Ted Butler responded to the infamous report in the Financial Times earlier this week that the U.S. Commodity Futures Trading Commission will drop its nearly 4-year-old investigation of the silver market.

Butler concludes that while the big silver short, JPMorgan Chase, is bigger than the U.S. government, publicity has trapped the bank so that it will be screwed whether it maintains its silver short position or tries to get out of it.

Ted's commentary is headlined "The CFTC Silver Investigation"...and it's posted over at the silverseek.com Internet site. It's a must read from one end to the other...and the link is here. I've already read it twice.
http://www.silverseek.com/commentary/cf ... estigation


¤ The Funnies

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¤ The Wrap

I wouldn't read much of anything into yesterday's price action in gold and silver. It was another day similar to Bill Murray's movie Groundhog Day. It was just about the same as Wednesday's. Nothing to see here, dear reader, please move along.

Well, it didn't take Ted very long to take my rather pithy advice to post his landmark essay in the public domain...as that's where it deserved to be...and I hope you agree now that you've read it.

The Capital Account TV interview with Chris Powell...and now this brass knuckles essay from Ted, is a double shot across the bows of the CFTC, the CME Group...and JPMorgan. They're all naked as jay birds, as everyone is on to them...and now we just have to wait for their next move.

The thing that amazes me the most as I put the finishing touches on today's column, is that silver and gold miners just sit their like lumps, even though a lot of them know precisely what's going on. We should be asking ourselves why we are invested in these companies when there isn't one company whose management and/or board of directors hasn't had the gonads to write to Gary Gensler and ask him for some sort of explanation. Not once in four years have any of them gone through this process. As I've said before...by their very silence, they are just as complicit as JPMorgan et al. Too bad there isn't capital punishment for cowardice.

Maybe they don't want to be associated with us 'conspiracy theorists'. Well, as one well-known gold analyst over at goldcore.com put it recently..."I expect conspiracy theory is about to become conspiracy fact."

Just about every precious metals mining executive [and analyst] reads everything that either Eric Sprott or John Embry has been writing over the last five years...and they haven't exactly been quiet about their beliefs...and their phones aren't ringing off the wall, either. You have to ask yourself why that is the case. What is it with these people?

I note with some interest the recent management changes at Barrick and Kinross. As bad as their managements are, or are not...that's not the issue...and they know it too. None of these problems would exist if the gold and silver prices were allowed to find their true market value, which they aren't. But when it does finally happen, mining executives will become like rock stars.

And in case you're wondering, I'm still "all in".

During Far East trading during their Friday, both metals were under a bit of selling pressure...and that intensified a hair shortly after the London open. Gold volume is light, but about 50 percent heavier than this time on Thursday...and silver volume, net of roll-overs out of the September contract, is about the same as it was Thursday. The dollar index isn't doing a thing. And as I hit the 'send' button at 5:20 a.m. Eastern time, gold is down about seven bucks...and silver about 30 cents.

Like it has been all week, you can't read too much into this price activity when volume is this light. We could blast higher from here at any time...but the opposite is true as well...so we just have to continue waiting to see how this situation resolves itself.

And if it does resolve itself to the upside, the first question on your mind should be "who is taking the short side of the trade?" I get tired of saying this, but the answer to that question will determine how fast and how high we go from here.

Today we get both the weekly Commitment of Traders Report...along with the August Bank Participation Report. The data for both is as of the close of Comex trading on Tuesday...so we can compare apples to apples in both reports for that one day per month, as the BRP is derived from the COT data on that date.

There's still the opportunity to either readjust your portfolio, or get fully invested in the continuing major up-leg of this bull market in both silver and gold...and I respectfully suggest that you take a trial subscription to either Casey Research's International Speculator [junior gold and silver exploration companies], or BIG GOLD [large producers], with all our best (and current) recommendations...as well as the archives. Don't forget that our 90-day guarantee of satisfaction is in effect for both publications.

Enjoy your weekend, or what's left of it if you're west of the International Dateline...and I'll see you on Saturday...or Sunday.
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Three cheers for BS where we pile it higher and deeper!- Bring the Gold
 
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Re: PM News articles, Analysis and Commentaries

Postby silvermotor on Sat Aug 11, 2012 10:24 am

Please follow link for charts, graphs, pictures and links to other articles.

SM

http://www.caseyresearch.com/gsd/home



John Embry: Precious Metals Markets Heating Up

"I must admit that the possibility now looms larger that JPMorgan et al may engineer another price decline before the summer is out."


¤ Yesterday in Gold and Silver

Like Thursday, gold was under quiet selling pressure all through Far East and London trading on Friday...with some of that being dollar index related.

The New York low [$1,604.90 spot] came just before 8:40 a.m. Eastern time...and then about ten minutes later a buyer of some significance showed up. About two hours...and a bit over twenty-three bucks later, gold reached its high tick of the day, which was $1,628.30 spot.

Then, either the buyer disappeared, or a not-for-profit seller showed up and, based on the volume and price action yesterday, I'd guess it was the latter scenario rather than the former.

From its high, gold got sold down eight bucks in very short order, before trading sideways into the 5:15 p.m. electronic close in New York.

But after all was said and done, gold only finished up $3.50 at $1,620.50 spot. But volume jumped up to around 120,000 contracts, so this rally did not go unopposed.

Silver's price path was the same...but different. It, too, was under light selling pressure during the same overseas time period...and by the time Comex trading began, the silver price was down about two bits from Thursday's close.

Then about 8:35 a.m. silver got smacked for thirty five cents in about ten minutes, with the low of the day [$27.51 spot] coming at 8:50 a.m. in New York.

Then, like gold, away went the price to the upside...and less than two hours later, silver was at it's $28.49 spot high tick. From that high, silver got sold down about thirty-five cents before it, too, traded sideways into the close. Silver's intraday move was 98 cents...3.6%.

The silver price finished the Friday trading session at $28.13 spot...down a penny from Thursday. Net volume was also up there...around 30,000 contracts, a big jump from the prior days this past week.

Platinum and palladium had similar types of moves, but far more subdued...and you'd be hard pressed to find the feature on the palladium chart from yesterday.

The dollar index began to rally before the close of trading on Thursday...and that rally continued right up to its Friday high of 82.85...which occurred at 9:30 a.m. Eastern time. Then, during the next ninety minutes, the index dropped 40 basis point...before quickly recovering 10 of that...and then traded sideways from there into the close. The dollar index was actually down 10 basis points on the day.

The big rallies in both gold and silver started about forty minutes before the dollar did its 9:30 a.m. face plant in New York...and the prices of both got capped about ten minutes before the dollar 'crash' ended. I'd guess that what the precious metals prices were doing was completely independent of what was going on in the dollar index. Remember, there are no markets anymore...only interventions.

Like Thursday, the gold shares got sold off in the first fifteen minutes of trading...but then headed higher...and were at their highs by around 11:00 a.m. in New York. They sagged a bit in the early afternoon, but then rallied into the close...and the HUI finished up 0.90%...almost on its high of the day.

With the odd exception, it was all red arrows in the silver equities yesterday...and Nick Laird's Silver Sentiment Index closed down 0.39%.


The CME Daily Delivery Report did not disappoint me yesterday, as 963 gold contracts were posted for delivery within the Comex-approved depositories on Tuesday. The biggest short/issuer was JPMorgan out of its in-house/proprietary trading account, with 902 contracts...and all the rest [61 contracts] are to be delivered by the Bank of Nova Scotia. The big long/stoppers were HSBC USA and Deutsche Bank...with 571 and 326 contracts respectively. Morgan Stanley took delivery of the remaining 66 contracts. One silver contract was also posted for delivery. The link to yesterday's Issuers and Stoppers Report is here.


The GLD ETF reported that an authorized participant added 103,097 troy ounces of gold yesterday...and there were no reported changes in SLV.

While on the subject of these two ETFs, the new short interest numbers for both were posted on the shortsqueeze.com Internet site late on Thursday night. So late in fact, that I never saw them, because I checked twice earlier in the evening, and they weren't there.

What they showed, did not amuse either Ted Butler or myself.

In silver, there was a whopping increase in the number of shares/ounces sold short in this ETF. The short interest blew out by 30.22%...to 14,784,600 shares/ounces, an increase of 3,431,300 shares/ounces from just two weeks ago.

The numbers for gold were equally atrocious. The short interest rose 28.67%...up to 21,749,900 shares sold short, or 2.17 million ounces of gold. That was an increase of 4,846,600 shares, or about 485,000 troy ounces of gold over the two week reporting period.

It was obvious to Ted that rather than go into the market to buy the physical metal and drive the prices up, the authorized participants chose to short the shares in lieu of doing that.

As of the cut-off for this report, GLD is owed just under 68 tonnes of gold...and SLV is owed 460 tonnes of silver. This is what would have to be added to cover all the short positions outstanding in each ETF.

One can only imagine what the prices of both silver and gold would be if the short holders actually had to purchase the metal to cover these short positions.

That's the reason why I wouldn't touch the shares of these ETFs with a 10-foot cattle prod.


Over at Switzerland's Zürcher Kantonalbank, they updated their gold and silver ETFs as of the close of trading on Thursday. Their gold ETF had a smallish withdrawal of 14,567 troy ounces. But their silver ETF added a rather hefty 778,894 troy ounces.


Finally there was a sales report from the U.S. Mint that was worthy of the name. They reported selling 5,000 ounces of gold eagles...1,000 one-ounce 24K gold buffaloes...and another 150,000 silver eagles. Month-to-date the mint has sold 9,000 ounces of gold eagles...3,500 one-ounce 24K gold buffaloes...and 915,000 silver eagles. Based on this sales data, the gold/silver sales ratio sits at 73:1 as of the close of business yesterday.


It was a quiet day over at the Comex-approved depositories on Thursday. They only reported receiving 5,117 ounces of silver...and shipped 71,538 troy ounces out the door. I won't know what Friday's figures were until about 3:00 p.m. Eastern time on Monday, as that's about the time that CME updates that data on its website.

Yesterday's Commitment of Traders Report was a mixed bag. I had expected an improvement in the Commercial net short position in both gold and silver, but only got it 50% right.

In silver there was a small increase in the Commercial net short position...490 contracts to be exact. This position now stands at 21,852 contracts, or 109.3 million ounces of silver. The report also shows that the four largest traders are short 162.8 million ounces...and the '5 through 8' largest traders on the short side, are short an additional 39.1 million ounces.

These eight traders are short 185% of the Commercial net short position and, when the market-neutral spread trades in the Non-Commercial category are removed, the four largest traders are short 34% of the entire Comex futures market in silver...and the '5 through 8' largest traders add another seven percentage points. So...the eight largest traders are short over 41% of the entire Comex futures market in silver.

In gold, there was a decent improvement in the short position from the prior reporting week. The Commercial net short position declined by 9,594 contracts, or 959,400 troy ounces of gold. This short position is now down to 14.64 million ounces. Not the lowest ever, but still a very low number. Ted says that the 'big 4' traders covered short positions aggressively during the reporting week.

Of that 14.64 million ounces, the four largest traders are short 8.66 million ounces...and the '5 through 8' largest traders are short an additional 4.50 million ounces. The eight largest traders are short 13.16 million ounces, or only 89.5% of the Commercial net short position in gold. Compared to silver [at 185%]...gold is practically a 'free market'...LOL!

On a net basis, once the market-neutral spread trades are removed from the Non-commercial category, the four largest traders are short 23.6% of the entire Comex gold market...and the '5 through 8' traders add another 12.3 percentage points to that. So, that means that the eight largest short holders, are short 35.9% of the entire Comex futures market in gold.

These concentrated positions are held by traders that buy and sell as a co-ordinated group, or collusively, as Ted Butler correctly points out. These eight traders on the short side are most certainly the same in both gold and silver. They are short against hundreds of long holders that all act independently of each other...so guess which group controls the price?

Here's Ted Butler's "Days of World Production to Cover Short Positions" chart of the '1 through 4'...and '5 through 8' largest traders of all the physical commodities that are traded on the Comex. It's a graphical representation of what I just spoke of above...and the data comes straight out of yesterday's COT report, but shown in days of world production, rather than in contracts. The chart is courtesy of Nick Laird.

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Now for the Bank Participation Report. These are Comex futures positions, both long and short, held by both U.S. and non-U.S. banks at the close of Comex trading on Tuesday...the same time as the COT Report. The data for the BPR is extracted from the COT data, so for this one day a month you can compare apples to apples.

In silver, 4 U.S. banks are net short 20,465 Comex contracts...and you can bet the ranch that JPMorgan holds 80-90% of this position all by themselves...and I suspect that HSBC USA holds almost all of what's left. This amount represents over 93% of the 21,852 contracts of the Commercial net short position shown in the COT report above.

The 13 non-U.S. banks that hold Comex futures contracts in silver are actually net long 828 Comex futures contracts, so their positions are immaterial. As I say every month at this time, the price management scheme in silver is 100% "Made in the U.S.A."

From the July report to the August report in silver, the 4 U.S. banks increased their net short position by 2,193 Comex contracts...and the 18 non-U.S. banks decreased their net long position by 76 contracts. Any questions as to what banks control the silver price?

In gold, 4 U.S. banks are net short 57,689 Comex gold contracts. Although JPM and HSBC USA hold large chunks of this position, they aren't anywhere near as dominant in gold as they are in silver.

The 18 non-U.S. banks that hold Comex futures contracts are net short 40,573 contracts.

Between these 22 banks, they hold Comex short positions totaling 98,262 contracts, or 9.83 million ounces. This represents 67% of the Commercial net short position in gold shown in the COT Report above. The price management scheme in gold is spread out over a lot more banks...and it's obvious that the non-U.S. banks are major players here, but are non-participants when it comes to silver.

From the July report to the August report in gold, the Commercial net short position dropped for both U.S. and non-U.S. banks. The 4 U.S. banks' Comex short position declined by 18,206 contracts...and the 18 non-U.S. banks showed a decline of 9,376 contracts.

In a nutshell, the bullion banks aggressively covered short positions in gold during the reporting month...and JPMorgan stepped in to go further short in the silver market to prevent the price from blowing sky high.



I don't have that many stories for you today, so I hope you have the time this weekend to go through the ones that interest you.

¤ Critical Reads

The Mighty Mississippi to Run Dry?

Due to the worst drought since the 1950s, the Mississippi may be about to go dry.

In Memphis and Vicksburg, the shrinking river is obvious: slower river, exposed river banks, and more sandbars. The water is down more than 13 and 20 feet in each city respectively. The Mississippi on average is about 13 feet below normal—and a whopping 55 feet below where it was at this time last year. On some stretches, the water level is perilously low. On July 17 it was reported that a 100-mile stretch of the Platte River in Nebraska, had dried up.

In fact, water levels are now so low that barge operators are no longer able to operate at full capacity and have to shed both weight and number of towed barges.

Casey Research's own Bud Conrad dug this story up yesterday. It was posted on thetrumpet.com Internet site on Tuesday...and is well worth the read. The link is here.


Food crisis fears mount as corn price hits record high

Fears of a potential repeat of the 2008 food crisis mounted, after a US government report showed that US crops were being savaged by an intense drought.

Corn prices hit a new record high today on confirmation that the US crop would probably slump by 13pc to a 6-year low.

The last time prices spiked 4 years ago food riots occurred in Egypt, India, Indonesia, Mexico and many other countries.

The US Department of Agriculture (USDA) said that the severe drought occurring in the US meant that this year’s harvest would be 10.779bn bushels, compared with 12.358bn bushels last year.

This story appeared on the telegraph.co.uk website early yesterday afternoon BST...and I thank Roy Stephens for sending it. The link is here.


U.S. banks told to make plans for preventing collapse

U.S. regulators directed five of the country's biggest banks, including Bank of America Corp and Goldman Sachs Group Inc, to develop plans for staving off collapse if they faced serious problems, emphasizing that the banks could not count on government help.

The two-year-old program, which has been largely secret until now, is in addition to the "living wills" the banks crafted to help regulators dismantle them if they actually do fail. It shows how hard regulators are working to ensure that banks have plans for worst-case scenarios and can act rationally in times of distress.

They told banks to consider drastic efforts to prevent failure in times of distress, including selling off businesses, finding other funding sources if regular borrowing markets shut them out, and reducing risk. The plans must be feasible to execute within three to six months, and banks were to "make no assumption of extraordinary support from the public sector," according to the documents.

This Reuters story was posted on their website early Friday morning...and I thank Donald Sinclair for bringing it to our attention. The link is here.


The Solution…is the Problem, Part II: Sprott Asset Management

This month's Market at a Glance by authors Eric Sprott and Étienne Bordeleau of Sprott Asset Management, was posted on their website yesterday. It's on the longish side...and I must admit that I've not read it yet, but it's on my 'to do' list later this weekend. The link is here.


Doug Noland: The Dog That's Not Barking

European economies are spiraling downward, and I expect economic activity to remain largely impervious to monetary stimulus. I don’t believe the Draghi Plan will reverse the crisis of confidence in eurozone debt or the European banking system. And, as I mentioned above, I fear a desperate ECB may increasingly jeopardize the euro (see Mr. Issing’s comments below). Mr. Draghi invoked “convertibility risk” as justification for monetizing government borrowings. Such measures, however, will not allay market fears regarding the sustainability of the euro currency. Increasingly destabilizing capital flight remains a serious risk.

Doug's Credit Bubble Bulletin on Friday is always a must read for me...and this one is no exception. It's posted over at the prudentbear.com Internet site...and I thank reader U.D. for sending it along. The link is here.


Libor rate overhaul launched by UK regulator

Libor benchmark interest rates are no longer "fit for purpose" and must be changed or replaced, Britain's regulator said on Friday as he set out proposals to restore their credibility.

The initial review by the Financial Services Authority is the first concrete step to reforming Libor after a rigging scandal that has dragged in global banks and hurt the reputation of regulators on both sides of the Atlantic.

The future of other benchmarks - for everything from oil and gold to stock prices - was also under scrutiny, he said.

The London Interbank Offered Rate, known as Libor, sets prices for everything from credit card payments to complex derivatives, but its credibility has been damaged since it emerged that it had been manipulated by the big banks that set it.

This Reuters story was filed from London yesterday morning...and I thank Donald Sinclair for digging it up on our behalf. The link is here.


The 'Singapore Connection' German Tax Investigators Set Their Sights on UBS

The German state of North Rhine-Westphalia has made headlines by buying data on Swiss bank accounts in a crackdown on German tax evaders. But now they have found evidence that Swiss bank UBS may have helped Germans shift their assets to Singapore before a tax treaty between Germany and Switzerland goes into effect next year.

German investigators who recently purchased data on UBS bank clients have come into possession of documents that show how Swiss banks allegedly help clients transfer their assets to Southeast Asia to evade taxes, according to the Friday edition of the Financial Times Deutschland. "For the first time, we have a paper trail to Singapore," a source close to the North Rhine-Westphalian state Finance Ministry told the newspaper. North Rhine-Westphalia, Germany's most populous state, has led the way in buying Swiss bank customer data in a bid to catch German tax cheats.

The UBS material is apparently so revealing that the investigation into the bank has now become the priority, a source told the FTD, which said that German tax evaders, the original target, were now being regarded merely as "bycatch." The investigators are said to have obtained video material which show "senior (UBS) employees" giving instructions on how German clients can invest their money with the bank in a "tax-optimized" manner -- in other words, keeping it concealed from the tax office. UBS swiftly denied the allegations.

Not a thing surprises me about this bank. This story showed up on the German website spiegel.de yesterday...and it's courtesy of Roy Stephens. The link is here.


More Power to Brussels? - Germany Considers Holding EU Referendum

Chancellor Angela Merkel wants Europe to move toward an ever closer union in a bid to solve the euro crisis. But she is already pushing at the limits of what is possible under the constitution. The debate about holding a referendum on transferring power to Brussels is gathering momentum in Germany.

Merkel's line is that she wants more Europe, not less. In the chancellor's bid to save the common currency, she is willing to go to the very limits of what is permissible under the German constitution. That was made clear by her support for the permanent euro rescue fund, the European Stability Mechanism (ESM), and her pet project, the fiscal pact. But Merkel still wants more. "We need a political union," she recently said on German public television station ARD. "That means we have to give up further competencies to Europe, step by step, in an ongoing process."

This rather surprising story showed up on the spiegel.de Internet site yesterday...and it's worth skimming. It's another offering from Roy Stephens...and the link is here.


Turkey’s backing of Syrian rebels leads to danger of Kurdish autonomy

When it comes to Turkey’s policy towards Syria, Ankara might be cutting off its nose to spite its face. As Turkey pushes for Assad’s ouster, chaos on its southern border has seen the possibility of a Kurdish-controlled region grow by the day.

Turkish foreign minister Ahmet Davutoglu’s “zero problems policy” to build strong economic, political and social ties with the country’s neighbors was almost an invitation for disaster.

Once the country moved to provide political support – and reportedly covert aid – to the Syrian opposition that is seeking regime change in Damascus, the blowback was almost immediate.

With millions of ethnic Kurds in Turkey, Syria, Iraq and Iran, destabilization in northern Syria has provided another base for the PKK (Kurdistan Workers’ Party) to launch military operations against Turkey in its struggle to establish an autonomous Kurdish state.

For students of the "New Great Game", this is a must read. It was posted over on the Russia Today Internet site on Wednesday...and I was saving it for today's column. I thank Roy Stephens for sending it our way...and the link is here.


Big Oil's Unwitting Bid for Kurdish Statehood

The connections between oil, money, and power are very well established. These three factors can elevate individuals to office, give Big Oil companies major sway with national governments, lead countries into war with one another, and influence or control any number of major relationships and conflicts.

But can oil bequeath statehood? It's a chicken-versus-egg question. Sovereign nations control the resource wealth in their lands, but what about the reverse: if a government controls the resource wealth in its region, is it in fact at the helm of a sovereign state?

It may seem a confusing question, but in the autonomous region of northern Iraq called Kurdistan it's a question that deserves some thought. Kurdistan has been a country within a country for years, both part of Iraq and separate from it. The Kurdistan Regional Government (KRG) governs the region, supported by its own armed forces, but the KRG still relies on the central Iraqi government in Baghdad for its budget. It's a reliance of necessity, based on the fact that Baghdad has aggressively retained control over all Iraqi oil revenues, depriving Kurdistan of the oil revenues that would otherwise fill its coffers. And it's a reliance from which Kurds cannot wait to escape.

This essay was written by Marin Katusa, Casey Research's Chief Energy Investment Strategist...and was contained in the Tuesday edition of Casey's Daily Dispatch. It dovetails beautifully with the RT story posted above...and is a must read as well. The link is here.


China, Japan stretch peace pacts

Asia's two giants, China and Japan, are playing a dangerous game, each indicating they are prepared to use force in defense of islands they both claim as their own.

With a side glance at China expanding its effective control of the disputed Paracel and Spratly islands in the South China Sea, Japan has been taking a stronger rhetorical stand against Beijing to protect its own sovereignty.

Japanese Prime Minister Yoshihiko Noda on July 26 said in the Diet (parliament) that if necessary the Self-Defense Forces (SDF) can be mobilized to defend the contested Senkaku/Diaoyu Islands in the East China Sea, which are controlled by Japan but claimed by China and Taiwan.

This very interesting read was posted on the Asia Times Internet site on Tuesday...and I've been saving it for today's column as well. I thank Roy Stephens for his last offering of the day...and the link is here.


Two King World News Blogs

The first is with Egon von Greyerz...and it's headlined "We Are Headed Right Into A Global Financial Crash". The second blog is with Nigel Farage. It's entitled "They Will Collapse The System & Enslave People".


Draft Russian bill facilitates foreign mining of gold, PGM, diamonds

Russia's ministry of natural resources has drafted a bill that will facilitate the access of companies with foreign capital to mine its gold, platinum group metals (PGM) and diamond reserves, according to documents published on a ministry website.

Russia's gold reserves account for about 10 percent of the global volume, second only to South Africa's, according to ministry data. Its share in palladium accounts for 24 percent of global reserves and in diamonds 35 percent.

But Russia lags behind countries such as Canada, Australia and the United States in exploration and development of minerals, Sergei Donskoi, recently named minister of natural resources, has said.

The draft bill would allow foreign-owned businesses to mine deposits of up to 250 tonnes (about 8 million troy ounces) of gold, five times the existing cap of 50 tonnes set in 2008, without facing additional regulation from the state, the documents showed.

This Thomson Reuters story was posted on the mineweb.com Internet site yesterday...and I thank Donald Sinclair for his last offering in today's column. The link is here.
http://www.mineweb.com/mineweb/view/min ... &pid=92730


Do You Have the Guts to Buy Low and Sell High?: Louis James

It's so outrageously simple that few investors can actually do it: buy low and sell high. The manic highs and lows of the market are actually good news for those investors who have mastered the discipline of buying low and waiting, according to Louis James, the senior editor of the International Speculator and Casey Investment Alert.

In this exclusive interview with The Gold Report, James talks about how not to be fooled into timing the market and how he finds value in precious metals by scouring some knock-out jurisdictions like Mexico and China.

This interview with Casey Research's own Louis James was posted on theaureport.com website yesterday...and the link is here.
http://www.theaureport.com/pub/na/14100 ... 2015:09:01


Precious metals markets heating up: John Embry

Gold and silver markets are rapidly heating up, although the casual observer might not know it.

That's because of the blatant price suppression of both metals that's now occurring in the paper markets.

But this obscures the physical off-take now going on behind the scenes, an off-take that's a precursor to an inevitable price explosion.

John's monthly essay for Investor's Digest of Canada was posted on their website on June 29, 2012...and is now posted in the clear over at Sprott.com. Anything that John writes is a must read in my opinion...and this offering is no exception. I thank Australian reader Wesley Legrand for bringing it to our attention...and the link is here.
http://www.sprott.com/media/176498/Inve ... 9-2012.pdf


¤ The Funnies

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¤ The Wrap

Life is like a roll of toilet paper. The closer to the end you get, the faster it goes. - Author unknown


Today's 'blast from the past' is a song by a Winnipeg, Manitoba group that was a big hit both north and south of the 49th parallel back in 1974. It's hard to believe that this recording is almost 40 years young. Where does the time go? I hope you enjoy it, so turn up your speakers and click here.

Well, it was Bill Murray's Ground Hog Day all week long, as the high-frequency traders kept everything under control. The price action was so similar every day, you could have set your watch by it. As Chris Powell so correctly put it...There are no market anymore, only interventions.

However, one thing I have been watching out of the corner of my eye is how the PM share prices have been sneaking higher lately...and I'm encouraged by that.

But what I'm not happy about is the monstrous short position in silver that JPMorgan has now built up in the Comex futures market once again and, like Ted Butler, I'm not a happy camper about the new short positions in both GLD and SLV. Obviously if these events hadn't occurred, we'd be looking at a startlingly higher price for silver...and for gold, too, I would think. As I've said many times before, this blatant price management scheme is now so obvious, that even Stevie Wonder could see it.

I must admit that the possibility now looms larger that JPMorgan et al may engineer another price decline before the summer is out, despite the fact that the Commitment of Traders is wildly bullish for both metals.

Of course I'd be the happiest man in the world if I was proven wrong about all this...but after twelve years of watching these bastards have their way with the precious metal markets, I'm always on the lookout for "in your ear".

That's it for the day...and the week.

See you on Tuesday.
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Three cheers for BS where we pile it higher and deeper!- Bring the Gold
 
Posts: 3188
Joined: Mon Jul 13, 2009 1:23 pm
Location: South Florida

Re: PM News articles, Analysis and Commentaries

Postby silvermotor on Tue Aug 14, 2012 7:56 am

Please follow link for charts, graphs, pictures and links to other articles.

SM

http://www.caseyresearch.com/gsd/home



Chris Powell: If There's Ever Journalism About Gold, Ask Central Banks These Questions

"As Ted Butler is wont to say, it was "just another day off the calendar"."


¤ Yesterday in Gold and Silver

The 'dog days' of summer are in full cry...and I certainly wouldn't read much into gold's price action anywhere on Planet Earth on Monday. The price hung in there pretty good until the 3:00 p.m. BST London p.m. gold fix...10:00 a.m. Eastern...and it was touching to see a not-for-profit seller drop gold about ten bucks going into the close of Comex trading.

Gold closed the New York trading session at $1,609.90 spot...down $10.60 from Friday's close.

Gross volume was pretty enormous...around 125,000 contracts. But most of that was probably spread related, because about 30,000 contracts were traded in the Dec 2013 to December 2016 time frame. Once those spread are removed, net volume was around 74,000 contracts, which is vapour.

Silver was under pressure the entire trading day...and it, too, got sold off a bit going into the Comex close. But I wouldn't read a whole heck of a lot into that price action, either.

Silver finished the Monday trading session at $27.83 spot...down 30 cents. Once all the roll-overs out the September contract were removed, the net volume in silver was around 17,500...which is fumes.

The dollar index opened on Sunday night around the 82.75 mark...and rallied a bit from there. But mid-afternoon Hong Kong time, the index began to roll over...and the index hit its nadir at the London p.m. gold fix at 10:00 a.m. in New York. From there it rallied a hair into the close...and finished around the 82.43 mark...down a bit over 30 basis points.

There was obviously no co-relation between the dollar index and the precious metal prices yesterday.

The gold stocks peaked just a few minutes before the gold price...and then immediately headed south. Most of the decline was in by noon Eastern time...and the stocks traded more or less sideways from there. It's interesting to note the big sell-off in the gold price that came just before the Comex close, had little impact on the share prices. The HUI finished down 1.29%.

With the odd exception, the silver shares were down across the board again...and Nick Laird's Silver Sentiment Index closed down 1.10%.



The CME's Daily Delivery Report showed that 207 gold contracts were posted for delivery tomorrow inside the Comex-approved depositories. JPMorgan was by far the biggest short/issuers with 197 contracts...and HSBC USA and Deutsche Bank were the two largest long/stoppers with 113 and 64 contracts respectively. The Bank of Nova Scotia was a distant third with 22 contracts stopped. There was nothing to report in silver.

There were no reported changes in either GLD or SLV...and the U.S. Mint sold another 475,000 silver eagles.

I noticed that the Sprott Physical Silver Trust reported adding another 227,000 troy ounces to their stash yesterday...and there's still a bit more to come...at least 600,000 troy ounces as a minimum would be my guess.

It was a very quiet day over at the Comex-approved depositories on Friday. They reported receiving 38,268 troy ounces of silver...and shipped 46,604 ounces out the door.



I have the usual number of stories for a Tuesday...a lot...and, as always, the final edit is in your hands.

¤ Critical Reads

Sentinel ruling may hurt MF Global clients

A ruling in the case of failed futures brokerage Sentinel Management Group could make it more difficult for customers to recoup money lost in the much larger collapse of MF Global, according to Sentinel's bankruptcy trustee.

A federal appeals court on Thursday upheld a ruling that puts Bank of New York Mellon ahead of former customers of Sentinel in the line of those seeking the return of money lost in the 2007 failure of the suburban Chicago-based futures broker.

The appeals court affirmed an earlier district court ruling that the bank had a "secured position" on a $312 million loan it gave to Sentinel, which turned out to have been secured by customer money.

Futures brokers are required to keep customers' funds in dedicated accounts to protect them from being used for anything other than client business.

However, Thursday's ruling suggests that brokerages can use customer funds to pay off other creditors, Sentinel trustee Fred Grede told Reuters.

"I don't think that's what the Commodity Futures Trading Commission had in mind" with its requirement that brokers keep customer money separate from their own, he said.

"It does not bode well for the protection of customer funds."

This Reuters story was posted on their website late Thursday evening...and is definitely worth reading. I thank Paul Laviers for bringing it to our attention...and the link is here.


Fair Game: Breaking a Buck, Maybe, but Not Taxpayers’ Backs

Mark August 29th on your calendar. It’s the day all of us could end up on the hook for a big future bailout.

The Securities and Exchange Commission is expected to vote that day on a proposal that would limit taxpayers’ exposure to the $2.6 trillion world of money market mutual funds. The plan would reduce the odds of having to rescue teetering funds when the next financial crisis comes — and it will.

Money market funds are a huge cog in the nation’s financial machinery. Many people think that these funds are as safe as federally insured bank deposits. In most cases, they aren’t. But then, in the dark days of 2008, a run on one fund, Reserve Primary, reverberated in the industry.

Investors fled, and the Treasury stepped in. It earmarked $50 billion to protect money market funds and to prevent them from “breaking the buck,” or having their shares fall below the sacrosanct $1 net asset value. Of course, if the government rides to the rescue once, the thinking goes, it will surely do so again.

This Gretchen Morgenson offering showed up in The New York Times on Saturday...and it's worth reading as well. I thank Donald Sinclair for sending it...and the link is here.


White House offers drought relief, feels heat to waive ethanol mandate

Drought conditions plague much of the United States after a summer of scorching temperatures and a lack of rain. The dryness is affecting America's farmland, threatening crops like soybean and corn.

President Barack Obama announced emergency measures Monday to ease the impact of the worst drought in half a century, but stopped short of waiving the government’s requirement that a large portion of the now-shriveled corn crop be diverted to make ethanol.

Obama announced that the Department of Agriculture will buy up to $170 million of pork, lamb, chicken and catfish to help support farmers suffering from the drought. The food purchases will go toward "food nutrition assistance" programs, like food banks.

This story was posted on the nbcnews.com Internet site around noon Eastern time yesterday...and I thank Casey Research's own Dennis Miller for sharing it with us. The link is here.


Why Central Banks May Never Allow LIBOR To Be Fixed

The Federal Reserve and the world's other central banks have good reason to want control of lending—the primary purpose of central banks is to impact lending via monetary policy, thus easing or tightening the supply of credit to the real economy.

That said, allowing central banks to control this so closely does remove the "invisible hand" that governs markets so well.

If regulators want to replace LIBOR, then they'll have to effectively wrest it from the control of central banks. They will have to let lending rates rise and fall on their own to accurately reflect tensions in financial markets.

That's not a power central banks are likely to give up so easily, particularly not when they are doing all they can to flood the system with cheap money and keep floundering economies alive.

"The real problem is a government that thinks it can solve it," Burghardt remarked.

This story showed up on the businessinsider.com website last Friday...and I thank Donald Sinclair for his second offering in today's column. The link is here.


Sir David Walker: I will change Barclays

Sir David Walker, the new chairman of Barclays, is to undertake a wholesale review of the way the bank operates and has admitted that he agrees "in principle" with customers paying to use current accounts and the end of the free banking model.

In his first interview as chairman, Sir David told The Sunday Telegraph that he wanted to see significant change at Barclays and revealed that he was not committed to any of former chief executive Bob Diamond's business plan "except getting it right".

Setting a 24-month deadline by which time he hopes the bank will be back on a firmer footing, Barclays' incoming chairman said his first priorities in the role would be the three Cs – a new chief executive, reformed compensation and a changed culture. He also wants to strengthen the board so it is better able to challenge the new chief executive.

It's a good bet that "Sir David" will do everything in his power to make sure that there are no changes worth mentioning ever implemented at Barclays. This story appeared on the telegraph.co.uk Internet site late on Saturday night...and I thank Roy Stephens for sending it. The link is here.


Debt crisis: ECB buying Spanish and Italian debt 'makes no sense' says Belgian bank governor

Luc Coene told Belgian newspapers De Tijd and L’Echo that buying the bonds of these countries would only serve to weaken the ECB and do nothing to resolve underlying issues of competitiveness.

“It makes no sense for the ECB to start financing those countries,” said Mr Coene, “It would only lead to the ECB taking on the whole public debt of Spain and Italy onto its balance sheet," he said.

"That would in turn weaken the ECB and do nothing to resolve the underlying problems...as it will take away the pressure on politicians to act."

This story was posted on The Telegraph's website at 11:00 a.m. BST on Saturday morning...and it's Roy Stephens second offering in today's column. The link is here.


Debt crisis: Germany ready to block Greek aid if country misses targets

The deputy head of Chancellor Angela Merkel's conservative parliamentary bloc, Michael Fuchs, told business daily Handelsblatt that Berlin was ready to use its veto if it is unhappy with findings from the Greece creditors "troika".

"You can quote me: even if the glass is half-full, that is not enough for a new aid package," he said in an interview to appear in the paper's Monday issue. "Germany cannot and will not agree to that."

Germany, Europe's biggest economy, is waiting with eurozone partners for the report on Greece from a so-called troika of inspectors from the European Union, International Monetary Fund and European Central Bank.

Their verdict, which is expected by mid-September, will determine if Athens receives the next installment of €31.5bn in rescue funds.

This story was posted on the telegraph.co.uk Internet site on Sunday afternoon BST...and I thank Roy Stephens for bringing it to our attention. The link is here.


Greek economy shrank 6.2pc in second quarter

The economy contracted 6.5pc in the first quarter, worse than the initially given 6.2pc, according to revised figures issued in June.

The Bank of Greece expects the economy to shrink 4.5pc for 2012 as a whole, following a 6.9pc drop last year, according to AFP.

The country is relying on two financial rescue packages backed by the EU, the International Monetary Fund and the European Central Bank worth around €240bn for its economic survival.

Last year, private creditors agreed to write-off more than €100bn in debt, roughly half the amount they were owed, as part of a second bailout programme.

This is another story courtesy of Roy Stephens. It's from The Telegraph late yesterday morning...and the link is here.


Brent crude rises on Israel-Iran tensions

Prime Minister Benjamin Netanyahu said on Sunday that most threats to Israel's security were "dwarfed" by the prospect of Iran obtaining nuclear weaponry.

His comment fuelled the debate in Israel about whether to go to war against Iran over its nuclear programme. This worried oil investors who see it as defying appeals by US President Barack Obama to allow more time for international diplomacy.

"We are seeing prices rise despite weak growth outlook numbers on Friday," said Ben Le Brun, an analyst at OptionsXpress, told Reuters. "The Israeli comments ... (are) a major concern."

A decline in North Sea crude output is also supporting Brent. Output from 11 production streams is set to fall by 17pc in September due to maintenance and natural decline.

Please take careful note of the last two words of the previous sentence..."natural decline." North Sea oil production is on the wrong side of Hubbard's Peak...and has been for quite a number of years. The production outlook for the next five years is shocking...both for the U.K. and Norway. This story was posted on the The Telegraph's website during the London lunch hour yesterday...and I thank Roy Stephens once again for finding it for us. The link is here.


Five years on, the Great Recession is turning into a life sentence

China is sufficiently alarmed by the flint hardness of its "soft-landing" to talk up trillions of fresh stimulus. The European Central Bank is preparing to print “whatever it takes” to save Spain and Italy. Markets are pricing in an 80pc chance of yet more printing by the US Federal Reserve in September or soon after.

There is no doubt that the three superpowers acting in concert can launch a mini-cycle of growth early next year - assuming they deliver on their rhetoric - but the twin headwinds of debt-leveraging and excess manufacturing plant across the globe cannot easily be conjured away.

The world remains in barely contained slump. Industrial output is still below earlier peaks in Germany (-2), US (-3), Canada (-8) France (-9), Sweden (-10), Britain (-11), Belgium (-12), Japan (-15), Hungary (-15) Italy (-17), Spain (-22), Greece (-27), according to St Louis Fed data. By that gauge this is proving more intractable than the Great Depression.

Some date the crisis to August 9 2007, the day it became clear that Europe’s banks were up to their necks in US housing debt. The ECB flooded markets with €95bn of liquidity. It seemed a lot of money then. The term “trillion” was still banned by the Telegraph style book in those innocent days. We have since learned to swing with the modern dance music from central banks.

This Ambrose Evans-Pritchard offering was posted on the telegraph.co.uk website late Sunday afternoon BST...and I thank Roy once again for digging this up for us. It's well worth reading...and the link is here.


Alasdair Macleod: Anniversary of the credit crunch

Writing for GoldMoney's research bureau, economist Alasdair Macleod notes that no Keynesian economists saw the credit crunch coming...and now all of them are advocating still more credit creation to revive the world's economies. Macleod notes that gold and silver have performed well since the credit crunch began while traditional equity investments have declined.

I borrowed the headline and the paragraph of introduction from a GATA release yesterday. Macleod's commentary is headlined "Anniversary of the Credit Crunch"...and it's posted at GoldMoney.com website. The link is here.


Currency's Days Seen Numbered: Investors Prepare for Euro Collapse

Banks, companies and investors are preparing themselves for a collapse of the euro. Cross-border bank lending is falling, asset managers are shunning Europe and money is flowing into German real estate and bonds. The euro remains stable against the dollar because America has debt problems too. But unlike the euro, the dollar's structure isn't in doubt.

Otmar Issing is looks a bit tired. The former chief economist at the European Central Bank (ECB) is sitting on a barstool in a room adjoining the Frankfurt Stock Exchange. He resembles a father whose troubled teenager has fallen in with the wrong crowd. Issing is just about to explain again all the things that have gone wrong with the euro, and why the current, as yet unsuccessful efforts to save the European common currency are cause for grave concern.

He begins with an anecdote. "Dear Otmar, congratulations on an impossible job." That's what the late Nobel Prize-winning American economist Milton Friedman wrote to him when Issing became a member of the ECB Executive Board. Right from the start, Friedman didn't believe that the new currency would survive. Issing at the time saw the euro as an "experiment" that was nevertheless worth fighting for.

Fourteen years later, Issing is still fighting long after he's gone into retirement. But just next door on the stock exchange floor, and in other financial centers around the world, apparently a great many people believe that Friedman's prophecy will soon be fulfilled.

This story was posted on the German website spiegel.de yesterday...and it's another story courtesy of Roy Stephens. The link is here.


Egyptian President replaces army chief, curbs military powers

Egypt’s military signaled its acquiescence Monday to the president’s surprise decision to retire the defense minister and chief of staff and retake powers that the nation’s top generals grabbed from his office.

President Mohammed Morsi’s shake-up of the military on Sunday took the nation by surprise. It transformed his image overnight from a weak leader to a savvy politician who carefully timed his move against the military brass who stripped him of significant powers days before he took office on June 30.

A posting on a Facebook page known to be close to the country’s military said the changes amounted to the “natural” handing over of leadership to a younger generation.

This AP story was posted on the france24.com Internet site on Sunday...and is Roy Stephens final offering in today's column. The link is here.


Bill Bonner: Japan's Debt...a Small Taste of the Coming Financial Implosion

The big news went almost unnoticed. Bloomberg was there, however, and had this report: Housewives With Frying Pans Protest Japan Tax Hike as Debt Soars... "About 200 housewives marched down a shopping street in central Tokyo, beating pans with ladles and shouting slogans criticizing a government plan to double Japan's 5 percent consumption tax."

You're probably thinking what most of the world's financial press thought. This story seems small. Unimportant. Insignificant.

But it is THE story of our time... a harbinger of the coming worldwide financial implosion.

Do you recall the news reports in 2001 as Argentina's economy slipped into the biggest default the world had ever seen - $100 billion worth?

Groups of housewives began beating on pots. They called them the "cacerolazos". They were protesting against the "corralito", in which their savings were forcibly trapped by the government. This led to a breakdown in the whole financial system... including the above-mentioned defaults.

Bill Bonner calls it the way it is...and the way it's going to be. The commentary was posted over on the dailyreckoning.com.au Internet site yesterday...and I thank Nitin Agrawal for sending it. The link is here.


Three King World News Blogs

The first blog is with John Embry...and it's headlined "Gold to Spike as Physical Market is Shockingly Tight". The second is with James Turk...and it's entitled "Tight Gold & Silver Markets to Spark Massive Breakout". And lastly is this blog with Michael Pento. It's headlined "Central Banks To Launch Unprecedented & Coordinated Action".
http://kingworldnews.com/kingworldnews/ ... _News.html


Ron Paul: Legalize competing currencies

I recently held a hearing in my congressional subcommittee on the subject of competing currencies. This is an issue of enormous importance, but unfortunately few Americans understand how the Federal Reserve and Treasury Department impose a strict monopoly on money in America.

This monopoly is maintained using federal counterfeiting laws, which is a bit of a stretch. If any organization is guilty of counterfeiting dollars, it is the Federal Reserve. But those who dare to challenge federal legal tender laws by circulating competing currencies -- at least physical currencies -- risk going to prison.

Like all government-created monopolies, the federal monopoly on money results in substandard product in the form of our ever-depreciating dollars.

I plucked this must read story from a GATA release yesterday. It was posted over at the paul.house.gov Internet site yesterday..and the link is here.
http://paul.house.gov/index.php?option= ... &Itemid=69


President Lyndon B. Johnson: Remarks at the Signing of the Coinage Act...July 23, 1965

"..All of you know these changes are necessary for a very simple reason--silver is a scarce material. Our uses of silver are growing as our population and our economy grows. The hard fact is that silver consumption is now more than double new silver production each year. So, in the face of this worldwide shortage of silver, and our rapidly growing need for coins, the only really prudent course was to reduce our dependence upon silver for making our coins.

If we had not done so, we would have risked chronic coin shortages in the very near future.

If anybody has any idea of hoarding our silver coins, let me say this. Treasury has a lot of silver on hand, and it can be, and it will be used to keep the price of silver in line with its value in our present silver coin. There will be no profit in holding them out of circulation for the value of their silver content.

I heard Chris Powell mention this in his Capital Account interview last week...and reader Ron Flutur was kind enough to forward the speech that LBJ made about it at the time. It's posted over at the presidency.ucsb.edu website...and the link is here. It's definitely worth the read.
http://www.presidency.ucsb.edu/ws/?pid=27108


Van Eck's Joe Foster: Gold Miners Offer Rally Leverage

Gold analyst Joe Foster is the investment team leader for Van Eck’s flagship gold fund, the Van Eck International Investors Gold Fund. He also serves on the investment teams for the Van Eck Global Hard Assets Fund and Van Eck VIP Global Hard Assets Fund, and is an advisor to the Market Vectors ETF Trust – Gold Miners ETF (GDX) and Junior Gold Miners ETF (GDXJ).

Foster has been in the mining and investment business for more than 25 years and is frequently quoted in the Wall Street Journal and Barron’s. He’s also a frequent guest on CNBC and Bloomberg TV. Hard Assets Investor Managing Editor Drew Voros spoke recently with Foster about the gold market as well as the gold mining sector.

Of course Joes doesn't even hint at the short-side corner that the '8 or less' traders hold in the Comex futures market in both gold and silver, so you have to take his reasoning with what's driving prices with a big grain of salt. But I agree with his general premise that the precious metal stocks will be the place to be when the powers that be finally let the precious metals fly.

This interview was posted over at the indexuniverse.com website yesterday...and I thank Randall Reinwasser for sending it along. The link is here.
http://www.indexuniverse.com/hot-topics ... =1&start=3


Return to gold is inevitable, Gold Standard Institute founder Barton says

GATA's friend the journalist Lars Schall today interviews the founder and president of the Gold Standard Institute, Philip Barton, about his belief that a gold standard for the whole world is inevitable -- a return to gold but not to the gold standard system of old.

This is another story that I lifted from a GATA release yesterday. The interview is underwritten by Matterhorn Asset Management and is posted at its Internet site, Gold Switzerland.com. It's certainly worth reading...and the link is here.
http://goldswitzerland.com/the-gold-sta ... nevitable/


Nick Barisheff: Gold Rising to $10K in 5 Years?

Here's an interview that Nick Barisheff of Bullion Management Group did with Fox Business News show "Money" on Friday, August 10, 2012. The video clip runs for 3:41...and it's worth watching. The link is here.
http://video.foxbusiness.com/v/1780408637001/


If there's ever journalism about gold, ask central banks these questions

For years GATA has been glad to respond to questions about the gold market from financial journalists in the mainstream news media...but we have always urged them to question the primary actors in the market, central banks, particularly in light of the documentation we have amassed showing or suggesting their often-surreptitious intervention in the market.

As far as we know, no such journalists have yet tried to question central banks about gold and reported the answers or refusals to answer, even as the efforts to question Germany's central bank, the Bundesbank, by the Canadian market analyst Rob Kirby in 2009 and the German freelance journalist Lars Schall in 2010 extracted some sensational confirmations in the form of denials.

So to make it easy for mainstream news media financial journalists in case they ever want to pursue the gold story seriously, GATA has compiled some critical questions for central banks.

This GATA dispatch was posted on the gata.org Internet site early yesterday afternoon Eastern time...and is a must read from one end to the other. The link is here.
http://www.gata.org/node/11661


¤ The Funnies

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¤ The Wrap

There are no markets anymore...only interventions. - Chris Powell, GATA


As I said at the top of this column, with volume being what it was, I wouldn't read much into yesterday's price action. As Ted Butler is wont to say, it was "just another day off the calendar".

But, having said that, here's the 3-year gold chart and, as I [and other commentators] have pointed out, the gold price is being compressed into an ever-decreasing trading range...and sooner or later it will break out, one way or another.

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[ Larger version: http://www.caseyresearch.com/gsd/sites/ ... old_34.png ]

And here's the 3-year silver chart...

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[ Larger version: http://www.caseyresearch.com/gsd/sites/ ... ver_41.png ]

If I had to bet ten bucks on the trading action over the next thirty days, I'd guess that JPMorgan et al will engineer one more price smash to the downside...the severity of which is unknown. My guess would be around $60 in gold...and $1.50 or so in silver.

After that, I would suspect that we'll have an upside rally of major significance...and the only thing that will determine how high and how fast we rise, as I've mentioned countless times, will be the actions of the short sellers of last resort.

However, we could blast off right from this point if events dictate...and 'da boyz' put their hands in their pockets.

So we wait.

There wasn't much price activity in either silver or gold during the Far East trading session on their Tuesday. London has been open a bit more than two hours as I hit the 'send' button on this column...and volumes are ultra-light in both metals once again. The dollar index is down about 14 basis points.

That's more than enough for today...and I'll see you here tomorrow.
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Three cheers for BS where we pile it higher and deeper!- Bring the Gold
 
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Re: PM News articles, Analysis and Commentaries

Postby silvermotor on Tue Aug 14, 2012 7:51 pm

http://www.bloomberg.com/news/2012-08-1 ... -2008.html



Paulson, Soros Add Gold as Price Declines Most Since 2008
By Debarati Roy - Aug 14, 2012 7:00 PM ET

Billionaire investors George Soros and John Paulson increased their stakes in the biggest exchange- traded fund backed by gold as prices posted the largest quarterly drop since 2008.

Soros Fund Management more than doubled its investment in the SPDR Gold Trust to 884,400 shares as of June 30, compared with three months earlier, a U.S. Securities and Exchange Commission filing for second-quarter holdings showed yesterday. Paulson & Co. increased its holdings by 26 percent to 21.8 million shares.

Gold slumped 4 percent in the second quarter, the biggest such loss since Sept. 30, 2008. Prices fell as European Central Bank President Mario Draghi and Federal Reserve Chairman Ben S. Bernanke failed to increase stimulus measures, damping the outlook for global growth and demand for the metal as a hedge against inflation. The price is down 0.1 percent since June 30.

“It’s all about easing, and people are especially waiting for the Fed since investors expect prices will rise,” if the central bank announces more bond purchases, said Walter “Bucky” Hellwig, who helps manage $17 billion of assets at BB&T Wealth Management in Birmingham, Alabama. “People are willing to hold on to gold to see what the Fed will say.”

The metal surged 70 percent from the end of December 2008 to June 2011 as the Fed kept borrowing costs at a record low and bought $2.3 trillion of debt in two rounds of so-called quantitative easing.

Paulson, 56, who became a billionaire in 2007 by betting against the U.S. subprime mortgage market, lost 23 percent in his Gold Fund through July as lower bullion prices and slumping mining stocks contributed to declines. Armel Leslie, a spokesman for Paulson, declined to comment. Michael Vachon, a spokesman for Soros, declined to comment.

Erased Gains

Gold erased its gains this year in May as investors favored sovereign debt and the dollar as economic growth slowed. The U.S. currency gained 3.3 percent against a basket of currencies last quarter.

Hedge funds have cut their net-long position, or bets on higher prices, by 66 percent from a record in August 2011. Their holdings fell to 85,510 futures and options on Aug. 7, according to the U.S. Commodity Futures Trading Commission.

Still, prices have rallied for 11 consecutive years, gaining more than sevenfold, as investors snapped up the metal after government and central bank stimulus programs boosted speculation that inflation would accelerate. The metal is up 2.3 percent this year.

Vinik, Mindich

Vinik Asset Management, the Boston-based hedge fund founded by Jeffrey Vinik, who formerly ran the Fidelity Magellan Fund (FMAGX), cut its entire stake in the gold ETF. On March 30, the fund held 2.3 million shares, SEC data show. Eric Mindich’s Eton Park Capital also sold all of its 739,117 shares last quarter, a filing showed.

Jonathan Gasthalter, a spokesman for Eton Park, declined to comment.

Moore Capital Management LP acquired 120,000 shares of SPDR Gold Trust in the second quarter, a filing showed yesterday. The hedge fund held no shares in the gold fund as of March 31.

Global holdings in exchange-traded products rose to a record 2,417.3 metric tons on Aug. 10, according to data compiled by Bloomberg.

Central banks and the International Monetary Fund are the largest bullion owners with 29,500 tons at the end of last year, or 17 percent of all mined metal, World Gold Council data show. Central banks have been net buyers for two straight years, the council said. Purchases this year will probably exceed the 456 tons added in 2011, the WGC estimates.

Holding On

“People expect prices to rise in the third quarter since historically it has been proved that it’s one of the best periods for gold, and investors who see easing coming in from various central banks are either increasing or holding on to their positions,” Donald Selkin, the New York-based chief market strategist at National Securities Corp., which manages about $3 billion of assets, said by telephone.

Money managers who oversee more than $100 million in equities must file a Form 13F with the SEC within 45 days of each quarter’s end to show their U.S.-listed stocks, options and convertible bonds. The filings don’t show non-U.S. securities or how much cash the firms hold.

To contact the reporter on this story: Debarati Roy in New York at droy5@bloomberg.net

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net
Three cheers for BS where we pile it higher and deeper!- Bring the Gold
 
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Re: PM News articles, Analysis and Commentaries

Postby silvermotor on Wed Aug 15, 2012 8:03 am

Please follow link for charts, graphs, pictures and links to other articles.

SM

http://www.caseyresearch.com/gsd/home



Aaaand it's Gone: This is Why You Always Demand Physical

"It now boils down to how low this 'correction' will go...and over what time period it will occur."


¤ Yesterday in Gold and Silver

It was another 'nothing' sort of day in the gold market on Tuesday...right up until 8:30 a.m. Eastern time...when either a not-for-profit seller, or high-frequency trading platform, carved eighteen bucks off the gold price in less than fifteen minutes. However, it appears that retail sales and producer price index data was released at 8:30...and that may have been the cause of the sell-off...or the fig leaf behind which the bear raid was conducted. I highly suspect the latter scenario.

The actual low price tick...$1,590.40 spot, if Kitco's number can be believed...came at 9:00 a.m....and the gold price recovered slowly from there, before getting sold off a hair going into the 1:30 p.m. Comex close. After that it traded ruler-flat going into the 5:15 p.m. electronic close in New York. The New York high tick came just a minute or so after the Comex opened...and that printed $1,615.30 spot.

Gold closed at $1,599.00 spot...down $10.90 from Monday. Net volume appeared to be just as heavy as Monday's volume...around 125,000 contracts.

Here's the New York Spot Gold [Bid] chart on its own, so you can see the relevant action up close and personal.

Silver's price path was more or less similar to gold's. It's attempt to rise above the $28.00 spot mark ran into a willing seller about half an hour after the London open...and the London low came around the 12 o'clock noon London silver fix.

The subsequent rally ran into the same not-for-profit seller at the same New York time as gold did...with silver's low [$27.56 spot] coming the same time as gold's...right at 9:00 a.m. Eastern. The rally that followed got nowhere...and after all the price gyrations of the preceding 24-hour time period, silver closed at $27.83 spot, the same price it closed at on Monday.

Net volume, once the roll-overs out of the September delivery month were subtracted out, came in at a very tiny 17,500 contracts...give or take. Silver's high price tick in New York was $28.05 spot and, like gold, that came just minutes after the Comex open.

Here's the New York chart on its own...

Just for 'information purposes only'...here's the platinum chart from yesterday...and you thought the intervention in the gold market was egregious!

If you check the high ticks in both gold and silver above, you'll see that both were set to blast off as well. It's just so much more obvious on the above platinum chart, as the trace actually shows up on the chart, but the price rallies were too fast in the other two metals.

The dollar index rolled over about twenty basis points during Far East trading...and hit its low of the day [82.21] shortly before 9:30 a.m. in London.

The subsequent 35 basis point rally lasted until about 10:40 a.m. in New York, before the dollar index more or less traded sideways into the 5:30 p.m. Eastern time 82.53 close.

You'd have to smoke one or more of those pointy cigarettes before you could see much co-relation between the precious metals prices and the dollar index on Tuesday.

Surprisingly enough, the gold stocks put on a decent showing despite the fact that the metal itself had just had the living snot kicked out of it less than an hour before the open. The stocks peaked shortly after 10:00 a.m....and then traded sideways until around the 1:30 p.m. Comex close...and then they slowly sold off into the close. The HUI finished down only 0.50%. It could have been worse.

For the third day in a row, the silver stocks were in the red virtually across the board...and Nick Laird's Silver Sentiment Index closed down another 1.33%.



The CME's Daily Delivery Report showed that 339 gold and 2 silver contracts were posted for delivery within the Comex-approved warehouses on Thursday. JPMorgan was the biggest short/issuer with 267 contracts...179 in its in-house account, along with another 88 in its client account. The Bank of Nova Scotia was in distant second place with 72 contracts posted for delivery. The only two long/stoppers of note were HSBC USA with 212 contracts...and Deutsche Bank with 121 contracts. The link to yesterday's Issuers and Stoppers Report, is here.

There were no reported changes in GLD yesterday...but an authorized participant withdrew 1,647,762 troy ounces from SLV.


I got a call from David Morgan last night...and one of the subjects of our discussion was just how much silver that the Sprott Physical Silver Trust was still owed. A quick e-mail exchange with Nick [Hawkeye] Laird revealed that they'd already received 6,546,513 troy ounces of the stuff, so it appears that they still have a bit over 1.5 million ounces yet to go. I had guessed at 600,000 ounces in this space on Tuesday.


There was no sales report from the U.S. Mint.

Over at the Comex-approved depositories on Monday, they reported receiving 800,439 troy ounces of silver...and shipped a very small 9,249 troy ounces out the door. The link to that action is here.

Well, First Majestic Silver Corporation posted their second quarter financial results yesterday...and here's an interesting item from that report..."In addition to cash, First Majestic was carrying 574,000 PSLV (Sprott Physical Silver Trust) units at quarter end with an approximate market value of $6.65 million...and 100 Silver Futures contracts representing 500,000 ounces of silver valued at $1.7 million including the unrealized gain and the margin requirement. The Company is currently holding 150 contracts representing 750,000 ounces of silver at an average cost basis of $27.277."

750,000 ounces of paper silver? They mine this stuff...and buy paper silver? I'm sure that JPMorgan laughed with glee as they sold them the Comex futures contracts. You can't make this stuff up! It makes me want to sell my position in the company at the open this morning, but I won't. Let's see if 'da boyz' can arrange for them to get stopped out, which is precisely what they deserve to have happen.

Here's a too-cute-for-words photo of a baby spotted skunk that my daughter Kathleen sent me yesterday...and I thought it worth sharing.



Despite ruthless editing, I still have a fair number of stories for you once again today.

¤ Critical Reads

JPMorgan Bank to Hold Collateral After Futures Firms’ Losses

JPMorgan Chase & Co. will allow customers to house excess swaps and futures collateral in a separate bank account as it seeks to reassure investors after losses at MF Global Holdings Ltd. and Peregrine Financial Group Inc.

The new service will allow clients to automatically aggregate excess margin at JPMorgan Chase Bank N.A., the firm’s insured deposit-taking unit, Emily Portney, head of agency clearing, collateral and execution at the New York-based bank, said in a telephone interview.

“It’s certainly in response to client queries and more emphasis on safekeeping of client money,” Portney said. “The key is safety, operational efficiency and more choice for clients” in how their funds are protected and invested, Portney said.

This Bloomberg story was posted on their website just before lunchtime in New York yesterday...and I thank reader Ulrike Marx for sending it. The link is here.


Union Greed and Politician Apathy are Killing Cities

Stockton and other Californian cities have slashed public services, thus putting the demands of public employees above the concerns of taxpayers and residents who rely on public services. Now we see that even bondholders don’t stand a chance when their interests collide with those of public-sector unions.

It’s easier to take on an offshore firm than confront CalPers [California Public Employees’ Retirement System], which had threatened to wage a protracted court battle against another Californian city, Vallejo, if it decided to reduce pension promises after its 2008 bankruptcy. Stockton officials no doubt are aware of that threat.

Why not screw the bondholders?

This story showed up on the townhall.com Internet site yesterday...and I thank reader Marshall Angeles for bringing it to our attention. The link is here.


On Wall Street, the Rising Cost of Faster Trades

For several years, the Wall Street wizards who built a faster, more fragmented stock market justified their creation by pointing to the benefits it yielded for investors in the form of lower trading costs.

But as the speed and complexity of the markets have continued to change at a rapid pace — with trade times now measured in millionths of a second — a growing number of studies and market participants suggest that those benefits to investors have stalled or even started to reverse.

Research from the broker Abel/Noser indicates that the total cost for an investor to get into and out of a single share of stock fell by more than half between 2000 and 2010, to 3.5 cents. Since then, though, the cost has leveled off and then ticked up in the most recent quarter to 3.8 cents, confirming a trend that has also been visible in recent data from Credit Suisse Trading Strategy and from Celent, a consulting firm specializing in financial markets.

This story was posted in The New York Times on Monday...and I thank Donald Sinclair for sharing it with us. The link is here.


UK inflation jumps unexpectedly in July to 2.6pc

The Office for National Statistics said its consumer prices index (CPI) measure of inflation rose to 2.6pc in July from 2.4pc in June, driven by a 21.7pc rise in the cost of flights which saw overall transport prices rise by 1pc.

The Retail Price Index inflation figure, which will be used to calculate the increase in rail fares, jumped to 3.2pc, against expectations of 2.8pc, leaving commuters faced with the prospect of £100-a-week fares.

In England fares will rise by inflation plus 3pc, while in Scotland they will go up by inflation plus 1pc. Wales has yet to set a figure for its increase.

The jump in inflation is a blow for the Bank of England's Monetary Policy Committee, which has repeatedly overshot its 2pc target in recent months.

Every negative surprise is "unexpected"...and/or a "temporary blip"...and it's a given that the inflation numbers are much worse than the government is reporting.

This Roy Stephens offering was posted on the telegraph.co.uk Internet site mid-morning BST in London...and the link is here.


France gives green light to holiday home tax hike

Owning a charming holiday home in the heart of rural France may no longer be the life-long dream of Francophiles across the world, thanks to new substantial tax rises.

A massive tax rise affecting foreigners who own second homes in the country has been given its blessing by France’s highest authority, the Constitutional Council.

The legislation was approved on August 9, despite strong claims by many in the property market that it is against EU laws.

It comes even after President François Hollande appeared to reassure Britain’s legion of holiday home owners during a recent trip to the UK.

This story was posted on the france24.com website on Monday...and I thank Roy Stephens for finding it for us. The link is here.


AIG latest to make capital flight from eurozone

A quarterly filing by the insurer in the US shows that the firm is working to slash its exposure to both European sovereign debt and the eurozone’s banks, a further indication that companies are losing confidence in the single currency,

Between December 31 last year and June 30, the company reduced its holdings of German, French and Spanish government debt.

Its reduction in exposure to German sovereign debt was the most marked, falling 16pc over six months, from $1.85bn (£1.2bn) to $1.37bn, indicating that Europe’s largest economy is not insulated from the capital flight gripping the eurozone’s southern and heavily indebted members.

The company has also reduced its holdings in German, French, Spanish and Italian banks, the quarterly filing of its investments shows.

This story was filed on The Telegraph's website late afternoon BST on Saturday...and I thank London reader Iain Doherty for digging it up on our behalf. The link is here.


Debt crisis: Greece raises €4bn at debt auction to help government avoid cash crunch

Greece raised €4.063bn (£3.2bn) in a sale of three-month debt on Tuesday, paying a modestly higher rate of 4.43pc that will help the government avoid a cash crunch.

The extraordinarily large sale was held ahead of the redemption of a €3.2bn bond held by the ECB which expires on August 20. it will also help the country pay salaries and pensions while it awaits the next installment of its EU-IMF bailout package.

In its last equivalent sale on July 17, Greece raised €1.625bn euros at a slightly lower rate of 4.28pc.

Greece has been shut out of the long-term debt markets since 2010 and has regularly issued short-term debt, but previous placements had not been as high as Tuesday's.

And so it has come to this...a loan to get it through until the next IMF pay day. This story was posted on the telegraph.co.uk Internet site at 7:00 a.m. Eastern time yesterday morning...and I thank Roy Stephens for sending it along. The link is here.


Debt crisis: Mariano Rajoy remains tight-lipped on Spanish bail-out

Spanish prime minister Mariano Rajoy has remained tight-lipped on whether he will make a formal request for a bail-out, as Olli Rehn indicated the ECB and EU were ready to shore up the eurozone.

Speaking in Mallorca after meeting King Juan Carlos, Mr Rajoy repeated that the government would act “in the best interests” of Spaniards. Asked if the pair had discussed the possibility of a second bail-out, he said: "Until we know what decision the ECB has taken on this matter, we aren't going to take one either".

Earlier this month, Mr Rajoy opened the door to a bail-out request, but said he would first need to know the attached conditions as well as the form a rescue would take.

Mr Rajoy also confirmed that the government will renew a six-month jobless subsidy designed for people who have exhausted other jobless benefits.

This is another story from yesterday's edition of The Telegraph...and it was posted on their website mid-afternoon BST yesterday...and it's another story courtesy of Roy Stephens. The link is here.


World shipping crisis threatens German dominance as Greeks win long game

Germany’s shipping industry faces a wave of bankruptcies over coming months as funding dries up and deepening economic woes across the world cause a sharp contraction in container trade.

Over 100 German ship funds have already shut down as the long-simmering crisis in global container shipping finally comes to a head. A further 800 funds are threatened with insolvency, according to consultants TPW in Hamburg.

They are not alone. Britain’s oldest ship owner, Stephenson Clark, dating back to 1730, went into liquidation last week, closing the final chapter of Britain’s coal trade and the industrial revolution.

It cited “incredibly depressed” vessel rates. The firm over-invested in the boom four years ago, betting too much on the China syndrome.

Germany is the superpower of container shipping, controlling almost 40pc of the world market. The Germans also misread the cycle and have been struggling to cope ever since with a legacy of debt and a glut of ships. Now everything is going wrong at once.

This Ambrose-Evans Pritchard blog was posted on the telegraph.co.uk website late on Monday night...and I thank Australian reader Wesley Legrand for sending it along. It's definitely worth reading...and the link is here.


Two stories from the Tehran Times

The first is headlined "Deal lets India resume Iran oil shipments". The second is entitled "Russia says new U.S. sanctions on Iran are 'overt blackmail', could affect ties". Both items are courtesy of Roy Stephens.


The Number of Desperately Poor People in Japan is Growing at an Alarming Rate

Having failed to graduate from high school in a country that places significant emphasis on education and where 92 percent of the population graduates, Hiro knew his prospects of a steady job in a Japanese company were slim.

But, he says, “I never thought it would be this bad. I didn’t ever expect to be rich, but I never thought it would be this tough,” says the 27-year-old, who asked to be identified only by his first name out of respect to his family.

Hiro represents a growing number of Japanese living below the poverty line.

Famously, a majority of Japan’s population once considered themselves middle class. While this was always something of an illusion, income inequality was lower than in other industrialized nations and there was almost full employment. Now, the ranks of those being left at the bottom of the world’s third-largest economy are swelling, and they are falling further behind the rest of society. The Health, Labor and Welfare Ministry announced last month that a record 2.1 million people are now receiving benefits and other financial assistance.

This Christian Science Monitor story was posted on the businessinsider.com Internet site yesterday...and is definitely worth reading...and I thank Roy Stephens for his final offering in today's column. The link is here.


Three King World News Blogs

The first is with Bill Fleckenstein...and it's headlined "Markets Will Crush Central Bank Actions". The second blog is with Rick Rule. It's entitled "Gold Strong, Expect Merger & Acquisition Boom In Miners". And last but not least is this blog with Robert Fitzwilson of The Portola Group...and it's headlined "This Will Be The Biggest Financial Fight In Human History".
http://kingworldnews.com/kingworldnews/ ... _News.html


Sierra Leone plans gold tax cut to curb smuggling

Sierra Leone plans to cut taxes on gold produced by small, individual miners nearly in half to reduce smuggling and boost exports, a year after the West African state did the same for diamonds, a top mining official told Reuters on Monday.

The move would undo part of a mining law drawn up in 2009 and backed by the International Monetary Fund. The law was meant to increase government revenue in the war-scarred country but instead backfired by triggering a slide in official exports.

The proposed cut would bring export taxes on individually mined gold down to 3 percent from the current 5 percent, he said. The move would follow a cut on individually mined diamonds to 3 percent in March 2011 from the previous 6.5 percent.

This Reuters story, posted at the mineweb.com website yesterday, was filed from Freetown on Tuesday morning...and I thank Donald Sinclair for sharing it with us. The link is here.
http://www.mineweb.com/mineweb/view/min ... &pid=92730


John Doody: Stage set for gold to go higher - and silver even better

John is poised to deploy the one-third of his portfolio he's been holding in cash into his top 10 gold and silver stocks.

It goes without saying that this 'analyst' never once mentions the real driving force behind gold and silver prices...and that's the grotesque Comex short positions held in both gold and silver, along with the price management techniques of JPMorgan et al. He should know better.

This interview was originally posted on The Gold Report website...and is posted here on the mineweb.com Internet site. I thank Donald Sinclair for his last offering in today's column...and the link is here.
http://www.mineweb.com/mineweb/view/min ... pid=110649


Aaaand It's Gone: This Is Why You Always Demand Physical

We have said it over and over, we'll say it again. For all those who for one reason or another would like to boycott the broken markets, yet trade gold in paper form, please understand that all the invested capital is at risk of total loss...and can and will be lost, co-mingled and re-hypothecated, not necessarily in that order, with little to zero recourse...and the residual claim on liquidating assets pushed to the very end of the queue.

[Now] here comes Amber Gold: a gold-based investment Ponzi scheme out of Poland, in which it is likely needless to say that the gullible investors never had actual possession of the gold. And when they tried, it was gone. All gone.

This must read Zero Hedge posting from yesterday evening was sent to me by reader 'David in California...and the link is here.
http://www.zerohedge.com/news/and-why-y ... d-physical


Paulson, Soros Add Gold as Price Declines Most Since 2008

Billionaire investors George Soros and John Paulson increased their stakes in the biggest exchange- traded fund backed by gold as prices posted the largest quarterly drop since 2008.

Soros Fund Management more than doubled its investment in the SPDR Gold Trust to 884,400 shares as of June 30, compared with three months earlier, a U.S. Securities and Exchange Commission filing for second-quarter holdings showed yesterday. Paulson & Co. increased its holdings by 26 percent to 21.8 million shares.

Australian reader Wesley Legrand sent me this story early on their Wednesday morning. It's posted on the businessweek.com Internet site...and it's certainly worth skimming. The link is here.
http://www.businessweek.com/news/2012-0 ... since-2008


¤ The Funnies

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¤ The Wrap

There are no markets anymore...only interventions. - Chris Powell, GATA



Well, with gold closing just below the $1,600 spot price mark...and also breaking below, but closing just above, its 50-day moving average...you have to wonder what's coming next. As I said in the first paragraph of this column, the 8:30 a.m. Eastern time engineered sell-off was about as blatant an act as your likely to see...until the next one.

Here's the 6-month gold chart...

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[ Larger version: http://www.caseyresearch.com/gsd/sites/ ... old_80.png ]

Exactly the same thing could be said about silver as well...and here's the 6-month chart for that...

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[ Larger version: http://www.caseyresearch.com/gsd/sites/ ... ver_83.png ]

As for platinum and palladium, they haven't been above their respective 50-day moving averages for any appreciable length of time since much earlier this year.

Could this be the start of the sell-off that I mentioned in yesterday's column? I don't have an answer for that yet, but I doubt very much if JPMorgan et al will leave us in suspense for long.

Yesterday at 1:30 p.m. Eastern time, was the cut-off for Friday's Commitment of Traders Report...and all the volume data from yesterday morning's price 'action' should be in that report when it comes out. The last couple of the times that 'da boyz' have smashed the price to the downside, they did it the day after the cut-off for the COT report...and that would be today.

As has been the case for the last while, there was no price action worth mentioning during Far East trading...and volumes were vanishingly small once again. The dollar index is unchanged.

But very shortly before the London open, both gold and silver developed a negative bias...and at 9:00 a.m. BST, the bid vanished...and the prices of both metals dropped like a stone. At this moment, it's 9:03 a.m. in London...4:03 a.m. Eastern time...so this is happening in real time as I write this paragraph.

If 'da boyz' follow the standard plan, the low will be in at such a point in time that nobody in North America will be able to trade it in any significant way. Everyone on this side of the Atlantic will wake up and find the deed already done...and we'll all be looking at the event in the rear view mirror.

It now boils down to how low this 'correction' will go...and over what time period it will occur. I believe I mentioned in this space yesterday that we could be looking at around $60 down in gold...and about a $1.50 in silver. I'll stand by those numbers...and if I'm out, it won't be by much. And whatever ultimate lows are painted, it won't last long...and is another opportunity to buy the physical metal itself.

If you're so inclined, dear reader, the most famous of all gold conferences in North America is coming up later this year...and that's the annual wiener roast in New Orleans...the New Orleans Investment Conference...which runs from October 24-27, 2012. I've attended it many times...and it's always a hoot. New Orleans is a very interesting city as well...and this boy from Canada hasn't got tired of it yet. If you have any interest, you can find out more by clicking here.

As I hit the 'send' button at 5:20 a.m. Eastern time, I must admit that I await the Comex trading session with more than the usual amount of interest...and it will be interesting to see if First Majestic's futures contracts make it through today's trading session.

See you on Thursday.
Image
Three cheers for BS where we pile it higher and deeper!- Bring the Gold
 
Posts: 3188
Joined: Mon Jul 13, 2009 1:23 pm
Location: South Florida

Re: PM News articles, Analysis and Commentaries

Postby silvermotor on Thu Aug 16, 2012 8:13 am

Please follow link for charts, graphs, pictures and links to other articles.

SM

http://www.caseyresearch.com/gsd/home



41 Years After the Death of the Gold Standard: A Look at "How We Ended Up in This Economic Purgatory"

"Silver closed on Wednesday at the precise same price as it did on Tuesday...and Monday...$27.83 spot."


¤ Yesterday in Gold and Silver

Well, the 9:00 a.m. BST sell-off in London proved to be the low of the day. The subsequent rally was weak...and then the price tailed off once again going into the New York open.

The secondary low of the day came about ten minutes before the Comex began to trade...and the rally that followed came to an end at 9:40 a.m. Eastern time...and then traded sideways to down a hair going into the 5:15 p.m. electronic close in New York.

The low of the day was a few dollars below $1,590 spot at 9:00 a.m. BST...and the New York high of $1,607.40 was at 9:40 a.m.

Gold closed at $1,603.10 spot...up $4.10 on the day...and back above its 50-day moving average. Volume was around the 107,000 contract mark.

The silver price pattern was very similar to gold's, except more 'volatile'. Silver's high [$28.13 spot] also came at 9:40 a.m. Eastern as well...and from there it got sold off and closed 30 cents off its high. Silver's low came at 9:00 a.m. BST...and was somewhere below $27.50 spot.

Silver closed on Wednesday at the precise same price as it did on Tuesday...and Monday...$27.83 spot. What are the chances, dear reader, that this was the free market in action? Net volume, once the rolls out of the September delivery month were subtracted, was a tiny 18,500 contracts.

By the way, these price moves were specific to only gold and silver. There was no trace of it in either platinum or palladium.

The dollar index opened around the 82.55 mark, with the low of the day coming at precisely 10:00 a.m. in London. Then in the next ninety minutes the index rose to 82.75 before giving back about 10 basis points going in the 5:30 p.m. New York close. In a nutshell, the dollar index didn't do much yesterday...and was never a factor in Wednesday's precious metals price activity.

The gold stocks spiked up a bit at the open, but slid into negative territory as soon as it became obvious that the 9:40 a.m. high in gold was all there was. The stocks traded down about half a percent until about 2:20 p.m. Eastern. Then, like the Dow, they caught a bid...and by the close of trading, the HUI finished in the black to the tune of 0.43%.

For the most part, the silver shares finished in the plus column yesterday...and Nick Laird's Silver Sentiment Index closed up 0.72%.



The CME's Daily Delivery Report showed that 88 gold and 4 silver contracts were posted for delivery within the Comex-approved depositories on Friday. Morgan Stanley and the Bank of Nova Scotia were the two issuers of note, with 50 and 35 contracts respectively. HSBC USA and Deutsche Bank stopped 55 and 32 contracts respectively. The link to yesterday's Issuers and Stoppers Report is here.

There were no reported changes in GLD but, after about 1.6 million ounces was withdrawn from SLV on Tuesday, an authorized participant added 1,356,958 troy ounces of silver yesterday.

There was no sales report from the U.S. Mint.

The Comex-approved depositories did not receive any silver on Tuesday, but they shipped 378,196 troy ounces out the door. The link to that activity is here.


After my remarks about First Majestic Silver Corporation yesterday, I was less than surprised to find an e-mail from the company in my in-box when I finally crawled out of bed yesterday morning...and here it is in its entirety...

Hi Ed – Hope all is well. Thanks for reading our news release yesterday, however, I’m honestly quite surprised to read your comment below in today’s G&S Daily…

Mr. Neumeyer (like yourself) is a silver bull and employs the use silver futures to trade the volatility in the market. By utilizing some of the top physical metal traders in the world (whom trade approx.. 70% of the world’s silver market), we have access to valuable information. Furthermore, this activity is nothing new… for more than 2 years our shareholders have benefited from this activity. For the first half of 2012, First Majestic has realized a gain of $2.3M; 2011 +$2.4M; 2010 +$2.9M.

Quite frankly, I realize your issue is not with the trading activity; it’s directed at the use of Comex futures. Your concerns have been received and we always appreciate valuable shareholder feedback.

BTW - the use of stops are not practical for professional trading…

Regards,

Todd Anthony, MBA
Investor Relations Manager
Toll Free: 1-866-529-2807



I have the usual number of stories for a weekday...and I hope you have time to at least skim the 'cut and paste' portions of each.

¤ Critical Reads

JPMorgan, UBS Said Among Banks Queried in Libor Probe

JPMorgan Chase & Co. and Barclays Plc are among seven banks subpoenaed in New York and Connecticut’s investigation into alleged manipulation of Libor, according to a person familiar with the matter and company filings.

Subpoenas were sent in recent weeks to five of the banks, Deutsche Bank AG, Royal Bank of Scotland Group Plc and HSBC Holdings Plc in addition to JPMorgan and Barclays, the person said yesterday. Citigroup Inc. and UBS AG received subpoenas earlier this year as part of the investigation.

New York Attorney General Eric Schneiderman and Connecticut Attorney General George Jepsen are jointly investigating alleged manipulation of the London interbank offered rate by lenders. RBS, UBS, Lloyds Banking Group Plc and Deutsche Bank are among the lenders regulators in Europe, Asia and the U.S. are investigating. The U.S. is conducting a criminal investigation.

This story was posted on the Bloomberg website yesterday...and I thank Donald Sinclair for bringing it to my attention...and now to yours. The link is here.


It Has Come to This: Close-to-Death Cash-Strapped Americans Selling Their Life Insurance Policies

We have such an eroded public safety net that folks are reduced to selling their life insurance policies for the sake of paying their medical bills.

When we think of “innovative financial products,” we probably think of credit-default swaps, collateralized debt obligations, and other ghoulish abstractions that we nervously half-remember from that last Michael Lewis book we read. We probably don’t think of life insurance. But a fascinating new article in the New York Times Magazine gives a very informative tour through the “life-settlements business:” an emerging marketplace whereby people who need cash near what is ostensibly the end of their life sell their life insurance policies to a third party for a price.

As ghoulish as this sounds, the article’s writer, James Vlahos, makes the case that this is in fact a pro-consumer innovation in the life insurance marketplace. But what many commenters to the article really find ghoulish is the simple fact that [here in the U.S.A.] we have such an eroded public safety net that folks are reduced to selling their life insurance policies for the sake of paying their medical bills and the other costs associated with old age.

This article showed up on the alternet.org website on Tuesday...and I thank Roy Stephens for his first offering of the day. The link is here.


Goldman Non-Prosecution: AG Eric Holder Has No Balls

I’ve been on deadline in the past week or so, so I haven't had a chance to weigh in on Eric Holder’s predictable decision to not pursue criminal charges against Goldman, Sachs for any of the activities in the report prepared by Senators Carl Levin and Tom Coburn two years ago.

Last year I spent a lot of time and energy jabbering and gesticulating in public about what seemed to me the most obviously prosecutable offenses detailed in the report – the seemingly blatant perjury before congress of Lloyd Blankfein and other Goldman executives, and the almost comically long list of frauds committed by the company in its desperate effort to unload its crappy “cats and dogs” mortgage-backed inventory.

In the notorious Hudson transaction, for instance, Goldman claimed, in writing, that it was fully "aligned" with the interests of its client, Morgan Stanley, because it owned a $6 million slice of the deal. What Goldman left out is that it had a $2 billion short position against the same deal.

If that isn’t fraud, Mr. Holder, just what exactly is fraud?

Matt Taibbi, in his usual pithy prose, tees Holder up and drives him down the fairway. This commentary was posted on the Rolling Stone magazine Internet site yesterday morning...and I thank Randall Reinwasser for bringing it to my attention. The link is here.


Charles Hugh Smith: We Are All Muppets Now

Every participant in the manipulated, rigged stock market is now a muppet.

Just as President Richard Nixon signalled his embrace of endless fiscal stimulus and bottomless deficits by declaring "We are all Keynesians now," it is now apparent that we are all muppets now, willing participants in a fraudulent, manipulated market in the hopes that we will skim the same outsized gains reaped by the manipulators.

Actually, Nixon said, "I am now a Keynesian in economics," but the catchier phrase has entered popular history.

Using the word muppets to describe credulous investors who could be ripped off at will originated with investment banking giant Goldman Sachs.

This piece showed up on the Zero Hedge website yesterday...and I thank reader Marshall Angeles for sending it. It's a short, but very worthwhile read...and the link is here.


More QE coming, Bank of England minutes show

Minutes of the Bank’s Monetary Policy Committee meeting this month showed that, although the decision to hold rates at 0.5pc and leave quantitative easing unchanged at £375bn was unanimous, the decision was “finely balanced” for some of the nine members.

The release of the minutes coincided with separate comments from deputy governor Charlie Bean and fellow rate-setter Paul Fisher, both of whom suggested that QE still has a role to play in helping the recovery.

The MPC voted 7-2 in favour of adding another £50bn to QE in July. It is expected to increase that again by £50bn before the end of the year. According to the minutes, some members even considered doing more this month “since a good case could be made at this meeting for more asset purchases”.

Last week, the Bank downgraded its forecasts for growth to zero this year and the minutes reflected concerns about the economy. The Bank now believes that even long-term prospects may have been damaged.

This story was posted on the telegraph.co.uk Internet site in the very early afternoon BST...and I thank Roy Stephens once again. The link is here.


UK threatens to 'assault' Ecuadorian Embassy to arrest Assange

British authorities have “warned” Ecuador that they could raid its embassy and arrest Julian Assange if he is not handed over. The Ecuadorian Foreign Minister responded by saying such a move would be a “flagrant violation” of international law.

Ecuador received a "direct" threat from the authorities in London that they are prepared to storm the Ecuadorian Embassy and arrest Assange if he is not delivered to their custody. Ricardo Patino, Ecuador's Foreign Minister, said the "written threat," an aide memoire, was delivered to Ecuador's Foreign Ministry and ambassador in London.

The letter received by the Ecuadorian Embassy stated that British authorities have a legal basis, founded in the Diplomatic and Consular Act of 1987, to arrest Assange on the Embassy’s premises.

"You need to be aware that there is a legal base in the UK, the Diplomatic and Consular Premises Act 1987, that would allow us to take actions in order to arrest Mr Assange in the current premises of the Embassy,” read the letter. "We sincerely hope that we do not reach that point, but if you are not capable of resolving this matter of Mr Assange's presence in your premises, this is an open option for us."

This story was posted on the Russia Today website early today...and I thank Roy Stephens for sending it our way. The link is here.


Standard Chartered and Iran: Hush money

It could have been disastrous. Standard Chartered was facing a hearing before New York state’s Department of Financial Services (DFS) on August 15th that would have certainly aired embarrassing information. Instead it will be expensive. The bank has acceded to a fast settlement of the charges that it had illicitly processed $250 billion in transactions with Iran, paying $340m in civil penalties and agreeing to various other provisions.

As a result of the deal, the bank's management is temporarily off the hook for personal liability. Just as important, they will not have to defend the bank's actions before the regulator. The agreement also appears to cap potential penalties which, in theory, could have included losing a critical license to operate in America and thus provide its vast emerging-markets network with cross-border dollar transactions.

Any celebration, however, will be muted. In the agreement, Standard Chartered acknowledged that the scope of its illicit activity was indeed $250 billion, the number put forward by the DFS, and not merely $14m, which the bank initially insisted was the case.

Furthermore, the payment does not stop America’s other regulators from pursuing their own charges. Ordinarily there is a sorting out process between regulators before a settlement, and often before the announcement of charges. But in this case the DFS moved ahead on its own, much to the surprise of Standard Chartered, as well as officials at the Federal Reserve, Treasury and Justice Department.

This very short story was posted in the economist.com website yesterday...and I thank Donald Sinclair for sending it. The link is here.


Buying Time: Greece to Request Extension on Austerity Measures

Greek Prime Minister Antonis Samaras is expected to have a difficult mission next week. He wants to persuade German Chancellor Angela Merkel to ease strict austerity conditions on his country, and he may also need to ask for billions in additional aid. Speculation is also growing about a possible bond-buying program for Spain.

Antonis Samaras is showing a bit of courage at the moment. Next week the Greek prime minister plans to travel to Berlin, where he wants to personally persuade Chancellor Angela Merkel to loosen tough conditions for aid despite growing criticism of Athens in Germany. Samaras plans to seek a two-year extension, to 2016, of an austerity plan that was previously agreed with the so-called troika of the European Commission, the International Monetary Fund and the European Central Bank, the Financial Times is reporting, citing a document it has obtained.

The British newspaper is reporting that Samaras wants to first present the plan next week to French President François Hollande and then travel to Berlin one day later for a meeting with Merkel. Iannis Mourmouras, Samaras' chief economic adviser, told the newspaper the extension was justified because of the country's deep recession, with the economy set to shrink this year by 7 percent.

This story was posted on the German website spiegel.de yesterday...and I thank Donald Sinclair for sending it. The link is here.


Resistance in Berlin: The Return of the Iron Chancellor

Antonis Samaras' trip to Germany next week will be a complicated one. The Greek prime minister is expected to ask Angela Merkel for his country to be given two more years to adhere to the austerity conditions attached to the country's EU-IMF bailout program. With political resistance growing in Berlin, the chancellor has little leeway for compromise.

The recent shrill threats toward Athens made by some in her government camp haven't pleased Merkel, either. Yet Greek Prime Minister Antonis Samaras shouldn't hope for too much understanding when he makes his first official visit to Germany next week. On the contrary, his appeal for understanding may fall on deaf ears because the chancellor has no maneuvering room left for compromise. Within her coalition government -- which includes her Christian Democratic Union (CDU), its Bavarian sister party, the Christian Social Union (CSU), and its junior partner, the business-friendly Free Democratic Party -- patience with Greece has been exhausted. Each additional concession toward Athens could trigger a revolt against Merkel within the ranks of her own government.

This was another story from the spiegel.de Internet site yesterday...and another offering from Donald Sinclair. The link is here.


Troubled Times: Wave of Suicides Shocks Greece

On July 16, a businessman and father of three hanged himself in his shop on the island of Crete. A 49-year-old man from Patras was found by his son. He had also hanged himself. On July 25, a 79-year-old man on the southern Peloponnese peninsula hanged himself with a cable tied to an olive tree. On August 3, a 31-year-old man shot himself to death at his home near Olympia. On August 5, a 15-year-old boy hanged himself in Pieria. And, on August 6, a 60-year-old former footballer self-immolated in Chalcis.

These are also reports from Greece, reports that, at first glance, seem to have nothing to do with the economy. They come together to form a grim statistic, raising questions of what is triggering the suicides and whether the high incidence is merely a coincidence.

Or do people see suicide as a way out of the crisis that has taken hold of their country and their lives? Are they bowing out before things get even worse? Germany and the International Monetary Fund (IMF) are opposed to a new bailout package for Athens. The country faces a shortfall of at least €40 billion ($49 billion). Greece could very well be officially bankrupt by the fall.

This story is another one from the spiegel.de Internet site yesterday...and is courtesy of Roy Stephens...and the link is here.


Japan arrests pro-China activists on disputed island

Regional tensions flared on the emotional anniversary of Japan’s World War II surrender as activists from China and South Korea used Wednesday’s occasion to press rival territorial claims, prompting 14 arrests by Japanese authorities.

China’s official Xinhua News Agency said the arrests had caused tensions over its territorial dispute with Japan to surge “to a new high.”

The 14 people had travelled by boat from Hong Kong to a set of uninhabited islands controlled by Japan but also claimed by China and Taiwan. Japanese police initially arrested five activists who swam ashore in the East China Sea chain, known as Senkaku in Japanese and Diaoyu in Chinese.

This AP story was posted on the france24.com website yesterday...and it's worth running through. It's also Roy Stephens final offering in today's column...and the link is here.


Four King World News Blogs/Interviews

The first is with Richard Russell. It's headlined "Get Ready For Massive QE3 & Epic Inflation". The second blog is with Stephen Leeb...and it's entitled "$12,000 Gold, Paulson, Soros, & A Coming Mania In The Shares". The last blog is with Dan Norcini...and it's headlined "Get Ready, Gold Bears To Be Crushed & Silver To Catch Fire". The audio interview is with Bill Fleckenstein.
http://kingworldnews.com/kingworldnews/ ... _News.html


Silver hoard nears record but speculative bulls recoil

At a time when hedge funds are the least bullish on silver in almost four years, investors' holdings are near a record, siding with the analysts predicting a rally as central banks move to bolster growth.

Speculators cut bets on higher prices by 72 percent since the end of February, mirroring changes in their copper wagers, which turned bearish in May, U.S. Commodity Futures Trading Commission data show. Silver held in exchange-traded products climbed for three months and is now valued at $16.2 billion, according to data compiled by Bloomberg. Prices will average $33.02 an ounce in the fourth quarter, 18 percent more than now, the median of 13 analyst estimates compiled by Bloomberg show.

Hedge funds anticipate slowing growth will curb demand for silver, 53 percent of which is used in products from televisions to batteries. Investors and analysts are bullish on expectations central banks will do more to stimulate economies, expanding consumption and increasing the allure of precious metals as a store of value. Prices tripled as the Federal Reserve bought $2.3 trillion of debt in two rounds of so-called quantitative easing from December 2008 to June 2011.

This rather strange Bloomberg story was filed from London on Tuesday...and I'm not sure what to make of it. Of course there isn't a word in there about the short-side corner that eight largest traders have in the metal...and how that influences the price. I thank Donald Sinclair for his final offering in today's column. It's posted over at the mineweb.com Internet site..and the link is here.
http://www.mineweb.com/mineweb/view/min ... pid=110649


Acquisition frustration boils over at B2Gold

B2Gold is on the hunt for acquisitions, as are many other mining and mineral exploration companies. The goal is to grow and, presumably, to take advantage of markets that have not been this bad since 2008, or that are arguably worse.

The slow grind down over the past year - as opposed to the trampoline like crash and recovery in 2008/2009 - has forced many, explorers especially, into ever tightening corners as money burns out. As James West of the Midas Letter succinctly retold the history of junior crashes recently: "Since the post-2009 high of 2,423 reached in March of 2011 (on the TSX Venture), we have again seen the market sliding back towards the sub-1,000 mark, but this time, it's happening so slowly that its toll on public company treasuries in the junior resource space is far worse. Companies deferred raising money throughout 2011, as the feeling was that the markets were poor, and they would wait for improvement. Well now the markets are worse, and more companies are running on fumes."

But B2Gold CEO Clive Johnson was being stymied in his efforts. He said it was surprising how many companies out there are unwilling to sign confidentiality agreements at all. And if they are willing, they come with caveats - shackles in the form of standstill agreements - that make it tough to do anything even if you can get into the data room. The self interest here is evident. B2Gold wants to leverage its position of relative strength. The beaten down, however, see no reason to put ink on paper at market lows. To do so is like starved lambs letting the fat wolves in, the thinking may go. If they do open the gate, well, they add a little poison to the ink.

This very interesting story was brought to my attention by Casey Research's own Jeff Clark. It's posted over at the mineweb.com as well...and it's worth the read. The link is here.
http://www.mineweb.com/mineweb/view/min ... pid=110649


The Hoarding Continues: China Has Imported More Gold In Six Months Than Portugal's Entire Gold Reserve

While the highly "sophisticated" traders that make up the gold market continue to buy or sell the precious metal based on whether the Fed will or will not do the new QE tomorrow, China continues to do one thing. Buy.

Beijing continues to buy non-US gold, in the form of 68 tonnes in imports from Hong Kong in the month of June. The year to date total is 383 tons. In other words, in half a year China, whose official total tally is still a massively underrepresented 1054 tonnes, has imported more gold than the official gold reserves of Portugal, Venezuela, Saudi Arabia, the UK, and so on, and whose YTD imports alone make it the 14th largest holder of gold in the world.

This must read Zero Hedge posting from yesterday was sent to me by West Virginia reader Elliot Simon...and the link is here.
http://www.zerohedge.com/news/hoarding- ... d-reserves


41 Years After The Death Of The Gold Standard: A Look At "How We Ended Up In This Economic Purgatory"

This being August 15, 2012, students of the history of monetary economics no doubt are aware that this is the 41th Anniversary of the breakdown of Bretton Woods. It was on this day 41 years ago that President Nixon defaulted on the promise to exchange gold for paper dollars presented for exchange by foreign central banks. Aug 15th marks the anniversary of the collapse of Bretton Woods and the gold-exchange standard that was established after WW II. (Notice that dollar debasement has been bipartisan over the years: Republicans Nixon and Bush and Democrats Carter and Obama have all presided over major declines in the value of U.S. money.)

The current crisis in the global monetary system pales in magnitude to the sundering of gold from central banks' fiat paper currencies in 1971. That is, we are not witnessing the wholesale dismantling of an entire monetary system. What we are witnessing is a loss of confidence in the current monetary system, which, of course, is equivalent to a loss of confidence in central banks' ability to restore stability. However, the decision to renege on the gold-exchange standard that was made 41 years ago is still reverberating today. In *fact*, many or most of the problems observed today are the direct result of wrong-headed discretionary monetary policies.

What was it that made the current morass inevitable once the paper dollar was severed from gold?

The answer is simple: fiat paper money that is not grounded in any objective standard can be manipulated at the whim of the issuer. Without the requirement to exchange fiat money for gold or some other commodity, the central bank can issue unlimited amounts, thus making its value subject to extreme volatility and, as we have seen, perpetual debasement.

According to the folks over at the zerohedge.com Internet site yesterday evening, this essay was courtesy of Kenneth Landon of JPMorgan. One has to wonder if this is some sort of 'trail balloon' as well. It's a must read for sure...and is another offering from Elliot Simon. The link is here.
http://www.zerohedge.com/news/41-years- ... -purgatory


¤ The Funnies

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¤ The Wrap

In any discussion of the future of Gold, or of the price of Gold, the first thing that must be realized is that Gold is a political metal. In the true meaning of the word, its price is "governed".

This is so for the very simple reason that Gold in its historical role as a currency is fundamentally incompatible with the modern worldwide financial system.

Up until August 15, 1971, there has never in history been an era when no paper currency was linked to Gold. The history of money is replete with instances of coin clipping, printing, debt defaults, and the other attendant ills of currency debasement. In all other eras of history, people could always escape to other currencies, whose Gold backing remained intact. But since 1971, there is no escape because no paper currency has had any link to Gold.

All of the economic, monetary, and financial upheaval of the past 41 years is a direct result of this fact.

The global paper currency system is very young. It depends for its continued functioning on the belief that the debt upon which it is based will, someday, be repaid. The one thing, above all others, that could shake that faith, and therefore the foundations of the modern financial system itself, is a rise (especially a sharp rise) in the U.S. Dollar price of Gold. - Bill Buckler, Gold This Week.



Well, yesterday didn't prove to be the start of the big sell-off. It turned out to be the usual high-frequency traders doing the dirty...digging a hole for gold and silver to climb out of in overnight trading, so it could be arranged to finish the New York trading session basically unchanged from the previous day. As Ted Butler pointed out yesterday, this tight trading range has mostly consisted of that pattern for the last few months or so.

And nothing could prove that point more than the closing price of silver on Monday, Tuesday and Wednesday. It closed at $27.83 spot on all three days. The statistical probability of that being free market forces in action is beyond astronomically high, so it was obviously a big 'up yours' from the powers that be.

Far East trading during their Thursday was a non-event once again, with net volumes as low as I can remember them being...especially in silver. The dollar index is up a tad, but nothing significant...and now that London is open, not much is happening their, either. I'm sure that Comex trading will probably be interesting once again.

So we still sit here in these manufactured 'summer doldrums' waiting for the next shoe to drop. I can't shake the feeling that when it does it hit the floor, it will be heard around the world...and the impact will be a market-altering event. The only unknown is what form it will take...and I'd like to believe that gold [and silver] will play their part in it.

See you tomorrow.
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Re: PM News articles, Analysis and Commentaries

Postby InfleXion on Thu Aug 16, 2012 11:34 am

Central Bank Gold Demand Doubles in 2Q

http://www.foxbusiness.com/news/2012/08 ... bles-in-2q

/ Published August 16, 2012 / Dow Jones Newswires

Total central bank gold purchases in the second quarter were more than double the level reported just one year earlier, as emerging market governments sought to diversify away from traditional reserve currencies amid heightened economic insecurity, according to World Gold Council data Thursday.

At 157.5 metric tons, gold buying among central banks came in at its highest quarterly level since the sector became a net buyer of the precious metal in the second quarter of 2009, data in the organization's quarterly Gold Demand Trends report show.

The official sector--central banks and other official institutions--had, by comparison, bought 66.2 tons in the second quarter of 2011.

Should central banks continue to buy gold at the current rate, official sector gold purchases would likely total around 500 tons this year, easily surpassing the 458 tons of gold bought by the official sector in 2011, Marcus Grubb, WGC managing director of investment said in an interview with Dow Jones Newswires.

Central bank gold purchases were a bright spot in overall gold demand last quarter, which dropped 7% globally, driven primarily by a 38% drop in consumer demand for gold in India.

Central banks in emerging economies have been largely net buyers of gold over the past couple of years, beefing up reserves in reaction to the sovereign debt crises affecting the U.S. dollar and the euro. Before 2009, however, central banks had been net sellers of gold bullion for around two decades.

"Through all the uncertainty, it is clear that gold's fundamental properties as a vehicle for capital preservation and a source of liquidity continue to endure," the WGC said in its report. "This is evident from the activity of central banks, the ultimate long term investors, which continue to increase their gold holdings to diversify reserves and protect against reliance on one or more foreign currencies," it added.

Particularly active in the gold market in recent months have been the central banks of Kazakhstan, Russia, Ukraine and the Philippines.

Kazakhstan's central bank purchased gold for a seventh-straight month in June as it continued to rapidly expand its reserves, which are now 1 million troy ounces higher than a year ago, according to data from the International Monetary Fund.
Silver: the Rodney Dangerfield of precious metals.

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Re: PM News articles, Analysis and Commentaries

Postby silvermotor on Thu Aug 16, 2012 8:38 pm

http://www.bloomberg.com/news/2012-08-1 ... isery.html



Gold Runs Out in Lisbon as Price Drop Compounds Money Misery
By Henrique Almeida - Aug 16, 2012 12:12 PM ET

Paulo Oliveira and his wife sold their wedding rings to pay the rent after he lost his job as a builder last month. They were the couple’s last pieces of jewelry.

“We have no more gold to save us from being kicked out this month,” the 46-year-old said as he stood in the area of downtown Lisbon popular with cash-for-gold stores. “Everyone I know is struggling, even the gold stores are empty because nobody has any more gold left to sell.”

Oliveira encapsulates a growing trend in debt crisis- stricken Europe as household gold supplies dry up after record prices and a deepening recession prompted a proliferation of places to exchange the metal for money.

In Portugal, the historical home of some of Europe’s biggest gold reserves, the number of jewelry stores, which include cash-for-gold shops, increased 29 percent in 2011 from a year earlier, a study commissioned by parliament found. In the first quarter, an average of two new stores opened every day, the report said. Now some of them are closing.

“Business has gone from great to terrible in a matter of months,” Luis Almeida, whose family has owned a gold store near Lisbon’s Rossio Square for more than 40 years, said in an interview. “The sad truth is that most of my clients have already sold all of their gold rings.”

Market Slump

Recycled gold supplies, which are derived in part from melted jewelry, fell 7.7 percent to 363.7 tons in the three months through June from the previous quarter, according to the World Gold Council. Global demand for gold dropped 7.1 percent in the second quarter to 990 metric tons from a year earlier, the London-based industry group said today in a report.

Gold for immediate delivery jumped 10 percent in London in 2011, reaching a record of $1,921.15 an ounce on Sept. 6. Since then, the price has fallen 16 percent and traded at $1,616.04 at 5:06 p.m. in London.

The market swing coincided with Portugal raising taxes and cutting spending to meet terms of the 78 billion-euro ($96.2 billion) 2011 bailout package from the International Monetary Fund and its European partners. Portugal was the third country to seek aid, following Greece and Ireland in 2010.

“That’s when I started selling all the gold I had,” said Oliveira, who made 800 euros a month working as a bricklayer for construction companies such as Mota-Engil SGPS SA (EGL) and Soares da Costa SGPS SA before being laid off in July.

Gold Exports


Portugal’s gold exports increased by more than five times to 519.4 million euros last year from 102.1 million euros in 2009, according to data published on the Lisbon-based National Statistics Institute’s website.

Oliveira said he now makes as little as 15 euros a day polishing shoes on a wooden stool in Lisbon’s central Barros Queiroz street, where gold traders complain competition is eating profit.

“It’s like seven dogs for one bone,” said Alcina Bernardo, who owns a gold shop 500 meters away in the Rua do Ouro street, once a center for goldsmiths working with metal brought back from Brazil in the 18th and 19th centuries.

As a country, Portugal traditionally has guarded that gold. The central bank holds more gold relative to the size of the country’s economy than any euro country, mostly accumulated during former dictator Antonio de Oliveira Salazar’s 36 years in power, based on data compiled by the World Gold Council.

The law prevents proceeds from selling any gold reserves from going toward the government’s budget.

Already Melted

While central banks bought 157.5 tons in the second quarter, compared with 66.2 tons a year earlier, jewelry use slipped 14 percent to 418.3 tons, the council said. Jewelry demand from India, 2011’s biggest buyer, plunged 30 percent to 124.8 tons, accounting for 30 percent of the global total.

“The loose scrap in the market has already been melted,” said Nikos Kavalis, an analyst at the Royal Bank of Scotland Group Plc in London who forecasts gold prices will fall to $1,250 an ounce by 2015.“People are also less willing to sell their jewelry amid lower gold prices.”

With the Portuguese unemployment rate at a euro-era record of 15 percent in the second quarter, Oliveira is now wondering who will help bail him out now that his job and gold are gone.

The government forecasts unemployment will increase to 15.5 percent for all of 2012 and to 15.9 percent next year. An average of 86 people a day sought help for indebtedness during the first half of the year, the Portuguese Association for Consumer Protection said in a report published in July.

“It’s okay for the gold shops around me to go broke, they’ve already made their profit,” Oliveira said. “What I would like to know is who will help me and my wife when we get evicted?”

To contact the reporter on this story: Henrique Almeida in Lisbon at halmeida5@bloomberg.net

To contact the editor responsible for this story: Jerrold Colten at jcolten@bloomberg.net
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Re: PM News articles, Analysis and Commentaries

Postby silvermotor on Fri Aug 17, 2012 8:07 am

Please follow link for charts, graphs, pictures and links to other articles.

SM

http://www.caseyresearch.com/gsd/home



Global Gold Demand Down in Q2...But Central Bank Buying Hits Record

"I was really encouraged by the share price action yesterday...and I'm hoping that this is a harbinger of things to come."


¤ Yesterday in Gold and Silver

As has been the usual situation these days, the gold price didn't do much of anything during Far East trading on Thursday, but did develop a positive price bias starting almost at the 8:00 a.m. BST London open...which also happened to be the low price print of the day as well.

There was a bit of a pop minutes after the Comex open, but that didn't last. The real fireworks started the moment that the London p.m. gold fix was in at 3:00 p.m. BST...which was 10:00 a.m. in New York. In one hour flat the gold price rose seventeen bucks, with the high tick of the day [$1,621.00 spot] coming a minute or so after 11:00 a.m. Eastern.

At that point a willing not-for-profit seller showed up...and gold gave up five bucks of those gains in very short order...and from there the gold price traded pretty flat into the close of electronic trading.

Gold closed the Thursday session at $1,614.70 spot...up $11.60 from Wednesday. Net volume was in the 112,000 contract area. The lion's share of that volume occurred during the New York trading session, so it's obvious [based on these volume figures] that the rally did not go unopposed.

It was pretty much the same price path in silver. Most of the gains were in by 11:00 a.m. Eastern, but the high tick of the day [$28.41 spot] came just a few minutes before the Comex close...but that spike got pounded flat immediately by the usual suspects, I would think...as there's barely a hint of it even on the New York Spot Silver [Bid] chart.

Silver closed at $28.22 spot...up 39 cents from Wednesday. Net volume was around 25,000 contracts.

Here's the New York Spot Silver [Bid] chart I just spoke of. You will note that there's no indication that the high tick of the day came anywhere near $28.41 spot.

Platinum and palladium did better than either gold or silver...especially platinum. It was up a whopping 3.02%...and palladium was up 1.57%. As a comparison, gold was up 0.72%...and silver up 1.40%.

The dollar index opened around the 82.65 mark...and rose to around 82.85 shortly before the London open. It hung in there reasonably well until shortly after 8:00 a.m. in New York, before it headed south.

Most of the approximately 45 basis point decline was in by shortly before 11:00 a.m. in New York...and it mostly traded sideways into the 5:30 p.m. Eastern close. When all was said an done, the dollar index was down about 25 basis points on the day.

Once again it's a stretch to find much co-relation between what gold and silver did...and what the dollar index did.

The gold stocks gapped up a hair at the open, but then away they went to the upside...with most of the gains coming before noon Eastern time. But the stocks continued to grind slowly higher from that point...and the HUI finished on its high tick of the day, up 3.40%.

The silver stocks put in a good show as well...and Nick Laird's Silver Sentiment Index closed up 3.75%.



The CME's Daily Delivery Report showed that 131 gold and 26 silver contracts were posted for delivery inside the Comex-approved warehouses on Monday. There were only two short/issuers in gold...the Bank of Nova Scotia and Merrill, with 67 and 64 contracts issued. All but one of those contracts went to either HSBC USA [83 contracts] or Deutsche Bank [47 contracts]. The only thing about the deliveries in silver worth noting was the fact that the Bank of Nova Scotia was the long/stopper on all 26 contracts. The link to yesterday's Issuers and Stoppers Report is here.

GLD reported that an authorized participant[s] added 174,569 troy ounces of gold yesterday...and there were no reported changes in SLV.

It was another day of no sales report from the U.S. Mint.

The Comex-approved depositories reported receiving 599,490 troy ounces of silver on Wednesday...and shipped a smallish 32,813 ounces out the door. The link to that activity is here.

Here's a chart and some text from Peter DeGraaf's website at pdegraaf.com, that Australian reader Wesley Legrand sent me last night...and I thought you might find it useful.

"This is the Chart of the Day for August 17, 2012 AD."

"It's the index that compares the gold and silver producers of the HUI index to the price of gold. Historically whenever HUI outperforms bullion it represents a bull market for both sectors. Price broke out above the 50-day moving average on Thursday, and a close above the blue arrow will confirm the breakout, with a target at the green arrow. A breakout becomes all the more important when it comes off a double bottom, or an ABC bottom. The supporting indicators are positive."

"The Gold Direction Indicator [GDI...a personal indicator Peter uses] closed at 78% compared to 46%. The interpretation is: hold off buying until price backs off. Whenever the GDI rises above 70% we are close to a point where commercials start to sell."

Image

I'll have more on this in 'The Wrap'.



As usual, I have a lot of stories for you again today...and a lot of them are gold-related

¤ Critical Reads

No Criminal Case Is Likely in Loss at MF Global

A criminal investigation into the collapse of the brokerage firm MF Global and the disappearance of about $1 billion in customer money is now heading into its final stage without charges expected against any top executives.

After 10 months of stitching together evidence on the firm’s demise, criminal investigators are concluding that chaos and porous risk controls at the firm, rather than fraud, allowed the money to disappear, according to people involved in the case.

The hurdles to building a criminal case were always high with MF Global, which filed for bankruptcy in October after a huge bet on European debt unnerved the market. But a lack of charges in the largest Wall Street blowup since 2008 is likely to fuel frustration with the government’s struggle to charge financial executives. Just a few individuals — none of them top Wall Street players — have been prosecuted for the risky acts that led to recent failures and billions of dollars in losses.

Why should we be surprised at this outcome, dear reader? This story was posted on The New York Times website late on Wednesday night...and I thank Phil Barlett for sending it. The link is here.


Retail Exodus From Stocks Continues: Another $3.6 Billion Pulled Out Last week

In the past two years, or 106 weeks of market data, there here been 17 weeks of inflows, or 16% of the total, amounting to $31 billion. The remainder? Outflows for a total of $300 billion.

In the 32 weeks of YTD 2012 money flows, there have been 5 weeks of inflows for a total of $3.6 billion (which was also equal to the outflow in the last week alone) none of which coincided with market tops, and in fact the biggest outflows occurred just as the market hit interim highs.

This short must read article was posted on the Zero Hedge website yesterday afternoon Eastern time...and I thank reader U.D. for bringing it our attention. The chart is worth a look as well...and the link is here.


Labor Dept. Attempts to Stop Layoffs by Giving $100 Million to States to Subsidize Payrolls

The Labor Department announced on Monday that it will be awarding almost $100 million in grant funding to states to prevent layoffs by allowing businesses to pay employees as part-time workers and the federal government will pick up the tab for the cost of a full-time paycheck.

The “work-sharing” program was passed as part of a Republican-led bill in the House, H.R. 3630, and Senate Amendment 1465 to extend the payroll tax deduction and unemployment benefits. In February 2012, President Barack Obama signed the bill into law, which included the $100 million in funding.

"Establishing or expanding work-sharing programs nationwide will help business owners better weather hard economic times by temporarily reducing their labor costs while still keeping their existing skilled employees," Labor Secretary Hilda L. Solis said in the press release announcing the grants. "This program is a win-win for businesses and employees alike."

This story was posted on the cnsnews.com Internet site on Wednesday...and I borrowed it from yesterday's King Report. The link is here.


WikiLeaks: Ecuador grants Julian Assange asylum despite UK 'threats'

The WikiLeaks founder has been holed up in the South American country’s London embassy for almost two months as he tries to avoid being sent to Sweden, where two women have accused him of sexual assault.

On Thursday the Ecuadorian government finally announced that it had agreed to give the maverick Australian asylum because of his fears of persecution over the secret files his whistle-blowing organisation has revealed, which he believes could see him sent to face an unfair trial in America.

There was applause as the foreign minister, Ricardo Patiño, made the declaration that Mr Assange had been given “diplomatic asylum” at a press conference in the capital, Quito.

“We believe that his fears are legitimate and there are the threats that he could face political persecution.

This story was posted on the telegraph.co.uk Internet site early yesterday afternoon BST...and I thank Roy Stephens for finding it for us. The link is here.


Simon Black: The West Has Just Become A Giant Banana Republic

Wikileaks founder Julian Assange has made an admirable habit of enraging western governments over the last few years, particularly the United States.

Most notably, his release of classified diplomatic documents in 2010 proved ruthlessly embarrassing, shining a spotlight on the absurd, petty little world of international relations.

Ever since, the US government has done everything it can to stop him. Short of assassination. They shut down his website, but mirror sites instantly popped up. They sought legal action, but their efforts have been impeded by the bureaucratic deftness of his attorneys. They froze his bank accounts… but donations have poured in from all over the world.

Swarms of British police have now descended on the Ecuadoran embassy in London. This, on the heels of the British Foreign Ministry issuing a warning letter to Ecuador’s government threatening to “take actions in order to arrest Mr. Assange in the current premises of the [Ecuadoran] embassy.”

Such a move would be appalling, to say the least.

Embassies are hallowed sovereign ground, not to be trespassed. Ever. This is the most sacrosanct, fundamental, inviolable principle of international relations, explicitly codified in both the Vienna Convention on Diplomatic Relations (1961) and the Vienna Convention on Consular Relations (1963).

This piece showed up over at the sovereignman.com website yesterday...and is now posted over at the Zero Hedge Internet site. In light of the current situation, it's definitely worth reading...and it's another Roy Stephens offering. The link is here.


Finland prepares for break-up of eurozone

The Nordic state is battening down the hatches for a full-blown currency crisis as tensions in the eurozone mount and has said it will not tolerate further bail-out creep or fiscal union by stealth.

“We have to face openly the possibility of a euro-break up,” said Erkki Tuomioja, the country’s veteran foreign minister and a member of the Social Democratic Party, one of six that make up the country’s coalition government.

“It is not something that anybody — even the True Finns [eurosceptic party] — are advocating in Finland, let alone the government. But we have to be prepared,” he told The Daily Telegraph.

“Our officials, like everybody else and like every general staff, have some sort of operational plan for any eventuality.”

Mr Tuomioja’s intervention is the bluntest warning to date by a senior eurozone minister. As he discussed the crisis, the minister had a copy of the Economist on his desk. It had a picture of Angela Merkel, the German Chancellor, reading a fictitious report entitled “How to break up the euro”, with a caption: “Tempted, Angela?”

Ambrose Evans-Pritchard is in fine form in this posting at The Telegraph yesterday evening BST...and it's certainly worth reading. I thank Manitoba reader Ulrike Marx for bringing this story to our attention...and the link is here.


Secret diplomacy holds the key to any solution of the Iran crisis

The lesson of history is that covert contacts and back channels can pave the way to peace.

The British spy was known to his interlocutors as “mountain climber”; his contact was a passionate Irish republican imbued with Christian pacifism. This unlikely pair established a secret channel between the IRA and the British government that started as long ago as 1973 and was crucial to settling Northern Ireland’s conflict. Michael Oatley, an MI6 officer (the “mountain climber”), and Brendan Duddy, a Derry businessman, were the joint custodians of this open line between two supposedly implacable foes.

There may be no obvious link between covert peacemaking in the back streets of Belfast four decades ago and the latest talk of war between Israel and Iran, but all intractable conflicts share one common feature: they will never be resolved by open, set-piece diplomacy alone.

The nuclear-tipped confrontation between Iran and the rest of the world is no exception – and the urgency of defusing this ticking time bomb beneath global affairs has become greater this week. Once again, Israel is making clear that its patience is wearing thin: unnamed “decision-makers” have briefed the local press that if no one else prevents Iran from seizing the ability to make nuclear weapons, then the Israeli air force might have to do the job.

This is another Roy Stephens offering from The Telegraph...this one from Wednesday evening...and the link is here.


Two King World News Blogs

The first is with Egon von Greyerz...and it's headlined "Expect Massive Short Covering In Gold Within Weeks". The second blog is with Citi analyst Tom Fitzpatrick. It's entitled "The Gold Market May Stun Participants With A Move To $6,300".
http://kingworldnews.com/kingworldnews/ ... _News.html


4 arraigned in big bucks, precious metals bullion Ponzi-scheme

A broker--previously disciplined by the CFTC and the National Futures Association in a 1993 commodities options scheme--is again facing charges for a Ponzi-scheme involving precious metals bullion investment.

Four men were scheduled to be arraigned Wednesday before a federal magistrate in Miami, Florida, on charges of conspiracy to commit mail and wire fraud in connection with a precious metals bullion investment scheme.

The indictment was brought by federal and state agencies including the U.S. Attorney for the Southern District of Florida, the FBI, the U.S. Postal Inspector Service and the State of Florida's Office of Financial Regulation.

The indictment claims that, instead of purchasing the physical bullion as promised, the defendants "merely established investment accounts for Capital Asset Management with a broker/dealer in London and used the account to purchase derivative contract investments in precious metals but never actually purchased any physical metal for the investors."

This gold-related story is the first of four in a row from reader Donald Sinclair. It was filed from Reno, Nevada yesterday...and is posted on the mineweb.com Internet site. The link is here.
http://www.mineweb.com/mineweb/view/min ... &pid=92730


Global gold demand down in Q2 but Central Bank buying hits record

Latest figures from the World Gold Council show that global gold demand fell back in Q2 2012 compared with a year ago, but Central Bank buying rose to a new record level.

In its latest Gold Demand Trends report, the World Gold Council estimates, on figures provided by Thomson Reuters GFMS, that global gold demand in Q2 2012 was 990.0 tonnes, down 7% from the 1,065.8 tonnes in Q2 2011. The organisation does point out though that demand in Q2 2011 was exceptionally high.

However perhaps one of the most interesting findings of this latest analysis is that gold buying by the world's Central Banks hit a new record of 157.5 tonnes , more than double the level of Q2 2011 and accounting for 16% of overall global demand. This, by our reckoning is also around 22.5% of total gold supply over the period extrapolating from the WGC's own annual figures for 2011. Central banks that significantly bolstered their holdings during the quarter included the National Bank of Kazakhstan, and the central banks of the Philippines, Russia and Ukraine.

Overall the WGC notes that if the Central Bank buying continues at the current rate where they have bought 254 tonnes against 200 tonnes H1 2011 this could be a record year, for Central Bank buying.

This is Donald Sinclair's second story in a row from the mineweb.com Internet site...and it's worth reading. The link is here. Don also sent a similar, but different story on this that was posted over at theglobeandmail.com website yesterday. It's headlined "Gold expected to pull out of slump"...and the link to that is here.
http://www.theglobeandmail.com/globe-in ... le4483125/


Forces conspiring to create gold's perfect scenario

David Levenstein looks at the many reasons he sees gold going higher and why $1,600 is the metal's new support level.

It was only two weeks ago, that the price of gold struggled to breach the key resistance of $1600 an ounce. Now it has remained above this level for enough time to consider it to be the new support level. Thus any dips to this level should be bought while we await a break above the $1625 an ounce level which I believe will occur shortly.

This rather longish commentary was filed from Johannesburg yesterday...and I thank Donald Sinclair for his fourth and final offering in today's column. It's also posted on the mineweb.com Internet site...and the link is here.
http://www.mineweb.com/mineweb/view/min ... pid=110649


Barrick eyes Africa sale as problems mount

Jamie Sokalsky has made his first big move as Barrick Gold Corp.’s chief executive officer, putting the company’s high-cost Africa unit on the block as part of a larger shift in strategy.

The world’s largest gold miner is in preliminary talks to sell African Barrick Gold PLC to state-owned China National Gold Group Corp. A successful deal, which analysts expect would bring in about $2.5-billion, would give some financial relief to Barrick Gold as it struggles with billions in cost overruns at a key growth project in the southern Andes, and continues to absorb the $7.3-billion cash purchase of Equinox Minerals last year.

The negotiations, which the company said are “at an early stage,” are a signal of intent by Mr. Sokalsky, who was appointed in early June to replace Aaron Regent, who was sacked by the board. The new CEO has pledged to focus on generating higher returns from its projects, rather than simply increasing production. They also highlight China’s growing desire to be an owner of large-scale resource projects around the world, an ambition that led another state-owned corporation, CNOOC Ltd., to make a $15.1-billion bid for Calgary oil and gas producer Nexen Inc.

The mines of African Barrick – all in Tanzania – include some of the largest producers on the continent, but they are also some of the most expensive to run for a company that is otherwise among the world’s lowest-cost gold producers. The cost of producing an ounce of gold at the four mines was on average $938 an ounce in the first half of the year, compared to between $550 and $575 for Barrick as a whole.

This rather lengthy story showed up on the Globe and Mail website in the wee hours of yesterday morning...and I thank Roy Stephens for his final offering in today's column. It's worth the read if you have the time...and the link is here.
http://www.theglobeandmail.com/report-o ... le4483591/


Gold Runs Out in Lisbon as Price Drop Compounds Money Misery

Paulo Oliveira and his wife sold their wedding rings to pay the rent after he lost his job as a builder last month. They were the couple’s last pieces of jewelry.

“We have no more gold to save us from being kicked out this month,” the 46-year-old said as he stood in the area of downtown Lisbon popular with cash-for-gold stores. “Everyone I know is struggling, even the gold stores are empty because nobody has any more gold left to sell.”

Oliveira encapsulates a growing trend in debt crisis- stricken Europe as household gold supplies dry up after record prices and a deepening recession prompted a proliferation of places to exchange the metal for money.

In Portugal, the historical home of some of Europe’s biggest gold reserves, the number of jewelry stores, which include cash-for-gold shops, increased 29 percent in 2011 from a year earlier, a study commissioned by parliament found. In the first quarter, an average of two new stores opened every day, the report said. Now some of them are closing.

“Business has gone from great to terrible in a matter of months,” Luis Almeida, whose family has owned a gold store near Lisbon’s Rossio Square for more than 40 years, said in an interview. “The sad truth is that most of my clients have already sold all of their gold rings.”

This Bloomberg story, filed from Lisbon early yesterday morning, is a must read in my opinion...and I thank Manitoba reader Ulrike Marx for her second story in today's column. The link is here.
http://www.bloomberg.com/news/2012-08-1 ... isery.html


Chris Waltzek: Gold and silver have long way to go before reaching 'mania' stage

Yesterday, GoldSeek Radio's Chris Waltzek revisited the "Fear Index" concept of GoldMoney founder and GATA consultant James Turk...and calculated that both gold and silver have a long way upward to go before entering the "mania" stage.

I found this short item in a GATA release...and I thank Chris for the headline...and the paragraph of introduction. Waltzek's commentary is headlined "Current Gold Fear Index"...and it's posted at the radio.goldseek.com Internet site. The link is here. The chart is worth the trip...and the article is worth reading.
http://radio.goldseek.com/silverfearindex.php


¤ The Funnies

Image

¤ The Wrap

There are no markets anymore...only interventions. - Chris Powell, GATA


The dollar index hit the skids just about the time the Comex opened yesterday but, for whatever reason, gold and silver got hit the moment they started rallying at the open...and they weren't allowed to go anywhere until the London p.m. gold fix was in. From that point they were away to the races. I wonder how far they would have gone if they hadn't run into a willing seller less than five minutes after trading began in New York?

Since the mid-May bottom in the gold price, every rally attempt, no matter how tiny, has been sold off by JPMorgan et al. I count six times in total on the 6-month gold chart below...and I'm wondering out loud if the current 'rally' will meet the same fate. Time will tell.

Image
[ Larger version: http://www.caseyresearch.com/gsd/sites/ ... old_81.png ]

As Peter DeGraaf mentioned further up in this column, once we get past a certain point, we can look forward to a sell-off of some sort. Normally we have to wait until we get into overbought territory around the 70 level on the RSI on the above chart, but that certainly hasn't been the case since the mid-May low, as gold and silver both get sold off the moment they develop any upward momentum at all. 'Da Boyz' are keeping things range bound, but for what reason...and for how much longer?

I was really encouraged by the share price action yesterday...and I'm hoping that this is a harbinger of things to come. But, as you know, I'm always on the lookout for "in your ear"...and until we have a clear break-out, you should be, too.

As has been the case for quite a while, the gold and silver price action in the Far East on their Friday was comatose...and not much is going on in early London trading, either. Volumes are astonishingly light once again...and the dollar index [as of 5:20 a.m. Eastern time] isn't doing much of anything. It's obvious that if there is going to be any excitement in the precious metals market today, it will happen in New York...or five minutes after I hit the 'send' button on today's column.

Today we get the latest Commitment of Traders Report...and based on the reporting week's price action, there may be minor declines in the Commercial net short position in both gold and silver. Whatever the number are, I'll have comments about them in tomorrow's column.

There's still the opportunity to either readjust your portfolio, or get fully invested in the continuing major up-leg of this bull market in both silver and gold...and I respectfully suggest that you take a trial subscription to either Casey Research's International Speculator [junior gold and silver exploration companies], or BIG GOLD [large producers], with all our best (and current) recommendations...as well as the archives. Don't forget that our 90-day guarantee of satisfaction is in effect for both publications.

Enjoy your weekend, or what's left of it, depending where on Planet Earth you live.
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Three cheers for BS where we pile it higher and deeper!- Bring the Gold
 
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Re: PM News articles, Analysis and Commentaries

Postby silvermotor on Sat Aug 18, 2012 9:11 am

Please follow link for charts, graphs, pictures and links to other articles.

SM

http://www.caseyresearch.com/gsd/home



Platinum Mine Violence Impact - Could it Spread to Gold Mines Too?

"I wouldn't want to be caught short in the precious metal markets for all the tea in China...and I'm still 'all in'."


¤ Yesterday in Gold and Silver

As I mentioned in 'The Wrap' section of Friday's column, there was no price activity worthy of the name during the Far East trading day...and very little during London trading, either.

The usual rally that began shortly before the Comex open, was dispatched in the usual way by what I would suspect would be the usual group of not-for-profit sellers.

The high tick of the day [$1,622.00 spot] came at 8:50 a.m. in New York...and immediately got sold down from there.

Gold closed the Friday electronic trading session at $1,615.80 spot, up $1.10 from Thursday's close. Net volume was a tiny 82,000 contracts.

Silver didn't do much in Far East trading, either...and the several attempts it made to move higher during the London session didn't get far. Beginning shortly after 10:00 a.m. BST, silver got sold down to its London low, which came about fifteen minutes before the Comex open...1:15 p.m. BST.

Like, gold it rallied higher before meeting the same 8:50 a.m. fate as gold. It's high tick at that point was $28.46 spot. From there, it got sold down to its absolute low of the day...$27.94 spot...which came around 12:10 a.m. in New York. The price rebounded a hair from there...and then traded sideways into the close.

Silver closed at $28.09 spot...down 13 cents on the day. Net volume was a very small 19,000 contracts.

Platinum and palladium were on fire yesterday for obvious reasons. Platinum was up 2.37%...and palladium was up 3.95%. Gold was up only 0.07%...and silver was down 0.46%.

The dollar index opened just under the 82.40 mark...and chopped around until it set its low of the day [82.34 spot] at precisely 10:00 a.m. in London. From there it rallied to is high...82.74...just shortly before 11:00 a.m. in New York. Then it got sold down to its closing price of 82.54 at 5:15 p.m. in New York. The index closed up a smallish 17 basis points when all was said and done.

The rallies for both gold and silver that began before the Comex open in New York had nothing to do with any currency movements, which is obvious from the chart below. But the rallies ended at the same moment that the dollar index began to rally...as if someone had hit the 'buy the dollar/sell gold and silver button'.

The gold stocks opened in slightly positive territory, but got sold off almost right away as it became apparent that the underlying metal was getting sold down as well. The low for the stocks came at 10:50 a.m...the same instant that the rally in the dollar index topped out and gold hit its nadir. The HUI finished down 0.85% on the day.

The silver stocks finished mixed...and Nick Laird's Silver Sentiment Index closed down a smallish 0.27%.



The CME's Daily Delivery Report showed that 182 gold contracts were posted for delivery within the Comex-approved depositories on Tuesday. Morgan Stanley was the big short/issuer with 178 contracts...and the long/stoppers were the Bank of Nova Scotia, HSBC USA...and Deutsche Bank. On Tuesday, they will have 80, 66 and 36 contracts worth of gold delivered to them. The link to yesterday's Issuers and Stoppers Report is here.

The GLD ETF had another pile of good delivery bars delivered by an authorized participant yesterday. This time it was 358,833 troy ounces worth. In the last two days alone, GLD has received about 534,000 ounces of gold. There were no reported changes in SLV.


Over at Switzerland's Zürcher Kantonalbank, they updated their gold and silver ETF inventories as of the close of business on Thursday. They added a smallish 8,657 troy ounces of gold...but showed a decline of 140,756 troy ounces in silver.



The U.S. Mint had a smallish sales report yesterday. They sold 3,000 ounces of gold eagles...and 193,500 silver eagles. Month-to-date the mint has sold 12,000 ounces of gold eagles...3,500 one-ounce 24K gold buffaloes...and 1,583,500 silver eagles. Based on these figures, silver eagles sales are selling at a ratio of 102:1 to gold eagle/buffalo sales. That's very high ratio.


It was a big day over at the Comex-approved depositories on Thursday, as they reported receiving 2,391,780 troy ounces of silver...and only shipped 205,947 ounces of the stuff out the door. Virtually all the action was at the Scotia Mocatta and JPMorgan warehouses. The link to this activity is here...and it's worth a peek.


The Commitment of Traders report showed that the Commercial net short position in silver increased by 1,550 contracts...and if I'm reading reader E.F.'s charts right, it was a combination of the 'big 4' increasing their short position...and Ted Butler's raptors selling long positions. These weren't the sort of numbers I was hoping for, but they are what they are.

The Commercial net short position in silver increased by 7,750,000 ounces during the reporting week, which ended at the Comex close on Tuesday. The Commercial net short position is now up to 117.0 million ounces...still bullish, but creeping ever higher...and a long way off its lows of earlier this year.

The four largest traders on the short side in silver are short 171.6 million ounces of silver...33.7% of the entire Comex futures market on a net basis. The '5 through 8' largest traders are short an additional 36.7 million ounces...7.2% of the entire Comex futures market on a net basis. So the eight largest traders are short 40.9% of the Comex silver market on a net basis...and those are minimum numbers. If we could see [and subtract] the spreads from the Commercial category of the COT, I'd bet serious money that the '8 or less' traders would be shown to be short well over 50% of the silver market on a net basis...and that's precisely the reason that they don't show them in the report. Because if they did, you could figure out in a flash just how concentrated their actual short positions are...and what we can see is bad enough.

With both JPMorgan and HSBC USA holding the lion's share of that total amount, please explain to me how this is not a short-side corner on the market.

There was another improvement in the short position in gold, albeit a small one. The Commercial net short position declined by a very modest 2,478 contracts. The Commercial net short position in gold is now down to 14.39 million ounces...and according to reader E.F...this is the smallest that the Commercial net short position has been since October 24, 2006 when gold was $578 the ounce...over $1,000 per ounce lower than it closed at on Friday. It does appear that the JPMorgan et al may be edging towards the exit in gold.

The short position of the four largest traders in gold currently sits at 8.15 million ounces...22.5% of the Comex futures market on a net basis...and the '5 through 8' largest short holders are short an additional 4.62 million ounces...which is 12.7% of the Comex futures market on a net basis. These eight largest traders are short 35.2% of the entire Comex gold market...and that's a minimum number as well.

Looking at it another way, the eight largest short holders in gold are short 12.77 million ounces of the stuff, or 88.7% of the Commercial net short position of 14.39 million ounces. In silver, the eight largest short holders are short 208.3 million ounces of silver, which represents 178% of the Commercial net short position, which currently sits at 117.0 million ounces. As I said last week in this space, the gold market is free and fair when stacked up against the obscene short position in silver.

And as Ted Butler has said just about every week for the last ten years, the Comex futures market in all the precious metals are all controlled by a handful of traders working collusively. It's as simple as that.

Here's Nick Laird's "Concentration of Traders in the CFTC COT Report"...which has been converted to 'Days of world Production to cover Short Contracts'. The red bar in the gold chart, the short positions of the four largest traders, is the smallest it has been since October 24, 2006 when gold was $578 an ounce.

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[ Larger version: http://www.caseyresearch.com/gsd/sites/ ... ver_49.png ]

Here's a pretty picture I stole from a marketwatch.com story that reader Scott Pluschau was kind enough to send me in the wee hours of yesterday morning...and I thought that eye candy like this was worth sharing.

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I have the usual number of stories again today, a few of which I've been saving for Saturdays' column...and I hope you can find the time in what's left of your weekend to read through the ones that interest you.

¤ Critical Reads

Top 50 Safest Global Banks

For banking safely, global citizens had better go to the local government. And pretty much avoid the U.S.

No U.S. bank cracks the list until No. 29 with Bank of New York Mellon, the trust bank that last year threatened to start charging for deposits when customers flooded it with cash.

The top three U.S. banks by assets, J.P. Morgan, Bank of America and Citigroup, miss the cut altogether. Wells Fargo, the fourth-biggest U.S. bank comes in at 48th, just ahead of the Standard Chartered in the U.K. J.P. Morgan had been No. 34 last year.

But those on the list had better not rest on their supposedly safe laurels.

This story was posted on The Wall Street Journal Internet site early Thursday evening...and I thank Donald Sinclair for sending it. The link is here.


The End of Reason: What Potatoes Say about the State of US Democracy

He has climbed the highest peaks in the Rocky Mountains, he is in excellent physical condition, and he could easily serve as the face of a marketing campaign to promote healthy living. In his 14th year in the US Congress, Colorado Senator Mark Udall is standing in front of his seat in the Senate, in the second-to-last row on the Democratic side of the aisle, talking about pizza and French fries. "Let's be honest," says Udall. "Anything can be fried or drowned in any number of fats."

It's the core of his argument against the new guidelines that President Barack Obama wants to see enacted for school cafeterias. Obama had tried to separate healthy from unhealthy food in school cafeterias and have more vegetables served to students instead of just pizza and French fries.

Every French fry and every Tater Tot, the 61-year-old politician argues, was once a potato, which makes it a vegetable, just like broccoli, green beans, spinach or carrots. Banning French fries, he says, is basically discriminating against potatoes just because they're sometimes dipped in oil. At issue, says Udall, is the equal treatment of vegetables, and the fact that even a potato has vitamins, as does pizza -- because of the tomato sauce.

This comes from the top drawer of the "You-can't-make-this-stuff-up" filing cabinet. It was posted on the German website spiegel.de yesterday...and is Roy Stephens first offering of the day. The link is here.


Dollar Tree Suffers Two-Second Flash Crash

Dollar Tree, the discount retailer that sells everything for $1 or less, suffered a mini "flash crash" in the first two seconds after the open Thursday.

The stock plunged 18 percent before snapping back to more normal levels less than two seconds later.

"That's definitely the machines," said Keith McCullough, CEO of Hedgeye Risk Management and CNBC Contributor, on CNBC's "Fast Money Halftime Report." "Somebody had a fat finger or dumb finger."

"At the end of the day, this kind of stuff is going to be ongoing because the machines are contributing the only margin that's really left in the broker-dealer community," he said. "You saw this issue with Knight Capital."

This story was posted on the cnbc.com website mid-afternoon on Thursday...and I thank West Virginia reader Elliot Simon for sending it along. The link is here.


Government's Foreign Debt Hits Record $5.29 Trillion

The U.S. government's debt held by foreign entities hit a record $5.2923 trillion in June, CNSNews.com reported, citing Treasury Department data.

The government’s indebtedness to foreign entities has shot up 72.3 percent since President Barack Obama took office.

In January 2009 the U.S. government owed $3.0717 trillion to foreigners entities, the news service added.

China was the top creditor to the U.S. government, though Japanese entities were a close second.

"Although the Chinese maintained their place as the top foreign owners of U.S. debt in June, they are not the top owners of U.S. debt in the world," CNSNews.com reported. "That distinction belongs to the U.S. Federal Reserve, which according to its July monthly report, owned $1.667 trillion in U.S. government debt in June."

This story was posted on the moneynews.com Internet site on Thursday afternoon...and I thank Elliot Simon for his second offering in a row in today's column. The link is here.


U.S. considers intervening in oil market

The White House is "dusting off old plans" for a potential release of oil reserves to dampen prices and prevent high energy costs from undermining sanctions against Iran, a source with knowledge of the situation said on Thursday.

U.S. officials will monitor market conditions over the next few weeks, watching whether gasoline prices fall after the September 3 Labor Day holiday, as they historically do, the source said.

It was too early to detail the size of any release from the U.S. Strategic Petroleum Reserve and other international stockpiles if a decision to proceed was taken, the source said.

I'm not sure if this is petty...or just childish. It's hard to believe that grown 'men' would act like this. I found this Reuters story in a GATA release...and the link is here.


The World from Berlin: Assange Case Exposes 'International Hypocrisy'

Ecuador may have granted WikiLeaks founder Julian Assange asylum, but it seems unlikely that he will ever make it to the South American country. More to the point, say German commentators, is the fact that both Ecuador and Britain have granted Assange an even larger soap box.

For almost two years, WikiLeaks founder Julian Assange has wiggled out of efforts to have him extradited to Sweden where he faces sexual assault charges. Now with the decision of the Ecuadorian government to grant him asylum at its London embassy, Assange got another reprieve. What happens next is far from clear.

The British government has retaliated by threatening to invoke a little used law to remove the embassy's diplomatic status so that it can ship Assange to Sweden. The law was enacted in 1987 after a British police officer was shot outside a Libyan embassy. In doing so it would be violating the principles behind the 1961 Vienna Convention which deemed embassies as extra territorial areas so that diplomats could work undisturbed in foreign countries. Furthermore, London has promised to arrest Assange as soon as he sets foot on British soil, something he would have to do should he wish to travel to Ecuador.

Here's another story from the spiegel.de website...and another offering from Roy Stephens. The link is here.


Americas bloc takes UK threats to Ecuador for international discussion

British threats to invade Ecuador’s embassy will be discussed at international-level talks between the foreign ministers of the Organization of American States. The proposal was adopted despite the US saying OAS has nothing to do with the issue.

­Ecuador’s resolution to convene a meeting of the OAS member nations' foreign ministers was adopted with 23 voting in favor, three against and five abstentions.

The US and Canada were among those who opposed the measure, stating that the dispute over Assange's fate is a bilateral matter between Ecuador and the United Kingdom, and should not be dragged to the international table.

This story showed up on the Russia Today website just after midnight...and I thank Roy Stephens for sending it. The link is here.


Spanish Bad Bank Loans Have Hit A New Record High

Spanish banks' bad loans rose to a record high in June as assets tied to the country's deflating property market soured further, keeping the financial sector at the forefront of investor concerns about the country's fragile economy.

In the same month that Spain sought a European bailout of up to 100 billion euros for its struggling lenders, their non-performing loans rose to 9.42 percent of outstanding portfolios from 8.95 percent in May, central bank data showed on Friday.

Loans that fell into arrears increased by 8.4 billion euros ($1.03 billion) to 164.4 billion euros.

Bad loan rates have risen steadily since a decade-long property boom ended four years ago, with the country now in its second recession since 2009 and one in four Spaniards out of work.

This Reuters piece was posted on the businessinsider.com website early yesterday morning...and I thank Donald Sinclair for bringing it to our attention. The link is here.


Doug Noland: The Winding Down of Fannie and Freddie?

“Risk on” has seen 10-year Treasury yields jump 40 bps off July 24 lows to 1.81%. The way things are unfolding, the placid Treasury market might turn into rather treacherous waters. I expect Draghi’s Plan to be yet another European disappointment. “Risk off” waits patiently. But it’s also apparent that over-liquefied U.S. securities markets have turned highly speculative. An enduring “risk on” backdrop could easily see things get out of hand. Amazingly, as the signs of excess become increasingly apparent, the Fed apparently remains ready with additional monetary stimulus. It’s going to be an interesting fall.

Doug Noland's Credit Bubble Bulletin posted each Friday evening over at the prudentbear.com Internet site is always a must read for me...and this week's offering is no exception. I thank reader U.D. for digging it up on our behalf...and the link is here.


A Cyber "Warhead" With an Unknown Target

The Gauss malware described last week that targets Lebanese bank accounts still has one secret to divulge - the purpose of its "encrypted warhead" known as Godel. That's the term used by researchers at Kaspersky, the computer security firm that described Gauss last week, for a part of the malware programmed to decrypt only when it lands on exactly the right computer system. What Godel does under those conditions is unknown, and today, Kaspersky laid out what it knows about Godel and asked for help determining its purpose.

"Today we are presenting all the available information about the payload in the hope that someone can find a solution and unlock its secrets. We are asking anyone interested in cryptology and mathematics to join us in solving the mystery and extracting the hidden payload."

Kaspersky says Gauss is related to government-sponsored cyber-weapons Stuxnet and Flame, and the company's researchers and some other experts believe Gauss was also created by a nation state. Godel can only be decrypted with a key built using information drawn from the computer it has infected, specifically information about programs installed on the system. Until someone figures out exactly what Godel's looking for, it's impossible to know what it will do when activated.

This technologyreview.com story is the first of three items that I've saved for the weekend. Roy Stephens sent me this one on Tuesday. It's a short, but very interesting read...and the link is here.


China's winning strategy in Africa

Contention between China and the United States is extending far beyond the current hot spot of the South China Sea. As China's economy continues its rapid expansion, a truly global realignment of power is taking place. Regions that were dominated by the West for centuries are now coming into China's orbit, challenging America's position at the top on a once-unipolar world.

This trend is particularly evident in Africa. The United States is now seeking to counter China's economic and political inroads in the African continent. The Africa policies of both the US and China are important not only in their own right, but also because these policies serve to indicate the significant differences in these two powers' general foreign strategies and world views.

US Secretary of State Hillary Rodham Clinton has been quick to question China's relationship with Africa, and highlight the purported difference in Africa policy between the US and China. During her visit to Senegal (the first stop of her African tour), she promoted "a model of sustainable partnership that adds value, rather than extracts it". She went on to promise: "America will stand up for democracy and universal human rights even when it might be easier to look the other way and keep the resources flowing."

This Asia Times story is another one that I've been saving for today, as there really was no place for an essay of this size in my weekday column. It is, of course, courtesy of Roy Stephens...and well worth the read. The link is here.


Paul Craig Roberts: Is Washington Deaf As Well as Criminal?

The morons who rule the american sheeple are not only dumb and blind, they are deaf as well. The ears of the american "superpower" only work when the Israeli prime minister, the crazed Netanyahu, speaks. Then Washington hears everything and rushes to comply.

Israel is a tiny, insignificant state, created by the careless British and the stupid americans. It has no power except what its american protector provides. Yet, despite Israel's insignificance, it rules Washington.

When a resolution introduced by the Israel Lobby is delivered to Congress, it passes unanimously. If Israel wants war, Israel gets its wish. When Israel commits war crimes against Palestinians and Lebanon and is damned by the hundred plus UN resolutions passed against Israel's criminal actions, the US bails Israel out of trouble with its veto.

The power that tiny Israel exercises over the "world's only superpower" is unique in history. Tens of millions of "christians" bow down to this power, reinforcing it, moved by the exhortations of their "christian" ministers.

Paul Craig Roberts is known to be very outspoken and controversial, but his take on the potential for nuclear war makes for interesting reading nonetheless. This is an absolute must read for any serious student of the "New Great Game"...and I thank reader Carl Lindfors for sharing it with us. It was posted over at thedailybell.com Internet site on Thursday...and the link is here.


Three King World News Blogs/Interviews

The first blog is with Ben Davies...and it's headlined "This Could Ignite The Gold Market On Monday". The second is with Greg Weldon. It's entitled "Expect Major Silver Price Spike As COMEX Silver Inventories Decline". Lastly is this audio interview with Egon von Greyerz.
http://kingworldnews.com/kingworldnews/ ... _News.html


Mine Strike Mayhem Stuns South Africa as Police Open Fire

The police fired on machete-wielding workers engaged in a wildcat strike at a platinum mine here on Thursday, leaving a field strewed with bodies and a deepening fault line between the governing African National Congress and a nation that, 18 years after the end of apartheid, is increasingly impatient with deep poverty, rampant unemployment and yawning inequality.

In a scene replayed endlessly on television that reminded some South Africans of the days when the police of the apartheid government opened fire on protesters, heavily armed officers shot into a charging crowd of workers who walked off the job last Friday, demanding higher wages.

The strike has pitted the country’s largest mine workers union, which is closely allied with the governing A.N.C., against a radical upstart union demanding sharp increases in pay and faster action to improve the grim living and working standards for miners.

This story...filed from Marikana, South Africa...appeared on The New York Times website late on Thursday evening...and it's courtesy of Roy Stephens as well. The link is here.


Mine "bloodbath" shocks post-apartheid South Africa

The police killing of 34 striking platinum miners in the bloodiest security operation since the end of white rule cut to the quick of South Africa's psyche on Friday, with searching questions asked of its post-apartheid soul.

Newspaper headlines screamed "Bloodbath", "Killing Field" and "Mine Slaughter", with graphic photographs of heavily armed white and black police officers walking casually past the bloodied corpses of black men lying crumpled in the dust.

The images, along with Reuters TV footage of officers opening up with automatic weapons on a small group of men in blankets and T-shirts at Lonmin's Marikana platinum plant, rekindled uncomfortable memories of South Africa's racist past.

This story was posted on the Reuters website later in the afternoon on Friday...and I thank Manitoba reader Ulrike Marx for sending it along. The link is here.

There was also a story on this, but from a slightly different perspective, posted on the telegraph.co.uk Internet site yesterday evening BST. It's headlined "Lonmin mining massacre shocks investors with flashback to apartheid South Africa"...and I thank Roy Stephens for that one. The link is here.


Platinum mine violence impact - could it spread to gold mines too?

Nearly 50 years ago when I worked there on the mines, Rustenburg in South Africa used to be a relatively sleepy small town some 160 km from Johannesburg where big city dwellers would repair for a quiet weekend at tourist resort Retief's Kloof and farmers grew oranges, despite it being the site of Rustenburg Platinum Mines (then run by JCI) then and now still the world's largest platinum mine.

Nowadays, with the expansion of the platinum sector, first with Impala and then with Lonrho (now Lonmin), Aquarius and others, the sleepy town has changed out of all recognition as the platinum mining industry expanded, and expanded. Anglo American, which was a major shareholder in JCI, effectively decimated the latter company and absorbed Rustenburg Platinum into Anglo American Platinum (Amplats) and the town became even more the centre of the world for platinum mining and for exploration on the Bushveld Complex Western limb, which accounts for most of South Africa's, and the world's, platinum output.

This thoughtful article was written by Mineweb's General Manger and Editorial Director, Lawrence [Lawrie] Williams. He's speaking from personal experience, as he used to live and work there...and I consider it a must read. I thank Donald Sinclair for his final offering in today's column...and the link is here.


CME Clearing Europe will take gold as collateral

Over two years ago, the US Clearing house of the CME, the world's largest derivatives marketplace, had no choice but to allow gold as collateral.

As of minutes ago, the European arm of CME Clearing has folded too, and has released a press release stating that it too "has extended the range of eligible collateral types to include gold bullion." Of course, this is the same gold bullion that Germany will be seeking to "repo" in exchange for sovereign bail outs as Europe's periphery continues to run out of endogenous money and has to increasingly rely on the benevolence of the Bundesbank.

For now all we need to know is that another exchange just threw in the towel and admitted that contrary to Bernanke's stern position, gold is, indeed money.

This must read Zero Hedge piece also includes the link to the Bloomberg story from which it is derived. I thank Elliot Simon for sending it...and the link is here.
http://www.zerohedge.com/news/gold-cont ... collateral


Doug Hornig: Big Changes Ahead: Gold Just Became Money Again

On June 18, the Federal Reserve and FDIC circulated a letter to banks that proposes to harmonize US regulatory capital rules with Basel III.

BASEL III is an accord that tells a bank how much capital it must hold to safeguard its solvency and overall economic stability. It's a global standard on bank capital adequacy, stress testing, and market liquidity risk...but here's the important bit:

At the top of the proposed changes is the new list of "zero-percent risk weighted items," which now includes "gold bullion," right after "cash."

That's the part to take notice of.

If the proposals are approved by regulators – and that seems likely since adoption of Basel III will be – then this is a momentous change for the gold market.

Casey Research's own Doug Hornig does the honours here...and this short piece is well worth reading. It was posted at the caseyresearch.com Internet site yesterday...and I thank Roy Stephens for his final offering in Saturday's column. The link is here.
http://www.caseyresearch.com/articles/b ... oney-again


James Turk on metals' prospects, government intervention, and need for diversification

Interviewed by GoldMoney's followers on Facebook and LinkedIn, GoldMoney founder and GATA consultant James Turk covers his outlook for the monetary metals markets, manipulation of those markets, and government intervention against gold and silver investors. He advises investors to diversify their gold and silver holdings in form and location. He also cites GATA's work.

I found this interview imbedded in a GATA release yesterday. It's posted at GoldMoney's Internet site...and the link is here.
http://www.goldmoney.com/gold-research/ ... fcode=gata


Investor Alert: Love Trade Cools as Central Banks' Gold Demand Heats Up

The first part of Frank Holmes weekly Investor Alert deals exclusively with gold...and is a must read. The last two graphs regarding gold are more than worthy of your attention.

This commentary was posted over at the usfunds.com Internet site yesterday...and I thank Elliot Simon for his last offering in Saturday's column. The link is here.
http://www.usfunds.com/investor-resourc ... a8d1df0917


¤ The Funnies

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¤ The Wrap

Gold is a treasure, and he who possesses it does all he wishes in this world, and succeeds in helping souls into paradise. But in truth, should I meet with gold or spices in great quantity, I shall remain 'till I collect as much as possible, and for this purpose I am proceeding solely in quest of them. - Christopher Columbus


I heard this week's 'blast from the past' when the announcer on CBC Radio 1 was taking about The Jersey Boys just a few days ago...and they played a bit from this particular song.

I'm sure this group, that was formed under its current name back in 1960, had no inkling of the fact that their life stories were going to be the stuff of Broadway plays forty-five years later. They were superstars during my high school years...and from 1962 to early 1964 [when The Beatles showed up for real], only the Beach Boys matched this group in record sales in the United States.

My favourite of all their hits didn't appear on the scene until 1975...and it's just as popular and fresh-sounding today as it was when it first hit the airwaves way back then. So turn up your speakers...and then click here.

As platinum and palladium soared yesterday, the similar rallies that began in gold and silver at the Comex open were dealt with by the usual not-profit-sellers. However, under the light volumes that existed during the trading day, that was not a difficult task. But one can still fantasize on what might have been if the short sellers of last resort had put their hands in their pockets instead.

The tragedy in South Africa underlines the fact that the poorly-paid miners are risking life and limb for peanuts...and the Mineweb's Lawrie Williams makes it abundantly clear that if this trouble spreads to South African gold mines, it's possible that it could light a fire under the gold price that would be very difficult to put out.

The law of unintended consequences is now stalking the mining landscape in that country...and I'm sure that JPMorgan et al...plus many other world players that are interested in keeping the gold price quiet, at least for now...are watching this situation with some fear and trepidation.

But setting that aside for the moment, it's obvious that we are still in the 'summer doldrums' in gold and silver...a situation being unscrupulously cultivated by 'da boyz'. But I just can't shake the feeling that all the forces that now appear to be converging on the precious metal markets, both planned and unplanned, are about to come to a head in the not-to-distant future.

But I'm also of the opinion, based on the latest Commitment of Traders Report, that the bullion banks have all the ammunition they need to smack gold and silver to the downside one more time before things start to come unglued to the upside. There's also the possibility that we could blast off right from here, as whatever plans the powers that be may have had, went up in smoke when the shooting started.

But there's not a soul out there that knows how this is all going to pan out, including this writer. However, I wouldn't want to be caught short in the precious metal markets for all the tea in China...and I'm still 'all in'.

If you're so inclined, dear reader, the most famous of all gold conferences in North America is coming up later this year...and that's the annual wiener roast in New Orleans...the New Orleans Investment Conference...which runs from October 24-27, 2012. I've attended it many times...and it's always a hoot. New Orleans is a very interesting city as well...and this boy from Canada hasn't got tired of it yet. If you have any interest, you can find out more by clicking here.

Enjoy what's left of your weekend and I'll see you here on Tuesday, but make that Wednesday west of the International Date Line.
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Three cheers for BS where we pile it higher and deeper!- Bring the Gold
 
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Re: PM News articles, Analysis and Commentaries

Postby silvermotor on Mon Aug 20, 2012 8:14 pm

http://news.goldseek.com/GoldSeek/1345492920.php


Love Trade Cools as Central Banks’ Gold Demand Heats Up

-- Posted Monday, 20 August 2012 | Share this article | Source: GoldSeek.com

By Frank Holmes
CEO and Chief Investment Officer
U.S. Global Investors

The two largest gold buyers in the world that largely drive the Love Trade [ http://www.usfunds.com/investor-resourc ... d-trading/ ], China and India, underwhelmed the metals market with their subdued demand for the yellow metal during the second quarter of this year.

According to the World Gold Council’s [ http://www.gold.org/ ] (WGC) quarterly Gold Demand Trends report, total demand was 990 tons, which was about 7 percent lower compared to the second quarter of 2011. When you break down demand and look at the jewelry sector, you can see that Chindia remains about 50 percent of the world’s total gold demand. However, this quarter’s jewelry demand of a little more than 400 tons makes it one of the weakest periods in two years.

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Total bar and coin demand was also weak in China and India compared with the rest of the world.

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As we discussed earlier this year [ http://www.usfunds.com/investor-resourc ... ld-thrive/ ], India has been facing a number of economic challenges, resulting in a dramatic decrease of 30 percent in jewelry demand for the country over the second quarter compared to this time last year. The country’s “unsupportive environment” for gold included a slowing GDP growth, record high gold prices because of its currency, rising domestic inflation, high interest rates, and fears of a poor monsoon season, says the WGC.

China’s gold demand has been affected by a slowing economy as well as a “lack of clear direction in the gold price,” says the WGC. However, during the WGC’s conference call, Managing Director of Investment Marcus Grubb said it would be wrong to think that China is entering a period of extended weakness. If you look at Chinese demand for gold over the first half of 2012, the level was 410 tons—about the level that it was this time last year over the same period.

As we enter the Love Season for gold [ http://www.usfunds.com/investor-resourc ... -for-gold/ ], we’ll look for any indications from government policies that might spur the continuation of the long-standing tradition of gold buying for weddings and Diwali in India, along with gold gifts for weddings and births that take place in China during this auspicious Year of the Dragon.

Although the Love Trade is on ice for the period, a relatively new gold buyer has been warming up to gold.

The official sector continued its gold buying spree [ http://www.usfunds.com/investor-resourc ... with-gold/ ] this quarter. The WGC reported that central bank purchases hit a record high since the official sector became gold buyers three years ago. According to Mr. Grubb, if this trend continues over the remainder of 2012, central banks will be entering a “new territory” of gold buying that has not been seen since the early 1960s and since the end of the Bretton Woods System in 1971.

According to the firm’s quarter-end data, official sector institutions purchased 158 tons of gold in the second quarter—or about 16 percent of the quarter’s total gold demand. During the first half of 2012, central banks have acquired 254 tons of the metal, which is about 25 percent higher than the same period last year, says WGC.

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Central banks from developing markets led the buying trend once again. The WGC says Kazakhstan indicated that it is “targeting an allocation to gold of 15 percent of its foreign exchange reserves” and one way it plans to build up its allocation is to purchase “the country’s entire domestic production over the next two to three years.”

Other emerging countries with central banks increasing their allocations to gold include Mexico, the Philippines, Russia, Turkey and Ukraine. According to Mr. Grubb, central banks have been motivated to add gold mainly as a currency hedge. Central banks want to increase their weightings in reserve asset portfolios and diversify away their dependence on U.S. dollars—and possibly the euro. There’s also a belief that sovereign debt is no longer considered to be a “risk-free” asset, says the WGC.

During his quarterly conference call, Mr. Grubb elaborated on this up-and-coming trend that we’ve been watching take place over the past 12 to 18 months. [ http://www.usfunds.com/investor-resourc ... -upgraded/ ] He believes gold is being “reintegrated into the fabric of the financial system” as a use of collateral. Mr. Grubb noted how “many exchanges are making gold eligible, with a haircut somewhere between sovereign debt and equities, as a collateral asset in all kinds of financial transactions.” The CME Group in the U.S. has already accepted gold as collateral, and just today, the European clearing house, the CME Clearing Europe, announced that gold bullion is now considered an “eligible collateral type.”

When it comes to collateral and capital requirements, “gold is being brought back into the fold as an important asset,” says Mr. Grubb.

Strike While Gold’s Not Hot?

There’s been a lot of discussion from market pundits wondering where gold is heading. I say investors should use math to their advantage. Similar to card counting strategies used by blackjack players, count historical trends to discover inflection points.

Gold appears to be at one of those inflection points right now. Using the last 10 years of data, if you plot the 12-month rolling return, you can see that gold has reached an extreme low, registering a -2 sigma.

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The last time gold reached this point was in August 2008. You can see below the yellow metal’s significant climb after hitting that standard deviation low.

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Just recently, the gold price has moved above its 50-day and 100-day moving averages, which is another indication of potential strength for the metal and an additional reason to believe that gold may be an attractive entry point.


I’ll be talking about gold and natural resources at the Chicago Hard Assets Investment Conference on September 21. If you’d like to learn more about attending the free event and when I’ll be speaking, send me a note at editor@usfunds.com.

U.S. Global Investors, Inc. is an investment management firm specializing in gold, natural resources, emerging markets and global infrastructure opportunities around the world. The company, headquartered in San Antonio, Texas, manages 13 no-load mutual funds in the U.S. Global Investors fund family, as well as funds for international clients.

For more updates on global investing from Frank and the rest of the U.S. Global Investors team, follow us on Twitter at http://www.twitter.com/USFunds or like us on Facebook at http://www.facebook.com/USFunds. You can also watch exclusive videos on what our research overseas has turned up on our YouTube channel at http://www.youtube.com/USFunds.


All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor. Standard deviation is a measure of the dispersion of a set of data from its mean. The more spread apart the data, the higher the deviation. Standard deviation is also known as historical volatility.


-- Posted Monday, 20 August 2012
Three cheers for BS where we pile it higher and deeper!- Bring the Gold
 
Posts: 3188
Joined: Mon Jul 13, 2009 1:23 pm
Location: South Florida

Re: PM News articles, Analysis and Commentaries

Postby silvermotor on Tue Aug 21, 2012 7:30 am

Please follow link for charts, graphs, pictures and links to other articles.

SM

http://www.caseyresearch.com/gsd/home



John Hathaway: This Financial System is Now in its Final Stages

"I'm hoping that the price action we saw yesterday was the beginning of the end of the 'summer doldrums'."


¤ Yesterday in Gold and Silver

Once again the gold price didn't do much of anything during the Far East trading session on Monday...and the Far East 'high' came just before 4:00 p.m. Hong Kong time...which was shortly before London opened for trading at 8:00 a.m. BST yesterday morning.

From there, gold got sold off all through the early London trading session...and then got hit for a few more dollars about ten minutes after the Comex open in New York.

That proved to be the low of the day...$1,609.00 spot...and gold rallied from there, but developed a few more legs starting at 11:00 a.m. Eastern, which also happened to be the close of London trading. Most of the significant gains were in by 11:30 a.m....and from there, gold mostly traded sideways into the close.

The high tick...$1,623.70 spot...came shortly after 2:00 p.m. Eastern in electronic trading...but got sold off immediately after that.

Gold closed at $1,621.20 spot...up $5.40 from Friday's close. Net volume was a very anemic 72,000 contracts...and the three hour rally during the morning Comex trading session was on very light volume. It had all the hallmarks of a short-covering rally, but I wouldn't bet the ranch on that.

The other thing that made yesterday's rally in gold look impression on the Kitco chart, was the scale of the graph...and the fact that the gold price started in a big hole compared to Friday's close...and from that low, the subsequent rally looked really impressive on the screen, but wasn't.

Silver's price path was virtually identical to gold's...the sell-off starting just before the London open...the low tick [$27.86 spot] at 8:30 a.m. Eastern...the subsequent rally...and the big run-up that started about 11:10 a.m. Eastern.

Like gold, most of the really big gains were in by 11:30 a.m. in New York...but the silver price continued to work its way slowly higher from there. The high tick of the day...$27.96 spot...came around 3:30 p.m. Eastern...and from there got sold off a hair into the 5:15 p.m. electronic close.

Volume was pretty light up until the start of the 8:30 a.m. rally...and then picked up a bit from there. Silver closed at $28.81 spot...up 72 cents from Friday's close. Net volume was around 24,000 contracts. I'd like to believe that there was some short covering going on, but we'll have to wait until Friday's COT Report to find out for sure.

The goings-on in the currency markets on Monday [such as they were] were unrelated to the goings-on in the precious metal markets...and the dollar index closed down less than 10 basis points from Friday.

The gold stocks opened flat...and then sold off a bit. But once the 11:00 a.m. rally in gold began, the stocks finally made it back above the unchanged mark shortly before noon in New York. The HUI finished up a rather unenthusiastic 0.50%.

With the odd exception, the silver stocks more than made up for it, as most had decent gains on the day...especially some of the small cap producers. Nick Laird's Silver Sentiment Index closed up a respectable 2.07%.



The CME's Daily Delivery Report for Monday wasn't particularly exciting, as only 40 gold contracts were posted for delivery tomorrow. JPMorgan was the short/issuer on all of them...and three of the other 'usual suspects' were the long/stoppers...the Bank of Nova Scotia, HSBC USA...and Deutsche Bank.

There were no reported changes in either GLD or SLV.

There was a decent sales report from the U.S. Mint. They sold 6,000 ounces of gold eagles...2,000 one-ounce 24K gold buffaloes...and 437,500 silver eagles.

The Comex-approved depositories did not receive any silver on Friday...but shipped 215,235 troy ounces of the stuff out the door. The link to that action is here.

I note that Bron Suchecki 'down under' at The Perth Mint had a thing or two to say about First Majestic's foray into Comex futures market in silver. It was posted in a blog at his website yesterday afternoon Perth time...and it's worth the read. It's headlined "First Majestic and Silver Speculation"...and the link is here.
http://goldchat.blogspot.com.au/2012/08 ... ation.html


Since yesterday was the 20th of August, The Central Bank of the Russian Federation updated its website with their July numbers yesterday. They reported adding another 600,000 troy ounces of gold to their reserves, which now sit at 30.1 million ounces.

I thank Nick Laird for his wonderful graph which you see before you now. It's obvious that Russia has been actively adding to its gold reserves since mid-2007.

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[ Larger version: http://www.caseyresearch.com/gsd/sites/ ... ves_12.png ]



As is typical for a Tuesday, I have a lot of stories for you today...too many, in fact.

¤ Critical Reads

Banks Use $1.77 Trillion to Double Treasury Purchases

The gap between U.S. bank deposits and loans is growing at the fastest pace in two years, providing lenders with more funds to buy bonds and temper the biggest sell-off in Treasuries since 2010.

As deposits increased 3.3 percent to $8.88 trillion in the two months ended July 31, business lending rose 0.7 percent to $7.11 trillion, Federal Reserve data show. The record gap of $1.77 trillion has expanded 15 percent since May, the biggest similar-period gain since July, 2010. Banks have already bought $136.4 billion in Treasury and government agency debt this year, more than double the $62.6 billion in all of 2011, pushing their holdings to an all-time high of $1.84 trillion.

“Bank deposits continue to explode and in turn they continue to buy Treasuries as the economy loses momentum, inflation is trending down, Europe continues to hang over our heads and political uncertainty reigns” said Michael Mata, a money manager in Atlanta at ING Investment Management Americas, which oversees about $160 billion. “There is no reason for interest rates to climb in any meaningful way any time soon.”

This story was posted on the Bloomberg website during the lunch hour in New York yesterday...and I thank Donald Sinclair for sending it. The link is here.


California Farm Labor Shortage 'Worst It's Been, Ever'

There's a different sort of drought plaguing California, the nation's largest farm state. It's $38 billion agricultural sector is facing a scarcity of labor.

This year is the worst it's been, ever," said Craig Underwood, who farms everything from strawberries to lemons to peppers, carrots, and turnips in Ventura County.

Some crops aren't get picked this season due to a lack of workers.

"We just left them in the field," he said.

The Western Growers Association told CNBC its members are reporting a 20 percent drop in laborers this year. Stronger border controls are keeping workers from crossing into the U.S. illegally, and the current guest worker program is not providing enough bodies.

This CNBC story was posted on their website early yesterday afternoon Eastern time...and I thank Scott Pluschau for bringing it to our attention. The link is here.


Three Jim Rickards Interview/Blogs

The first is a 15-minute video interview with the Australian Broadcasting Corporation last week. The next item is a blog posted on the usnews.com Internet site yesterday. It's headlined "How China Is Driving Federal Reserve Policy"...and the link to that is here. Lastly is this 7:25 minute video interview with Deirdre Bolton posted at the bloomberg.com Internet site yesterday. All these items are courtesy of reader Harold Jacobsen, for which I thank him on your behalf.


Bank of England deputy governor Paul Tucker warned banks they could collapse 'before Christmas'

Paul Tucker, the deputy governor of the Bank of England, told an October meeting of the chief executives of Britain’s largest banks that there was a serious chance none of their businesses would survive to the end of the year.

“Gentlemen, you could all be out of business by Christmas,” Mr Tucker said in a stark warning to the bank chiefs, according to three sources present at the meeting.

The revelation of Mr Tucker’s remarkable warning shows the depth of fear among senior officials over the havoc the collapse of the eurozone would wreak on the British financial system.

Mr Tucker is one of the front-runners to replace Sir Mervyn King as Governor of the Bank of England.

Well, that's going to happen sooner or later anyway, as it's just a matter of when...whether it was last Christmas, this Christmas, or next Christmas...or some point in between. This story was posted on the telegraph.co.uk Internet site on Saturday night...and I thank Donald Sinclair for sending it along. The link is here.


Lord Rothschild takes £130m bet against the euro

The member of the banking dynasty has taken the position through RIT Capital Partners, the £1.9bn investment trust of which he is executive chairman.

The fact that the former investment banker, a senior member of the Rothschild family, has taken such a view will be seen as a further negative for the currency.

RIT, which Lord Rothschild has led since 1988, had a -7pc net short position in terms of principal currency exposures on the euro at the end of July, up from -3pc at the end of January. Given a net asset value of £1.836bn at the end of July, the position is worth £128m.

Sources close to RIT suggested that the position was not a dogmatic negative view on the euro as a currency, but rather a realistic approach on a currency that remains relatively weak.

This was another Saturday night posting on The Telegraph's website...and is another offering from Donald Sinclair. The link is here.


Russian Bear stops Finland leaving euro

German eurosceptics quietly hope that Finland will become the first creditor state to storm out of monetary union in disgust, opening the way for others to break free.

Once Finns break the taboo, it would be easier for Germany to extricate itself from an escalating national disaster without inviting opprobrium from across Europe, or so goes the argument.

“We can’t start this off, but the Finns can,” said Hans-Olaf Henkel, former head of Germany’s industry federation.

Berlin’s policy elites are constrained by their honourable - if misdirected - feelings of moral duty towards the euro. They cannot bring themselves to plunge the dagger.

This Ambrose Evans-Pritchard offering was posted on the telegraph.co.uk website on Sunday afternoon BST...and I thank reader Ulrike Marx for bringing it to our attention. It's worth the read...and the link is here.


Bank deposit turns into a waking Iberian nightmare

Spanish banks have invested their customers’ money even without their permission. Helena and Esko Antikainen...from Finland...who live part of the year in Spain, are among the thousands of victims of this illegal practice.

The value of the bank deposits made with Spanish banks by foreigners living in the country is under threat of being slashed drastically. This group of unfortunates also includes a number of Finns living in Spain. Hundreds of thousands of Spaniards are facing the same problem. The reason for this is that Spanish banks have offered savings accounts to their clients, from which some of the money has been invested in stock. Now that the Spanish economy has more or less stalled, the value of the shares in many cases has plummeted.

Investments in stock have even been made without seeking permission from the account holders.

People have been under the impression that their capital is sitting there normally in a savings account. In some cases, the banks’ information to customers about the terms and conditions of the accounts has been unclear or insufficient. Within the European Union, bank deposits are protected up to EUR 100,000...but the deposit protection, however, does not cover losses if the money has been invested in stock.

This perfect Catch-22 story was posted on the Finnish website hs.fi/english/...and I thank London, U.K. reader Iain Doherty for sending it. The link is here.


Another 2.5 Billion Euros Greek Shortfall Growing Ever Larger

Athens has not been having an easy time coming up with the €11.5 billion in cost cutting measures over the next two years it has promised Europe. Indeed, Greek Prime Minister Antonis Samaras is reportedly set to request an additional two years to make those cuts during meetings later this week with German Chancellor Angela Merkel on Friday and French President François Hollande on Saturday.

But according to information obtained by SPIEGEL, the financing gap his country faces could be even greater. During its recent fact-finding trip to Athens, the so-called troika -- made up of representatives from the European Central Bank, the European Commission and the International Monetary Fund -- found that Greece will have to come up with as much as €14 billion to meet the terms for international aid.

This story was posted on the spiegel.de Internet site yesterday...and I thank Roy Stephens for sending it. The link is here.


Ambrose Evans-Pritchard: Der Spiegel Is Right, The Long-Awaited 'Game Changer' From The ECB May Finally Be Close

Ambrose Evans-Pritchard of The Telegraph is usually one of the foremost purveyors of the Euro doom argument, so it's worth sitting up and taking notice at his latest column...

In it, he says The Telegraph can corroborate that Der Spiegel article from this weekend, which said the ECB is preparing some kind of scheme to cap borrowing costs for Spain and Italy.

That article was the subject of analyst skepticism, and it was rejected by the ECB this morning (though in some very careful language).

This Joe Weisenthal piece showed up on the businessinsider.com website late yesterday afternoon...and, once again, I thank Roy Stephens for bringing it to our attention. It's worth reading...as is the link to the Ambrose Evans-Pritchard piece that's imbedded...and the link is here.


Walker's World: The Return of the Euro Crisis

Just back from vacation, France's President Francois Hollande plunges right back into a new euro crisis, as he goes to Berlin for talks this week with Chancellor Angela Merkel. And then each of them separately has talks with the new Greek Prime Minister Antonis Samaras, who is hoping to be allowed four years rather than two to carry out the deficit cuts and privatizations required by his European partners.

The chances are not good.

"We cannot responsibly throw money into a bottomless pit," German Finance Minister Wolfgang Schauble said at the weekend.

Volker Kauder, leader of the ruling conservative coalition in the Bundestag, Germany's parliament, was dismissive of Greek hopes. "There is no more latitude, either on the timeframe or the matter itself," he said.

This UPI story was filed from Paris yesterday...and I thank Roy Stephens for sharing it with us. The link is here.


Suicide of Deloitte partner Daniel Pirron linked to Standard Chartered's Iran scandal

The family of a senior partner at Deloitte has called for answers after he apparently committed suicide days after the auditing firm was linked to the Standard Chartered Iran dollar trades scandal.

Daniel Pirron, a partner in Delloite’s key General Counsel’s office in New York, was found dead in a car park near his home in Trumbull, Connecticut.

On August 6, Deloitte was accused by the New York Department of Financial Services of aiding Standard Chartered in its “deception” over billions of dollars’ worth of trades involving Iran...and Mr Pirron apparently took his own life seven days later.

Speaking publicly for the first time about the incident, Mr Pirron’s brother, Mike, said the family believed the two events were connected and that Daniel Pirron had warned his daughters the day before his death that there was “big trouble” ahead.

I was suspicious of this 'suicide' when I first heard about it...but decided not to post the story at the time because it wasn't associated with anything going on at the time. Well, in hindsight, there was. This stinks to high heaven...and the contents of the story confirm that. It was also posted on The Telegraph's website on Saturday night...and I thank Roy Stephens for sending it along. It's worth reading...and the link is here.


U.S. Says Iraqis Are Helping Iran to Skirt Sanctions

When President Obama announced last month that he was barring a Baghdad bank from any dealings with the American banking system, it was a rare acknowledgment of a delicate problem facing the administration in a country that American troops just left: for months, Iraq has been helping Iran skirt economic sanctions imposed on Tehran because of its nuclear program.

The little-known bank singled out by the United States, the Elaf Islamic Bank, is only part of a network of financial institutions and oil-smuggling operations that, according to current and former American and Iraqi government officials and experts on the Iraqi banking sector, has provided Iran with a crucial flow of dollars at a time when sanctions are squeezing its economy.

The Obama administration is not eager for a public showdown with the government of Prime Minister Nuri Kamal al-Maliki over Iran just eight months after the last American troops withdrew from Baghdad.

This 2-page story showed up on The New York Times website on Saturday...and it's a must read for any student of the "new great game". I thank Donald Sinclair for finding it for us...and the link is here.


China worries about social fallout of soybean oil price jump

Construction laborer Yi Jichun has never heard of Illinois or Iowa. But the migrant worker's favorite comfort food comes straight out of the U.S. Midwest: soybean oil.

"Without the oil, it would taste too plain," Yi said as he tucked into a lunch of sliced cucumbers and chicken drumsticks slathered with grease. "I wouldn't want to finish it."

And that has officials in Beijing worried. The worst U.S. drought in half a century is sending global grain prices soaring. The fallout is almost certain to be felt at dinner tables across China. The No. 1 foreign buyer of American soybeans, which are pressed into cooking oil and used for animal feed, China last year purchased about half of U.S. exports, more than $10.4 billion worth, according to the American Soybean Assn. China has also stepped up purchases of U.S. corn and wheat to feed the nation's growing appetite.

This story was posted in the L.A. Times on Sunday...and I 'borrowed' it from yesterday's edition of the King Report. The link is here.


Seven King World News Blogs/Interviews

The first blog is with John Hathaway...and it's headlined "This Financial System Is Now In Its Final Stages". The second is with John Embry. It's entitled "Apple, Gold, Manipulation & Financial Implosion". The next blog is from several contributors that Eric King spoke with...including Pierre Lassonde and Rick Rule. It's headlined "Global Collapse Now Accelerating As Central Banks Buy Gold". Next is this blog with Michael Pento...and it's headlined "Prepare For War, Skyrocketing Crude & A Global Depression". Next is this blog with Robert Fitzwilson of The Portola Group. It bears the title "Gold and a NASDAQ Stock that Rocketed 117,000% Higher". The seventh item is this audio interview with Rick Rule...and lastly is this audio interview with Ben Davies.
http://kingworldnews.com/kingworldnews/ ... _News.html


Malema calls for other mines to join Lonmin strike

Expelled ANC Youth leader Julius Malema has urged workers from other mines to join their Lonmin compatriots at Marikana in striking for wage increases.

Malema addressed a few thousand miners and residents of the town near the scene of Thursday's confrontation between police and striking miners, which claimed the lives of 34 miners.

Malema blamed his usual culprits for the violence, saying President Jacob Zuma and police minister Nathi Mthethwa were in charge of the police force that fired on the miners. He called on them to resign.

In a stinging attack, Malema slammed the police's handling of the incident, saying live ammunition should never have been used. He said: "Even if you threaten police, they have no right to use live ammunition against civilians. The minister of Police must step down because this massacre was committed under his supervision, the same thing with President Zuma, he must step down."

According to ex-pat South African Ulrike Marx, who sent me this story..."the S.A. police force is now predominantly black...and there are a lot of other ramifications to this story, not widely reported in most media reports."

Just an example or two: there are old tribal tensions at play here, with the rock drillers from a specific tribal subgroup. Earlier in the week, two policemen had been hacked to death with pangas (machetes). Reports also fail to emphasize the importance of the confrontation between two rival unions, namely the established NUM (symbiotic relationship with the ruling ANC) and the upstart AMCU."...NUM president Senzeni Zokwana refused to leave the safety of a police armoured vehicle to address the miners ..."

This story was posted on the sabc.co.za Internet site on Saturday afternoon...and the link is here.


Beyond the chaos at Marikana

Violent clashes between police and striking miners have left many people dead this week. But the miners – specifically, the rock drillers – are determined to stay on their outcrop until they are heard. But it’s more than a strike, it’s becoming a war, writes Greg Marinovich in an article published before Thursday’s violence.

Several thousand men cover the orange outcrop of igneous rock like a single organism, spilling on to the dry thorn-veld below.

They are wrapped in blankets; their spears and fighting sticks protruding menacingly as they chant songs of war.

Many have died around this strange geological redoubt; two of them policemen. The violent showdown between these miners and their multinational employer, the platinum giant Lonmin, shows no sign of abating.

This behind-the-scenes story was posted over at the iol.co.za website last Friday...and is another story from Ulrike Marx. The link is here.


Lonmin admits firing miners could lead to more violence

Lonmin, the world's third-largest platinum producer, on Tuesday conceded that sacking 3,000 striking workers at its Marikana mine near Johannesburg, South Africa, could lead to more violence.

Police last week opened fire on strikers armed with machetes and sticks, killing 34 and raising the death toll from the week-long dispute to 44.

"It won't help anyone if Lonmin goes out and dismisses a whole lot of people for not coming to work today. It will set us back significantly in terms of violence, in terms of building trust," Mark Munroe, Lonmin executive vice-president for mining, told a local radio station on Tuesday morning.

London-based Lonmin on Monday extended its ultimatum for striking workers to return to duty to Tuesday morning, but workers continued to trickle in as the deadline expired.

This Reuters story was posted on the mineweb.com Internet site early this morning...and I thank Donald Sinclair for sending it to me just before I hit the 'send' button. It's worth reading...and the link is here.
http://www.mineweb.com/mineweb/view/min ... &pid=92730


This Banker Is Buying Gold: Casey's Daily Dispatch

Jeff Clark interviewed Chuck Butler, senior vice president of world markets at EverBank at our last Summit, and even though a few months have passed, the information is just as valid today, if not more so. In this twelve-minute video, Jeff asks Chuck about inflation vs. deflation, why the US dollar is still holding up, how much gold and silver to own, the best currencies for diversification, and his best advice for investors.

This was the introduction that Louis James gave in yesterday's edition of Casey's Daily Dispatch...and the interview with Chuck runs 11:51 minutes. The link is here.
http://www.caseyresearch.com/cdd/banker-buying-gold


Crisis-hit Italians selling gold jewellery to make ends meet

Times are now so tough that Valerio Novelli, a ticket inspector on Rome's buses, is planning to sell his old gold teeth.

In a country suffering from economic crisis, buying gold off desperate people has become one of the few boom industries.

City centres are being transformed as traditional shops go out of business, their signs replaced by ones that announce "Compro Oro", or "I Buy Gold".

The Eurispes think tank estimates the number of "Compro Oro" shops has quadrupled in the last two years. The growth of the industry is "a very good indicator of the level of hardship in the country," said Gian Maria Fara, the think tank's president.

This Reuters story is very similar to the one I posted about Portugal on this subject last week. This was posted over on the mineweb.com Internet site yesterday...and I thank Donald Sinclair for his final offering in today's column. The link is here.
http://www.mineweb.com/mineweb/view/min ... pid=110649


¤ The Funnies

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¤ The Wrap

Sometimes I wonder whether the world is being run by smart people who are putting us on, or by imbeciles who really mean it. - Mark Twain


With such light volume yesterday, I'm not entirely sure what to read into yesterday's price action...especially silver. Was it new speculative buying by the Non-Commercial traders, or was it short covering by JPMorgan et al? I don't know...and nobody else does, either. As I said at the top of this column, I'm hoping that Friday's Commitment of Traders Report will shine some light on it.

Of course the cut-off for that report is at the close of Comex trading at 1:30 p.m. Eastern time today...and after yesterday's surprise rallies, I wouldn't know what way to bet today's New York price action...or even the remainder of the London trading day.

I'm hoping that the price action we saw yesterday was the beginning of the end of the 'summer doldrums'...as big gains on Mondays have been pretty rare birds this last little while.

As John Hathaway and John Embry put it, we're at the end of the line for this current experiment in paper money...and it's only the timing of the end that is unknown. Of course we'll all be interested in knowing what will replace it when the time comes, but if it isn't a gold-backed currency of some type, or at least a major re-pricing of gold to balance the books at the world's central banks, it will be D.O.A. no matter what it is.

Neither gold nor silver did much of anything during the Far East trading session on their Tuesday, but things are looking somewhat more interesting now that London has begun to trade. Gold volumes are reasonbly light [but significantly higher than they were this time yesterday]. Silver volumes are far more substantial...almost heavy.

The dollar index is a different matter, as it began to head south [albeit slowly] right from the 6:00 p.m. open in New York last night...and then headed further south with a vengeance shortly after London began to trade, so I would assume that that's the reason both gold and silver popped about that time. As of 5:20 a.m. Eastern time, the index is down about 31 basis points. Based on the size of the drop in the dollar index, I would guess that both gold and silver ran into some selling pressure the moment that they appeared to got too frisky to the upside.

As I just said, I haven't the foggiest idea of what may, or may not, happen in New York today...but I'll be anxious to see what it is once I get up later this morning.

That's more than enough for one day...too much, actually...and I'll see you here tomorrow.
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Three cheers for BS where we pile it higher and deeper!- Bring the Gold
 
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Re: PM News articles, Analysis and Commentaries

Postby silvermotor on Wed Aug 22, 2012 7:45 am

Please follow link for charts, graphs, pictures and links to other articles.

SM

http://www.caseyresearch.com/gsd/home



U.S. Silver Output Plunges 63% Between January and May - U.S.G.S.

"I'm concerned about the volume figures...and who was going short against all the new technical fund long contracts being placed."


¤ Yesterday in Gold and Silver

The gold price didn't do much of anything up until 1:00 p.m. Hong Kong time...12 midnight Eastern...and then developed a slightly positive bias from there. It then traded flat from shortly after the London open, right up until half-past lunchtime BST...7:30 a.m. in New York...and at that point, a rally of some substance developed.

This rally continued at the 8:40 a.m. Comex open...and ten minutes later the price went vertical...and it was obvious, at least to me, that a not-for-profit seller stepped and managed the price higher from there. The high tick of the day [$1,642.60 spot] came at 10:00 a.m. Eastern...which was the 3:00 p.m. BST London gold fix.

It got sold down a few dollars from that high...and then more or less traded sideways into the 5:15 p.m. close of electronic trading.

The gold price closed the Tuesday session at $1,638.60 spot...up $17.40 on the day. Volume was very decent at around 140,000 contracts, virtually double Monday's volume. It's obvious from that volume, coupled with the price action, that this rally was not going unopposed by JPMorgan et al.

Here's the New York Spot Gold [Bid] chart on its own, which is pretty much the only chart that matters.

The silver chart looks almost the same as the gold chart. The only real difference between the two was the fact that the high of the day for silver [$29.63 spot] did not come at the London gold fix, but within the first thirty minutes of electronic trading after the 1:30 p.m. Eastern Comex close.

From that high, silver got sold down a bit more than 30 cents by 3:15 p.m...and then more or less traded sideways into the close.

Silver finished the Tuesday session at $29.33 spot...up 52 cents from Monday's close. Net volume was around 33,500 contracts...about 40% higher than Monday's.

And, for information purposes only, here's the New York Spot Silver [Bid] chart that shows the minute-by-minute action during the Comex session...and the electronic market that followed.

The dollar index developed a negative bias right from the 6:00 p.m. Monday night open...and then really headed south very shortly after London open for trading at 8:00 a.m. BST...3:00 a.m. in New York.

From there, the index continued lower...and the low price tick [81.82] came just a few minutes after 11:00 a.m. Eastern. The subsequent rally into the close cut the daily loss by less than 10 basis points.

The dollar index close down a bit over 50 basis points...and you can see from the gold and silver charts that the decline had virtually no impact on their prices until around 11:30 a.m. in London, or 7:30 a.m. in New York. Only then did the rallies in the precious metals develop some legs...and by that time, half the decline in the dollar index was already in.

In my opinion, it's a stretch to say that there was any co-relation between currency movements and the precious metal prices yesterday.

The gold stocks gapped up...and then stayed up. They hit their zenith around 11:00 a.m. Eastern time, about an hour after gold hit its high. From there, and up until half an hour before trading ended, the shares gave up over two percentage points of their gains, even though the gold price was trading sideways. Then, with thirty minute left, the HUI rallied into the close...and finished up 1.69%. But at its high, the HUI was up about 3.50%.

The silver stocks had another good day, as did the juniors. Nick Laird's Silver Sentiment Index closed up another 2.66%.



The CME's Daily Delivery Report showed that 75 gold...along with 1 silver contract...were posted for delivery on Thursday. Like Monday, the biggest short/issuer was JPMorgan with 74 contracts...and it was the same group of 'usual suspects' as long/stoppers...the Bank of Nova Scotia, HSBC USA...and Deutsche Bank. The link to the action is here.

An authorized participant added 135,679 troy ounces of gold to GLD yesterday...and there were no reported changes in SLV. Since the beginning of August...authorized participants have added 869,264 ounce of gold to GLD, but have only added about 1,470,000 ounces of silver to SLV. I'm sure that the authorized participants would have added more...and the obvious reason that they haven't, is because it's just not available. So in lieu of adding physical silver, they short the shares instead. The next report on GLD and SLV's short position from shortsqueeze.com should, hopefully, tell us a lot.

There was no sales report from the U.S. Mint.

Over at the Comex-approved depositories on Monday, they didn't receive any silver...but they shipped 1,063,729 troy ounces of the stuff out the door. The link to that activity is here.

Here are a couple of charts that Washington state reader S.A. sent me yesterday...and I seem to remember posting the first one, once before. But it fits like a hand in a glove with the second chart, so here it is again. Nothing has obviously changed over the millennia...governments debasing the currency to worthlessness.

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Here's another chart for you today...this one courtesy of Nick Laird. Nick said that based on a 40% backing, the gold price would have to just about double to US$3,400 just to play 'catch up' from where it's priced at right now.

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[ Larger version: http://www.caseyresearch.com/gsd/sites/ ... 20Base.png ]



I have the usual number of stories for you today, which is quite a few...but not nearly as many as yesterday.

¤ Critical Reads

CHART OF THE DAY: OH NO, It's The Dreaded Triple Top!

Traders have been talking about the S&P's Triple Top recently, as the index hit highs not seen since before the financial crisis began in 2008.

The Triple Top is a take on the Head and Shoulders trading pattern, that garnered attention at the end of 2011.

Simply, the Triple Top is three peaks perforated by recessions or sell-offs in between rallies. Volume tends to decline from the first peak to the second, and from the second to the third, something we've noted has been endemic to the recent trading data.

This must read story was posted on the businessinsider.com website yesterday afternoon...and it's courtesy of Roy Stephens. The link is here.


Analysis: U.S. corporate earnings point to further gloom

Earnings season is drawing to a close and the results raise a number of worrying questions about the economy's direction.

For the second quarter, the percentage of companies beating revenue forecasts was the lowest since 2009. For every company that gave a positive outlook, nearly five companies gave negative outlooks, Thomson Reuters data showed.

Third-quarter earnings estimates are down sharply, and now show a year-over-year decline of 1.8 percent, which would be the first quarter of negative growth in three years.

This Reuters story from last Friday is one that I borrowed from yesterday's King Report...and the link is here.


Matt Taibbi: More Evidence Wall Street Is Overpaid

One of the most frequently-overlooked problems of the financialization age is that a lot of our brilliant financial engineers are actually pretty damned average, when it comes to playing the market.

There's a great little piece at Zero Hedge about how hedge funds are having a terrible year (for the second straight year), with only 11% of all funds outperforming the Standard and Poor's 500, the basic stock index.

Here's Tyler's take on the panic in the hedge fund industry:

This is the worst yearly aggregate S&P 500 underperformance by the hedge fund industry in history, and also explains why the smooth sailing in the S&P500 belies the fact that nearly every single hedge fund manager (and at least 89% of all) is currently panicking like never before knowing very well there are only 4 more months left to beat the S&P or face terminal redemption requests. And with $1.2 trillion in gross equity positions, the day of redemption reckoning at the end of the year (and just after September 30 for that matter as well) could be the most painful yet.

Matt Taibbi is at it again in this short and rather pithy blog over at the Rolling Stone website...and it's definitely worth the read. It's also courtesy of Roy Stephens...and the link is here.


Oil resumes upward march, hits 3-month high

The price of oil resumed climbing Tuesday, reaching its highest point since early May.

Speculation that the U.S. Federal Reserve might take action to spark the sluggish recovery and hopes for good news from upcoming debt-crisis meetings in Europe were the catalysts.

Benchmark crude finished up 71 cents at $96.68 in New York. Earlier, it crossed $97 for the first time since May 11. It lost 4 cents Monday after rising for four straight days.

Brent crude, which is used to price international varieties of oil, rose 94 cents to $114.64 per barrel in London.

This AP story was posted on their website later in the afternoon on Tuesday...and it's another item that I lifted from yesterday's edition of the King Report. Since I posted this, the headline has now been changed to read "Oil Prices up as Traders Foresee Tighter Supplies"...and the link is here.


Forget Europe... This is a REAL Crisis to Be Afraid Of

We need to address a MAJOR situation that is developing: the drought in the US and its impact on US crops.

The US is experiencing its worst drought since 1956. Altogether 63% of the lower US 48 states are experiencing a drought. As a result of this, the USDA has said that 50% of the US’s corn crop will be in poor to very poor condition.

What does this mean? That the US will have a very VERY low corn crop. This in of itself is bad. But when you consider that corn supplies are at their lowest levels in 17 years, you’ve got a recipe for a serious corn shortage.

Few people understand how large a part of the US industrial food chain is tied to corn.

This is the first of two stories in a row about the devastating U.S. drought. This short essay appeared on the zerohedge.com Internet site yesterday...and I thank reader Marshall Angeles for sharing this story with us. It's definitely worth the read...and the link is here.


The Cost of Hunger: Drought Only One Factor Behind High Food Prices

The severe drought in the US has been blamed the rising prices of agricultural commodities. But that is only part of the story: Biofuels, financial speculation and changing dietary habits are also playing a role. The global food supply faces pressure from all sides.

The American Midwest is experiencing its worst drought since the 1930s. One-sixth of the corn crop has been lost and the soybean plants and wheat stalks don't look much better. Shortages and rising prices for essential commodities are the result.

Some prices have soared by almost 50 percent within just 10 weeks, and grain warehouses are beginning to empty out. Other important supplier countries also anticipate poor harvests. Because of a prolonged dry period in Russia, wheat exports are expected to be only half of what they were last year. Brazil, on the other hand, has had too much rain, which is bad news for sugar-cane farmers. "The latest crop predictions suggest that we should fear the worst," the United Nations World Food Programme warned last week. It is the third such warning in recent years, following similar crises in 2008 and 2011. Catastrophe, it would seem, is becoming the norm.

Sudden spikes in the prices of wheat, soybeans and corn threaten the wellbeing of every individual. Economists warn of "agflation," or inflation triggered by a rise in the price of agricultural products. Poor nations, however, are disproportionately affected because people there spend a larger share of their income on food. But consumers in the industrialized world will also feel the effects.

This short essay was posted on the German website spiegel.de yesterday...and I thank Roy Stephens for his third offering in today's column. The link is here.


Secret Libor Committee Clings to Anonymity Following Scandal

Every two months, representatives from the world’s largest banks meet at an undisclosed location to review the London interbank offered rate.

Who sits on the British Bankers’ Association’s Foreign Exchange and Money Markets Committee, the body that governs the benchmark for more than $300 trillion of securities worldwide, is a secret. No minutes are published. The BBA won’t identify any members, saying it wants to protect them from being lobbied, and declined to make the chairman available for interview.

The group’s lack of transparency is symptomatic of a self- regulated system that failed to stop traders around the world manipulating the world’s most widely used benchmark interest rate for profit. Martin Wheatley, the British regulator charged with reviewing Libor after the scandal, is now weighing whether to bring oversight under the control of regulators.

Well, this Bloomberg story from yesterday was a big eye-opener for me...and I expect for you as well, dear reader. For that reason alone, it's a must read...and I thank Richard Craggs for sending it our way. The link is here.


George Osborne's plans hit by rising borrowing

George Osborne’s attempts to slash Britain’s ballooning deficit have been dealt a blow by official figures revealing a shock rise in borrowing in July.

The damning numbers mean the Chancellor may have to tap the markets for at least £10bn more borrowing than last year, even after the planned £18bn of tax rises and spending cuts.

Economists put the looming shortfall down to the weakness of the economy, which has resulted in a fall in tax receipts and a sharp rise in benefit payments.

The Treasury had been expected to pay off £2.2bn of the national debt last month, which is traditionally good for corporation and self-assessment tax receipts. Instead, the Office for National Statistics (ONS) revealed that the Government borrowed £600m more.

This story was posted on the telegraph.co.uk Internet site late yesterday morning BST...and I thank Donald Sinclair for sending it along. The link is here.


SocGen: Italy Looks 'Perilously Close' To Getting Shut Out Of The Bond Markets

Italian GDP contracted for the last 12 months and the country is now looking at a longer and deeper recession than was previously expected.

With Spain already expected to request a sovereign bailout, investors are worried that the giant Italian economy might be the next domino to fall. So the big question on everyone's mind: Is Italian debt sustainable? i.e. can Italy meet its debt without debt relief and avoid default.

Société Générale's James Nixon say that "What our models serve to illustrate, however, is that Italy has precious little room for maneuver. If there is significant slippage beyond what we are forecasting, then Italy’s debt position could easily slip to the other side of the saddle path equilibrium and Italy could find itself on an unsustainable debt trajectory. Despite Italy’s low absolute deficit, it is precisely this fear that is reflected in current Italian spreads.

Italy therefore looks perilously close to losing market access and finding itself on an unsustainable debt trajectory…Thus, there is a good chance that the EU will seize the opportunity to impose deep and meaningful reforms on Italy – something that at the moment all the political parties inside Italy appear keen to avoid."

This story was posted on the businessinsider.com Internet site just before midnight last night...and is another contribution from Roy Stephens. The link is here.


China bubble in 'danger zone' warns Bank of Japan

China risks a repeat of Japan’s boom-bust disaster 20 years ago as exorbitant property prices combine with a demographic tipping point, a top Japanese official has warned.

The surge in Chinese home prices and loan growth over the past five years has surpassed extremes seen in Japan before the Nikkei bubble popped in 1990. Construction reached 12pc of GDP in China last year; it peaked in Japan at 10pc.

Mr Nishimura said credit and housing booms can remain “benign” so long as the workforce is young and growing. They turn “malign” once the ratio of working age people to dependents rolls over as it did in Japan.

This Ambrose Evans-Pritchard offering was posted on The Telegraph's website yesterday evening at 9:06 p.m. BST...and I thank Roy Stephens for sharing it with us. It's worth skimming...and the link is here.


Three King World News Blogs

The first is with Richard Russell...and it's headlined "The Key to Stocks, Gold & Growing Old". The second blog is with Dr. Stephen Leeb. It bears the title "Supply Crunch To Send Silver Into The Stratosphere". And lastly is this blog with Dan Norcini. It's headlined "Large Entities Creating Major Breakouts In Crucial Markets".
http://kingworldnews.com/kingworldnews/ ... _News.html


Silicosis lawsuit filed against South Africa's gold miners

South Africa's leading gold miners are facing a potential lawsuit on behalf of thousands of workers who claim they contracted silicosis, a lung disease, through the companies' negligence.

A South African lawyer filed the first papers on Tuesday against AngloGold Ashanti, Gold Fields and Harmony, in a preliminary step to determine whether the court recognizes the case as a class action.

"If the certification is granted we anticipate that this may be the largest damages suit in the history of this country, in the tens of billions of rand possibly," lawyer Charles Abrahams, who represents more than 3,000 mostly former miners, said.

This story was posted over at the mineweb.com Internet site yesterday...and I thank Donald Sinclair for sending it along. It's worth reading...and the link is here.


Australian Mining Companies Are Desperate For Workers And Want To Hire US Veterans

With Post 9/11 veteran unemployment hovering near nine percent and the services preparing to drastically cut forces, Australian mining companies have stepped up to grab some of that labor for their short staffed operations down under.

Seth Robson at Stars and Stripes reports the mines are looking for everything from plumbers and electricians, to heavy-equipment operators and project managers with pay ranging from $65K to 200K to start.

Australian headhunters are looking for new hires at job fairs throughout the US, but Robson mentions Detroit and Houston specifically and that 400 to 500 positions need to be filled immediately.

This story was posted on the businessinsider.com website late last night...and I thank Roy Stephens for his final offering in today's column. The link is here.
http://www.businessinsider.com/australi ... der-2012-8


Chris Powell, GATA's Treasurer, Interviewed by Jay Taylor

GATA's secretary/treasurer was interviewed for about 30 minutes yesterday by financial letter writer Jay Taylor on his VoiceAmerica Internet radio program, "Turning Hard Times Into Good Times".

The interview begins at about 32 minutes and 50 seconds into the program...and it's archived at the voiceamerica.com Internet site. The link is here.
http://www.voiceamerica.com/episode/638 ... empt/54974


Is Gold Money? LCH Accepts Shiny Yellow Metal As Collateral

Whether it is because the CME just did it; or it's all their clients have left; or Gold volatility is lower than EUR/USD volatility (9.0% vs. 9.6% in last 3 weeks); or they see the painting on the wall of Draghi's grand-plans, the LCH-Clearnet just announced that as of August 28th, unallocated gold will be accepted as collateral for margin cover purposes. This now means all the major exchanges accept worthless barbarous relics as collateral - as well as worthless fiat paper 'money'.

Gold is edging ever closer to being officially recognized as a currency once again...and it's my guess that the moment it is, it will come with a shockingly high sticker price. This story was posted over at Zero Hedge early yesterday afternoon...and I thank West Virginia reader Elliot Simon for bringing it to our attention. The link is here.
http://www.zerohedge.com/news/gold-mone ... collateral


U.S. silver output plunges between January and May - U.S.G.S.

The temporary closure of Hecla's Lucky Friday Mine, complicated by ground support rehabilitation work at the company's Greens Creek Mine, negatively impacted U.S. silver production earlier this year.

Domestic silver production for the period from January to May of this year totaled 411,000 kg (13,214,000 oz.), down 63% from total production of 1,120,000 kg (36,008,836 oz.) reported during the first five months of last year.

U.S. Geological Survey figures show the United States imported 2.4 million kg (77,161,800 oz.) of silver with a value of $2.58 billion from January to May of this year. The U.S. imported silver bullion, silver doré, silver ores and concentrates, and silver ash and residues from Argentina, Belgium, Canada, Chile, Columbia, the Dominican Republic, Ecuador, Italy, Jamaica, Mexico, Morocco, Nicaragua, Panama and Peru.

This story...filed from Reno, Nevada...was posted on the mineweb.co.za Internet site in the wee hours of this morning...and you may not believe it, but I found the story all by myself! It's a short must read...and the link is here.
http://www.mineweb.co.za/mineweb/view/m ... pid=102055


¤ The Funnies

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¤ The Wrap

I was happy to see the price moves in all the precious metals on both Monday and Tuesday, but I'm concerned about the volume figures...and who was going short against all the new technical fund long contracts being placed.

As Ted Butler said on the phone yesterday, it all depends on what JPMorgan et al are doing...especially in silver. Yesterday, at the Comex close, was the cut-off for Friday's Commitment of Traders Report...and when that is posted on the CFTC's Internet site at 3:30 p.m. Eastern time, we'll have some idea of how good/bad it really is.

Here's the 6-month silver chart. As you can see, we're well above the 50-day moving average, but still have a ways to go to get to the 200-day. You should also note that the RSI has now broken through the 70 mark, at 70.37...always a sign that the market is approaching 'overbought'...and may be due for a 'correction'.

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Of course, it can stay overbought for quite a while, but I'm always on the look out for 'in your ear'...and we'll have to see how this all turns out in the days and weeks ahead.

We still have one week left for traders holding Comex futures contracts in silver to roll out of the September delivery month, so it will be a busy time. As of the CME's preliminary report from yesterday, there are 35,000+ contracts still open for that month...and those that aren't standing for delivery have to be out within the next five trading days or so.

Here's the 6-month gold chart. As you can tell, we are rapidly approaching the 200-day moving average...and as I write this paragraph at 4:20 a.m. Eastern time, we're less than ten bucks away. The RSI still has not hit the overbought mark as of yet, but another up day like yesterday will certainly do the trick.

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Gold and silver didn't do much in Far East trading on their Wednesday, which has certainly been the norm for a long while now...but an hour after London opened, both metals jumped up a bit, so it's my guess that we'll have another interesting trading day again today. Net volumes in both metals are nothing special but, like yesterday, the silver volume is a little higher than I'd like to see...but gold's volume is still reasonable. The dollar index has been basically comatose all night long. And is almost always the case, I expect the major price action to occur during the Comex trading session.

Since the May lows in both metals, the price trend has been slowly higher, but have been kept within a very narrow trading range since then. Based on these last three months' price action, I'm not about to wave the 'all clear' flag just yet, but it's certainly heading in the right direction.

I'm cautiously optimistic...and I'm still 'all in'.

See you tomorrow.
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Three cheers for BS where we pile it higher and deeper!- Bring the Gold
 
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