Monthly Archives: January 2014

A Glimpse into the Coming Collapse…… by Jeff Thomas

crystalball

A Glimpse into the Coming Collapse

by Jeff Thomas - Casey Reseach
Published : January 17th, 2014

Beginning in 1999, we predicted a systemic economic collapse that would take place in the First World and would impact all other economies. We began to list some of the “dominoes” that would fall as the collapse evolved and described that the “Great Unravelling,” as we termed it, would take roughly ten years. At that time, we guesstimated that the first two of the dominoes, a real estate crash and subsequent stock market crash in the US, would begin in about 2005.

We were premature in this prediction, as the first of the crashes did not occur until 2007. And, truth be told, we have frequently been incorrect in the timing of the other dominoes. Whilst the actual events have been predicted correctly, our timing has often been incorrect. In every such case, the prediction has been premature.

Sadly, however, the prediction of the events of the collapse have been almost entirely correct.

We also predicted that, just as a ball of string speeds up its rotation as it rolls along unravelling, so, too, the events of the Great Unravelling would occur more quickly as the situation worsened. Additionally, the severity of the events would increase concurrently with the increase in velocity.

However, none of the above was the result of gypsy fortune-telling, nor did it require the brightest of minds to work out. It is mostly based on the simple assumption that history repeats itself—that the world’s leaders make the same mistakes in every era, because human nature never changes. Anyone who is willing to expend the effort to study history diligently and to be prepared to think in contrarian terms, may develop a meaningful insight into the events of the future.

Back in 1999, of course, the very idea that the world was headed for serious economic calamity was considered ridiculous by most. The unfortunate fact is, most people do truly deal in the present, rarely questioning the future beyond what they consider to be the very next event. The truth of this statement is borne out by the fact that the great majority of people, who have already seen the first half of the Great Unravelling come to pass, still somehow cannot imagine the second half—the more disastrous half—as being in any way possible. Surely, somehow, the governments of the world will fix things.

However, the number of people whose eyes have been opened seems to be growing, and many of them are asking what the collapse will look like as it unfolds. What will the symptoms be?

Well, the primary events are fairly predictable: they would include major collapses in the bond and stock markets and possible sudden deflation (primarily of assets), followed by dramatic inflation, if not hyperinflation (primarily of commodities), followed by a crash of several major currencies, particularly the euro and the US dollar.

The secondary events will be less certain, but likely: increased unemployment, currency controls, protective tariffs, severe depression, etc.

But, along the way, there will be numerous surprises—actions taken by governments that may be as unprecedented as they would be unlawful. Why? Because, again, such actions are the norm when a government finds itself losing its grip over the people it perceives as its minions. Here are a few:

  • Travel Restrictions. This will begin with restrictions on foreign travel, including suspension/removal of passports. (This has begun in a small way in both the EU and US.) Later, travel restrictions will be extended within the boundaries of countries (highway checkpoints, etc.)
  • Confiscation of wealth. The EU has instituted the confiscation of bank accounts, which can be expected to become an international form of governmental theft. This does not automatically mean that other assets, such as precious metals and real estate will also be confiscated, but it does mean that the barrier for confiscation has been eliminated. There is therefore no reason to assume that any asset is safe from any government that approves theft through bail-ins.
  • Food Shortages. The food industry operates on very small profit margins and survives only as a result of quick payment of invoices. With dramatic inflation, marginal businesses (suppliers, wholesalers, and retailers) will fall by the wayside. The percentage of failing businesses will be dependent upon the duration and severity of the inflationary trend.
  • Squatters Rebellions. A dramatic increase in the number of home and business foreclosures will result in homelessness for anyone whose debt exceeds his ability to pay—even those who presently appear to be well-offAs numbers rise significantly, a new homeless class will be created amongst the former middle class. As they become more numerous, large scale ownership of property may give way to large scale “possession” of property.
  • Riots. These will likely happen spontaneously due to the above conditions, but if not, governments will create them to justify their desire for greater control of the masses.
  • Martial Law. The US has already prepared for this, with the passing of the 2012 National Defense Authorization Act (NDAA), which many interpret as declaring the US to be a “battlefield.” The NDAA allows the suspension of habeas corpus, indefinite detention, and the assumption that any resident may be considered an enemy combatant. Similar legislation may be expected in other countries that perceive martial law as a solution to civil unrest.

The above list is purposely brief—a sampling of eventualities that, should they occur, will almost definitely come unannounced. As the decline unfolds, they will surely happen with greater frequency.

But the value in projecting what the collapsing governments may do to their citizens is not merely an exercise in speculation. By anticipating the likelihood of any of the above, the individual may find that it would be prudent to turn off the game on television tonight and spend his time musing on the possibility of what he would do if any of the above events were to take place. (And, again, these projections are not mere fancy; they are actions typically taken by governments as their declines play out.)

Most importantly, if the reader concludes that there is a significant percentage of likelihood that any of the above are coming his way, he would be well-advised to assess whether they are developments that he feels he could live with. If not, he might wish to assess how much time he has before these events become a reality and what he may do to sidestep their impact on him.

Whilst, throughout the First World, the comment, “The whole world is going to Hell,” is becoming common, in fact, this is not the case. Although some countries are in decline, others are on the rise. It is left to the reader to decide whether he will fall victim to coming events, or will use them as an opportunity to internationalise himself.

Gold Inversion & Inflection in February 2014………by Martin Amrstrong

Gold & the Inversion

QUESTION: Marty, Long time reader.  According to your September 15, 2011 issue, the computer, in its first writing since 1999, pontificated it’s forecast on gold. On page 14 the computer said:

Utilizing a composite structure in cyclical timing analysis, the key months for a turning point in NY GOLD will be 10/2011 and 02/2014.

With everything happening in the press about gold, do you believe we’ll see a major inflection point in gold this Februrary?

Thanks,

S

ANSWER: Yes. But the first quarter is plagued by 3 Directional Changes warning of choppiness. The intraday low is still last year. However, the low in gold reached pretty close to our minimum projected target we gave back in 2011 of 1150. The low is 1151. So from a price perspective, the model is satisfied as far as the minimum objective. Now it is TIME. If gold drops to $890 that is fine. It will not change the cyclical trend – that is just a price objective on the max side.

NYGOLD-M 2014-01

The Goldbugs hate my guts when I say down. When I say UP, I become a hero. Gold will rise as capital flees the public sector and people begin to question government on a rising basis around the globe. It is not going to be gold up everything else down. Look closely at gold’s performance. It rallied from a 2008 low into 2011. Gold rallied with the downside of the ECM and not the bull leg as was the case going into 1980. That wave peaked in 1981.35. Gold has INVERTED and is starting to rally counter-trend to the economy. This isNOT a demand-push rally.

ECM2011

 

Chinese Gold Leasing: Hidden Danger…..by Koos Jansen

Original post at Koos Jansen site In Gold We Trust

LeaseGold

Chinese Gold Leasing: Hidden Danger

I got this article from a source in the mainland.

In short, some enterprises in China use gold leasing from banks to solve their short-term funding problems in the hope of buying back the gold at lower levels to repay the lease. However they can be short-squeezed when gold moves higher. My source was so kind to do a quick translation for us (the west):

bulls vs bears china gold leasing

 

The Gold Bear Market Game: Spread Arbitrage Through Gold Leasing For Individuals

January 20, 2014

By Chen Zhi, Shanghai

It’s Spring Festival time again. A private business owner Chen Qian (Alias) is unhappy with her own investment impulse.

At the beginning of January, she got the 11 million RMB from a due trust product and she wanted to use it as the cushion to pay for the bills for procurement. 2 weeks later, because she couldn’t resist the temptation of a real estate trust product with an annualized rate of 11%, she put her money into this product.

To her surprise, because another sum of sales proceeds was said to be delayed, she now needed some money to pay for business procurement.

In fact, this is not her first time to be in a shortage of funds. In the past, she could pledge trust products at banks to apply for short-term bridge loans. This year, she was told banks didn’t have enough lending capacity so the bridge loan was impossible.

Therefore, she had to try the gold lease business.

Gold lease is like this: eligible businesses can lease gold from banks and pay the same quantity and grade gold when the gold lease is due and pay the relevant gold lease rate. During the lease, businesses can sell the gold to get short-term funding.

However, to her surprise, gold lease is not only a new financing tool but many business owners use it as a modern arbitrage means.

“Among my friends, there are business owners investing tens of millions of RMB and play the gold lease risk-free spread arbitrage.” Chen Qian said. But in her opinion, this kind of risk free arbitrage may have unfathomable risks.

6.7 % Funding Cost: The Involvement Of Individuals

Chen Qian’s first experience with gold lease is from the recommendation of a jewellery manufacturer.

In the past, through gold lease, this jewellery manufacturer could easily get tens of millions yuan of “cheap”funds, even in the time of credit crunch, which made her jealous.

It works like this: the jewellery manufacturer first leases 33kg of gold from a bank and then sells it through the Shanghai Gold Exchange to get around 10 million yuan (at 303 yuan/gram). Then he uses 1.5 million (15% margin rate) to buy 33 kg of gold futures contracts and use the 8.5 million left for the short-term funding of businesses.

Because the finance expenses including the gold lease expense, the brokerage fee for the futures contract are less than 0.55 million yuan, then the effective cost for the gold lease is close to 6.7 %. At the same time, the total finance expenses for bank loans (including loan rate, to cost to buy wealth management products, business audits, etc) are more than 9 %.

But not all businesses are qualified for gold lease as a means to get low rate loans. Chen Qian’s first application for gold lease was turned down. The reason is banks only lease gold to companies involved in gold market, including gold production, fabrication, sales and trade. Gold lease is not available for high net worth individuals.

Under the guide of the jewellery manufacturer, Chen Qian found that high net worth individuals can circumvent rules to get gold lease contracts. Way No. 1: set up an enterprise related to gold business. One only needs to put the phrase “gold jewellery business” into the business license to satisfy the internal compliance needs of banks. Way No 2: use the “tunnel” provided by financial lease companies and gold fabricators. One just needs to ask them to lease gold from banks to re-lease to individuals.

In her opinion, her enterprise’s internal credit rating in banks is B+ and has enough credit limit and funds so leasing gold is simple.

“Some bank insiders say, gold lease is an off-sheet lease activity. When authorities are putting tight controls on on-sheet lending, this kind of off-sheet lease business is flexible” Chen Qian said. The biggest flexibility in her opinion is lack of generalised pricing standards.

At the moment, ICBC, CCB, SPDB, BOC etc all have gold lease businesses. The 3 banks Chen met had the following rates: the lowest 3.5 %, highest 4.2 % and one is 3.8 %.

“The pricing (of the lease) is related to banks’ internal pricing of risks” a person working at a Bank’s precious metals dept. This is related to the bank’s cost to deal with future gold volatility, the cost for physical delivery etc. But he emphasized that to prevent enterprises and individuals to use gold lease to get funds for speculation, most banks don’t allow non-gold related enterprises to get involved.

Every rule has loopholes. Chen found in casual chat that gold lease has become a fashionable spread arbitrage game among the enterprise owners around.

Picking Pennies In Front Of A Bulldozer Through Spread Arbitrage.

Spread arbitrage is like this: these business owners, in the background of gold’s 28% pullback in 2013, remain bearish on gold. They “borrow”gold through different ways and sell the gold on the SGE for funds. They hope to buy back the same amount of gold to repay and get the spread when gold falls further to their targets in 2014.

“A business owner signed a 3-month gold lease agreement at the end of last year and sold the gold at $1300/oz. He said he would buy back and return the gold when gold fell to $1150/oz in Q1 2014 and pocket the $150/oz difference.” Chen said. This business owner used tens of thousands of yuan. Because banks had many limitation on gold lease targets, he chose to lease physical gold from gold producers/merchants.

Gold merchants have a lot of physical gold in hand and this gold has no interest. So they would rather lease out the gold for a return.

This method is similar to banks’ gold lease. It needs business owners to put a certain percentage as margin and use real estate as pledge. During the lease, the hedge in the gold futures agreement must be done through the gold merchant’s account to control gold price volatility. But if the gold’s fall is far less than business owner’s target price to buy back the gold at the beginning of the lease, the business owner has to meet margin calls or even suffer losses.

“Gold lease is usually shorter than 1 year because the shortage the tenor, the easier to control price volatility.” The person working at the Bank’s precious metals department said. But there are some radical rich investors.

Recently, some rich people even use the funds through gold lease to invest in high yield real estate trust products to achieve “getting something from nothing”. The spread between the yield on trust products and gold lease rate is risk free in their eyes.

“Is it really risk free?” Chen was suspicious. On the one hand, many real estate investment products are facing default risks and on the other, gold lease arbitrage is facing the volatility of gold price. If these 2 risks occur at the same time, this seemingly risk-free arbitrage could be in fact “picking pennies in front of a bulldozer.”

 

Chart Binge Treat on the Real Economy & Markets

What Do “Insiders” Know That You Don’t?

What 1,592 Days Of Central Planning Looks Like

 

“X” Marks The Spot Of The Death Of Monetary Policy

$1 Trillion worth of central banking money printing around the world just does not seem to go as far as it used to… behold, the death cross of faith in monetary policy.

 

People Not in the Labour Force Soars

Labor participation rate just dropped to a fresh 35 year low, hitting levels not seen since 1978, at 62.8%

And the piece de resistance: Americans not in the labor force exploded higher by 535,000 to a new all time high 91.8 million.

Via Citi,

Is consumer confidence set to turn?

An even greater debt bubble…

global bond market 90 Trillion

 

Chart That Shows Why EU’s Barroso Is A Liar

Despite record levels of unemployment across Europe (most specifically among the youth)record high (and surging) levels of loan delinquencies, and collapsing credit creation, the leaders of the EU continue to peddle their own brand of dis-information and willful blindness. While UKIP’s Nigel Farage tongue-lashings are normally enough, EU’s Barroso this morning unleashed the following:

  • *EU’S BARROSO SAYS ECONOMIC GROWTH ‘SLOWLY RETURNING’
  • *EU’S BARROSO SAYS EU AT TURNING POINT IN CRISIS

Of course, Barroso’s lies should not be a total surprise from Europe (as we noted here) and of course the final admission of guilt by Jean-Claude Juncker:

On the tape, Mr. Juncker says he has “had to lie” and, speaking about touchy economic topics, “When it becomes serious, you have to lie.

 

 

Yes, Corporations Do Have Record Cash: They Also Have Record-er Debt, As Net Leverage Soars 15% Above Its 2008 Peak

From SocGen :US corporates do indeed hold lots of cash, which is currently at record levels, but they also hold record levels of debt. Net debt (so discounting those massive cash piles) is 15% above the levels seen in 2008/09. The idea that corporates are paying down debt is simply not seen in the numbers. What is true is that deleveraging has occurred through the usual mechanism of higher asset prices (no doubt an aim of central bank policy). This is the painless form of deleveraging. It is also the most temporary, for a simple pull-back in equities and rise in volatility will put the problem back on centre stage.

Tic (Treasury International Capital) data was recently released (Jan 15th 2014)  produced a result that no one seems to talk about, all Foreign Ownership / Holders of US Treasury Securities  have only increased from 5,538 Billion US$ (Nov 2012) to 5,717 (Nov 2013) an increase of only 179 Billion US$ over 12 months, and yet 996 Billion US$ of new issuance was excreted by the US Government. If foreigners are not buying US Debt  - there really is a great deal of trouble in dodge !!!!!

 As per FOFOA blog post

Now see if you can spot the trend, and the dramatic change in 2013, in the following data. In 2010, the U.S. trade deficit was $498B, and foreign official holdings of Treasury securities that year grew by $456B. In 2011, the trade deficit was $560B, and foreign official holdings of Treasuries grew by $426B. In 2012, the trade deficit was $540B, and foreign official holdings of Treasuries grew by $386B. Of course the final numbers for 2013 aren’t in yet, but here’s what it looks like. The trade deficit in 2013 will probably be around $485B, and foreign official (that is, foreign central banks, i.e., “structural support”) holdings of Treasuries grew by a mere $20B through October, $24B extrapolated through December. Here, I made you a handy chart to help you visualize it! :D 

Chart below Courtsey of FOFOA….

 

Last 2 Times this Happened the USA Was Already in Recession 

 

Physical Gold Shortage Goes Mainstream plus Video

 

The economy is like a huge bucket with massive holes in it,  left alone the bucket drains out quickly  (real fundamentals), but at the moment there is a fire hose of water pouring into the bucket (Central banks currency creation and credit aggregate expansion), keeping it topped up (hence real fundamentals do not seem to have any effect) , however the holes are getting bigger  , eventually the bucket disintegrates under the pressure!!

Is The US Running Out of Gold Scrap ?……….by SRSrocco

Is The U.S. Running Out of Gold Scrap?

Filed in Precious Metals by  on January 20, 2014

As the U.S. economic and financial system continue down the road of self-destruction, there is an increasing amount of evidence that suggests the day of reckoning is fast approaching

One such indicator is the amount of U.S. gold export scrap.  At one point in time, the United States was exporting a great deal of gold scrap and waste, however it looks like its citizens are now…. tapped out.

In a previous article, “U.S. Total Gold Exports Up 31% in Oct 2013″, I discussed the record amount of gold bullion being exported from the United States.  The table below shows just how much gold is leaving the country:

Total US Gold Bullion Exports 2013 Jan-Oct

In the first ten months of the year, 449 metric tons (mt) of gold bullion were exported from the U.S. with the majority going to Hong Kong (193.6 mt) and Switzerland (143.5 mt).

While the U.S. is sending a record amount of gold bullion to foreign countries, gold scrap supply has fallen off a cliff in 2013.  If we look at the chart below, we can see just how much gold scrap exports have declined in the past year.

U.S. Gold Export Scrap

According to the USGS Gold Mineral Industry Surveys, the United States exported a record 886 mt (gross weight) in 2008.  Gold scrap exports declined to 728 mt in 2009 and then stayed basically flat for the next two years at 630 mt and 633 mt respectively.

However, in the past two years, gold scrap exports have declined substantially.  Here we can see that in 2012, gold scrap supply declined more than 50% to 266 mt compared to the previous year.  And in the first 10 months of 2013, U.S. gold scrap exports have fallen another 50% to only 121 mt.

The World Gold Council (statistics from Thomson Reuters GFMS) states that global gold scrap for recycling declined in 2013 due to the huge fall in the price of gold.  According to their statistics, total global scrap declined to 662 metric tons 1H of 2013:

World Gold Scrap & Recycling

Furthermore, GFMS believes global gold scrap will increase to 736 mt in the second half of 2013.  I don’t see how this is possible as the price of gold was still quite low during this time period.  Also, U.S. gold scrap exports continue to decline in 2013.

I estimate that total global gold scrap supply will be 650 mt in 2H of 2013 which would end up being a little more than 1,300 mt for the year.  GFMS is forecasting almost 1,400 mt for total global gold scrap supply in 2014.

Of course these are official figures, and we really don’t know what is the true amount, but we can certainly see that the U.S. is running out of gold scrap supply to the international market.

I would imagine when the markets crashed in 2008, U.S. citizens were turning in their gold for much-needed cash.  That is why we had a record amount of gold scrap exports of 886 mt (gross weight) in 2008.

The notion that price dictates the amount of gold scrap entering the market fails to address the huge drop in U.S. gold scrap exports in 2012.  The average price of gold was higher in 2012 than it was in 2011.  So, why did the amount of gold scrap exports fall to only 266 mt?

This is indeed a good question, and I believe the answer is quite simple.  Americans are just tapped out of gold scrap they can sell into the market… regardless of the price.  Even if the price of gold increased substantially from here, I don’t believe we are going to see much more gold scrap supply coming from the United States.

This is just another indicator that spells big trouble for the future of the U.S. financial system.  As the Indian government cracks down on gold smuggling into their country, U.S. citizens continue to purchase cars and homes with no money down and with very little credit verification.

Instead of fixing the problem, we have created an even worse financial nightmare than what took place in 2007-2008.  Unless you have protected your wealth with gold and silver… time is not on your side.

ADDITIONAL NOTE:   Please check back as I will be adding a REPORTS PAGE to the site.  There will be free & paid reports that will provide important information not found on the public area of the site.

 

The Big Reset, Part 1…… Koos Jansen interviews Willem Middelkoop

Original post at Koos Jansen site In Gold We Trust

 

The Big Reset, Part 1

The sole reason why I became interested in gold is because of the book “Overleef De Kredietcrisis” (How To Survive The Credit Crisis), written by Willem Middelkoop – the Dutch equivalent of Jim Rickards – in 2009. This book opened my eyes and interest for economics and I didn’t stop reading and writing about it ever since.

Willem Middelkoop 2011

Middelkoop had written four books in Dutch when he decided to switch to English, his latest book has just been relesed: The Big Reset. This book is about the War on Gold and the plans behind the scenes to create a new gold-backed world reserve currency. I had the privilege to do a Q&A with Middelkoop about his latest book. The Q&A will be published on this website in two parts.

The Big Reset

 

How did you started to invest in gold

Because of the books by Indian economist Ravi Batra in the1990’s I became aware of the anti-cyclical nature of gold. Through my internet research in 1999, when the internet bubble was getting pretty scary, I had learned about GATA and learned a great deal about fiat and hard money. After I took profits on my real estate investments in Amsterdam between 2001 and 2004 I started to invest in physical gold and silver and bought my first shares in precious metal companies in 2002. In the following yearns I experienced that investing in junior mining and exploration companies who worked on new discoveries delivered the best results. This first led to the publication of the Gold Discovery Letter and in 2008 to the start of the Gold Discovery Fund, which was renamed Commodity Discovery Fund in 2010 because some investors like the commodities more than gold. We have some 600 high net-worth Dutch investors and invest in (junior) mining companies. 50% is gold related, 25% silver related. We also have some Rare Earth and base metal investments. Because of the ongoing ‘World Championship Currency Debasement’ we expect much high prices for precious metals in the next few years.

 

Your new book is named The Big Reset, isn’t our current monetary system sustainable?

No, we now have arrived at the point where it is not the banks, but the countries themselves that are getting in serious financial trouble. The idea that we can ‘grow our way back’ out of debt is naive. The current solution to ‘park’ debts on to the balance sheets of central banks is just an interim solution. A global debt restructuring will be needed, as economists Rogoff en Reinhart recently explained in their working paper for the IMF. This will include a new global reserve system to replace the current failing dollar system, probably before 2020.

 

So you are not on your own with this call?

Right after the near death experience of the global financial system at the end of 2008 the IMF and others started to study the possibilities for a next phase of the financial system. In 2010 the IMF published a study titled ‘Reserve Accumulation and International Monetary Stability’ for a financial system without a dollar anchor. The United Nations called for ‘a new Global Reserve System’ based on the IMF’s Special Drawing Rights (SDR’s) a year later. The SDR was created in 1969, at the time the London Gold Pool couldn’t hold gold at $35 and the U.S. lost over 10,000 tons of gold because countries like France and the Netherlands returned excess dollar reserves to the U.S. treasury and demanded physical gold. This development led to the end of the gold backed dollar in August 1971, when President Nixon closed the gold window and the first dollar crisis started. It led to the run up of gold towards $880 in 1980. The UN idea is endorsed by China who has publicly stated several times that it is dissatisfied with the present dollar-orientated system. In 2009 China’s Central Bank Governor Zhou Xiaochuan advocated a new worldwide reserve currency system. Late 2013 the Chinese state press openly called to ‘de-Americanize’ the world’. In an official op-ed the idea for ‘the introduction of a new international reserve currency  to replace the dominant U.S. dollars’ was mentioned again. According to the London based think thank Official Monetary and Financial Institutions Forum (OMFIF) it will take many years before the renminbi will mount a credible challenge to the dollar. The euro is not suitable either.

 

How will this change unfold?

Our financial system can be changed in almost every way as long as the main world trading partners can agree on these changes. Two major problems in the world’s financial system have to be addressed, the demise of the U.S. dollar as the world reserve currency and the almost uncontrollable growth of the worldwide mountain of debts and central banks’ balance sheets. A reset planned well in advance can and probably will consist of different stages. So currently the U.S. together with the IMF seems to be planning a multiple reserve currency system as a successor of the current dollar system. But this system which still include and center around the dollar, but other important currencies will be added at its core. OMFIF has published an interesting study last year. They remarked:

‘This marks the onset of a multi-currency reserve system and a new era in world money. For most of the past 150 years, the world has had just two reserve currencies, with sterling in the lead until the First World War, and the dollar taking over as the prime asset during the past 100 years. The pound sterling  has been in relative decline since the Second World War. The birth of the euro in 1999 has turned the European single currency into the world’s no. 2 reserve unit, but it has been now officially accepted that the dollar and the euro share their role with smaller currencies. The renminbi has attracted widespread attention as a possible future reverse currency. But it’s still be some years away from attaining that status, primarily because it is not fully convertible.’

 

Some American insiders have even been calling for a return to the gold, isn’t it?

In an open letter to the Financial Times in 2010 titled ‘Bring back the gold standard’, the very well connected and former President of the World Bank Robert Zoellick pointed out he wants to use gold as a reference point in order to reform the current failing financial system. Mr. Zoellick explained an updated gold standard could help retool the world economy at a time of serious tensions over currencies and U.S. monetary policy. He said the world needed a new regime to succeed the ‘Bretton Woods II’ system of floating currencies, which has been in place since the fixed-rate currency system linked to gold broke down in 1971. He said the new system

‘is likely to need to involve the dollar, the euro, the yen, the pound and a renminbi. The system should also consider employing gold as an international reference point of market expectations about inflation, deflation and future currency values. Although textbooks may view gold as the old money, markets are using gold as an alternative monetary asset today.’

According to the famous publisher Steve Forbes, who was also an advisor for some of the presidential candidates in 2012,  ‘the debate should be focused on what the best gold system is, not on whether we need to go back on one.’ So it was at no surprise for me to see an interview with professor Robert Mundell in Forbes magazine, in which he argued for a return to the gold standard. Mundell can be seen as one of the architects of the euro, and has acted as an advisor to the Chinese government as well. Mundell said:

There could be a kind of Bretton Woods type of gold standard where the price of gold was fixed for central banks and they could use gold as an asset to trade central banks. The great advantage of that was that gold is nobody’s liability and it can’t be printed. So it has a strength and confidence that people trust. So If you had not just the U.S. dollar but the U.S. dollar and the euro tied together to each other and to gold, gold might be the intermediary and then with the other important currencies like the yen and Chinese Yuan and British pound all tied together as a kind of new SDR that could be one way the world could move forward on a better monetary system.’

 

And China supports these ideas for a currency reset?

As you know Chinese Central Bank Governor Zhou Xiaochuan advocated a new worldwide reserve currency system as early as 2009. He explained that the interests of the U.S. and those of other countries should be ‘aligned’, which isn’t the fact in the current dollar system. Zhou advised to develop the SDR’s into a ‘super-sovereign reserve currency disconnected from individual nations and able to remain stable in the long run’. According to some experts the IMF needs at least five years more years to prepare the international monetary system for a worldwide introduction of SDR’s to be used worldwide. Some doubt if we will have the luxury to wait that long. The fact China is stopped buying U.S. Treasuries in 2010 and have been loading up on gold ever since tells a great deal. Chinese high level officials have indicated China wants to grow their gold reserves ‘in the shortest time’ to at least 6,000 tons, in anticipation for the next phase of world financial system. A recent report by Bloomberg suggest The People’s Bank of China and private investors has been accumulating over 4,000 tons since 2008. The Chinese are afraid the U.S. could surprise the world with a gold revaluation. Wikileaks leaked a cable sent from the U.S. embassy in Beijing early 2010. The message, which was sent to Washington, quoted a Chinese news report about the consequences of such a dollar devaluation as it appeared in Shanghai’s Business News:

‘If we use all of our foreign exchange reserves to buy U.S. Treasury bonds, then when someday the U.S. Federal Reserve suddenly announces that the original ten old U.S. dollars are now worth only one new U.S. dollar, and the new U.S. dollar is pegged to the gold – we will be dumbfounded.

 

Can you explain the love for gold by the Chinese?

They know, even from their own history, gold has been used again and again to rebuild trust when a fiat money system has reached its endgame. As you might know, from your own studies, the main academic journal of the Chinese Communist Party’s Central Committee published an article in 2012 that sheds a light on the Chinese monetary or should we say gold strategy. The article [exclusively translated by In Gold We Trust] was written by Sun Zhaoxue, president of both the China National Gold Corporation (CNG) and the China Gold Association (CGA). Sun stated:

‘Increasing gold reserves should become a central pillar in our country’s development strategy. The state will need to elevate gold to an equal strategic resource as oil and energy, We should ‘achieve the highest gold reserves in the shortest time. Individual investment demand is an important component of  China’s gold reserve system; we should encourage individual investment demand for gold.’

According to my research the Chinese are now in the final stage to grow their gold reserves to 6,000 tons. They want to grow these reserves towards 10,000 tons before 2020. That amount will bring the Chinese on par with the U.S. and Europe on a gold/GPD ratio. This opens the door to a possible joint US-EU-China gold supported financial system like the IMF’s SDR-plan. Such a reset could also be backed by Russia since they have accumulated over 1,000 tons, most of it since the start of the credit crisis in 2008.

 

Do China (and Japan) have the same debt problems like the western countries?

According to John Mauldin, author of ‘The End Game’ and ‘Code Red’ China is ‘even more addicted to money printing than the US or Japan’. Despite national financial reserves of almost $4,000 billion, China has been confronted with its own debt crisis, after Chinese banking system’s assets grew by $14 trillion between 2008 and 2013. The old Chinese communist leadership still remembers how they succeeded to grab power because of the monetary problems between 1937–1949. Their main goal is to avoid social unrest like China experienced during a period of hyperinflation after World War II.

 

What do the Chinese know about the War on Gold?

Sun Zhaoxue explained in 2012:

After the disintegration of the Bretton Woods system in the 1970s, the gold standard which was in use for a century collapsed. Under the influence of the U.S. Dollar hegemony the stabilizing effect of gold was widely questioned, the ‘gold is useless’ discussion began to spread around the globe. Many people thought that gold is no longer the monetary base, that storing gold will only increase the cost of reserves. Therefore, some central banks began to sell gold reserves and gold prices continued to slump. Currently, there are more and more people recognizing that the ‘gold is useless’ story contains too many lies. Gold now suffers from a ‘smokescreen’ designed by the US, which stores 74% of global official gold reserves, to put down other currencies and maintain the US Dollar hegemony.

He then also explained how the US is debasing the value of its currency in a move to get rid of too much debt:

‘The rise of the US dollar and British pound, and later the euro currency, from a single country currency to a global or regional currency was supported by their huge gold reserves.  Especially noteworthy is that in the course of this international financial crisis, the US shows a huge financial deficit but it did not sell any of its gold reserves to reduce debt. Instead it turned on the printer, massively increasing the US Dollar supply, making the wealth of those countries and regions with foreign reserves mainly denominated in US Dollar quickly diminish, in effect automatically reducing their own debt. In stark contrast with the sharp depreciation of the US Dollar, the international gold price continued to rise breaking $1900 US Dollars per ounce in 2011, gold’s asset-preservation contrasts vividly with the devaluation of credit-based assets. Naturally the more devalued the US Dollar, the more the gold price rises, the more evident the function of US gold reserves as a hedge.’

Additional proof of the Chinese knowledge about the gold price suppression can be found in message leaked by Wikileaks from the American Embassy in Peking about a Chinese newspaper report:

‘The U.S. and Europe have always suppressed the rising price of gold. They intend to weaken gold’s function as an international reserve currency. They don’t want to see other countries turning to gold reserves instead of the U.S. dollar or Euro. Therefore, suppressing the price of gold is very beneficial for the U.S. in maintaining the U.S. dollar’s role as the international reserve currency. China’s increased gold reserves will thus act as a model and lead other countries towards reserving more gold. Large gold reserves are also beneficial in promoting the internationalization of the RMB.’

The office building of JPMorgan with its largest private gold vaults at Chase Manhattan Plaza, opposite to the New York Federal Reserve building, has been recently sold to the Chinese. This indicates the US and China seem to be working together in advance towards a global currency reset whereby the US, Europe and China will back the SDR’s with their gold reserves so the dollar can be replaced.

 

NYC-view02-China-WEB

More about the War on Gold next week in Part 2

In Gold We Trust

Synopsis of The Big Reset: Now five years after the near fatal collapse of world’s financial system we have to conclude central bankers and politicians have merely been buying time by trying to solve a credit crisis by creating even more debt. As a result worldwide central bank’s balance sheets expanded by $10 trillion. With this newly created money central banks have been buying up national bonds so long term interest rates and bond yields have collapsed. But ‘parking’ debt at national banks is no structural solution. The idea we can grow our way back out of this mountain of debt is a little naïve. In a recent working paper by the IMF titled ‘Financial and Sovereign Debt Crises: Some Lessons Learned and Those Forgotten’ the economist Reinhart and Rogoff point to this ‘denial problem’. According to them future economic growth will ‘not be sufficient to cope with the sheer magnitude of public and private debt overhangs. Rogoff and Reinhart conclude the size of the debt problems suggests that debt restructurings will be needed ‘far beyond anything discussed in public to this point.’ The endgame to the global financial crisis is likely to require restructuring of debt on a broad scale.

About the author: Willem Middelkoop (1962) is founder of the Commodity Discovery Fund and a bestselling Dutch author, who has been writing about the world’s financial system since the early 2000s. Between 2001 and 2008 he was a market commentator for RTL Television in the Netherlands and also appeared on CNBC. He predicted the credit crisis in his first bestseller in 2007.

Andy Hoffman’s Daily Thoughts

Andy Hoffman’s Daily Thoughts

On January 7th, we wrote of how the “Noose of reality continues to tighten” on TPTB; in their soon-to-miserably-fail attempt to control perception via unprecedented levels of money printing, market manipulation and propaganda. Moreover, we last week discussed the fraudulent “recovery” that will soon be understood to have never existed; and in fact, never will until the business cycle is either “allowed” to play out, or forced upon the world by the markets. This weekend’s superb Zero Hedge articlerefuting said “recovery” – re-published from none other than mainstream Wall Street firm Societe General – describes exactly what we have been referring to; and frankly, is must read material for anyone still drinking the MSM Kool-Aid. That is, anyone willfully ignoring the reality of the world around them.

 

As for Precious Metals, worldwide physical demand has never been stronger – even in the United States of Paper Dreams, where last year’s historic Cartel attacks have sapped sentiment

to record low levels; and as we discussed last week, PM prices are now at oversold levels NEVER before seen. Better yet, COMEX registered gold inventory is down nearly 90% from last April, worth just $450 million; i.e., a few minutes of global money printing. And BTW, for those spreading propaganda that “don’t worry, there’s still seven million ounces of “eligible” inventory; such “inventory” is not inventory at all – but instead, private holdings not available for sale. Heck, my personal “inventory” at Brink’s Montreal could be considered “eligible” as well – in that one day I might sell it. But for now – and likely, years, it’s not going anywhere!

 

Anyhow, the world has waited nearly six weeks for the U.S. Mint to finally re-open, and start reporting 2014 orders; and on Friday afternoon, it finally did. And it was worth waiting for; as through January 17th, gold coin sales (Eagles plus Buffaloes) were a whopping 123,000; on a pro-rated basis, projecting to more than 224,000, which would make it the fifth strongest month ever. And actually, it’s really the fourth largest, as October 2009 should be excluded given that Buffaloes had not been sold the prior ten months; and thus, had huge pent-up demand.

 

 

Meanwhile, silver sales followed up their strongest year ever with a blistering start to 2014; racking up 3,464,000 ounces in just 17 days – prorating to 6.3 million, which would nearly make it the second strongest month ever.

 

As we wrote Friday - and I discussed in this weekend’s Audioblog - the Cartel’s decade-long price suppression scheme is clearly in its death throes. Zero Hedge wrote of it as well; as did Eric Sprott and Andrew Maguire in a series of must read material this weekend, of how the gaping disparity between soaring PHYSICAL demand and depressed PAPER prices must resolve to the upside – likely, in short order.

 

As my good friend Brent Santiago highlighted last week – in thisfabulous presentation – it’s only “halftime” for this generational PM bull market; and sadly, the final minutes of history’s most destructive fiat currency experiment. Time is running out; so please, PROTECT yourself, and do it NOW.

 

PROTECT YOURSELF, and do it NOW!

 

Call Miles Franklin at 800-822-8080, and talk to one of our brokers.  Through industry-leading customer service and competitive pricing, we aim to EARN your business.

 

 

Gold Manipulation Going Mainstream

01-17-2014 14:00:06 PM

This morning, the literal WAR for $1,250/oz. gold continues; and I sense the bulls are about to win. PMs have endured identical, prototypical Cartel attacks each this week; and each day, has fought back to attain at least a “draw.” As I write at 10:45 AM EST, yet another “Cartel Herald” is attempting to stop gold’s from “breaking out” above the two-month “line in the sand at $1,250/oz., after having decidedly failed for the fourth time this week to push silver below its own, seven-month “line in the sand” at the very, very key round number of $20/oz. Of course, as the veritable swarm of PM-bullish data expands, such as this morning’s (truncated) list below, its ability to suppress gold and silver will become more and more diminished; particularly as the trend of global, PHYSICAL demand growth continues as its current, unprecedented pace.

    1. Cratering Chinese stocks, on speculation of a major “shadow banking” bankruptcy and a miasma of fog blanketing Beijing
    2. Miserable U.S. earnings, from Best Buy and Citigroup yesterday (the latter of which, doesn’t really “earn” anything; but instead, “writes up” assets to exploit fraudulent FASB rules) – to UPS, GE, and Intel today.
    3. Following up on the Best Buy catastrophe, an industry trade group reported that U.S. video game software sales plunged an astounding 17% in December, compared to the year-ago period. Yes, video game sales; i.e., the lifeblood of a dumbed down America – from which no doubt, Wal-Mart has racked up enormous gains from people blowing food stamps, unemployment checks, and disability checks on – are finally collapsing, just like the rest of the U.S. economy. But don’t worry, America’s obsession with killing is still intact – as the top selling games are “Call of Duty – Ghosts” and “Battlefield 4.”
    4. A massive, 10% sequential drop in housing permits and starts; followed by a plunging consumer confidence reading, which missed expectations by its largest margin in eight years.

The Dow is up, of course; care of the most maniacal PPT activity in financial market history; whilst the Fed has the 10-year Treasury yield safely below 3.0% – which as we discussed last week, can never be allowed to be breached. That is, until market forces eventually swamp that level on their own – which we assure you, they will. And then, of course, there’s the added possibility that hyperinflation is already starting to show itself, per John Williams’ prediction; as it appears to be in many corners of the globe, as stocks rocket higher, perfectly in tandem with accelerating money printing.

 

This is what initially occurred in Weimar Germany, modern Zimbabwe and hundreds of other hyperinflations throughout history; as initial “real” gains eventually turn nominal overnight. In 2013, Venezuela was the poster child of surging stocks combined with runaway inflation; and in 2014, it appears Argentina is taking the reigns – per this frightening article of how its Merval Index is exploding higher, while the Argentine Peso utterly collapses. And don’t forget that just yesterday, the Brazilian government – despite a rapidly weakening economy – was forced to raiseinterest rates in an attempt to stave off rapidly increasing inflation. I see the South African Rand and Turkish Lira are hitting ALL-TIME lows as well; as clearly, the next stage of the “Fragile Five‘s” collapse is upon us – as the Miles Franklin Blog predicted in its year-end review.

 

On to today’s main topic, where we’ll start by returning to theBloomberg article we presented yesterday; in which, amazingly, it commissioned its reporters to investigate the actual amount of Chinese gold reserves. While likely woefully low, the fact that they speculated the Chinese government holds 2,710 tonnes of gold reserves – compared to the “official” level of 1,054 tonnes – shows the mainstream world is finally starting to realize the real state of global physical markets. And how can they not; as amidst an unprecedented level of global money printing, amidst unprecedented economic misery, it’s plain to see that not only are COMEX, LBMA, and GLD inventories disappearing, but Swiss refineries running an unprecedented 24/7 to recast Western gold into Asian-friendly kilo bars. Throw in record coin sales at the Perth and U.S. Mints (in the latter case, only for silver); a run on UK sovereign gold coins; record Chinese gold imports; and record silver imports into India, amidst 25% physical gold premiums; and it becomes painfully obvious that something is not right in the fraudulent paper markets. Heck, if one simply reads the Miles Franklin Blog, they’ll know more about PM manipulation than 99.99999999% of the world’s population.

 

Anyhow, following up Bloomberg’s foray into actual physical gold demand, they published this article this morning, of how the President of Germany’s top securities regulator – Bafin – claimed gold manipulation is currently worse than LIBOR rigging. Think about such a statement, readers! Can you imagine the head of the CFTC saying such a thing – particularly a Goldman Sachs alumni like Gary Gensler? And to say it’s worse than the LIBOR scandal, which was unquestionably the most widespread, universally damaging financial scandal yet, is utterly incredible. Of course, he’s 100% right; as not only is gold trading rigged (i.e., suppressed) 24/7, but the catastrophic impact it had on the global economy is incomprehensible. However, hearing a mainstream outlet report it and a top securities regulator validate it, is simply amazing in today’s world of strict government media control.

 

And then you have Glen Beck, who – also yesterday – put out this amazing video about the Fed essentially stealing Germany’s gold; not to mention, the horrific ramifications when the world realizes how much Central bank gold has been re-hypothecated.   Even a rebel like Glen Beck has never gone into such detail about the ongoing gold scandal; and trust me, this video will go viral.

 

Finally, in the most apropos of all follow-up news stories, just last night it was reported that Deutsche Bank is withdrawing from its daily participation in the London gold “fix”; amidst expanding probes regarding the manipulation of gold prices related to such activity! And then there were four, as only Scotia Macotta, HSBC, Barclays and Societe Generale remain; of which, Barclays is widely known for leading the LIBOR rate-rigging scandal, while HSBC is custodian to the “highly controversial” GLD ETF.

 

Unfortunately, that’s all the time I have; although amazingly, my computer just fixed itself! And thus, I plan to tape my audio blog as usual. Hopefully, this article helps you understand the urgencyat which events are unfolding around the world; of which, this afternoon’s strong PM action may well be providing a “signal” that must be heeded.

Remember, when the next crisis commences – which as surely as death and taxes, it will; either you will have already protected your assets with REAL MONEY, or it will already be too late.

 

PROTECT YOURSELF, and do it NOW!

 

Call Miles Franklin at 800-822-8080, and talk to one of our brokers.  Through industry-leading customer service and competitive pricing, we aim to EARN your business.

 

Silver Bells, Supply / Demand …by Jeff Nielson

Silver Bells

Written by Jeff NielsonMonday, 30 December 2013 15:42

As the Christmas season passes, and the end of 2013 is upon us; this is a natural time to reflect upon what has transpired over the last year in the precious metals sector. Obviously 2013 will not be viewed as a good year, in retrospect, by precious metals investors.

This was the year of Hostage Markets; the year that the One Bank demonstrated in its own, inimitable, heavy-handed manner that it had corrupted our markets to the point where it could freeze bullion prices at any number it chose – regardless of supply/demand fundamentals. However, while these fundamentals have become virtually invisible, by no means have they ceased to exist.

Rather, in exerting absolute short-term control over bullion markets the One Bank has inadvertently once again demonstrated its (long-term) impotence against those fundamentals. When it perpetrated the Cyprus Steal to create a “precedent” for its newest form of paper-theft (the “bail-in”); the One Bank caused a stampede out of its own paper-called-gold, and anunprecedented collapse in the entire paper-gold market.

Worse still (for the Bankers), this exodus out of paper-called-gold manifested itself primarily in the form of a stampede into real, physical bullion. In part; this was a reflection of paper-called-gold holders swapping paper for metal – with the inevitable effect of a massive draw-down in Comex inventories.

However, the stampede out of paper-called-gold also caused an inevitable plunge in the price of gold, all “gold”. Thus at the same time that Western paper-holders were causing an artificial drop in the price of gold by moving from paper to metal; Eastern gold-buyers also stampeded into the market – attracted by the give-away prices created by that exodus.

Indeed, as reported earlier this year; at one point gold imports into China and India alone had spiked to an annualized rate of about 4,000 tonnes/year. This occurs in a global market where annual mine-supply is well below 3,000 tonnes/year, and falling.

Facing a new “supply crisis” in bullion markets (and again one of its own creation); the One Bank responded with its most blatantly brutal tactics to date. By manipulating the exchange rate of India’s currency to a record-low (via its now-exposed FX-rigging); the One Bank blackmailed the government of India into suspending all gold imports into the world’s largest gold market.

The Laws of Supply and Demand responded, again. Part of the frustrated demand for gold within the Indian population re-ignited gold-smuggling into India. Indeed, the government of India had spent years liberalizing trading rules for importing gold into the country precisely because gold-smuggling had previously been so prevalent. Thus it required only days to re-open those dormant smuggling routes.

However (as also previously noted) part of the frustrated demand for gold in India has morphed into demand for Poor Man’s gold: silver. A year which started out appearing to be a record year for Indian gold-imports quickly pivoted into a year of record silver imports instead.

 

Because the price of silver itself has been manipulated by the One Bank to such an extreme low, even these “record imports” into India only equal a small portion of the total amount of wealth which Indians had been previously funneling into gold. Presumably, gold-smuggling has only restored a fraction of the level of supply which has been lost in the form of official imports. Thus a considerable amount of pent-up bullion demand remains unsatisfied.

We see evidence of this pent-up, unsatisfied demand in the form of a slow-but-steadydecoupling in prices for gold in India. We have the phony, artificially-low “official” price for gold, the product of the One Bank’s price-fixing. But now we also have the steadily increasingreal price for gold in India: the blackmarket price.

The results achieved by the One Bank in its savage attack on India’s gold market are a less-than-impressive victory:

a) The beginning of a Decoupling in prices (in the world’s largest gold market) between the fraudulent, official price for gold in the bankers’ dying paper-called-gold markets versus the price for real, physical bullion.

b) Pent-up demand for gold in the Indian market. When (one way or another) the Indian gold market is once again “liberalized”; that tidal wave of unsatisfied demand will be unleashed, just as has occurred in China.

c) Record silver imports.

Massive, heavy-handed attacks on legitimate bullion markets (or any market) result in massive consequences. This is merely the latest example of what we see again and again. It was the savage price-suppression of bullion markets during the 1980’s and 90’s which created the massive bullion-run for gold and silver which lasted for more than a decade.

The longer that the One Bank plays its new game of Hostage Markets, the greater will be the consequences – in the opposite direction. The Laws of Supply and Demand will not be denied. After the previous, twelve-year bull run; do we need to fear (once again) decades of frozen prices in this reborn paradigm of Hostage Markets? Of course not.

What were the consequences the last time the One Bank exerted absolute control over bullion prices in its 20-year reign of terror? It squandered the largest stockpiles of bullion ever accumulated by our species. The 12-year bull run in precious metals markets from 2000 through 2011 was the product of that resultant inventory crisis.

Did the One Bank (and our Puppet Governments) spend that time rebuilding their inventories? No. They continued squandering what little gold they had left (after all their silver was already gone), until the gold-dumping by Western central banks abruptly screeched to a halt in 2009 – at least all official dumping.

Our new “era”(?) of Hostage Markets begins with the inventory-crisis which existed in 2000 having gotten substantially worse, fourteen years worse. Fourteen more years of the above-ground stockpiles of bullion being devoured, in an unprecedented shift of wealth and control from West to East. “He who has the Gold makes the Rules.”

As the warning-bells of (official) bullion-default and/or unofficial Decoupling ring even louder at the end of 2013 than they did at the beginning of 2000, they ring loudest in silver. Regular readers will be familiar with the chart below, the last time we saw any legitimate numbers on global silver inventories.

Price-fixing by the One Bank in the silver market during the 1980’s and 90’s (and the 600-year low in the real-dollar price of silver which resulted) led to a 90% collapse in silver inventories from 1990 – 2005 alone. What happened after 2005, as this collapse seemingly began to reverse?

This was when the One Bank instructed its minions to begin falsifying the numbers on global silver inventories. This was accomplished in an absurdly clumsy manner: through adding silversales receipts into total inventories. Specifically, every ounce of “silver” purchased in the bankers’ paper-called-silver market was added into total inventories. This has produced the totally farcical scenario in this quasi-official “record-keeping” where the more (paper) silver which is purchased, the larger the phony, official inventory numbers grow.

In short; we have absolutely no idea whether there are only two days of supply remaining for global demand for silver or two years. We only know that by 2005 the One Bank was already so alarmed by the complete collapse in global silver inventories that it began falsifying the reporting of this data – and this inventory-fraud persists to this day.

Newer readers also need to understand the fundamental differences between the gold and silver markets; what was described in a previous commentary as a matter of “stocks and flows”. While gold has been conserved over the past decades (and centuries), silver has beenconsumed.

Artificially priced far below its real value decade after decade; industrial demand for silver (the world’s most-versatile metal) has soared. Used primarily in small amounts; most of the silver mined over a span of more than 4,000 years is now strewn across (primarily) Western landfills. This silver cannot ever be economically recovered unless the price of silver should soar to some fantastic multiple of current prices – and thus has effectively been “consumed”.

While priced at a current ratio of 60:1 versus gold; the Earth’s crust contains only about seventeen times as much silver as gold. This is why (for more than 4,000 years) the legitimate price ratio between gold and silver hovered around 15:1.

Yet with global inventories/stockpiles of silver already at all-time lows (in per capita terms); we see the flows of (real) silver being sucked out of those dwindling inventories occurring at an even more unsustainable rate than in the gold market.

Investor demand (as reflected in the sales of U.S. gold and silver minted coins) almost precisely mirrors the 60:1 price ratio. Total “fabrication demand” for gold and silver (industrial demand/jewelry demand) is presently at ‘only’ about a 10:1 ratio (based on data from the WGCand Silver Institute); but with silver inventories/stockpiles already decimated, even that modest ratio is unsustainable.

The year 2014 should be “the year of silver”, in terms of fundamentals dictating a correction in prices which dwarfs the modest tripling which took place in 2009. However, if 2014 is not the year of silver; we should feel quite confident in predicting that 2015 will be the Year of Silver Default.

Courtsey of Nick Laird – Gold Market Story in 10 charts

Courtsey of Nick Laird, who is the founder of Sharelynx.com, the largest source of precious metals related data on the world. Sharelynx is recommended for both the professional investor but also the precious metals enthusiast. 

In this article, Nick Laird shows the gold market as it is today in ten charts. The charts tell a story, and Nick did an excellent job visualizing the storyline. He combines chart analysis with the futures market structure and COMEX gold stocks. Astonishingly, all data points confirm the same direction: the gold bull market is in the process of resuming its uptrend.

The banks are long gold:

CFTC bank participation January 2014 investing

 They are withdrawing supplies:

COMEX registered gold stocks 2002 2014 investing

COMEX Gold stock eligible 2002 2014 investing

 

Cots are positions perfectly for a bull run to start:

Gold COT Futures January 2014 investing

 

Pivot point time – double bottom:

COMEX Gold 2003 2014 investing

 

Silver double bottom:

Time to breakout & soar:

 

 

Time to get out of it’s funk:

Never been a better buy:

Just bounced off one of it’s most oversold phases:

 

 

You decide…………….

 

 

 

 

 

Video : Germany, Where is my Gold ?, Gold Manipulation Worse than Libor Scandal ?

fed image

Precious Metals Manipulation Worse Than Libor Scandal, German Regulator Says

Courtsey of Zerohedge….

Remember when banks were exposed manipulating virtually everything except precious metals, because obviously nobody ever manipulates the price of gold and silver? After all, the biggest “conspiracy theory” of all is that crazy gold bugs blame every move against them on some vile manipulator. It may be time to shift yet another conspiracy “theory” into the “fact” bin, thanks to Elke Koenig, the president of Germany’s top financial regulator, Bafin, which apparently is not as corrupt, complicit and clueless as its US equivalent, and who said that in addition to currency rates, manipulation of precious metals “is worse than the Libor-rigging scandal.”

and then Deutsche bank announced on Friday…..

German Gold Manipulation Blowback Escalates: Deutsche Bank Exits Gold Price Fixing

Germany’s blowback against gold manipulation is accelerating. Following yesterday’s report that Bafin took a hard line against precious metals manipulation, after its president Eike Koenig said possible manipulation of precious metals “is worse than the Libor-rigging scandal“, today the response has trickled down to Germany and Europe’s largest bank, Deutsche Bank, which announced that it would withdraw from the appropriately named gold and silver price “fixing”, as European regulators investigate suspected manipulation of precious metals prices by banks. As a reminder, Deutsche is one of five banks involved in the twice-daily gold fix for global price setting and said it was quitting the process after withdrawing from the bulk of its commodities business. The scramble away from gold fixing was certainly assisted by the recent first (of many) manipulation expose in the legacy media, when Bloomberg revealed “How Gold Price Is Manipulated During The “London Fix.” And sure enough, with Germany already very sensitive to the topic of its gold repatriation, and specifically why it is taking so long, it was only a matter of time before any German involvement in gold manipulation escalated to the very top.

Now I am no admirer of Glen Beck’s presentation style or some of his theories. But what is important is that he presenting the facts to the public about the Central bank’s leasing arrangements and the reality that the fed is finding it enormously difficult to return Germany’s gold.

It is another thing entirely when the former top personality on Fox News, and whose news website The Blaze is the 140th most visited website in the entire US, devotes 20 minutes of TV time discussing the German’s attempts to repatriate their gold reserves, and discusses the implications of what the Fed only returning 37 tons of re-cast gold bullion to the Bundesbank in year 1 likely means.