Harvey's blogspot - gold and silver data and related PM news items.....

http://harveyorgan.blogspot.com/2012/09/spanish-bad-loans-rise-to-97-of-total.html

WEDNESDAY, SEPTEMBER 19, 2012

Spanish bad loans rise to 9.7% of total loans equal to 27% of Spanish GDP/Japan joins the QE parade followed by England/Gold and silver steady/

Good evening Ladies and Gentlemen;


Gold closed up by 60 cents to $1769.00  Silver on the other hand was subjected to a lot of paper selling by the bankers as it lost 12 cents to $34.52. Gold got a boost from Japan early this morning announcing that they were joining the illustrious QE club with a huge quantitative easing program.  It's debt is now at 1.4 quadrillion yen.  The bankers fearful of how the world would treat a global QE, decided in their great wisdom to hit gold and silver trying to contained it's enthusiasm.  The smack occurred exactly at 3 am which is 5 seconds after the first London fixing.  The bankers were afraid to lose any gold and silver at lower prices. Early this morning, Spain released figures showing it's bad loans have reached 9.7% of total loans.
The total non performing loans now total 172 billion euros or 17% of Spain's GDP.  How on earth can the banks survive with this massive write off.  The war of words between China and Japan continue to escalate with many Chinese officials demanding that China sells off their entire portfolio of Japanese bonds.  That will hurt Japan big time.  We will go over these and other major stories but first.......Let us head straight to the comex and assess trading today.

The total comex gold open interest rose by 5031 contracts from 473,578 to 478,609.  As I mentioned to you yesterday, the attempted raid was futile and basically it resulted in an increase in OI.  The bankers must regroup and try again as they must try and wrestle the OI down as they fear the upcoming big December gold month battle.  The non active September gold month saw its OI rise by 1 contract despite 3 delivery notices.  We thus gained another 4 contracts or an additional 400 oz of gold is standing for ultimate September delivery. We are a little more than 1 week away from first day notice in the October contract (a very poor delivery active month)  In October, the OI fell marginally by only 504 contracts from 22,783 down to 22,279.  Almost all of those lost in October landed in December.  All eyes will be focused on the big December gold contract.  Today, the OI rose by a rather large 4859 contracts from 324,159 to 329,018.  The December OI is reaching lofty levels of OI and this is of a major concern to our banker cartel.  The estimated volume at the gold comex today came in at 166,228 compared to the confirmed volume yesterday at 176,508.
Word from London  suggest physical demand is extremely high.

The total silver OI continues to baffle our bankers as it followed in the footsteps of its older and wiser cousin, gold.  It rose from 123,670 up to 127,032 for a lofty gain of 3362 contracts.  These levels are multi-year highs. The active September contract saw it's OI fall 9 contracts despite 15 delivery notices yesterday.  So we  gained an additional 6 contracts or 30,000 oz of  silver  standing for delivery. The non active October silver contract month saw its OI rise by 21 contracts up to 224.  The big December contract is being viewed very carefully by JPMorgan and friends.  It's OI rose again to a very lofty 81,988 contracts or a gain of 2996 from yesterday's level of 79,002.  The bankers continue to supply the necessary non backed silver paper apparently fearless that the regulators will do anything to these criminals. The estimated volume today was lower than usual at 42,903 contracts.  The confirmed volume yesterday came in at 63,856.

*  *  * 

We had a lot of activity in the gold vaults today.

We had the following customer deposit at JPMorgan:

i) 192,900 oz  ( or 6,000 exact weight 32.15 kilo bars)

We had the following withdrawal by the customer:

i) 16,075.00 oz out of Scotia ( exactly 500 kilo bars)

we had no dealer activity and no adjustments.

Thus the dealer inventory in gold rests tonight at 2.52 million oz or 78.38 tonnes of gold.



The CME notified us that we had only 3 notices filed for 300 oz of gold.
The total number of notices filed so far this month total 722 for 72,200 oz.
To obtain what is left to be served upon, we take the OI standing for September (44) and subtract out today's notices (3) which leaves us with 41 notices or 4100 oz left to be served upon our longs.

Thus the total number of gold ounces standing in this non active delivery month of September is as follows:

72,200 oz (served)  +  4100 oz (to be served upon)  =  76,300 oz (2.373 tonnes)

and....

Again, we had considerable activity inside the silver vaults today.
However we had no dealer deposit and no dealer withdrawal.

The customer had the following deposit:

i) Into Delaware:  624,306.29 oz
ii) Into HSBC:  343,453.78 oz

total deposit;  967,760.07 oz

We had the following customer withdrawal:

i) Out of Delaware:  5119.355 oz
ii) Out of Scotia:  70,276.69 oz

total customer withdrawal:  75,396.045 oz

We did have one adjustment of 171,128.08 oz whereby the customer probably leased some silver back to the dealer and the vault was Scotia.

Tonight, the registered or dealer silver inventory rests at 39.449 million oz
The total of all silver rests at 140.414 million oz.


The CME notified us that strangely we had zero notices filed in an active delivery month.  Thus the total number of notices remain the same at 1332 for 6,660,000 oz.  To obtain what is left to be served upon,  I take the OI standing for September (485) and subtract out today's delivery notices (zero) which leaves us with 485 or 2,425,000 oz left to be served upon our longs.Thus the total number of silver ounces standing in this active delivery month of September is as follows:

6,660,000 oz (served)  +  2,425,000 oz (to be served upon)  =  9,085,000 oz

it looks like we will have a pretty good delivery month for silver at 9 million oz despite the many cash settlements.

*   *   * 

With the debt crisis gathering steam, Brodsky and Quaitance forecast that central banks will move from de-leveraging debt monetization to devaluing their currencies   (thus raising the price of gold).

Their shadow price of gold is between  $15,000 to $19,000 per oz.  They expect significant monetary inflation and a monetary regime change.  The paper is long but well worth it:

(courtesy Brodsky and Quaintance/GATA)

Brodsky and Quaintance: First monetize debts, then assets (aka gold)

Submitted by cpowell on Wed, 2012-09-19 00:11. Section: Daily Dispatches

8p ET Tuesday, September 18, 2012

Dear Friend of GATA and Gold:

In their latest report for QB Asset Management in New York, Paul Brodsky and Lee Quaintance forecast that central banks will move from de-leveraging the banking system through debt monetization to monetizing assets to devalue their currencies. Foremost among these assets, Brodsky and Quaintance write, will be gold. Their "shadow gold price" is between $15,000 and $19,000 per ounce. "We believe," they write, that "significant real Alpha will be generated by those properly positioned first for significant monetary inflation and monetary regime change, and second for significant price inflation." Their report is titled "No Pretense" and it's posted in PDF format at GATA's Internet site here:

http://www.gata.org/files/QBAMCONoPretense09-18-2012.pdf

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.  The

*   *   * 

and other gold and silver news.....

JIM SINCLAIR: SAMSUNG/ CLUFF FINANCING DEAL IS A GAME CHANGER FOR GOLD INDUSTRY!

SEPTEMBER 19, 2012 BY THE DOC 2 COMMENTS

The legendary Jim Sinclair has sent an email alert to subscribers stating that the Samsung/Cluff financing deal is a GAME CHANGER for the gold industry, and that the hedge fund gold shorts are in for a world of hurt as the financing formula is now:

1. Significant money.
2. Prior to Definitive Feasability.
3. For a junior producer.
4. From a cash rich company not usual to mine exploration & development financing.
5. Not in the form of the cash royalty company as a middle man.
6.   Are the gold(and silver) shorts about to get burned?
   From Jim Sinclair:
   Why the Cluff deal is a Game Changer in the gold industry:
   
   
   The scenario that gave comfort to hedge funds is the capital intensity of building a mine. That means all money in before profit out. The hedge funds believed by raiding the price of the shares of gold explorers and junior gold producers that they could strangle the company’s ability to raise funds free of major dilution, if at all. Unable to raise funds, the company would not be able take a property to the level of Definitive Feasibility where it is financeable by various industry standard methods free of the issue of significant common shares.
   
   
   Hedge funds that undertook short and distort did so feeling they had no risk because they had crippled the company’s ability to finance. We are all familiar with the dirty tricks used, selling of good news and capping activities undertaken in order to keep the company from it historical financing methods.
   
   
   Looking at the Cluff deal, the key elements to this game changer is the bypassing of the normal cash royalty company and raising significant money prior to Definitive Feasibility from a company not normally a financier of the mine development without dilution of any significant degree. Hedge funds beware! Your risk free game of destroying just got extremely risky, as gold begins its move to and above $3500 and non dilution financing is available, dependent on the property, before Definitive Feasibility, not the stock price. This is not a new way to structure a deal. It is the timing, size and source that distinguish it. Maybe Google might find this an interesting source for those billions in earnings?
   1. Samsung is not your usual source of finance for the development of a mine.
   2. Bakino Faso is ok, but not downtown Denver or Tokyo.
   3. Cluff bypassed the normal lenders and financiers for minerals such as the gold royalty companies, international banks that specialize in mineral financing and quasi government lending institutions all that rarely will commit significant money to any project prior to a completed Definitive Feasibility Study and this is the KEY for your understanding.
   4. Cluff vended a Gross Royalty Option limited in time to the financing entity as a small percentage of the gross gold sold as a sweetener to the cost of money.
   5. Samsung has a return well above anything possible to find elsewhere with less risk than a junk bond inherently has.

   
   

   This is bad news for the hedge funds who think they have killed good projects in developing nations by their short and distort tactic. This is bad news for the major royalty companies with projects in Africa, Cluff eliminated the normal route of cash producing royalty financing. This news is good news to those juniors with serious projects as they negotiated their own short term Gross Production Royalty agreement prior to having a Definitive Feasibility Study as a form of paying an attractive interest rate.

   
   

   The key elements to this game changer is the bypassing of the normal cash royalty company and raising significant money prior to Definitive Feasibility from a company not normally a financier of the mine development without dilution of any significant degree. Hedge funds beware! Your risk free game of destroying just got extremely risky as gold begins its move to and above $3500 and non dilution financing is available dependent on the property, not the stock price.

   The growing use of this method at that early time in a company’s history reverses the fundamental weakness that Hedge Funds took advantage of in the capital intensive business of developing major new gold mines for exploration and development companies as well as junior producers.

   
   

   The formula for your understanding:

   
   

   1. Significant money.
   2. Prior to Definitive Feasability.
   3. For a junior producer.
   4. From a cash rich company not usual to mine exploration & development financing.
   5. Not in the form of the cash royalty company as a middle man.

   
   

   Regards,
   Jim

   
   

   and........

   
   

   SOUTH KOREA INCREASES GOLD RESERVES TO 70.4 TONS

   SEPTEMBER 19, 2012 BY THE DOC LEAVE A COMMENT

   Gold continues to slowly chip away at the US dollar as it gradually continues it’s ascent towards the primary global reserve currency, as the World Gold Council has announced that South Korea increased it’s gold reserves by 16 tons to 70.4 tons at the end of August.   The increase moves the Asian nation up to 40th in the world in gold holdings, yet the 70.4 tons of physical gold remains only a paltry 0.9% of South Korea’s entire $317 billion in reserves.

   
   

   Asia’s fourth largest economy, South Korea’s gold reserves hit 70.4 tons valued $2.98 billion at the end of August, according to World Gold Council. [Read more...]

   and.....

   
   

   DAVID MORGAN: SILVER MOVING TOWARDS PAR WITH GOLD!

   SEPTEMBER 19, 2012 BY THE DOC 13 COMMENTS

   With gold and silver continuing their strong advances in the wake of the Fed’s QE∞ announcement last Thursday, The Doc sat down with silver expert David Morgan for anEXCLUSIVE INTERVIEW regarding gold and silver’s fundamentals and where Morgan sees the metals heading over the next 12 months.

   Morgan believes the big gains seen in the metals over the past month was the market pricing in QE3, but believes particularly silver has much room to run, stating that the metal will most certainly double from here, and will most likely triple from here.  Morgan believes silver’s nominal high near $50 will be broken to the upside in 2013, with silver likely reaching $60-$75/oz over the next 12-15 months.

   Morgan also discusses the current supply side for silver and the massive physical tightness in the market, potential BIG, BIG problems for Barrick if it’s Pascua Lama mine fails to reach production (anticipated to produce up to 40 million oz annually).

   The market’s premier silver analyst concludes by discussing his expectations for silver to massively out-perform gold going forward, and states that he expects the silver/gold ratio to narrow to at least 10 to 1, and states that silver is moving towards par with gold!

   The Doc’s EXCLUSIVE MUST LISTEN interview with silver expert David Morgan of Silver-Investor.com is below: [Read more...]