http://www.caseyresearch.com/gsd/edition/mexicos-audit-office-tells-bank-of-mexico-to-verify-gold-held-at-the-bank-o/
It was pretty much the same in silver, but without the volume. The silver price traded mostly below the $29 spot market during Far East and early London trading. Silver's low tick in London came at the noon silver fix local time...and then it rallied back to the $29 mark around 9:00 a.m. before getting smoked for over a percent until the big 10:15 a.m. Eastern time rally.
The big moves in gold and silver were not matched by platinum and palladium, as both of these white metals looked like they were trading in some other universe.
The dollar index closed on Monday evening at 81.89...and traded very close to that value for all of the Tuesday session...although it never got above the 82.00 mark...and closed at 81.85. Obviously there was no correlation between the dollar index and any of the precious metal prices yesterday.
Well, the results of the Italian election really throws a spanner into the inner workings of the E.U...and the ECB as well. As I [and a few others] have said over the years, the current 42-year experiment in fiat currencies is now on its last legs. A significantly higher price will be needed to balance the books of the governments and central banks of every Western country on Planet Earth. When that price does arrive on the scene, it will certainly turn everyone from a buyer of physical metal, into a seller. I would guess that would apply to the other precious metals as well.
and.....
http://www.gata.org/node/12282
Three articles from Silver doctors.....
http://www.silverdoctors.com/gold-silver-go-vertical/#more-22269
http://www.caseyresearch.com/gsd/edition/why-central-banks-need-to-hold-gold-way-down...or-get-it-up-to-10000/
http://www.silverdoctors.com/deepcaster-fed-minutes-propaganda-achieve-goal-drive-gold-silver-down-through-major-resistance/#more-22036
and....
http://jessescrossroadscafe.blogspot.com/2013/02/gold-daily-and-silver-weekly-charts_25.html
Gold and Silver had decent bounces off deeply oversold levels on this Comex expiration.
Stocks slumped hard, largely on renewed recognition that the sequester and Europe are still a problem.
There was really nothing new said, as VIX spiked, but the bubble in stocks had simply run its course for now as the last of the big caps reported their earnings.
What next? Keep an eye on the sequester in the US and on Europe in general. There are some signs of a growing problem in greatly overpriced Chinese real estate.
I am looking at this bounce to see how gold handles the 50 percent retracement level of this big waterfall decline, which was stage managed by the funds and probably the bullion banks.
Will this be a v-bottom, a multiply tested bottom, or no bottom at all?
The metals bears have come far and fast, and are paying little attention to their ability to supply the market at these prices. This is an expedition of opportunity, intended to set up a wash and rinse. But there are a lot of buyers out there, and they are seeking actual bullion and not a paper promise.
The levels of open interest on the Comex during this decline, as well as who was doing the selling, were remarkably significant. And likely to be ignored by the market 'regulators.'
http://www.gata.org/node/12277
¤ YESTERDAY IN GOLD & SILVER
The gold price didn't appear to do much during Far East and London trading on Tuesday...and gold's one attempt to break through the $1,600 spot price mark in early London trading wasn't allowed to stand. Volumes were very high right from the open in the Far East...and that volume increased rapidly into the London trading day. Big volume is always a surprise when there's so little price activity, unless the high-frequency traders are out and about. But if it was them, why were they there?
The gold price rallied back to unchanged by 9:00 a.m. in New York...and then got sold down to its low of the day.
Things changed at 10:15 a.m. in New York when "Helicopter Ben" opened his mouth...and gold was up about $35 in just over an hour. From that point, either the price got capped, or the buyer disappeared...and the gold price traded sideway for the rest of the Tuesday trading session.
That short, sharp rally had all the hallmarks of short covering, but I wouldn't bet the ranch on that because of the volume...but see my comments on this in 'The Wrap' further down. Gold's low and high ticks both occurred in New York trading. Kitco recorded the low at $1,583.60 spot...and the high at $1,621.40 spot.
The gold price closed at $1,614.70 spot...up $21.10 on the day. Gross volume was out of sight at 270,000 contracts, give or take a few hundred. There was very little in the way of roll-overs.
It was pretty much the same in silver, but without the volume. The silver price traded mostly below the $29 spot market during Far East and early London trading. Silver's low tick in London came at the noon silver fix local time...and then it rallied back to the $29 mark around 9:00 a.m. before getting smoked for over a percent until the big 10:15 a.m. Eastern time rally.
For the most part, the silver chart was almost a carbon copy of the gold chart. Like gold, silver's high and low ticks came in New York. The low tick printed $28.51 spot...and the high was $29.59 spot...and intraday move of over a dollar, to the upside for a change!
Silver closed at $29.43 spot...up 44 cents on the day. Gross volume was very heavy at 131,000 contracts, but once the roll-overs were deducted, net volume collapsed down to just 10,500 contracts. My guess is that the rally in silver was short covering but, like gold's rally, there's no real way of telling. Hopefully Friday's COT Report will shed more light on yesterday's trading action, as Tuesday was the cut-off. But, having said that, see my comments in 'The Wrap' on this as well.
The big moves in gold and silver were not matched by platinum and palladium, as both of these white metals looked like they were trading in some other universe.
The dollar index closed on Monday evening at 81.89...and traded very close to that value for all of the Tuesday session...although it never got above the 82.00 mark...and closed at 81.85. Obviously there was no correlation between the dollar index and any of the precious metal prices yesterday.
* * *
The CME's Daily Delivery Report showed that 108 gold and 5 silver contracts were posted for delivery on Thursday. JPMorgan was the short/issuer on 107 of the gold contracts...and HSBC USA and Deutsche Bank were the long/stoppers with 60 and 38 contracts respectively. The link to yesterday's Issuers and Stoppers Report is here.
The GLD ETF continues its long, slow decline as an authorized participant withdrew another 77,420 troy ounces of gold...and there were no reported changes in SLV.
Over at Switzerland's Zürcher Kantonalbank for the weekly period ending February 25th, they reported that their gold ETF declined by a rather large 104,291 troy ounces. However, their silver ETF went in the other direction, it rose by 69,574 troy ounces.
The U.S. Mint had a decent sales report yesterday. They sold a chunky 14,000 ounces of gold eagles...2,500 one-ounce 24K gold buffaloes...and another 337,000 silver eagles.
Monday was another busy day at the Comex-approved depositories. They reported receiving 1,464,870 troy ounces of silver...and shipped 910,517 troy ounces of the stuff out the door. The link to that activity is here.
Today's first chart is courtesy of Washington state reader S.A. I know he stole it from a Zero Hedgestory, because I have the story he took it from posted further down in the 'Critical Reads' section...but the chart is worth looking at on its own...and it doesn't require any further embellishment from me, as it's self-explanatory.
This next chart is courtesy of Casey Research's own Dennis Miller...and it's something that Rand Paul posted on his website.
The last chart is courtesy of Nick Laird. Nick's comment along with the chart said..."We have a breakout."
and selected news and views......
Bernanke Says U.S. Must End ‘Too Big to Fail’ Bank Subsidy
Federal Reserve Chairman Ben S. Bernanke said he wants to end investor perceptions that the largest U.S. financial institutions will be given taxpayer bailouts to prevent a collapse.
“We need to stop too-big-to-fail,” Bernanke said in testimony to the Senate Banking Committee in Washington yesterday in response to a question from Senator Elizabeth Warren, Democrat of Massachusetts. “As somebody who’s spent a lot of late nights trying to deal with these problems and the crisis, I would very much like to have the confidence that we could close down a large institution without causing damage to the rest of the economy.”
Warren cited a Bloomberg View article estimating that the largest U.S. banks receive an implicit taxpayer subsidy amounting to $83 billion a year because their funding costs are lowered by the perception they won’t be allowed to fail.
Well, dear reader, that Bloomberg story about the $83 billion per year mentioned in the previous paragraph was an article that I posted in Tuesday's column. But this particular Bloomberg story was posted on their website during the lunch hour Mountain Standard Time...and it's courtesy of Manitoba reader Ulrike Marx.
JPMorgan Mortgage, Community Units to Lose Up to 19,000 Jobs
JPMorgan Chase & Co., the biggest U.S. bank, will eliminate as many as 19,000 jobs in mortgages and community banking through 2014 as Chief Executive Officer Jamie Dimon trims expenses.
The lender, employing about 259,000 people at the end of December, will cut 13,000 to 15,000 jobs in its mortgage unit and 3,000 to 4,000 in community banking excluding home lending through the end of next year, the company said today in presentations on its website. Firm-wide headcount will shrink by about 4,000 people this year, mainly through attrition, while some employees are redeployed to other areas, said Kristin Lemkau, a spokeswoman.
Dimon, 56, is focusing on expense reductions after boosting net income to records for three straight years. Mortgage profits that drove banks’ earnings may fade this year as increased competition keeps the rates on new loans near all-time lows. Some firms also are cutting jobs after a settlement with U.S. regulators resolved obligations to review foreclosure documents.
This article appeared on the Bloomberg website late yesterday morning Mountain time...and I thank Ulrike Marx for her second offering in today's column.
Banks Fear Court Ruling in Argentina Bond Debt
A fierce battle between the government of Argentina and investors led by a group of hedge funds has already led to the seizure of a naval ship and dragged in the United States Treasury. Now a federal appeals court is hearing the dispute, and how it rules could have a major impact on world debt markets.
The investors — including the hedge fund tycoon Paul E. Singer — sued Argentina seeking payment for $1.3 billion relating to bonds that the country defaulted on in 2001. On Wednesday, the case comes before the United States Court of Appeals for the Second Circuit, which has already sided with the hedge funds on their main arguments.
But the issue that the appeals court is still undecided about is perhaps the most important. It involves devising a method to pressure Argentina to pay up on the disputed bonds. And that has left the investors who hold a majority of Argentina’s foreign debt vulnerable, as well as the banks that process the payments to those investors.
This story appeared in The New York Times on Monday evening...and I thank Phil Barlett for sending it.
Tucker Says He’s Open to Q.E. as Bank of England Stresses Flexibility
Bank of England Deputy Governor Paul Tucker said he’s open to adding to asset purchases as policy makers stressed the central bank has the flexibility to expand stimulus if needed.
Tucker was testifying alongside policy makers David Miles, Charlie Bean and Ian McCafferty at a Parliament hearing in London today on the BOE’s latest quarterly forecasts. The BOE has said it will “look through” a period of above-target inflation to keep nurturing growth, which Bean said “made sense” in the current environment. Tucker also raised the prospect of negative interest rates at the hearing.
Tucker’s comments signal a potential willingness to join Governor Mervyn King, Paul Fisher and Miles, who were defeated in a push for more bond purchases at the Monetary Policy Committee meeting this month. With incoming Governor Mark Carney having sparked a debate on how far central banks should go to help economies, Tucker said quantitative easing wasn’t necessarily at an end and that the MPC hadn’t dismissed other stimulus measures.
The green lights to print are going up everywhere. This Bloomberg story from yesterday morning Mountain time is another contribution from Ulrike Marx.
ECB Should Join ‘Currency War’ to Weaken Euro, Montebourg Says
The European Central Bank should weaken the euro, confronting the new “currency war” head on to help address economic stagnation in the region, French Industry Minister Arnaud Montebourg said today.
Calling for a more activist and “political” management of the currency shared by 17 European nations, Montebourg said at a press conference in Paris that he wants “the European Central Bank to do its job.”
“The euro is too strong and doesn’t correspond to economic fundamentals,” he said. The ECB “should prepare to confront a new currency war in which the weakening of currencies becomes a political tool.”
Something tells me we ain't in Kansas anymore, Toto. With every currency bloc trying to devalue against each other, the only winning forms of money will be the precious metals. This Bloomberg story, filed from Paris yesterday morning, was posted on their website in the wee hours of Tuesday morning Mountain time...and it's also courtesy of Ulrike Marx.
ECB bond plan in jeopardy as Italy's voters reject conditions
Italy's electoral earthquake is “a catastrophe for the euro and the European Union”, according to Luxembourg’s foreign minister, Jean Asselborn.
The verdict was much the same in chancelleries across the eurozone, especially in those countries already starting to feel the first wave of contagion.
“The result touches us all,” said Spain’s foreign minister, Jose Manuel Garcia-Margallo. “It is a jump into the void that bodes well for nobody, neither for Italy, nor for the rest of Europe.”
Almost 57pc of the Italian vote went to parties that have vowed to tear up the EU austerity script. Together they control a majority of senate seats.
This Ambrose Evans-Pritchard commentary in The Telegraph yesterday evening falls into the must read category...and my thanks go out to Ulrike Marx for bringing it to our attention.
Nervous Brussels urges Italy to stick to austerity
The European Commission has urged any future government in Italy to keep on implementing deficit-cutting measures, despite the fact that over half the electorate voted for anti-austerity parties.
"Last Friday the Italians were speaking quite clearly about debt-reduction commitments as well as a series of other commitments. These Italian commitments remain in force and the commission expects compliance," commission spokesperson Olivier Bailly said on Tuesday.
Italy's public debt is expected to hit 128 percent of national output this year.
This story, posted on the euobserver.com Internet site, was filed from Brussels yesterday afternoon Europe time...and is courtesy of Roy Stephens.
Italy’s anti-austerity ‘rebellion’ promises to spread
Any doubts that Italians were fed up with tax hikes and economic reform vanished in an election that awarded more than half of the votes to anti-austerity parties.
The question is whether the Italian-style uprising will ripple through the rest of Europe, especially in the countries deep in recession and saddled with high unemployment rates. Many economists, analysts and politicians think it will.
But they also think austerity cannot vanish as quickly as it landed in 2010, when sovereign bond yields surged in the suddenly distressed countries on Europe’s Mediterranean frontier and in Ireland.
“You cannot stop austerity outright because the markets would punish you if you did,” said Charles Wyplosz, the international economics professor at Geneva’s Graduate Institute, who has warned that “mindless austerity” is losing policy credibility.
This Globe and Mail article was filed from Rome early yesterday morning Eastern time...and it's Roy Stephens' final contribution to today's column.
Three King World News Blogs
The first blog is with Dr. Stephen Leeb...and it's headlined "Why Gold is Going to $20,000 and Silver Into the Stratosphere". Next comes Ben Davies...and this blog is entitled "4 Extraordinary Charts and the Piece Every Investor Must Read". And lastly is this interview with Jim Sinclair. It bears the headline "Gold Will Now Be Released to the Upside".
Mexico's audit office tells Bank of Mexico to verify gold held at Bank of England
Mexican financial journalist and agitator for accountability in government Guillermo Barba reports that the Mexican government audit office has reprimanded the Bank of Mexico for failing to verify its supposed purchase of $4.5 billion of gold vaulted at the Bank of England. The audit office confirms Barba's complaint last year that the Bank of Mexico had purchased only "paper gold" at the Bank of England and had no idea of the number of bars it had supposedly purchased, nor of the purity of the bars.
This is only the first paragraph of a must read commentary that was posted on the gata.org Internet site yesterday evening.
* * *
¤ THE WRAP
When the technical funds hold big short positions, there is virtually no chance of actual delivery by them. The tech fund shorts have one option...and one option only – to buy back at some point. The only question is at what price will the short contracts be bought back? And because any short position holds the theoretical risk of unlimited loss, when the tech funds and speculative short positions are covered, they are covered aggressively, most often on “market” orders or on a best price available basis. Of all the various buy orders possible, speculative short covering can be considered the most aggressive of all. I can’t tell you when the tech fund and speculative short covering will commence, but I can tell you it will be forceful enough that if the commercials decide to let the price of gold and silver rip to the upside, a price explosion can easily result. - Silver analyst Ted Butler...23 February 2013
I must admit that I really don't know what to make of the trading action in gold and silver yesterday. Both the gold chart and silver chart looked like identical twins, but the net volume associated with each metal was light years apart...monstrous in gold and very light in silver. Needless to say, the gross volume in both metals was off the charts.
The volume data in silver was muddied by the fact that yesterday and today are the last two days of trading in the March futures contract...and all the big traders had to be out on Tuesday...and the rest by the 1:30 p.m. Comex close today. This evening the CME will post the First Day Notice data for the March delivery month in silver...and I'll certainly be interested in what that report contains...and I'll have it for you in tomorrow's column.
Since yesterday was the cut-off for this Friday's Commitment of Traders Report, everything that happened should show up there. But whether it adds any clarity to the current situation remains to be seen. It may mask what happened during the final capitulation in gold and silver that occurred on Wednesday and Thursday of last week, as that data will be in Friday's COT report as well. As I mentioned in this space yesterday, I was hoping that Tuesday would be a quiet day in gold and silver, so we'd get a snapshot of the bottom of the market in Friday's report. That may not happen now...but I reserve the right to be wrong once you read the contents of the next paragraph which I added just before hitting the 'send' button on today's column.
The CME's preliminary volume/open interest numbers from yesterday were amazing. Gold's total open interest was actually down a bit...and silver's open interest showed a decline of 5,886 contracts! That's monstrous. I await the final numbers with great interest.
Here's something that reader 'David in California' sent my way yesterday. Apparently he borrowed it from Jim Sinclair's website. David says it's a picture of the CFTC's gold and silver price management complaint centre.
Well, the results of the Italian election really throws a spanner into the inner workings of the E.U...and the ECB as well. As I [and a few others] have said over the years, the current 42-year experiment in fiat currencies is now on its last legs. A significantly higher price will be needed to balance the books of the governments and central banks of every Western country on Planet Earth. When that price does arrive on the scene, it will certainly turn everyone from a buyer of physical metal, into a seller. I would guess that would apply to the other precious metals as well.
The world's economic, financial and monetary system is out of time...and the gold card is the only one they have left to play. It's only a matter of when, not if...and how the event will manifest itself when that time does arrives.
In overnight trading, gold got sold down about five bucks as the day wore on in the Far East...and is down a bit more starting around 9:00 a.m. GMT in London. Silver got sold down about 20 cents right at the start of Far East trading...and then traded flat until the London open...and has been under a bit more selling pressure since then. Volumes in gold are quite high considering the lack of price action...but only about half of what it was yesterday morning at this time. However, it's obvious that the high-frequency traders are out and about. Silver's net volume is actually on the low side...and a lot of it is now taking place in the new front month, which is May. The dollar index is flat.
After yesterday's somewhat surprising price action, it will be interesting to see how things unfold during the Comex trading session in New York today.
See you on Thursday.
and.....
http://www.gata.org/node/12282
Mexico's audit office tells Bank of Mexico to verify gold held at Bank of England
Submitted by cpowell on Wed, 2013-02-27 02:32. Section: Daily Dispatches
9:30p ET Tuesday, February 26, 2013
Dear Friend of GATA and Gold:
Mexican financial journalist and agitator for accountability in government Guillermo Barba reports today that the Mexican government audit office has reprimanded the Bank of Mexico for failing to verify its supposed purchase of $4.5 billion of gold vaulted at the Bank of England. The audit office confirms Barba's complaint last year that the Bank of Mexico had purchased only "paper gold" at the Bank of England and had no idea of the number of bars it had supposedly purchased, nor of the purity of the bars.
Barba writes that the audit office has recommended that the Bank of Mexico "make a physical inspection with the counterparty that has the gold under its custody, in order to be able to verify and validate its physical wholeness and the compliance with the terms and conditions of dealing with this asset." Barba adds that the Bank of Mexico does not want to do this but wants to trust the Bank of England not to play games with Mexico's gold.
Of course this situation is almost identical to the situation that developed in recent months with the gold of Germany's Bundesbank supposedly held in foreign vaults. Barba urges his country to repatriate its gold as a matter of basic national sovereignty just as Venezuela has done and as the Bundesbank has begun to do in tiny steps.
Barba's report is headlined "Mexico's Federal Audit Demands Physical Inspection of Sovereign Gold Holdings" and it's posted in England at his Internet site, Global Financial Intelligence, here:
Of course GATA urges its friends in Mexico to make themselves heard in support of Barba and Mexican sovereignty.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
Gold Anti-Trust Action Committee Inc.
Three articles from Silver doctors.....
US MINT SETS ALL-TIME SILVER EAGLE SALES RECORD FOR FEBRUARY- NEARLY 11 MILLION SOLD IN 2013!
After smashing the all-time monthly sales record in January by selling 7.5 million Silver Eagles (even with production halted for half the month), silver eagle sales have continued at a record setting clip. http://www.silverdoctors.com/gold-silver-go-vertical/#more-22269
GOLD & SILVER GO VERTICAL
In the midst of gold and silver’s relentless attacks last week by the cartel, we wrote that investors should be prepared for a potential bottom in gold and silver on or around Monday 2/25, options expiration in both gold and silver.http://www.caseyresearch.com/gsd/edition/why-central-banks-need-to-hold-gold-way-down...or-get-it-up-to-10000/
¤ YESTERDAY IN GOLD & SILVER
It was pretty quiet in the gold world on Planet Earth on Monday. The price was up about ten bucks or so about thirty minutes after the London open...and then chopped around five dollars either side of that for the rest of the trading day.
The high, such was it was, came at 3:30 p.m. Eastern time in the electronic market in New York...and Kitco recorded that as $1,598.20 spot...and then it got sold off before it could break through the $1,600 price mark.
Gold closed at $1,593.60 spot...up $12.10 on the day. Gross volume was around 189,000 contracts.
Silver's price path was about the same, although the high tick of the day [around $29.30 spot] came shortly before the London silver fix at noon GMT. After that, silver got sold down about 30 cents...and closed at $28.99 spot...up 23 cents on the day. Volume, net of all the roll-overs out of the March delivery month, was quiet at around 23,500 contracts.
The dollar index closed at 81.46 on Friday evening in New York...an immediately jumped up to 81.63 at the open on Sunday evening in New York. From that point, it traded sideways until 1:00 p.m. Hong Kong time...and then headed south. The low price tick [81.09] came at precisely 8:00 a.m in New York...and then took off to the upside. It closed the Monday trading session at 81.89...it's high of the day...up 43 basis points from it's Friday close.
Once again there was no co-relation between what the dollar index was doing and what was going in the precious metal markets.
* * *
The CME's Daily Delivery Report showed that 63 gold contracts were posted for delivery on Wednesday...which should just about be all the deliveries for the February month in gold. There may be a handful more between now and the 28th...but not many. There were no silver contracts issued for delivery. The issuers and stoppers in yesterday's report included "all the usual suspects"...and the link to that activity is here.
GLD continues to shed gold, as an authorized participant withdrew another 251,619 troy ounces yesterday. The big surprise once again was SLV...as there were no reported changes in it...as of 10:05 p.m. last evening.
The U.S. Mint had a small sales report yesterday. They didn't sell any gold eagles or gold buffaloes, but they did sell another 485,000 silver eagles. I know you're getting sick of hearing this, but I do hope that you're getting your share of them...or their equivalent in other silver bullion products.
Over at the Comex-approved depositories on Friday, they reported receiving 710,819 troy ounces of silver...and shipped 198,982 ounces of the stuff out the door. The link to that activity ishere.
Here's gold's 32-year Point & Figure chart...courtesy of Nick Laird...going back to the top of the bull market in 1980. Because of the price management scheme in all the precious metals, it's hard to take gold's break below its long-term moving average seriously...or anything that comes before it, for that matter. As I've said more times that I can remember, all the precious metal charts are fabrication jobs by JPMorgan et al. They can, and they do, print whatever prices they want. However, no matter what the evidence to the contrary, there are tonnes of T/A people out there that can make up any number of ridiculous reasons why the sky is falling.
Here's another chart...this one courtesy of James Turk. Not that we need reminding, but here's another self-explanatory chart that shows how badly the precious metal equities are underperforming the metals themselves. James pointed out that the chart is only current as of the end of January, so it's a safe bet that it looks much worse/better now...depending on your point of view.
and selected news and views.......
Why Should Taxpayers Give Big Banks $83 Billion a Year?
On television, in interviews and in meetings with investors, executives of the biggest U.S. banks -- notably JPMorgan Chase & Co. Chief Executive Jamie Dimon -- make the case that size is a competitive advantage. It helps them lower costs and vie for customers on an international scale. Limiting it, they warn, would impair profitability and weaken the country’s position in global finance.
So what if we told you that, by our calculations, the largest U.S. banks aren’t really profitable at all? What if the billions of dollars they allegedly earn for their shareholders were almost entirely a gift from U.S. taxpayers?
Once shareholders fully recognized how poorly the biggest banks perform without government support, they would be motivated to demand better. This could entail anything from cutting pay packages to breaking down financial juggernauts into more manageable units. The market discipline might not please executives, but it would certainly be an improvement over paying banks to put us in danger.
This short, but very interesting read, was posted on the Bloomberg website last Wednesday...and I thank Washington state reader S.A. for sending it to me on Saturday.
There's A Fresh Round Of Layoffs Coming To Goldman Sachs
This just in from Reuters, Goldman Sachs is about to begin a fresh round of job cuts. They could begin as early as next week and will hit the equities business harder than fixed income.
Goldman usually cuts the fat from its firm around this time of year, but that number is usually at around 5%.
According to Reuters, this year's cuts are supposed to be bigger.
I suppose it's too much to ask that Jamie Dimon will go. How about Blythe Masters? Just asking. This businessinsider.com story was posted on their Internet site early yesterday afternoon Eastern time...and I thank Roy Stephens for sending it.
Can Endless Quantitative Easing Ever End?
Three problems present themselves:
1) The bigger our balance sheet gets (currently, $3 trillion and counting), the more difficult it will be to ever load off some of these assets in the future. When we start liquidating, markets will panic. We might end up having absolutely no maneuvering space whatsoever.
2) All this money printing will one day feed into higher headline inflation that no statistical gimmickry will manage to hide. Then some folks may expect us to tighten policy, which we won’t be able to do because of 1).
3) We are persistently manipulating quite a few major asset markets here. Against this backdrop, market participants are not able to price risk properly. We are encouraging financial risk taking and the type of behaviour that has led to the financial crisis in the first place.”
This most excellent commentary was posted on the Zero Hedge website on Sunday...and I thank reader Norman Willis for his first contribution to this column.
Pound falls to two-year low as currency markets lose faith in UK economy
Sterling fell to a two-year low on Monday as currency markets signalled their waning confidence in the UK economy's ability to exit the longest depression in 80 years.
The pound, which has tumbled by 8% in recent weeks, fell to $1.51 as investors digested the loss of Britain's AAA credit status and the increasingly gloomy economic outlook from independent forecasters. As recently as December it was trading at $1.63.
The ratings agency Moody's, which downgraded the UK to the lower AA1, joined many analysts in predicting that the economy will be held back by a longer than expected period of low growth and bigger debt mountain.
This article appeared on The Guardian's website late yesterday afternoon GMT...and I thank Roy Stephens for bringing it to my attention...and now to yours.
Debt crisis: France puts brakes on austerity
The Europe-wide economic slowdown has forced France to delay its target of cutting the state deficit to three percent of GDP this year and the government has said it does not want to impose too much austerity on an economy near recession.
"It would be wrong to take measures that put another brake on consumption and investment," Hollande said at the annual Paris farm show on Saturday. "There is no need to add more austerity in 2013. A lot has already been asked of the taxpayer."
He added that while government efforts to reduce the deficit had until now consisted of more tax increases than spending cuts, that trend would be reversed in 2014.
This story showed up on the telegraph.co.uk Internet site late Saturday afternoon GMT...and it's also courtesy of Roy Stephens.
Euro debt crisis looms again as Italians defy EU austerity demands
The eurozone’s debt crisis strategy was in chaos on Monday night after anti-austerity parties appeared on track to win a majority of seats in the Italian parliament, vastly complicating efforts to forge a government able to carry through EU-imposed reforms.
In an earthquake result, the Five Star protest movement of comedian Beppe Grillo looked likely to emerge as the biggest single party in the lower house. The scourge of bankers and corrupt elites, Mr Grillo has campaigned for a return to the lira and a restructuring of Italy’s €1.9 trillion (£1.64 trillion) public debt.
The conservative bloc of ex-premier Silvio Berlusconi looked poised to win the senate, coming back from the political grave with vows to rip up the EU’s austerity plans and push through tax cuts to pull Italy out of deep slump.
“The majority of Italians have clearly voted against the Brussels consensus. That is a damning indictment,” said Mats Persson from Open Europe.
The Ambrose Evans-Pritchard offering was posted on The Telegraph's website yesterday evening...and it's courtesy of Manitoba reader Ulrike Marx.
Six King World News Blogs/Audio Interviews
1. Ben Davies: "We May Be Seeing a V-Shaped Bottom in Gold". 2. James Turk: "The Federal Reserve is Already Insolvent". 3. Egon von Greyerz: "Coming Soon - $10 Trillion of Yearly Q.E. and Fantastic Gold Chart". 4.Michael Pento: "What Will Cause Markets to Crash and Will it Happen?". 5. Robertson Fitzwilson: "Why Investors Around the World Must Move Into Gold and Silver". 6. The audio interview is with Andrew Maguire.
2012 Chinese gold production up 12%
China’s Ministry of Industry and Information Technology reported Saturday that China’s 2012 total gold production increased 11.66% or by 42.1 tonnes to a total 403.1 metric tonnes of which 341.8 tonnes came from gold mines while 61.3 tonnes were by-products of nonferrous metal smelting.
The top ten gold group produced a total of 198.1 tonnes of gold in 2012, accounting for 49.14% of China’s national production, said the ministry.
The World Gold Council put China’s consumer gold demand at 776.1 tonnes last year, virtually flat from the previous year’s consumer gold consumption.
This short article was posted on the mineweb.com Internet site yesterday...and it's courtesy of Marshall Angeles as well.
Why central banks need to hold gold way down or get it up to $10,000
Officials at the US Federal Reserve may be more worried than they have let on about the treacherous task of extricating America from quantitative easing. This is an unsettling twist, with global implications.
A new paper for the US Monetary Policy Forum and published by the Fed warns that the institution's capital base could be wiped out "several times" once borrowing costs start to rise in earnest.
A mere whiff of inflation or more likely stagflation would cause a bond market rout, leaving the Fed nursing escalating losses on its $2.9 trillion holdings. This portfolio is rising by $85 billion each month under QE3. The longer it goes on, the greater the risk. Exit will become much harder by 2014.
Investors have of course been fretting about this for some time. Scott Minerd from Guggenheim Partners thinks the Fed is already trapped and may have to talk up gold to $10,000 an ounce to ensure that its own bullion reserves cover mounting liabilities.
This must read article was posted in The Telegraph on Sunday...and is an offering from Ambrose Evans-Pritchard. The real headline reads "Trade Protectionism Looms Next as Central Banks Exhaust Q.E."
* * *
¤ THE WRAP
The most important point I would make about the unusual metal inflows into SLV this [past] week is that it reconfirms my claim that the price declines in silver these past two weeks were strictly a result of paper trading games and manipulation on the COMEX. I said that there was no evidence of physical metal selling in silver and that was before the big 2 million oz deposit in SLV on Thursday. It’s hard to imagine how anyone paying the slightest attention to what is transpiring in the precious metals, not to see the obvious signs of price manipulation. - Silver analyst Ted Butler...23 February 2013
Based on the volume and price activity, I'm not going to attempt to read much into yesterday's price action in either gold or silver. The March delivery month is upon us...and last day for delivery into the February contract in gold is tomorrow...and First Day Notice for delivery into the March silver contract will be on Thursday.
Whether we're done to the downside...and where we go from here pricewise...is still very much up in the air. Ted Butler says that we're pretty much done to the downside in gold, but I wouldn't put a thing past JPMorgan and friends...especially in silver. Today is the cut-off for this Friday's Commitment of Traders Report...and I'm hoping that we have another quiet trading day so we can get a look at the report with the 'bottom' numbers intact. Wednesday and Thursday of last week were the big capitulation days to the downside, as massive short bets were being placed. As good as the numbers were in both metals in last Friday's COT Report, they should be pretty much one for the record books when we see them on Friday...at least in gold.
Not much happened in Far East trading on their Tuesday...and all is pretty quiet going into the London open. Volumes, as of 1:15 a.m. Eastern time, were pretty heavy in gold already...and silver as well. But over half of silver's volume was roll-overs, as all future contract holders have to be out of the March delivery month by the close of trading on Wednesday, or stand for delivery on Thursday.
And as I hit the 'send' button at 4:45 a.m. Eastern time, the $15 rally in gold that began shortly before the London open ran into a massive wall of selling by JPMorgan et al just before 9:00 a.m. GMT...as volume sky-rocketed...and is now north of 55,000 contracts, over double what it would be under normal market conditions at this time of day. Obviously this rally did not got unopposed. The gold price made it above the $1,600 spot mark...but that wasn't allowed to last...at least not for the moment. Silver had a smallish price spike as well, but there was little change in net volume. The dollar index is down a hair.
I'll be watching today's price activity with great interest.
And before I head out the door, I want to remind you one more time, if you didn't listen the to Jim Rickards interview on Kitco that I posted further up in the 'Critical Reads' section, you should invest twenty-one minutes of your time and do it now. I've listened to the whole thing...and it'sdefinitely worth it. The link is here.
See you tomorrow.
and......
http://www.silverdoctors.com/deepcaster-fed-minutes-propaganda-achieve-goal-drive-gold-silver-down-through-major-resistance/#more-22036
DEEPCASTER: FED MINUTES PROPAGANDA ACHIEVE GOAL, DRIVE GOLD & SILVER DOWN THROUGH MAJOR RESISTANCE
Submitted by and....
http://jessescrossroadscafe.blogspot.com/2013/02/gold-daily-and-silver-weekly-charts_25.html
25 FEBRUARY 2013
Gold Daily And Silver Weekly Charts - Comex Option Expiration - Goldfinger
Gold and Silver had decent bounces off deeply oversold levels on this Comex expiration.
Stocks slumped hard, largely on renewed recognition that the sequester and Europe are still a problem.
There was really nothing new said, as VIX spiked, but the bubble in stocks had simply run its course for now as the last of the big caps reported their earnings.
What next? Keep an eye on the sequester in the US and on Europe in general. There are some signs of a growing problem in greatly overpriced Chinese real estate.
I am looking at this bounce to see how gold handles the 50 percent retracement level of this big waterfall decline, which was stage managed by the funds and probably the bullion banks.
Will this be a v-bottom, a multiply tested bottom, or no bottom at all?
The metals bears have come far and fast, and are paying little attention to their ability to supply the market at these prices. This is an expedition of opportunity, intended to set up a wash and rinse. But there are a lot of buyers out there, and they are seeking actual bullion and not a paper promise.
The levels of open interest on the Comex during this decline, as well as who was doing the selling, were remarkably significant. And likely to be ignored by the market 'regulators.'
http://www.gata.org/node/12277
Fed is already technically insolvent, Turk tells King World News
Submitted by cpowell on Mon, 2013-02-25 22:46. Section: Daily Dispatches
2:45p PT Monday, February 25, 2013
Dear Friend of GATA and Gold:
GoldMoney founder and GATA consultant James Turk today tells King World News that the U.S. Federal Reserve is already technically insolvent and that this has serious negative implications for the dollar. Turk also says gold and silver are terribly oversold even as silver longs in the futures market have not yet capitulated. An excerpt from the interview is posted at the King World News blog here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
Gold Anti-Trust Action Committee Inc.
http://www.gata.org/node/12279
Fed is 'nowhere close' to raising rates and tightening, Rickards tells Kitco News
Submitted by cpowell on Tue, 2013-02-26 00:43. Section: Daily Dispatches
4:35p PT Monday, February 25, 2013
Dear Friend of GATA and Gold:
Market analyst and hedge fund manager James G. Rickards, author of the best-selling book "Currency Wars," today tells Kitco News' Daniela Cambone that the Federal Reserve is "nowhere close" to raising interest rates and tightening monetary conditions. Rickards adds that gold's volatility lately has been the dollar's and that gold simply should be purchased and socked away because it will do fine over time. The interview is 21 minutes long and can be viewed at Kitco News here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
Gold Anti-Trust Action Committee Inc.
http://www.gata.org/node/12278
Swiss vault operator wants U.S. gold bugs out
Submitted by cpowell on Tue, 2013-02-26 00:14. Section: Daily Dispatches
By Clementine Wallop and Tatyana Shumsky
The Wall Street Journal
Monday, February 25, 2013
The Wall Street Journal
Monday, February 25, 2013
U.S. gold bugs who sought to store their gold overseas are under pressure from vault operator Via Mat International.
The Swiss-based company said it will no longer offer to store gold outside of the U.S. to private clients with potential U.S. tax liability, starting from the middle of 2013. The company attributed the decision to regulatory changes without specifying exactly what regulations led to the decision.
Via Mat's move targets the heart of the gold-bug movement. While many investors seek gold as a haven from inflation, currency risk, or economic uncertainty, for some, owning gold isn't enough. Only gold stored outside of Uncle Sam's reach will do.
That's because these gold bugs worry that rising U.S. debt will trigger a replay of 1933's Gold Confiscation Act. These fears have led to swelling bullion inventories in London, Zurich, Singapore, and Hong Kong, with banks and vault operators opening new storage facilities to meet rising demand in recent years. Other worries include the collapse of the financial system or a particular bank, which had been a prominent worry since the 2008 financial crisis destabilized a number of U.S. and global banks.
Via Mat's response to shifting financial regulations comes just weeks after Swiss banks USB and Credit Suisse adjusted their gold storage fees to encourage customers to hold individual storage accounts. Previously, the banks pooled their clients' gold and kept it on their own balance sheets, but post-financial crisis regulations prompted the shift by requiring banks to set aside more capital to back such assets.
But as governments ratchet up their oversight of the financial world, options for holding wealth outside of their purview are shrinking, especially for gold bugs.
I really liked your blog. Gold price chart and silver price chart look like twins but the net volume associated with them is different. Hope to see more updates from you.
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