Tuesday, April 9, 2013

Ed Steer's Gold & Silver news , data and views - April 9 , 2013

http://www.zerohedge.com/news/2013-04-09/day-government-seized-americans-gold-april-5th-1933


The Day The Government Seized Americans' Gold - April 5th 1933

Tyler Durden's picture
Submitted by Tyler Durden on 04/09/2013 08:45 -0400




From GoldCore
The Day The Government Seized Americans' Gold - April 5th 1933
Alix Steele reports on the 1933 declaration by U.S. President Franklin Delano Roosevelt to have American’s turn in their gold on Bloomberg TV’s “Lunch Money”. 
“80 years ago on April 5th, 1933, was the day that the federal government took all our gold and changed the precious metals as we know it,” said Alix Steel.
April 5th, 1933, FDR confiscated every gold coin, bar, or certificate and people had to turn in their gold to the Federal Government or else they would face a fine of $10,000 or 10 years in jail.  That is about $179,000 in today’s money.  You were able to keep a small amount or some rare coins and those that did give up their gold received about $20/oz. 
“Why would the government do that?” asks Ms. Steel.  They did this for the following reasons:
1. To prevent hoarding.
2. To devalue the dollar during the Great Depression.
3. The government set the gold price at $35/oz and pegged it to the dollar.
“But this could never happen again, right?” asks Ms. Steel. “Well tell that to Texas.”  
Steel reports, “The state of Texas is contemplating creating a bill to create the Texas Bullion Depository to protect its gold. It will abandon its New York depository and move their gold back stateside.  If the U.S. Federal Government tries to come for their gold the state says it is prepared to fight with the 10th amendment.  Arguing that state’s rights trump any order by the federal government.” 
The confiscation of individuals and companies savings by the Troika (EU, ECB and IMF) in Cyprus shows how there is a risk of confiscation of all assets - from deposits to pensions funds to stored gold.
This is something we have long warned of and we have consistently said that if confiscation takes place it will be of large stores of pooled gold, ETF custodial and unallocated gold in the banking system and large holdings of gold stored with companies and in countries that are massively indebted.
This shows the vital importance of owning gold either with a AAA rated government that has a tradition of respect for property rights or in a private depository in a safer country such as Switzerland. It also shows the importance of owning and taking personal possession of some gold coins and bars. 
Anecdotally it is known that many people did not turn in their gold in 1933. Today, it would be even more problematic and governments would be unlikely to send the police door to door to confiscate the tiny amounts of gold coins and bars held by its citizens. 
NEWS
COMMENTARY
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and....





http://www.caseyresearch.com/gsd/edition/how-the-u.s.-herds-the-sheep-away-from-the-gold-market/


"What's going on in the paper world is light years removed from what's happening in the retail market for bullion."

¤ YESTERDAY IN GOLD & SILVER

It was a nothing sort of day in gold again on Monday.  Volume was very light right up until about 10:30 a.m in New York.  But the tiny sell-off that occurred at that time bumped the volume up quite a bit.  The low price tick [$1,566.20 spot] came about 11:20 a.m. Eastern time...and from there it recovered a few dollars during the East coast lunch hour, before trading sideways for the rest of the day.
Gold closed the Monday trading session at $1,572.70 spot...down $9.60 from Friday's close.  Gross volume was reasonably light...around 122,000 contracts...with a big chunk of that occurring during the late morning sell off in New York.
Silver spiked up a bit at the New York open on Sunday night, but that wasn't allowed to last...and the silver price spent virtually the entire trading day oscillating between $27.20 and $27.35 spot.
Silver closed at $27.30 spot...down a nickel from Friday's close.  Volume, net of roll-overs out of the May delivery month, was very light at only 22,000 contracts.
The dollar index closed at 82.49 on Friday...and rallied a bit in a rather rollercoaster trading session on Monday...with the high tick of 82.84 coming just after 3:30 p.m. Eastern time.  From there it faded a bit in to the close...finishing the day at 82.72...up 23 basis points from its close on Friday.




*     *      * 



The CME's Daily Delivery Report showed that 50 gold and 9 silver contracts were posted for delivery within the Comex-approved depositories on Wednesday.  In both metals it was "all the usual suspects".  The link to yesterday's Issuers and Stoppers Report is here.
There were no reported changes in GLD or SLV...at least not as of 9:24 p.m. Eastern time yesterday evening.
After reporting virtually no sales during most of last week, the U.S. Mint had a very chunky sales report yesterday.  They sold 21,500 ounces of gold eagles...2,000 one-ounce 24K gold buffaloes...and 833,000 silver eagles.
Over at the Comex-approved depositories on Friday, they reported receiving 798,335 troy ounces of silver...and didn't ship any out the door.  The link to that activity is here.
It was another very busy day at the store yesterday...and has been since business began after the Easter long weekend.  Our silver sales dominated our gold sales by many thousands of ounces for every ounce of gold we sold yesterday.  It was amazing the number of people who had had enough of the banking system and/or the interest rates they were providing...and little had to do with this 'conspiracy stuff'.  Our usual suppliers still aren't taking orders for one-ounce rounds.
Here's a chart that Nick Laird sent me late on Friday evening that I just didn't have the space for in Saturday's column.  It's the Total PMs Pool...and it's self-explanatory.
(Click on image to enlarge)

Selected news items.....



CFTC looks into possible price manipulation of interest-rate swaps

The Commodity Futures Trading Commission has issued subpoenas to ICAP Plc brokers and as many as 15 Wall Street banks as part of an investigation into possible price manipulation of benchmark interest-rate swaps, according to people familiar with the matter.
The CFTC plans to interview about a dozen current and former brokers at ICAP's Jersey City, New Jersey, office as well as dealers that contribute prices used to set the daily ISDAfix swap rates, said three of the people, who asked not to be named because the matter is private. The regulator is probing whether ICAP brokers are colluding with dealers who stand to profit from inaccurate quotes, including failing to update published market prices after trades occur, one of the people said.
The ISDAfix levels, which the Federal Reserve includes in a daily report on money-market rates, are used by everyone from corporate treasurers to money managers to determine borrowing costs and to value much of the $379 trillion of outstanding interest-rate swaps globally.
This Bloomberg piece from yesterday is something I found in a GATA release.


Eurozone faces new challenge as Portugal blocks cuts

The single currency bloc has already been destabilised by Cyprus and now faces fresh uncertainty if Lisbon cannot find new savings to meet the conditions of its €78bn (£66bn) bail-out.
Pedro Passos Coelho, Portugal’s prime minister, said on Sunday night that the rejection posed “serious obstacles and risks” to Portugal’s progress in meeting its bail-out commitments, but that it would “do everything to avoid a second rescue”.
“The government is committed to all the objectives of the programme,” he said.
The prime minister said the ruling would mean other deep spending cuts, in social security, health, education and public enterprises
This story was posted on The Telegraph's website early on Monday morning BST...and it's the second story in a row from Roy Stephens.


Record 2,564 Spanish Firms File For Bankruptcy In Q1, 45% Higher Than Year Ago

Perhaps the best measure to gauge the European recovery is by the soaring number of companies going bust, because only from this perspective is Europe finally "fixed." As Reuters reports citing a report by Axesor, a record 2,564 companies filed for "insolvency proceedings", a more palatable version of the word bankruptcy, in the first quarter - an increase of 10% from Q4 and up a whopping 45% from Q1 2012.
The reasons given: "tight credit conditions and meager demand." Or in other words: no actual cash flow to fund demand for products and services.
This Zero Hedge piece was posted on their website early yesterday afternoon Eastern time...and it's courtesy of reader 'David in California'.


Slovenia Bailout Signaled by Worsening Debt Swaps: Euro Credit

Slovenia’s creditworthiness is deteriorating at the fastest pace in the world after Cyprus as investors speculate a banking crisis will force it to follow the island nation and become the sixth euro country to need aid.
Credit-default swaps insuring Slovenian debt for five years soared as much as 66 percent to a six-month high of 414 basis points on March 28 from 250 on March 15, the last trading day before Cyprus announced plans for its rescue. It’s now up 34 percent at 336 basis points, compared with a 45 percent increase for Cyprus and 18 percent for Portugal in the period.
Slovenia’s two-week old government is struggling to prop up banks hit by recession and saddled with bad loans worth about a fifth of the country’s economic output.  “Since the Cyprus resolution, Slovenia has been in the spotlight,” said Bas van Geffen, an analyst at Rabobank International in Utrecht, Netherlands. “The country’s smallness is now clearly a drawback in the post-Cyprus era, which has fueled speculation that the country might be the next Cyprus.”
This Bloomberg story was posted on their website in the wee hours of Monday morning Mountain Daylight Time...and I thank Manitoba reader Ulrike Marx for sending it.


Doug Noland: Kuroda Leapfrogs Bernanke

"These central bankers seem oblivious to the fact that they are on a perilous course that risks a crisis of confidence in “money,” not to mention global risk markets. The history of monetary fiascos is replete with out of control inflations. Once the money printing gets heated up, there is a strong proclivity for one year of elevated money printing ensuring only more intense pressure for even greater printing the next. Actually, this dynamic has been in play for years now. After having carefully studied these types of dynamics, I’ll confess it’s almost surreal to witness them in real time."
Doug pretty much sums it all up in the above paragraph from his latest Credit Bubble Bulletin posted over at the prudentbear.com Internet site on Friday evening. Doug's 10-plus years of commentaries have always been must readsfor me...and this one was no exception.  I thank reader U.D. for sending it.


Seven King World News Blogs/Audio Interviews



Azerbaijan's SOFAZ buys one more ton of Gold

Azerbaijan's State Oil Fund (SOFAZ) purchased one more ton of gold on the first week of this month to make the total at 4 tons.
UK’s Brinks Global Services completed the purchase for SOFAZ in compliance with the rules set forth by the LBMA. The gold was temporarily stored in the vaults of the Central Bank of the Republic of Azerbaijan.
The State Oil Fund of Azerbaijan, the sovereign wealth fund, was set up in December 1999 by the Presidential Decree as an extra-budgetary entity which accumulates and manages oil and gas revenues of the country.
In accordance with the amendments under the Presidential decree, up to 5 percent of the investment portfolio can be invested in gold. Earlier SOFAZ announced plans to bring its gold reserves to 30 tons by late 2013.
This very interesting article, filed from Baku, was posted on thebullionstreet.com Internet site during the lunch hour India Standard Time on Monday.  Nice photo, too!  I thank Marshall Angeles for digging it up for us.


New Dubai gold and PM refinery to be one of world’s largest

Hard on the heels of an announcement that it is to build a gold smelter and refinery in Suriname in South America in conjunction with that country’s government, Dubai’s Kaloti group has announced it is to build a US$60 million state-of-the-art gold and precious metals refinery in its own country – and this is expected to be one of the world’s largest such facilities.  Kaloti already has a gold and precious metals refinery in nearby Sharjah in the United Arab Emirates.
The Kaloti Jewellery Group already reckons to be one of the world’s largest gold and precious metals refiners and trading houses.  The company, its subsidiaries and associates employs 300 people in seven countries Dubai, Singapore, Hong Kong, USA, Turkey, Suriname as well as its refinery in Sharjah. The company says it thus provides a complete and comprehensive solution for the precious metals industry including assaying, logistics, bullion trading and refining and vaulting services.
This excellent article by Lawrence Williams was posted on the mineweb.comInternet site yesterday morning...and I thank Ulrike Marx for sharing it with us.


From South Africa: How the U.S. herds the 'sheep' away from the gold market

The egregious conduct of the giant banking establishments could never have been allowed to occur if they had been subjected to the discipline of gold. Those who consider that gold has use only as adornment suffer from a conspicuous lack of imagination.
It cannot be seriously disputed that the US administration intervenes to suppress the price of gold. In this way, investors are to be herded, like sheep, into the investment forms the administration has chosen for them. Sociologist Max Weber observed that the state was in essence a criminal institution with the power of law. His pronouncement appears as apposite now as ever.
This absolute must read article appeared on Business Day Live website in South Africa on Monday...and pretty much sums up the current situation in the gold market...except for the willfully blind.  I found it hiding in a GATA release.

Giving Cyprus (and the world) ideas about alternatives in money

GoldMoney and the Bitcoin Foundation have made a 14-minute documentary from interviews of residents of Cyprus, whose money and wealth have just been pretty much yanked out from under them, inviting them to consider alternatives to the money they have been using.
GoldMoney's Alasdair Macleod concludes the video this way: "We want to invite people around the world to think of a better, more honest money system, a world in which individuals are free to choose their own currencies -- whether that is paper money, bitcoin, gold, silver, or something else, and in any combination. In a free society we hold the freedom of choice sacrosanct and value the ability to choose between multiple goods and services. Why should this not apply to money as well?"
This 14-minute documentary is certainly worth your time...as is the rest of Chris Powell's preamble in this GATA release from Saturday.

With counterintuitive action, the gold price suppression gets more obvious every day

Every day it seems that gold price suppression couldn't get more obvious and yet every next day it does get more obvious, as GoldMoney's Alasdair Macleod notes today.
"When news such as the Cyprus banking debacle hits the headlines, gold and silver get sold down aggressively," Macleod writes. "This contrary action is consistent with intervention designed to bolster confidence in paper money. The evidence that central banks and their agencies have been suppressing the price of gold is therefore overwhelming, and Paul Roberts' analysis confirms why this is happening."
This commentary by Alasdair is another article worth reading...as is Chris Powell's extensive introduction.  It was posted on the gata.org Internet site on Sunday.


BNN lets Embry discuss gold market manipulation

Canada's Business News Network a bit surprisingly today gave Sprott Asset Management's John Embry 10 minutes to talk about gold market manipulation, so maybe the topic isn't quite as forbidden at BNN anymore as it was whenBNN discouraged newsletter writer Jay Taylor from talking about it on the air last year.
The two links embedded in this GATA release from Monday are certainly worth your while as well.


¤ THE WRAP

[In case you missed the meaning in the last cartoon...'Fat Man' and 'Little Boy' were the code names of the two atomic bombs that were dropped on Hiroshima and Nagasaki...which brought the war against Japan to an end. - Ed]
The problem with socialism is that you eventually run out of other people's money. - Margaret Thatcher
With the prices of both gold and silver miles below their respective 20, 50 and 100-day moving averages, there's not much incentive for the technical funds to cover short positions or go long these markets...and it remains to be seen how long it takes for a rally to develop that will force them into action.  With that in mind, JPMorgan et al can keep price range-bound below these averages with little effort...and if Monday's price action is any indication, that appears to be what's happening.
But what's going on in the paper world is light years removed from what's happening in the retail market for bullion...as there is no sign anywhere that I can see that the public is backing off in their attempts to partially exit the banking system.  The recent events in Cyprus and Japan...plus the new sale prices that JPMorgan et al have provided in all four precious metals...has brought out another round of determined buyers.
As I said in this space during the last week, the buyers' attitudes have changed.  Before it was about making a buck...now it's about wealth preservation and the world's central banks' wall-to-wall ZIRP.  I'd call it a paradigm shift of sorts...phase transition as they say in physics, or 'The 100th Monkey Principle' in psychology...and as Ted Butler mentioned on the phone yesterday, the next rally will most likely bring out another wave of buyers, most likely even stronger than the two big rallies that we've experienced during the last eighteen months.
That's why I've always been a believer that we will see an overnight revaluation in all the precious metals.  The financial powers that be cannot afford another scenario like they watched unfold in mid 2010 until April 2011, where it became obvious that a rush to precious metals had begun.  That was when the May 1st drive-by shooting in silver occurred...but that has only postponed the day of reckoning...and now demand is on the rise again.  If another public gold rush does develop, it should be a sight to see.
As Jim Rickards said in the second interview posted in the 'Critical Reads' section of today's column..."the next crisis is the upcoming collapse of the international monetary system"...and it's only upcoming events like this where the powers that be can trot out HM The Queen for such a photo op.  And when it does arrive, you'll either be all the way in, or all the way out.  If the Chinese and Russian [amongst others] are buying gold hand over fist...that should be all the reason you need to the same yourself.
Nothing of importance happened in either precious metal in Far East trading on their Tuesday...and it's pretty much the same now that London has been open for a couple of hours.  Volumes are on the lighter side...and dollar index is trading aimlessly in a broad range between 82.50 and 82.80.  Nothing to see here.  Maybe things will change when New York opens.
See you here tomorrow.
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