I challenge anyone one to provide credible evidence that manipulation of gold and silver doesn't exist after Friday ....... bring it ! Friday was not caused by a rising dollar ( see the data on the USD below) , the Friday massacre was not foreshadowed by Asian trading nor did the first hour of trading in London provide a tell - then wham , the boys and girls got the playbook for the day and just got really busy ..... a drop of 84 bucks for gold spot from Thursday ( down to 1477 ) and a 1.81 drop for silver ( down to 25.85 ) , brings 1450 ( funny how that hits GS target below ) and 25.50 into view for gold and silver respectively - one can then see 1400 and 25 for both looming ! Capitulation coming over the next couple of trading days ( after 25 , next major support for silver is about 22 - then 18 ) ?
This week's COT was blase , but after Friday , can you imagine what the COT will look like next Friday ? I think massive covering of shorts could be revealed as certainly one heck of an opportunity was presented Friday !
2011 yearly chart is interesting .... considering where we are now ( 1477 spot price Friday ) , 1500 support breached , 1450 support in view which could lead down to 1400..... after 1400 - 2011 bottom was at 1320....not a prediction , but it is POSSIBLE to see margins calls / stop running and typical Cartel manipulation drive gold down to 1300 - 1320 , where we should hopefully see strong support appear - Fibonnaci technical analysis would put 38.2 percent level for gold at 1285 , 50 percent level at 1088( 1285 therefore could be tested in this move. ) . Stay tuned !
One question in my mind - why have CME margins not been changed for gold and silver ( reduced 2/7 - The CME cut gold initial and maintenance margins from $6,600 & $6,000 to $5,940 & $5,400 respectively, and also slashed silver initial & maintenance margins from $12,100 & $11,000 to $10,400 & $9,500, a reduction of 10% in gold & 14% in silver !) , kinda volatile , right ? If we see CME raise margins for gold and silver next week , watch out ?
http://www.kitco.com/reports/KitcoNews20130412_technical.html
****
http://www.zerohedge.com/news/2013-04-14/gold-asian-liquidation-mode
Submitted by Tyler Durden on 04/14/2013 22:02 -0400
And London will be calling in a few hours.....
http://goldtrends.net/FreeDailyBlog?mode=PostView&bmi=1267250
( One point of view of Friday takedown in gold... )
http://ausbullion.blogspot.com.au/2013/04/10-of-us-silver-supply-slides-into.html
( American Eagles are presently being rationed. But obviously losing 10 percent of US silver supply for the considerable future on 4/10 ( and news of same crossing 4/11) had no " fundamental effect " - in light of the silver massacre of 4/12.... )
http://www.infowars.com/assault-on-gold-update/
http://www.tfmetalsreport.com/blog/4641/here-where
http://www.zerohedge.com/news/2013-04-13/john-paulson-loses-over-300-million-fridays-gold-tumble
Submitted by Tyler Durden on 04/13/2013 18:11 -0400
http://silverdoctors.com/sd-metals-markets-413-gold-silver-on-verge-of-capitulation-to-1400-22-prior-to-massive-rally/
( unless you on the Fed's email daisy chain , you simply don't know the playbook - but this could come to pass..... )
Paper Metals Market Madness: Silver Breaks $26 And Gold Dives Below $1500
The big story tonight is the epic raid Friday in the paper metals markets, as over 500 tons of paper gold were dumped on the market triggering sell-stops and capitulation in gold and silver, as gold broke below $1500 to $1485, and silver broke below significant long term support at $26 to as low as $25.72.
It was truly an epic sell-off, bringing back memories of the May 2011 silver collapse.
There was really no follow-through to this morning’s small rally, no conviction buying in the paper markets of any sort. We breached the low of $26.02 for the entire 2 year correction early this afternoon and with the 50 cent sell off at the end of the access session to close the week at $25.85, there is significant risk of a gap down overnight Sunday and early Monday, with the next major support in the $22 area. I’d give the odds at least 50/50 of a final gap-down spike low with silver dropping potentially as low as $22 and gold now potentially testing $1400 early next week.
That being said, silver was down almost $2, nearly 7%, and gold was down $85 today, nearly 6%, its largest single day decline since the February 29th 2012 Leap Day Massacre when LTRO2 was announced in Europe.
Gold hasn’t trading in the upper $1400′s since summer of 2011. Professionals are buying into this weakness, and when you look at the fundamentals with Japan going nuclear on QE just last week, the whole Cyprus bail-in contagion going global: 6% and 7% weakness in gold and silver are being responded to professional with accumulation. China has also been a massive buyer.
That being said, the potential for a capitulation spike low is now very real, so while today’s weakness must be responded to professionally with accumulation, it might be prudent to save a bit of dry powder for the event of a final capitulation overnight Sunday and into Monday.
Just as was seen in the massive sell-offs in 2008 and May of 2011, premiums are skyrocketing for physical metal (APMEX Buy-back price for 90% is now a whopping $3 OVER SPOT!), and even if the paper price trades down to $22 and $1400 early next week, it wouldn’t surprise us at all to see price for physical metal not dip much below $1600 and $30.
We set an all-time sales record today at SDBullion- I think we burned through nearly 10,000 ounces of silver. Our suppliers wouldn’t even answer the phones. One of our suppliers informed us they had already sold thousands of ounces of gold and hundreds of thousands of ounces of silver… before noon!
The demand for physical is simply enormous, and will result in widening spreads and premiums between paper and physical metal.
Vampire Squid Must Eat: The Set-up Before Cyprus Forks Over Gold
This movie is getting old. It would be one thing if the Western banksters were actually tossing some scraps around as they rape and pillage future generations — the somewhat hidden outcome of the dumping of debt obligations on nations to “fix” the insolvency the bankers created in the first place. But these thieves have absolutely no honor. Policy makers in Washington DC and Western Europe are no better. Talk about a bought and paid for lot. If money and perks aren’t enough for these createns, blackmail “control files” serve as backstop.
Let’s unpack the latest statements from Goldman Sachs’ alumnus and current European Central Bank head Super Thief Mario Draghi. Alan — babble them into indifference — Greenspan could learn a thing or two from Mario about lying.
Draghi was quoted by Bloomberg, as SilverDoctors reported:
Asked about a letter he wrote to Cyprus President Nicos Anastasiades, Draghi said the letter is “very, very clear.” He said the government must abide by the central bank’s handling of the gold stock, since it is independent from political control under European rules.
“The independence of central banks in the euro area is enshrined in the treaty,” Draghi said. “The ECB will look at developments in Cyprus from this angle.”
Speaking alongside Draghi, Dutch Finance Minister Jeroen Dijsselbloem said selling gold “has always been an option put forward by the Cypriot authorities.”
“But as mentioned in the program documentation, this is a decision to be made independently by the Cypriot central bank,” he said. “And it’s not any demand from the troika or the eurogroup.”
The full Bloomberg story is linked within the original SilverDoctors.com article.
Any notion that the Cypriot Central Bank having independence from anything is farcical. If a robber walks into your house and sticks a gun to your head, perhaps Dutch Finance Minister Jeroen Dijsselbloem would arrogantly suggest, “Giving the robber your money has always been an option put forward by other hold-up victims.”
We need to go back in time to understand how the game (arguably, a scam) is played:
First, Cypriot banksters make bad loans, for which traditional capitalist system remedies such as placing banks into receivership are not called upon to honestly fix the mess. Next, the situation becomes a crisis as credit to the Cypriot banking system dries up, a perfectly natural and expected reaction by even rational and non-corrupt bankers who are unwilling to lend further to bad creditors.
Hang in here, dear reader. It’s about to get interesting.
What does Draghi and his Brussels Brethren do next? Why, of course, tell the Cypriot government they can turn to the oh-so-independent Cypriot central bank to issue special loans to insolvent Cypriot banks under a program called Emergency Liquidity Assistance (ELA). That has been going on long before the Cypriot crisis was worldwide news. The ECB authorizes this direct ELA lending by the Cypriot national bank, which includes more permissive collateral requirements to grease the injection of liquidity — because no real banker not backstopped by taxpayers socializing losses would make such risky loans to already hobbled creditors without permissive collateral requirements! Result? A weak and failing Cypriot financial system is turned into a liquidity crack dependent, flat on it’s back and at the total mercy of subsequent demands from the ECB.
The end game is now set-up. Draghi gets to slither around in his calm, technocratic demeanor, claiming that the Cypriot central bank has independence while the ECB and the Brussels Brethren demand that the Cypriot central bank sell its gold to cover the ELA credit issued to supposedly fix the insolvent banking system. It’s not just gold the banksters are after, by the way. Cypriot gold is just the icing on the cake. The bankster bad loan losses above and beyond the value of the gold are entirely socialized on the backs of the citizens of Cyprus, which enables Brussels to exert greater political control over Cyprus, a supposedly sovereign nation.
Meanwhile, not one in ten thousand media professionals have the intellectual curiosity to investigate this chain reaction setup. Even those journalists that do understand usually dare not speak truth to power lest they find themselves facing friction from their employers, who may very well be owned outright by financial sector interests (e.g., Bloomberg, and another fine example, CNBC, and it’s 49% owner, GE, which also happens to own shadow banking system titan GE Capital, etc.).
Mainstream Media that isn’t directly owned by the financial sector must deal with other challenges because they either have dependence on financial sector advertising directly, or are simply aligned with general corporate interests. The average man on the street has no hope of learning the truth without spending considerable time seeking out alternative resources like SilverDoctors.com and the observations of financial market professionals like myself — people that have exited the belly of the beast in disgust and are willing to describe the machinations of that beast’s incessant, criminal appetite because our paychecks are not beholden to the beast.
# # # # #
Tribute To Bill Murphy, Chris Powell And GATA: An Open “Letter” From Eric Dubin And SilverDoctors.com
Apparently, cartel actions have become so obvious that an increasing number of money managers feel compelled to speak up. The latest: well known money manager and former candidate for US Senate Peter Schiff. During a CNBC interview, Mr. Schiff has finally declared that gold might be manipulated in service of the Fed:
“I think goldman wants to knock the price down either because they want to buy more cheaper for themselves, or maybe they’re trying to help out their friends out at the Federal Reserve. They have a pretty cozy relationship. The Federal Reserve does not want the price of gold to go up because it invalidates everything that they’re doing. So, they might be manipulating the market for that reason.” - Peter Schiff
It took you long enough, but Mr. Schiff we welcome you to “planet reality.” Or, as Bill Murphy would say, “Welcome to planet GATA” (versus “planet Wall Street”).
For well over a decade, Bill Murphy, Chris Powell and GATA have tirelessly collected documentation proving the existence of the gold cartel, detailing how and why they act. Detractors usually focus on Bill Murphy’s tendency towards exasperation in the face of the mainstream media’s general refusal to investigate this ongoing activity. In truth, Bill Murphy has not been tilting at windmills. The cartel is real and Murphy’s righteous indignation — combined with a huge dose of Irish tenacity — has served him well as GATA’s leader.
Bill Murphy is an American hero in the most classic sense of the term. GATA is taking up the fight of the underdog, the average citizen unaware how distortions in the capital markets injure the economy and the lives of millions. Consequences of the cartel’s actions transcend manipulation of precious metals markets. Consider the Fed and US Treasury’s management of the bond market. Few media professionals find it odd that management of the bond market and the price of money (interest rates) is open public policy and ok to talk about. But talk about the management of the price of gold, which indirectly has a massive impact on interest rates and confidence required to support the exchange value of the US dollar, is strictly verboten.
Truth be told, in order for the Fed’s public policy of control of the bond market to work, fund managers, traders and other market participants MUST know about it. That’s the jawboning propaganda mechanics behind so-called “financial repression.” The whole point is to make market actors think, “don’t fight the Fed” while pretending interest rates can stay low, reflating the housing market while banks take part of the liquidity they receive from the Fed in exchange for the crap mortgage back securities banks hold. The so-called liquidity then flows into the stock market and beyond. Neat trick. All the while, the common man and generations after him get stuck with the tax bill to pay off all that added debt while banksters socialize their losses.
With scams this large, is it any wonder there’s a propaganda war against truth telling organizations like GATA?
Yes, there have been times when Bill Murphy makes market calls that fail. All rational analysts, traders and investors understand being wrong from time to time is normal. Yes, there have been times when Bill Murphy’s righteous indignation has led him to call a given day’s gold trading action cartel-driven when it probably wasn’t (although, the past year has witnessed an unusually high level of cartel activity). So what? When it comes to the big picture, GATA’s amassed documentation speaks for itself. GATA, Chris Powell — and certainly — Bill Murphy have integrity and guts. Rather than criticizing them, market participants should be opening their checkbooks and writing a tax deductible donation to GATA. Market participants should also get off their duff and actually read all the documentation freely available at GATA.org.
Perhaps Peter Schiff has finally done just that. Who’s next? Pretend cartel denier but otherwise brilliant James Grant of Grants Interest Rate Observer? Heck, it’s my opinion that even the otherwise non-dogmatic Rick Rule hasn’t even bothered to take a week, roll-up his sleeves, and carefully examine the GATA document treasure trove. How could I make such a seemingly preposterous statement about Eric Sprott’s right hand man? For starters, Rule makes no secret he’s a bit skeptical about at least the level of manipulation in the precious metals market. He describes himself as skeptical about the ability for conspiracies and agendas to be able to be hidden for extended periods of time. During a recent radio interview with Al Korelin, Rule noted how no matter what manipulation efforts he saw during his days in the Vancouver investment community, truth eventually came to light.
How quaint.
Mr. Rule, the world of Vancouver resource finance amounts to a backwater when compared to the massive geostrategic imperatives necessary to maintain the dollar as the world reserve currency — with all the benefits that accrue to the nation burdened with such an exorbitant privilege.
Don’t get me wrong. I deeply respect Rick Rule. His intellect is at genius level, and his abilities as an investor are legendary. I’m in my mid 40s. When I grow up I hope to have at least half his wisdom and mastery over as many fields as Mr. Rule. Nevertheless, someone has got to call him out because resting on assumptions and dogmatic logic about what markets should and should not do just isn’t good enough for someone as good as Mr. Rule. Mr. Rule didn’t make billions as a slave to normalcy bias, and it’s time he joins GATA’s apparent latest (albeit not credited) convert, Peter Schiff.
An ancient Chinese proverb comes to mind: “The beginning of wisdom is to call things by their proper names.”
Enough said.
Thank you, Bill Murphy, Chris Powell and all the people that have helped make GATA what it is today. There will come a day when you are seen for what you are: true American heros.
Sincerely,
Eric Dubin
http://hat4uk.wordpress.com/2013/04/13/gold-greed-global-collapse-who-benefitted-most-from-yesterdays-spectacular-fall/
Submitted by Tyler Durden on 04/10/2013 07:22 -0400
http://www.caseyresearch.com/gsd/edition/lawrence-williams-gold-price-manipulation-the-never-ending-game/
http://silverdoctors.com/hypothermia-contagion-in-the-eurozone/#more-24845
( Is there a correlation between Cyprus being forced to turnover their gold to the Troika , the ongoing incredible manipulations of gold and silver and the massive deleveraging of gold by the West to China ? )
http://www.paulcraigroberts.org/
For Americans, financial and economic Armageddon might be close at hand. The evidence for this conclusion is the concerted effort by the Federal Reserve and its dependent financial institutions to scare people away from gold and silver by driving down their prices.
When gold prices hit $1,917.50 an ounce on August 23, 2011, a gain of more than $500 an ounce in less than 8 months, capping a rise over a decade from $272 at the end of December 2000, the Federal Reserve panicked. With the US dollar losing value so rapidly compared to the world standard for money, the Federal Reserve’s policy of printing $1 trillion annually in order to support the impaired balance sheets of banks and to finance the federal deficit was placed in danger. Who could believe the dollar’s exchange rate in relation to other currencies when the dollar was collapsing in value in relation to gold and silver.
The Federal Reserve realized that its massive purchase of bonds in order to keep their
prices high (and thus interest rates low) was threatened by the dollar’s rapid loss of value in terms of gold and silver. The Federal Reserve was concerned that large holders of US dollars, such as the central banks of China and Japan and the OPEC sovereign investment funds, might join the flight of individual investors away from the US dollar, thus ending in the fall of the dollar’s foreign exchange value and thus decline in US bond and stock prices.
Intelligent people could see that the US government could not afford the long and numerous wars that the neoconservatives were engineering or the loss of tax base and consumer income from offshoring millions of US middle class jobs for the sake of executive bonuses and shareholder capital gains. They could see what was in the cards, and began exiting the dollar for gold and silver.
Central banks are slower to act. Saudi Arabia and the oil emirates are dependent on US protection and do not want to anger their protector. Japan is a puppet state that is careful in its relationship with its master. China wanted to hold on to the American consumer market for as long as that market existed. It was individuals who began the exit from the US dollar.
When gold topped $1,900, Washington put out the story that gold was a bubble. The presstitute media fell in line with Washington’s propaganda. “Gold looking a bit bubbly” declared CNN Money on August 23, 2011.
The Federal Reserve used its dependent “banks too big to fail” to short the precious metals markets. By selling naked shorts in the paper bullion market against the rising demand for physical possession, the Federal Reserve was able to drive the price of gold down to $1,750 and keep it more or less capped there until recently, when a concerted effort on April 2-3, 2013, drove gold down to $1,557 and silver, which had approached $50 per ounce in 2011, down to $27.
The Federal Reserve began its April Fool’s assault on gold by sending the word to brokerage houses, which quickly went out to clients, that hedge funds and other large investors were going to unload their gold positions and that clients should get out of the precious metal market prior to these sales. As this inside information was the government’s own strategy, individuals cannot be prosecuted for acting on it. By this operation, the Federal Reserve, a totally corrupt entity, was able to combine individual flight with institutional flight. Bullion prices took a big hit, and bullishness departed from the gold and silver markets. The flow of dollars into bullion, which threatened to become a torrent, was stopped.
For now it seems that the Fed has succeeded in creating wariness among Americans about the virtues of gold and silver, and thus the Federal Reserve has extended the time that it can print money to keep the house of cards standing. This time could be short or it could last a couple of years.
However, for the Russians and Chinese, whose central banks have more dollars than they any longer want, and for the 1.3 billion Indians in India, the low dollar price for gold that the Federal Reserve has engineered is an opportunity. They see the opportunity that the Federal Reserve has given them to purchase gold at $350-$400 an ounce less than two years ago as a gift.
The Federal Reserve’s attack on bullion is an act of desperation that, when widely recognized, will doom its policy.
As I have explained previously, the orchestrated move against gold and silver is to protect the exchange value of the US dollar. If bullion were not a threat, the government would not be attacking it.
The Federal Reserve is creating $1 trillion new dollars per year, but the world is moving away from the use of the dollar for international payments and, thus, as reserve currency. The result is an increase in supply and a decrease in demand. This means a falling exchange value of the dollar, domestic inflation from rising import prices, and a rising interest rate and collapsing bond, stock and real estate markets.
The Federal Reserve’s orchestration against bullion cannot ultimately succeed. It is designed to gain time for the Federal Reserve to be able to continue financing the federal budget deficit by printing money and also to keep interest rates low and debt prices high in order to support the banks' balance sheets.
When the Federal Reserve can no longer print due to dollar decline which printing would make worse, US bank deposits and pensions could be grabbed in order to finance the federal budget deficit for couple of more years. Anything to stave off the final catastrophe.
The manipulation of the bullion market is illegal, but as government is doing it the law will not be enforced.
By its obvious and concerted attack on gold and silver, the US government could not give any clearer warning that trouble is approaching. The values of the dollar and of financial assets denominated in dollars are in doubt.
Those who believe in government and those who believe in deregulation will be proved equally wrong. The United States of America is past its zenith. As I predicted early in the 21st century, in 20 years the US will be a third world country. We are halfway there.
http://canadafreepress.com/index.php/article/53842
( this has been pretty spot on - DHS Insider first reported concerns for this spring back in December....)
This week's COT was blase , but after Friday , can you imagine what the COT will look like next Friday ? I think massive covering of shorts could be revealed as certainly one heck of an opportunity was presented Friday !
2011 yearly chart is interesting .... considering where we are now ( 1477 spot price Friday ) , 1500 support breached , 1450 support in view which could lead down to 1400..... after 1400 - 2011 bottom was at 1320....not a prediction , but it is POSSIBLE to see margins calls / stop running and typical Cartel manipulation drive gold down to 1300 - 1320 , where we should hopefully see strong support appear - Fibonnaci technical analysis would put 38.2 percent level for gold at 1285 , 50 percent level at 1088( 1285 therefore could be tested in this move. ) . Stay tuned !
One question in my mind - why have CME margins not been changed for gold and silver ( reduced 2/7 - The CME cut gold initial and maintenance margins from $6,600 & $6,000 to $5,940 & $5,400 respectively, and also slashed silver initial & maintenance margins from $12,100 & $11,000 to $10,400 & $9,500, a reduction of 10% in gold & 14% in silver !) , kinda volatile , right ? If we see CME raise margins for gold and silver next week , watch out ?
http://www.kitco.com/reports/KitcoNews20130412_technical.html
****
From a Fibonacci technical analysis perspective, which is a valid and respected area of chart study, the situation is not so bearish for gold.
Followers of Fibonacci consider serious chart damage to have occurred in a bull market move when prices drop below significant "retracement" levels of the previous up-trending price move. The first major Fibonacci level is 38.2% and then 50%, with the 50% retracement level arguably being the most important. The price move from the 2001 low of $255 to the 2011 high of$1,923 sees a 38.2% retracement level come in at $1,285. A 50% retracement of that same move comes in at $1,088.
Followers of Fibonacci consider serious chart damage to have occurred in a bull market move when prices drop below significant "retracement" levels of the previous up-trending price move. The first major Fibonacci level is 38.2% and then 50%, with the 50% retracement level arguably being the most important. The price move from the 2001 low of $255 to the 2011 high of$1,923 sees a 38.2% retracement level come in at $1,285. A 50% retracement of that same move comes in at $1,088.
2011 gold chart....
| Exchg | Asset Class | Product | Product Code | Start Period | End Period | Initial | Maint. | Initial Vol. Scan | Maint. Vol. Scan |
|---|---|---|---|---|---|---|---|---|---|
| CMX | METALS | COMEX 100 GOLD FUTURES | GC | 04/2013 | 08/2013 | 5,940 USD | 5,400 USD | 0.06 | 0.05 |
| CMX | METALS | COMEX 100 GOLD FUTURES | GC | 10/2013 | 12/2013 | 5,940 USD | 5,400 USD | 0.03 | 0.03 |
| CMX | METALS | COMEX 100 GOLD FUTURES | GC | 02/2014 | 12/2018 | 5,940 USD | 5,400 USD | 0.02 | 0.02 |
Silver
| Exchg | Asset Class | Product | Product Code | Start Period | End Period | Initial | Maint. | Initial Vol. Scan | Maint. Vol. Scan |
|---|---|---|---|---|---|---|---|---|---|
| CMX | METALS | COMEX 5000 SILVER FUTURES | SI | 04/2013 | 07/2013 | 10,450 USD | 9,500 USD | 0.12 | 0.11 |
| CMX | METALS | COMEX 5000 SILVER FUTURES | SI | 09/2013 | 12/2013 | 10,450 USD | 9,500 USD | 0.06 | 0.05 |
| CMX | METALS | COMEX 5000 SILVER FUTURES | SI | 01/2014 | 12/2017 | 10,450 USD | 9,500 USD | 0.03 | 0.03 |
http://www.zerohedge.com/news/2013-04-14/gold-asian-liquidation-mode
Gold, Silver In Asian Liquidation Mode
UPDATE: Spot Gold $1426 (from $1564 highs Friday)
As Asia opens to the bloodbath that occurred in precious metals on Friday in the US, it would appear that more than a few traders got the 'tap on the shoulder'. Shanghai futures are limit-down and spot gold and silver prices are plunging once again as we suspect forced margin-calls and the raising of cash (to cover extreme variation margin - or capital reserves) needed in JGB positions, as we explained here.Liquidation is certainly the theme of the evening - investors are selling JGBs (6th day in a row of multiple-sigma moves in long-dated Japanese bonds 30Y +56bps off its post-BoJ lows at 1.60%!), selling Japanese stocks (Nikkei -128 pts, second biggest down day post-BoJ), selling US Treasuries (futures down), selling gold and silver (gold spot down over $100 from Friday's highs), and despite selling JPY early (retracing 30% of the weakness post-BoJ), JPY is practically unchanged (jerking lower only on the US futures open and Asian equity open) - it seems Mrs.Watanabe is struggling and unwinding some her excessively short JPY and long NKY positions.
Gold down over $100 from Friday's highs...
Silver ugly too...
Another day, another 4-sigma move in JGBs...
and post the China data...
- GDP Miss
- Retail Sales Miss
- Industrial Production Miss
- Fixed Asset Investment Miss
... everything is red - JGBs down, Japanese stocks down, US Stocks down, US Treasuries down, Gold and Silver down, Copper down, Oil down
Charts: Bloomberg
And London will be calling in a few hours.....
http://goldtrends.net/FreeDailyBlog?mode=PostView&bmi=1267250
( One point of view of Friday takedown in gold... )
http://ausbullion.blogspot.com.au/2013/04/10-of-us-silver-supply-slides-into.html
( American Eagles are presently being rationed. But obviously losing 10 percent of US silver supply for the considerable future on 4/10 ( and news of same crossing 4/11) had no " fundamental effect " - in light of the silver massacre of 4/12.... )
Sunday, April 14, 2013
10% of US Silver Supply Slides into the World's Largest Hole
Bingham Canyon Mine north wall slide update
Posted: April 11, 2013
South Jordan, Utah (April 11, 2013) - Kennecott Utah Copper’s Bingham Canyon Mine experienced a slide along a geotechnical fault-line of its northeastern wall at 9:30 p.m. MDT April 10, 2013. Monitoring systems identified the event as a single slide that failed progressively.
All employees are safe and accounted for. Rio Tinto’s Kennecott Utah Copper wants to publicly thank them for their efforts and cooperation.
The magnitude of the impact from the slide is unknown at this point. Experts are assessing the site remotely. Once it has been established that it is safe to send people into the mine for closer assessment next response steps will be determined.
As far as we can determine, there have been no impacts to the community. The movement has been contained to the mine and presents no threat to the public. Minimal dust resulted from the slide, in part, because of favorable weather conditions.
Pit wall movement is infrequent but something we monitor and plan for and no other events are anticipated.
Assault On Gold Update
Paul Craig Roberts
Infowars.com
April 14, 2013
Infowars.com
April 14, 2013
I was the first to point out that the Federal Reserve was rigging all markets, not merely bond prices and interest rates, and that the Fed is rigging the bullion market in order to protect the US dollar’s exchange value, which is threatened by the Fed’s quantitative easing. With the Fed adding to the supply of dollars faster than the demand for dollars is increasing, the price or exchange value of the dollar is set up to fall.
A fall in the dollar’s exchange rate would push up import prices and, thereby, domestic inflation, and the Fed would lose control over interest rates. The bond market would collapse and with it the values of debt-related derivatives on the “banks too big too fail” balance sheets. The financial system would be in turmoil, and panic would reign.
Rapidly rising bullion prices were an indication of loss of confidence in the dollar and were signaling a drop in the dollar’s exchange rate. The Fed used naked shorts in the paper gold market to offset the price effect of a rising demand for bullion possession. Short sales that drive down the price trigger stop-loss orders that automatically lead to individual sales of bullion holdings once their loss limits are reached.
According to Andrew Maguire, on Friday, April 12, the Fed’s agents hit the market with 500 tons of naked shorts. Normally, a short is when an investor thinks the price of a stock or commodity is going to fall. He wants to sell the item in advance of the fall, pocket the money, and then buy the item back after it falls in price, thus making money on the short sale. If he doesn’t have the item, he borrows it from someone who does, putting up cash collateral equal to the current market price. Then he sells the item, waits for it to fall in price, buys it back at the lower price and returns it to the owner who returns his collateral. If enough shorts are sold, the result can be to drive down the market price.
A naked short is when the short seller does not have or borrow the item that he shorts, but sells shorts regardless. In the paper gold market, the participants are betting on gold prices and are content with the monetary payment. Therefore, generally, as participants are not interested in taking delivery of the gold, naked shorts do not need to be covered with the physical metal.
In other words, with naked shorts, no physical metal is actually sold.
People ask me how I know that the Fed is rigging the bullion price and seem surprised that anyone would think the Fed and its bullion bank agents would do such a thing, despite the public knowledge that the Fed is rigging the bond market and the banks with the Fed’s knowledge rigged the Libor rate. The answer is that the circumstantial evidence is powerful.
Consider the 500 tons of paper gold sold on Friday. Begin with the question, how many ounces is 500 tons? There are 2,000 pounds to one ton. 500 tons equal 1,000,000 pounds. There are 16 ounces to one pound, which comes to 16 million ounces of short sales on Friday.
Who has 16 million ounces of gold? At the beginning gold price that day of about $1,550, that comes to $24,800,000,000. Who has that kind of money?
What happens when 500 tons of gold sales are dumped on the market at one time or on one day? Correct, it drives the price down. Investors who want to get out of large positions would spread sales out over time so as not to lower their sales proceeds. The sale took gold down by about $73 per ounce. That means the seller or sellers lost up to $73 dollars 16 million times, or $1,168,000,000.
Who can afford to lose that kind of money? Only a central bank that can print it.
I believe that the authorities would like to drive the gold price down further and will, if they can, hit the gold market twice more next week and put gold at $1,400 per ounce or lower. The successive declines could perhaps spook individual holders of physical gold and result in actual net sales of physical gold as people reduced their holdings of the metal.
However, bullion dealer Bill Haynes told kingworldnews.com that last Friday bullion purchasers among the public outpaced sellers by 50 to 1, and that the premiums over the spot price on gold and silver coins are the highest in decades. I myself checked with Gainesville Coins and was told that far more buyers than sellers had responded to the price drop.
Unless the authorities have the actual metal with which to back up the short selling, they could be met with demands for deliveries. Unable to cover the shorts with real metal, the scheme would be exposed.
Do the authorities have the metal with which to cover shorts? I do not know. However, knowledgeable dealers are suspicious. Some think that US physical stocks of gold were used up in sales in efforts to disrupt the rise in the gold price from $272 in December 2000 to $1,900 in 2011. They point to Germany’s recent request that the US return the German gold stored in the US, and to the US government’s reply that it would return the gold piecemeal over seven years. If the US has the gold, why not return it to Germany?
The clear implication is that the US cannot deliver the gold.
Andrew Maguire also reports that foreign central banks, especially China, are loading up on physical gold at the low prices made possible by the short selling. If central banks are using their dollar holdings to purchase bullion at bargain prices, the likely results will be pressure on the dollar’s exchange value and a declining market supply of physical bullion. In other words, by trying to protect the dollar from its quantitative easing policy, the Fed might be hastening the dollar’s demise.
Possibly the Fed fears a dollar crisis or derivative blowup is nearing and is trying to reset the gold/dollar price prior to the outbreak of trouble. If ill winds are forecast, the Fed might feel it is better positioned to deal with crisis if the price of bullion is lower and confidence in bullion as a refuge has been shaken.
In addition to short selling that is clearly intended to drive down the gold price, orchestration is also indicated by the advance announcements this month first from brokerage houses and then from Goldman Sachs that hedge funds and institutional investors would be selling their gold positions. The purpose of these announcements was to encourage individual investors to get out of gold before the big boys did. Does anyone believe that hedge funds and Wall Street would announce their sales in advance so the small fry can get out of gold at a higher price than they do?
If these advanced announcements are not orchestration, what are they?
I see the orchestrated effort to suppress the price of gold and silver as a sign that the authorities are frightened that trouble is brewing that they cannot control unless there is strong confidence in the dollar. Otherwise, what is the point of the heavy short selling and orchestrated announcements of gold sales in advance of the sales?
From Here, Where?
I've been thinking since yesterday about what I should write today. My first idea was to overwhelm you with information. Charts, data, links...the usual stuff, only more so. Then it dawned on me...that's probably not what you want to hear right now.
Besides there are all kinds of other websites out there where you can get that stuff. And today, I'm not too concerned about technicals. You see, my obligation is to you and to the other 28,939 unique IPs that hit this site yesterday. What do you need to hear? Or, put this way, if I was in your shoes, what would I want to hear from Turd this weekend?
Therefore I've decided, at least for today, to dispense with the charts and the links. I'm not going to mention the info that Andy shared on KWN or the fact that the GLD incredibly shed another 22.86 metric tonnes of "inventory" yesterday. (That's another 1,840 bars or 10 of my pallets, by the way.) Nope, none of that. If I were you, I'd want to be reassured that this wasn't all just a big crock of shit. All this gold stuff. All of the new reserve currency stuff. All of the Cartel manipulation stuff. All of it. I'd want to know that I hadn't been snookered and taken advantage of. I'd want to know that all of these "internet people" that I follow aren't simply making stuff up as they go along. And I'd want to know that they're sincere and that they're just as frustrated as I am.
So, I guess I'll start with myself. I think everyone knows this but I'll state it again: I'm just a nobody. I live in the American Midwest and my entire life has been spent doing pretty-much normal stuff. About five years ago, I quit the "corporate ladder" and pursued a path of independence. In 2009, I discovered ZeroHedge and the rest, as they say, is history. I now find myself in the middle of a global struggle against elements of the established central and bullion banking order. Suffice it to say: It's a surreal existence and not one that I could ever have envisioned. But I'm here now and waist-deep in the fight. Does this make me infallible or all-knowledgeable? Of course not. But I do my best to share with you, my dear reader, as much information and insight as I can.
The past eight months have been the most challenging. Not only have I lost all remaining faith in the idea that Americans live in a self-governing, representative republic, I've also been privileged(?) to witness first-hand some of the true depth of the corruption. Concurrently, I allowed myself to be totally caught off-guard by the ferocity of the attack on the precious metals after the announcement of QE∞. At this critical time, I should have anticipated that all necessary measures would be taken todiscourage the ownership of any form of money other than fiat currency. In failing to recognize this contingency, I failed you, my dear reader. Though I am 100% confident in the accuracy of my predictions of "the end of the Great Keynesian Experiment", I failed to recognize that this current beatdown was both predictable and inevitable. I hope we've both learned something and that we both are able to keep from making the same mistake in the future.
But mistakes will still be made and the point of this post is to assure you that I am on your side and doing everything in my power to help you prepare for what is inevitably coming. I do so with all sincerity of purpose and the cloak of this responsibility wears heavily upon my soldiers every day. Just ask MrsF or the LTs. They'll tell you how they often catch me staring blankly off into the distance, seemingly detached from the moment. "What are you thinking about", they'll ask. "Oh, dear, where do I begin...". But that's OK; I'm not looking for sympathy. I just want you to know that I, and most everyone else I've had the privilege to meet within the metals "community", truly believe in the cause and we are doing our best to help as many as possible.
I've often said that the greatest thing about "being Turd" is the access this grants me and the friendships and contacts that I've been able to make, so, please indulge me this. As stated above, this post is not about me. It's about what I assume must be on your mind this weekend. Namely, is this real and are the people with these websites trustworthy? For what it's worth, here's some of what I know (with apologies to anyone I mistakenly leave out):
- Jim Sinclair (Santa): JSMineset was the first metals website I ever visited. That I've actually gotten to know Jim a little bit is a great honor. I've known a couple of NYSE-listed CEOs is in my life and Jim is no different. He smart and wise. Measured in his words but with a vision. Under no circumstances does he need to publish JSM but he does. Why? Because he cares. Period. He firmly believes that he can clearly see what is coming and he's trying to use his platform to warn as many as possible. You can trust and believe in him because I do.
- Andrew Maguire: Not sure where to start and I'll try to keep this brief. Andy is a true gentleman and staunch ally of all of us. Sort of like Jim Sinclair, he doesn't need any of this but he's sick of the injustice and the inequity created by the bullion banks...and he's fighting back. Even though we've never met, I've come to trust him implicitly.
- Ned Naylor-Leyland: I don't think you could find a nicer guy on the face of the planet. Again, just like so many of us, Ned's sort of had this stuff thrust upon him. But he's an eloquent spokesman for our cause and I've come to value him as a friend.
- Jim Willie: You may think that Jim has some crazy theories. I know I do. But please do not doubt his intellect, his intuition or his sincerity. The guy is a true visionary and I have no doubt that, one day soon, he will be vindicated and treated as such.
- Bill Murphy and Chris Powell: The veteran soldiers of the movement. Though Bill might seem a bit of a loose cannon from time to time, he's a good man and tireless campaigner against The Cartels. Chris is a solid, upright and honest man whose commitment and integrity benefits all of us.
- Ted Butler, Ranting Andy, Mike Krieger, Jim Quinn, Kerry Lutz, Dave Janda, David Morgan, Alasdair Macleod, Jeff Nielson, Detlev Schilchter, John Williams: All of these guys either write newsletters or offer paid subscription analysis and I have either met them in person or made their acquaintance via Skype. All of them provide a valuable resource and all of them are doing everything they can to help the cause. I feel I can personally vouch for them and I strongly recommend that you trust them, too.
- There are many others but, for the sake of your time, I'll stop here.
I could go on but I don't want to turn this into some kind of LoveFest. The point of this is what I stated above. Though you should always question the things you read, do your own research and due diligence, I wanted to pass along what I know to reassure you about the gold community and those involved within it. I hope I've done just that.
Please utilize the rest of this weekend to get some much-needed rest and relaxation. To me, it's quite clear that we have entered the final chapter of bullion bank hegemony and the days ahead are only going to get more volatile. You're going to need information and wisdom to see your way through it so I hope that this post has been a valuable use of your time.
See you Monday.
TF
http://www.zerohedge.com/news/2013-04-13/john-paulson-loses-over-300-million-fridays-gold-tumble
John Paulson Loses Over $300 Million On Friday's Gold Tumble
There were many casualties following Friday's 4% gold rout, but none were hurt more than one-time hedge fund idol John Paulson, who according to estimates, lost more than $300 million of his own money in one day.
Per Bloomberg: "Paulson has roughly $9.5 billion invested across his hedge funds, of which about 85 percent is invested in gold share classes. Gold dropped 4.1 percent today, shaving about $328 million from his net worth on this bet alone." This is merely the latest insult to what has otherwise been a 3 year-long injury for Paulson and his few remaining investors, whose very inappropriately named Advantage Plus is among the bottom 10 hedge funds for the third year in a row. Yet despite being a one-hit wonder thanks to one lucrative idea (long ABX CDS) generated by one of his former employees (Pelegrini), Paulson still has been lucky enough to somehow amass a $10 billion personal fortune which can have a $300 million downswing in one day, even if it is in an asset class which eventually will go only one way - up. Unless, of course, like so many other fly by night billionaires, Paulson too hasn't somehow managed to lever up all his equity into numerous other downstream ventures, and where a $300 million blow up leads to margin calls and other terminal liquidity outcomes.
More:
“The recent decline in gold prices has not changed our long-term thesis,” John Reade, a partner and gold strategist at Paulson & Co., said in an e-mailed statement. “We started investing in gold at $900 in April 2009 and while it’s down from its peak to $1500, it’s up considerably from our cost.”Paulson investors can choose between dollar-and gold- denominated versions for most of the firm’s funds. In addition losses from bullion’s decline, investors in Paulson & Co. funds, including the firm’s founder, lost about $62 million today on their gold-stock investments, based on holdings as of Dec. 31, 2012. New York-based Paulson & Co.’s biggest wagers in miners include a 7.35 percent stake in AngloGold Ashanti Ltd.Paulson’s Reade said gold will continue to appreciate in the long run because governments are pumping money into the economy at a rate not seen before.“Federal governments have been printing money at an unprecedented rate,” said Reade. “We expect the strengthening of the economy and stock market to cause money supply to rise more than real growth and eventually lead to inflation. It is this expectation of paper currency debasement which makes gold an attractive long-term investment for us.”
That said, one doesn't have to be a bull in gold and gold equities to position appropriately for the eventual inflationary outcome, whose arrival is only a matter of time now that not one but two central banks are injecting $80+ billion in fresh liquidity into the global markets every month.
Recall that gold bull Hugh Hendry said in October that while he is long gold, he is short gold equities, a trade which has generated substantial alpha, courtesy of the 40% plunge in GDX and associated gold miners (a pair trade we have supported incidentally), and one which may well continue generating additional returns should Japanese financial institutions be forced to continue selling off the yellow metal on margin concerns, due to the record surge in JGB volatility as we explained yesterday.
As for gold as an inflation hedge, here Paulson is certainly correct. The only question is when will the price suppression scheme of gold as an alternative currency finally end. Since various official organizations (such as the Troika) are currently doing all they can to buy the sovereign gold of insolvent nations at firesale prices, it is likely that the period of artificially suppressed prices may continue.
Which, incidentally, for all those who lament the recent price drop in gold, is a good thing: for those who see gold as an alternative currency to fiat, all the recent sell off (as well as alleged or real downward price manipulation) does is provide a lower cost basis for accumulating hard monetary assets. Which is something to be welcomed and not mourned, especially if one plans on holding on to said gold (or silver) as a currency, instead of merely converting it back into fiat at a higher price point, and thus as an asset (something all those who bought BitCoin at $260 and sold at $50 appear to have completely forgotten).
http://silverdoctors.com/sd-metals-markets-413-gold-silver-on-verge-of-capitulation-to-1400-22-prior-to-massive-rally/
( unless you on the Fed's email daisy chain , you simply don't know the playbook - but this could come to pass..... )
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Paper Metals Market Madness: Silver Breaks $26 And Gold Dives Below $1500
The big story tonight is the epic raid Friday in the paper metals markets, as over 500 tons of paper gold were dumped on the market triggering sell-stops and capitulation in gold and silver, as gold broke below $1500 to $1485, and silver broke below significant long term support at $26 to as low as $25.72.
It was truly an epic sell-off, bringing back memories of the May 2011 silver collapse.
There was really no follow-through to this morning’s small rally, no conviction buying in the paper markets of any sort. We breached the low of $26.02 for the entire 2 year correction early this afternoon and with the 50 cent sell off at the end of the access session to close the week at $25.85, there is significant risk of a gap down overnight Sunday and early Monday, with the next major support in the $22 area. I’d give the odds at least 50/50 of a final gap-down spike low with silver dropping potentially as low as $22 and gold now potentially testing $1400 early next week.
That being said, silver was down almost $2, nearly 7%, and gold was down $85 today, nearly 6%, its largest single day decline since the February 29th 2012 Leap Day Massacre when LTRO2 was announced in Europe.
Gold hasn’t trading in the upper $1400′s since summer of 2011. Professionals are buying into this weakness, and when you look at the fundamentals with Japan going nuclear on QE just last week, the whole Cyprus bail-in contagion going global: 6% and 7% weakness in gold and silver are being responded to professional with accumulation. China has also been a massive buyer.
That being said, the potential for a capitulation spike low is now very real, so while today’s weakness must be responded to professionally with accumulation, it might be prudent to save a bit of dry powder for the event of a final capitulation overnight Sunday and into Monday.
Just as was seen in the massive sell-offs in 2008 and May of 2011, premiums are skyrocketing for physical metal (APMEX Buy-back price for 90% is now a whopping $3 OVER SPOT!), and even if the paper price trades down to $22 and $1400 early next week, it wouldn’t surprise us at all to see price for physical metal not dip much below $1600 and $30.
We set an all-time sales record today at SDBullion- I think we burned through nearly 10,000 ounces of silver. Our suppliers wouldn’t even answer the phones. One of our suppliers informed us they had already sold thousands of ounces of gold and hundreds of thousands of ounces of silver… before noon!
The demand for physical is simply enormous, and will result in widening spreads and premiums between paper and physical metal.
Vampire Squid Must Eat: The Set-up Before Cyprus Forks Over Gold
This movie is getting old. It would be one thing if the Western banksters were actually tossing some scraps around as they rape and pillage future generations — the somewhat hidden outcome of the dumping of debt obligations on nations to “fix” the insolvency the bankers created in the first place. But these thieves have absolutely no honor. Policy makers in Washington DC and Western Europe are no better. Talk about a bought and paid for lot. If money and perks aren’t enough for these createns, blackmail “control files” serve as backstop.
Let’s unpack the latest statements from Goldman Sachs’ alumnus and current European Central Bank head Super Thief Mario Draghi. Alan — babble them into indifference — Greenspan could learn a thing or two from Mario about lying.
Draghi was quoted by Bloomberg, as SilverDoctors reported:
Asked about a letter he wrote to Cyprus President Nicos Anastasiades, Draghi said the letter is “very, very clear.” He said the government must abide by the central bank’s handling of the gold stock, since it is independent from political control under European rules.
“The independence of central banks in the euro area is enshrined in the treaty,” Draghi said. “The ECB will look at developments in Cyprus from this angle.”
Speaking alongside Draghi, Dutch Finance Minister Jeroen Dijsselbloem said selling gold “has always been an option put forward by the Cypriot authorities.”
“But as mentioned in the program documentation, this is a decision to be made independently by the Cypriot central bank,” he said. “And it’s not any demand from the troika or the eurogroup.”
The full Bloomberg story is linked within the original SilverDoctors.com article.
Any notion that the Cypriot Central Bank having independence from anything is farcical. If a robber walks into your house and sticks a gun to your head, perhaps Dutch Finance Minister Jeroen Dijsselbloem would arrogantly suggest, “Giving the robber your money has always been an option put forward by other hold-up victims.”
We need to go back in time to understand how the game (arguably, a scam) is played:
First, Cypriot banksters make bad loans, for which traditional capitalist system remedies such as placing banks into receivership are not called upon to honestly fix the mess. Next, the situation becomes a crisis as credit to the Cypriot banking system dries up, a perfectly natural and expected reaction by even rational and non-corrupt bankers who are unwilling to lend further to bad creditors.
Hang in here, dear reader. It’s about to get interesting.
What does Draghi and his Brussels Brethren do next? Why, of course, tell the Cypriot government they can turn to the oh-so-independent Cypriot central bank to issue special loans to insolvent Cypriot banks under a program called Emergency Liquidity Assistance (ELA). That has been going on long before the Cypriot crisis was worldwide news. The ECB authorizes this direct ELA lending by the Cypriot national bank, which includes more permissive collateral requirements to grease the injection of liquidity — because no real banker not backstopped by taxpayers socializing losses would make such risky loans to already hobbled creditors without permissive collateral requirements! Result? A weak and failing Cypriot financial system is turned into a liquidity crack dependent, flat on it’s back and at the total mercy of subsequent demands from the ECB.
The end game is now set-up. Draghi gets to slither around in his calm, technocratic demeanor, claiming that the Cypriot central bank has independence while the ECB and the Brussels Brethren demand that the Cypriot central bank sell its gold to cover the ELA credit issued to supposedly fix the insolvent banking system. It’s not just gold the banksters are after, by the way. Cypriot gold is just the icing on the cake. The bankster bad loan losses above and beyond the value of the gold are entirely socialized on the backs of the citizens of Cyprus, which enables Brussels to exert greater political control over Cyprus, a supposedly sovereign nation.
Meanwhile, not one in ten thousand media professionals have the intellectual curiosity to investigate this chain reaction setup. Even those journalists that do understand usually dare not speak truth to power lest they find themselves facing friction from their employers, who may very well be owned outright by financial sector interests (e.g., Bloomberg, and another fine example, CNBC, and it’s 49% owner, GE, which also happens to own shadow banking system titan GE Capital, etc.).
Mainstream Media that isn’t directly owned by the financial sector must deal with other challenges because they either have dependence on financial sector advertising directly, or are simply aligned with general corporate interests. The average man on the street has no hope of learning the truth without spending considerable time seeking out alternative resources like SilverDoctors.com and the observations of financial market professionals like myself — people that have exited the belly of the beast in disgust and are willing to describe the machinations of that beast’s incessant, criminal appetite because our paychecks are not beholden to the beast.
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Tribute To Bill Murphy, Chris Powell And GATA: An Open “Letter” From Eric Dubin And SilverDoctors.com
Apparently, cartel actions have become so obvious that an increasing number of money managers feel compelled to speak up. The latest: well known money manager and former candidate for US Senate Peter Schiff. During a CNBC interview, Mr. Schiff has finally declared that gold might be manipulated in service of the Fed:
“I think goldman wants to knock the price down either because they want to buy more cheaper for themselves, or maybe they’re trying to help out their friends out at the Federal Reserve. They have a pretty cozy relationship. The Federal Reserve does not want the price of gold to go up because it invalidates everything that they’re doing. So, they might be manipulating the market for that reason.” - Peter Schiff
It took you long enough, but Mr. Schiff we welcome you to “planet reality.” Or, as Bill Murphy would say, “Welcome to planet GATA” (versus “planet Wall Street”).
For well over a decade, Bill Murphy, Chris Powell and GATA have tirelessly collected documentation proving the existence of the gold cartel, detailing how and why they act. Detractors usually focus on Bill Murphy’s tendency towards exasperation in the face of the mainstream media’s general refusal to investigate this ongoing activity. In truth, Bill Murphy has not been tilting at windmills. The cartel is real and Murphy’s righteous indignation — combined with a huge dose of Irish tenacity — has served him well as GATA’s leader.
Bill Murphy is an American hero in the most classic sense of the term. GATA is taking up the fight of the underdog, the average citizen unaware how distortions in the capital markets injure the economy and the lives of millions. Consequences of the cartel’s actions transcend manipulation of precious metals markets. Consider the Fed and US Treasury’s management of the bond market. Few media professionals find it odd that management of the bond market and the price of money (interest rates) is open public policy and ok to talk about. But talk about the management of the price of gold, which indirectly has a massive impact on interest rates and confidence required to support the exchange value of the US dollar, is strictly verboten.
Truth be told, in order for the Fed’s public policy of control of the bond market to work, fund managers, traders and other market participants MUST know about it. That’s the jawboning propaganda mechanics behind so-called “financial repression.” The whole point is to make market actors think, “don’t fight the Fed” while pretending interest rates can stay low, reflating the housing market while banks take part of the liquidity they receive from the Fed in exchange for the crap mortgage back securities banks hold. The so-called liquidity then flows into the stock market and beyond. Neat trick. All the while, the common man and generations after him get stuck with the tax bill to pay off all that added debt while banksters socialize their losses.
With scams this large, is it any wonder there’s a propaganda war against truth telling organizations like GATA?
Yes, there have been times when Bill Murphy makes market calls that fail. All rational analysts, traders and investors understand being wrong from time to time is normal. Yes, there have been times when Bill Murphy’s righteous indignation has led him to call a given day’s gold trading action cartel-driven when it probably wasn’t (although, the past year has witnessed an unusually high level of cartel activity). So what? When it comes to the big picture, GATA’s amassed documentation speaks for itself. GATA, Chris Powell — and certainly — Bill Murphy have integrity and guts. Rather than criticizing them, market participants should be opening their checkbooks and writing a tax deductible donation to GATA. Market participants should also get off their duff and actually read all the documentation freely available at GATA.org.
Perhaps Peter Schiff has finally done just that. Who’s next? Pretend cartel denier but otherwise brilliant James Grant of Grants Interest Rate Observer? Heck, it’s my opinion that even the otherwise non-dogmatic Rick Rule hasn’t even bothered to take a week, roll-up his sleeves, and carefully examine the GATA document treasure trove. How could I make such a seemingly preposterous statement about Eric Sprott’s right hand man? For starters, Rule makes no secret he’s a bit skeptical about at least the level of manipulation in the precious metals market. He describes himself as skeptical about the ability for conspiracies and agendas to be able to be hidden for extended periods of time. During a recent radio interview with Al Korelin, Rule noted how no matter what manipulation efforts he saw during his days in the Vancouver investment community, truth eventually came to light.
How quaint.
Mr. Rule, the world of Vancouver resource finance amounts to a backwater when compared to the massive geostrategic imperatives necessary to maintain the dollar as the world reserve currency — with all the benefits that accrue to the nation burdened with such an exorbitant privilege.
Don’t get me wrong. I deeply respect Rick Rule. His intellect is at genius level, and his abilities as an investor are legendary. I’m in my mid 40s. When I grow up I hope to have at least half his wisdom and mastery over as many fields as Mr. Rule. Nevertheless, someone has got to call him out because resting on assumptions and dogmatic logic about what markets should and should not do just isn’t good enough for someone as good as Mr. Rule. Mr. Rule didn’t make billions as a slave to normalcy bias, and it’s time he joins GATA’s apparent latest (albeit not credited) convert, Peter Schiff.
An ancient Chinese proverb comes to mind: “The beginning of wisdom is to call things by their proper names.”
Enough said.
Thank you, Bill Murphy, Chris Powell and all the people that have helped make GATA what it is today. There will come a day when you are seen for what you are: true American heros.
Sincerely,
Eric Dubin
http://hat4uk.wordpress.com/2013/04/13/gold-greed-global-collapse-who-benefitted-most-from-yesterdays-spectacular-fall/
GOLD, GREED & GLOBAL COLLAPSE: who benefitted most from yesterday’s spectacular fall
What you see above isn’t just the tale of a horrendous day for gold – it fell $88, or just over 4%, in a day – it is the record of a fall that steepened the minute New York opened, twice tried (and failed) to rally, and yet managed to do all this on a day when the vast majority of fundamentals should’ve been pushing the price up, not down.
The one exception to this was the Troika demand on Thursday that Cyprus sell its gold to help pay off debt. I have two observations to make about that: one, why do that to Cyprus now and not to anyone else before? And two, on paper it didn’t look like the sort of volume to start a gold freefall.
This is a murky business, so we need to consider it from all sensible angles.
The fundamentals
The US is degrading and diluting its currency, the UK’s austerity strategy is falling apart, the EU economy is flatlining, and Russia is massively overdependent on energy sales in a world where the outlook for energy consumption is awful: indeed, only the coldest european Spring for decades has enabled it to maintain any kind of momentum.
China’s slowdown now looks inevitable given the atrocious consumption outlook outside its borders, and US economic nerves tightened yesterday when the IMF cut its growth forecast for the year from 2% to 1.7%, alongside official figures confirming a 0.4% slump in retail sales in March – the biggest fall since last July. Factory output in the EU declined, and the north-south imbalance worsened as Slovenia edged towards the centre of the debt radar. Italy’s output fell by a disastrous 8%, and Portugal’s constitutional Court has rejected the Troika’s bailout plan. 41% of Germans no longer believe their banked money is safe.
The myth of Obama’s ‘recovery’ long ridiculed here is now clearly seen for the lie it was. The Cyprus ‘bailin’ has caused massive leakage of capital from the eurozone. The Troika’s Athens talks are acrimonious and stalled.
Every last indicator last week suggested a turning tide for gold as a hedge against currency devaluation, and as an asset which – even if it fell in value medium term – would be better than worthless paper. But that wasn’t the market mood, and it wasn’t what happened. To call that strange is like referring to the Krakatoa eruption as a small bang: worldwide gold demand in 2012 was another record high of $236.4 billion in the World Gold Council’s latest report. This was up 6% in value terms in the fourth quarter to $66.2 billion – the highest fourth quarter ever and real volume demand in the fourth quarter of 2012 was up 4% to 1,195.9 tonnes.
So who were the suspects behind what, I’m fairly sure this morning, was a massive fix?
The manipulation clues
The central banks bought gold at a rate ahead of market growth last year – which means their share of it grew.
Central bank buying for 2012 rose by 17% over 2011 to some 534.6 tonnes - the highest level since 1964. Central bank purchases stood at 145 tonnes in the fourth quarter – up 9% from the comparable period in 2011. Central banks have now been net purchasers of gold for eight consecutive quarters. This despite the non-stop stream of CB spin about there being no money-printing or inflation to get concerned about. Fancy that.
Did anything else make sense of this strategic decision by the Draghulas? Spookily enough it did. Last year, Basel III moved the goalposts on gold’s risk score, moving gold from tier 3 to quasi tier 1 status. Gold thus became “zero percent risk-weighted” in terms of credit risk – a whopping upgrade for the shiny metal. But to buy lots of it (and thus reduce risk-panic among investors) one needs the price to go down.
And guess what? Despite that massive Central Bank buying splurge since late 2010, gold has hovered and wobbled, been weak in its challenging of top prices – and persistent in challenging lows. Or put another way, the exact opposite of what the first rule of Supply and Demand dictates. My oh my.
The Guardian this morning ran a truly daft piece saying that ‘gold fell to its lowest level in more than 18 months on Friday night amid fears that sales of the precious metal forced on Cyprus by its desperate financial plight would lead to wholesale dumping by hard-pressed countries in the coming months’. Pardon me Gruauniad, but “Bollocks”. The sum total of Cypriot selling required is €400m tops. That is a flea-bite on the ankle of the gold sector.
More pertinent, perhaps, is that the Cyprus sale (1) enabled the CBs to buy still more of it, and (2) provides an excuse for the price fall that naifs might accept at face value.
Other potential culprits are also implicated. During January 2013, the COMEX gold futures platform pushed expectations for the price up by 8.3%. One wonders who pushed it in that direction, and why. What’s more, over the last 90 days without any announcement, stocks of gold held at Comex warehouses plunged by the largest figure ever on record. JP Morgan Chase’s reported gold stockpile dropped by over 1.2 million ounces – a staggering $1.8 billion dollars worth of physical gold in just 120 days. The owners involved took their metal offsite, and it’s no longer stored in Comex warehouses…did they do so from a lack of trust? Or did they know something we didn’t?
Then there’s the chance that the Fed itself was trying to reduce its cost of returning gold: Germany’s Bundesbank recently announced it would be moving a major portion of its reserves from the US and all of its reserves from France back to Frankfurt. Nearly half of Germany’s gold reserves are held in a vault at the Federal Reserve Bank of New York. Nice way to reduce loss of face on safe assets if you work for Washington.
Is there a bottom line here?
There is, but I don’t think one can see the exact nature of it just yet. What seems to me clear, however, is that this was a fix….and Cyprus was a cover story for it, not the reason why.
On balance, it feels to me like some leaking, some massaging, and some reduction in the cost of global looting. But whatever: next week is indeed going to be interesting.
http://www.zerohedge.com/news/2013-04-10/goldman-buying-gold-selling-treasurys-muppets-whom-it-advises-do-opposite
Goldman Buying Gold, Selling Treasurys To Muppets Whom It Advises To Do Opposite
There was a brief period of confusion for a while when Goldman didn't have clear muppet-stomping trades on the book, and those who wished to frontrun the Goldman prop desk (and do the opposite of the muppet flow) were stuck furiously scratching their head. And granted while it's not a "Stolper", tonight we got two gifts (in the parlance of Whitney Tilson) with Goldman first telling its clients to sell gold following Goldman's lowering of its price target for the yellow metal (which as always means the hedge fund known as Goldman is buying what its clients are selling). And then, moments ago, we also learned that Goldman is also selling the 10 Year, which it advise muppets to buy.
First on gold:
Given gold’s recent lackluster price action and our economists’ expectation that the acceleration in US growth later this year to above-trend pace will support US real rates, we are lowering our USD-denominated gold price forecast once again. Our new forecast is further below the forward curve with year-end targets of $1,450/toz in 2013 and $1,270/toz in 2014. As a result, we recommend closing the long COMEX gold position that we first initiated on October 11, 2010 for a potential gain of $219/toz, with the risk reversal overlay expired on March 25. Our long-term gold price forecast (2017+) remains at $1,200/toz: while higher inflation may be the catalyst for the next gold cycle, this is likely several years away.
Or several months ago if you are the price of unleaded gas in Tokyo and pretty much anything else. It gets better:
While there are risks for modest near-term upside to gold prices should US growth continue to slow down, we see risks to current prices as skewed to the downside as we move through 2013. In fact, should our expectation for lower gold prices continue to prove correct, the fall in prices could end up being faster and larger than our forecast, as aggregate speculative net long positions across COMEX futures and gold ETFs remain near record highs. We therefore recommend initiating a short COMEX gold position as our ECS Top Trade #8, implemented through an S&P GSCI® front-month rolling index to further benefit from the contango in the COMEX future curve, targeting a move to $1,450/toz with a stop at $1,650/toz. While we may be end up too early in entering this trade, we prefer that to being late given our belief that the skew to current prices is to the downside.
Remember, however, to please execute the trade with your friendly Goldman trader, who will gladly buy all the gold you have to sell all the way down to $1450.
And just out moments ago, Goldman goes bearish (like everyone else) on the 10 Year - because you see, nobody has heard of the perpetually wrong "Great Rotation" call in 2010... or 2011... or 2012.... or 2013... Or at least Goldman clients haven't. And apparently not the Fed, which just can't get enough of buying just this.
We recommend going short 10-year US Treasuries via June futures (TYM3) at the current level of 132-20 for an initial price target of 130-00 and stops on a close above 134-00. In yields space, the corresponding move is from the current 1.76% to around 2.10%, and stops on a close around 1.60% - corresponding to the lows from last November.The rationale for our recommendation rests on the following four considerations:
- The valuation case for shorting Treasuries has become more compelling after the decline in yields following a worse-than-expected US jobs report and the BoJ’s easing. Our assessment of the macroeconomic outlook for the US and the main advanced economies has not changed; if anything, it has improved following the large fiscal and monetary stimulus in Japan.
- The market appears to have already factored in a softening in US growth during the second quarter, after a stronger-than-expected first quarter. Our US GDP Growth Basket (a ‘tracking portfolio’ of US real GDP growth) has retraced all the gains recorded between last November and mid-February. This should protect the trade should the forthcoming batch of macro data, starting with retail sales this Friday, be weaker than earlier in the year. That said, a near-term risk to the trade stems from an escalation of tensions in North Asia. So far, these developments appear to have had a small impact on global asset prices.
- We think the most persistent part of the BoJ's ‘surprise’ is a flattening of the 10s-30s segment of the yield curve. This is mostly a domestic play, with limited spill-over effects for overseas fixed income markets. We have likened this move to that resulting from the Fed’s ‘Operation Twist’: the slope of the ultra-long-end of the Treasury has remained in a 60-80bp range, while the level of 10-year yields has moved around. Interestingly, 10-year Japanese yields are heading back to pre-BoJ announcement levels.
- Treasury bond futures have tried to break above the upper end of a broad price range in place since July 2012, and failed. Short positioning in the rates market is lighter, according to anecdotal evidence.
Thank you Goldman - we can always rely on you.
Real metal isn't backing up short sales, Maguire tells King World News
Submitted by cpowell on Sat, 2013-04-13 01:34. Section: Daily Dispatches
9:30p ET Friday, April 12, 2013
Dear Friend of GATA and Gold:
London metals trader Andrew Maguire tells King World News tonight that no real metal is appearing to support the naked shorting of gold in the futures markets. "That official sellers are even more reliant on massive coordination of mainstream media and verbal interventions to back up these virtual sales, it's not going unnoticed by Middle-Eastern and Eastern-centric central banks and sovereigns." 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.
China absorbs huge amounts of gold amid futures shorting: Maguire
Submitted by cpowell on Fri, 2013-04-12 17:24. Section: Daily Dispatches
1:21p ET Friday, April 12, 2013
Dear Friend of GATA and Gold:
London monetary metals trader Andrew Maguire today tells King World News that huge volumes of gold are moving to China amid the pounding of the gold price in the futures market. Maguire thinks that central bank purchases soon will overwhelm futures market shorting. 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.
Fed smashing metals to guard dollar against hyperinflation, Roberts tells KWN
Submitted by cpowell on Fri, 2013-04-12 21:06. Section: Daily Dispatches
5p ET Friday, April 12, 2013
Dear Friend of GATA and Gold:
Former Assistant Treasury Secretary Paul Craig Roberts tells King World News today that the smashing of gold and silver prices is a Federal Reserve campaign to defend the U.S. dollar against a hyperinflationary scenario.
"The exchange value of the dollar is threatened," Roberts says, "and if that collapses the Fed loses control over interest rates. Then the bond market blows up, the stock market blows up, and the banks that are too big to fail, fail. So it's an act of desperation because they've got to establish in people's minds that the dollar is the only safe place, it is the only safe haven, not gold, not silver, and not other currencies."
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.caseyresearch.com/gsd/edition/lawrence-williams-gold-price-manipulation-the-never-ending-game/
¤ YESTERDAY IN GOLD & SILVER
It was a bloodbath at the hands of JPMorgan et al on Friday...and as GATA's Chris Powell so eloquently stated many years ago in Washington, D.C..."The are no markets anymore, only interventions."
There was no hint in Far East trading, or in the first hour of London trading, that Friday was going to be any different than Thursday. But at 9:00 a.m. in London, the high frequency traders went to work...and what a job they did. I was fortunate enough to be in the final stages of editing Friday's column at the time and I was able to report on it...and also speculated on what might lie ahead in the upcoming New York session.
As I also mentioned in 'The Wrap' section of yesterday's column, silver analyst Ted Butler said that it would take a price well below the $1,540 spot price to drive the technical funds into holding a record short position in gold.
Well, we got it in spades...and also in hearts, diamonds and clubs.
By the time the fires were out and the smoke had cleared, gold closed down $84.00 from Thursday, finishing the Friday session on its absolute low tick of the day, which was $1,477.00 spot. Gross volume was over the moon at 390,000 contracts.
Needless to say, I'll have more on this in 'The Wrap' at the bottom of today's column.
It was the same story in silver...and it closed at $25.85 spot...down $1.81 from Thursday's close. Net volume was an eye-watering 84,000 contracts!
The charts for platinum and palladium look similar, but try as they might, JPMorgan Chase et alcouldn't break palladium below the magic $700 price mark, but they certainly gave it the old college try.
In percentage terms, the engineered price declines on Friday resulted in a one day drop in the gold price of 5.38%...silver was down 6.54%...platinum down 3.07%...and palladium down 3.42%.
The dollar index opened at 82.23 in Tokyo on Friday...dipped a bit...and then began to rally starting around 1:00 p.m. in Hong Kong. The rally topped out at 82.46 at 11:00 a.m. in London...and hung in there until about 8:40 a.m. in New York. From there it chopped lower for the rest of the day, closing at 82.10...down 13 basis points.
It should be obvious that currencies played no roll in yesterday's drive-by shooting by JPMorgan et al...and hardly ever does.
The shares were slaughtered...gapping down big at the open...and barely pausing after that. The HUI closed virtually on its low of the day...down 6.00%...and only a whisker above the 300 mark. One has to wonder who was the buyer of all the mining company shares that got thrown overboard yesterday.
The silver stocks did little better...and Nick Laird's Intraday Silver Sentiment Index closed down 4.88%. Although we hit a new low for this move down, it wasn't by much, so I'd guess that the silver shares are pretty much washed out at this point...but there was an obvious buyer for every one that fell of the table on Friday.
(Click on image to enlarge)
Here's the long-term Silver Sentiment Index to show you how bad things are when looking at it from a 'big picture' perspective.
The CME's Daily Delivery Report showed that 471 gold and 124 silver contracts were posted for delivery on Tuesday. In gold, JPMorgan Chase was the short/issuer on 469 of those contracts out of its client account...and Barclays, HSBC USA and Canada's Bank of Nova Scotia were the long/stoppers on all but three of those contracts. In silver, it was Jefferies as the short/issuer on all 124 contracts. They and the Bank of Nova Scotia [with 94 contracts] were the two largest long/stoppers. The link to yesterday's Issuers and Stoppers Report is linked here...and I think it's worth a quick look.
There was another monster withdrawal from GLD yesterday, as 735,125 troy ounces were removed...and you have to ask yourself where all this gold is going, as 6.2 million ounces has been withdrawn since December 1, 2012. And as of 9:46 p.m. Friday evening, there were no reported changes in SLV.
The U.S. Mint had a tiny sales report yesterday. They sold 4,000 ounces of gold eagles...500 one-ounce 24K gold buffaloes...and zero silver eagles. Month-to-date the mint has sold 50,500 ounces of gold eagles...7,000 one-ounce 24K gold buffaloes...and 1,712,000 silver eagles. Based on these sales, the silver/gold sales ratio is a hair under 30 to 1 so far this month.
Over at the Comex-approved depositories on Thursday, they reported receiving 1,557,140 troy ounces of silver...and shipped 122,609 troy ounces of the stuff out the door. The link to that activity is here.
It was blow-out week at the depositories for the week that was...and I just know that Ted Butler will have some comments on that in his commentary for his paying subscribers later today.
And it was a pretty frantic day at the bullion store on Friday, as it was virtually non-stop all day long. It was one of the best days for gold sales that we have ever seen, as customers were buying the stuff hand over fist...although silver sales didn't suffer by any means.
For the second week in a row, the Commitment of Traders Report came in virtually as Ted Butler predicted. This time he predicted no change...and that's basically what we got. For that very reason, I'm not going to spend much time on it, as its contents are now 'yesterday's news' in light of what happened since the Tuesday cut-off...and particularly what happened yesterday.
In silver, the net Commercial short position declined by 290,000 ounces...and in gold, the Commercial net short position increased by 128,000 ounces. Nothing to see here, folks...but next week's COT Report will be one for the record books...unless prices blow sky-high between now and next Tuesday's cut-off.
I'd give a few days pay to know what the COT Report looked like at the end of trading on Friday. It would show new record short and long positions in virtually every category.
Here's Nick Laird's "Days of World Production to Cover Short Positions" chart as of this past Tuesday's cut-off...and it has barely changed since the one I posted in this space last Saturday. Of course next Saturday's chart will be a sight to see when it becomes available.
(Click on image to enlarge)
Here's another familiar chart that Nick sent me in the wee hours of this morning...and that's the "Total PMs Pool". Nick pointed out that "There's not too much damage here." In the grand scheme of things, he would be right about that.
(Click on image to enlarge)
* * *
selected news and views items
Doug Noland: Things Have Gone Too Far
Forecasting Bubble behavior is a tricky, tricky business. Yet I’ll stick with the view that Europe is the initial major crack in the “global government finance Bubble.” And while Draghi resuscitated “risk on” throughout Europe, this actually works to exacerbate fragilities as that region struggles with a deep and evolving crisis. I’ll stick with the view that five years of global financial excess has helped push China to the status of a crazy dangerous Bubble. And I see no reason to back away from the analysis that the emerging economies in general suffer from a dangerous Bubble mix of rampant Credit excess, problematic imbalances and deteriorating economic performance. Moreover, I’m content with the view that the “global leveraged speculating community” is one huge accident in the making.
Perhaps the crack in commodities markets is indicative of a confluence of unfolding faltering Bubble risk in Europe, China, the emerging markets and the hedge fund community. The Bank of Japan’s obtrusive market intervention provided a huge windfall for some while hammering others, not unlike recent obtrusive interventions by the ECB and Fed. All along the way, global risk markets become increasingly unstable - if not hopelessly dysfunctional. At this point, risks associated with repeated attempts to cure post-asset Bubble stagnation with “helicopter money” should not be all that difficult to discern.
Doug is always right on the money...and very few people have such a keen grasp of the financial markets. His Friday missives are always must reads for me...and his latest is posted at the prudentbear.com Internet site.
Perhaps the crack in commodities markets is indicative of a confluence of unfolding faltering Bubble risk in Europe, China, the emerging markets and the hedge fund community. The Bank of Japan’s obtrusive market intervention provided a huge windfall for some while hammering others, not unlike recent obtrusive interventions by the ECB and Fed. All along the way, global risk markets become increasingly unstable - if not hopelessly dysfunctional. At this point, risks associated with repeated attempts to cure post-asset Bubble stagnation with “helicopter money” should not be all that difficult to discern.
Doug is always right on the money...and very few people have such a keen grasp of the financial markets. His Friday missives are always must reads for me...and his latest is posted at the prudentbear.com Internet site.
Doug Casey: Obama’s Budget Is a Ridiculous Charade
He is quick to spit out divisive statements like, “the ethical thing to do would be for the U.S. to declare bankruptcy,” “the next generation will be turned into indentured servants,” and “people who buy government debt deserve to be punished and taught a lesson.”
In an interview with The Daily Ticker, Casey explains his provocative oratory style. “Look, this is an academic point that I’m making. I know that [the U.S. debt] is not going to be defaulted on tomorrow morning," he says. "I’m just putting the thought out there so people can think about these things in a new unit of time, and try to think about it rationally.”
This 4:16 minute video clip with the lovely Lauren Lyster as host, was picked up by the finance.yahoo.com Internet site on Thursday...and is definitely worth your time.
Rise of the Predators: A Secret Deal on Drones, Sealed in Blood
Nek Muhammad knew he was being followed.
On a hot day in June 2004, the Pashtun tribesman was lounging inside a mud compound in South Waziristan, speaking by satellite phone to one of the many reporters who regularly interviewed him on how he had fought and humbled Pakistan’s army in the country’s western mountains. He asked one of his followers about the strange, metallic bird hovering above him.
Less than 24 hours later, a missile tore through the compound, severing Mr. Muhammad’s left leg and killing him and several others, including two boys, ages 10 and 16. A Pakistani military spokesman was quick to claim responsibility for the attack, saying that Pakistani forces had fired at the compound.
That was a lie.
This most excellent story appeared on The New York Times website last Saturday...and I've been waiting for a week to post it in today's column. It's a must read for all serious students of the "New Great Game"...and I thank Washington state reader S.A. for bringing it to my attention.
Cyprus goes from bad to worse by the day; so does Portugal
On cue, Angela Merkel's Christian Democrat base in the Bundestag has warned that there can be no increase in the EU-IMF rescue package for Cyprus.
The Cypriot people alone must carry the extra cost of up to €5.5bn beyond what was already agreed in the €17.5bn deal in March.
If the eurozone refuses to offer any further help, there must surely be a greater temptation to withdraw from the euro and default on sovereign debt in a classic restructuring deal with the IMF.
This Ambrose Evans-Pritchard commentary was posted on thetelegraph.co.uk Internet site yesterday...and I consider it a must read. I thank Roy Stephens for his second offering in today's column.
China's shadow banking boom rings alarm bells
Loan growth in China’s shadow banking system surged to near record levels in March, prompting fresh warnings that the country’s credit bubble is spinning out of control.
New loans jumped by $400bn, mostly in the less regulated pockets of the banking system. Trust loans have surged by 360pc over the past year.
Wang Yongping, head of China’s Commercial Real Estate Association, said there is a major bubble in office property across the country as developers switch strategy to evade curbs on residential homes, with extreme over-building in second tier cities or deep in the interior.
The vacancy rate in Shenyang has hit 24.3pc, with 55 giant projects still being built. “It will take at least five years to find enough tenants to fill the vacancies if no new project is approved,” he told Caixin magazine. Mr Wang said there had been wild construction in the western city of Chengdu, as well as Tianjin on the coast. “The supply is huge in these cities.”
Here is another Ambrose Evans-Pritchard offering from The Telegraph...this one from early Thursday evening BST...and I thank Roy Stephens once more for bringing it to our attention.
Three King World News Blogs/Audio Interviews
The first of two interviews with Andrew Maguire is headlined "Over 500 Tons of Paper Gold Sold in Takedown". The second blog is with Dr. Paul Craig Roberts. It's entitled "Former U.S. Treasury Official - Fed Orchestrated Smash in Gold". And lastly is the second interview withAndrew Maguire...and it bears the title "There is Absolutely No Physical Gold For Sale".
Lawrence Williams: Gold price manipulation – the never ending game?
"The argument goes on and on – but many of those in the mainstream are beginning to come around to the opinion that gold manipulation is alive and well in the interests of avoiding global economic collapse."
MineWeb's Lawrence Williams writes that opinion in the gold world, noting the ever-more-counterintuitive action in the gold price, is moving toward GATA's position that the gold price is manipulated by Western central banks. Williams' commentary is headlined "Gold Price Manipulation -- the Never-Ending Game?"...and it was posted on the mineweb.com Internet site yesterday. It's on the longish side, but definitely worth reading...and I found it hidden in a GATA release.
Outlook 2013 - The Irreversible Trends Driving Gold to $10,000
Perhaps the most prevalent indication that something is amiss with the world’s economy is a sense of malaise that many have been experiencing—a distrust in the financial system and the government.
Such distrust is a tangible indication that the 42-year-old experiment in a global fiat currency system is failing.
At this stage, it is no surprise to see that those who benefited from this system are stepping up their PR campaign. Their goal is to bolster trust in paper currencies. Such campaigns are broad-based. As James Rickards, author ofCurrency Wars pointed out, the world is in the midst of an economic war between countries, currencies and gold. Developing countries are challenging the U.S. dollar’s de facto reserve currency status, and many in the East are turning to physical gold.
The Western financial media insists on supporting the status quo with their positive messages of imminent economic recovery, but many are not buying it and the global appetite for physical gold is the best indication of this.
This 11-page essay by Nick Barisheff, president and CEO of Bullion Management Group Inc, is well worth the read...and you can also view it in a 3-part video.
¤ THE WRAP
Militias, when properly formed, are in fact the people themselves and include all men capable of bearing arms. [...] To preserve liberty it is essential that the whole body of the people always possess arms and be taught alike, especially when young, how to use them. -- Senator Richard Henry Lee, 1788, on "militia" in the 2nd Amendment
Here's is today's pop musical selection which I hope you enjoy. It's linked here...and the classical piece is discussed below.
Danse Macabre, Op. 40, composed by Camille Saint-Saëns in 1874, started off life as a tone poem for orchestra...and it was not well received at its premiere. It has been transcribed for a number of solo instruments since, but my favourite is the pipe organ transcription by another world-renown organist, Edwin H. Lemare. Here is French organ virtuoso Vincent Dubois doing the honours at the Gothic Cathédrale Saint-Gervais-et-Saint-Protais de Soissons in France. The audio quality of thisyoutube.com video leaves much to be desired...as the recording equipment used was not remotely close to being up to the task, as it only hints at the dynamic range of the piece...and the pipe organ itself. Turn your speakers way up...and then click here.
Surfing a few of the major gold Internet sites in the wee hours of the morning, it was amazing to read some of the commentary that passes as analysis from so-called gold 'experts'. They went out of their way to come up with the most incredible reasons why the precious metals got slammed yesterday...so they didn't have to face the fact that what happened was direct price management by JPMorgan Chaseet al...and it's all such b.s. This goes for the main-stream media as well...although Lawrence Williams over at mineweb.com recognizes the situation for what it is...as do a handful of other prominent gold commentators. But they are in the definite minority.
There was only one reason for yesterday's price action in all four precious metals...plus a few other markets...and that was the premeditated intervention by the bullion banks as they made their [hopefully] last attempt to reduce their massive short positions that they currently hold.
Yesterday's interventions were particularly vicious...and without doubt the most blatant. Their footprints were so obvious that even a blind person could see it. The CFTC and the CME Group saw it as well. So did all the silver and gold mining companies that we own shares in...but we already know that they won't do a thing to prevent the wholesale rape of their individual companies, or their industry in general.
"Da boyz" were probably wildly successful in their attempt to further extricate themselves from their monster short positions...and as I said further up in this column, I would love to see what the Commitment of Trader Report looked like as of the close of trading in New York yesterday. I'm sure it would show new records in virtually every category.
It's impossible for JPMorgan, Canada's Bank of Nova Scotia and HSBC USA...plus a handful of others...to cover all their short positions in the manner they attempted on Friday. All they can hope for is to reduce them to a minimum amount in a downside smash like this one. The point will come when they have to go into the market and cover shorts by purchasing a long contract...and that will become immediately apparent the moment they attempt it.
But there was another possibility that Ted sort of hinted at yesterday...and that was the fact the bullion banks may reduced their short positions to such an extent that they may now have accumulated enough physical gold and silver to get out them out from under most, if not all, of their remaining short positions. Wouldn't that be an interesting development?
The other scenario that I've discussed with Ted over the years is the fact that raptors, who currently hold a record long position in silver...and maybe gold now, as well...may be asked/coerced into selling enough positions to the big bullion banks to allow them to cover that way as well.
I must admit that I'm speculating here, but JPMorgan et al will pull every dirty trick in the book...legal or otherwise...to extricate themselves from whatever short positions they have remaining. Their past actions over the years proves that beyond a shadow of a doubt.
So, are we done to the downside? Beats me...but yesterday's price and volume action sure looked like capitulation to me. But as Ted Butler so correctly put it, we won't know for sure until we see the bottom in the rear-view mirror. Needless to say, I'll be watching the Sunday night open in New York with great interest.
But I don't need to see any COT Report to know that the set-up in both gold and silver [along with copper] is probably the most wildly bullish in history. And as I mentioned the other day, the only thing we don't know is what the triggering event will be to set off the next rally. The other factor that will determine how high we go and how fast we get there, will be the action of JPMorgan and a handful of other bullion banks. Will they go short on the next rally...and will the raptors [the Commercial traders other than the Big 8] sell their long positions. These two combined actions have always been sufficient to cap any price rally in the past...and it remains to be seen whether or not history repeats itself on the next one.
But looking beyond that scenario, the possibility of re-pricing of all the precious metals is still an option that I [and others] have spoken about for many years...and that scenario may play out this time around.
It's hard to say exactly how this situation will resolve itself in the days and weeks ahead, but I can't believe that the bullion banks would make such an obvious spectacle of themselves as the did yesterday...and then be willing to put their collective heads back in the lion's mouth any time soon...if at all.
Here are the 3-year charts for gold and silver...and they are both pretty ugly from a T.A. point of view...but that's not the way you should be looking at them.
(Click on image to enlarge)
(Click on image to enlarge)
The Monday trading session should be a sight to behold.
Just one more time, I'd like to point out that Casey Research is having another webinar hard on the heels of the mega-successful one that they had this past Monday...and this one is on a subject that is near and dear to Doug Casey's heart, as it's headlined "Internationalizing Your Assets".
This webinar will feature Doug Casey, Peter Schiff, Mike Maloney, David Galland, andKevin Brekke...and they will explain how to get the same kind of protection for your wealth that real diplomats get. Viewers will learn how to [legally] escape the long arms of the U.S. government and protect their assets from rising taxes… climbing inflation… and crippling regulations designed to handicap private businesses and investors alike. It will reveal strategies anyone can use to protect their wealth from greedy politicians.
It will air on Tuesday, April 30th at 2:00 p.m. Eastern Daylight Time...and you can click here to get all the details. It's perfectly priced as well...because it's FREE.
Enjoy your weekend...or what's left of it...and I'll see you here on Tuesday.
( Is there a correlation between Cyprus being forced to turnover their gold to the Troika , the ongoing incredible manipulations of gold and silver and the massive deleveraging of gold by the West to China ? )
HYPOTHERMIA: CONTAGION IN THE EUROZONE
and....
» The Assault On Gold — Paul Craig Roberts
For Americans, financial and economic Armageddon might be close at hand. The evidence for this conclusion is the concerted effort by the Federal Reserve and its dependent financial institutions to scare people away from gold and silver by driving down their prices.
When gold prices hit $1,917.50 an ounce on August 23, 2011, a gain of more than $500 an ounce in less than 8 months, capping a rise over a decade from $272 at the end of December 2000, the Federal Reserve panicked. With the US dollar losing value so rapidly compared to the world standard for money, the Federal Reserve’s policy of printing $1 trillion annually in order to support the impaired balance sheets of banks and to finance the federal deficit was placed in danger. Who could believe the dollar’s exchange rate in relation to other currencies when the dollar was collapsing in value in relation to gold and silver.
The Federal Reserve realized that its massive purchase of bonds in order to keep their
prices high (and thus interest rates low) was threatened by the dollar’s rapid loss of value in terms of gold and silver. The Federal Reserve was concerned that large holders of US dollars, such as the central banks of China and Japan and the OPEC sovereign investment funds, might join the flight of individual investors away from the US dollar, thus ending in the fall of the dollar’s foreign exchange value and thus decline in US bond and stock prices.
Intelligent people could see that the US government could not afford the long and numerous wars that the neoconservatives were engineering or the loss of tax base and consumer income from offshoring millions of US middle class jobs for the sake of executive bonuses and shareholder capital gains. They could see what was in the cards, and began exiting the dollar for gold and silver.
Central banks are slower to act. Saudi Arabia and the oil emirates are dependent on US protection and do not want to anger their protector. Japan is a puppet state that is careful in its relationship with its master. China wanted to hold on to the American consumer market for as long as that market existed. It was individuals who began the exit from the US dollar.
When gold topped $1,900, Washington put out the story that gold was a bubble. The presstitute media fell in line with Washington’s propaganda. “Gold looking a bit bubbly” declared CNN Money on August 23, 2011.
The Federal Reserve used its dependent “banks too big to fail” to short the precious metals markets. By selling naked shorts in the paper bullion market against the rising demand for physical possession, the Federal Reserve was able to drive the price of gold down to $1,750 and keep it more or less capped there until recently, when a concerted effort on April 2-3, 2013, drove gold down to $1,557 and silver, which had approached $50 per ounce in 2011, down to $27.
The Federal Reserve began its April Fool’s assault on gold by sending the word to brokerage houses, which quickly went out to clients, that hedge funds and other large investors were going to unload their gold positions and that clients should get out of the precious metal market prior to these sales. As this inside information was the government’s own strategy, individuals cannot be prosecuted for acting on it. By this operation, the Federal Reserve, a totally corrupt entity, was able to combine individual flight with institutional flight. Bullion prices took a big hit, and bullishness departed from the gold and silver markets. The flow of dollars into bullion, which threatened to become a torrent, was stopped.
For now it seems that the Fed has succeeded in creating wariness among Americans about the virtues of gold and silver, and thus the Federal Reserve has extended the time that it can print money to keep the house of cards standing. This time could be short or it could last a couple of years.
However, for the Russians and Chinese, whose central banks have more dollars than they any longer want, and for the 1.3 billion Indians in India, the low dollar price for gold that the Federal Reserve has engineered is an opportunity. They see the opportunity that the Federal Reserve has given them to purchase gold at $350-$400 an ounce less than two years ago as a gift.
The Federal Reserve’s attack on bullion is an act of desperation that, when widely recognized, will doom its policy.
As I have explained previously, the orchestrated move against gold and silver is to protect the exchange value of the US dollar. If bullion were not a threat, the government would not be attacking it.
The Federal Reserve is creating $1 trillion new dollars per year, but the world is moving away from the use of the dollar for international payments and, thus, as reserve currency. The result is an increase in supply and a decrease in demand. This means a falling exchange value of the dollar, domestic inflation from rising import prices, and a rising interest rate and collapsing bond, stock and real estate markets.
The Federal Reserve’s orchestration against bullion cannot ultimately succeed. It is designed to gain time for the Federal Reserve to be able to continue financing the federal budget deficit by printing money and also to keep interest rates low and debt prices high in order to support the banks' balance sheets.
When the Federal Reserve can no longer print due to dollar decline which printing would make worse, US bank deposits and pensions could be grabbed in order to finance the federal budget deficit for couple of more years. Anything to stave off the final catastrophe.
The manipulation of the bullion market is illegal, but as government is doing it the law will not be enforced.
By its obvious and concerted attack on gold and silver, the US government could not give any clearer warning that trouble is approaching. The values of the dollar and of financial assets denominated in dollars are in doubt.
Those who believe in government and those who believe in deregulation will be proved equally wrong. The United States of America is past its zenith. As I predicted early in the 21st century, in 20 years the US will be a third world country. We are halfway there.
http://canadafreepress.com/index.php/article/53842
( this has been pretty spot on - DHS Insider first reported concerns for this spring back in December....)
DHS Insider update: It has begun
Much like my high-level source within the U.S. Department of Homeland Securityoutlined in a series of interviews beginning last year, the orchestrated collapse of the U.S. dollar and the entire world’s economic system has begun. The first shots in a global economic take-over were fired in Cyprus as my esteemed colleague and founding editor of Canada Free Press, Judi McLeod laid out in frank detail in hercolumn yesterday and her follow up today.
Please read it and heed her advice, or suffer the consequences of your own normalcy bias that such an event will not happen in the United States, Canada, or from wherever you might be reading this. It will, and the plan appears to be on schedule for a shot across the bow later this spring here in the West, with a more aggressive take-over starting sometime this fall, according to my source.
To those needing a quick refresher, the plan is quite simple and can be summarized by the Clinton-era quip attributed to political strategist James Carville, “the economy, stupid” and the June 9, 2010 statement by former Obama czar Van Jones, Socialist extraordinaire, “top down, bottom up, inside out.” It is a plan for a one world Communist economy where the “middle class” will be wiped out through a series of events that will have the same ultimate effect as we are seeing in present day Cyprus.
The Plan
Based on the events in Cyprus, it should be quite clear to even the most vocal critic of the legitimacy of the information provided to me by my source within the DHS as published on this web site is no longer at issue. The U.S. dollar, the backbone of world currencies and the proverbial firewall preventing the erosion of our national sovereignty, is the ultimate target of a takedown by the global banking interests controlled by a handful of banks and families of the “royal elite.”
The plan for a global currency or a one world economic order is a matter that transcends political parties. Those who continue to argue in the Republican-Democrat meme are doing nothing more than providing entertainment to distract people from the real issue, that of the global elite versus the rest of us. The top of the pyramid in this Ponzi scheme is filled with members of both U.S. political parties who are systematically pillaging us and our future generations into financial debt, bondage and slavery. It is a plan that has been in the works for centuries. The problem, however, is that we have been conditioned not to think that big. Yet, the lie is that big.
Our current financial situation was not bred out of incompetence, but by design. The occupancy of Barack Hussein Obama as the putative President of the United States was a plan in the making long ago, to usher in this oppressive system where we will be left at the mercy of the global ruling class. It is not by accident that we have been prevented from knowing exactly who this man is, from the controversy of his birth records to his college transcripts and even his social security number. Contrary to what the state-controlled media wants you to believe, these questions have never been answered with any measure of authenticity.
For example, does anyone honestly believe that it is merely a coincidence that Obama’s alleged mother, Stanley Ann Dunham-Soetoro, just happened to work with Timothy Geithner’s father, Peter Geithner, at the Ford Foundation in Indonesia? Is it reasonable to believe that the Republican party had no knowledge of the background of Barack Hussein Obama? Yet not one word from the Republican establishment as they not only watched, but facilitated the takeover of the United States from within. As I’ve written before, our nation is a captured operation.
The plan was set into motion long ago, stemming back to the founding of the United States and the temporary resistance to the central banking system. In 1913, the creation of the Federal Reserve set the countdown clock in motion for the complete subjugation of the United States to the interests of the global bankers and the global elite. The secret supra-governmental cabals such as the Council on Foreign Relations and the Trilateral Commission worked behind the scenes, under the cover provided by the complicit media, to bring us to this point in history. Perpetual wars were induced to occupy the masses while the chess pieces were placed into their current positions. We are now about to pay the price for our inability or unwillingness to confront the establishment and incremental advancements leading to our own demise.
According to the most recent information provided to me from my source within the Department of Homeland Security known as “Rosebud,” the final preparations are being made to deploy heavily armed federalized forces onto the streets of America. They will be deployed under the pretext of “restoring and maintaining order from the chaos brought about by the economic collapse,” adding that “many will demand and embrace their deployment on the streets of America. They will get what they ask for, and more.”
Much like the security theater we have seen following the attacks of 9/11, we will be subjected to the jack-booted control of a federal army whose allegiance is not to the American people, but to the very architects of the chaos.
“This is the reason that drones are flying over U.S. cities and farmland, and gun control legislation is on the fast track for complete implementation,” stated this source. “How can people look at the situation in Cyprus and not think it won’t happen here? It will, and the blowback will be unlike this country has ever seen. Surveillance, disarming the public, and conditioning the people to believe it’s for their own safety is and has been part of the plan all along. Anyone owing a gun will be demonized and described as contributing to the problem.”
“What happens when the middle class loses much of their wealth, or it is confiscated, by the stroke of a pen or a keyboard? What will the stores look like when people, unprepared due to the damn lies of the corporate media and the shills for the ruling elite, run to empty out everything they can get their hands on as the world, as they know it, collapses around them?”
It was during my most recent contact with my source yesterday that he admitted that the situation will be blamed not on the bankers and the elected leaders who are raping us of our wealth and buying power, but on “right-wing, gun-toting Conservative ‘militia’ groups who believe that the situation is orchestrated.”
And, of course, it is orchestrated.
“There is no Republican-Democrat argument to be made anymore. It’s all political theater to keep the majority of the masses occupied while the true enemy has already captured both parties,” he added. “They are all in on it, either knowingly or unwittingly, the takeover, that is. And it’s getting harder to believe that there are any who are unwitting accomplices at this point.”
“When the curtain is pulled back to reveal the true agenda of a single digital world currency, the people who have been yelling the loudest about such ‘conspiracy theories’ will be specifically singled out and demonized. They will be blamed for causing the panic we will see, and of course, dealt with by the army we asked for, accepted and even tolerated.”
Anyone who still believes that the information provided by this insider is “doom porn” or some self-created fantasy need to look at the events taking place in Cyprus. It’s coming to America. It has already begun.
The plan for a global currency or a one world economic order is a matter that transcends political parties. Those who continue to argue in the Republican-Democrat meme are doing nothing more than providing entertainment to distract people from the real issue, that of the global elite versus the rest of us. The top of the pyramid in this Ponzi scheme is filled with members of both U.S. political parties who are systematically pillaging us and our future generations into financial debt, bondage and slavery. It is a plan that has been in the works for centuries. The problem, however, is that we have been conditioned not to think that big. Yet, the lie is that big.
The parties
For example, does anyone honestly believe that it is merely a coincidence that Obama’s alleged mother, Stanley Ann Dunham-Soetoro, just happened to work with Timothy Geithner’s father, Peter Geithner, at the Ford Foundation in Indonesia? Is it reasonable to believe that the Republican party had no knowledge of the background of Barack Hussein Obama? Yet not one word from the Republican establishment as they not only watched, but facilitated the takeover of the United States from within. As I’ve written before, our nation is a captured operation.
The plan was set into motion long ago, stemming back to the founding of the United States and the temporary resistance to the central banking system. In 1913, the creation of the Federal Reserve set the countdown clock in motion for the complete subjugation of the United States to the interests of the global bankers and the global elite. The secret supra-governmental cabals such as the Council on Foreign Relations and the Trilateral Commission worked behind the scenes, under the cover provided by the complicit media, to bring us to this point in history. Perpetual wars were induced to occupy the masses while the chess pieces were placed into their current positions. We are now about to pay the price for our inability or unwillingness to confront the establishment and incremental advancements leading to our own demise.
DHS source: Everything is not “coming up roses”
Much like the security theater we have seen following the attacks of 9/11, we will be subjected to the jack-booted control of a federal army whose allegiance is not to the American people, but to the very architects of the chaos.
“This is the reason that drones are flying over U.S. cities and farmland, and gun control legislation is on the fast track for complete implementation,” stated this source. “How can people look at the situation in Cyprus and not think it won’t happen here? It will, and the blowback will be unlike this country has ever seen. Surveillance, disarming the public, and conditioning the people to believe it’s for their own safety is and has been part of the plan all along. Anyone owing a gun will be demonized and described as contributing to the problem.”
“What happens when the middle class loses much of their wealth, or it is confiscated, by the stroke of a pen or a keyboard? What will the stores look like when people, unprepared due to the damn lies of the corporate media and the shills for the ruling elite, run to empty out everything they can get their hands on as the world, as they know it, collapses around them?”
It was during my most recent contact with my source yesterday that he admitted that the situation will be blamed not on the bankers and the elected leaders who are raping us of our wealth and buying power, but on “right-wing, gun-toting Conservative ‘militia’ groups who believe that the situation is orchestrated.”
And, of course, it is orchestrated.
“There is no Republican-Democrat argument to be made anymore. It’s all political theater to keep the majority of the masses occupied while the true enemy has already captured both parties,” he added. “They are all in on it, either knowingly or unwittingly, the takeover, that is. And it’s getting harder to believe that there are any who are unwitting accomplices at this point.”
“When the curtain is pulled back to reveal the true agenda of a single digital world currency, the people who have been yelling the loudest about such ‘conspiracy theories’ will be specifically singled out and demonized. They will be blamed for causing the panic we will see, and of course, dealt with by the army we asked for, accepted and even tolerated.”
Anyone who still believes that the information provided by this insider is “doom porn” or some self-created fantasy need to look at the events taking place in Cyprus. It’s coming to America. It has already begun.
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