Monday, June 3, 2013

Harvey Organ - June 3 , 2013 Gold and Silver Report - Note the curious activity at Comex with JPM pertaining to both their customer ( Eligible ) account , as well as the dealer ( Registered ) account . Does JPM have the gold to settle contracts for May and June from their customer and dealer accounts ? If yes , what is the hold up ? Note the flatine recently for inventories at the GLD ETF as withdrawals have stopped since May 29 , 2013 - is this anything to worry about as it seems to coincide roughly with JPM's non actions for gold contracts ? Any correlation to what may or may not be happening in the gold accounts at JPM and the recent musing of the BIS and their simple plan to handle big bank failures ? ?

http://harveyorgan.blogspot.com/2013/06/mine-interruptions-at-lonmin-and.html


Monday, June 3, 2013

Mine interruptions at Lonmin and Grasberg/gold and silver shine/Bleeding at GLD stops/Gold at JPM refuses to leave despite issuance/

Good evening Ladies and Gentlemen:

Gold closed up by $20.70 to $1413.70 (comex closing time).  Silver rose by 49 cents to $22.72  (comex closing time)

In the access market at 5:00 pm, gold and silver finished trading at the following prices :

gold: 1412.00
silver:  $22.70
I

At the Comex, the open interest in silver fell by only 683 contracts to 145,316 contracts with silver's fall in price on Friday by 27 cents.  The silver OI is  holding firm at elevated levels . The open interest on the entire gold comex contracts fell  by 10,685 contracts to 375,206 which is extremely low considering  we have deliveries which must be subtracted from OI. As of yet, very little gold has left. There is no question that all of the weak speculators in gold have now departed.  Only the strong remain. The number of ounces which stands on second day notice is 951,700 or 29.6 tonnes.The number of silver ounces, standing for delivery for second day notice is represented by 800,000. No doubt this level will climb as the June month proceeds.


 Tonight, the Comex registered or dealer gold lowers remains at  1.571 million oz or 48.86 tonnes.  The total of all gold at the comex fell slightly and now above the 8 million oz at 8.046 million oz or 250.1 tonnes of gold. However we must see gold leave as contracts are settled for the May and June delivery months.

The GLD  reported no change in inventory in gold. The SLV inventory of silver also remained firm with no losses. 

On the physical side of things, we have another great commentary from Alasdair Macleod.  Jaco Schipper does a great job analyzing the "new deal" with respect to gold trading and storage by the big Dutch bank Amro.  I truly hope that nobody deposits their hard earned money to buy their crap and please do not put your physical gold with them.

Zero hedge has a good story of increasing premiums of gold inside China.

On the paper side of things, we have two great commentaries for you courtesy of Bill Holter.

His first paper deals with the Federal Research Advisory board's advice to the Fed and they are warning of bubbles  with the accompanying unsustainable inflation on the horizon.  This is a very important commentary for you tonight.

His second paper deals with the just released warnings from none other than the BIS.  They warn that the Bank of Japan's massive printing of paper yen is dangerous as it all stimuli from all of the central banks.  The BIS gives the gravest of warnings.  The BIS generally works behind the scenes so when they pound the table, the warnings are indeed dire in nature.

We also have stories on the collapse on the Turkish stock exchange as well as Japan which saw the Nikkei plummet by over 3.72%.  Also during this morning the USA/Yen cross lowered below the magical 100 level which no doubt will cause a massive exodus from the yen carry trade with further turmoil tonight.


We will go over these and other stories but first.....................

Let us now head over to the comex and assess trading over there today.
Here are the details:


The total gold comex open interest fell  by 10,685 contracts from  385,901 down to 375,206 with gold falling by $18.40 on Friday. The front active month of June saw it's OI fall by 5667 contracts from 10,513 down to 4946. We had 4571 contracts served upon our longs on day no 2 for the June delivery cycle.  We thus lost 996 contracts or 99,600 oz from standing this month. The next delivery month is the non active July contract and here the OI fell by 3 contracts down to 527.  The next active delivery month for gold is August and here the OI fell by  6,334 contracts from 221,946 all the way down to 215,612 . The estimated volume today was poor at 139,940 contracts.    The confirmed volume on Friday was  good at 182,940 contracts. It looks to me like all of the gold longs have been washed out!!



The total silver Comex OI completely plays to a different drummer than gold. Its OI fell  by only 683  contracts to 145,316,  with  silver's fall in price to the tune of 44 cents on Friday.  The front non active June silver contract month shows an OI of 140 contracts for a loss of 15 contracts.  We had 20 notices filed on Friday so in essence we gained 5 contracts or 25,000 additional silver ounces will stand for the June delivery month.  The estimated volume today was good, coming in at 42,902 contracts.  The confirmed volume on Friday was excellent  at 52,763.


Comex gold/May contract month:


June 3/2013

 the June contract month:




Ounces
Withdrawals from Dealers Inventory in oz
100.000 oz (Brinks)
Withdrawals from Customer Inventory in oz
 12,963.649  oz (JPMorgan)
Deposits to the Dealer Inventory in oz
nil
Deposits to the Customer Inventory, in oz
500.183 (Brinks,Scotia)
No of oz served (contracts) today
 1415 (141,500  oz)
No of oz to be served (notices)
3531 (353,100 oz
Total monthly oz gold served (contracts) so far this month
5986  (598,600  oz)
Total accumulative withdrawal of gold from the Dealers inventory this month
100.000 oz
Total accumulative withdrawal of gold from the Customer inventory this month


 
1326.269 oz



We again had lousy activity at the gold vaults and mighty strange for the  first two days of the June delivery cycle.
The dealer had 0 deposits and 1  dealer withdrawal.

i) Out of Brinks, 1 brick of exactly 100.000 oz
this is the first .000 in quite some time (after I complained to the CFTC)





We had 2 customer deposits today:

i) Into Brinks;  294.46 oz
ii) Into Scotia:  205.723 oz






total customer deposit: 500.183 oz



We had 1  customer withdrawal today and the vault is our carefully watched vault JPMorgan.

Out of JPMorgan customer account:  12,963.649 oz

total customer withdrawals:  12,963.649  oz

We had 0  adjustments 


If you will recall, we needed to see 100,000 oz of gold removed from JPMorgan's customer account. (1000 contracts served upon our longs in mid May)  Strangely only 12,963.oz were removed from the customer account of JPM today.


The JPMorgan customer vault inventory falls to  333,878.117 oz or 10.38 tonnes.
You will also recall on Saturday night, I reported that JPMorgan had 470,322.102 oz in it's dealer account.

On Day 1 (first day notice) we had 4571 contracts served upon of which 4551 contracts were issued from the dealer (house account) of JPMorgan.

On Day 2  (today) we had 1415 notices filed of which zero came from HSBC and 192 contracts were issued by JPMorgan's dealer account and 43 notices were issued from their customer account of JPM.

The customer account prior to today stood at 346,844.766 oz and with the removal of the 12,9063.649 oz leaves us with 333,878.117 oz

We are still missing 91,337 oz which must come from JPMorgan's customer account. The initial delivery notice issued from JPMorgan occurred a week ago last Friday.

On the dealer side of JPMorgan: the total number of gold contracts issued from the JPMorgan vault equals  4551 contracts (day 1) +  192 contracts (day 2) 
equals  4743 contracts or 474,300 oz

JPMorgan's dealer vault registers 470,322.102 oz of which zero gold ounces left.

somehow we have a negative balance as   i) the gold has not left JPMorgan's dealer account yet

ii) it is still deficient by 3978 oz

JPMorgan has not had any deposits in gold in quite some time.
How will JPMorgan satisfy this shortfall??

HSBC 's dealer vault gold is also slim as it remains at: 260,323.275 oz  (8.09 tonnes)


Tonight the dealer inventory remains tonight at a low of 1.571 million oz (48.86) tonnes of gold. The total of all gold slightly contracts, resting tonight at 8.042 million oz or 250.1 tonnes.

Today we had 1415 notices served upon our longs on first day notice for 141,500 oz of gold. In order to calculate what I believe will stand for delivery in June, I take the OI standing for June (5986) and subtract out today's notices (1415) which leaves us with 3531 contracts or 353,100 oz left to be served upon our longs.


Thus  we have the following gold ounces standing for metal in June:

5986 contracts x 100 oz per contract  or  598,600 oz served upon +  3531 contracts or 353,100 oz (left to be served upon)  =  951,700 oz or 29.60 tonnes of gold. 

We lost 99,600 oz of gold standing for the June contract month.



 We now have the official USA production of gold last year and it registered 230 tonnes.  Thus approximately 19.16 tonnes of gold is produced by all mines in the USA per month. Thus the amount standing for gold this month represents  154.4% of that total production.


end






Silver:



June 3.2013:  June silver contract month: 



Silver
Ounces
Withdrawals from Dealers Inventory622,560.93  oz (CNT)
Withdrawals from Customer Inventory 1,164,912.871 oz (Brinks, Delaware, Scotia,JPM)  
Deposits to the Dealer Inventory nil
Deposits to the Customer Inventory 553,069.000( Brinks,CNT)
No of oz served (contracts)2  (10,000  oz)
No of oz to be served (notices)138  (690,000 oz)
Total monthly oz silver served (contracts) 22  (110,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month701,301.63 oz
Total accumulative withdrawal of silver from the Customer inventory this month1,227,181. oz


Today, we  had huge activity  inside the silver vaults.

 we had 0 dealer deposits and 1  dealer withdrawals.




i) Out of the dealer CNT:  622,560.93  oz

total dealer withdrawal:  622,560.93 oz


We had 2 customer deposits:


i) Into brinks:  155,073.87. oz
ii) Into CNT:  397,995.13 oz




total customer deposit; 553,069.000  oz


We had 4 customer withdrawals:


i) out of Brinks:  466,865.03 oz
ii) Out of Delaware:  435,552.03 oz
iii) out of JPM:  211,669.96
iv) out of Scotia:  50,835.86 oz







total customer withdrawal    1,164,912.871   oz 

  
we had 2    adjustments  today

i) out of JPMorgan:  120,647.162 oz was removed from the dealer and this landed into the customer account at JPMorgan

ii) Out of Scotia:  50,120.800 oz was removed from the customer and landed into the dealer account.


Registered silver  at :  42.035 million oz
total of all silver:  164.5 million oz.




The CME reported that we had 2 notices filed for 10,000 oz on this second day notice. In order to calculate what we believe will stand in the month of June, I take the Oi standing for June (140) and subtract out today's notices (2) which leaves us with 138 notices or 690,000
  
Thus the total number of silver ounces standing in this non  active delivery month of June is as follows:

22 contracts x 5000 oz per contract (served) = 110,000  oz  + 138 contracts x 5000 oz =  690,000 oz left to be served upon =  800,000 oz

we gained 25,000 additional silver ounces standing.



Now let us check on gold inventories at the GLD first: notice GLD ETF inventory has flatlined.....


June 3.2013:



Tonnes1,013.15

Ounces32,573,918.24

Value US$45.662  billion




May 31.2013:


Tonnes1,013.15

Ounces32,573,918.24

Value US$45.403  billion




May 30.2013:

Tonnes1,013.15

Ounces32,573,918.24

Value US$46.023   billion






May 29.2013:


Tonnes1,013.15

Ounces32,573,918.24

Value US$45.014  billion







*   *   *  

Selected news and views....


Strong Gold/silver bullion coin sales headed for a record despite a sluggish May:



 (courtesy Dorothy Kosich/Mineweb)


  

U.S. gold bullion coins headed for record despite sluggish May

The strong sales in U.S. Mint gold and silver bullion coins seen in April faltered in May, U.S. Mint figures reveal.
Author: Dorothy Kosich
Posted: Monday , 03 Jun 2013
RENO (MINEWEB) -




Sales of the American Eagle silver bullion coins remain on track to set a new annual record this year. May sales, however, were down more than 15% from April.
Meanwhile, May sales of American Eagle gold bullion coins fell nearly 67% from April, U.S. Mint figures showed as of Sunday.
May sales of American Eagle one-ounce gold bullion coin sales were 61,000 ounces in May, up from 49,000 ounces in May 2012. However, American Eagle one-ounce gold bullion coin sales soared to a total of 187,500 ounces in April 2013.
Total American Eagle gold bullion coin sales of all denominations for May 2013 were 70,000 ounces, up from a total of 53,000 ounces for May 2012. Total gold sales for the first five months of this year are reported at 572,000 ounces.
Sales of the American Eagle silver coins were a total 3,458,500 ounces in May 2013, up from 2,875,000 ounces in May 2012. However, May silver bullion coins sales declined from total April 2013 sales of 4,087,000 ounces.
Total year-to-date sales for the American Eagle silver bullion coins were 21,768,500 at the end of May.
Meanwhile, May sales of the America the Beautiful five-ounce silver bullion coins totaled at 25,800 coins. The first of the 2013 coins did not launch until May 13th.



http://www.mineweb.com/mineweb/content/en/mineweb-whats-new?oid=192755&sn=Detail


Another great commentary from Alasdair Macleod:

(courtesy Alasdair Macleod/GoldMoney Research)


Alasdair Macleod: Why gold is money

Submitted by cpowell on Mon, 2013-06-03 02:21. Section: 
10:20p ET Sunday, June 2, 2013
Dear Friend of GATA and Gold:
In commentary posted tonight, GoldMoney research director Alasdair Macleod explains why gold is money, contrary to opinion in the political mainstream. The political mainstream's complacency about gold, Macleod writes, "is likely to be undermined by events. We already see the four major central banks committed to issuing their confidence-based currency in increasing quantities, to finance their governments and to prop up the banks. We have yet to see how they intend to stop doing so."
Macleod's commentary is headlined "Why Gold Is Money" and it's posted at the GoldMoney Internet site here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.


Jaco Schipper dissects Amro's dealing in gold:





(Courtesy Jaco Schipper Blog)


Nationalized ABN Amro offers fool’s gold

In March, Dutch nationalized banking giant ABN Amro send its trading clients a letter explaining that they have changed the conditions for precious metals trading. In their letter[1], the bank explains that they will no longer deliver physical precious metals (gold, silver, platinum and palladium), that they administer prices slightly differently, and that they have found a new custodian. ABN Amro suggests that clients do not have to do anything, stating “we will administer and manage your precious metals holdings in the new manner”.
Of course clients do not have to do anything, but given the new conditions [2], this is hardly advisable or prudent. Investors with precious metals holdings with ABN Amro are potentially facing fatal risks.
Conditions, schmonditions..
For the proper legal context one must understand that ABN Amro uses a separate brokerage vehicle “Stichting beleggersgiro ABN Amro” through which clients can trade amongst others bonds, stocks, currencies, and precious metals. Under the new conditions — and they state this very explicitly — the “Stichting..” promises that they “will attempt to at least hold 70% of invested funds in precious metals” in the vaults of UBS, in Zürich. Why ABN Amro did not mention UBS is a mere aside, but under the new conditions ABN Amro discloses that they “do not guarantee this to be the case”. So it can be more or less 70% and whether it is actually 60% or 72%, it does not matter; the point is, ABN Amro does not give any guarantee of what is in a UBS vault at all.
Yet there is more. Clients who chose to have exposure to precious metals do not acquire anything themselves. Formally, they only hold a claim on ABN Amro’s brokerage vehicle that owns the metals with UBS. However, UBS can also choose to have gold allocated with a third party, a third party unknown to ABN Amro and its clients. So it is not necessarily the case that clients of ABN Amro have an indirect claim on precious metals in an UBS-vault, but to gold in the vault of some unknown third party “somewhere else”. And then there’s the article that stipulates, “the bank and its “Stichting” cannot be held liable for any third party bankruptcies or that of UBS”. ABN Amro goes even as far as to describe what happens if UBS or an unknown third party goes bankrupt: you stand in line hoping to receive an equal share of what is then to be liquidated, “if there is anything left at all”.
Also troubling, if UBS deems market conditions “extreme”, it has the right to ignore orders given by clients of ABN Amro, and UBS is reserved the right to stop their service at any point in time albeit they have to communicate such a decision 30 days prior before ending their bullion services. So if UBS decides to stop their bullion vaulting “service”, ABN Amro clients can only sell off whatever it is they had bought, and of course, they must hope they have the opportunity to do so without UBS autonomously declaring market conditions as too extreme.
So what is ABN Amro actually offering?
It is an intriguing question to ask: what do precious metals investors at ABN Amro really buy? Obviously, it is not an equivalent of physical ownership. It is a “paper only” account and even that is not a proper description because an account is never a one-way street. Despite ABN Amro denominates this account in terms of weight that is valued in euro, clients can never withdraw precious metals, so this denomination is entirely meaningless. Also, it cannot be considered a quasi ETF-certificate because at most, it is an “un-unallocated” claim: the invested funds may be anywhere and likewise the gold. And since physical delivery has been postponed all together, it cannot be regarded as a quasi futures contract or an option on that either.
Given these new conditions, this precious metals investment has become some sort of twisted commodity swap whereby investors swap their money to invest in any upside price potential of precious metals and whereby they take on all sorts of financial counterparty risks without hedging anything at all. Investors always face a price risk, but if one “buys” precious metals with ABN Amro, then one also faces a forced sell-off risk, a (discounted) cash-settlement risk, and last but not least, an outright default risk. And here’s the gist of it: nobody can be held liable if these risks materialize. In other words, investors bet their money on a horse that might or might not exist and for which they can know upfront, this horse will never cross the finish line.
Fiduciary responsibilities?
Personally, I am disappointed in ABN Amro and most prominently in its board. Under leadership of former minister of Finance Gerrit Zalm, ABN Amro is supposed to act as a custodian of Dutch taxpayers who coughed up €17 billion in the nationalization scheme to save ABN Amro from a disorderly collapse from the Fortis holding in 2008. Taxpayers who vested another €13 billion to absorb hidden losses. That’s €30 billion for a bank that nowadays proclaims to have “embedded” a client-centered approach.
Imagine you invested in precious metals with ABN Amro, for example because you deemed them trustworthy and because you wanted to store your precious metals safely. And then ABN Amro tells you they have changed the conditions introducing the very risks you wanted to avoid and tells you, “You do not have to do anything.” If you ask me, ABN Amro has relegated its precious metals clients from “not so savvy” to mere “muppets”.
Taking issue
Some might argue that since ABN Amro fully disclosed their zero accountability, all is fine or say it is OK because Dutch taxpayers are now off the hook for any mishaps in the precious metals markets. But ABN Amro still has to be sold off one day. So if it is not about protecting the interests of small (financial illiterate) investors, or let alone the bigger picture of the precious metals markets (all that paper metal remains a persistent financial taboo), then it still remains a question of jeopardizing ABN Amro’s reputation. In my humble opinion, there are thus 30 billion reasons to take issue with this.
If you are a client at ABN Amro with precious metals, I wouldn’t wait for something to happen. Make no mistake about this: you are potentially left empty handed. And in case people at ABN Amro read this, here’s a question: When something as utterly simple as sticking a lump of metal in a vault, something you apparently cannot guarantee anno 2013 — a banking establishment for crying out loud — then why offer this financial precious metal mumbo jumbo at all? Is your reputation of a trustworthy counterparty not worth anything at all? Is this ABN Amro’s new interpretation of embedding a client-centered approach? Here’s a simple idea: stop offering “fool’s gold” and go back to basics, because if not now, then when? After it is all too late?
As for members of Dutch parliament and Dutch regulators: anyone paying attention? It wouldn’t be the first time you only acted until after it was too late.

[2] ABN Amro’s new conditions (PDF, in Dutch)
Internet site here:


Response by Chris Powell on the above commentary:

(courtesy Chris Powell/GATA/Jaco Schipper

Jaco Schipper: Nationalized ABN Amro offers fool's gold

Submitted by cpowell on Mon, 2013-06-03 03:02. Section: 
11:05p ET Sunday, June 2, 2013
Dear Friend of GATA and Gold:
Analyzing the new terms under which the Netherlands bank ABN Amro offers to trade and hold gold, the Dutch economist Jaco Schipper finds that the bank's customers can have little idea of what they really own, where it is being kept, and what they can be sure of being able to liquidate. Schipper's commentary is headlined "Nationalized ABN Amro Offers Fool's Gold" and it's posted at his Internet site here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.


Oh Boy!! something big is going on.  The BIS now is laying out a simple plan on how to handle big bank failures:

(courtesy Reuters)




BIS lays out "simple" plan for how to handle bank failures

(Reuters) - Central bank forum the Bank for International Settlements laid out a blueprint on Sunday for how to recapitalize a major lender in the event of a failure, seeking to avoid the sort of chaotic ad hoc rescues seen since 2008's financial crash.
Authorities have been grappling since the collapse of U.S. investment bank Lehman Brothers five years ago with the question of how banks regarded as systemically important - or too big to fail (TBTF) - can be recapitalized without causing panic and without needing taxpayer cash.
The BIS paper released on Sunday said its plan would allow banks to be recapitalized quickly and easily and would allow authorities to give an unequivocal guarantee that insured depositors would not lose savings.
"(It) proposes a simple recapitalization mechanism that is consistent with the rights of creditors and enables recapitalization of a TBTF bank over a weekend without the use of taxpayers' money," the paper said.
Under the template laid out by BIS, which is termed a creditor-funded recapitalization mechanism, the bank would undergo a forced recapitalization by its creditors when it reaches the point of failure.
The ownership of a bank would be transferred to a newly created temporary holding company over a weekend. The bank is then immediately recapitalized by writing off the claims of creditors.
The authors suggested the blueprint could be the only way to respect the pecking order for the repayment of creditors, achieve a quick recapitalization and prevent risk from moral hazard, when expectations of government help can encourage banks to take more risks.
The creditor hierarchy would be observed, with subordinated creditors written off and some losses imposed on senior unsecured creditors - enough to give the bank capital to easily withstand future losses and restore market confidence. That would include losses for deposits above the guarantee.
"On Monday morning, the authorities re-open the bank and can provide it with any necessary and appropriate liquidity assistance because it is now well-capitalized," the report said.
The holding company would sell the recapitalized bank in the following months at market prices, and proceeds would be distributed to the written-down creditors.
Management and board members could be replaced between the recapitalization and sale of the bank, if required.
The plan includes elements of other resolution methods, particularly the bail-in of creditors and a holding company resolution.
Europe is pushing ahead with plans to implement a "bail-in" regime that would see bondholders and big depositors take hits.
But the bail-in model does not fully respect the creditor hierarchy, as it can inflict losses on bondholders before shareholders have been fully wiped out, said the BIS report's authors, Paul Melaschenko and Noel Reynolds.

(Reporting by Steve Slater; editing by Patrick Graham)


Bill Holter comments on the BIS announcements this weekend.  As I mentioned above, the BIS generally likes to guide in secret.  They you see them banging the table, you must pay attention

Another important commentary courtesy of Bill Holter





(courtesy Bill Holter/Miles Franklin)



I don't get it.





A couple of years back I wrote a piece similar to what I'm thinking right now.  I couldn't understand "how people couldn't see what was happening".  Now, it is so obvious where we are headed yet it seems that the "disconnect" between those who can "see" and those who can't (or refuse to) has grown.  On the one hand you have the people who warned back in 2006-08 of the housing bubble, debt and banking meltdowns and financial trainwreck.  On the other hand you have the "blue skies" crowd.  Now, just like the back then...someone is going to be wrong, VERY wrong.
  Just over the last week, the BIS has issued 3 separate statements of warning.  (They were in hindsight the only "official" agency to warn ahead of time back in 2007 of the coming crisis).  They recently made a call for cracking down on the collateral chain in the shadow banking system and then over the weekend they said that "stimulus must stop" because it is not and has not worked.  Imagine that?  The central bank of central banks has said that the "savior" for all, ..."QE", printing, monetizing or whatever else you'd like to call it...doesn't work.  They even went so far as to say that "if a medicine doesn't work it doesn't necessarily mean that the dose wasn't strong enough".  Maybe the wrong medicine?
  But wait, it gets even better.  The BIS came out with one more statement over the weekend http://www.reuters.com/article/2013/06/02/us-banks-recapitalisation-bis-idUSBRE9510CO20130602 .  They say that they have a "simple" plan to "recapitalize" banks that fail.  Not just "any" banks mind you, no, they are talking about U.S. Banks!  This simple plan is really "simple"...no more bailouts, no more taxpayer monies (maybe because it's not doable and the Treasury has already broken itself over the last 5 years?).  This simple plan proposes to wipeout shareholders, preferred shareholders, bond holders and other creditors...AND depositors.  Yes, the same as Europe is working on and of course the same as the poor old Cypriots have already experienced.
  So the BIS has now within 1 week's time warned about the daisy chain called "collateral, warned that QE (monetizing debt) doesn't work and should be halted, and have now laid out a plan to "fix" insolvent U.S. banks.  Like I asked last week..."Why now?".  Of course, while this has been happening we have seen the parade of jokers on CNBC spouting bullish garbage with Cramer in the background screaming BUY BUY BUY!   As I said above, someone is going to wrong, seriously wrong.  There is one side saying that we have blue skies 'til the year 2525 and the other side saying it's over and the entire system is going to collapse.  So which is it?
  Well, these 2 sides are basically the same people and institutions that chose sides back in 2007.  The "Blue Skyers" back then are the same group (Keynesians and Monetarists) that are pointing to the stock market (and current correction in Gold) and saying "look, all is well".  The Austrians on the other hand are saying that it is game over and we don't (won't) get another chance like back in 2008-09 to try to reflate because Treasury balance sheets have already been wasted.
  As for me?  I just don't get it.  I don't see how anyone can even glance (unless it's only at incorrect headlines) at the current situation and not see what is coming.  I have received e-mails about how Gold is a "risky asset" (it is not, it is simply money at it most basic, raw and core form) and owning it is for barbarians.  I have received e-mails telling me what and idiot alarmist I am because I believe the LBMA and COMEX will default on their Gold and Silver contracts.  "This" can never happen they say (at least in our lifetimes).  "This" I personally say HAS to happen because there are 100 ounces "sold" for every 1 real ounce in existence.  AND the last "correction" has served to at least double global demand which will only bring the final day of reckoning closer on the calendar.
  I don't get a lot of things, how was the price of lumber crashing if real estate is so "hot"?  How are the banks absolutely loaded with foreclosed RE and yet reporting higher earnings due to "lower" loan loss provisions.  How is unemployment reported under 8% if it is over 17% as measured in the old days?  How is inflation reported under 2% when everything you look at is at higher by 10% over the last year?  How can interest rates be where they are if inflation is already far higher, are people actually locking in guaranteed losses?  And what about the various short term rates that are actually negative where investors PAY the borrower to "safeguard" their monies?  What's up with this?  Of course, I wouldn't be a true "lunatic" if I didn't ask the question, how is it that all of the "selling" in huge and panic fashion in Gold and Silver has caused shortages?  Where did all of this "sold" metal go to?  Like I said, I don't get it.
  I do understand one thing for sure.  We are coming to an absolutely EPIC and HISTORIC crossroads in the global financial and economic highway.  The choices made and "sides" taken now will affect the rest of your lives no matter what age you are now.  Your actions now will probably affect not only the next generation but also the one following.  "Someone" is going to be wrong and will be wiped out financially.  Myself?  I am going with the ones who have been right in the past for the right reasons.  Call me an idiot.  Call me stupid.  Heck, call me barbaric!  I vote for common sense!  Regards,  Bill H.

end


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