Gold & Silver Articles
A scrolling feed of the latest and best articles on the Gold & Silver market from Ed Steer’s Gold & Silver Daily. Every day he lists all the important and must-read articles around the web, this is unmissable.
- Wed, 22 Feb 2012 11:10:26 +0000: John Embry: Machinations to Blame For End-of-Year Slide - Ed Steer's Gold & Silver DailyAuthor:
Yesterday in Gold and Silver
Ed_GSDFebruary 22, 2012 11:10am GMTBy 3:00 p.m. in Hong Kong on their Tuesday afternoon, gold was up about seven dollars...and from there until shortly before the Comex opened in New York, the gold price gave back about half of that gain...such as it was.
But the moment that trading began in New York, it was a whole new ball game. In four separate steps, gold rose another twenty dollars...and closed virtually on its high of the day.
Gold closed at $1,760.30 spot...up $26.20 from Monday's close. Net volume, which was pretty chunky around the London open...checked in around 188,000 contracts. A bunch of that volume was from Monday, so it wasn't as heavy as it seemed, but heavy enough nonetheless.
As I pointed out in 'The Wrap' in yesterday's column, the rally going into the London open on their Tuesday morning ran into some real resistance...and it's obvious that the $20 rally in New York ran into heavy resistance as well.
It was pretty much the same price action in silver. Nothing much happened until shortly before 2:00 p.m. in Hong Kong on their Tuesday afternoon. The subsequent rally ran into a lot of resistance...and every penny of those gains...and a few cents more...disappeared by 12:30 p.m. in London.
Then, in a manner very similar to gold, away silver went to the upside when the Comex opened less than an hour later. The high of the day [$34.58 spot] came moments before the Comex trading day ended at 1:30 p.m. Eastern time. Silver then got sold off about two bits into the close.
Silver finished the Tuesday trading day at $34.35 spot...up 74 cents. Net volume [after removing the roll-overs and Monday's trading volume] was around 36,000 contracts. I was expecting a much higher volume number than that...and was happy that it was 'only' that much.
The dollar index spent Tuesday in a wild 40 basis point trading range around the 79.00 mark...which is exactly what it was doing when I wrote about it twenty-four hours ago as well.
The gold stocks gapped up...and then added to their gains for the next hour or so. But by 11:00 a.m. Eastern..more or less...they traded basically sideways in a very tight range, despite what the gold price did after that. The HUI finished up 3.08% on the day.
It almost goes without saying that the silver stocks put in a robust performance as well...helped along immensely by the Hecla Mining announcement of silver-linked dividends. Nick Laird's Silver Sentiment Index closed up 3.35%.
(Click on image to enlarge)
The CME's Daily Delivery Report showed that only 24 gold contracts were posted for delivery on Thursday.
The GLD ETF showed a small increase yesterday as an authorized participant shipped in 9,718 troy ounces. But it was a different story over at the SLV ETF yesterday, as 680,164 ounce were reported withdrawn.
Obviously the silver was more desperately needed elsewhere, as there was nothing in the price activity during the last two or three trading days that would warrant such a withdrawal. Since February 9th, there has been 4.1 million ounces of silver withdrawn from SLV, even though the silver price has basically traded sideways for the last month, at just under $34 the ounce.
The U.S. Mint started off the week with a sales report...but a very small one. They sold 1,000 ounces of gold eagles...1,000 one-ounce 24K gold buffaloes...and 115,000 silver eagles. Month-to-date sales are pretty pathetic...16,000 ounce of gold eagles...4,500 one-ounce 24K gold buffaloes...and 950,000 silver eagles.
The Comex-approved depositories reported receiving 930,708 ounces of silver on Friday...and shipped 457,876 ounces out the door. The link to that action is here.
I have slightly fewer stories today than I did yesterday, which suits me just fine...and you as well, I would suspect.
Since February 9th, there has been 4.1 million ounces of silver withdrawn from SLV, even though the silver price has basically traded sideways for the last month.Nick Barisheff: Bullion Management Group Interview. Rick Rule - Greek Bailout and What it Means for Gold. Nigel Farage - Catastrophe Imminent & Gold to Break $2,500.Critical Reads
Some Doubt a Settlement Will End Mortgage Ills
Ed_GSDFebruary 22, 2012 11:10am GMTEven as government officials prepare to unveil new standards this week for how banks treat millions of Americans facing foreclosure, housing advocates and homeowners are skeptical the rules will be able to do something past efforts have not: provide a beleaguered borrower with one individual to help them navigate the mortgage maze.
While the entire process of seeking a mortgage modification is complicated and time-consuming, few elements are as maddening as the inability to get through to a representative at the bank, or being asked for the same documents again and again.
So the promise of a single point of contact has emerged as a crucial element in the much-ballyhooed $26 billion settlement reached earlier this month involving state attorneys general, the federal government and the five biggest mortgage servicers. These rules will apply nationwide and come with commitments of strong enforcement by federal and state authorities, but they carry a familiar ring for those experienced in the foreclosure process.
This story was in the Monday edition of The New York Times...and I thank reader Phil Barlett for sending it along. The link is here.
As Dow Passes 13,000 In Nominal Terms, Here Is The "Real" Picture
Ed_GSDFebruary 22, 2012 11:10am GMTThree charts that perhaps will calm the nominal euphoria as Dow 13,000 screams across the screens. Since May 2008, the Dow is unchanged in price and down 50% in 'real' gold terms. The picture is just as disheartening from the start of 2011 and 2012. Next stop Dow 20,000 and Gold 20,000?
From May 2008, the Dow priced in Gold is down 50% while we have nominally recovered unchanged. From the start of 2011. The Dow is up 11.35% while in real terms it is down 12.4%...and from the beginning of this year, the Dow is up 4.8% while in gold 'real' terms, it is down 4.25%.
This short zerohedge.com piece from yesterday is another Phil Barlett offering. The charts are certainly worth the trip...and the link is here.
Under Volcker, Old Dividing Line in Banks May Return
Ed_GSDFebruary 22, 2012 11:10am GMTThe Volcker Rule, and its limitations on bank trading, may have the unintended effect of dividing the world back into investment banks and commercial banks. The unusual twist here is that Goldman Sachs and Morgan Stanley may end up stuck on the wrong side of the fence, treated under the law as commercial banks instead of the investment banks they once were.
The backdrop to this issue is that it is increasingly clear that banks are simply unable to make as much money from proprietary and other trading businesses as they did before the financial crisis. Take Goldman Sachs. In 2007, Goldman had revenue of $7.6 billion from traditional investment banking, but $31.2 billion in revenue from trading-related operations. Last year, Goldman had just $17.3 billion in revenue related to trading operations.
This is a trend likely to accelerate. Under the Dodd-Frank regulatory overhaul, derivatives are to be traded on central clearing agencies rather than between investment banks as before the financial crisis. Heightened bank capital requirements prevent warehousing large amounts of securities and increase the cost of financing. Then there is the Volcker Rule, which is likely to substantially reduce much of the banks’ profits from their trading businesses.
This is the third story in a row from The New York Times...and the third in a row from Phil Barlett. The link is here.
As US Debt To GDP Passes 101%, The Global Debt Ponzi Enters Its Final Stages
Ed_GSDFebruary 22, 2012 11:10am GMTYesterday, without much fanfare, US debt to GDP ratio hit 101% with the latest issuance of $32 billion in 2 Year Bonds. If the moment when this ratio went from double to triple digits is still fresh in readers minds, is because it is: total debt hit and surpassed the most recently revised Q4 GDP on January 30, or just three weeks ago.
Said otherwise, it has taken the US 21 days to add a full percentage point to this most critical of debt sustainability ratios: but fear not, with just under $1 trillion in new debt issuance on deck in the next 9 months, we will be at 110% in no time.
This short piece was posted over at zerohedge.com yesterday...and I thank Australian reader Wesley Legrand for bringing it to my attention. It's worth the read...and the graphs are great. The link is here.
New Bailout Is a Reprieve for Greece, but Doubts Persist
Ed_GSDFebruary 22, 2012 11:10am GMTGreece may have dodged a default with its last-minute bailout deal, but longer-term doubts over its ability to repay its staggering debts remain, raising questions about whether even more rescue money will eventually be needed.
European leaders were to sign off on Greece’s second bailout of about 130 billion euros ($172 billion) at their summit meeting in Brussels next week — subject to Greece’s taking immediate steps to put into effect the deep structural changes that they agreed to.
Greece must also persuade, if not actually force, its private sector bondholders to accept a higher-than-expected loss of more than 70 percent on their holdings to reduce Greece’s debt stock by the targeted amount of 100 billion euros.
This is another Phil Barlett offering from The New York Times yesterday...and the link is here.
How Goldman Sachs Helped Mask Greece's Debt
Ed_GSDFebruary 22, 2012 11:10am GMTNick Dunbar, author of The Devil's Derivatives, reveals how the country turned to investment bank Goldman Sachs for help getting around the deficit rules in order to join the Eurozone.
In his report for BBC's Newsnight, some of those who did the deal, talk publicly for the first time.
This 10-minute video was posted over at bbc.co.uk website on Monday. I thank reader 'T. Unger' for sending this my way...and it's well worth watching. The link is here.
A Political Establishment in Freefall: Greece Lurches to Left Amid Radical Austerity
Ed_GSDFebruary 22, 2012 11:10am GMTThere are many uncertainties in Greece today: whether the country can remain in the euro zone, whether the €130 billion ($171.8 billion) second bailout package will sufficiently reduce the insolvent country's staggering debt load, and whether the Greeks will ever implement the reforms their international creditors are demanding of them. At the moment, only one thing seems predictable: that nothing will remain the same. "Everything is changing, and everything is frightening," writes the newspaper Kathimerini.
Only with great difficulty was the transitional government of Prime Minister Lucas Papademos able to commit last week to the reforms that the European Union, the European Central Bank (ECB) and the International Monetary Fund (IMF) had demanded -- and its commitment came at a high political price. The nationalist right-wing Popular Orthodox Rally (LAOS) withdrew from the government, and the heads of the two large traditional parties, the Panhellenic Socialist Movement (PASOK) and the conservative Nea Dimokratia (ND), or New Democracy, saw 43 of their members resign or be expelled from their respective parties.
The lesson can be summed up with two words: "panta rhei," or everything flows. No political commentary these days describes the situation in Greece as clearly as these words from ancient Greece.
This story was posted over at the German website spiegel.de yesterday...and I thank Roy Stephens for sending it along. The link is here.
Averting the Next Greece: Portugal Needs More Money To Stay Afloat
Ed_GSDFebruary 22, 2012 11:10am GMTWith its massive austerity measures, Portugal has become the poster child of the troika of the EU, ECB and IMF. But the country is still stuck in a deep recession and it is unclear how it will return to growth. It may need to rely on European loans for years to come.
Nothing is sacred to Pedro Passos Coelho, not even Carnival. Portugal's prime minister expects government employees at their desks and working on Entrudo, the traditional high point of the country's Carnival celebrations, which falls on this Tuesday.
This is "not the time to talk about tradition," the conservative head of state has commanded those of his citizens who see the move as an attack on their culture. Rather, he says, they should stop "whining" about austerity measures. It's time, the prime minister adds, to break free of old structures and to change "lazy and sometimes self-involved patterns of behavior."
Fans of Carnival celebrations are not the only ones affected -- churchgoers and nationalists will have to make bitter sacrifices as well. In response to this national state of emergency, the Portuguese government plans to do away with four public holidays. Corpus Christi and Assumption are to be crossed off the calendar without a replacement, and public holidays celebrating Portugal's first republic and the 1640 end to its union with Spain can no longer be commemorated, as is customary, with family celebrations and an extended siesta.
Portugal, like Greece, is dead meat as well. I consider this 2-page story on Portugal a must read...and it's another Roy Stephens offering from yesterday's edition of spiegel.de. The link is here.
Michael Pento - Money Supply & Inflation Exploding Around the World
Ed_GSDFebruary 22, 2012 11:10am GMTEurope's central planners have resorted to the ECB doing a massive counterfeiting scheme in an attempt to bailout insolvent nations.
This has never worked from Hungary, to Bosnia, to Argentina, to Weimar Germany. Inflation can never bail you out of insolvency. Because central bankers around the world believe that inflation is equivalent to growth, they are going to persist on this monetization of insolvent debt.
All of your developed countries from Japan, to Europe and America are in a condition of insolvency. As I said, central bankers are trying to monetize this debt away. It will never work, it has never worked and it cannot work...
This blog was posted over at King World News yesterday...and the link is here.
Rick Rule - Greek Bailout and What it Means for Gold
Ed_GSDFebruary 22, 2012 11:10am GMTHere's another blog that Eric King sent my way yesterday. It's posted over at the KWN website as well...and the link to that is here.
Nigel Farage - Catastrophe Imminent & Gold to Break $2,500
Ed_GSDFebruary 22, 2012 11:10am GMTHere's the last King World News offering of the day. Eric sent me this blog yesterday afternoon...and the link is here.
Nick Barisheff: Bullion Management Group Interview
Ed_GSDFebruary 22, 2012 11:10am GMTThis audio interview with Nick Barisheff runs for an hour, so you may want to top up your coffee before you hit the 'play' button. It was posted over at the voiceamerica.com website on Monday...and the link is here.
John Embry: Machinations to blame for end-of-year slide
Ed_GSDFebruary 22, 2012 11:10am GMTThis 2-page offering from Sprott Asset Management's chief investment strategist, John Embry, was posted in the February edition of the Investor's Digest of Canada...and I thank Australian reader Wesley Legrand for bringing it to my attention. It is, of course, a must read...and it's posted over at the sprott.com website. The link is here.
The Wrap
Ed_GSDFebruary 22, 2012 11:10am GMTI was delighted to see both gold and silver head higher in New York yesterday...but unhappy about the fact that the strong rallies that started before London opened early yesterday morning, were sold off pretty hard. As I mentioned at the start of this column, there was very big volume in both gold and silver yesterday...particularly in gold...so these rallies are obviously running into strong resistance from the usual traders in the Commercial category.
We still need to see both metals power higher from here in order to form a clear break out. Yesterday's price action in New York was a good start, but we'll need more price action like that...and soon.
All of yesterday's price and volume data will be in Friday's Commitment of Traders Report, if it's all reported in a timely manner, that is. And because of the holiday on Monday, yesterday was the cut-off for that report. With a new COT weekly cycle now starting, it will be interesting to see how JPMorgan et al allow gold and silver prices to perform during the next day or so.
Looking at overnight action, both metals got sold off a bit right from the open in New York at 6:00 p.m. Eastern time last night...and although they both recovered somewhat going into the London open, both got sold down again at the usual time...just a few minutes before trading began at 8:00 a.m. GMT. As I hit the 'send' button at 5:18 a.m. Eastern time, gold is down about seven bucks...and silver is down about 25 cents.
With the subdued price action, the volume numbers are lower than they were this time yesterday...but not by a lot, at least in gold. The roll-overs out of the March delivery month in silver are getting more frantic as the days go by. First Day Notice for March is next Wednesday, the 29th. As of this writing, there are still 94 silver contracts open in February...and it remains to be seen if the owners of these remaining contracts will sell, roll over, or stand for delivery. We'll know in the next five business days.
The dollar index is still hanging in there...very tight to the 79.00 mark for the third day in a row.
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And it's not really a 'price to be paid'...so much as an investment in your future. This fee includes complimentary subscriptions to both Casey Energy Report [$995 per year] and Casey Energy Opportunities [$79 per year]. So if energy is your bailiwick, you can find out more about Casey Energy Confidential...and the link is here.
See you on Thursday.
- Tue, 21 Feb 2012 11:12:26 +0000: Rising Gold Price Got You Down? Call the BIS at 1-800-RIG-MKTS - Ed Steer's Gold & Silver DailyAuthor:
Yesterday in Gold and Silver
Ed_GSDFebruary 21, 2012 11:12am GMTWell, here's my column for Tuesday...such as it is.
With the U.S. markets closed for President's Day, the gold market was but a shadow of what it normally is. Volume and price action was non-existent.
The gold price did jump up about twelve bucks right at the open, but that appeared to be mostly dollar related...as the dollar gapped down at the open on Sunday night...and both gold and silver responded as one would expect.
Gold finished the Monday trading day at $1,734.10 spot...up $10.30. Net volume was around 35,000 contracts.
The silver price also gapped up at the open...and the high of the day was in around 9:00 a.m. Hong Kong time. From there, the price got sold off about 30 cents..with its low coming minutes before 11:00 a.m. in London. From that low, silver crawled back almost to its high of the day by the close of trading at 1:15 p.m. Eastern time.
Silver closed at $33.61 spot...up 33 cents from Friday's close. Net volume was only around 4,000 contracts.
As I mentioned in the first paragraph, the dollar index gapped down about 35 basis points right at the open in New York at 6:00 p.m. on Sunday night...and then dropped another 30 basis points starting shortly after 10:00 a.m. in London.
Ninety minutes later, the dollar had pretty much bottomed out...and then began to rise shortly before 11:00 a.m. Eastern time...and closed within an eyelash of 79.00...which was down about 40 basis points from Friday's close.
With the New York and Toronto equity markets both closed yesterday, there were was no HUI or SSI yesterday.
To go along with that, there was no Daily Delivery Report, changes in GLD and SLV, U.S. Mint sales, nor report from the Comex-approved depositories.
Silver analyst Ted Butler had a few things to say in his weekend commentary to paying subscribers...and here are three free paragraphs...
"Conditions in the wholesale physical silver market still appear tight, although retail demand may be cooling off. There is still unusually high turnover or movement of metal into and out from the COMEX approved silver warehouses, as the total level of inventory was mostly unchanged for the week. Although there is little sign of widespread attention to this silver movement, it still resonates with me. That’s because, up until a year or so ago, such consistent turnover didn’t exist."
"The vision of daily large truck deliveries, being loaded and unloaded in and around New York City (not the most traffic-friendly environment) is one I often think about. Having some familiarity with that NYC traffic, I can’t help but ask - who would subject themselves to that experience unnecessarily? What's so important about moving metal so feverishly in those traffic conditions and congestion? The most plausible explanation to me is that most of the near 130 million oz already there is unavailable and new stuff must be brought in to satisfy consistent withdrawal demands. Again, this turnover pattern didn’t exist over the past quarter century."
"Sure, there were times over the past 25 years when many tens of millions and even a hundred million ounces came into and out from the COMEX silver warehouses over varying periods of time. But I don’t ever remember this daily in and out on the COMEX. Also adding to the signs of physical tightness was the withdrawal of 3.5 million oz from the big silver ETF, SLV, this week. Price patterns and trading volume did not suggest that the withdrawal was due to plain-vanilla investor liquidation. The most plausible explanation was that SLV shares were converted to metal and that metal was removed because it was needed somewhere more urgently than in the London warehouse of the custodian. This tends to confirm the tightness scenario, as does the 600 thousand oz withdrawal from the big Swiss silver ETF, ZKB."
The Central Bank of the Russian Federation updated their website with January's data yesterday...and it showed that, officially, they never purchased any gold during the month. They didn't purchase any gold in January of 2010, either. Here's Nick's most excellent graph.
Here's a chart that Washington state reader S.A. sent me last night. It shows all the housing busts of note back to the Great Depression...and compares them to the one going on today.
The only reason that I have a column today is to post the long list of stories that I've accumulated over the weekend.
Gold made a rally attempt to $1,750...and silver tried to blast above the $34 price ceiling...but both were turned back by the usual suspects in the usual way.Nomura's Bob Janjuah: Markets now so rigged by govt. that there's little to say. Eric Sprott: Silver Will Become a Currency Again. Simplicity: Grant Williams. Gold Speaks Up: Casey Daily DispatchCritical Reads
SEC Surrender Continues With Bear Bankers Deal
Ed_GSDFebruary 21, 2012 11:12am GMTOnce again, the Securities and Exchange Commission has embarrassed itself. Last week it let off the hook two hotshot former Wall Street hedge-fund managers who lost a bundle for the investors trusting them to manage their money responsibly.
Instead of going to court on Feb. 13 and laying bare the sordid facts for a jury, at the last minute the SEC settled a civil suit against Ralph Cioffi and Matthew Tannin of the now defunct Bear Stearns Co. These were the hedge-fund managers who five years ago loaded up their two funds with $1.6 billion dollars of lousy mortgage-backed securities and collateralized debt obligations, leveraged them to the hilt and, when the market for the securities soured in July 2007, liquidated the funds.
The price the SEC extracted from Cioffi and Tannin as part of a settlement -- after previously telling the court it intended to go to trial -- was a mere pittance, “chump change,” according to the federal judge in Brooklyn overseeing the case. Cioffi, who made $22 million in 2005 and 2006 at Bear Stearns, will pay just $800,000 and agree to a three-year ban from the securities industry. Tannin, who was paid $4.4 million in his last two years at Bear, will pay $250,000 and agree to a two-year ban. Neither has to admit to wrongdoing. The agreement will deter absolutely no one from trying to pull off a similar stunt.
Crime definitely pays. This story appeared on the Bloomberg website yesterday morning...and I thank Washington state reader S.A. for sending it along. The link is here.
In Alabama, a County That Fell Off the Financial Cliff
Ed_GSDFebruary 21, 2012 11:12am GMTOne county jail here is so crowded that some inmates sleep on the floor, while the other county jail, a few miles down the road, sits empty...as there is no money to run the second one anymore.
There is no money for a lot of things around here, not since Jefferson County, population 658,000, went bankrupt last fall. There is no money for holiday D.U.I. checkpoints, litter patrols or overtime pay at the courthouse. None for crews to pull weeds or pick up road kill — not even when, as happened recently, an unlucky cow was hit near the town of Wylam.
This is life today in Jefferson County — Bankrupt, U.S.A. For all the talk in Washington about taxes and deficits, here is a place where government finances, and government itself, have simply broken down. The county, which includes the city of Birmingham, is drowning under $4 billion in debt, the legacy of a big sewer project and corrupt financial dealings that sent 17 people to prison.
This very interesting, but very depressing 3-page essay, appeared in the Saturday edition of The New York Times...and I thank reader Phil Barlett for sharing it with us. The link is here.
Corporatocracy: Ron Paul says US ‘slipping into fascism’
Ed_GSDFebruary 21, 2012 11:12am GMTRepublican presidential candidate Ron Paul slammed America's system of governance at a rally in Kansas City, saying businesses and government are pushing the country into twenty-first century fascism.
But before you start picturing fair-skinned, blue-eyed CEOs and bureaucrats running amok and with their right arms held high, calm down. What the outspoken Texas Republican meant was fascist corporatism – an economic model most prominently seen in Mussolini’s Italy of the 1920s to the 1940s. Fascist economic corporatism involved government and private management of full sectors of the economy – which Paul says is par for the course in today's America.
“We’ve slipped away from a true republic,” Paul told thousands of his supporters at the rally. “Now we’re slipping into a fascist system where it’s a combination of government, big business and authoritarian rule, and the suppression of the individual rights of each and every American citizen.”
The presidential hopeful echoed words already once delivered to the American people – by their president. Dwight Eisenhower said, in his farewell address to the nation, “In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.”
It's beyond strange to read these paragraphs, because they were posted over at the Russia Today website...and that's where Roy Stephens found this story on Sunday. It's worth skimming...and the link is here.
Drones Set Sights on U.S. Skies
Ed_GSDFebruary 21, 2012 11:12am GMTA new federal law, signed by the president last Tuesday, compels the Federal Aviation Administration to allow drones to be used for all sorts of commercial endeavors — from selling real estate and dusting crops, to monitoring oil spills and wildlife, even shooting Hollywood films. Local police and emergency services will also be freer to send up their own drones.
But while businesses, and drone manufacturers especially, are celebrating the opening of the skies to these unmanned aerial vehicles, the law raises new worries about how much detail the drones will capture about lives down below — and what will be done with that information. Safety concerns like midair collisions and property damage on the ground are also an issue.
American courts have generally permitted surveillance of private property from public airspace. But scholars of privacy law expect that the likely proliferation of drones will force Americans to re-examine how much surveillance they are comfortable with.
This story appeared in The New York Times on Friday...and is another Phil Barlett offering. The link is here.
Nomura's Bob Janjuah: Markets now so rigged by govt. that there's little to say
Ed_GSDFebruary 21, 2012 11:12am GMTYesterday, Zero Hedge published the latest market letter written by Nomura International's investment strategist Bob Janjuah, who sounds quite a lot like GATA: "Bond and currency markets are now so rigged by policy makers that I have no meaningful insights to offer, other than my bubble fears." Maybe in another century or two observations about market rigging by government will become actual news stories in the mainstream financial news media. But for the time being market reality is confined to a few obscure Internet sites.
The original story was posted over at the businessinsider.com website yesterday...and I thank reader George Findlay for bringing it to my attention...and Chris Powell for writing the above introduction. The link is here.
Alasdair Macleod: The destruction of savings by inflation
Ed_GSDFebruary 21, 2012 11:12am GMTWriting for GoldMoney, economist and former banker Alasdair Macleod explains today how interest on savings in the modern fiat money system is more than wiped out by inflation, that the resulting impoverishment of pensioners will impose far greater welfare costs on government than are understood now, and that savers would do far better under a "sound money" system.
I borrowed the story...and the above introduction...from a GATA release yesterday. The story is posted over at the goldmoney.com website...and the link is here.
Libor Manipulation: Another Black Eye for UBS
Ed_GSDFebruary 21, 2012 11:12am GMTFor Switzerland’s largest bank, the hits just keep coming. After years of being whacked with millions of dollars of fines for all sorts of infractions, UBS now appears to be at the center of the financial world’s latest scandal: an alleged conspiracy by traders and brokers to rig the price of derivatives around the world by manipulating a key interest rate.
The Wall Street Journal reports that UBS has admitted to Canadian regulators that between 2007 and 2010, some of its traders and cash brokers conspired to manipulate the London interbank offered rate, also known as Libor. This is the rate that banks use to lend to each other, and it is essentially the backbone of half the world’s fixed-income market, because it’s also used to calculate the price of trillions of dollars of floating-rate securities every day, from car loans to corporate bonds and derivatives.
By allegedly conspiring to set Libor rates, traders and cash brokers appear to have been able to profit off of derivatives linked to it. Bloomberg News reports that UBS recently suspended a number of senior executives and traders in conjunction with the investigation.
Nothing surprises or shocks me any more...and this is just another brick in the wall. I thank reader Brad Robertson for sending along this businessweek.com story from Friday...and the link is here.
Germany drawing up plans for Greece to leave the euro
Ed_GSDFebruary 21, 2012 11:12am GMTThe German finance ministry is actively pushing for Greece to declare itself bankrupt and to agree a "haircut" on the bulk of its debts held by banks, a move that would be classed as a default by financial markets.
Eurozone finance ministers meet on Monday to approve the next tranche of loans from the EU and the International Monetary Fund, designed to stave off national bankruptcy while the new Greek government puts the country's finances in order.
But the severe austerity measures being demanded have caused such fury in Greece, and the cuts required are so deep, that Wolfgang Schäuble, the German finance minister, does not believe that any government would be able to implement them.
Schäuble has a keen grasp of the obvious. This story appeared in The Telegraph on Saturday...and is Roy Stephens second offering of the day. The link is here.
Stop the Second Bailout Package! - EU Should Admit Greece is Bankrupt
Ed_GSDFebruary 21, 2012 11:12am GMTGreece is bankrupt and will need a 100 percent debt cut to get back on its feet. The bailout package about to be agreed by the euro finance ministers will help Greece's creditors more than the country itself. EU leaders should channel the aid into rebuilding the economy rather than rewarding financial speculators for their high-risk deals.
Around a quarter of the package won't even arrive in Athens but will flow directly to the country's international creditors. The holders of Greek government bonds are to get some €30 billion as an incentive to convert their old paper into new bonds. The aim is to keep alive the illusion that Greece isn't bankrupt -- after all, the creditors are voluntarily forgiving part of the debt. The financial sector is cleverly manipulating the fear that a Greek bankruptcy would trigger a fatal chain reaction.
That leaves €100 billion. But that too isn't geared to what Greece needs in order to get back on its feet. It's linked to an estimate of how much debt the Greek economy can bear without collapsing. International technocrats agree that with debts amounting to 120 percent of gross domestic product, the country can just about go on servicing its debt. That's the level at which the cow can go on supplying milk without dying of exhaustion. So 120 percent became the goal.
This story was posted on the German website spiegel.de yesterday...and is Roy's second offering in a row. The link is here.
Britons in Greece told to prepare to leave the country as fears of default mount
Ed_GSDFebruary 21, 2012 11:12am GMTBritons in Greece were warned on Sunday that they may have to be evacuated.
It comes as eurozone ministers prepare to sign off another £108billion rescue package for the crippled economy.
Foreign Secretary William Hague revealed Britons were being urged to register with the consulate as officials are updating plans to evacuate citizens ‘on a daily basis’ in case Greece goes under.
This story was posted in the Daily Mail yesterday...and is Roy Stephens third offering in a row. The link is here.
Three Stories from the Tehran Times
Ed_GSDFebruary 21, 2012 11:12am GMTThe first is headlined "Why Iran can withstand the sanctions". The second bears the title "Export bank will hike oil price to $150, Iran says". The last story is headlined "EU pays price for oil sanction on Iran". I thank Roy Stephens for all three of these stories.
Another March to War? - Matt Taibbi
Ed_GSDFebruary 21, 2012 11:12am GMTAs a journalist, there’s a buzz you can detect once the normal restraints in your business have been loosened, a smell of fresh chum in the waters, urging us down the road to war. Many years removed from the Iraq disaster, that smell is back, this time with Iran.
You can just feel it: many of the same newspapers and TV stations we saw leading the charge in the Bush years have gone back to the attic and are dusting off their war pom-poms.
Once upon a time, way back in the stone ages, when Noam Chomsky was first writing about these propaganda techniques in Manufacturing Consent, our leaders felt the need to conceal – or at least sugar-coat – these Orwellian principles. It was assumed that the American people genuinely needed to feel like they were on the right side of things, and so the foreign powers we clashed with were always depicted as being the instigators and aggressors, while our role in provoking those responses was always disguised or at least played down.
But now the public openly embraces circular thinking like, “Any country that squawks when we threaten to bomb it is a threat that needs to be wiped out.” Maybe I’m mistaken, but I have to believe that there was a time when ideas like that sounded weird to the American ear. Now they seem to make sense to almost everyone here at home, and that to me is just as a scary as Ahmadinejad.
This Matt Taibbi blog posted in Rolling Stone magazine last Friday is well worth the read...and I thank reader U.D. for being the first one through the door with it. The link is here.
US, Iran inching toward talks
Ed_GSDFebruary 21, 2012 11:12am GMTThe foreplay is nearing completion on the Iran situation. The surest sign is that there were no serious takers in Western capitals for the Israeli smear campaign this week that Tehran's agents had been going about placing bombs in New Delhi, Tbilisi and Bangkok. Simply put, there is growing impatience that it is way past the time for histrionics.
Several indicators are available that matters are moving towards a substantive plane. One cluster of events this week consists of the Iranian reply to the letter from the European Union foreign policy chief, Catherine Ashton, penned by Tehran's chief negotiator, Saeed Jalili. Simultaneously, Tehran announced it was developing a new generation of centrifuges and augmenting its number of centrifuges from 6,000 to 9,000 as well as loading a research reactor with Iran's first batch of domestically produced fuel.
While Tehran's announcement of new nuclear "achievements" might have appeared as a belligerent move - Washington derided it as "hype" meant for the domestic audience in Iran - the contents of Jalili's letter, and, more important, the initial responses of cautious optimism it generated within hours in Western capitals convey that there are positive stirrings in the air.
The reaction in Washington is particularly noteworthy. A White House official was quoted as saying, "It [Jalili's letter] could lead to further diplomacy, provided that they [Iranians] are serious about it. We have made clear that this has to be a dialogue about their nuclear program specifically."The author of this piece, that was posted in the Asia Times on Saturday, is M. K. Bhadrakumar. He was a career diplomat in the Indian Foreign Service. His assignments included the Soviet Union, South Korea, Sri Lanka, Germany, Afghanistan, Pakistan, Uzbekistan, Kuwait and Turkey...so I'd say he knows a thing or two about what's happening. This is a must read in my opinion...and it's Roy Stephens final offering of the day. The link is here.
A new kind of hyperinflation: Zimbabwe hikes mining fees by as much as 8,000%
Ed_GSDFebruary 21, 2012 11:12am GMTThe Zimbabwe Chamber of Mines says the government’s hike of pre-exploration fees for the majority of minerals – by as much as 8,000% – will cripple the industry.
According to Reuters a raft of other charges include “registration of platinum and diamond claims going up to $2.5 million and $5 million” and “annual ground rentals ranging from $500 per hectare for chrome to $3,000 per hectare for diamonds.”
NewsDay reports the industry estimates the hikes in fees could cost the mining sector up The country’s 2012 budget also calls for royalty increases of 7.5% for gold and 10% for platinum.
This very short read, posted over at the mining.com website yesterday, is well worth your time...and I thank Australian reader Wesley Legrand for sending it along. The link is here.
John Embry: Audio interview posted at King World News
Ed_GSDFebruary 21, 2012 11:12am GMTI posted the blog of this interview in the middle of last week. Eric sent me the complete audio interview yesterday afternoon. I'd say it's worth listening to...and the link is here.
Simplicity: Grant Williams
Ed_GSDFebruary 21, 2012 11:12am GMTGrant Williams is Portfolio and Strategy Advisor for Vulpes Investment Management in Singapore − a hedge fund running $200 million of largely partners' capital across multiple strategies. Grant has 26 years of experience in finance on the Asian, Australian, European and US markets and has held senior positions at several international investment houses.
Grant made this presentation at the Cambridge House California Investment Conference in Indian Well, California on February 12th. The 30-minute youtube.com video is posted in two parts...and I thank an anonymous reader from Zurich for bringing it to our attention. I've viewed the entire presentation...and it's a must watch. The link to Part 1 is here...and Part 2, here.
Gold Speaks Up: Casey Daily Dispatch
Ed_GSDFebruary 21, 2012 11:12am GMTYesterday's edition of the above dispatch was all about gold. Louis James provided the introduction...and BIG GOLD editor Jeff Clark did the rest. It's certainly worth your time...and it's posted at the Casey Research website. The link is here.
By the way, if you're not receiving this free daily service, you can sign up for it while you're on the site.
Eric Sprott: Silver Will Become a Currency Again
Ed_GSDFebruary 21, 2012 11:12am GMTThis most excellent interview showed up posted over at the silverdoctors.com website yesterday...and is a must read as well. I thank West Virginia reader Elliot Simon for sending it to me...and the link is here.
Rising gold price got you down? Call the BIS at 1-800-RIG-MKTS
Ed_GSDFebruary 21, 2012 11:12am GMTIn a 24-page brochure prepared by the Bank for International Settlements to introduce itself to prospective members at a seminar at BIS headquarters in Basel, Switzerland in June 2008. The brochure includes an advertisement for the gold market-rigging services provided by the BIS to its 50 or so member central banks. Page 17 of the brochure touts "Our Products," including "Gold & Forex Services -- Interventions."
No surprises here, dear reader. This showed up in a GATA release yesterday...and needless to say, it's a must read...and the link is here.
The Wrap
Ed_GSDFebruary 21, 2012 11:12am GMTIn our age there is no such thing as ‘keeping out of politics.’ All issues are political issues, and politics itself is a mass of lies, evasions, folly, hatred and schizophrenia. The very concept of objective truth is fading out of the world. Lies will pass into history. – George Orwell
Well, there's certainly nothing to talk about regarding yesterday's markets in gold and silver, so I'll just post this chart that Nick Laird thought you should see. I'm also going to post the comments [verbatim] he had in the accompanying e-mail...and here they are.
It's an Elliott Wave projection of the future price of gold. The blue plot is gold so far, with the first two up-legs shown. The red line is the future price of gold based on the first two up-legs.
It shows the roadmap of gold behind us & where gold is going in front of us.
Ed, you might not understand it but a lot of your readers will...and they will love it. Please post it in your blog and see the reaction you get from it. I think you will be surprised!!!
To me this chart porn - the best chart I've ever done on gold. This to me as a T/A (technical analyst) is a Picasso or Rembrandt - it is a work of art.
What's more, watch this chart every month for the next 16 months and we should hit W4(B) (see position on chart) by June 2013. If that happens then watch out. Here's the link to the chart, which is posted in the clear.
Cheers, Nick
P.S. Elliott Wave is not infallible - this is only a roadmap & directions might well change. So consider it a rough road map of where gold is going.
(Click on image to enlarge)
The 'click to enlarge' feature will be useful here, as it's a big chart. Any and all comments about this graph should be directed to nick@sharelynx.com.
In overnight activity I note that neither gold nor silver did much until shortly before 2:00 p.m. Hong Kong time during their Tuesday afternoon trading session. Gold made a rally attempt to $1,750...and silver tried to blast above the $34 price ceiling...but both were turned back by the usual suspects in the usual way. Normally JPMorgan et al drop the hammer shortly before the London open...but the way that the metal prices were acting, they would have blown through both these price levels long before that time arrived, so they had to step in sooner.
As of 5:05 a.m. Eastern time, gold is now only up six bucks...and silver is well off its high. One wonders just how many Comex futures contracts on the short side they had to sell to stop these breakouts in their respective tracks?
The CME's volume figures are already very high in both metals, even after Monday's trading volume is subtracted. It's obvious that there's a big fight going on...and 'da boyz' are really throwing everything at the gold and silver price at the moment. The dollar index has been all over the place within a tight trading range centered around the 79.00 cent mark.
It could be an eventful day in the precious metals pits in New York this morning and, as is almost always the case, I await the Comex open with great interest.
See you tomorrow.
- Sat, 18 Feb 2012 15:30:08 +0000: Gold Bulls Expand as Billionaire Paulson Says Buy - Ed Steer's Gold & Silver DailyAuthor:
Yesterday in Gold and Silver
Juli_GSDFebruary 18, 2012 3:30pm GMTThe gold price did approximately nothing during the Friday trading day...at least not until shortly before the equity markets opened in New York at 9:30 a.m. At that point, not-for-profit sellers took it upon themselves to knock $15 off the price going into the London p.m. gold fix at 10:00 a.m. Eastern time.
From there, the gold price recovered a bit, only to get sold down again, with the low of the day [$1,716.40 spot] coming shortly after 11:00 a.m. in New York. Then the gold price rallied a few dollars until the Comex trading session closed at 1:30 p.m...and from that point on, gold flat-lined during the electronic trading session that followed. From it's New York high to its New York low, gold got sold off about twenty-one dollars.
Gold closed at $1,723.80 spot...down five bucks on the day. Net volume was very light...around 104,000 contracts.
Silver's price path was virtually identical. Like gold, silver had a brief spike to its high of the day...$33.80 spot...at 8:30 a.m. Eastern time, but got hit immediately...and then, at the same time as gold, the silver price got sold off, with the low of the day [$32.97 spot] coming sometime between 11:30 a.m. and 12:30 p.m. in New York.
The subsequent...and very tiny rally...ended at the Comex close...and silver, too, traded sideways for the rest of the session. From its New York high to its New York low, silver got sold off about 83 cents, or 2.46%. Silver closed at $33.28 spot...down 24 cents on the day. Net volume was also pretty light...around 29,000 contracts.
Here's the New York Spot Silver [Bid] chart on its own. Note the 8:30 a.m. price spike to $33.80 spot...which got smacked in a heartbeat. Gold had a similar spike at the very same moment, but not as big. It's hard to pick out the exact bottom tick...but it looks like a few minutes past high noon in New York to me.
If you examine Kitco's 24-hour chart above against this New York chart below, you can see just how much fine detail gets lost when looking at the big picture chart on its own.
The dollar index didn't do much...although it did decline 25 basis points right up until 9:30 a.m. Eastern time...and then in the space of forty minutes gained it all back...and closed unchanged from Thursday.
The sell-off in both gold and silver started about ten minutes before the dollars index's little 25 basis points rally began at 9:30 a.m...and the sell-off in both metals continued long after the 30-minute dollar index rally ended, which was just minutes after 10:00 a.m. Eastern.
It all looked a little too contrived for my liking...but as I've said on several occasions, maybe I'm looking for black bears in dark rooms that aren't there. I'll leave it up to you to draw your own conclusions...and I have more to say about this in 'The Wrap' further down.
The gold stocks opened in positive territory, but that didn't last long, as the sell off in gold that had begun just ten minutes before the equity markets opened, soon turned the metal price and their associated shares into negative territory...and that was it for the day. The stocks pretty much followed the lead of the gold price itself...and the HUI closed down 1.24%...giving up half of its Thursday gains.
The silver stocks finished mixed...and Nick Laird's Silver Sentiment index closed down 1.05%.
(Click on image to enlarge)
The CME Daily Delivery Report showed that only 1 gold and 57 silver contracts were posted for delivery on Wednesday. It was the same threesome in silver as usual...Jefferies as the short/issuer...and the Bank of Nova Scotia and JPMorgan as the long/stoppers. The link to this action is here.
There were no reported changes in either GLD or SLV on Friday...and no sales report from the U.S. Mint, either.
Over at the Comex-approved depositories on Thursday, they reported receiving only 7,491 ounces of silver...and shipped 329,691 troy ounces out the door.
The Commitment of Traders Report, for positions held at the close of trading on Valentine's Day, was a bit of a surprise...and both Ted Butler and myself were trying to sort out what it really meant during our daily phone conversation yesterday.
Despite the fact that there was virtually no price movement in silver during the reporting week, the Commercial net short position rose by another 2,660 contracts, which translates into 13.3 million ounces of silver. The total Commercial net short position now sits at 186.6 million ounces of silver...up over 105 million ounces from its late December low. I was not happy to see this...and neither was Ted. He said that the small commercial traders sold another 1,600 of their long positions...and JPMorgan went short another 1,400 contracts.
JPMorgan, all by itself, now appears to hold a short position of more than 25% of the entire Comex futures market in silver.
If silver's COT numbers were a surprise...the gold numbers were a surprise in the other direction. The Commercial net short position in gold declined by a very chunky 11,664 contracts, or 1.16 million ounces. Like silver, the gold price did very little during the reporting week.
Why the dichotomy between the metals? Beats me. Off the top of his head, Ted couldn't make any sense out of it either...but maybe he'll have an answer in his weekend report, which he'll be sending out to his paying subscribers later today. If he does, I'll steal it...and post it in my next column.
Here's a chart that some kind reader sent me about a week ago. It's been posted on my desktop for so long, I've forgotten who sent it to me. The graph is self-explanatory.
I have the usual number of stories...and quite a number of them I've been saving for Saturday's column because of content or length. They're definitely worth the read, so I hope you have time to spend on them over the weekend.
Despite the happy surprise in the COT for gold yesterday, I am getting concerned about the Commercial short position in silver.John Williams: $8,890 Gold, $517 Silver & Hyperinflation Update. Colorado looking at gold, silver currency. Debt derivatives and gold will explode shortly: Egon von GreyerzCritical Reads
Volcker Said to Lobby SEC Chief Personally
Juli_GSDFebruary 18, 2012 3:30pm GMTFormer Federal Reserve chairman Paul Volcker met in person with U.S. Securities and Exchange Commission Chairman Mary Schapiro this week to discuss the proposed ban on proprietary trading named for him, according to a person familiar with the meeting.
Volcker, 84, has been a prominent advocate for the ban, which he asserts would curb the kind of risky trading that contributed to the 2008 financial crisis.
“Proprietary trading of financial instruments -- essentially speculative in nature -- engaged in primarily for the benefit of limited groups of highly paid employees and of stockholders does not justify the taxpayer subsidy implicit in routine access to Federal Reserve credit, deposit insurance or emergency support,” Volcker wrote in a commentary submitted to regulators Feb. 13th.
This Bloomberg story was posted on their website yesterday afternoon...and I thank West Virginia reader Elliot Simon for sending it along. It's certainly worth the read...and the link is here.
Jim Rogers: Don’t Pay Governments Much Attention
Juli_GSDFebruary 18, 2012 3:30pm GMTInvestors shouldn’t pay “much attention” to what governments are doing, well-known investor Jim Rogers, CEO and Chairman of Rogers Holdings, told CNBC Friday.
“If you listen to governments, then you are not going to make a lot of money. Governments lie, distort and make mistakes,” he said.
Investors should focus on “real assets” like commodities to deal with continuing worries of another downturn, he added.
“My way of playing this is to own real assets like commodities,” he said “You now have the Bank of England, the Bank of Japan, the Federal Reserve printing money. The way to protect yourself at a time like this is to own assets.”
Rogers added that he thinks silver looks more attractive than gold at the moment because of the sustained rise in the gold price.
This story was posted on the cnbc.com website yesterday...and is another contribution from Elliot Simon. The link is here.
A New Bull Market? - Doug Noland
Juli_GSDFebruary 18, 2012 3:30pm GMTBut don’t count me bullish. I see no holes in the analysis that this is an ongoing slow train wreck – the unfolding worst-case-scenario. The European financial and economic crisis will not be resolved anytime soon (think post-Bubble Japan). Greece is an unmitigated disaster and, throughout Europe, economic structure now (in a post Credit boom backdrop) matters. I don’t see how such dissimilar economic structures (and social and political systems), say between Italy and Germany, are consistent with a common currency. LTRO only buys time. China is, as well, an accident in the making.
I look at the global backdrop and see all the makings for a major, major market top. It’s just impossible to know how far away – both in time and price – we are from such an outcome. I don’t envisage a new bull market – but instead see the same type of manic marketplace that brought us the 2010 “flash crash” and the 2011 10-day market shellacking.
Doug Noland's Credit Bubble Bulletin every Friday is a must read for me...and it should be for you as well. I thank reader U.D. for sending me yesterday's edition that's posted over at the prudentbear.com website...and the link is here.
The Collapse of Jon Corzine
Juli_GSDFebruary 18, 2012 3:30pm GMTOn December 15, Jon Corzine (D-NJ), former CEO of the suddenly bankrupt commodities and futures brokerage firm MF Global, finished three days of testimony before the House Financial Services Oversight and Investigations Subcommittee. This followed the December 2nd decision of the House Agriculture Committee to subpoena Corzine after a request for a voluntary appearance went unanswered. Two other congressional committees subpoenaed Corzine in the next several days. To say that it is unusual for Congress to issue a subpoena to a former United States senator (and, in this case, governor) is an understatement. As an Associated Press article noted, "Congressional historians and Capitol Hill insiders can't recall another time when a former member of Congress was summoned by his former peers to testify about a matter under federal investigation."
In fact, the move was so rare that even the New York Times, Washington Post, and Politico—each of which had reported remarkably little on the eighth largest bankruptcy in our nation's history and America's biggest financial failure since Lehman Brothers—had to take notice.
The bankruptcy was caused by Corzine's decision (if I may borrow a phrase from Corzine's good friend, President Barack Obama) to fundamentally transform MF Global from a sizeable but relatively staid commodities brokerage firm into a gambling enterprise. MF, which was spun off from the British firm Man Financial in 2007, not only risked the firm's own money but then used customers' funds to plug the holes when Corzine's massive speculative purchases of European government debt went south. Fundamentally transforming something that was already working pretty well is perhaps not the best strategy for success.
Having read Roger Lowenstein's classic 2001 tome...When Genius Failed: The Rise and Fall of Long-Term Capital Management shortly after it was published, I was already well aware of this creature called Jon Corzine, as Roger did not paint a flattering picture of him, or Goldman Sachs, even back in those days.
This 3-page exposé on Corzine showed up as the feature article in the February edition of The American Spectator...and I thank Washington state reader S.A. for digging up this absolute must read on our behalf. The link is here.
Creeping Fascism, Part One: Return of the Company Town
Juli_GSDFebruary 18, 2012 3:30pm GMTThe US government's obliteration of the Bill of Rights via the Patriot Act, the recent defense bill that allows the military to detain citizens indefinitely without trial, the health care law that forces citizens to buy insurance, and the attempted takeover of the Internet through SOPA and PIPA has gotten a lot of attention lately, and in a few rare cases has generated some effective push-back.
But according to an article in this month's Harper's Magazine (Killing the competition: How the new monopolies are destroying open markets, by Barry C. Lynn), US corporations are evolving into forms that are more threatening to their victims than anything emanating from Washington. As the author characterizes it, a new generation of monopolists are imposing their own private governments on their industries -- and not always the industries one would expect. This long, detailed article should be read by anyone with a desire to understand how the US is evolving.
This excellent piece by John Rubino was posted over at the safehaven.com website on Thursday...and is well worth the read. I thank Swiss reader B.G. for bringing it to my attention...and the link is here.
Washington's Insouciance Has No Rival: Paul Craig Roberts
Juli_GSDFebruary 18, 2012 3:30pm GMTIs Obama a hypocrite or merely insouciant? Or is he an idiot?
According to news reports Obama’s White House meeting on Valentine’s day with China’s Vice President, Xi Jinping, provided an opportunity for Obama to raise “a sensitive human rights issue with the Chinese leader-in-waiting.” The brave and forthright Obama didn’t let etiquette or decorum get in his way. Afterwards, Obama declared that Washington would “continue to emphasize what we believe is the importance of realizing the aspirations and rights of all people.”
Think about that for a minute. Washington is now in the second decade of murdering Muslim men, women, and children in six countries. Washington is so concerned with human rights that it drops bombs on schools, hospitals, weddings and funerals, all in order to uphold the human rights of Muslim people. You see, bombing liberates Muslim women from having to wear the burka and from male domination.
One hundred thousand, or one million, dead Iraqis, four million displaced Iraqis, a country with destroyed infrastructure, and entire cities, such as Fallujah, bombed and burnt with white phosphorus into cinders is the proper way to show concern for human rights.As usual, Paul is right on the money. This piece was posted on the paulcraigroberts.org website on February 15th...and I thank reader 'James R' in Texas for sending it. It's definitely worth the read...and the link is here.
Meteorological Office in the Media: 29 January 2012
Juli_GSDFebruary 18, 2012 3:30pm GMTLast Saturday I posted a story out of London's Daily Mail that was written by columnist David Rose. It was headlined "Forget global warming - it's Cycle 25 we need to worry about (and if NASA scientists are right the Thames will be freezing over again)" - repeats what is becoming a common misconception in the tabloid press: that a drop in solar activity is about to cause a 'mini ice age'.
In the piece, Rose so badly misrepresents the Met Office's work that they have taken the unusual step of responding to it on their blog, describing his article as containing "numerous errors in the reporting of published peer reviewed science undertaken by the Met Office Hadley Centre."
The link to their January 29th rebuttal is posted at their website metofficenews.wordpress.com...and the link is here. It's worth the read...and I thank reader J. Parker in Houston, Texas for bringing this item to my attention.
The Truth Peddlers: Smoke and Mirrors in the Climate Debate
Juli_GSDFebruary 18, 2012 3:30pm GMTA new book by an executive at a major German power utility claims we aren't facing a climate catastrophe and rejects current mainstream ideas on global warming. Both climate change skeptics and those who warn of global warming profit from such controversies -- so who should we believe?
Science can be so easy -- at least when it is stripped of its nuances. Fritz Vahrenholt and his colleague, geologist Sebastian Lüning, say the world isn't facing a climate catastrophe. The two are peddling precisely the kind of theory that generates publicity and allows both sides of the debate to profit. But it also leaves people wondering who they should believe.
The authors both work for German electric utility company RWE, where Vahrenholt is an executive. In their book "Die Kalte Sonne" ("The Cold Sun"), they claim that important research about climate change has been kept under wraps and that cries of an impending climate catastrophe are misleading. Their book arrived in book stores in Germany last week, with considerable media attention.
This climate story was posted over at the German website spiegel.de on Thursday...and I thank Roy Stephens for sending it along. It's a short read that's worth your while...and the link is here.
Vatican told to pay taxes as Italy tackles budget crisis
Juli_GSDFebruary 18, 2012 3:30pm GMTAfter several years of scandal in which the Catholic Church has faced allegations of financial impropriety, pedophile priests and rumours of plots to kill the Pope, the Vatican is now facing a new €600m-a-year tax bill as Rome seeks to head off European Commission censure over controversial property tax breaks enjoyed by the Church.
As the EC heads closer to officially condemning the fiscal perks enjoyed by the Catholic Church and introduced by the Berlusconi administration, Prime Minister Mario Monti has written to the Competition Commissioner, Joaquin Almunia, saying that the Vatican will resume property tax, or Ici, payments.
This story was posted over at the independent.co.uk website yesterday...and I thank Australian reader Wesley Legrand for sharing it with us. The link is here.
Iceland's Viking Victory: Ambrose Evans-Pritchard
Juli_GSDFebruary 18, 2012 3:30pm GMTCongratulations to Iceland.
Fitch has upgraded the country to investment grade BBB – with stable outlook, expecting government debt to peak at 100pc of GDP.
The OECD's latest forecast said growth will be 2.4pc this year, after 2.9pc in 2011.
Unemployment will fall from 7pc last year to 6.1pc this year and then 5.3pc in 2013.
The current account deficit was 11.2pc in 2010. It will shrink to 3.4pc this year, and will be almost disappear next year.
This story appeared in The Telegraph yesterday...and is worth skimming. I thank Roy Stephens for sending it along...and the link is here.
Big Bucks Attract High School Grads To Mining
Juli_GSDFebruary 18, 2012 3:30pm GMTDon Kotschevar teaches high school in the small town of Mullan in north Idaho's remote Silver Valley. He is the assistant principal, basketball coach and shop teacher. Lately, Kotschevar has been questioning his own career path. He watches his students parlay the skills he teaches them in this industrial mechanics class into lucrative mining jobs.
"Some of them, in the first six, eight months, their salaries absolutely crush mine," Kotschevar says. Entry-level mine jobs can pay $50,000 a year. Kotschevar has been thinking he could get a similar offer from local mine bosses.
"You know, I've got nine more years, so I can get my retirement here, and then when I retire I'll probably go to see if they'll hire me. Hopefully I won't be too old," he says. "I've been in teaching — I need to have a retirement plan."
This story was posted on the National Public Radio website yesterday...and is another offering from West Virginia reader Elliot Simon. The link is here.
Gold Bulls Expand as Billionaire Paulson Says Buy
Juli_GSDFebruary 18, 2012 3:30pm GMTGold traders are getting more bullish after billionaire hedge-fund manager John Paulson told investors it’s time to buy the metal as protection against inflation caused by government spending.
Twelve of 22 surveyed by Bloomberg expect prices to gain next week and five were neutral. Paulson & Co. is already the biggest investor in the SPDR Gold Trust, the largest exchange- traded product backed by bullion, with a stake valued at $2.9 billion, a Securities and Exchange Commission filing Feb. 14 showed. Investors have 2,389.7 metric tons in ETPs, within 0.2 percent of the record reached in December and more than all but four central banks, according to data compiled by Bloomberg.
This Bloomberg story from yesterday was sent to me by Washington state reader S.A...and the link is here.
The above Bloomberg story prompted the following outburst over at zerohedge.com yesterday..."We wish we had good news, but we are not going to lie: This is the worst possible news for any gold bull out there." Wesley Legrand sent me that story...and the link is here.
John Williams: $8,890 Gold, $517 Silver & Hyperinflation Update
Juli_GSDFebruary 18, 2012 3:30pm GMTDespite the September 5, 2011 historic-high gold price of $1,895.00 per troy ounce, and despite the multi-decade-high silver price of $48.70 per troy ounce, gold and silver prices have yet to re-hit their 1980 historic levels, adjusted for inflation. The earlier all-time high of $850.00 of January 21, 1980 would be $2,476 per troy ounce, based on January 2012 CPI-U-adjusted dollars, $8,890 per troy ounce based on SGS-Alternate-CPI-adjusted dollars.
In like manner, the all-time high price for silver in January 1980 of $49.45 per troy ounce still has not been hit since 1980, including in terms of inflation-adjusted dollars. Based on January 2012 CPI-U inflation, the 1980 silver price peak would be $144 per troy ounce...and would be $517 per troy ounce in terms of SGS-Alternate-CPI-adjusted dollars.
John knows his stuff...and he's absolutely right about this. Silver is dirt cheap at today's price. This must read blog is posted over at the King World News website...and the link is here.
Colorado looking at gold, silver currency
Juli_GSDFebruary 18, 2012 3:30pm GMTWorried that the U.S. dollar may not be good as gold, some Colorado lawmakers are pushing a bill to legalize gold and silver coins as usable currency.
"There are lots of concerns about the U.S. monetary system," said the bill's sponsor, Republican Sen. Kent Lambert of Colorado Springs. "Individuals and states ought to be increasing their gold reserves. There's no way to maintain the value of anything if countries start a race to the bottom by inflating their currency to get out of debt."
Republican presidential candidate Ron Paul is among those who believe the nation should return to the gold standard, in which paper currency is guaranteed by precious metal.
"I am not a Ron Paul kind of guy," Lambert said. "But that's something I think is very legitimate that he brought up."
This story was posted in the Daily Herald out of Provo, Utah yesterday...and I thank reader Ken Metcalfe for sending it along. The link is here.
Investor Alert - The Enduring Popularity of Gold
Juli_GSDFebruary 18, 2012 3:30pm GMTThe World Gold Council (WGC) reaffirmed the power of the Love Trade in its 2011 Gold Demand Trends report released this week. Gold demand grew 0.4 percent in 2011 despite a 28 percent year-over-year increase in bullion’s average price.
After flirting with the top spot for some time, China emerged as the world’s largest gold market for jewelry and investment during the fourth quarter of 2011 as demand in India weakened. This is the first time China’s demand outpaced India’s in 11 quarters. However, India did retain the gold demand crown for the entire year, purchasing 933 tons compared to China’s demand of 770 tons.
I always say the trend is your friend, and I believe China’s increasing demand for gold is one trend that is just getting started. Although gold imports from Hong Kong were cut in half in December, HSBC Global Research reports that overall gold imports from Hong Kong were 10 times the historical average from January through November 2011. HSBC expects a continued rise in Chinese incomes will keep demand at a robust pace. The WGC sees domestic demand for gold jewelry and investment driving 20 percent growth in Chinese gold demand during 2012.
This rather long piece [with some excellent charts] was posted by my friend Frank Holmes, CEO and Chief Investment Officer over at U.S. Global Investors. It's worth reading if you have the time...and it's Elliot Simon's final offering in today's column. The link is here.
Debt derivatives and gold will explode shortly, von Greyerz tells King World News
Juli_GSDFebruary 18, 2012 3:30pm GMTFund manager Egon von Greyerz, was interviewed by King World News yesterday...and he expects debt derivatives to start exploding across Europe and the United States soon, and gold to end its consolidation phase and to start moving up again as soon as next week.
Let's hope he's right. An excerpt from the interview is posted at the KWN website...and the link is here.
The Wrap
Juli_GSDFebruary 18, 2012 3:30pm GMTI think that the current financial system, as we know it, will be totally destroyed, probably sooner rather than later. The next system will require gold backing to have any legitimacy. This has happened many times in history. - John Embry, Sprott Asset Management
I have a couple of 'blasts from the past' for you today. The first one popped into my head earlier this week. If any song is instantly identifiable with Paris in particular...and France in general...it's this one. Written in 1951 by French composer and lyricist, Hubert Giraud, it's instantly recognizable by anyone pushing 60...or older. I have two youtube.com versions for you. Listen to both and then decide which one you like the best. Arrangement #1 is here...and #2 is here.
My second'blast from the past' was written by the same French composer in 1970. He conceived the song in his car waiting out a Parisian traffic jam...and completed its demo within a few days. It went on to be a world-wide hit in 1971/72. My jaw hit the floor when I made this discovery, because I used to play the 45 rpm recording of this on AM radio station CHAR in Alert, N.W.T. back in 1972/73! I hope you'll be amazed as well...and the link to the group that made it a hit is here.
I must admit that I wasn't overly surprised atFriday's price action. The 8:30 a.m. Eastern time pop in both gold and silver was indicative of how gold and silver prices want to behave if given a free market to roam in...and that certainly wasn't the case yesterday. Shortly before the equity markets opened, the selling pressure was on...and 'da boyz' took both metals lower on the day.
Here's Nick Laird's "IntradayAverage Gold Price Movements" chart that he made up at my request a couple of years back. Note that the absolute high price tick of the day on this chart occurs at precisely 9:30 a.m. Eastern time...the time when the equity markets open in New York. The four years worth of data in this chart lays bare the primary trend for all to see. This ain't rocket science, dear reader...it's price management.
(Click on image to enlarge)
So the 9:20 a.m. price take-down in gold and silver yesterdaywas just 'da boyz' doing what they have always done.
Despite the happy surprise in the COT for gold yesterday, I am getting concerned about the Commercial short position in silver. True, we are nowhere near the extreme short positions of the past, but that doesn't negate the possibility that JPMorgan et al will pull the lever and ring the cash register sometime during the days or weeks ahead.
Silver analyst Ted Butler pointed out last weekendthat we could still have major rallies in both metals based on the current COT structure...and he's absolutely right about that as well.
But which scenario is going to play outin the short, medium, or long term? Beats me. However, any pull-back in prices is just going to be another buying opportunity in my eyes.
Before signing off on today's column, I continue to point out that there's still timeto either re-adjust your portfolio, or get fully invested in the continuing major up-leg of this bull market in both silver and gold...and I respectfully suggest that you take a trial subscription to either Casey Research's International Speculator [junior gold and silver exploration companies], or BIG GOLD [large producers], with all our best [and current] recommendations...as well as the archives. A subscription to the International Speculator also includes a free subscription to BIG GOLD as well. And don't forget that our 90-day guarantee of satisfaction is in effect for both publications.
That's it for the day and the week. Monday is President's Day in the U.S.A. I'm not sure if the precious metals markets will be open or not...and IF I do have a column on Tuesday, it won't be in your mail-box early in the morning, as I see no reason to get sweet, young, tender Juli out of bed early on a holiday...so she can post it whenever she gets up. And if nothing shows up on Tuesday, then you'll know the reason.
- Fri, 17 Feb 2012 11:19:29 +0000: Import Data Implies Gold Buying by China's Central Bank - Ed Steer's Gold & Silver DailyAuthor:
Yesterday in Gold and Silver
Ed_GSDFebruary 17, 2012 11:19am GMTWell, it turned into an interesting day on Thursday. The gold price declined up until just past 8:30 a.m. in London...and then trended a bit higher until just after 12 o'clock noon GMT. Then a seller showed up...and two hours later [minutes before 9:00 a.m. in New York] the gold price hit its low of the day, which was $1,704.30 spot.
From that low, gold rallied nicely...and starting shortly after Comex trading ended at 1:30 p.m. Eastern time, the gold price mostly traded sideways into the 5:15 p.m. New York close. The high tick of the day...$1,731.20 spot...came around 3:00 p.m.
The gold price closed at $1,728.80 spot...up a whole 70 cents on the day. Net volume was a very impressive 152,000 contracts...give or take a few thousand contracts.
Silver pretty much followed the same price path during Far East and early London trading...although the real sell-off in silver began at the Comex open, rather than shortly after 12 o'clock noon in London like the gold price did. Silver's low price tick [$32.56 spot] also came minutes before 9:00 a.m. in New York.
From there, silver rallied along with gold...and its price also traded basically sideways, starting very shortly after the Comex close at 1:30 p.m. in New York.
After being down a dollar on the day at one point, the silver price closed at $33.52 spot...up two whole cents from Wednesday. Net volume was pretty chunky at 44,000 contracts.
As I mentioned in my closing remarks in Thursday's column, the dollar index continued to rally above the 80.00 mark. That state of affairs that lasted right up until 7:30 a.m. in New York...and then it rolled over and declined a hefty 80 plus basis points, with the low coming about 3:45 p.m. Eastern. From there it recovered just a little...closing at 79.40...the exact same price it closed at in New York on Tuesday.
The gold stocks did well yesterday...and even though the price was still well in the red when the equity markets opened, it didn't take long for the associated stocks to get into the plus column...with the high coming at gold's high tick of the day, which was around 3:00 p.m. Eastern.
There was some minor profit-taking going into the close...and despite the fact that the gold finished up less than a dollar, the HUI finished up 2.68% on the day.
The same can be said for the silver equities. Even though the price only closed up two cents...and had been down over a dollar at one point...the silver stocks did great for the most part. Nick Laird's Silver Sentiment Index closed up 2.54%.
(Click on image to enlarge)
The CME's Daily Delivery Report showed that only 6 gold contracts were posted for delivery on Monday but, as I alluded to yesterday, there was a big delivery posted in silver...124 contracts to be precise. And it should come as no surprise that it was Jefferies as the short/issuer with 113 contracts...and the Bank of Nova Scotia as the big long/stopper with 112 contracts. JPMorgan was a bit player yesterday, but they were issuers and stoppers as well.
Now we're up to 709 silver contracts issued for delivery in February. I'm wondering if Jefferies, who was obviously massively short silver...and other metals, is being helped out in the delivery process in order that it, too, does not fail as did MF Global. We'll probably never know for sure, but it appears that something is going on behind the scenes. The link to the Issuers and Stoppers Report is here...and it's worth a look.
By the way, another 30 silver contracts were added to the February delivery schedule yesterday as well.
An authorized participant over at GLD added 97,179 troy ounces of gold yesterday...and there was no report from SLV.
There was no sales report from the U.S. Mint, either.
The Comex-approved depositories received 596,255 troy ounces of silver on Wednesday...and shipped 790,009 ounces of the stuff out the door. The link to that action is here.
Here's a real interesting chart about Apple vs. the broader stock market. I ran a chart on that the other day...but this one that Australian reader Wesley Legrand just sent me, really tells the tale. Without Apple, the rest of the equity markets would look lousy.
Here's another chart from young Wesley. It graphs the 5-year Credit Default Swaps of the founding Eurozone countries against the percent of 25-34 year old males still living at home with their parents in those same countries. It ain't scientific, but...
I have a lot of stories again today, as there is so much going on in the world right now...and for whatever reason, a goodly number of them are precious metal related.
It's a near certainty that the subsequent rallies off the lows in both metals had a large short covering component to them.$1 million in gold coins rains down from the rafters. Handyman finds secret gold stash in kitchen. South Africa Sends Army to End Rioting at Platinum Mine. Ted Butler: Fair is Fair.Critical Reads
Moody’s Weighs Rating Cuts for Major Banks
Ed_GSDFebruary 17, 2012 11:19am GMTMoody’s Investors Service has put Goldman Sachs, Morgan Stanley, Deutsche Bank, UBS and more than 100 other financial institutions on notice.
Citing increasingly challenging market conditions, the credit rating agency said it would review its grades for 114 banks based across Europe, as well as eight other financial institutions based elsewhere, including JPMorgan Chase, Bank of America and Nomura.
Moody’s indicated it could cut some credit ratings by as much as three levels as it weighed the risks to the banks’ investment banking models and large capital market exposures.
This story, filed from London, was in The New York Times yesterday...and I thank reader Phil Barlett for sending it. The link is here.
Derivative CDs Backed by FDIC Tempt Savers as Banks Reap 8% Fees
Ed_GSDFebruary 17, 2012 11:19am GMTA gray-haired woman picking a flower with a young girl adorns the cover of an HSBC Holdings Plc brochure that promises investors both “the growth of the market” and “the security of FDIC Insurance.”
By tying interest rates to everything from the Dow Jones Industrial Average to precious metals, the pamphlet for HSBC’s Market-Linked Certificates of Deposits explains U.S. investors have the potential to earn “enhanced returns” over as long as seven years. A separate disclosure states that they also may earn zero, getting just their original principal back after the CD matures, while brokers may collect fees of 6 percent or more. Investors that need to get their money earlier must find a buyer for the CD, risking a loss.
“It is questionable whether some of these products should be sold to retail investors in the first place,” said Moritz Seibert in Westport, Connecticut, the former U.S. head of equity derivatives structuring at the Royal Bank of Scotland Group Plc who’s now starting an alternative investment business. “Traders at issuing banks understand the nitty-gritty pricing of those products very well. It seems that professional institutional investors would be a more suitable clientele.”
Wow! Derivatives for the great unwashed! What will they think of next? This very long Bloomberg piece was posted on their website on Tuesday...and I thank reader Ken Metcalfe for sending it along. The link is here.
Forget Greece, Traders Are Worried About Something That Could Send Us Back To The Middle Ages: Art Cashin
Ed_GSDFebruary 17, 2012 11:19am GMTIn yesterday morning's Cashin's Comments, UBS's Art Cashin addressed what worries traders these days.
A Greek default has been on everyone's minds lately. But the traders Cashin has talked to think that it's just the tip of the iceberg.
The bigger fear is what happens in the credit default swap (CDS) markets. No one knows how big it is, who the counterparties are, and, worst of all, whether the CDS contracts will actually trigger in what many would consider a default.
Yep, this is a real can of worms involving tens of trillions of dollars. Good luck to all! This story was posted on the businessinsider.com website yesterday...and I thank Washington state reader S.A. for bringing it to my attention. It's worth the read...and the link is here.
Germany's smear campaign against Greece
Ed_GSDFebruary 17, 2012 11:19am GMTGermany's Wolfgang Schäuble is entering into ever more dangerous waters.
His apparent demand that Greece postpone elections scheduled for April, and impose a technocrat junta (a l’Italiana) for another year without PASOK and New Democracy, takes your breath away. Is this really the position of the German government? Greek democracy be damned?
I presume he has seen pictures of the blackened buildings below the Acropolis – and yes, the evidence is everywhere: a neo-classical house near my hotel at Monastiraki metro station was completely gutted, as was a building across the road. (There were four homeless sleeping in the cold alley next door, being comforted by a young volunteer.)
I presume too that Mr. Schäuble has been well-briefed on the explosive political mood in Greece, so one can only view such a demarche as deliberate provocation – like the Austrian ultimatum to Serbia in 1914 (a miscalculation, as it later turned out, since "contagion" from Serbia could not be contained).
Hell hath no fury like Ambrose Evans-Pritchard when he's up on his soap box. This story from yesterday's edition of The Telegraph is Roy Stephens first offering of the day...and the link is here.
Just as Greece complies at last, Europe pulls the plug
Ed_GSDFebruary 17, 2012 11:19am GMTThe regime of drastic cuts has tipped the economy into a violent downward spiral. They thought that private industry would muddle through as the state went through the austerity mincer. What the EU-IMF "Troika" did not fully understand is how many firms were really part of the state in disguise.
"The Greek government outsources everything," said one official with close knowledge of the events.
Faced with the guillotine, the state first slashed procurement contracts and then stopped paying its bills altogether. The government is now €7bn (£5.8bn) in arrears to private companies, including €3bn in unpaid VAT refunds for exporters. It is why business has borne the brunt of the fiscal squeeze, suffering 450,000 job losses, and why Greece's unemployment has soared to 21pc.
This is another piece by Ambrose...and this is one that was posted late last night London time. It, too, is a must read...and I thank Roy Stephens for digging it up on our behalf. The link is here.
Iran "shadow war" intensifies, crosses borders
Ed_GSDFebruary 17, 2012 11:19am GMTAs bombings go, this week's trio of apparent attempted attacks on Israeli targets -- which also included an attack on a car carrying the wife of an Israeli diplomat in New Delhi and a bomb found attached to an Israeli diplomatic vehicle in the Georgian capital Tbilisi -- seemed unusually inept.
But security experts believe they sent a clear message, the first serious retaliation for a quietly waged but increasingly bloody campaign of sabotage waged against Iran's nuclear program.
At least four Iranian nuclear scientists have been killed in recent years in attacks believed to have been carried out by or for Israel's intelligence services. While Israel invariably refuses to comment, some security analysts also suspect it has been involved in a string of major explosions at military and nuclear facilities in Iran, such as one in November that killed more than a dozen, including a senior Iranian general.
Tehran denied any involvement in this week's attacks, accusing Israel of staging them itself. But there are widespread suspicions that the real intent may have been to warn the Jewish state that Iran is prepared to retaliate in kind.
This Reuters story was filed jointly from Bangkok and London yesterday...and I thank Washington state reader S.A. for sending it to me. The link is here.
The World from Berlin: 'The Iran Conflict Is Intensifying Step by Step'
Ed_GSDFebruary 17, 2012 11:19am GMTTaken together, the myriad developments are baffling. Iran says it has made advances in nuclear research, but wants to resume talks with the West. It is threatening to cut off oil supplies to Europe while allegedly sponsoring attacks against Israeli diplomats. German editorialists attempt to make sense of the confusion.
Is anyone at the controls in Iran? It is a question that many in the West are asking following this week's flurry of announcements, denials and conciliatory advances centering on the country's nuclear program. Perhaps even more vexing, however, is the fact that Tehran is also thought to be behind a series of decidedly amateurish attacks targeting Israeli diplomatic personnel in Georgia, India and Thailand.
"What we see is provocative acts … designed to distract attention from the demonstrated impact that (international) sanctions are having," White House spokesman Jay Carney told reporters on Wednesday. "It is not unusual for Iran to try to distract attention … by some burst of rhetoric or some announcement."
This story was posted on the German website spiegel.de yesterday...and is another Roy Stephens offering. The link is here.
US wants SWIFT war on Iran: Pepe Escobar
Ed_GSDFebruary 17, 2012 11:19am GMTWhat was the parade of European poodles thinking - that Tehran would just roll over and absorb the European Union's oil embargo, scheduled to start on July 1?
No wonder Brussels was caught as a Gucci deer in the headlights when the news started to flow that Tehran would preempt the move and immediately slap its own embargo of crude oil exports to six European Union countries - deeply in crisis Club Med members Portugal, Italy, Greece and Spain plus recession-hit France and the Netherlands.Yet the vultures, jackals and hyenas of regime change/war can never be appeased in their sanction lust. The US is now forcing the EU to cut off Iran from Brussels-based SWIFT - the independent telecom mechanism/clearinghouse used by every bank in the world to exchange financial data (its official name is Society for Worldwide Interbank Financial Telecommunications). Iran's Central Bank itself may become a victim.
In a nutshell, SWIFT is the wheel that moves global financial transactions and trade. So if this is not an extended, remixed declaration of hardcore economic war against one country - nothing else is.
This story was posted on the Asia Times website early this morning...and is a must read. I thank Roy Stephens for sharing it with us...and the link is here.$1 million in gold coins rains down from the rafters
Ed_GSDFebruary 17, 2012 11:19am GMTA team of builders renovating a vineyard facility in France were stunned when U.S. gold coins worth $1 million rained down on them from the rafters.
The treasure trove of 497 coins was hidden in the attic of an old building in the rural village of Les Riceys in the country's famed Champagne region.
The pieces, which have a face value of $20 each, were minted between 1851 and 1928 and are the equivalent of 17 kilograms of gold.
This delightful must read story was posted in the Daily Mail yesterday...and the first one through the door with it was reader "Vic in Toronto". The link is here.
Handyman finds secret gold stash in kitchen
Ed_GSDFebruary 17, 2012 11:19am GMTA German handyman renovating the kitchen of a woman who had recently died, opened what he thought was a bag of rubbish to find coins and gold bars worth at least €100,000.
The bag was full of Australian golden coins, gold nuggets stamped with Degussa, and a host of silver coins as well as silver cutlery wrapped in newspaper.
This is another very interesting read...and was posted over at the German website thelocal.de yesterday...and the link is here. I thank West Virginia reader Elliot Simon for sending it along.
South Africa Sends Army to End Rioting at Largest Platinum Mine
Ed_GSDFebruary 17, 2012 11:19am GMTSouth Africa sent troops to end rioting at the world’s largest platinum mine after owner Impala Platinum Holdings Ltd. asked for government help to stop violence stemming from an illegal strike that has halted output.
Protesters set fire to cars overnight, barricading the main road to Sun City, a resort within the platinum-producing region near Rustenburg, Impala Chief Executive Officer David Brown said today. The police presence at the mine has been inadequate, failing to end attacks and intimidation and prompting a request to the Security Minister to intervene, he said.
Impala last week fired 17,200 workers at the mine, which accounts for about 12 percent of global production of platinum, used in jewelry and cars. The disruption has caused lost output of 60,000 ounces worth about 1.2 billion rand ($153 million) as of Feb. 14, Brown told reporters on a conference call. The mine came to a halt Jan. 30 and it may take a further three or four weeks to restore operations, curbing global supplies, he said.
I thank Washington state reader S.A. for sending me this Bloomberg story from yesterday...and the link is here.
Three King World News Blogs/Interviews
Ed_GSDFebruary 17, 2012 11:19am GMTThe first one is a Rick Rule blog headlined "Here's What I'm Doing With My Money Right Now". The second blog is titled "Stephen Leeb: This Will Spark the Next Leg Higher in Gold"...and the audio interview is with Keith Barron. The link to that is here.
Another misplaced sneer about gold from The Wall Street Journal
Ed_GSDFebruary 17, 2012 11:19am GMTThe willfully ignorant sneering about gold in the mainstream financial news media never stops. The latest example comes from The Wall Street Journal's Liam Denning, who snickers in commentary appended here that support for gold now should be coming from central bankers, the scourge of gold bugs. Denning writes that "central bank buying masks the impact of weak jewelry demand, slowing increases in investment flows, and higher supply."
But in sneering that gold, "as an investment, yields nothing," Denning conveniently neglects to note that all major currencies now yield nothing as well, failing to pay a real rate of interest. Where's the sneering about them?
These are the first two paragraphs of Chris Powell's long preamble to the WSJ story...and it's definitely a must read. It's posted in the clear over at the gata.org website...and the link is here.
Gold Switzerland's interview with Embry covers gold market manipulation
Ed_GSDFebruary 17, 2012 11:19am GMTGATA's friend, the German freelance journalist Lars Schall, has just done a comprehensive interview with Sprott Asset Management's chief investment strategist, John Embry, touching heavily on gold market manipulation.
I borrowed the above introductory paragraph from the GATA release yesterday...but received this interview earlier in the day from Wesley Legrand. It's posted at Matterhorn Asset Management's Gold Switzerland Internet site...and the link is here.
China set to become world's biggest gold market
Ed_GSDFebruary 17, 2012 11:19am GMTChina is poised to overtake India as the world's biggest gold market this year, as rising incomes fuel demand for the precious metal and a weak rupee diminishes Indian purchases, the industry body said.
The amount of gold bought in China rose 20pc in 2011 over the year before to 770 metric tons, the World Gold Council said in its annual report. That put China behind only first-place India, where 933 metric tons were bought.
Worldwide, the amount of gold purchased rose 0.4pc to 4,0671 metric tons worth $205.5bn (£131bn).
After the World Gold Council came out with its 2011 year-end numbers, there was no end to the number of stories about it in the main stream media on Thursday. This one is from yesterday's edition of The Telegraph...and is Roy Stephens final offering of the day. The link is here.
Import data implies gold buying by China's central bank
Ed_GSDFebruary 17, 2012 11:19am GMTThe World Gold Council believes China's central bank made significant gold purchases in the final months of 2011, contributing to a surge in the country's imports.
Marcus Grubb, managing director for investment at the WGC, a lobby group for the gold mining industry, told the Financial Times that buying by the People's Bank of China could explain a large discrepancy between Chinese imports and the WGC's estimates of consumer demand in the country.
"There is absolutely a discrepancy in the import figures," said Marcus Grubb. "The obvious inference is that the central bank is buying."
This story showed up in the Financial Times yesterday...and is printed in the clear in this GATA release...and the link is here.
Ted Butler: Fair is Fair
Ed_GSDFebruary 17, 2012 11:19am GMTSilver market analyst Ted Butler, who has long complained that the short position in the silver exchange-traded fund SLV serves to create a huge imaginary supply of the metal, discloses today that, perhaps as a result of silver investor agitation, that short position has been substantially reduced.
Needless to say, this is an absolute must read...and it's posted over at silverseek.com...and the link is here.
The Wrap
Ed_GSDFebruary 17, 2012 11:19am GMTWhoever controls the volume of money in our country is absolute master of all industry and commerce…and when you realize that the entire system is very easily controlled, one way or another, by few powerful men at the top, you will not have to be told how periods of inflation and depression originate. – President James Garfield, 2 weeks before his assassination
With the dollar rally breathing its last early yesterday morning in New York, the boys hit gold and silver prices as hard as they could just before the dollar began to head south. During the two hours between 7:00 and 9:00 a.m. Eastern, they peeled about thirteen bucks off the gold price...and about 70 cents off the silver price.
Without doubt they were successful in getting a large number of speculative longs to sell out...and this allowed JPMorgan et al to either cover short positions...or go long themselves, or both. It's a near certainty that the subsequent rallies off the lows in both metals had a large short covering component to them as well. None of this will be in today's Commitment of Traders report.
It remains to be seen if this is the worst they could do, or not. It's still entirely possible that these engineered price declines will continue for another week. If that's not the case, then I'm somewhat surprised that they didn't hit the four precious metals even harder than they did on Wednesday and Thursday, considering the size of the dollar rally they had going for them.
As far as I'm concerned, I don't think we'll see a major rally in either precious metal until the $1,750 spot price in gold...and the $34 spot price in silver...are taken out with some authority. These two prices are being well defended...especially the $34 silver price.
(Click on image to enlarge)
And here's the 6-month gold chart...
(Click on image to enlarge)
Today we get the Commitment of Traders Report for positions held at the close of trading on Valentines' Day...and I'll have something to say about it in Saturday's column.
As of 10:14 a.m. in London, gold is up about five bucks...and silver is down a nickel. Volume is pretty light in both metals...and the dollar index dropped about 15 basis points about an hour after London opened. Since today is Friday, I'm ready for anything as far as price action goes in New York when the Comex opens for trading at 8:20 a.m. Eastern time.
There's still time to either re-adjust your portfolio, or get fully invested in the continuing major up-leg of this bull market in both silver and gold...and I respectfully suggest that you take a trial subscription to either Casey Research's International Speculator [junior gold and silver exploration companies], or BIG GOLD [large producers], with all our best [and current] recommendations...as well as the archives. A subscription to the International Speculator also includes a free subscription to BIG GOLD as well. And don't forget that our 90-day guarantee of satisfaction is in effect for both publications.
That's all I have for today. Have a great weekend...and I'll see you here sometime tomorrow.
- Thu, 16 Feb 2012 11:12:26 +0000: Tune Out...Buy Gold...Be Happy: Bill Bonner - Ed Steer's Gold & Silver DailyAuthor:
Yesterday in Gold and Silver
Ed_GSDFebruary 16, 2012 11:12am GMTIf you check the Kitco chart below, you'll see that the Wednesday trading day in gold was virtually a carbon copy of what happened on Tuesday. I was tempted to just cut and paste my Tuesday gold commentary in this spot to save time...but I didn't.
Like Tuesday, the prominent feature in Wednesday gold trading was the 'rally' that began at the open of Comex trading in New York. This rally lasted less than an hour before the selling started...and it was all down hill until about 2:20 p.m. Eastern time.
Gold's low tick of the day [$1,719.70 spot] came at this 2:20 time...and the gold price recovered about eight bucks by the close of the New York Access Market at 5:15 p.m. Eastern.
Gold finished at $1,728.10 spot...up $7.00 on the day. Net volume was not light...around 131,000 contracts.
Silver's chart was similar, but the price was far more 'volatile'. Twice in early morning Comex trading silver tried to take off in price, but got sold down both times. Then, to add insult to injury, a not-for-profit seller showed up at precisely 2:00 p.m. Eastern in the thinly-traded electronic market and sold the silver price down about 45 cents in about ten minutes. This spike down [$33.02 spot] proved to be the low of the day.
But, by the close of trading, silver had regained all that 'loss'...and closed at $33.50 spot, down 'only' 8 cents on the day. Volume, net of all roll-overs out of the March delivery month, was in the 35,000 contract range.
The dollar index opened around 79.40...and then hit its nadir [79.12] about 7:20 a.m. in London yesterday morning. The ensuing rally lasted the rest of the day...and the dollar index closed around 79.65...up 25 basis points.
Despite the dollar rally, it's pretty obvious that gold and silver wanted to take off to the upside the moment that New York opened...and it's equally as obvious that one or more not-for-profit sellers were there to sell whatever amount of futures contracts it took on the short side to kill the rallies stone cold dead.
The gold stocks gapped up over a percent when the equity markets opened at 9:30 a.m. in New York, but that was pretty much all she wrote from that point on. The stocks held in their pretty good until just before lunch Eastern time...but the ten dollar drop in the price over the next few hours caused the gold stocks to swoon and they never really recovered after that...despite the fact that the gold price then rallied and closed seven bucks in the black.
I'm sure that the poor performance of the general equity markets at the end of the day didn't help the HUI either...as it finished down 0.34% when all was said and done.
The silver stocks finished mixed on the day as well...and Nick Laird's Silver Sentiment Index closed basically unchanged...up 0.03%.
Well, the CME Daily Delivery Report showed that only 2 gold contracts were posted for delivery tomorrow...and no silver contracts for the second day running. But, having said that, there are nine days left before first day notice for delivery into the March contract for silver...and the CME reported yesterday that there are still 385 gold, and 187 silver contracts open for February delivery...and 56 of those silver contracts were just added to the delivery schedule yesterday.
The GLD ETF did not have a report yesterday...but there was another withdrawal reported from SLV...as authorized participants withdrew another 1,068,875 troy ounces.
The U.S. Mint had its first sales report of the week on Wednesday. They sold 5,000 ounces of gold eagles...1,500 one-ounce 24K gold buffaloes...and 100,000 silver eagles. Month-to-date sales numbers are not impressive. So far in February the mint has sold 15,000 ounces of gold eagles...3,500 one-ounce 24K gold buffaloes...and 835,000 silver eagles.
It was a rather quiet day at the Comex-approved depositories on Tuesday. They only reported receiving 303,246 ounces of silver...and shipped 381,430 troy ounces out the door. The link to that action is here.
Silver analyst Ted Butler had his mid-week commentary to his paying subscribers...and here are three free paragraphs...
"Let me confess one of my greatest fears about a potential future bubble in silver. If a silver bubble does develop, by definition large numbers of uninformed investors will join in the fray, eager to capture sure profits. The concerns for risk will be cast aside, as they are in any bubble. Undoubtedly, many of my former bullish arguments for buying silver will be trotted out as current reasons for buying even as price and risk grow. I doubt very much that I will be pounding the table to buy in a silver bubble and instead will probably be way too early in suggesting its sale. Yet new uniformed buyers will mistakenly view my past pronouncements as reasons to buy after a bubble is formed. The thought that I will inadvertently be responsible for damage to the latecomers is troubling."
"Of course, the risk to latecomers only grows deep into the bubble, should it form. The risk of a silver bubble bursting now is remote, because it hasn’t formed yet. Yes, there is always the risk of short term sell-offs for reasons related to manipulative activities on the COMEX, but those sell-offs should be viewed as buying opportunities as has been the case for the life of the silver bull market to date. In terms of a bubble-like collapse in silver prices, that risk will not exist until a bubble first forms."
"In the meantime, since a bubble has not yet formed in silver, what are the possible effects on the price should a silver bubble form? Certainly, I have not been particularly surprised by the 8 to 10 fold increase in price over the past 5 to 10 years. If anything, the price performance to date in silver, given all the facts, has been somewhat muted. Leaving out a possible bubble forming, it would not surprise me to see eventual long term silver prices at $100 or even $200. That’s without a bubble. If a silver bubble does form, it is hard for me not to imagine some multiple of those prices."
Reader Scott Pluschau, a frequent contributor to this column, sent me this short note yesterday..."Since you mentioned TA and equities the other day, Wednesday was a key reversal day in the Nasdaq 100 on a surge in volume...if you have any interest." I did...and his blog from yesterday is well worth a look. The chart is a standout...and the link is here.
Washington state reader S.A. sent me these two charts showing the decline in Chinese and Russian U.S. Treasury holdings...and there are no surprises.
Then a bit more than twelve hours later, the zerohedge.com story that he lifted these graphs from arrived in my in-box courtesy of West Virginia reader Elliot Simon. The headline reads "Russia Dumps Treasurys For 14 Consecutive Months; China Slashes Holdings To Lowest In Over A Year"...and if you want to run through it, the link is here.
I have the usual number of stories for you today...and I hope you have time to at least skim most of them.
How much of this price movement has to do with the ongoing dollar rally...or an engineered sell-off...remains to be seen.Soros Raises Gold Fund Stake as Paulson Joins Tudor in Selloff. World has seen 'peak gold,' John Embry. U.S. Supreme Court Rejects Stay in Spanish Sunken Treasure Case.Critical Reads
US Retail Sales Disappointment Weighs on Markets
Ed_GSDFebruary 16, 2012 11:12am GMTWeaker than expected U.S. retail sales figures dented market confidence Tuesday after another mass downgrade of the creditworthiness of European countries had little impact.
Figures showing that retail sales in the U.S. rose by 0.4 percent in January, half the anticipated amount. That prompted a reverse in stock markets, which had earlier shown resilience to Moody's decision to downgrade six EU countries and its accompanying warning that top-rated Britain, France and Austria could see their ratings cut too.
Following a downwardly revised flat reading for December, the retail sales figures proved a disappointment in the markets, especially in light of the recent run of strong U.S. economic data, most notably relating to the job market.
Well, dear reader, that 'strong economic data' that's mentioned in the above paragraph is all b.s...and that's why sales are weak. I'm sure the sales data is even worse than the numbers show. This AP story showed up posted over at abcnews.go.com on Tuesday. I stole it from yesterday's King Report...and the link is here.
The insiders are selling heavily: Mark Hulbert
Ed_GSDFebruary 16, 2012 11:12am GMTCorporate insiders are now selling their companies’ stock at a rate not seen since late last July.
That’s a scary parallel indeed, since that late-July spike in selling came just days before one of the more painful two-week periods in the stock market in years.
In early August, as you may recall, the U.S. government lost its triple-A credit rating, and the bottom dropped out of the stock market. Between the last week of July and the second week of August, the Dow Jones Industrial Average dropped 2,000 points.
This marketwatch.com story is from last Thursday...and I thank Nitin Agrawal for sending it along in the wee hours of this morning. The link is here.
JPMorgan, HSBC Among Firms Accused by Informant Bank in Canada Libor Case
Ed_GSDFebruary 16, 2012 11:12am GMTJPMorgan Chase & Co., Deutsche Bank AG and HSBC Holdings Plc are among at least seven firms accused by another bank of participating in a conspiracy to manipulate the price of derivatives worldwide for more than three years.
The unnamed bank, seeking immunity, told Canada’s Competition Bureau that traders and cash brokers conspired to influence the Yen London interbank offered rate from 2007 to 2010 to profit on interest-rate derivative positions linked to the benchmark. The bureau spelled out the probe in documents it filed with the Ontario Superior Court in May.
The documents, shown yesterday to Bloomberg News by court clerks, offer one of the most detailed accounts yet as watchdogs in Europe, Asia and the U.S. look into concerns that firms conspired to manipulate interest rates serving as benchmarks for trillions of dollars of financial products. Canada also is investigating Citigroup Inc., Royal Bank of Scotland Group Plc, ICAP Plc and RP Martin Holdings Ltd., the court documents show.
The rot in the financial system is deeper than anyone knows. There are no markets anymore...only interventions. I thank Washington state reader S.A. for sending me this Bloomberg story that was posted on their website late on Tuesday evening. The link is here.
Single currency's struggle takes its toll on Europe
Ed_GSDFebruary 16, 2012 11:12am GMTThe diverse nature of the 17 countries brought together in monetary union has never been so apparent.
As Greece stands on the brink of bankruptcy, Germany, its financially disciplined and powerful eurozone peer looks down with disapproval on a country that for years lived beyond its means.
Greece may be in a bad state but it is not alone, and the eurozone's weakest economies have dragged down the strongest with them. As Howard Archer, economist at IHS Global Insight, puts it, the region "stuck one foot back through the recession door" in the fourth quarter of 2011, after the combined economy shrank by 0.3pc. The other foot is expected to join it in the coming months.
"We doubt that the eurozone will be able to avoid further contraction in the first quarter and very possibly the second as well in the face of tighter credit conditions, a further tightening in fiscal policy in many countries, the ongoing pressures facing consumers, and limited global growth," said Mr. Archer.
This story was filed in The Telegraph late last night London time...and I thank Roy Stephens for sending it along. The link is here.
Germany is 'playing with fire' on Greece, warns finance minister
Ed_GSDFebruary 16, 2012 11:12am GMTGreek finance minister Evangelos Venizelos accused European leaders of "playing with fire" by trying to oust the beleaguered country from the eurozone amid fears they want to delay releasing the €130bn (£108bn) bail-out until after Greek elections in April.
The warning came as credit rating agency Moody’s last night put 114 European banks – including nine in the UK – on review for a downgrade, citing the “prolonged” impact of the euro crisis. Royal Bank of Scotland, Barclays, Lloyds Banking Group and HSBC were among those affected.
With less than five weeks to avert bankruptcy and yet more delays and demands from Berlin and Brussels, Mr. Venizelos said: "In the euro area, there are plenty who don't want us anymore. There are some playing with fire, domestically and abroad."
This story was posted in The Telegraph just after midnight local time...and I thank Roy Stephens for his second offering of the day. The link is here.
Nigel Farage - Greece Descending into Total Chaos & Violence
Ed_GSDFebruary 16, 2012 11:12am GMTNigel neither guilds lilies...nor suffers fools gladly. His interview with Eric King is no exception to that rule...and the blog is posted over at the King World News website...and the link is here.
Greece's Model Mayor: Reform Hero Takes on Corruption in Thessaloniki
Ed_GSDFebruary 16, 2012 11:12am GMTEuropean Union officials have nothing but praise for the mayor of the Greek city of Thessaloniki. Yiannis Boutaris has been pushing ahead with far-reaching reforms to undo the abuses of his predecessors and has already slashed the city's spending by 30 percent. He's even asking the Germans for advice.
Boutaris is the most unusual politician in Greece, despite his insistence that he is not a politician at all. In fact, he says, he is the opposite of a politician, a businessman who has taken on a new project: running the city of Thessaloniki, where he has been mayor for almost exactly a year.
It's relatively uncommon for the international observers working for the so-called troika of the European Union, the International Monetary Fund (IMF) and the European Central Bank (ECB) in Athens to say something complimentary about a Greek politician. And it's almost unheard of for them to praise a Greek for his penchant for reform, as they are doing with Boutaris. In their reports home, the officials write that, since Boutaris came into office, Thessaloniki has been an "island of hope" and a "model for all of Greece." A member of the European Commission team in Athens says: "Boutaris is the exception, a beacon. Everyone else can learn something from him."
This very interesting read was posted over at the German website spiegel.de yesterday...and is Roy Stephens third offering in today's column. It's certainly worth your while...and the link is here.
Iran Warns 6 Countries in Europe It Will Cut Off Oil
Ed_GSDFebruary 16, 2012 11:12am GMTBesieged by international sanctions over the Iranian nuclear program including a planned oil embargo by Europe, Iran warned six European buyers on Wednesday that it might strike first by immediately cutting them off from Iranian oil.
Iran’s official Islamic Republic News Agency said the threat was conveyed to the ambassadors of Italy, Spain, France, the Netherlands, Greece and Portugal in separate meetings at the Foreign Ministry in Tehran. Officials said in an earlier report by Press TV, Iran’s state-financed satellite broadcaster, that Iran had already cut supplies to the six countries was inaccurate — but not before word of the Press TV report sent a brief shudder through the global oil market, sending prices up slightly.
“Iran warns Europe it will find other customers for its oil,” the Islamic Republic News Agency said. “European people should know that if Iran changes destinations of the oil it gives to them, the responsibility will rest with the European governments themselves.”
This story was posted in The New York Times yesterday...and I thank reader Phil Barlett for sharing it with us...and the link is here.
Insurance fears see few tankers ready to haul Iran crude
Ed_GSDFebruary 16, 2012 11:12am GMTAsian buyers of Iranian crude are struggling to find vessels willing to call at ports in the Islamic Republic as ship-owners fear losing insurance cover for their tankers because of European and US sanctions aimed at curbing Tehran's nuclear ambitions.
Although the EU ban on the import and transportation of Iranian crude does not directly affect Iran's Asian customers, a provision in the sanctions legislation agreed January 23 is having an impact far beyond European shores. "It shall be prohibited to provide, directly or indirectly, financing or financial assistance, including financial derivatives, as well as insurance and reinsurance, related to the import, purchase, or transport of Iranian crude oil and petroleum products," the legislation says.
Chartering and ship owning sources say that tanker operators with protection and indemnity (P&I) insurance cover from mutual clubs based in Europe are not accepting crude cargoes loading from Iran, despite being offered a premium to standard rates.This rather long story was filed from Singapore late on Tuesday...and was sent to me by reader W. Busser. The article is posted on the platts.com website...and is well worth skimming. The link is here.
India's support for Iran threatens its US relationship and global leadership role
Ed_GSDFebruary 16, 2012 11:12am GMTThe Indian government’s ill-advised statement last week that it will continue to purchase oil from Iran is a major setback for the US attempt to isolate the Iranian government over the nuclear issue. The New York Times reported Sunday that Indian authorities are actively aiding Indian firms to avoid current sanctions by advising them to pay for Iranian oil in Indian rupees. It may go even further by agreeing to barter deals with Iran – all to circumvent the sanctions regime carefully constructed by the United States and its friends and allies. According to the Times, India now has the dubious distinction of being the leading importer of Iranian oil.
This is bitterly disappointing news for those of us who have championed a close relationship with India. And it represents a real setback in the attempt by the last three American presidents to establish a close and strategic partnership with successive Indian governments.
I'm happy to see at least one government do what's in its own interest. This story was posted on The Christian Science Monitor website on Tuesday...and is another offering from Washington state reader S.A. The link is here.
How Iran Nuclear Standoff Looks From Russia: Dmitri Trenin
Ed_GSDFebruary 16, 2012 11:12am GMTWhen Russians look at Iran, they see a country that has been their neighbor and rival forever. As the Russian empire advanced, it wrestled the North and South Caucasus from the Shah. Peter the Great annexed, briefly, Iran’s entire Caspian Sea coastline and put his forces just north of Tehran.
In the early 20th century, Russia and the U.K. divided Iran into zones of influence. The Russians got the north and proceeded to occupy Iran twice, during each of the world wars. When Franklin Delano Roosevelt and Winston Churchill met with Josef Stalin in Tehran in 1943, they were protected by the Red Army.
Yet there was never much love lost between the two countries. To Iranians, Russia was too powerful and too threatening. Russians, meanwhile, remembered their own embassy trauma at Iranian hands in 1829. Every schoolchild knows the fate of Alexander Griboyedov, the czar’s ambassador to Persia, who was murdered, with his entire embassy staff, by an angry Tehran mob. Griboyedov was a great Russian author, many of whose lines Russian children -- and grown-ups -- know by heart.
This story is a real education...and is something that you'd never read in any western history book. For that reason alone it's a must read and, once again, I thank Washington reader S.A. for digging this Bloomberg article up on our behalf...and the link is here.
U.S. Supreme Court Rejects Stay in Spanish Sunken Treasure Case
Ed_GSDFebruary 16, 2012 11:12am GMTSpain first stole it from Peru...and now steals it from the salvagers.
Last Thursday, the U.S. Supreme Court declined to hear an emergency application for a stay filed by a Florida deep-sea salvage company that wanted to maintain possession of a half billion dollars worth of gold and silver coins until a final decision is made about who owns them.
"Spain has now been victorious at every level in the United States courts, from Tampa to Atlanta to Washington," said Jim Goold, who defended Spain's claim to the treasure. "I am pleased and proud for all of us."
Odyssey Marine Exploration had made an emergency appeal to the high court in an attempt to block a lower court's order last week that it turn over the treasure to Spain.
This story was posted over at the cnn.com website on Thursday, February 9th...and I plucked it from a GATA release yesterday. The link is here.
Soros Raises Gold Fund Stake as Paulson Joins Tudor in Selloff
Ed_GSDFebruary 16, 2012 11:12am GMTPaulson & Co., the hedge fund founded by billionaire John Paulson, cut its stake in the SPDR Gold Trust for the second straight quarter, while billionaire investor George Soros increased his holdings.
Paulson held 17.3 million shares in the exchange-traded fund backed by bullion as of Dec. 31, 15 percent less than the 20.3 million on Sept. 30, Securities and Exchange Commission filings showed. His holdings fell 45 percent from end-June, the first reduction in more than two years. He is still the biggest stakeholder. Vinik Asset Management LP, Tudor Investment Corp. and SAC Capital Advisors LP also sold shares. Lone Pine Capital LLC added holdings.
This story was posted over at the moneynews.com website yesterday...and I thank West Virginia reader Elliot Simon for sending it along. The link is here.
World has seen 'peak gold,' Embry tells King World News
Ed_GSDFebruary 16, 2012 11:12am GMTInterviewed by King World News yesterday, Sprott Asset Management's chief investment strategist, John Embry, says central banks have put gold in a stranglehold while they stumble around the Greek sovereign debt problem, but no matter how that ends up, the world has already seen "peak gold" and declining production will support the price.
I thank Chris Powell for writing the introductory paragraph above. An excerpt from the interview, headlined "John Embry: Is Greece's Situation Bad for Gold?", is posted at the KWN website...and the link is here.
Tune out. Buy gold. Be happy. - Bill Bonner
Ed_GSDFebruary 16, 2012 11:12am GMTThe Sage of Omaha explained in Fortune magazine why bonds are dangerous.
He went on to explain why he doesn’t like gold either. He points out that since 1965, the total return on gold (not adjusted for inflation) was 4,455%. But the total return on stocks was higher, at 6,072%.
The difference between the two is that gold is a ‘sterile’ investment, says Buffett. Stocks are not.
He’s right. Gold is only useful at protecting purchasing power when the monetary system is in danger. At almost all other times, you’re better off with stocks, businesses, farmland or another productive asset.
That’s why Buffett now prefers stocks. And it is why we now prefer gold.
This rather short Bill Bonner offering was posted over at the moneyweek.com website on Valentine's Day...and it's a must read. The link to Roy Stephens last offering of the day is here.
John Embry: Debt saturation ensures much higher gold and silver
Ed_GSDFebruary 16, 2012 11:12am GMTRemarks by John Embry, Chief Investment Strategist, Sprott Asset Management, at the Cambridge House International California Investment Conference at the International Hyatt Grand Champions Resort, Indian Wells, California on Saturday, February 11th.
John is at the top of his game in this speech...and it's an absolute must read. It's posted on the gata.org website...and the link is here.
The Funnies
Ed_GSDFebruary 16, 2012 11:12am GMT
The only difference between a tax man and a taxidermist is that the taxidermist leaves the skin. ~ Mark Twain
The Wrap
Ed_GSDFebruary 16, 2012 11:12am GMTWell, there's nothing new I can say about the Wednesday trading day after my comments on the Tuesday trading day, as they were virtually identical. This sort of trading action certainly doesn't happen by chance.
I was talking to Eric Sprott yesterday...and asked him how he was making out getting all the silver from his last offering in PSLV. He told me that they had already received it...and we both agreed that Ted Butler had been right on his call that JPMorgan et al would make sure that the silver purchased for this offering was delivered in a timely manner...as 'da boyz' didn't want to run the gauntlet of negative public opinion by taking ten weeks to deliver this batch, like they did last time.
We also agreed that with options expiry looming for the March delivery month in silver, the Commercial traders are probably going to attempt to take a strip out of both gold and silver between now and then...and it was just a matter of when they started that process. I've mentioned that possibility a few times so far this month and, with the cut-off for tomorrow's Commitment of Traders Report out of the way at the close of Comex trading on Tuesday, it's possible that the process may have begun yesterday.
Gold and silver were under pressure right from the Thursday open at 6:00 p.m. in New York last night...and I see that the $33 price level in silver got punctured to the downside. How much of this price movement has to do with the ongoing dollar rally...or an engineered sell-off...remains to be seen. Blythe Masters would know, but she's not returning my calls.
As I just mentioned, the dollar rally is still ongoing...and about 8:45 a.m. in London this morning, the dollar index managed to break above the psychological 80.00 mark...and is up about 35 basis points as I hit the 'send' button. We'll see how long this state of affairs lasts. If we get a sharp dollar reversal from here, that would make a precious metals sell-off of any significant amount very difficult to pull off.
As of 5:18 a.m. Eastern time, gold volume is already way up there...and silver volume is huge as well...so I would guess that there's been quite a bit of speculative long liquidation associated with the price spike below the $33 mark in silver. At the moment, gold is down ten bucks...and silver is down about 45 cents. We'll just have to wait and see how this all unfolds as the rest of Thursday progresses, but at the moment, it's all up in the air.
Tomorrow is the date for the next Commitment of Traders Report...and it's too bad that yesterday's trading data won't be in it.
That's all I have for today. I hope your Thursday goes/went well...depending on what side of the International Date Line you are on.
See you tomorrow.
