Monday, December 21, 2009

CRIMEX Goons Facing Destruction?

Briefly...

A great deal of discussion the past several days regarding open interest on the COT has left traders 'Wondering what the hell is going on". The big air pockets in price have not resulted in the "normal" reduction of open interest in the futures as price declines, as the goons cover their large short positions and rake in their criminal profits.

Perhaps we should consider that the weaker hands that are being shaken out of the market here from all-time highs are being replaced by a greater number "stronger" hands determined to take on the corrupt cartel bankers and destroy them. in other words, the stronger speculators are taking on more gold and silver contracts and our wonderful and fraudulent bankers are shorting more and more gold and silver.

The CRIMEX goons have accomplished little over the past two weeks. They have lowered the price by $120 and increased their short positions, and that's about it. Did they not consider that by lowering the price they have only increased demand for PHYSICAL GOLD though out the world?

Have the goons shot them selves in both feet this time? Will they be able to stop the bleeding? This week ahead should prove to be most interesting. Expect to see an increase in the commercial shorts as the CRIMEX goons dig in and supply massive gold and silver contracts in which the underlying asset does not exist under their ownership. The second half of the run to $1300+ Gold may be birthing as we type this.

Near-term resistance in Gold lies at: 1116 / 1118 / 1124. Support at recent lows near 1095 and the 50 Day moving average remains key.

Near-term resistance in Silver lies at: 17.44 / 17.72 [50 day moving average] / 17.82 . Support at 17.05 remains key.

COMEX Raises Gold and Silver Margin Requirements, Validates Bull Market Strength
The COMEX has raised the margin requirements for gold and silver futures contracts. Additionally, gold is trading in minor backwardation but this is probably not serious. The margin requirement rise validates the strength of the bull market. There will likely be additional margin requirement increases during this upleg.

The result of these increases in the margin requirements will likely be somewhat bearish for the metals in three to six months. This is because it will require more capital to control the same amount of the commodity and will serve to dampen some of the speculative hot money which has been flowing into the metals lately.

Margin requirements and other exchange rules are what put a damper on the Hunt brother’s plans. Overnight the rules were changed without notice and it resulted in tremendous losses and margin calls to the Hunts. The effect of margin requirements on the instruments of the gold price suppression scheme does cause some questioning. For example, are they even subject to the requirements?
http://seekingalpha.com/article/178831-comex-raises-gold-and-silver-margin-requirements-validates-bull-market-strength?source=email

The Gold 'Bubble' that Goes On and On
The funny thing is, according to this data at Google news, the media has been calling gold a bubble for, not only years now, but decades.
http://seekingalpha.com/article/178911-the-gold-bubble-that-goes-on-and-on?source=email

Why precious metals aren’t in a bubble
Critics of precious metals investing have called gold and silver a bubble, further claiming that today’s higher prices will fade as economic conditions improve. Although gold and silver prices are much more expensive than they were even a few years ago, gold and silver are hardly near bubble status.

Scarce Ownership of Precious Metals
One of the most prominent reasons that gold and silver aren’t yet a bubble is that very few casual or institutional investors own physical gold and silver.


Gold Isn’t Speculative
Unlike oil, dot com stocks and even real estate, gold isn’t bought and sold to make people rich. It isn’t sold as a get-rich-quick product. In fact, gold and silver are sold as get-rich-slowly products that help investors retain their purchasing power.


Metals Prices Haven’t Truly Grown
While the money supply has expanded tremendously since the early 1990s, gold prices didn’t begin their most recent rally until 2002, mostly due to a relatively strong economy.


Rarity is Always Valuable
There is less gold and silver on the earth’s crust with each passing day. As precious metals are used in manufacturing, the amount in existence decreases, which subsequently increases the value of each gold and silver coin owned by investors.


Now or Never
While precious metals aren’t currently in a bubble, it’s impossible to deny that they might soon be. With so many investors realizing the only way to safeguard their assets from inflation, deflation, and economic calamity is physical metals, it is certain that the price of silver will continue to rally. From the everyday collector to the institutional investor, precious metals are now on the radar as a safe and reliable investment. Rather than wait as precious metal prices trend higher, protect your assets by purchasing gold and silver coins today.

http://www.investmentpostcards.com/2009/12/17/why-precious-metals-arent-in-a-bubble/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+wordpress%2FVYxj+%28Investment+Postcards+from+Cape+Town%29

Gold Is "Nowhere Near the Top"
The U.S. dollar has reigned as the world's reserve currency for more than 30 years. That's a real anomaly in the history of paper money, according to Stansberry & Associates Investment Research founder Porter Stansberry, but the dollar's days on the throne are numbered. With a sea-change in the monetary system on the horizon—and drawing ever-nearer as more and more U.S. creditors turn toward hard assets and away from paper dollars—he tells The Gold Report in this exclusive interview that the world is approaching a return to "at least a de facto gold standard." Porter does not recommend bullion as "insurance" (because that suggests hope for the dollar when there is nothing to pin hope on) but rather as "the perfect natural money."

TGR: Granted, the U.S. dollar is the reserve currency, but could a single currency drive the whole world to return to a gold standard?

PS: If you want to understand how one currency could replace the U.S. dollar as the global reserve currency, look into Gresham's Law. Historically, bad money always drives out good. Accordingly, if a central bank anywhere in the world sets up its currency to be backed by any kind of hard currency, it would cause people all around the world to desire that currency for their savings, rather than dollars.

The Swiss don't do it anymore, but suppose, for example, that China decided to back all of its currency in silver. That would make a big difference in the market for dollars in particular because there are so many excess dollars around the world that have to be purchased every year that it would displace the dollar very quickly. All you would need is a country with a large role in global trade deciding to establish a currency based on a hard commodity standard, whether gold or silver or a bi-metal standard. Those standards historically have always been very respected.

Then as soon as you have a hard currency standard, people will begin to hoard that currency and dump the dollar. For example, the U.S. bi-metal standard in the 1800s undervalued silver relative to gold. Within about 10 years—from 1810 to about 1820—no silver coinage was left in the country. That happened in the 1960s as well, by the way. At that time, the face value of silver coins in circulation, the pre-1964 quarters, for example, was lower than the value of the metal. So they disappeared from circulation almost overnight.

The same thing would happen were another currency to be made more secure—with backing from gold or silver, for example—than the dollar. People would begin to hoard that currency and dump the dollar.

I believe that's what we're beginning to see with the central bank purchases of gold. It may be hard to believe, but it's true, that central banks have been net sellers of gold since the end of Bretton Woods. It's really an anomaly that for 35-plus years, there has been no challenge to the dollar standard. There's never been a time before in human history that the world reserve currency wasn't backed by gold or by a combination of gold and silver.

http://news.goldseek.com/GoldSeek/1261174176.php

This came from economist David Rosenberg:
"We are not sure if this is a well known "fact", but the U.S. government has a record $2.5 trillion of its debt, including bills, bonds and notes, rolling over in 2010. That, my friends, is 35% of the outstanding level of Uncle Sam's marketable obligations having to be refinanced in one single year. "

THE DEBT BOMB
by Puru Saxena
BIG PICTURE- “It’s a question of how do you achieve the deleveraging. Do you go through a long period of slow growth, high savings and many legal problems or do you accept higher inflation? It would ameliorate the debt bomb and help us work through the deleveraging process” – Kenneth Rogoff, Professor of Economics at Harvard, Former Chief Economist at the International Monetary Fund

Make no mistake; the developed world is drowning in debt and as outlined above, there are only two viable options – a global economic depression or very high inflation. It is our contention that the policymakers have chosen the latter option and over the following years, we will experience the trauma of severe inflation.

Look. The American government is staring at total obligations of US$115 trillion, America’s debt to GDP ratio is off the charts and the American public is also up to its eyeballs in debt. Under this scenario, you can bet your bottom dollar that the American establishment will try to reduce this debt overhang through a process known as monetary inflation.

http://www.financialsense.com/editorials/saxena/2009/1218.html

"It is error alone that needs the support of government," wrote Thomas Jefferson. "Truth can stand by itself."

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