Tuesday, February 9, 2010

Panic Lurks In The Shadows Down Under

ECB Trichet departure sparks Greece rescue talk
SYDNEY: European Central Bank President Jean-Claude Trichet is cutting short a trip to Australia to attend a special European Union summit, prompting market speculation initiatives are in the works to help resolve Greece's debt problems.

EU heads of state are due to meet on Thursday in Brussels for a special summit on the economy under pressure to restore confidence among investors worried that rising debt in Greece, Portugal and other weaker states in the euro zone could undermine a global recovery.

The summit was called in early January and Trichet had been expected to spend both Tuesday and Wednesday in Australia at central bank meetings. Instead, he is leaving early, officials at the Reserve Bank of Australia and the ECB said.

He will fly on Tuesday to make sure he returns in time for the main session of the European summit, prompting speculation over the meaning of his early departure.

"There is a possibility that the EU could get the ECB involved and support Greece," said Ayako Sera, market strategist at Sumitomo Trust Bank. "Fiscal concerns that have also spread to Spain and Portugal could temporarily ease if we get something on Greece."

The euro inched up on news of Trichet's changed travel plans as dealers speculated about European support for Greece.

"Investors may begin to think that a policy measure directed at Greece's fiscal situation is in the works," said Barclays Capital in a research note.


Stocks jump on hopes for Greece debt rescue
NEW YORK (AP) -- The Dow Jones industrial average jumped back above 10,000 on hope that a resolution was near for Greece's debt crisis.

The Dow rose 150 points Tuesday, a day after closing below 10,000 for the first time in three months. The major indexes all gained more than 1 percent. Treasury prices slid as demand for safer investments fell.

Global markets bounced back on reports that plans are being developed in the European Union to rescue Greece. That raised hopes that policymakers will take bigger steps to contain debt troubles in other weak European economies including Portugal and Spain.

Though Greece's economy is small, that country's yawning budget gaps were undermining faith in the euro, Europe's common currency. Investors also believed that other countries might have trouble raising money in debt markets, which would hamper efforts to get their economies going again.


Something is up. Of what, we do not know. Traders wasted little time dumping the Dollar like the hot potato that it is. This sent Gold and Silver higher along with Oil, Copper and all the rest of the commodity sector. One day does not make a trend or signal a bottom in these markets. Continue to watch them closely. And pay particular attention to the US Dollar Index. 79.55 is a key marker on this Index now.

Jim Siclair's Thought For The Day:
Gold has spoken out both before and after US trading hours for two days now on the developments taking place in the darkened central bankers meeting room. This is the same room with the shades pulled down, military and police guards out front and air support flying above.

The floating exchange system as it now exists is going be folded. We are moving toward a one Western world currency, and one Western world central bank of central banks.

Because all Western world federal budget deficits are out of control and there is no PRACTICAL method to reverse this condition in the foreseeable future, there is no other alternative.

That means the two major Western World currencies will be Gold and the SDR (type entity).

As seen on Harvey Organ's - The Daily Gold
The open interest on both gold and silver comex absolutely floored me. First gold comex:

The Comex open interest is calculated as of the Comex close. Today we learned that yesterday's open interest, which includes the Access Market trading on Friday, went DOWN a stunning 20,972 contracts to 461,388. This steep a drop strongly suggests The Gold Cartel did some SERIOUS shortcovering.

and now for silver:

The silver open interest also dropped steeply, down 3483 contracts to 120,901. Heck, why should JP Morgan, and others in The Gold Cartel, not cover some silver shorts, along with gold, when they know the FIX is in with their insider information?

The volume on the gold comex basis Monday was 161000 and gold rose by 13.00 dollars. Usually JPMorgan supplies the paper as the gold price rises. Then at a later date they throw hundreds of thousand contracts at the opening of the comex trading and then they tell their banker friends to remove all bids to accentuate the fall. This has been their modus operandi for years.

Today however something strange occurred...a complete contraction of almost 21000 gold comex contracts in one trading session with the gold price rising by 13.00 dollars.
The silver comex also showed a massive contraction of 3483 contracts. The two contractions are comparable.

What happened? It is hard for me to say, but JPMorgan certainly did not waste any time in covering. They know something is up.

Gold has taken back the line at 1074, but must maintain and advance above it in short order. Silver remains below it's key reactionary price point at 16. A move back through 16 could signal an impending short squeeze.

Dan Norcini [http://jsmineset.com/] published an excellent graph over the weekend that shows that the "Commercial Traders" [read JPMorgan et al] are massively short the U.S. dollar index. As Dan says in the sidebar to this graph... "It could well be that the Dollar rally is getting long in the tooth." You can link to the graph here.

It is interesting to note that the last two times the big banks were this short the Dollar, Gold and Silver were marking a major low in October 2008 [681 Gold and 8.46 Silver] and a major breakout in January 2006 [730 Gold and 8.43 Silver]. Both of these previous peaks in commercial traders short positions in the US Dollar were followed by massive gains in the Precious Metals markets off these lows and breakouts as the Dollar crashed.

With Gold "price" having tested "the floor" established by India's 200 tonne purchase of IMF Gold last week, could the Dollar be poised for another take down that leads to new highs in the Precious Metals? Time will tell, but I doubt the central bankers hunkered down in Australia are signing the Dollars praises as there own economies disintegrate.

Let's focus on Silver today. Silver is without question the "investment opportunity of a lifetime". Recent price rigging on the CRIMEX has once again offered investors a fantastic opportunity to load up on this Precious Metal at discount prices...if they can find any physical bullion to buy.

A Sterling Account of Silver's January, 2010 Dismal Performance [MUST READ]
Contrary to reports stemming from mainstream analysts that January 2010 price drops imply that demand for silver is waning, it is very likely AND consistent with empirical observations that demand for PHYSICAL PRECIOUS METALS [SILVER] actually increased and they are actually in short physical supply.

A Silver Shortage? [Video]
Money manager Stephen Leeb predicts the price of silver to skyrocket on industrial growth in an interview on the Forbes Video Network.

Silver’s Most Important Price Point
By: Bill Downey
The majority of the data we see is usually short and sometimes medium term time frames. The selloff we saw in silver from 19.50 down to 16 dollars has a lot of investors asking and pondering the question of whether silver should be purchased here or not. Surely if silver was going to triple digit prices that now would be a great time to buy it. So I decided it was time to take a longer time frame look at the price of silver to see if it offers any clues as to direction. What I found was most surprising.

Forget Gold, Win with Silver[must read]
By Jeff Nielson
Decades of price-suppression by the anti-gold bankers' cabal have resulted in the extreme over-consumption of silver – wiping out global inventories. To hide the collapse of inventories, all of the silver supposedly owned by the unit-holders of “bullion-ETFs” has been added to official inventories – and ultimately only one entity will end up owning that silver – while two-thirds of the “holders” of that silver will end up with nothing but the paper-promises of bankers.

1 comment:

  1. Oh, when Greece goes under, so will the rest soon follow ...