Wednesday, April 7, 2010

Hot Air vs. The TRUTH

Gold broke strongly higher this morning as I was drawing the charts posted above. Nobody is buying the false strength in the US Dollar. The tired game of chasing the Dollar higher on weakness in the Euro is waning. The emperor has no clothes, and his crown is destined to be melted down as scrap Gold as the debt collectors come knocking.

Gold 1134 was the launch point as we pointed out several days ago. Now we must prepare for the CRIMEX goons to redeploy their defenses around the 1145 handle [the MARCH 2010 swing high miss identified in the chart above]. 1161, the January swing high, is the battle ground. A move through there and a major squeeze of the Rat Bastids will commence. As Gold moves further from the breakout at 1134, the more relevant it will become as support. Below that look for support around the 20-day moving average. Gold is poised for a strong move up into May, buy the dips.

Silver broke from it's downtrend at 17.90 and has been held in check near 18 until this morning. With Gold's break higher today, Silver should begin to creep higher and away from the 18 handle. Should the CRIMEX goons succeed in repelling Gold at 1145, expect a retest of the breakout from Silver's downtrend line. 17.60 looks like very solid support for Silver here. Like Gold, Silver is poised for a major mover higher from here into May, buy the dips.

What can be said about the Dollar that hasn't been said already. It is a false prophet, and naked as a jaybird. Only a fool buys the Dollar at these levels as it is NOT a safe-haven. The only thing holding the Dollar above water is hot air, and hot air is billowing out of Washington these days.

Upbeat Signs Revive Consumers’ Mood for Spending
American consumers are finally coming out of hiding.

After months of penny-pinching amid the recession, new figures — showing an improving job market, rising factory output and increased retail sales — suggest that consumers are no longer restricting their budgets to necessities like food and medicine. They are starting to buy clothes, jewelry and even cars again.

The mood has gone from panicked to cautious, and now, as Mark Zandi, chief economist for Moody’s put it, some consumers are “almost a bit giddy.”

More "signs". As I was saying, HOT AIR. I guess Mr. Zandi [is that another way to spell shill?] missed the report that food stamp use by Americans hit an ALL-TIME high in January.

Food stamp rolls break record again
About 39.4 million Americans, the most ever, received food stamps in January, the government said.

The number of recipients was up 22% from a year earlier, according to the U.S. Department of Agriculture. The total of Americans getting the subsidy has hit records for 14 consecutive months.

The national unemployment rate has hovered at 9.7% since January, according to the Bureau of Labor Statistics.

Beginning Oct. 1, an average of 40.5 million people are expected to get food stamps each month this year, rising to 43.3 million in 2011, according to White House estimates.,0,5967359,print.story

Mr. Zandi, did you miss this brief on job openings? I seriously doubt consumers are "giddy".

Job Openings in U.S. Decrease to 2.72 Million
April 6 (Bloomberg) -- Job openings in the U.S. fell in February for the first time in three months, a sign employers will be slow to expand staff even as firings subside.

Openings decreased by 131,000 to 2.72 million, the Labor Department said today in Washington. Fewer people were hired and the number of workers fired also decreased, the report also showed.

“Conditions in the labor market will continue to be tenuous as firms look for a pickup in sales activity before increasing employment opportunities,” Maxwell Clarke, chief U.S. economist at IDEAglobal in New York, said before the report. “Although labor conditions remain weak, we anticipate further improvement taking hold in coming months as conditions gradually improve.”

Employers in the world’s largest economy added 162,000 workers to payrolls in March, the most in three years, the government reported last week. The figures also showed more people had to take part-time jobs because of a lack of full-time opportunities and the average length of unemployment climbed to a record 31.2 weeks.

Openings fell 4.6 percent in February from a revised 2.85 million in January that was larger than previously estimated.

The rate of job openings in February fell to 2.1 from 2.2 the prior month, according to today’s report. Education and health services accounted for the biggest decrease in available jobs while manufacturers and retailers showed gains in help wanted.

I can hardly sit still! I must run out and spend money TODAY!

I need some TRUTH:

Manipulating Gold (GLD) and Silver (SLV): A Criminal Naked Short Position that Could Wreck the Economy
By Mark Mitchell
With Maguire’s warning, the regulators were able to watch a crime unfold, right before their eyes, in real time. Then the regulators thanked Maguire by saying, in essence, “you’re a nuisance, go away.” This is not just appalling, but scary, because the criminal activity that Maguire exposed is much bigger than the Madoff Ponzi scheme, and more likely to result in serious damage to the American economy. Indeed, there is a strong case to be made that our national security is at stake. As Maguire stated in a recent interview with King World radio, the manipulators have likely created a massive naked short position that can easily be exploited by foreign entities who might see financial or even political gain in eviscerating the dollar.

Maguire added: “What’s going to happen, if you’re an Asian trader, or a non-Western trader, who has no loyalty, or doesn’t care about homeland security or anything else, who says, now wait a minute, if I can establish in my mind that there is 100 ounces of paper gold, paper silver for example, for each ounce of real silver, than I have a naked short situation here that I can squeeze and they can go on the spot market which is basically a foreign exchange transaction, short dollar, long silver to any amount they want – billions, trillions — whatever they want, and they can take this market, squeeze this market, and blow it up…”

In other words, the problem isn’t just that criminal naked short sellers manipulate the metals market downwards. It is that they have created a condition where a foreign entity can merely demand delivery of real metal to induce a massive “squeeze” that sends the price of metals skyrocketing, putting huge downward pressure on the dollar. Meanwhile, says Maguire, with prices rising, “for 100 customers who show up there is only one guy who is going to get his gold or silver and there’s 99 who will be disappointed, so without any new money coming into the market, just asking for that gold and silver will create a default.”

“There are no prisoners taken in this kind of environment,” Maguire added. “All they need to establish is that it is naked, and by the admission of [former Goldman staffer] Christian at the meeting…we have a definition of physical actually being paper…They get that in their heads and its locked, it’s a done deal, then we don’t have to wait…there is a profit to be made here, and there is nothing [anybody] can do about it because it’s a foreign exchange transaction, and there are no limits on a foreign exchange transaction, and obviously foreign exchange transactions are coming to light, there [is talk] of manipulation…”

Indeed, Maguire says that he has received phone calls from wealthy individuals in Asia looking for the go ahead to exploit the naked short position. “The only question they have in their mind is can we establish that this is a naked short position, that’s the only thing they had to clarify, it’s become clear, it is now clear [that the naked short position is massive], and no doubt they do their own due diligence, but basically [the naked short position] has been admitted at the only metals meeting [the CFTC hearing] that we’ve ever had…”

Maguire says that the naked short selling scam is in the trillions of dollars, making it by far the biggest financial fraud in history. He calls it “financial terrorism” and accuses the naked short sellers of “treason” for putting national security at risk. It might be hard to believe that foreign entities are plotting to crush the U.S. economy, and perhaps they are not, but there is no doubt that loopholes in the clearing and settlement system – not just for metals, but also stocks, bonds, Treasuries, and derivatives – could quite easily be exploited by any foreign entity desiring to do harm to the U.S. economy. The only dispute is whether such a desire exists.

Will fraud lift gold prices to $10,000/ounce?
By Geena Paul
The CFTC hearing confirmed what GATA has been saying all along, that the gold market is being manipulated. And, how? The gold cartel has accumulated a huge short position and the huge short positions are ‘naked’, which means these positions are not hedged. There is 100-times more paper-gold outstanding than physical gold. You must be saying Oh, My God! Then wait, there is more to it.

Sub-prime crisis was peanuts before this scam. The bullion market is now slowly taking in the impact of these revelations. The result is, there will be no gold in the market. Because, if people ask for physical delivery of gold for their ETFs, who will give all the gold. THERE IS NO GOLD! And the price of gold can be $5,000 per ounce, $10,000 or may be even more. Who can predict the value of a commodity which is not there is the market?

To add fuel to fire The Wall Street Journal wrote: “The objective of this manipulation is to conceal the mismanagement of the US dollar so that it might retain its function as the world’s reserve currency. But to suppress the price of gold is to disable the barometer of the international financial system so that all markets may be more easily manipulated. This manipulation has been a primary cause of the catastrophic excesses in the markets that now threaten the whole world.”

So, the gold cartel now has a big target. It is inevitable that the big traders and hedge funds will push the naked shorts to the wall by asking for physical metal. If there is a squeeze on the naked shorts, the sky is the limit for precious metal prices.

There have been reports that over the past 10 years, the gold cartel has staged a controlled retreat. It has been fighting the advancing gold price with propaganda, paper short sales and the occasional dishoarding of physical metal from central bank vaults and more recently, the IMF. This retreat is about to turn into a rout, which means the upside potential for the precious metals is huge.$10000ounce-27107-3-1.html

What if Your Gold Isn't Really There?
By Patrick A. Heller
The London Bullion Market Association contracts emphasize that those who buy gold contracts through it are not really buying gold. Instead, they are becoming an unsecured creditor of the LBMA. In any kind of run to take delivery on contracts, almost all parties will be out of luck.

The efforts by central banks in the Far East and Middle East to remove physical gold from London to fulfill their long contracts must be wreaking havoc for the LBMA. So, if you think you own gold when you own a gold contract in London for physical delivery of gold upon maturity, you probably don’t.

Similarly, those who think they own gold because they own shares of gold or silver exchange traded funds (ETFs) may be in for a huge surprise. GLD, the symbol for the largest gold ETF, uses HSBC as its lead storage company. HSBC is widely considered to have the largest gold short position on the COMEX. It is a possibility, though it would be at least improper if not illegal, that some of the GLD gold holdings may be pledged as collateral against the COMEX short contracts. The prospectus for GLD discloses that shareholders of the ETF are not actually owners of physical metals, but are actually creditors of the fund.

The same problem exists with the largest silver ETF, trading under the symbol SLV. The head custodian is JPMorgan Chase, who holds the world’s largest silver short position. Again, it is possible that some of the ETF silver is pledged as collateral to short commodity contracts, with ETF investors left holding only a claim against the assets of the fund.

If you think you own gold by holding a COMEX contract, don’t hold your breath. The COMEX has adopted several rule changes over the past year to allow the sellers of contracts to deliver shares of an ETF instead of the physical metal. Of course, the COMEX has long allowed contracts to be settled for cash instead of the commodity.

Of course Sprott can't buy IMF gold: There isn't any!
Submitted by cpowell on 12:18PM ET Tuesday, April 6, 2010.
Dear Friend of GATA and Gold:

Give credit to Vince Veneziani of Business Insider for doing something that other supposed analysts of the gold market hardly ever do: put questions to an official source. But in commentary written after he questioned the International Monetary Fund about the refusal of the IMF to sell gold to Sprott Asset Management and its CEO, Eric Sprott, Veneziani seems to think that he has shown Sprott up when he has actually shown up the IMF itself.

"We called the IMF," Veneziani writes, "to get the full story." Full story? In fact, Veneziani got only the IMF's usual evasions and failed to pursue them.

"We spoke with Alistair Thomson, external relations officer at the IMF, who cleared up the matter for us. Here's the breakdown of what he told us:

"The IMF is selling gold only though a qualified agent. There is only one of these agents at the moment and due to the nature of the gold market, they won't reveal who or what that agent is."

The nature of the gold market? Exactly what is it about the gold market and government's meddling in it that requires such secrecy that the "qualified agent" can't be identified? Does the "qualified agent" get commissions or special favors or other advantages from the IMF? As an international agency, does the IMF not have some obligation to be transparent here? Of course Veneziani didn't ask any of these questions. Like most other financial writers, he accepts secrecy as the premise of government.

"The IMF is also phasing out the gold sale and does not intend to dump it all at once because to do so would disrupt markets, which is obviously not their intention."

Oh, obviously, obviously. There must be some reason other than disrupting the gold market -- that is, knocking down the gold price -- for the IMF to issue a thousand announcements and reminders in advance of every gold sale it contemplates.

"Sprott can't buy the gold directly because they [the IMF] do not deal with institutional clients like hedge funds, pension funds, etc. The only buyers can be central bankers and sovereign nations, that sort of thing."

Now why is it that the IMF sells only to central banks and other sovereign agents? Is that international law or something? Isn't Sprott's money as good as anyone else's? Or might Sprott, unlike some central bank, express dissatisfaction in public if he paid for gold and received from the IMF only a gilded certificate or two assuring him that somebody else would hold his gold for him in some place unknown to him?

"The IMF board agreed months ago how they wanted to approach the sale of the gold. Sprott is welcome to buy from central banks who have bought from the IMF, but not from the IMF directly."

Actually, the IMF suggested some weeks ago that it was contemplating making some gold sales on commercial markets as well to central banks. There was much buzz in the gold market about that, but obviously it must have been mistaken, for the IMF wouldn't ever do anything to disrupt the gold market.

"And there you have it. It's simply a matter of protocol and Mr. Sprott not adhering to it."

Yes, simply a matter of protocol. The protocol is that the IMF never puts itself in a position that might disclose that it has no gold at all, might disclose that the IMF has only the most tenuous claim on the gold reserves of its members and that its supposed gold transactions are really only bookkeeping entries whose primary purpose is indeed to spook the gold market.

Veneziani's inadvertent exposure of the IMF is headlined "Sorry, Eric Sprott, There's No Way You're Buying Gold From The IMF" and you can find it at Business Insider here:

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc

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