Wednesday, July 28, 2010

I will be going back to visit my roots in Detroit, Michigan for the next few days. It will be nice to get away from this nonsense in the Precious Metals markets. It is really getting under my skin. Thanks to everybody that's stoped by to see and read what I have to share...I hope you all find it enlightening and beneficial.

I'll go now, and leave a couple more stories from the crack financial media coverage of the Obamagasm's cratering recovery. He might ceaselessly blame Bush for this mess, but this IS the messiah's recovery.

Unemployment rises in 75 pct of metro areas- AP

Fed survey: Recovery slows in some places- AP

Orders for big-ticket goods fall 1 percent in June- AP

Economy erodes election hope for Democrats Reuters

Economic Recovery Anything But Durable[great observations]
Marko's Take
While investors are drinking the Obama Administration's Kool-Aid and popping champagne corks over the slew of optimistic earnings reports and guidance, the economy continues to quietly deteriorate. This morning we were treated to another disappointment: durable goods. Add to that the ongoing weakness in real estate and sub-par retail sales and it's hard to understand the unbridled optimism that has suddenly gripped the markets.

Not that economic statistics are a good barometer of future market prices. Like earnings, they are backward looking and generally have ZERO predictive value. Markets typically turn well before the economy and corporate earnings. So, what's my beef?

The main problem with these economic data is that they are occurring in the middle of a so called "recovery" and one that began more than a year ago. At this stage, we should be seeing growth in employment, sales, economic output and an increase in taking on credit. None of those are happening.

“Betting against gold is the same as betting on governments. He who bets on governments and government money bets against 6000 years of recorded human history.”
- Charles DeGaulle

The US Mint Fraud
By Bix Weir
One of the more disingenuous frauds the citizens of the United States are being subjected to these days is coming out of the US Mint. For over 2 years the Mint has been illegally rationing gold and silver American Eagles and now the Director of the U.S. Mint, Edmond Moy, is finally on the hot seat.

"A congressional subcommittee has been asked to investigate the growing backlog in and foreign procurement of U.S. bullion and collectors' precious metals coin blanks manufactured by the U.S. Mint."

Hoping for a Break
By Toby Connor, GoldScents
When a large fund wants to buy, it can’t just simply start buying stock like you or I would. Doing so would run the market up causing them to fill at higher and higher prices. Unlike the average retail trader, smart money attempts to buy into weakness and sell into strength. (Buy low, sell high). In order to buy in the kind of size they need without moving the market against themselves, a large trader needs very liquid conditions. Ask yourself, when do those kind of conditions exist? They happen when markets break technical levels.

If big money is selling it is because it is trying to push the market below a significant technical level so all the technicians will puke up their shares to him. By running an important technical level it can cause a ton of sell stops to activate, allowing it to accumulate a large position without moving the market against itself in the process. We saw this very thing happen in the oil market recently and also in February as gold bottomed.

Technical traders wrongly assume these breaks are continuation patterns but the reality is that very often they are just smart money “playing” the technical crowd so they can enter large positions. The key to watch for is an immediate reversal of a technical break. When that happens you know there was someone in the market buying when everyone else was selling. 9 times out of 10 it was smart money.

At the moment everyone is jumping on the bear side for gold. Remember we saw this exact same sentiment in the stock market 3 weeks ago. I knew the bears were going to be wrong simply because the market was way too late in the intermediate cycle for there to be enough time left for a significant decline.

The gold bears are going to be wrong also and for the exact same reason. It is just too late in the intermediate cycle for there to be enough time left for anything other than a minor decline.

Central banks will push gold up to rescue asset prices
Stewart Thompson
"There is a middle step between quantitative easing and money printing, and it is gold revaluation. No confiscation is needed in the current crisis to make revaluation 'work,' because so few people own gold. The major central banks are already committed to major long-term gold buy programs (the opposite of the 1990s), and these buy programs are the mechanism of gold revaluation under a sort of guise of currency reserves diversification.

"The central 'banksters' aren't stupid; they didn't get the market all wrong and accidentally sell their gold holdings into the end of the gold bear market, any more than the current buy programs are 'knee-jerk' reactions to a rising gold price.

"The buy program is about gold revaluation, not rushing to buy gold as an asset. As QE is more and more broadly deemed a failure in the fund community, the central banks will step up their gold buy programs, stepping UP the price they pay for the gold, with tremendous vigor.

"The buy programs of the central banks are not about adding gold to diversify their forex reserves; they are about devaluing paper money to raise asset prices, as blown marked-to-model OTC derivatives can then be marked to market."

Gold and Silver Capitulation is Near
On Tuesday, the price of gold fell $25.10 to $1,158 per ounce while the price of silver declined by $0.57 to $17.63 per ounce. Based on the emails and phone calls we have received in recent days, NIA believes we are approaching a capitulation point in gold and silver prices. The sentiment on gold and silver has abruptly changed to the negative like nothing we have ever seen before and to us this means the big move to the upside is right around the corner.

If you do a Google search for, "There is no inflation", it will bring up a shocking 385,000 web results and almost all of the articles are related to the U.S. economy. Investors around to globe are pointing to the consumer price index (CPI), which shows prices only up 1.05% from one year ago, and saying that inflation in the U.S. is not a problem. The most popular forecast by Wall Street analysts today is that the U.S. is headed for a long period of deflation, similar to Japan's "Lost Decade". NIA is currently in the process of dissecting exactly what took place during Japan's "Lost Decade". We are producing a short movie comparing Japan's economy to the U.S. economy and it will be released in the coming weeks.

NIA considers gold to be the best gauge of inflation, not the CPI. Most experts on Wall Street chalk up gold's rise from $255.95 to $1,158 this decade to rising fears and uncertainties and increasing jewelry demand from India, while maintaining that there is no inflation because the CPI says so. They fail to realize that the government has an agenda to minimize CPI increases in order to keep Social Security payment increases as low as possible. In the future, if the government decides to bailout their banker friends from hyperinflation by adjusting mortgage contracts to the rate of inflation, NIA predicts they will adjust mortgage principles based on the price of gold and not the CPI.

This past weekend, the New York Times wrote a front page article about how hedge fund manager Anthony Ward, through his private investment fund Armajaro, has purchased enough cocoa to make five billion chocolate bars. Ward took delivery of 240,100 tonnes of cocoa, the biggest delivery in 14 years and about 7% of the world's annual production of cocoa. Some are calling this an attempt to corner the cocoa market, similar to how the Hunt brothers tried to corner the silver market decades ago. Many people believe Ward is trying to create an artificial cocoa shortage in an attempt to artificially manipulate cocoa prices to the upside for his personal benefit and to the detriment of chocolate lovers everywhere.

NIA considers it to be outrageous for so much attention to be paid to Ward and his long position in cocoa, when the mainstream media continues to ignore JP Morgan and their concentrated short position in silver. Ward's long position of 7% of the world's annual cocoa production pales in comparison to JP Morgan's short position of 20% of the world's annual silver production. Ward purchased this cocoa using his firm's own funds. JP Morgan sold silver that it neither owned or legitimately borrowed.


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