Monday, November 29, 2010
Let us start with the gold comex:
The total open interest for all future months lowered by 8329 contracts to 599,335. It seems that there must have been some short covering by the bankers.
The key number is the open interest for the front month of December and the final reading for today (basis Friday) was 59,412. That means that 5.9 million oz of gold are standing as of Friday night.
The long holders had to place their entire 100% of money for a gold contract if they wanted to stand for delivery. This will be very exciting to watch.
The estimated volume for today was a very spectacular 269,920 contracts. The confirmed volume for Friday turned out to be a rather robust 265,518.
Now for silver:
The total open interest for silver remained relatively constant at 137,130 for a drop of only 814 contracts. It seems that the demand for these contracts was unending.
The total open interest for the front month of December and by far the most important number of the day, came in at 17,208 or 86.19 million oz of silver. Friday's number in OI was 28,268 so the drop was around 11,000 contracts which was very small as we entered first day notice today. The estimated volume for today was 125,092 which is huge for the end of November. The confirmed volume for Friday was also a very high 114,395.
The Comex May Have A Problem...
The Golden Truth
I have to allow for the typical accounting revisions that the Comex sometimes makes a day later. BUT, right now based on the o/i for gold and silver, the Comex is potentially insolvent.
Friday being the day before first notice, anyone with an account not funded to take delivery of a long position has to either sell or be liquidated by the end of last Friday's access session. I know this because I had a silver position liquidated a few years ago when I forgot what day it was lol. Any open long positions as of this morning are capable of taking delivery of gold and silver.
With that said, the open gold o/i as of this morning is 59,412 contracts. This translates into 5.9 million ounces. The Comex gold inventory shows only 2.6 million ounces of gold registered and approved for delivery. There is a total of 11.4mm ounces.
In silver, there are 17,208 open contracts. This translates into 86 million ounces. The Comex reports 48.5 million ounces available and approved for delivery, 107.2 million total ounces.
What does this mean, in the context of the cartel being unable to force liqidate a majority of the open gold/silver positions? Everyone reading this can use their imagination and I'm not willing to predict how this will unfold, but right now the Comex has a problem.
Clearly the hated CRIMEX goons are in over their heads. To say they are in a heap of sh*t would be an understatement. All eyes will be glued to their Precious Metals quote sources tomorrow as this impending CRIMEX default scenario unfolds. Be right and sit tight folks. Baby wants a rocket ride.
An interesting side note: at 11PM est the Chinese Yuan is trading at 6.66 vs the US Dollar.
Sunday, November 28, 2010
Last week, China and Russia announce an agreement that they will begin settling trade between their two "growing economies" with their local currencies the Yuan and the Ruble, and discontinue using the US Dollar to settle trade between them. And the US Dollar rises in value?
Late last week Vladimir Putin not only gives the EURO a vote of confidence despite the western financial media's fanning of European debt fears, but he suggests that Russia may one day become part of the Euro currency itself. And the US Dollar rises in value?
Meanwhile the US municipal bond market continues it's implosion, and the US Dollar rises in value?
The prices of Gold and Silver remain resilient in the face of this bogus US Dollar strength, revealing the Truth about the "strong dollar": It is a lie perpetuated by a never ending attempt to manipulate the price of Gold and Silver lower than they would be in a Free Market. Look no further than Friday's thin market take down in the price of Silver for proof of the now exposed Precious Metals manipulation, and the CFTC's blatant negligence in policing this quarter century long-running crime against the World.
The desperation at the bullion banks, led by the nose by the US Federal Reserve, in the desire to cap the rise in Precious Metals prices is now obvious to ALL investors. Is it merely a coincidence that the BIG rise in the prices of Precious Metals began with the announcement that the Fed had ended QE1 this past June, and the present cap in the Metals was placed with the announcement of QE2? Hardly! The banks are clearly being funneled monies from QE2 to fight the rise in the Precious Metals, and commodities in general. How else could these bullion banks that are losing BILLIONS because of their massive naked short positions in Gold and Silver continue to sell bullion that they not only do NOT own, but that DOES NOT EXIST? Why is there only a "sell-off" in the Precious Metals when there is a CRIMEX margin increase? Don't the shorts have to pony up higher margins for the short contracts too? Or does the Fed just cover that added expense of an already losing position?
Isn't it odd that the soft commodities markets of Cotton, Corn, Coffee, and Sugar are currently EXTREMELY volatile and trading near ALL-TIME highs themselves, but there is no increase in their margin rates at the CRIMEX. Isn't the exclusion of these commodities from margin increases against ONLY increases in the margin rates of the Precious Metals proof that the CRIMEX is not only involved, but determined to suppress the prices of them.
The jig is up at the CRIMEX, and tomorrow's First Notice Day is going to reveal the truth of that. An explosion in the prices of Gold and Silver are imminent!
Silver (and Gold) May Be Set-Up To Launch and the HUI To Do A Moonshot
The Golden Truth
As it turns out, Monday is "first notice" day for December gold/silver. What this means is that anyone with a long position has to either sell their position by yesterday's access close OR have an account that can 1) to accept delivery (most online trading futures accounts to not allow this) and 2) if the account can take delivery, it has to be fully funded to accept a delivery notice as of Friday evening. What typically happens leading into the day before first notice is that the cartel will make an aggressive attempt to force the market lower knowing that many smaller traders will be natural sellers going into the day before first notice. Moreover, the thin volumn on Wed/Fri makes this task a lot easier - ergo yesterday's action.
With this as the context, a couple of data points in silver and gold could make next week very interesting - to the upside. First, as of Wednesday, there were 28,000 open silver contracts. Yesterday's ambush may have forced most of those to sell (see the previous paragraph). Preliminarily, and I do not put a lot of faith in the Comex "prelimary" open interest report, only about 7900 December silver contracts liquidated. That would mean about 105 million ounces are standing for potential delivery. The Comex would default if this were to play out like that. It is likely that the silver contract liquidation was closer 20,000 contracts. We'll find out Monday mid-morning. That would leave 8k contracts standing, or 40mm ounces. That is still about 80% of the silver reported to be available for delivery. If that scenario plays out, the price of silver is going to explode over the next couple of weeks.
The second interesting piece of data was reported yesterday evening by zerohedge.com. Right at the close of the afternoon electronic trading session, someone bought 2000 contracts of February gold. I don't think I've ever seen something like that in 9 years of doing this sector exclusively. That is an enormous purchase. It was either desperate short-covering ahead of news that could propel the metals higher next week or a very big player has decided to square off against the egregiously corrupt maneuvers of JPM/HSBC. You can read about that trade and some interesting volatility color here: LINK
QE2 & The Great Misdiagnosis
By: Jim Willie CB, GoldenJackass.com
MARGIN HIKE AS FINAL LIMP WEAPON
Increases to the silver margin requirement in futures contracts should be viewed as the final act of desperation. It is a device to control price within the paper silver arena. However, in a grand backfire, a higher margin produces a lower price for the physical buyers, who eagerly step up to place and fill orders. The margin maintenance hike on November 9th was six times greater for silver than for gold. The Big Four US banks are caught in an historically unprecedented short squeeze, bleeding $billions. Tuesday November 9th saw a powerful gold & silver price downdraft. The COMEX raised the silver margin requirement in a bland attempt to slow a raging bull market amidst a broken global monetary system. One week later they raised the margin again for both monetary metals. The price downdraft continued. But some calmer winds in Europe enabled precious metals prices to recover. Silver has snapped back much more than gold.
The Chicago Mercantile Exchange raised the margin requirements for silver on November 9th. It was highly motivated. They wanted to prevent a blowout upside move in silver past $30 before Christmas, and to relieve some of the pain to the Big Four US banks. Unlike gold & silver, no margin hikes were doled out for soybeans, corn, sugar, or cotton despite their concurrent price gains. The message is clear, that desperation has set in relative to precious metals, as conditions are breaking down badly. The CME sent out a memo raising the margin maintenance requirements for silver futures by up to 29%, from $5000 to $6500 per contract. Initial positions have a slightly higher margin. It is their right, being the market maker. Let not their fast disappearing silver inventory deter their path. Less than two weeks later, the CME raised the silver margin maintenance requirement another 11.5% to $7250 in a sign of desperation. They also raised the gold margin, but only by 6% from $4251 to $4500 in a symbolic gesture. The CME motive is less about risk mitigation concerns and more driven by the desire to restrain the bull market movement. The investment world will regroup long before Christmas, like in the next week or two. Just when the European woes focused on Ireland, and a rescue aid package seemed in the offing, the silver price jumped upward by $2.00 on a single day, November 18th, a strong telegraph across the paper-physical silver table. The Powerz cannot halt the silver juggernaut, which will see $30/oz by January. If a double hike in the silver margin is the best they have, then they are truly whistling in the grave yard.
The demand for gold is global, diverse, and motivated by the gradual disintegration of the monetary system. Sovereign bonds that support the major currencies are in deep trouble the world over. The consensus actions toward Quantitative Easing, also known as hyper monetary inflation, have boosted demand for gold & silver monumentally in a natural offset. Dozens of nations and billions of people around the world are slowly awakening to the grand deception of money itself and the crumbly foundation that make up fiat currencies. They are losing money in supposedly safe government bonds, a trend without precedent. Most of Southern European nations will declare debt default within two years. Foreign central banks are attempting to diversify their oversized US$-based reserves without causing a run on the USDollar. Gold is gradually being seen as part of the solution, at least in private wealth preservation. Gold is the new reserve safe haven asset, since it is true money.
Important changes have come to the precious metals market. Silver has taken a leadership role. It has broken out in Europe to new highs. Its snapback was impressive after the weak-kneed COMEX hike in margin requirements. Silver is no longer only seen as just an industrial metal, a commodity, but rather as a safe haven alternative, a monetary brother to gold. The European Union bond fracture has wrought great damage to the structural foundation of the global monetary system. It is exposed as having a debt backbone, a paper spine fashioned of weakness, vulnerable to central bank abuse. Money is fleeing the EU Govt bonds, and fleeing even to some extent the USTreasurys. Horrible publicity has befallen the Big Four US banks with class action lawsuits at a time when Asian buyers have targeted the silver market. The Asians of unidentified origin (probably China) have descended with waves of layered orders, exploiting the discount offered from the paper impact after the margin hikes by COMEX officials. Recall that the US & China are locked in a trade war. The louder the USGovt accuses China of currency manipulation, the more they bid up Gold & Silver on the quiet. The strongest months of the year for Gold & Silver are December and January. The margin hike seemed designed to interrupt momentum. It only delayed the next powerful upward thrusts in price.
TITANIC BATTLE OVER PHYSICAL METAL
The nature of the Gold & Silver markets is two-headed. The price discovery aspect is driven by the paper futures contracts. Intended as devices to aid in pricing, to protect from drawn out periods under which business is conducted with commitments made, the paper futures arena turned into a monster two decades ago. The paper tail has led the metal dog, a backwards condition. Some important developments have taken place in recent weeks and months. Secure allocated account holders at both the COMEX and LBMA have forced the situation, demanding physical delivery of futures contracts. They openly cite their distrust, as suspicion is aroused of improper lease of allocated accounts. Huge delivery demands have come from Chinese and Arab investors. The remarkable new wrinkle is that silver paper price ambushes have led to strong silver physical purchases. Stories abound of an Asian assault on the silver market underway. Interviews granted by those with direct information have appeared on reliable websites. The skirmishes result in backfires to the paper market mavens, as they offer repeated discounts to the Asian physical buyers, who grab at the discounts with layered orders, as reported. Therefore, the actions by the paper mavens works to accelerate their own destruction. Investors should hope for occasional ambushes, so that the physical side can reload and obtain more physical metal at lower prices. Also, with occasional bouts of consolidation, the price advances are more stable. A very bizarre pathogenesis of the silver paper market is evident, hidden from view.
The London contact source has shared details to the inner workings of the Asian silver market assault on New York and London with an update. The Asian buyers have been squeezing the shorts in the silver market, causing great pain as the silver price has risen 50% since late summer. After the drop in price from a brief touch of $29 down to the low $25's, the physical market has responded with strong demand. Keep in mind that the paper silver market is the opposite, a key point. The bizarre anomalous paper market results in more selling when the price drops, the opposite to normal. The ambush catches the leveraged players off guard, forcing paper position sales in sudden liquidations. So a collision is in progress. The paper arena cannot produce enough silver after the raids push down the paper price in order to relieve their tenuous short condition. By pushing down the paper price, they must bring to the table the discounted silver at the lower price, in physical deliveries. The paper market is playing directly into the hands of the physical participants who want to drain the exchanges of their bullion metal. The credibility of the London source was enhanced by the quick jump above $26 as he predicted earlier in interviews. He described lines being crossed between the paper and physical orders, stops, covers, and delivery demands. Details are provided in the November Hat Trick Letter. Great intrepid work by King World News for developing the valuable source.
A staggering rise in physical demand is noted from Chinese & Indian buyers. Physical demand growth more than offsets the miner de-hedging, a process almost wound down fully. Investment demand globally is skyrocketing. According to the World Gold Council, global demand for gold bars climbed by over 30% between 2Q2009 and the second quarter this year. De-regulation in China might permit much broader gold ownership. That would unleash huge demand and pressure the Anglo bankers. Chinese demand has been strong for years, soon to reach a higher gear. With domestic mine output not expected to grow much next year, China will tap the global market, pushing up the gold price. New rules in China have already enabled tremendous increases in private gold demand, whose volume surpasses and overwhelms European central bank sales. The Chinese gold demand in 2010 will be a mammoth consensus estimated 500 tonnes. It will rise by as much as 20% in the year 2011, enough to surpass India as the top consumer in the next three years. Demand is forecasted to rise to around 600 tonnes in 2011, according to a Reuters survey of five analysts. Recent Chinese Govt restrictions imposed on property investment and speculation in other markets have resulted in more money going into gold and jewelry, which seems a calculated policy by the crafty government officials in Beijing. Gold will not burn their citizens in a bubble bust. Jewelry demand has risen by an average of 7% annually in steady fashion.
Investment demand for gold in China has surged by 60% in 2009 to 150 tonnes. On an annualized basis, China is on course to import 118 tonnes of gold through Hong Kong. Domestic gold mine output is expected to be flat inside China for 2011, the first time in years. Couple strong demand and flat output, and big net import of gold bullion will result. The Peoples Bank of China announced in August a relaxation of gold rules, a prelude to broader reform of financial markets pertaining to bonds and currencies. Banks would be permitted to export and import more gold in a program to drive the development of their market in the precious metal. Regard this as a direct assault on the COMEX in New York and LBMA in London, since huge physical gold demand will ramp up to a staggering high level. The PBOC wants to draw gold tonnage into their country without disrupting market equilibrium unduly, as it diversifies more of its burgeoning $2.6 trillion in FOREX reserves.
Bernanke Is Making the Crisis Worse
By Bud Conrad, Chief Economist, Casey Research
The Fed is a corrupt and powerful institution, and Chairman Bernanke is making the global crisis worse. His new speech given last week in Europe was terribly misguided and will upset markets as the Chinese and Germans won't ignore his challenges. Bernanke’s interpretations of the markets have been wrong since before he was appointed to head the Fed, and his actions are doing nothing but aggravating the situation.
In this seminal speech, titled “Rebalancing the Global Recovery,” Bernanke not only defended QE II as the right policy, but also attacked the monetary policy of China, the biggest holder of U.S. debt, an action that must be understood for how misdirected it is.
Here are a few excerpts from the speech:
Driving the News Agenda: Jones and Keiser
By: Rob Kirby
How many of you have noticed the change in news? The flavor of the news has markedly “changed” in the past 4 or 5 months – have you noticed it? Who has picked up on the likes of Fox News’ Glen Beck and his ‘about face’ on many key issues. Over the past number of months personalities like Beck have completely reversed their positions on subjects like the existence of World Government and FEMA CAMPS – going from complete denial to admitting they exist and the fact that they are intended for the American people.
Beck is not alone. In recent weeks we’ve seen a similar reversal in position from none other than Geraldo Rivera – he’s flip-flopped on his public position on 9/11:
Geraldo Rivera, who in the past labeled 9/11 truthers as nutcases, seems to have gotten the message. Not only did Rivera give air time to two people on the front lines of the 9/11 Truth movement, he also aired Larry Silverstein telling the world that they had no choice but to “pull it.”
Without a doubt, these are MAJOR recent reversals of position by key mainstream commentators. So what’s behind the change?
The Hidden Truth About The Gold Price Suppression
By SOP newswire2
Despite suppression efforts, the gold price has risen about five-fold since 2001, to over $1,300 today. According to the renowned gold trader Jim Sinclair and others, much of the reason for gold`s ongoing strength comes from physical gold buying in the Asian gold markets. Gold, incidentally, trades around the world on an almost 24-hour basis, Monday to Friday.
But who and why would anyone want to suppress gold prices today? In my article, Manipulated Markets Can Cause Ruin, I wrote, gold is the `anti-dollar` and barometer of confidence in the dollar. "Therefore "and noting Mr. Speck`s observation that the most recent era of gold price suppression began with America`s declaration of a `strong dollar policy` "providing a possible clue as to who might be behind it. Also, such an entity would require incredible financial muscle.
The most likely candidate for leading a gold price suppression scheme is the US Treasury and various central banks who want to maintain the US dollar`s value. After all, US dollar denominated assets often form more than 60 per cent of most central bank assets and it is still the `global currency.` Therefore they have powerful, strategic reasons to want a strong dollar.
"Also, as recently as October 18, the US Treasury Secretary Tim Geithner reiterated the US strong dollar policy by saying, we`re going to work very hard to make sure that we preserve confidence in the strong dollar."
With the advent of investors and regulators acknowledging fraud in the silver markets, those behind the apparent gold price suppression must be incredibly worried as their scheming to suppress its price is no longer hidden.
Tuesday, November 23, 2010
Today is Option's Expiration on the CRIMEX in New York. EVERY effort by our criminal bankers is being exhausted to keep the price of Gold below $1350, and Silver below $27 for the close of trading today at 1:30PM in an effort to steal profits from options traders...and discourage delivery requests. The CRIMEX goons are in a world of hurt going into the biggest delivery month of the year. They don't have near enough physical metal to cover the record unbacked paper Gold and Silver they have "sold" into the market to meet demand from the bulls.
Two margin increases in Silver, and one in Gold have not done much to help these weasels toe the government line, and suppress the rise in the Precious Metals. In fact their efforts to stifle have actually started to work against them and lead towards the cause of their own ultimate demise. Not to mention a complete wipe out of the CRIMEX as a viable center of trade for Precious Metals.
DO NOT be fooled by any downward pressure in today's NY session at the CRIMEX. Sales prices are to be taken advantage of, and the one finger salute given to these government sanctioned criminals. December is shaping up to be an explosive month to the upside in the Precious Metals arena.
Top banks face $100 billion Basel shortfall: report Reuters
Alasdair Macleod: Why gold is better than cash
While The U.S. Prints And Spends, Russia Loads The Boat With Gold...
Monetary Policy—Negligence, Ignorance or Fraud?
By: The Gold Report and James West
Recovery? What recovery? With more money in circulation than ever before in history, Midas Letter Editor James West asks, "Where's all the money?" The government would have us believe a "recovery" is underway and that we're all firmly back on the road to prosperity. "A recovery is underway," says James, "but those elements of the global economy that are recovering aren't in the economic interests of most planetary citizens."
Hollow Economy Recipe For Hyperinflation
By: Captain Hook
In case you are trying to put two and two together about what’s going on out there to make gold, silver, everything that’s not nailed down soar in price these days, let me clear things up for you. It’s our hollowed out economy, and the money that needs to be pumped into it so that it doesn’t implode.
China Makes Move to Fight Inflation- CNNMoney
What Bernanke Knows That You Don't- US News
Friday, November 19, 2010
China policy tightening weighs on world markets
Pan Pylas, AP Business Writer
Weighing on sentiment was the news that China's monetary authorities have ordered its banks to hold back more money as reserves in a new move to curb lending and cool inflation.
That was the second reserve increase in two weeks and came as Beijing tries to restore normal financial conditions and curb inflation, which rose to a 25-month high of 4.4 percent last month.
The central bank ordered lenders to set aside an additional 0.5 percent of their deposits, with effect from November 29.
The worry in stock markets is that tighter Chinese monetary policy will dent growth prospects. That's important because China is now the world's second largest economy.
China's rising inflation seems hard to believe given that inflation in the US is "contained". [Well, the government says it is anyways 8-)] China's rising inflation is a DIRECT result of US Federal Reserve money printing. America's number one export right now is inflation. As the guardian of the World's Reserve Currency, America can force feed inflation to the world at the press of a button.
By flooding the globe with US Dollars, the Fed can force inflationary pressures around the globe, and use them to force foreign trade partners to strengthen their currencies versus the US Dollar to combat the inflation. In other words, if China will not revalue their currency on their own, the US Federal Reserve will force them to. This action by the Fed will force the currency markets to push the US Dollar lower, and "in theory" make US exports cheaper and more desirable to our trade partners.
This "gimmick" is how the Fed can run around the World telling anybody who will listen that they are not spending $600 BILLION buying up US Treasury debt to devalue the US Dollar.
"We didn't crash the Dollar, the markets did."
Or that's what that clown Bernanke running the Fed would like everybody to believe. China, Germany, South Korea, and Japan ain't buying it. Neither are Russia, Brazil, or India. Witness the rise in interest rates following the Fed's announcement of their intent to "save the economy" by spending another $600 BILLION they don't have. It's absurd! Debt is not a path to prosperity.
Ben Bernanke is full of sh*t!
Bernanke hits back at critics of bond-buying plan
Jeannine Aversa, AP Economics Writer
WASHINGTON (AP) -- Federal Reserve Chairman Ben Bernanke has sought to defuse criticism of the Fed's $600 billion bond-purchase plan by arguing that it's needed to boost the economy and reduce unemployment. But he warned that the Fed's program can't succeed on its own.
In his first speech since the Fed announced the program Nov. 3, Bernanke on Friday made his most forceful case to date that Congress also must provide more stimulus aid.
The Fed chief also issued a stern warning to China, saying that it and other emerging nations are putting the global economy at risk by keeping their currencies artificially low. He made the remarks during his speech to a banking conference in Frankfurt, Germany.
Without more stimulus, high unemployment could persist for years, he said. But in making that argument, Bernanke risks heightening complaints that he's plunging the Fed into partisan politics.
The Fed's Treasury bond-buying program is intended to invigorate the economy in part by lowering interest rates, lifting stock prices and encouraging more spending. Lower interest rates on loans would prompt companies to borrow and expand.
And higher stock prices would boost the wealth and confidence of individuals and businesses, Bernanke has suggested. The additional spending would lift incomes, profits and growth.
But the Fed's program has triggered a barrage of criticism both within the United States and abroad.
Critics at home, including Republican leaders in Congress and some Fed officials, say they doubt the program will help the economy. They also worry it could do harm -- unleashing inflation and leading to speculative buying on Wall Street.
And at a summit of world leaders in South Korea last week, China, Germany, Brazil and other countries complained that the Fed's plan would give U.S. exporters a competitive price edge by flooding world markets with dollars. A weaker dollar makes U.S. goods more attractive to foreign buyers.
Emerging economies like Thailand and Indonesia also fear that falling Treasury yields will send money flooding their way in search of higher returns. Such emerging markets could be left vulnerable to a crash if investors later decide to pull out and move their money elsewhere.
Still, European Central Bank President Jean-Claude Trichet insisted during a panel discussion after Bernanke's speech that he and the Fed chairman "strongly share the view that a solid strong dollar ... is very important."
How does forcing the US Dollar lower by exporting inflation to our trade partners result in a "stronger Dollar" guys?
The Fed's Treasury bond-buying program is little more than a cover for debasing the US Dollar.
The definition of insanity is doing the same thing over and over and expecting a different result each time. Bernanke's bond buying program is fiscally insane. The Fed printed and spent almost $2 TRILLION in their first trip down the Quantitative Easing highway. Combined with criminal changes in accounting laws by the FASB, QEI successfully slowed the collapse of the World Economy...give Bumbling Ben a medal. To suggest for even a minute that his plan to double down with QEII is going to result in a growing economy and a stronger US Dollar is pure fantasy.
Destruction of the US Economy is now all but certain, the global economy almost certainly crippled as a result.
This brings us to our theme this week that the present "correction" in Precious Metals prices is merely a head fake, and a colossal Bear Trap has been set for those buying into the Fed's claptrap, nonsense, and blatant lies. With Bernanke forced to defend his bond buying program, we can only discern that the end is near for the global fiat money system. The US Dollar is toast.
The recent take down in the prices of Precious Metals has been a boon for investors looking to purchase physical bullion. Ironically, lower Precious Metals prices have only contributed to the bullion banks eventual demise as lower prices have greatly increased demand for Gold and Silver. Investors have finally come to view weakness in the Precious Metals as a buying opportunity. This behavior flies directly in the face of the bullion banks 20 year price suppression formula as increased demand on falling prices makes it impossible for these CRIMEX Crooks to cover their shorts and stay ahead of the investment crowd and bullish traders. What goes around, comes around. In the end, the criminals at the bullion banks will be the cause of their own destruction.
James Turk - Delta-Hedging to Cause Gold Price to Explode
Eric King, KingWorldNews.com
With gold and silver taking off to the upside, King World News interviewed James Turk today out of Spain. Turk commented, “What we are seeing right now is the breaking apart of the gold cartel. They are losing control of the market just like they did back in the late 1960’s when gold began trading above $35 in the cash market in London, even though the price was still officially fixed at $35. The market was simply saying, we just don’t believe this $35 price anymore.”
“The same principle applies today. The same group that is trying to hold the price down is being overrun just like they were in the late 1960’s. Normally you would expect the gold market to fade into next week’s options expiry. The fact that we are so strong today is an indication that the shorts are being overwhelmed and I am looking for higher prices as a result.
This could be explosive over the next few days if the shorts have to start buying because of delta-hedging on the calls that they have written. In other words, the more the price of gold rises, the more they have to buy. This can be a vicious cycle that feeds upon itself causing prices to explode.
I like Pierre Lassonde’s observation in his new audio interview on King World News that gold is going significantly higher because of all of the money printing around the globe. Eric, Pierre is laying out the big picture as to why gold is going much higher in the years ahead.
Silver is up a dollar from yesterday which is a good indication that this market is different from what we have seen all decade long. It’s like we discussed the other day, lower prices just increase the demand for physical silver. The amazing thing is that we are seeing this even in the paper market. Open interest on the Comex is growing, so if any longs were shaken out, new buyers came in to replace them. What that does is put the silver shorts in an impossible position because now they are trapped short.”
What Turk is saying is the the gold cartel is on the verge of suffering a major defeat in the gold war. With regards to silver, let’s just say they have been defeated and are now in the process of a full retreat.
Jim Sinclair - This is Late 1979, Gold Will Rise Violently
Eric King, KingWorldNews.com
With gold heading higher today, King World News interviewed legendary trader Jim Sinclair. When asked about the action in gold Sinclair stated, “We have to be right in front of a major move in gold. Today the gold market had all of the indications of what would be considered by the old-time traders (Bert Seligman & Jesse Livermore) as a major turn. This would be a sign to them that the bulls are gaining strength in the market, and given any excuse it will rise violently.”
“The strategy now would not be to run after spikes and strength, but to begin to take in those periods which will certainly come, of weakness that exist during the day. This is really the first time since we came off of the high, that it’s starting to show a character of wanting to make a new high.
The chorus of complaints about the Fed and their adoption of QE, I call that the backfire of MOPE. You have so many of the new guys convinced that yes, the economy is recovering but not really that fast, and there is no inflation anywhere. Then why in the world is Bernanke going to a $600 billion project which is a rescue plan that comes up during a period of crisis? They can’t understand it.
The other thing is the belief that the financial institutions balance sheets have made such great progress. The bottom line is he (Bernanke) sees what they don’t see. The stumped recovery we’ve had is in fact an economy headed down.
Getting back to gold, this is late 1979. It’s got all of the characteristics of late 1979. If people will go back and look at the long chart they’ll see that there was one violent flip right before it took off and never looked back. And it’s getting very close to that point now. I think what you have seen is a major shake of the tree right before gold takes off.”
Silver closed up yesterday $1.34. That was the first time in 30 years that Silver was up over one dollar in a 24 hour period.
Ed Steer shares a note he received from Ted Butler on Tuesday:
In a note to clients yesterday, silver analyst Ted Butler had the following to say about Monday's Commitment of Traders report... and the subsequent price action in silver... "This manipulated take down, as criminal as it was, makes the COT structure great. In fact, I just can't believe how good. Extrapolating for the current reporting week, we may have the best COT structure in silver in six months. Remarkably, we likely have as low, or lower, of a total commercial net short position in the next COT than we had back on July 27th. Please think about that for a moment. Back then, not only was silver at $18, we were below all the important moving averages, including the 50,100 and 200-day moving averages. Now, we're $7 higher... and still well above most major moving averages. I'm getting a feeling in my bones that as soon as this current manipulated take down is complete [which should be close], we will soon witness some real excitement to the upside in silver. These feelings are similar to what I felt back in July and August, when I speculated we could see a $5 to $10 pop in silver from the then-price of $18. This time, I'm thinking that the pop could be larger and quicker."
Once again, these markets clearly look to be set up in Bear Traps that are, or have been sprung. Today's weakness in the Precious Metals is certainly suspect as it began with the opening of the London markets and progressed into the CRIMEX open as more blather about China and Ireland filled the vortex of financial media hoopla. Gold is being capped near $1365, and Silver at $27. Options expiration is next Wednesday, and as we warned, the ride into those expirations will be bumpy. The CRIMEX goons are in a world of hurt as their little price suppression scam melts before their eyes. The more they do to fight the rise in the price of the Precious Metals, the more they do to slit their own throats. This is entertainment folks, enjoy it and profit by it.
Wednesday, November 17, 2010
SINGAPORE, Nov 16 (Reuters) - The Chicago Mercantile Exchange said on its website that it is raising initial and maintenance margins for precious metals, effective after the close.
Margins on gold would be hiked by 5.9 percent and initial margins would rise to $6,075 for 100 ounces, and maintenance margins would go up to $4,500.
Silver margins will be hiked by 11.5 pct. The initial margin will be $9,788 for 5,000 oz, and maintenance margins are up to $7,250.
CME also raised margins on platinum and palladium by 20 percent. The new initial margin on platinum will be $4,950 for 50 oz, and maintenance will be set at $4,500.
The new initial margin on palladium will be raised to $4,950/100 oz, and the maintenance margin to $4,500.
Don't be dismayed! This is great news... The CRIMEX shorts have basically come out and admitted that their backs are against the wall, with no way out of their hole. By raising margin rates they hope to put off their day of reckoning, and "marginalize" the cost of their inevitable default.
This announcement would explain Tuesday's further "decline" in Gold and Silver "prices". I will not use the term "sell-off" as no real metal was sold. These conniving cheats have finally been caught with their hands in the cookie jar, and are making every effort to steer traders away from their paper Gold and Silver. Ironically, this will only push traders further into the physical market, and make these CRIMEX Crocks efforts to obtain the metal necessary to cover the rising tide of deliver demands near impossible.
Stop and consider that the total number of silver oz standing in this non delivery month of November is presently 3.88 million oz. This Silver has to be delivered in December, along with all the Silver that will stand for delivery in December from the contracts that expire on Novemeber 23. The CRIMEX Crooks are screwed, and they know it. And by increasing margin rates in a feeble effort to shake longs from the markets, the whole world knows they are facing their demise.
In Gold, the total number of ounces that are standing in this non-delivery month of November is 118,500 or 3.7 tonnes. This is a very high number for a non-delivery month, and these ounces must be delivered to those demanding it by the end of December....along with all the contracts that stand for delivery when the December contract closes November 23.
The clock is ticking on these Rat Bastids, desperation and deceit is all they have left...
On September 9, 2010 I said the following:
Thursday, September 9, 2010
The Advancing Army Of Physical Metal Demand
With Gold scratching at $1260, Silver clawing at $20, and the HUI GOLD BUGS INDEX sniffing 500, whats a bullion bank criminal supposed to do? Cheat!
With every increasing amounts of paper Gold and Silver being sold by the bullion banks, none of it backed by physical bullion, the CRIMEX goons have their backs pressed right up against the wall. They are trapped. There demise all but certain. Will they be allowed to default by their government backers, or will the government ride to their rescue with a rules change for settlement? No bother. A rules change will simply confirm the lack of supply to meet demand, and a mushroom cloud will replace the CRIMEX. Deceit inevitably ends in destruction.
Every conniving effort is being made as I type this to break Gold. Gold obviously wants to stretch its legs here, but the bullion banks keep hitting it below the knees. This is Gold's season to soar, and the CRIMEX Rat Bastids know this. They appear prepared to give up their existence as functioning banks in an effort to prevent the inevitable.
Signs have pointed to a December Default in the Precious Metals at the CRIMEX for weeks. That day of reckoning appears now to be close at hand. Buckle up folks, this ride could be extremely bumpy the next five trading days.
I came across the essay below, Bond Market Implosion & Gold Tactics, yesterday after I posted up my blog entry. This essay says everything I was trying to say when I referred to the present Gold and Silver markets as being in a bear trap".
What we are presently witnessing is the first wave of massive volatility swings in these Precious Metals markets as the central banks and their conies fight for their lives and that of their fiat currencies. What we have today is the makings of yet another massive bear trap very similar to the one we identified about a month ago with Silver hovering between $23 and $25, and Gold between $1315 and $1385.
The short side of these markets is the VERY WRONG side of these markets when looked at in contest of what is occurring in the bond markets. With Gold and Silver prices marked down here, investors should be backing up the truck, not looking for a better price down below. If you continue to look for a better price you run the risk of being left at the station when these Precious Metals launch, and squeeze the shorts mercilessly.
Please take the time to read this essay in it's entirety. It brings into focus the madness present in the markets today. Gold and Silver are clearly the safest refuge for all investors at this time:
Bond Market Implosion & Gold Tactics
By Stewart Thomson
1. “I cannot overemphasize the critical importance of factoring the bond market into any analysis of the crisis now.” That was the sentence I started yesterday’s update with, and it’s probably the sentence I should start every update with, for the next six months!
2. I see a lot of gold analysts trying to gauge the “gold market correction” but they are seemingly unaware that the bond market just imploded, and Bill Gross basically issued a massive sell signal on his own fund, the world’s largest bond fund. For the past few months I’ve urged you to understand that when the bond implodes, there would be initial weakness in gold followed by tremendous strength. Here and now, the words “Gold” and “Bond” must be mentioned in the same sentence, or you are out to gold market analysis lunch.
3. The conventional view in the public, and a view held by many institutional money managers, is that lower rates produce higher gold prices (correct), and higher rates produce lower gold prices. Well, sometimes, yes. Sometimes, no. Sometimes higher rates produce an upside gold parabola.
4. On the second situation, higher rates and gold, in a commodity demand-related gold bull market, higher rates are a negative for the price of gold. In such a situation, gold functions as a commodity, and the economy gets higher prices as demand for goods increases. The cost of borrowing increases as the demand for loans increases because business conditions are solid. As the cost of borrowing rises, that hurts demand. Prices (int rates) for money and the price for goods both fall.
5. Look out your market window. Do you see a booming economy, or potential economic Armageddon? My message to you: the new bankster game is in play, and it’s a big one; the bond market. Bond market chaos that could send gold stocks parabolic on the upside. Here’s why:
6. I coined the term, “The Institutional Awakening”. The awakening is a bankster game to create a mass mindset of terror amongst institutions, a mindset that further QE won’t work to continue the markets recovery, and instead further QE will see bond market prices stagnate or even fall, while the US dollar falls like a rock. All in all, a nightmare situation, given the backdrop of the marked to model OTC Derivatives quadrillion dollar. Marked to model is: Marked to Lies.
7. In practical terms, meaning flows of liquidity by institutions, what the institutional awakening means is a mass panic out of bonds and into…?
8. What the gold community needs to understand is the LAW. Institutional money managers have written mandates as well as unwritten mandates on what they can and cannot do with their assets. Pouring money into gold is not on their “oh yeah, let’s do it!” list. It’s on their “if we dump our assets into gold, then our investors pull out, we get no pay, and we could get charged with securities violations” list.
9. The history of institutional money flows in a currency and bond panic is a massive flow of liquidity into the stock market. Having said that, what do YOU think happens to the Gold Price Thermometer of global financial health what that occurs, or is thought to be about to occur? I don’t think most in the gold community really understand what just happened to the bond market, and what this event means for gold.
10. I know that because, other than Bob Moriarty at www.321gold.com and Trader Dan Norcini at www.jsmineset.com, almost nobody is even mentioning the imploding bond market, yet they are conducting one study after another as to why gold “could be in a correction”. Translation: “Here’s all the reasons why I just sold all my gold and you should do the same.” Thanks, but no thanks. In regards to the bond market, to quote John “Sir Johnny” Templeton, who uttered these words after the first phase of the markets crisis began in 2000,
11. “Does anybody know what just happened?”
12. Markets anticipate price and factor in what has already happened. The gold market is on the verge of anticipating the Institutional Awakening, meaning the gold price is on the verge of surging higher, not lower, while most are wasting current buy prices, standing there with no buy fills, thinking the game is to be the one to guess how LOW gold goes. Wrong tactics. Wrong tactics, bigtime.
13. The winning tactical play is to be the one who is buying gold here and now as it goes down. Much more importantly, the game is to buy gold stock, partially because there will be some buying of gold stock in major size by institutional money managers as the awakening, the mass terror, sets in. Gold stock has not even begun it’s parabolic move. The bond market demolition man is the trigger.
14. You can’t expect a monster fundamental factor like the implosion of the bond market to roll onto the gold market playing field and not cause a massive spike in price volatility. This is not business as usual. This is the factor in play now that could literally put Elmer Fudd Public Investor, Elmer Fudd Public Moron, onto the bread line. Millions of Fudds impaled by the Gold Punisher’s bond market harpoon. Those who thought gold was risky, and bonds lower risk than gold as an asset, are being revealed as complete market imbeciles. Their final revelation comes standing in the coming bread lines, created by the banksters to entertain and enrich themselves.
15. My view is the bond mkt-caused initial shock to the gold market comes after we make a new high above $1424, which would stun the current mob of gold top callers who you know, full well, are sure they have got 1424 as the top, after blowing almost every other top call, since the bull started at $250. One more for the Golden Gipper?
16. That initial shock on gold is going to involve the wrong view by institutional money managers that higher rates are negative for gold. If the scenario plays out, it could cause a big hit on gold of hundreds of dollars to the downside, perhaps as much as $500, a massive handoff of gold, from the fundsters to the banksters. But what actually occurs is going to depend on how the banksters play out their Awakening Game.
17. The theory is that falling bond prices are positive for the US dollar, because a higher rate of interest attracts institutional capital. I want to draw your attention to the 1979 period of time, when the US dollar began to rally, and the floor traders and large speculators began to short gold, thinking they were about to make piles of free money. The banksters were on the other side of that gold trade. Long Gold. What happened? Gold accelerated its rise, while the US dollar itself surged higher. The (leveraged) gold top callers shorted more, sure the top had to be in. Instead, gold surged hundreds of dollars higher, frying Team Shorty Pants to a golden crisp.
18. Today, analysts are thinking that a declining bond market is a positive for the US dollar and a negative for gold. That’s the view the banksters want everyone to have. All is fine, all is A-ok. A-ok or Z-ok, what’s a few letters in the alphabet of difference? For the record, I’m in the things are Z-ok camp, and have been since Dec 1999, when I told my people to get out of the stock market and begin gold items accumulation. Arthur Ziekel, head of Merrill Lynch Asset Mgt at the time, said “it’s 1929 again”. Ironically, millions of Merrill clients said, “No, it’s wieners to the sky forever time”.
19. What you are witnessing here and now with Bill Gross’ investors is an instant replay in the bond market, of the stock market with Arthur Ziekel. The firm’s own clients are too stupid to listen to the sell signals being given by the lead man. “I have $2 million in bonds. The head of the world’s largest bond fund just issued a sell signal on his own fund. Can I bring myself to sell one dollar of bonds now? No, because I’m ruled by greed.” -Elmer Fudd, Public Bond Market Investor, Nov 16, 2010. Fudd probably is being told by his golf ball advisors this morning that bonds are an ultra-bargain buy, gold is finished, and he’s lapping it up. Let’s give Fudd a pat on his head. Good lapdoggie, buy what the banksters tell you to buy, when they tell you to buy it, and all will be fine. “Take some more financial heroin, it’s better than vitamins, really.” –Banksters, Nov 16, 2010? Fudd, his bonds, and his golf ball advisors, are only things that I see being finished. Not gold.
20. Institutional monies will flow, and are flowing now, into the US dollar, yes. But notice the modest rise in the dollar compared to the fall in bonds. US Dollar "Big Rally" Chart. While subs know I’ve bought the dollar all the way down with my pgen buy generator, and the weekly chart shown here does look possibly positive, the extent of any rally is unknown, and all strength should be used to book profit on trading positions in preparation for a possible total wipeout type situation to the downside. There’s really not that much strength in the dollar given the magnitude of the bond wipeout. Here’s the Weekly Bond Mkt Chart. What a horror chart. It’s critical that you see what is really on this chart; you are looking at a potentially classic technical play of what happens when a massive head and shoulders top “fails”, meaning price rises above the right shoulder high. That’s what just happened recently and such a failure is a buy signal for a pipsqueak rally yes, (which occurred) but it is all-critical that you understand that such a failure is much more of a harbinger of danger to come, particularly after a major rally. The final top is generally near when such a h&s top failure event occurs. You may be, here and now, live, looking at the “bread lines trigger”, being pulled by the banksters. The coming pain to the real estate bottom callers is nearly unimaginable if the bond market end game scenario is now in play. The movie Apocalypse Now is reborn…
21. I believe a substantial portion of USD sells into any rally here should be re-allocated into the purchase of gold stock if this USD rally materializes into anything. I’ve talked about “Three Gold Nets” of buy zones for you on the GDX and the GDXJ/ZJG-tsx. Here’s the Gold Juniors Chart. Notice that I’ve now added a 4th much larger net in the upper price range. These “nets” are areas where you place buys on weakness. The larger net does not mean you allocate more risk capital and chase price. It means that at some point you are going to be faced with the reality of price in that range, and odds are high price is much more volatile than it is now.
22. Most bond investors are all-in on bonds now. Some institutional managers are cautious, and want much higher rates before buying the bond. There is an undercurrent of worry, the cusp of the awakening, a worry that QE targeted at govt bonds has reached the point of maximum saturation. “What happens if we load up on bonds, and the central bank QE programs cause the dollar to tank, while bonds go up only a bit? These rates of interest can’t compensate for a hit on the dollar!” –The Institutional Money Manager’s Mind. Nov 16, 2010.
23. If I was bankster, today I would be working feverishly to bait institutional money managers into the worldview that the dollar is a superbuy, and bonds are a superbargain. I’d look to get a rally in bonds from here and loan them money to buy more of their “winner”. Then I would look to take the bond down under 125 and start pumping the media with “maybe the situation has changed, maybe the situation for the dollar is much worse than we thought, and bonds may not be such a good investment.”
24. Watch the gold price thermometer while buying solid amounts of gold stock into this weakness. Ignore the analysis of the 1424 top callers who don’t understand the real implications of the bond market implosion. Get on the buy as the losers liquidate their gold stock in failure this week. Buy it… before the banksters take it all!
Fed likely to buy entire $600 billion in plan: Bullard- Reuters
Fed orders new "stress tests" for banks- AP
US launches criminal probes into bank officials- AP
Foreclosure class actions pile up against banks- AP
Tuesday, November 16, 2010
Once again we are being force fed rumours of an imminent default in the sovereign debt of several European nations just as the US Dollar is about to sink into a bottomless pit. Once again we are being told that the Chinese growth engine is going to be stopped dead in it's tracks. Once again Gold and Silver that do not exist are being sold illegally by banks to save their sorry asses from destruction because of the millions of non-existent bullion they have sold over the past 20 years as government regulators turned a blind eye to the fraud. Once again we are being told that the almighty George Soros sold some of his fraudulent GLD gold bullion ETF shares, and that the Gold market is the ultimate "Bubble".
And we are being told that a "group of Republican lawmakers" are opposed to the Fed's QE2 program. So what! The Fed has it's independence, and they can do what ever the hell they want...no matter what ANYBODY in Washington thinks about it. As Bumbling Ben Bernanke is so fond of reminding these lawmakers, "The Federal Reserve Act gives me the right." Unless and until the US Congress abolishes the Fed, they can go on printing as much damn funny money as they please.
Interest rates are rising, and this is the bugaboo that has the Precious Metals investors "shorts" in a bunch. This is historically a stupid reaction to rising interest rates. In 1979/80 rising interest rates were met by exponentially rising Gold and Silver markets. Recall also that in March of 2009 when the Fed announced their first round of QE, interest rates rose substantially before rolling over and hitting new all-time lows. The same thing will happen again. The Fed is not only determined to lower interest rates, they will stop at nothing to do it. If the Fed has to spend $300 BILLION a month to buy up the entire supply of treasury notes being sold into the bond market, they will do it. They have no other choice to prevent outright default by the Treasury on the USA's sovereign debt. And default is out of the question. As Jim Sinclair says, "QE to infinity."
Rising interest rates will be a boon for Gold and Silver. One of the greatest myths perpetrated on the Internet today is that rising interest rates equate to Falling Precious Metals prices. This is absolute poppycock as the chart below proves. Between 1976 and 1980, interest rates rose from 5% to 15%. Over that span the price of Gold rose from $100 an ounce to $880 an ounce, going parabolic into the top in interest rates in 1979.
And then there is the folly infesting the financial news media the past week. Asian inflation fears, and European debt fears. Are these not BOTH fundamentally supportive of higher Precious Metals prices? The Dollar is being printed into infinity, and investors are really going to sell Gold and Silver because of fears of Asian inflation and European debt default? What about US debt default, and US inflation fears? Does anybody recognize that rising Asian inflation is directly related to the printing of US Dollars? The Fed is engaged in exporting inflation to these countries to force them to raise interest rates and strengthen their currencies vs the US Dollar. It is a game of counterfeit and deceit that the Fed is playing. It is why the World collectively gave Obama and Geithner the finger at last weeks G20 meeting.
Nobody is selling Gold, and nobody is selling Silver...bullion. The only thing being sold on the CRIMEX and at the LBMA in London is more fraudulent paper Precious Metals substitutes. Proof of this is that the bulk of the prices take down over the past week has occurred in the "after hours market", when trading is thin and the crooks can roam freely as the CFTC sleeps.
What we are presently witnessing is the first wave of massive volatility swings in these Precious Metals markets as the central banks and their conies fight for their lives and that of their fiat currencies. What we have today is the makings of yet another massive bear trap very similar to the one we identified about a month ago with Silver hovering between $23 and $25, and Gold between $1315 and $1385.
Silver this morning is retesting the post election breakout at $25. Gold is retesting the post election lows this morning at $1325. Both, price points of interest, as they sprung the bear traps set for the Crooks of the CRIMEX on November 3, 2010. Expect a similar reaction here as the longer prices are kept down here, the more of a threat they become to the bears as physical buyers sense the bargain prices and begin to buy in volume once again forcing the shorts to run for cover.
A break back above $25.50 should spook the Silver bears. A break back above $1365 should spook the Gold bears.
Jim Sinclair nails the nonsense in today's currency and Precious Metals markets:
How many times have we gone through the standard operation for the international investment banks to profit on the short of the euro, as is occurring today?
The OTC derivative (credit default derivative prices moving higher) market turns against the Irish.
Media turns focus directly on both the OTC derivative action (credit default derivatives moving higher), and runs multiple stories of the dire circumstances.
The government in question opens negotiations on a form a rescue. Other euro states jump up and down saying why should we finance the country in question.
The media calls this a non-united euro zone. The euro declines into and during the event, consolidating rises thereafter.
The ECB camouflages a great deal of its Quantitative Easing in secretly being the buyer in the bond offering of the country in question. The media lauds the UNEXPECTED good buying in the euro. The euro moves back into the $1.40s where the international investment banks put out their short and do it all again against this time Spain and/or Portugal.
The bad news is that Europe is courting a business disaster by their actions on austerity while at the same time doing QE in the bailout and covert bond buying at auction.
Greece has 110 billion committed which is without any doubt covert QE.
The so called good news if that the perps continue to make a million per minute on the days of covering the euro short. How many times do you have to see this to know it is gold positive and deleterious to the entirety of the Western world’s finances.
The Bear Trap has been set. Traders prepare to buy at full throttle as these sale prices could vanish in minutes at anytime. Investors, continue to sit tight and be right. The risk is being out of this market. The bigger risk is being short these Precious Metals markets. There is every reason for these markets to continue moving higher, and only unchecked criminal trading to slow them down.
Thursday, November 11, 2010
-Tim Geithner, US Treasury Secretary
Isn't it interesting, some might say amusing, that within hours of the Fed's QE2 announcement and the global criticisms of it, the spectre of Euro Zone "debt fears" suddenly reappears in the global financial news headlines.
This pathetic ploy of "fear mongering" worked spectacularly one year ago as the US Dollar stared over the cliff at 74 on the Dollar Index. Recall the sudden financial media obsession with Greek Debt late last Fall that continued through the Spring of 2010, and the subsequent rush into the "safe-haven" US Dollar and US Treasury Debt. Against all odds the US Dollar rose from the depths at 74 all the way to a bear market rally peak of 88 in early June. It has been all downhill since, as the economy's floundering recovery ramped up expectations for the Fed to set sail aboard its QE2 money bomb.
QE2 is now sailing the high seas of global currency war, clearly received as a negative for the US Dollar. Time to trot out the fear of a Euro Zone debt implosion to scare global investors back into the Dollar to "protect" them.
Fool me once, shame on you. Fool me twice, shame on me.
There is NO protection in the US Dollar or US Treasury debt. That ship has hit the iceberg, and she's taking on water. The US Dollar is a sinking ship. A line to board this disaster in progress is not going to form this time. In fact, the imminent move below 76 on the Dollar Index will likely lead to a rush to the exits along with screams to "abandon ship".
Despite comments to the contrary, the European Union is now prepared with it's own QE mechanism to backstop sovereign debt fears within the Union, the European Financial Stability Facility. The EU will not this time fall prey to big US Banks making bets against the sovereign debts of countries like Greece, Ireland, or Portugal and Spain...and neither will global investors. In fact, once this weeks bloated G20 summit passes without substantive results, global investors are likely to call the US Dollars bluff here, and begin to sell it and US Treasury debt with impunity.
Managers fear 'domino effects' after Portugal and Irish debt blowout - Investment Week
Euro-Zone Debt Problems Getting Worse - Wall Street Journal (blog)
Barroso reaffirms offer of help to Ireland
José Manuel Barroso, European Commission president, said Ireland had not requested financial assistance from the European Union but that the bloc was prepared to assist Dublin if requested.
Speaking in Seoul on Thursday where he is attending the G20 summit, Mr Barroso said the commission, the European Union’s executive branch, was monitoring Ireland’s fiscal situation “on a permanent basis” and could act if called upon.
He said: “What is important to know is that we have all the essential instruments in place in the European Union and eurozone to act if necessary, but I am not going to make any speculation”.
Meanwhile, the Precious Metals are continuing to recover from Tuesday's desperate CRIMEX margin requirement increase for Silver futures. How convenient to just simply "change the rules" in the middle of the game when your side is getting an ass whuppin. The question that nags at me is why did the Silver market go down when there are so many shorts in this market? Didn't margin requirements rise for ALL participants in the futures markets?
I'll speculate. The CRIMEX board of directors raised the margin requirement for Silver claiming that "volatility" in the markets demanded it. Funny, they only volatility in the Silver market the past two months is that the price has continued to rise despite every cheap trick the bullion banks could throw at it. As the price of Silver was quickly approaching $30 an ounce Tuesday, the board of directors, meaning "the traders" were staring a catastrophic loses on their overwhelmingly naked short positions in Silver. Something had to be done immediately.
A decision was made to "change the rules" [which is actually in the rules], and a margin increase in Silver [and only Silver] was determined to be the best course of action to best throw water on a raging fire. Traders were given the heads up on the margin increase announcement. And prepared their assault on the market.
Has anybody found it odd that the "crash" in Silver prices Tuesday began at exactly 1PM, yet the margin increase announcement came AFTER the close of trading at 1:30PM? Does anybody suspect that the criminals of the CRIMEX, armed with "inside information", loaded the pipe with shorts leading up to the margin increase announcement? And that it was this tsunami of shorts "ahead" of the margin increase announcement that forced prices down 10% in a matter of minutes as the announcement hit the floor and the wires? Seriously, does anybody believe that a margin increase announcement "alone" forced this large of a correction in price IF both sides of the trade are subject to margin increase? Not bloody likely!
Tuesday's move lower in Silver prices was a clear and present example of market manipulation AND Insider Trading. Where was the CFTC during all of this? Do you really need to ask that question? They were, once again, ASLEEP!
The Precious Metals have reacted about as one would've expected following this CRIMEX chicanery. The Asians bought the gift of lower prices gratefully, the Europeans stood aside, and then the Americans sold the rebound thankful to have gotten out at a higher price on Wednesday. Now we consolidate price as the dust settles and we work our way through the blah-blah at the G20 summit, and the fear mongering over Euro Zone debt.
Gold is stuck between $1385 and $1410. Silver is stuck between $26.50 and $28. The fundamentals have not changed one bit, and they won't be anytime soon. The US Dollar is a sinking ship, only a fool would bet otherwise. Do not forget that Gold rose during the bear market rally in the Dollar last Fall and Winter, though a rally here in the Dollar seems highly unlikely given the Fed's QE2 plans to debase the currency, despite Timmy Geithner's claims to the contrary.
Geithner Says Greenspan Wrong, Dollar Fell on Risk Appetite
By Rebecca Christie
Treasury Secretary Timothy F. Geithner said the dollar’s drop in recent months is due to a reversal in safe-haven capital flows, rebutting former Federal Reserve Chairman Alan Greenspan’s assessment of U.S. policy.
Investors are no longer seeking as much of a refuge in dollars, and that’s “a sign of greater confidence that although we face challenges in the U.S. and globally the risks we face are more manageable,” Geithner said in a transcript of an interview with CNBC television distributed by e-mail today. This shift is “the dominant trend that we see,” he said.
The remarks follow criticism from Chinese officials, including Vice Finance Minister Zhu Guangyao on Nov. 8, that the Fed plan to buy $600 billion of Treasuries may “shock” emerging markets by flooding them with short-term capital. German Finance Minister Wolfgang Schaeuble called the Fed “clueless” and Greenspan wrote in the Financial Times today that the U.S. is “pursuing a policy of currency weakening.”
“I have enormous respect for Greenspan, had the privilege of working with him for a long period of years but that’s not an accurate description of either the Fed’s policies or our policies,” said Geithner, who arrived in South Korea today to join President Barack Obama in efforts to rally support for U.S. trade initiatives. “We will never seek to weaken our currency as a tool to gain competitive advantage or to grow the economy.”
Three’s Company, Silver Margin Change
By James G. Rickards
November 9 (King World News) There's been a lot of buzz about today's price action in gold and silver. Beginning with the Monday push upwards based on the Zoellick op-ed in the Financial Times, the market surged upward through most of the day today and then hit a serious air pocket with gold falling 2% and silver falling almost 5% in a short period of time late in the trading day.
On a technical basis, there's nothing surprising about that; we've seen similar moves before and I expect to see them again. The overall trend has been upward with higher highs and higher lows. The market seems to find a strong bid at progressively higher levels even after sharp corrections. Nothing too disturbing there and nothing to indicate that primary trends are not still intact.
What was noteworthy was the catalyst for the pullback, specifically an increase in margin requirements for silver futures contracts. There was no comparable change in gold futures margin but as often happens in markets there was instantaneous contagion from silver to gold notwithstanding the different circumstances. Again, no surprise that the markets correlate to a great extent even when the news only affects one market or the other.
This is a pointed reminder to the readers and listeners of King World News and something we have discussed before. Most markets consist of two parties, the buyer and the seller. But in futures markets there's a third party in every trade which is the exchange and more specifically the rule making bodies and margin setting panels on each exchange. They act not in the best interests of buyers or sellers but in the best interests of the exchange itself and its statutory duty to maintain orderly markets. Of course, the word "orderly" can be in the eye of the beholder. What may be an "orderly" price spike to a long may be a "disorderly" rout to a short. Either way, the exchange has the last word. They have many tools at their disposal. They can increase initial margin (what you put up when you open a contract) increase the frequency of variation margin (make you post intra-day instead of end of day) and require "trading for liquidation only" which means longs can go short and shorts can go long but no one can expand a position or increase the open interest. Finally, an exchange can suspend physical delivery and allow offsets and rolls only. All of these rules have been invoked many times and will be again.
Invariably the parties disadvantaged by these moves complain that the exchange is "changing the rules in the middle of the game". That's a naive and pointless perspective. The fact is that the ability to change the rule is itself a rule. The exchange is not changing the rules, they are just utilizing an alternate set of rules that are already in place. Traders should stop complaining and read the rule book. It's all there.
What is more intriguing is what motivates the exchange officials to use these rules? Is it truly a disorderly market (the usual reason) or is it part of a larger coordinated effort involving Federal regulators and policymakers to do whatever it takes to push up prices of risky assets such as housing, stocks and junk bonds and push down prices of safe-harbor assets such as gold and silver?
The point is, when buyers and sellers transact in futures markets, they're never alone. Exchange monitors are always looking over your shoulder. Never ignore the power of the exchanges and regulators and always remember they will use this power when it suits them, not you.
Silver Margin Hike Underscores Need for Bullion Ownership
By: Jeff Berwick
On November 9th the Chicago Mercantile Exchange said it will raise its silver futures trading margins by 30 percent to $6,500 an ounce from $5,000 an ounce effective November 10th setting off a rapid sell-off in the metal. No other margin requirement on any other metals was changed.
According to Reuters, "Exchanges often raise margins to mitigate risks as price volatility increases."
But, where is the supposed volatility in Silver?
In fact, the only volatility you can find on the silver contract in the last four months occurred in the moments after the CME announcement...
Clearly silver was targeted as having "gotten too high". When was the last time margin requirements were raised on US Treasuries which are at all-time highs?
The financial authorities pulled the same chicanery in early 1980 when Nelson Bunker Hunt and Herbert Hunt had nearly cornered the market in silver. In 1979, the price of silver jumped from $6/oz to an all-time record high of $48.70/oz. The brothers were estimated to hold one third of the entire world supply of silver at the time.
But on January 7 1980, just like on November 9 2010, the exchange rules regarding leverage were changed, when Comex adopted 'Silver Rule 7' placing heavy restrictions on the purchase of commodities on margin. The Hunt brothers had borrowed heavily to finance their purchases, and as the price began to fall again, dropping over 50% in just four days, they were unable to meet their obligations, causing panic in the markets.
Who is Selling Silver? -Gene Arensberg
Tuesday, November 9, 2010
Jim Sinclair said it best in his "Thought For The Day":
The ultimate proof of a bull market is the increase of margin rates.
They are a professional tool to cover shorts and dictated by the board of directors of the exchange, which means floor traders.
The CRIMEX goons have exposed themselves via this act. They have lost control of the price of Silver, and have resorted to this last ditch effort of raising margin requirements to slow the rise in the price of Silver, and quell demand.
What a farce!
Silver is traded around the world. Do these clowns really expect that by raising margin requirements on the CRIMEX that the rest of the world is going to stop buying Silver? The realization that these goons DO NOT possess, nor can they find the physical bullion to cover their naked ass shorts is upon them. The realization is there for the whole world to see. The race to accumulate physical Silver has only just begun.
An excellent buying opportunity is at hand.
Silver Margin Requirements to Change
CME Group, the operator of the New York Mercantile Exchange and Commodity Exchange (COMEX), on which silver futures contracts are traded, released a statement to clearing member firms, chief financial officers, back office managers, and margin managers notifying them of an increase in margin requirements “as per the normal review of market volatility to ensure adequate collateral coverage.”
Zero Hedge obtained a copy of the notice, which states that effective after the close of business on November 10, 2010, the maintenance margin requirement for COMEX 5000 Silver Trust Futures (SI) and COMEX 5000 Silver Trade at Settle (SIT) will increase from $5,000 to $6,500 per contract.
Speculation has arisen that this news is responsible for this afternoon’s significant negative reversal in the price of silver. While silver did tumble shortly before release of the CME’s notice, keep in mind that it had climbed considerably in recent weeks and may have anyways been due for at least a short-term correction. Nonetheless, the timing of the market’s response is somewhat suspicious.
Monday, November 8, 2010
I return with one overwhelming observation: If there is indeed a world economic crisis, you'd never know by walking around the theme parks in Orlando. There was no lack of patrons at any of the four Disney Parks, Universal, or Sea World.
The weak US Dollar is a boon for foreign travelers. The European Union was very well represented at all the parks, as was Australia. South America was represented by many visitors from Brazil, and quite a large number of Asians were spotted in the parks also.
Americans still find the cash for a pilgrimage to this entertainment mecca in Orlando, Florida, they outnumbered the tourists from overseas by a wide margin. But it is far, far cheaper for a visitor from Germany to visit the Magic Kingdom than it is for the locals.
It cost $82 for one adult to visit JUST the Magic Kingdom for ONE DAY. Our friendly visitor from Germany will pay just 59 Euros and change for the thrill of having their picture taken with Mickey Mouse.
Weakness in the US Dollar has put America on sale for the rest of the World...and it is only going to get cheaper.
When I last posted we were watching the dust settle on the US mid-term elections, and the Fed's QE2 announcement. The dust settled quickly as by mid-morning Thursday last, the Precious Metals were exploding in price as confidence in the Fed and the US Dollar began to evaporate globally:
Germany's Finance Minister Wolfgang Schauble: "It doesn't add up when the Americans accuse the Chinese of currency manipulation and then, with the help of their central bank's printing presses, artificially lower the value of the dollar." (Der Spiegel)
Brazil's Finance Minister Guido Mantega: "It is doubtful the Fed decision will produce any results. Throwing money out of a helicopter doesn't do any good." (WSJ)
Japan's Finance Minister Yoshihiko Noda: "I believe that it is necessary for us to watch developments regarding the U.S.'s economic conditions and monetary policy closely." (WSJ)
China knocks US plan to pump money into system
By Christopher Bodeen
BEIJING (AP) -- The U.S. Federal Reserve's move to pump hundreds of billions of dollars into the financial system will bring greater volatility to markets worldwide, a Chinese official said Monday.
The step will create new waves of cash sloshing in and out of countries in search of short-term profits, vice finance minister Zhu Guangyao told reporters at a news conference to discuss the Group of 20 meeting of major advanced and developing nations in Seoul, South Korea later this week.
The U.S. decision "does not recognize, as a country that issues one of the world's major reserve currencies, its obligation to stabilize capital markets," Zhu said, referring to the global use of the dollar as the currency in which nations store the bulk of their foreign reserves.
"Nor does it take into consideration the impact of this excessive fluidity on the financial markets of emerging countries," he said.
The Feds Biggest Fear
By Greg Hunter’s USAWatchdog.com
Last week’s decision by the Fed to start another round of Quantitative Easing was met with only one dissenting vote by the Federal Open Market Committee. That does not mean everybody in the rest of the world thinks this is a good idea. Any country holding dollars is faced with a decrease in buying power. Some of the most powerful members of the G-20 are highly critical of the Fed’s money printing. Germany, Brazil and China all made negative comments about the Fed’s latest round of QE in a Bloomberg article over the weekend. It reported, “It’s our problem as well if the U.S. is no longer certain that the old recipes don’t work anymore,” German Finance Minister Wolfgang Schaeuble said yesterday in Berlin. The Fed’s injection of $600 billion was “clueless” and won’t revive growth, he said. Brazil’s central bank president, Henrique Meirelles, said “excess liquidity” in the U.S. economy is creating “risks for everyone.” In China, Vice Foreign Minister Cui Tiankai said “many countries are worried about the impact of the policy on their economies.” He also said the U.S. “owes us some explanation on their decision on quantitative easing.”
Still, Fed Chief Bernanke is unwavering in the decision to print money to revive the economy. The same Bloomberg article quoted Mr. Bernanke, “Our first objective, the first goal that we have, is to meet our mandate to get price stability and maximum employment in the United States . . . A strong U.S. economy, a recovering economy, is critical not just for Americans but it’s also critical for the global recovery.” The rest of the world is clearly not buying the idea that the Fed is saving the world economy. So what would make the Fed so defiant in the face of such global criticism? I think the Fed is really worried about mortgage interest rates and declining home prices.
Bernanke Defends Bond Purchases, Predicts Stronger Growth
By Steve Matthews and Timothy R. Homan
Federal Reserve Chairman Ben S. Bernanke said the central bank must focus on the U.S. rather than overseas economies when trying to spur the recovery by purchasing an additional $600 billion in Treasuries.
“Our first objective, the first goal that we have, is to meet our mandate to get price stability and maximum employment in the United States,” Bernanke said yesterday in response to questions from college students in Jacksonville, Florida. “A strong U.S. economy, a recovering economy, is critical not just for Americans but it’s also critical for the global recovery.”
“We are showing insufficient stimulus,” Bernanke said yesterday in his remarks, mostly in response to questions. Asset purchases have “the goal of reducing interest rates, providing more stimulus to the economy and, we hope, creating a faster recovery and an inflation rate consistent with long-run stability,” Bernanke said to students.
An acceleration of U.S. economic growth would support the value of the U.S. dollar, Bernanke said.
“The best fundamentals for the dollar will come when the economy is growing strongly,” Bernanke said yesterday. “That is where the fundamentals come from. We are aware the dollar plays a special role in the global economy.”
Bernanke said additional easing will help the Fed achieve its two mandates set by Congress for ensuring full employment and stable prices.
“The unemployment rate, if at all, is coming down very, very slowly,” Bernanke told students at Jacksonville University. “Inflation is very, very low, probably below the level that is healthy for the economy in the longer term.”
Asked by a student if “skyrocketing” commodities prices may threaten his inflation outlook, Bernanke said rising commodities prices are “the one exception” to a broad reduction in inflationary pressures. Overall, excess slack in the economy will make it difficult for producers to push through higher prices to consumers, he said.
“Emerging markets are growing quite quickly,” Bernanke said. “Demand for those commodities is pretty strong. That is going to be a contributor to inflation in the U.S. because it will affect gas prices, for example, and so on.”
Asked by a student about rising gold prices and concerns over inflation, Bernanke said the Fed wouldn’t sacrifice price stability in an attempt to boost growth.
“Let me be very clear: We are absolutely committed to keeping inflation low and stable,” he said. “We have the tools to unwind and tighten policy at the appropriate time. We will honor both sides of our dual mandate.”
Ben Bernanke is a desperate man that is full of sh*t folks. His tools consist of BS spread evenly on sliced bread. The Bernanke Fed's plan for Americans is to force feed them a sh*t sandwich. It becomes more clear by the day that Bernanke's plan to get growth out of the economy is to force business and consumers to spend their savings to stay ahead of rising prices to give the world an "illusion" of a growing economy in America. Bumbling Ben is making a huge gamble that he can buffalo not only Americans, but citizens of the world, that inflation is "good for the economy" and that without it their can be no growth.
In essence Ben is confirming the lie that has been the American economy for the past 40 years: A steadily growing money supply leads to higher prices which lead to higher sales receipts and in turn the ILLUSION of growth. By hiding behind the "supposed" "dual mandates" of the Fed, stable prices and low unemployment, Ben makes the excuse that higher rates of inflation are good. This is pure unadulterated hogwash. The man should be jailed for high treason, along with his tax cheat pal Timmy Geithner.
Beware The Fed Tide
By: John BrowneSenior Market Strategist, Euro Pacific Capital, Inc.
This week, desperation became palpable at the Fed. In both the formulaic statement that accompanied its FOMC policy decision and Chairman Ben Bernanke's unusual (and clumsy) Washington Post op-ed follow up, the guardians of our currency expressed grave disappointment at the slow pace of US economic recovery and emphasized the continued threat of deflation. The Fed is now pledging to defeat this recession using any monetary means necessary. Unfortunately, their embrace threatens to smother our economy.
Despite its paternalistic rhetoric, the Fed really has just a few simple goals: allow for the perpetual expansion of the federal deficit, push up stock prices to create the illusion of wealth, and stimulate consumer spending. To do this, the Fed will hold interest rates near zero for the foreseeable future, and will buy some $600 billion of US Treasury debt by April of next year. Per capita, the commitment to quantitative easing comes to almost $2,000 per American. What's more, if this program fails to pull the economy out of recession, the Fed stands ready to up the ante. This amounts to little more than gambling; but instead of using their own accounts, the central bankers are wagering the nation's savings.
What the Fed is doing, essentially, is forcing consumers to spend their cash hoardings. Until the economic and financial policies of the government change dramatically, those who are tempted to invest their savings within the United States risk increasing regime uncertainty. So, much of our domestic capital is flowing into hard assets and overseas markets.
This will do nothing to help the festering wounds underlying the US economy.
The Precious Metals are loving this admission of fraud by Banana Ben's Fed. They have responded by exploding in price as we have long believed they eventually would. The US Dollar is going to pay a high price for this man and his banks treason. As the World, followed by US citizens, continue to lose confidence in Bumbling Ben and the US Dollar, the precious Metals will accelerate to heights unimaginable going forward. The Silver markets are on the verge of a calamitous detonation as we type.
From Harvey Organ this evening via his Daily Gold And Silver Report :
In silver we witnessed a huge 129 notices sent down for options exercised. This represents 645,000 oz of silver. The total number of silver notices sent down so far total 569 or 2,845,000 oz of silver. There are still 41 notices that still remain to be served for a total of 205,000 oz.
Thus the total number of silver oz standing in this non delivery month of November is as follows:
2,845,000 oz (already served upon) + 205,000 oz (to be served) = 3,050,000 oz (this number is rising)
Our banking cartel are getting quite nervous when they see over 3 million oz standing in a non delivery month. Can you imagine what is going to happen in December?
The shorts in Silver not only have their backs to the wall, and their butts in a sling...but their balls are in a vicelock, and about to be squeezed into oblivion. I don't care how well funded these bullion banks might be, they can not continue, and they can not be allowed to continue to sell unbacked Silver futures contracts into the markets to meet overwhelming demand. The Day Of Reckoning is close at hand.
Gene Arensberg analyzes the big banks in silver futures
Dear Friend of GATA and Gold (and Silver):
Gene Arensberg of the Got Gold Report today published a detailed analysis of the U.S. silver futures market and concluded that the two biggest commercial traders are so big that they indeed are likely manipulating the market at strategic moments, even as he doubts that they are "naked short" silver. Rather, Arensberg thinks the commercial traders that are short in the U.S. futures market are hedged in some way, with "offsetting corresponding net long derivatives in other markets or inventory, or future production/cash flows, or hedging more complex financial derivatives, or perhaps hedging something we have not thought of."
Of course hedging with derivatives might be a form a naked shorting, depending on the derivatives and their issuer. Maybe all this will be illuminated by the recent class-action lawsuits filed in U.S. District Court for the Southern District of New York accusing J.P. Morgan Chase and HSBC of manipulating the silver market.
Arensberg's analysis is titled "U.S. Banks in Silver Futures" and you can find it at the Got Gold Report's Internet site here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
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