Tuesday, July 26, 2011

Deal Or No Deal: Gold And Silver Will Continue To Rise

It should be a shock to no one early this morning that Gold and Silver prices are being pressured lower as options futures contracts at the CRIMEX expire today.  Look no further than today's crumbling US Dollar to confirm the ongoing manipulation of the Precious Metals markets.  Gold and Silver should be rising today as the Dollar is falling, but not if their is an options expiration and 20,000 Gold calls are sitting at the $1600 strike price.  A close above $1600 will make the line for delivery next month very long for the banks that do not have the Gold they sold to the holders of these contracts.

Eric King, KingWorldNews.com
...today King World News interviewed James Turk. When asked about the action in gold Turk replied, “Today’s action was very significant Eric as both gold and silver closed above previous resistance points. In the interview that we did last week, I said $1,640 to $,1650 is the near-term target. That is the level we should be focusing on, but readers have to remember that option expiry starts tomorrow. Given the recurring downward price pressure that we normally see during option expiry, the action over the next two days should be watched closely.”

Turk continues:

“If gold cannot be pushed back below $1,600 during option expiry, we should take that to mean that the shorts are losing control. The consequences of that would be the potential for an upside explosion, which as you know is consistent with what I have been expecting for the gold price this summer.

Here is another interesting development Eric, the support under $1,600 regardless of how you measure it looks solid. Asian buying has been following the market up since gold went over $1,000. I was surprised to see how quickly the bids under $1,600 developed. So my view of market conditions at the moment is that as bullish as I am, even I might be surprised by how quickly gold accelerates from here.

When asked about silver specifically Turk remarked, “The situation is just as bullish. The fact that we are breaking through $40, which has provided overhead resistance for so long, is a clear sign that the shorts are losing control. The upper hand is shifting to the buyers of physical silver.

My near-term target is still something in the mid $40’s, but if gold starts moving higher as I expect, silver will be testing that $50 level by next month. That is going to spoil the summer vacations of many of the silver shorts who will be left shocked and in disbelief as they buy hand over fist to limit their losses.”

CRIMEX trading opened yesterday with 193,611 Gold contracts still open for August delivery.  At 100 ounces per cntract that is equivalent ot 19,361,100 ounces of Gold.  As of Friday, July 22, total CRIMEX Gold Warehouse stocks were listed at 11,432,710.  Unfortunately for the CRIMEX, less than 1/2 of the total warehouse stocks are actually "registered for delivery".  This obviously poses a very big problem for the bankers that have been selling mountains of paper Gold the past 10 days to halt the rise in the price of Gold.  Could we see a string of margin increases in the Gold futures early in August, ala the May Silver margin increases, to help aleviate the CME from the threat of a CRIMEX Gold delivery default?  Time will tell...

The other question many financial media pundits have been asking as Gold continues it's relentless rise this month is, will a debt ceiling settlement cause the price of Gold to fall?   It's a very good question, but their expectations that a debt ceiling settlment will certainly be bad for Gold is not only wrong, but proves once again thei complete ignorance of Gold as the ultimate alternative currency.  Case in point:

The following CNBC roundtable on Gold and the debt celing is quite amusing.  The way the CNBC talking heads dismiss their guests answer to their question, AND his predictions for the price of Gold is truly pathetic, and just more proof of the financial media's culpability in the governments efforts to suppress the price of Gold.

The question, "will the price of gold drop on debt deal?" can easily be answered by this one simple chart of the US debt, the "debt ceilings", and the price of Gold posted below:

NO, the price of Gold will NOT DROP on a debt ceiling deal.  Now, it might dip briefly on the news of a debt ceiling deal...we have seen that occur at least three times in the last week, but the price of Gold is not "going to go down" because the US Congress has agreed to raise the debt ceiling.  NOTHING about raising the debt ceiling is negative for the price of Gold.  In fact, it could not be more positive.  The nation is $14.3 TRILLION in debt now, does adding more debt make the nation's debt problem go away?  Hardly!  Besides, look again at the chart posted just above...it is simple to understand!  Raise the debt limit, and the price of Gold will follow...it has for the past 10 years!

And Silver will follow the price of Gold higher...  Silver has moved through the month of July so far just as we had expected.  Yesterday Silver met yet another expected roadblock at the $41 level, and Prices were reversed quickly by our ever vigilant CRIMEX/ Banking Cartel.

By Keith Fitz-Gerald, MoneyMorning
If you're still bearish on long-term silver prices, you'd better reconsider your stance.

Dollar-denominated Chinese silver futures were scheduled to begin trading on the Hong Kong Mercantile Exchange early Friday. This development will grant Asian investors direct access to the metal, and will blunt the U.S. dominance in silver-bullion trading.

It's also highly bullish for long-term silver prices.

Let me explain ...

...yesterday I spoke to Christian from GoldSilver.com and he pointed me to a link on YouTube by someone using the nom de plume Brother John F. I watched this video in stunned disbelief. This man had a live streaming video from the Commercial Mercantile Exchange (COMEX) for the minute by minute trades. Silver contracts were selling higher and at about 1:40PM they started to sell off for no reason. Then at 2:03PM there was a trade for 50,000 contracts of silver sold. (This would lead anyone to conclude that the sale was known 23 minutes before it occurred.) This is not a typo. That is 50,000 contracts in one minute! If you are not aware each contract is for 5,000 ounces of silver. So if we do the math 50,000 contracts X 5,000 ounces per contract equals 250,000,000 ounces of paper silver contracts. If you're getting dizzy reading all of those zeros I will spell it out for you. That is Two Hundred Fifty Million ounces of paper silver traded in one minute. If we do some further math and we multiply two hundred fifty million contracts by the proxy price of silver yesterday which was $40.00 per ounce. That trade was for 10 billion dollars in one minute.

...the amount of silver produced per year in the entire world is roughly around 680 million ounces of silver and the amount mined in the united state last year was 50 million ounces. The amount that was traded on the CME yesterday was approximately one third of all of the silver mined in the world. It was 5 times the amount mined in America. So how can this be? So you may ask why this is so troubling. The reason is that I have been writing for some time now that there are rumors that the silver ETF (SLV) is rumored to not have the silver that the paper purports to represent. There are reports that if SLV was ever called upon to produce the underlying asset it represents it would be unable to do so. Is there any wonder why this commodity is so volatile?

The fact is that the silver market is being incredibly manipulated. Well that is about to change. On Friday July 22nd the Hong Kong Mercantile Exchange will start trading dollar denominated silver futures contracts with the hopes of tapping into the growing demand for the metal in China and India. The new contact will enable buyers and sellers in China to trade effectively with their counterparts across the world, while at the same time allow investors to gain exposure to silver price movements and broaden their investment portfolio. The exchange also plans to roll out a Yuan-priced gold and silver futures to capitalize on growing investor demand for China's strengthening currency. They also have ambitions for products in base metals, energy and agriculture.

This was the missing piece of the puzzle I could not find. Starting tomorrow Friday July 22nd the Anglo American monopoly on silver is over. This will be the first time that Asians can buy and take future delivery of silver in Asia. No longer can the CME raise margins close to 100% in eight days. The silver shorts are and should be afraid of the hundreds of millions of Asians that will be entering this small market. China alone has trillions of dollars and they could drop 0.01% of that money into silver and explode silver beyond the control of the American elite.

By Andy Hoffman
...many worry that since silver peaked at $50 in early 1980 (again due to blatant government manipulation), and then again at that same level earlier this year, that somehow this means the $50 level is insurpassable. This thesis is patently absurd, trying to equate what happened 30 years ago, on frankly another financial planet, as if the trading back then has even the slightest relationship to what is happening today, with a global money supply (on and off-balance sheet) AT LEAST 10x larger and growing exponentially!

Moreover, as immaterial as I consider SHORT-TERM charts is how material I consider LONG-TERM charts. In fact, I believe long-term charts to be EVEN MORE IMPORTANT than EVER thanks to the massive resistance/support phenomenon described above, PARTICULARLY when occurring at a MAJOR ROUND NUMBER such as $50/oz.

Looking at the below 37-year silver chart, I see perhaps the largest reverse head and shoulders/cup and handle formation of all time, one with such an incredibly powerful base that I believe a move to hundreds of dollars per ounce is IMMINENT, even without looking at the aforementioned money supply figures.

Perhaps it will take a few more months to break through $50 for good, and perhaps the “consensus” will be taken off guard if it blows through $50 later this summer, which as noted above I place a high probability on.

To conclude, all I can say is that the Western World financial system is coming down all around us in rapid motion. Whether the Cartel/PPT/ESF can engineer a “soft landing” during the second half of 2011 is still in question (I do not believe they can), but irrespective PHYSICAL silver and gold are poised to move up markedly, if not parabolically, during this period.

I can't help comment now on the President's address of the nation last night.  [Not that many American's bothered to watch it.]  Does this guy really believe the the words on the telprompter before him?  Or is he really just reading the script?

Here is a link to the teleprompted delivery of the President's address last
night to the nation:

Here is the link to the written transcript of the President's address:

I always look for the transcript because it is easier to pick apart the
written word than the spoken.

The first 2/3 of this speech was a pathetic distortion of history where the President tries to rewrite history and blame President Bush for the debt without using his name...the true mark of a loser is to "blame sombody else for your problems  The last 1/3 of the speech he focuses on the stalemate and uses scare tactics to "call the country" to action and phone your representative...LOOOOOOL, like that will solve anything...these
clowns in DC NEVER listen to their voting constituents, they only listenen to their "paying" constituents. And I can't believe he stooped to using a Ronald Reagan quote...is this Obama guy desperate or what?

Below I will cut and paste the last third and insert my "comments" on the Presidents assertions:

"Would you rather reduce deficits and interest rates by raising revenue from those who are not now paying their fair share, or would you rather accept larger budget deficits, higher interest rates, and higher unemployment? And I think I know your answer."

Those words were spoken by Ronald Reagan. But today, many Republicans in the House refuse to consider this kind of balanced approach - an approach that was pursued not only by President Reagan, but by the first President Bush, President Clinton, myself, and many Democrats and Republicans in the United States Senate. So we are left with a stalemate.

Now, what makes today's stalemate so dangerous is that it has been tied to something known as the debt ceiling - a term that most people outside of Washington have probably never heard of before.

Understand - raising the debt ceiling does not allow Congress to spend more money. [BULLSHIT! THERE IS NOTHING BEING SAID ABOUT A SPENDING FREEZE GOING FORWARD FROM AUGUST 2ND.] It simply gives our country the ability to pay the bills that Congress has already racked up. [THIS IS CALLED BORROWING MONEY TO PAY YOUR DEBTS, WHERE I COME FROM YOU DO THIS BECAUSE YOU ARE BROKE.] In the past, raising the debt ceiling was routine. Since the 1950s, Congress has always passed it, and every President has signed it. President Reagan did it 18 times. George W. Bush did it 7 times. And we have to do it by next Tuesday, August 2nd, or else we won't be able to pay all of our bills. [BEGS THE QUESTION: WHY DO WE HAVE A DEBT CEILING, IF RAISING IT IS "ROUTINE"?]

Unfortunately, for the past several weeks, Republican House members have essentially said that the only way they'll vote to prevent America's first-ever default is if the rest of us agree to their deep, spending

If that happens, and we default, we would not have enough money to pay all of our bills - bills that include monthly Social Security checks, veterans' benefits, and the government contracts we've signed with thousands of businesses. [BUT I THOUGHT SOCIAL SECURITY MONIES WERE HELD IN A "LOCKBOX"? DO YOU REALLY THINK AMERICANS WILL SIT IDLY BY WHILE YOU PAY THE CHINESE INTEREST ON THEIR LOANS AND NOT PAY AMEICANS THEIR SOCIAL SECURITY MONEY?]

For the first time in history, our country's Triple A credit rating would be downgraded, leaving investors around the world to wonder whether the United States is still a good bet. [THE REST OF THE WORLD ALREADY HAS REALIZED THAT AMERICA IS A BAD BET, WASHINGTON IS THE LAST TO FIGURE THAT OUT] Interest rates would skyrocket on credit cards, mortgages, and car loans, whichamounts to a huge tax hike on the American people. [HIGHER BORROWING COSTS ARE NOT A "TAX HIKE", QUIT WITH THE SCARE MONGERING.] We would risk sparking a deep economic crisis - one caused almost entirely by Washington. [WE ARE IN A "DEEP ECONOMIC CRISIS ALREADY, DESPITE YOUR CLAIMS TO THE CONTRARY, WE DID NOT AVOID THE SECOND GREAT DEPRESSION...DENY IT ALL YOU WANT, WE ARE IN THE MIDST OF THE GREATER DEPRESSION RIGHT NOW AS YOU SPEAK AND SQUABBLE WITH CONGRESS...AND IT WAS CAUSED ALMOST ENTIRELY BY WASHINGTON'S CUDDLING WITH THE BANKING INDUSTRY THE PAST 25 YEARS.]

Defaulting on our obligations is a reckless and irresponsible outcome to this debate. And Republican leaders say that they agree we must avoid default. But the new approach that Speaker Boehner unveiled today, which would temporarily extend the debt ceiling in exchange for spending cuts, would force us to once again face the threat of default just six months from now. In other words, it doesn't solve the problem. [NO, IT DOESN'T. AND NEITHER WILL ADDING ANOTHER 12 MONTHS TO THE SPEAKERS PLAN. THE FACT IS MR PRESIDENT, AMERICA HAS ALREADY DEFAULTED ON ITS OBLIGATIONS, YOU CLOWNS ARE JUST TRYING TO FIND A BUTTERFLY BANDAGE TO COVER UP THIS SUCKING CHEST WOUND.]

First of all, a six-month extension of the debt ceiling might not be enough to avoid a credit downgrade and the higher interest rates that all Americans would have to pay as a result. [WHAT GUARANTEE DO YOU HAVE THAT THERE WON'T BE A DEBT DOWNGRADE EVEN IF YOU DO RAISE THE DEBT CEILING. FOR THAT MATTER, WHAT MAKES YOU THINK THE WORLD BELIEVES THE "AMERICAN" RATING AGENCIES AAA RATING RIGHT NOW AS YOU SPEAK?] We know what we have to do to reduce our deficits; there's no point in putting the economy at risk by kicking the can further down the road. [HEY DUMBASS! RAISING THE DEBT CEILING IS "KICKING THE CAN DOWN THE ROAD!]

But there's an even greater danger to this approach. Based on what we've seen these past few weeks, we know what to expect six months from now. The House will once again refuse to prevent default unless the rest of us accept their cuts-only approach. Again, they will refuse to ask the wealthiest Americans to give up their tax cuts or deductions. Again, they will demand harsh cuts to programs like Medicare. And once again, the economy will be held captive unless they get their way. [TAX THE RICH...IS THAT YOUR ANSWER TO EVERYTHING THAT AILS THIS COUNTRY? DID THE RICH RUN UP THE CREDIT CARD OR DID THE CONGRESS?]

That is no way to run the greatest country on Earth. It is a dangerous game we've never played before, and we can't afford to play it now. [WHAT A STUPID THING TO SAY. THE COUNTRY HAS BEEN RUN LIKE THIS FOR THE PAST 40 YEARS! AFTER THE LAST TIME WE DEFAULTED ON OUR OBLIGATIONS BY CLOSING THE GOLD WINDOW ON THE REST OF THE WORLD, AUGUST 15, 1971.] Not when the jobs and livelihoods of so many families are at stake. We can't allow the

Congress now has one week left to act, and there are still paths forward. The Senate has introduced a plan to avoid default, which makes a down payment on deficit reduction and ensures that we don't have to go through this again in six months. [A GIMMICK THAT SIMPLY SWEEPS THE PROBLEM UNDER

I think that's a much better path, although serious deficit reduction would still require us to tackle the tough challenges of entitlement and tax reform. Either way, I have told leaders of both parties that they must come
up with a fair compromise in the next few days that can pass both houses of Congress - a compromise I can sign. [BECAUSE I AM ONLY WORRIED ABOUT THE NEXT ELECTION CYCLE] And I am confident we can reach this compromise. Despite our disagreements, Republican leaders and I have found common ground before. And I believe that enough members of both parties will ultimately put politics aside and help us make progress. [AND KICK THE CAN A LITTLE FURTHER DOWN THE ROAD.]

I realize that a lot of the new members of Congress and I don't see eye-to-eye on many issues. But we were each elected by some of the same Americans for some of the same reasons. Yes, many want government to start living within its means. And many are fed up with a system in which the deck seems stacked against middle-class Americans in favor of the wealthiest few. But do you know what people are fed up with most of all? [YES, HAVING AN UNQUALIFIED COMMUNITY ORGANIZER AS THE PRESIDENT OF THE UNITED STATES.]

They're fed up with a town where compromise has become a dirty word. They work all day long, many of them scraping by, just to put food on the table. And when these Americans come home at night, bone-tired, and turn on the news, all they see is the same partisan three-ring circus here in
Washington. They see leaders who can't seem to come together and do what it
takes to make life just a little bit better for ordinary Americans. They are offended by that. And they should be.

The American people may have voted for divided government, but they didn't vote for a dysfunctional government. So I'm asking you all to make your voice heard. If you want a balanced approach to reducing the deficit, let our Member of Congress know. If you believe we can solve this problem
through compromise, send that message.

America, after all, has always been a grand experiment in compromise. As a democracy made up of every race and religion, where every belief and point of view is welcomed, we have put to the test time and again the proposition at the heart of our founding: that out of many, we are one. We have engaged
in fierce and passionate debates about the issues of the day, but from slavery to war, from civil liberties to questions of economic justice, we have tried to live by the words that Jefferson once wrote: "Every man cannot have his way in all things...Without this mutual disposition, we are disjointed individuals, but not a society."

History is scattered with the stories of those who held fast to rigid ideologies and refused to listen to those who disagreed. But those are not the Americans we remember. We remember the Americans who put country above self, and set personal grievances aside for the greater good. We remember
the Americans who held this country together during its most difficult hours; who put aside pride and party to form a more perfect union. [THE ONLY THINGS YOU CLOWNS REMEMBER IN WAHINGTON IS WHO GAVE YOU MONEY AND THE DATE OF THE NEXT ELECTION...NOT A ONE OF YOU (EXCEPT RON PAUL) CAN HOLD A CANDLE TO THE THE FOUNDING FATHERS OF THIS NATION.]

That's who we remember. That's who we need to be right now. The entire world is watching [AMERICA GO DOWN THE TOILET AN REVELING IN IT]. So let's seize this moment to show why the United States of America is still the greatest[INDEBTED] nation on Earth - not just because we can still keep our word and meet our obligations [BY PRINTING MONEY TO PAY OUR DEBTS], but because wecan still come together as one nation. Thank you, God bless you, and mayGod bless the United States of America.
By Daniel Gross , Daily Ticker
Despite the hand-wringing about American decline and the constant refrain that the U.S. is the next Greece, the bond markets remain remarkably permissive. The U.S. government is currently borrowing for 10 years at almost exactly 3 percent, an extraordinarily low rate that is within spitting distance of a historic low. Look at the chart from the past six months. The Federal Reserve has stopped buying bonds, the political stalemate has worsened, inflation hasn't disappeared. And yet interest rates are contained. Why? As John Tamny and I discuss in the accompanying video, nobody really believes the U.S. government is going to default, even if it pierces the debt ceiling next week.

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