Wednesday, November 28, 2012

Gold Price Hammered As USA Heads Towards Financial Doomsday

Didn't the CME lower margins on Gold and Silver last week?

CME lowers gold, silver, copper, natgas margins | Reuters

  • Nov 15, 2012 · Nov 15 (Reuters) - The CME Group on Thursday lowered margins for natural gas, gold, silver, copper, lean hog and live cattle futures, effective after …
ANY COMEX margin change, higher or lower, always manages to favor the shorts.

December is the NUMBER ONE month for Gold and Silver deliveries annually.  The "December" Gold and Silver contracts trade on the notably criminal COMEX in New York during the month of "November".  November is "seasonally", on average, the first or second most bullish month for these two Precious Metals EVERY year.

This year, from it's close on October 28, 2012 up to it's November high, the price of Gold was up 4.5%.  On one 100 ounce NY COMEX Gold contract, a trader held a $7694 unrealized profit at the November high price, if he had purchased his contract at the close in October.  The November high in Gold occurred at 11AM the morning of November 23, 2012.  The November high price for Gold at that time was $1754 per ounce.

This year, from it's close on October 28, 2012 up to it's November high, the price of Silver was up 11%.  On one 5000 ounce NY COMEX Silver contract, a trader held a $16,950 unrealized profit at the November high price, if he had purchased his contract at the close in October.  The November high in Silver occurred at 7PM October 26, 2012.  The November high price for Silver at that time was $34.28 per ounce.

With unrealized profits in the Precious Metals of this magnitude going into options expiration, it was imperative that the bullion banks do everything in their power to prevent delivery demands at great financial loss to the banks.

Nov. 27 Comex December gold options expiry

Nov. 27 Comex December silver options expiry

Let the games begin!

CME Declares Force Majeure Due To “Operational Limitations” On NYC Gold Depository

Published in Market Update Precious Metals on 27 November 2012 

CME Group declared a force majeure at one of its New York precious metals depositories yesterday, run by bullion dealer and major coin dealer Manfra, Tordella and Brooks (MTB), due to “operational limitations” posed by Hurricane Sandy.

MTB has “operational limitations” following Hurricane Sandy and can’t load gold bullion, platinum bullion or palladium bullion, CME Group Inc., the parent of the Comex and New York Mercantile Exchange, said today in a statement.

MTB must provide holders with metal at Brinks Inc. in New York to meet current outstanding warrants in relevant delivery periods with compensation for costs, Chicago-based CME said.

The CME said that MTB will not be able to deliver metal as the lower Manhattan company deals with "operational limitations" almost a month after the arrival of Hurricane Sandy.

MTB is one of five depositories licensed to deliver gold against CME's benchmark 100-troy ounce gold contract, held 29,276 troy ounces of gold and 33,000 troy ounces of palladium as of Nov. 23, according to data from CME subsidiary Comex.

In a notice to customers on Monday, CME declared force majeure for the facility, a contract clause that frees parties from liability due to an event outside of their control.

CME said that individuals holding MTB warrants or certificates for a specific lot of metal stored in the depository, may receive gold delivered from Brinks Co. (BCO) in New York. MTB is responsible for any additional costs incurred by customers receiving metal from Brinks, CME said.

"This shouldn't have a material impact on the way market participants are doing business," a CME spokesman said. "They'll still contact MTB if they want to take delivery on contracts," and MTB will arrange for delivery through Brinks according to Dow Jones Newswires.

In a notice posted to its website dated Nov. 12, MTB said the firm "sustained substantial damages" following Hurricane Sandy's arrival in New York City on Oct. 29, and had curtailed its operations.

The force majeure will remain in effect until further notice from the exchange, the CME said. The delivery period for CME's December-delivery precious metals futures begins on Friday.


Doesn't ANYBODY find it the least bit alarming that MTB has conveniently used a natural disaster to hide the fact [assumed] that it DOES NOT HAVE THE METAL AVAILABLE to meet December Gold delivery demands?  Seriously, this storm hit New York almost one month ago, and now with just two days before "first notice delivery" they have encountered “operational limitations” preventing them from making good on delivery demand of Gold via December Gold contracts sold through their depository?  Seriously?  This is OUTRAGEOUS!

Jim’s Mail Box

Richard outdoes himself in this report. Now they are calling it a roll over that was executed not as a spread but as an outright sale. That was such a bold manipulation that even they have to come up with an excuse.
Richard is right. That is what is called “an operation.”
Those watching the precious metals markets (this excludes the CFTC) are well aware of yesterday’s options expiry for Gold and Silver on the COMEX, and the Friday “first day notice” just ahead…and some violent ‘games’ by the Cartel in the paper markets were duly expected.
This morning Blythe apparently unleashed her heavily-caffeinated flying monkeys to ‘game’ the markets. Completely incredible paper volume in view of existing physical supply. In seconds. Good morning!
Oh, did I say ‘physical?’
– Yesterday’s Manfra ‘force majeure’ excuse (one of COMEX’s five bullion stores) for non-delivery of physical bullion should (in a regulated, unmanipulated market) have sent the spot price of Gold several hundred dollars higher, but it looks like the Banksters have discovered Bennie’s secret CTRL+P trick of creating binary electronic digits out of thin air…beats mining with a pick and shovel, eh?
These are no longer markets as price-discovery vehicles, but more resemble playing naked-twister with sociopaths and crooks.
– The MF Global and LIeBOR frauds were just a small ‘taste’ of what’s coming when it is discovered that the paper masters of the universe have hypothecated and rehypothecated physical bullion (both private and sovereign) many times over. [For CFTC regulators read: it's long gone and many are not going to get it back, ever.]


Tuesday, November 20, 2012

Gold and Silver At A Crossroads, But Solid Fundamentals Support A Move To New All-time Highs In 2013

Gold and Silver have performed "constructively" since the late September highs in both markets.  A 50% correction in both Precious Metals markets thru the annually weak month of October was less about manipulation, and more about "necessary", following both Precious Metals strong rallies that commenced in early August.

No market moves straight up, or straight down.  Corrections should be welcomed, and looked at as opportunities to add to positions in the direction you believe the market is moving within the "big picture".

The "correction zone" for any strong rally is between 38% and 50% of the rally [or decline].  If a market finds support within the correction zone, it is likely to soon retest its recent high, and/or extend the recent rally to new highs [or lows].

Understanding this technical aspect of any market makes it much easier to understand and take advantage of "opportunities" a market presents to ALL traders.

With that being said, please note that since I suggested "buying the dip" in my November 2nd post, both Gold and Silver have rallied and regained 50% of their respective October declines.

Gold and Silver are at a crossroads now.  Take out the respective 50% Fibonacci retracements of their October declines, and we can expect to see a retest of the late September highs in both Precious Metals going into the Christmas holidays.

[click on image to enlarge]

It can not be emphasized enough that the "fundamentals" of the Precious Metals offer MAJOR support to both these markets.  The results of the Presidential Election [as incorrect as my prediction was ;-) ] have not changed a thing in Washington.  The Status Quo survived intact, and only adds support to the bullish case for both Gold and Silver.

Consider that the "Fiscal Cliff" the mainstream financial press has suddenly "discovered" was caused by dealing with the Debt Ceiling debate in September 2011, and that its hoped for "resolution" will only conflict with yet ANOTHER Debt Ceiling debate in early can anyone be anything but bullish on the prices of the Precious Metals?  Seriously, the President and the Congress have their backs firmly against the Fiscal Cliff's edge.  Damned if they do, double damned if they don't.  

The American public [the tax payers] are about to be sold the notion that the Debt Ceiling must be raised by $2.5 TRILLION to "prevent" the US Government for defaulting on their debt obligations.  What could be more LUDICROUS escapes me.

Look at the reaction to mere photo opps as the President and Congress try to provide confidence to the World that America will avoid the Fiscal Cliff and remain "solvent".  The recent equity rallies are little more than short squeezes.  The "business climate" going forward in America and Europe is hardly encouraging.  Hope and Hot Air are not fundamentally sound pillars of global business and equity strength.

The single biggest deterrent to a race higher in the Precious Metals would be a false strengthening in the US Dollar should the US Equity markets implode as the reality of the Fiscal Cliff and the impending Debt Ceiling debate becomes all too obvious to even the bumbling mainstream financial news media.  This deterrent will be fleeting at best as the entire World comes to the realization that the US Dollar is DOOMED.

Foreign Buying of U.S. Assets Plunges on Europe Optimism
By Kasia Klimasinska and Meera Louis – Nov 16, 2012 11:53 AM ET

International purchases of U.S. financial assets plunged 96 percent in September as confidence grew that Europe was beginning to solve its debt crisis and investors sold Treasuries following the Federal Reserve’s quantitative easing announcement.

Net buying of long-term equities, notes and bonds totaled $3.3 billion during the month, down from net purchases of $90.3 billion in August, the Treasury Department said today in Washington. Economists surveyed by Bloomberg projected net buying of $50 billion of long-term assets, according to the median estimate.

ECB President Mario Draghi has called the euro “irreversible” and said the new government bond purchasing program will have effective conditionality attached. Photographer: Andrew Harrer/Bloomberg

The Federal Open Market Committee said Sept. 13 that it would undertake a third round of quantitative easing by purchasing mortgage-backed securities at a pace of $40 billion per month until labor markets improve substantially.

“QE3 certainly played its role in basically encouraging people to take risk and to some extent to short the dollar,” Sebastien Galy, a senior foreign-exchange strategist at Societe Generale SA in New York, said. “The risk appetite was pretty strong overall, there were better places to park your money than the dollar,” and “there was a big rise in optimism regarding the euro zone.”


Asian economies turn to yuan
Updated: 2012-10-24 00:57
By Gao Changxin ( China Daily)

A “renminbi bloc” has been formed in East Asia, as nations in the region abandon the US dollar and peg their currency to the Chinese yuan — a major signal of China’s successful bid to internationalize its currency, a research report has said.

The Peterson Institute for International Economics, or PIIE, said in its latest research that China has moved closer to its long-term goal for the renminbi to become a global reserve currency.

Since the global financial crisis, the report said, more and more nations, especially emerging economies, see the yuan as the main reference currency when setting their exchange rate.

And now seven out of 10 economies in the region — including South Korea, Indonesia, Malaysia, Singapore and Thailand — track the renminbi more closely than they do the US dollar. Only three economies in the group — Hong Kong, Vietnam, and Mongolia — still have currencies following the dollar more closely than the renminbi, said the report, posted on the institute’s website.

The South Korean won, for example, has appreciated in sync with the renminbi against the dollar since mid-2010.

China has long vowed to raise its currency’s global sway, along with the rise of its economy, which became the world’s second-biggest last year.


U.S. Companies Cut Spending Plans Amid Fiscal and Economic Uncertainty

U.S. companies are scaling back investment plans at the fastest pace since the recession, signaling more trouble for the economic recovery.

Half of the nation’s 40 biggest publicly traded corporate spenders have announced plans to curtail capital expenditures this year or next, according to a review by The Wall Street Journal of securities filings and conference calls.

Nationwide, business investment in equipment and software—a measure of economic vitality in the corporate sector—stalled in the third quarter for the first time since early 2009. Corporate investment in new buildings has declined.

At the same time, exports are slowing or falling to such critical markets as China and the euro zone as the global economy downshifts, creating another drag on firms’ expansion plans.

Corporate executives say they are slowing or delaying big projects to protect profits amid easing demand and rising uncertainty. Uncertainty around the U.S. elections and federal budget policies also appear among the factors driving the investment pullback since midyear. It is unclear whether Washington will avert the so-called fiscal cliff, tax increases and spending cuts scheduled to begin Jan. 2.


Treasury Secretary Geithner: Lift Debt Limit to Infinity

( – Treasury Secretary Timothy Geithner said Friday that Congress should stop placing legal limits on the amount of money the government can borrow and effectively lift the debt limit to infinity.

On Bloomberg TV, “Political Capital” host Al Hunt asked Geithner if he believes “we ought to just eliminate the debt ceiling.”

“Oh, absolutely,” Geithner said.

“You do? Will you propose that?” Hunt asked.


Central Banks’ Gold Likely Gone-Eric Sprott

By Greg Hunter’s

Money manager Eric Sprott says, “The central banks’ gold is likely gone with no realistic chance of getting it back.” Don’t expect this revelation to get any coverage by the mainstream media. In an interview last week, Sprott’s analysis was met with words such as “gold bug” and “conspiracy theory.” Sprott answers that sort of disrespect by saying, “We’ve had so many conspiracies, I don’t know why anyone would think this was unusual.” To back up his point, he named “LIBOR, electricity markets in California and the Madoff” scandals. Sprott’s analysis shows a “flat supply” and at least a “2,500 ton net increase in gold demand” since 2000. “Where’s all the gold coming from?” asks Sprott. He says Western central banks “. . . keep supplying this market with product in order to keep the price down so nobody knows how vulnerable the situation is.” Sprott, who manages nearly $10 billion in assets, boldly proclaims, “We have a shortage of gold.” Join Greg Hunter as he goes One-on-One with Eric Sprott of Sprott Asset Management.


Jeff Clark: So How Many Ounces of Gold (or Silver) Should You Own?

Saturday, November 17, 2012, 2:00 PM

You want to focus on how many ounces you own, not necessarily looking at whether the price is $5 higher today than it was yesterday. How many ounces do you own? That is really the question you want to ask yourself, so you can focus on how much you are really going to need, and the amount really comes down to this.

For me, I am probably going to use some of this gold if we get high inflation. How are you going to protect your standard of living if we get some kind of runaway inflation? And let’s say it's not runaway hyperinflation; let’s just say it's high inflation, 10%, 15%. Remember it was 14% in 1980, so the odds of us getting high inflation are realistic. So if I am going to use that gold to cover my standard of living, you are going to need about two thirds of an ounce of gold for every thousand dollars of monthly expenses. If you want to protect your standard of living and not have your house be ravaged by inflation, so to speak, so that is a good guideline to follow.

So if inflation lasts a couple years, well, you are going to need 15 ounces of gold for every thousand dollars of monthly expenses. That is a good guideline to think about. And if your expenses are more per month, you are going to need more gold than that. If inflation lasts longer than two years, you are going to need more than that, but you can actually use the sales of gold and silver to protect your standard of living. You sell some gold and silver, you are going to get U.S. dollars or Canadian dollars with it and you can use the increase in the gold and silver price to offset the increase in the goods and services you are buying.
So I think that is the way to view it, to look at how you are going to use it. And so the focus again comes back to how many ounces do you own? So if you do not have any, you need to obviously start buying. 


Friday, November 2, 2012

Gold's October Slump Is NO SURPRISE - Buy The Dip!

A number of "things" have kept me away from my blog posts.  Not the least of which were fears that I would turn this site into a biased political rant during the height of this election cycle.

 For what it is worth, I would like to go on the record here and predict the outcome of next week's Presidential election...Despite what our clueless mainstream media would like you to believe...the outcome will not even be close.  I promise that more than once you will here references to the 1980 Reagan vs Carter throw down as the election results come in next Tuesday evening.  The White House will get cleaned out soon...

But I'm here to talk about Gold!

This headline today caught my attention and drew me back to my beloved blog.

Gold Falls 2% After Strong U.S. Nonfarm Payrolls Reuters
Gold slid 2% in heavy trade on Friday, breaking below $1,690 an ounce for the first time in about two months on lowered expectations for economic stimulus provided by global central banks.

This is absolute BULLSHIT!!!  Lowered expectations for economic stimulus provided by global central banks?  Yeah right...if central banks lowered their present "economic stimulus expectations" the global economy would implode immediately!  Who writes this garbage?

Gold is down today for ONE SIMPLE REASON...the US Dollar was up strongly today as the US Equity markets collapsed on the back of what was genuinely a VERY POOR jobs report...despite what the mainstream liberal loving media would have you believe. [I'm sorry.  See what I mean about politicizing my blog.]

In fact, much of Gold's "recent" weakness could be directly related to the "strong dollar" we have seen since October 16, 2012.

Observe the chart below.  The price of the US Dollar is overlayed on the price of Gold.  It's pretty clear from this snapshot of Gold that the value of the US Dollar is a major factor in the "ups and downs" of the Gold price.  [click to enlarge]

Much of Gold's recent weakness has been attributed to "manipulation" in the futures markets.  And though I will ALWAYS believe that Gold, and Silver, are not allowed to trade freely...I can not lay a lot of blame on this "excuse" here and now.

There are many legitimate "technical" reasons for Gold's recent fall from $1725 to today's lows.  As well as Gold's failure at $1800 in early October.

Do you know that "seasonally" October is one of the weakest months of the entire year for the price of Gold?  [click to enlarge]

The fall in today's price of Gold therefore has NOTHING to do with today's jobs report signalling ANY lowered expectations for economic stimulus provided by global central banks.  The notion that the central banks are going to stop printing money is LUDICROUS!  No matter the outcome of any election anywhere, the banks will continue to print money.  And because ALL MONEY IS DEBT, the only way to pay for today's debt is to print more money...It's called a circle jerk people!

I'd be buying Gold and Silver here with every extra filthy US Dollar I had in my possession.  As soon as this election is over, and the looming US Debt limit returns to the headlines, Gold and Silver are going to lift-off all over again.

I hope to return to regular blog posts soon.



Tuesday, July 24, 2012

Global Financial Fraud Is WIN-WIN For Gold And Silver

The Special Inspector General for Tarp Issues a Wakeup Call … Lambasts the Government and the Banks

By George Washington on 07/23/2012, via Zero Hedge

The government’s special inspector general in charge of oversight of the Troubled Asset Relief Program (the “TARP” bank bailouts) – Neil M. Barofsky – wrote a stunning editorial for Bloomberg yesterday, concluding:
Americans should lose faith in their government. They should deplore the captured politicians and regulators who distributed tax dollars to the banks without insisting that they be accountable. The American people should be revolted by a financial system that rewards failure and protects those who drove it to the point of collapse and will undoubtedly do so again.

Only with this appropriate and justified rage can we hope for the type of reform that will one day break our system free from the corrupting grasp of the megabanks.
See this for background.
This is not the statement of a raving blogger (although some of the best reporters write blogs) or a conspiracy theorist living in his mom’s basement (even though some conspiracies are real).
This is the former government official who oversaw the bailouts.

And just where did all that TARP money go?
Interest Or No Interest On Excess Reserves, That Is The Question

July 21, 2012
Today billionaire Eric Sprott spoke with King World News about his greatest fear.  Sprott literally shocked KWN by saying, “My biggest black swan, Eric, is that I think I’ll be right one day.  My worry is that one day they just shut everything down.”  Sprott, who is Chairman of Sprott Asset Management, also added, “They (central planners) say, ‘You know what, we just can’t keep this up anymore, the whole Ponzi (scheme), we just can’t do it and we shut it down.’”  

Sprott went on to say that all of the markets would then “freeze.”  But first, here is what he had to say about the ongoing ciris in Europe:  “It’s beyond the ability of governments to deal with all of these weak countries.  There are only one of two answers:  Yes, someone could print as much money as they want.  Maybe they could print $5 trillion and say, ‘We’ll back up all of the banking systems.’”

“And then one could maybe say the problem is solved.  Of course the problem is, if they print $5 trillion, everyone knows they can’t back it up with anything.  Then you will lose confidence in the currency and you will go into hyperinflation because people will realize that real things are safer than paper things, including bonds and stocks and things like that.

So there are only two choices, they’ve got to print or there are going to be some defaults, which is the natural offspring of a Minsky moment.... 

“Sooner or later you have to write off the debt or you have to inflate it away.

Continue reading the Eric Sprott interview here

Embry - Expect Shortages Of Gold As Soon As Next Month
From Eric King,
July 23, 2012
“We are moving toward a fundamental shortage of gold, and I believe it may start as soon as next month.  I think the bottom is being put in right now.  You see once again with the stock market trading lower, they just turn the algorithms on and grind the price down.

But this action is all just building a massive base in gold.  I think the big issue going forward is this growing shortage of available physical gold.  I strongly believe one of the reasons for the shortage is a lot of it is headed East.  The last four or five months of the year gold should challenge and easily take out its all-time high.  

For what it’s worth, there is an enormous amount of interference in the gold and silver share market.  I think that will end as soon as gold and silver break their highs.  When that happens, I think it’s going to unleash a rally in these stocks that is absolutely going to stun people.  People will be shocked that don’t understand the full extent of the manipulation and how cheap these stocks have become as a result of it.”

Continue reading the John Embry interview here

London Trader - The LBMA Gold Price Fixing Scheme Is Over
From Eric King,
July 20, 2012

With many global investors still concerned about the recent price action in gold and silver, today King World News interviewed the “London Trader” to get his take on these markets.  The source told KWN that “... the LBMA’s price fixing scheme is coming to an end.”  The source also said that because of this, the eventual “move in gold and silver will literally frighten most people.” 

Here is what the source had to say:  “It is now beginning to be discussed, openly, that the unallocated gold is not at the banks.  This is definitely the case with many of the allocated accounts as well.  The reason I’m pointing this out is you have a more ‘open’ disclosure that’s taking place with regards to this.

“This tells me there is something major that is happening behind the scenes.  It tells me that the LBMA’s price fixing scheme is coming to an end.  You have these naked short positions, that are incomprehensible to most people, in both gold and silver....

“As this scandal is brought to light, that the unallocated gold and silver are not there, and much of the allocated gold and silver is not at these banks either, and as you see these naked short positions unwound, the world will witness a massive price rise in in both gold and silver.  The move in gold and silver, at that point, will literally frighten most people.  They simply won’t understand what is happening.

When someone goes to a bank and deposits money, if you look at the small print, you don’t actually own that money, you’ve simply loaned it to the bank.  The banks will then turn right around and lend ten to one or whatever leverage they determine to use with your cash.  Well, when there is a run on the banks, as there has been in Europe, the money is printed by governments and given to the customers to calm things down.

The underlying problem here is that when the run on physical gold and silver begins, how will the banks print the gold and silver?  It’s not possible.  So something is brewing here.  There’s no smoke without a fire.  The reason this information is beginning to be discussed more openly is because of legal reasons.  They need to be able to say, ‘We disclosed to people that the gold and silver wasn’t there.’  

Yes, this will include a scandal at the LBMA in those unallocated accounts.  The paper leverage in the LBMA system is off the charts.  Investors believe their gold and silver is sitting in those unallocated accounts, and they will be in shock when they find out it isn’t there.

We are talking here about a run on the bullion bank.  As this unfolds there will be a failure.  These people will only receive the fixed price before trading is halted.  This will not be called a default.  Then there will be a massive gap in the price of gold and silver.  But the bullion banks will not be allowed to go bankrupt during this process.  There is a ring of counterparties here.  If one of them fails, the whole system can fail.  So they will not be allowed to fail.”

Continue reading the London Trader interview here

It should be OBVIOUS now, print money - Precious Metals WIN.  Default on global sovereign debt - Precious Metals WIN.


Got Gold You Can Hold?

Got Silver You Can Squeeze?

It's NOT To Late To Accumulate!!!