Wednesday, February 29, 2012

Sale Prices On Gold And Silver, While Supplies Last!

The ECB just created nearly 3/4 of a TRILLION dollars, and handed it to the financial system...why would anybody sell their Silver and Gold?

ECB hands out $712-billion in loans to banks

European banks gorged themselves on a second helping of cheap European Central Bank loans as the ECB moved with alacrity once again to avert a banking liquidity squeeze and take the edge off the sovereign debt crisis.

On Wednesday morning, the ECB lent €529-billion ($712-billion U.S.) of 1-per-cent money to 800 banks, which was slightly above the consensus figure but well below one or two predictions that as much as €1-trillion would be soaked up. In the last auction, in December, the ECB loaned €489-billion to 523 banks.

The loans, known as the long-term refinancing operation (LTRO), were introduced by then-new ECB president Mario Draghi late last year as the bank’s prime effort to prevent a Lehman Bros.-style banking collapse on home ground. While the ECB had hosed out cheap loans in the past, under Mr. Draghi’s predecessor, Jean-Claude Trichet, they were short-term loans. The new loans have been for an unprecedented three years.

The December LTRO was widely credited with triggering a bank rally and bringing down the yields on the sovereign bonds of highly indebted countries, such as Italy. That’s because the banks, under the urging of French president Nicolas Sarkozy, used some of the loans to buy government debt.

Economists and analysts attached no particular significance to bigger size of the second LTRO operation. There is no doubt that more banks took part on Wednesday because the EBC relaxed loan-collateral requirements, allowing hundreds of smaller banks to participate in the auction.

Italian and Spanish banks were the biggest consumers of the cheapie ECB loans in December; together, they absorbed €215-billion of ECB liquidity. Economists think the Italian and Spanish banks were the leading borrowers again today. Greek banks were probably only minor participants in today’s auction, because of the ECB’s decision this week to suspend the use of Greek government securities in ECB refinancing operations.

Since Wednesday’s ECB auction included funds rolled in from shorter-dated auctions, a net €314-billion of new liquidity was added to the banking system. In December, the equivalent figure was about €193-billion.

Economists generally put a positive spin on Wednesday’s auction.

Martin Van Vliet, of ING Financial Markets, said “in our view it is a Goldilocks outcome: not overly large as to generate concern about the fragility of the European banking system, but high enough to pre-fund a substantial share of maturing bank debt and spark more buying of Italian and Spanish paper.”

The euro was down slightly against the dollar after the EBC auction. The FTSE was flat but Eurofirst 300 was up 0.4 per cent.

The ECB has hinted strongly that no third LTRO is coming, because of moral hazard. Some of the central bankers, notably those from Germany, fear that the cheap loans are effectively a form of subsidy. In a note published last week, Deutsche Bank’s economists said that “bank restructuring is undermined by an overly generous provision of funds from the central bank.

“Instead of going through painful restructuring, banks may use the cheap central bank money to fund large-scale purchase of government bonds in the hope to use the profits from the carry trade to strengthen their balance sheets.”

Over the past 11 weeks, the ECB has created an additional 10% of the Eurozone’s entire money supply...Why would anybody sell their Silver and Gold?

Bumbling Ben Bernanke has created over $2 TRILLION over the past 6 months and because "he" sees no more reason for more you are going to sell your Silver and Gold?

This might make a great headline for those opposed to the TRUTH that Gold represents, but it is NOT a reason to sell your Silver and Gold!

Gold down 5 percent, biggest one-day drop in 3 years
(Reuters) - Gold fell 5 percent to below $1,690 an ounce on Wednesday for its biggest one-day drop in more than three years, as speculation that central banks might be done with easy monetary policies led funds to exit the bullion trade.
Gold fell nearly $100 and silver was down $3 from session highs. Losses started to snowball at 10 a.m. EST (1500 GMT) after U.S. Federal Reserve Chairman Ben Bernanke did not mention another round of monetary easing was imminent.

Another round of monetary easing wasn't imminent?  What in the hell do you call the $713 BILLION the ECB just force fed the financial system this morning?

When Ben Bernanke talks, why do people listen?

Bernanke Tries Talking Down Commodities

February 29, 2012, at 1:26 pm
by Dan Norcini in the category Trader Dan Norcini | Print This Post | Email This Post

Click here to visit Trader Dan’s website…

Dear CIGAs,

Today was Fed Chairman Bernanke’s chance to testisfy before the Congress’ Financial Services Committee. Here is a quick synopsis of his comments as I see them.

"The economy is getting better based on what we can see of the employment numbers but it is not growing at a fast enough clip to justify any immediate change in our accomodative monetary policy. The uptick in hiring has been helped by this policy and any change to it at the present time is not warranted. Real Estate is still a concern. Us fiscal condition is dire and faces a serious challenge at the end of this year. Inflation is not a concern although temporary rises in energy prices bear monitoring".

There you basically have it.

Based on this testimony, gold and silver were murdered. The supposed reason? – We are told that traders were expecting QE3 to be imminent and were disappointed because the usually dovish Bernanke did not sound quite as dovish as before. Thus the metals were hammered mercilessly lower.

Excuse me – but as a trader who watches these markets each and every day for more hours than I would prefer anymore, I have not seen any analyst explain the reason for the heretofore rally in the metals as traders EXPECTING AN IMMINENT QE3 program to launch.

The reason for the rally has been expectations by the market that Central Banks would keep the liquidity spighots open for the foreseeable future (near zero interest rate policy coupled with QE out of Europe and the UK) and thus create an environment in which there was little opportunity cost for buying the metals. This has been generating RISK TRADES in which traders/investors buy both stocks and commodities and generally sell off the Dollar, which was particularly pronounced after a rush back into the Euro once traders were convinced that the immediate fallout from the Greece debacle was past.

Comments this morning trying to explain the sell off in gold mentioned the failure of the metal to make it through the $1800 level and downside stops as the culprit but ironically they are deathly quiet in regards to silver, which only yesterday had staged a MASSIVE UPSIDE BREAKOUT on strong volume out of a congestion zone. Yet today we saw a nearly 8% wipe out in silver which completey erased yesterday’s breakout and then some.

Click here to read the full article…

Following today's announcement by the ECB regarding the creation of $713 BILLION, Gold and Silver prices were firm and beginning to rise.  At 7:55AM est Zero Hedge commented:

Silver Surges 4.5% To Over $37/Oz On "Massive Fund Buying"

Gold rose 1% in New York yesterday and closed at $1,783.90/oz. Gold rose in Asia to a high of $1,790.16 it’s highest since mid November then edged down.  Europe this morning saw sideways trading until unusually volatile trading around the London AM fix saw gold rise from $1785.oz to over $1790/oz at 1030 GMT and then fall quickly to $1783/oz.

Spot silver has gained another 0.5% to $37.05 an ounce, after surging 4.5% yesterday once it rose above resistance at $35.50/oz. Silver reached a 5 month high of $37.21 but remains more than 30% below its nominal high in of April last year of $48.44.

Over 800 European banks have taken €529.5 billion from the ECB today after taking €489 billion euros at the first tender in December. The ECB’s 3 year lending is now near 1 trillion euros ($1.35 trillion) and the ECB’s balance sheet looks increasingly precarious.

Although the flood of paper has been credited with fuelling a rally on Europe’s distraught bond markets and safeguarding the region’s banks, it is another exercise in kicking the beer keg down the road as it fails to address the fundamental issue which is the insolvency of many European banks and many European nations and the obvious risk of contagion from that.

The continuation of ultra loose monetary policies increases the risk of inflation which will benefit gold which is an excellent inflation hedge. Extremely low yields on deposits and “risk free” sovereign debt means the opportunity cost of carrying non yielding bullion remains very low.

Spot silver gained 0.4% to $37.05 an ounce, after surging 4% and hitting a 5 month high of $37.21 in the previous session.

Silver as ever outperformed gold yesterday and traders attributed the surge to “massive fund buying” and to “panic” short covering. Some of the bullion banks with large concentrated short positions covered short positions after the technical level of $35.50/oz was breached easily.

Massive liquidity injections and ultra loose monetary policies make silver increasingly attractive for hedge funds, institutions and investors.

This time last year (February 28th 2011) silver was at $36.67/oz. Two months later on April 28th it had risen to $48.44/oz for a gain of 32% in 2 months.

There then came a very sharp correction and a period of consolidation in recent months. Silver’s fundamentals remain as bullish as ever and the technicals look increasingly bullish with strong gains seen in January and February.

Very bullish is the fact that silver also remains more than 30% below its record nominal high 32 years ago in 1980 and more than 75% below its inflation adjusted high of $140/oz in 1980.

The gold-silver ratio dropped to its lowest level in 5 months, after silver rose more than 12% so far this month and an enormous 34% this year, outperforming other precious metals.

Rising holdings of silver-backed ETF’s also indicated growing investor interest in the metal. The overall silver Exchange Traded Funds holdings rose to 491.079 million ounces, the highest since last May.

Spot platinum gained nearly 0.5% to $1,722.24, as investors await the latest in Impala Platinum's dealing with an illegal strike that has disrupted production at Rustenburg, the world's largest platinum mine.

Coincidentally, at 10AM est as The Money Printer In Chief, Ben "I lie like a filthy doormat" Bernanke took a seat before Congress to tell our "fiscally inept" legislators that pigs look better with lipstick on them, Gold and Silver suddenly disintigrate  Yeah like this guy is going to stop printing money in an election year...inflation is barely 2%...and the economy is chugging along.

The criminals that inhabit the CRIMEX want you to believe just that:

click to enlarge

And you should sell you Silver and Gold?

LTRO – Fatter than El Gordo
By: Adrian Ash, BullionVault

Gasp at the sheer size of El Tro, the €1 trillion money storm raining down on Europe's banks...

The FATTEST PRIZE in the world's biggest lottery, El Gordo – the "Fat One" – just keeps getting fatter, according to its promoters.

But even the fattest total of prizes to date – some €2.5 billion at Christmas 2011 – looks a tin-ribs next to El Tro, the storm of money now raining down on Europe's banks.

Wednesday's Long Term Refinancing Operation took the grand total of giveaway money to more than €1 trillion, pumped out by the European Central Bank and known by the acronym LTRO. It is christened El Tro by us here at BullionVault today via the Catalan for "thunder". Because that's just what people keep calling it – El Tro.

"You can't argue with [that]," reckons one Credit Agricole analyst, nodding at the €530 billion which El Tro will hand to commercial banks when the latest chunk of cheap-money loans is settled on Thursday. But he should add two exclamation marks (¡the first upside down of course!) and do PR for the Spanish lottery's El Gordo instead.

Because El Tro – Europe's money storm – demands a far stronger sales pitch than that.

In just two operations in barely 11 weeks, the ECB has created an additional 10% of the Eurozone's entire money supply, lending out €3,084 for every soul in the 17-nation union. Throw in the non-Euro banks scrabbling to scoop up El Tro's gifts on Wednesday, and this latest offer was met by some 800 different institutions. Even the cash raised from shareholders by all US and Eurozone banks added together during the crisis of 2007-2010 fails to match the size of El Tro's gifts.

And make no mistake: the LTRO is a gift. Even if price-inflation subsides to average the ECB's annual target of 2.0% between now and start-2015, the central bank will make a loss of €44.7bn in real terms. Inflation stuck (or pushed above) the latest reading of 2.6% would cost the Frankfurt lenders nearer €62bn...a full 6% of the €1,018 billion now lent out in total.

Any bank looking to book an instant profit meantime can simply stick the cash into 3-year government bonds and turn their 1.0% annual cost into 1.10% with Finnish debt, 1.55% with Belgian debt...or a massive 5.41% per year with Italian debt. Hell, you could buy German Bunds and make risk-free money on anything above 6 years to maturity.

So c'mon! Everyone's a winner with El Tro. Except the central bank, of course. And the banks themselves, if Belgium, Italy or one of the rest fail to make good on their bond repayments. Which the banks already have a very clear interest in avoiding, seeing how they're backed by state guarantees, whether stated or implicit.

How does one play El Tro? To get a ticket you need a banking license inside the European Union. Then the central bank pings you an email, and makes you an offer you really cannot refuse:

Unlimited loans for 3 years at a cost of 1% per year!

Last December, the prize draw totaled €489 billion. This week the cash pay-out totals €529bn. Apparently that's your lot. ECB president Mario Draghi says today's giveaway was the last. But a trillion Euros will be a lot of money to find when the loans need repaying at start-2015, even though they'll no doubt be worth much less in real terms. We wouldn't bet against a new offer – and with fatter prizes – in the next couple of years. Anyone wanting to bet on it might think buying gold or silver a smart move. But they'll likely need nerves of steel, especially at first.

Just as with US and UK quantitative easing, buy-the-rumor, sell-the-news also applies to Europe's LTRO. Gold tumbled more than 3% on Wednesday, and silver slumped almost 9% at one point, despite the biggest 1-day deluge of money ever seen in history so far. But such volatility is to be expected, we're coming to learn. Trying to fatten the money supply of the world's largest economic region by 10% in one morning is sure to make everyone queasy. And net-net, quantitative easing and El Tro look very similar. The aim looks exactly the same.

Money is handed to banks on terms they wouldn't dare have imagined pre-2008. Officially, the plan is to boost lending to small businesses. The central banks all promise that this cash injection is only temporary (3 years for LTRO, undated for QE and clearly indefinite in the case of Japan) and will be withdrawn in future. A good chunk of it winds up in government bonds. Very little, if any, reaches what TV news anchors calls the "real economy".

"The idea that the long term repo operations have eased the supply of finance to small businesses in the Euro area is a myth," as Bank of England governor Mervyn King to UK politicians in London today.

"What it has done is to provide a source of funding to banks particularly in the southern member countries of the Euro area which were experiencing a bank run, enabling them to fund the withdrawal of funds."

Note that our Mervyn didn't say the loans were a round-a-bout way of keeping Spain afloat, even though Spanish banks – heavy players of El Tro the first time – accounted for 97% of the increase in Eurozone government debt held by all Eurozone banks in the 3 months to Feb. Because note too that, by the end of next month, the Bank of England itself plans to hold one-third of all UK government bonds in issue.

So pot, kettle and all that. And just as with the US Fed and Bank of England's un-ending queasing, so the ECB's unlimited loans look likely to become a permanent and regular feature for gambling fans.

Another day, another Fed and bullion bank intervention
Submitted by cpowell on Wed, 2012-02-29 18:22. Section: Daily Dispatches

1:24p ET Wednesday, February 29, 2012

Dear Friend of GATA and Gold (and Silver):

Interviewed today by King World News, Sprott Asset Management's John Embry discusses another smash in the gold and silver paper markets by their "manipulators," the bullion banks:

Market analyst and gold mining entrepreneur Jim Sinclair writes that today's action in gold is an "intervention" functioning as "window dressing" camouflage for more "quantitative easing" by central banks:

And MarketWatch quotes Richard Hastings of Global Hunter Securities as saying today's comments by Federal Reserve Chairman Ben Bernanke may have been "designed to take out some of the inflation in the industrial and commodity side of the markets right now, since the Fed does not want inflation to creep up and threaten its ultra-low rate policy at this time":

That is, more market manipulation by the Federal Reserve, market manipulation being, as GATA has been noting for many years, central banking's reason for being:

"And so we have come to an era of daily market interventions by central banks -- so much so that the main purpose of central banking now is to prevent ordinary markets from happening at all." (

Well, at least this manipulation and intervention are being acknowledged in public more often now. But don't ask GATA when they'll end or when foreign central banks and sovereign wealth funds will pull the plug on the operation by dumping U.S. government bonds and buying gold and commodities all at once. That portfolio rebalancing has been happening gradually for a long time, the plug will be pulled only when those foreign central banks and sovereign wealth funds consider themselves fully hedged, and they won't be tipping us off the night before.

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


Today legendary value investor, Jean-Marie Eveillard told King World News he believes central banks are desperate and they are intervening in the gold market.  Eveillard, who oversees $50 billion at First Eagle Funds, had this to say about the situation, “Usually I don’t have much to say for bullion regarding day to day trading.  But a move of $75 is somewhat striking.  Central banks acknowledge they intervene in foreign exchange markets.  They (central banks) sort of don’t exactly deny, but they are very quiet about the fact that obviously they also intervene in the gold market.”

Jean Marie Eveillard continues:

“For all I know that may be the case today (that central banks are intervening in the gold market).  Whether the fact that it’s the last day of the month is important or not, I leave that to traders to explain, if there is even an explanation there. 

I understand this morning that Mr. Bernanke said something to the effect that he didn’t see the point to having additional stimulus right now, although if necessary he would provide it....

“Investors have to remember that in only a couple of months the price of gold, up until yesterday, had recovered from $1,525 to $1,785, which is not peanuts.  Today we are just giving up a portion of that move.

But from someone who has a long-term outlook like myself, it used to be the Federal Reserve and the Bank of England that were printing money like there was no tomorrow.  Then the ECB did.  Now the Swiss National Bank is doing it too and indeed the Bank of Japan gives the impression they are joining the party as well.

Maybe the Japanese don’t like being alone in not joining the others, particularly since their economy has been flat on its back for almost twenty years.  They had also been complaining bitterly that the yen had been too strong. 

The other day somebody pointed out, and I have not checked the numbers, but somebody stated that over the past three to five years, the top five central banks in the world have increased their balance sheets by 70% of all of the gold mined over the past 3,000 years. 

To me if it’s true, and it doesn’t matter whether it’s three years or five years, it’s mind boggling.  To me it indicates central banks have been truly desperate over the past three to five years.  

They (central banks), of course, have been trying to offset the leveraging of the government debt.  They have been trying to stabilize matters because of the tremendous decline in the private sector.  They have been trying to avoid a return to the Great Depression.

But as the Austrians (Economists) like to say, ‘If you were stupid enough to let a credit boom go on too long, then once the credit cycle turns, which it did in 2007 and 2008, you have to be careful not to try to patch things up in the short-term.  Stabilizing the short-term causes tremendous danger to the medium and long-term.’ 

So with all of this as the backdrop, I wouldn’t worry too much about what happened today with gold and silver.”

Bob “The International Forecaster” Chapman is watching the precious metals raid and even he can’t believe the depth and depravity of the efforts the Elite are using to stop gold and silver’s rallies dead in their tracks. According to Bob, and we must agree, the raid will fail. It can’t work in the long term, the underlying fundamentals show that fiat currencies are going the way of the buggy whip and the floppy disk. This is just another part of the concerted effort to try and undermine our faith in precious metals and jack up the confidence in paper currencies/ assets. But just like the London Gold Pool of the 1970′s, you can’t change the course of a market with platitudes. The market always speaks truth to power.

Do you, dear reader, really believe that this pathetic and BLATANT "raid" by the Gold cartel via the CRIMEX is going to halt the demand for PHYSICAL Gold and Silver.  If anything this desperate attack on THE TRUTH is all the evidence one needs to own these Precious Metals to protect and insure their wealth.

And lest we forget, in all of today's whirlwind of Bernanke BS, today was First Notice Day for holders of CRIMEX March Silver contracts.  Clearly the banking cartel is coming up a bit short on physical Silver to meet delivery demands.  This more than anything likely explains today's raid on Gold, and coincident fallout in Silver.  For if EVER there was a reason to own these Precious Metals, the ECB just gave us a dandy this matter what that JACKASS Bernanke would "like you to believe".  Somebody has to finance the USA's 1.2 TRILLION Dollar deficit, and Bernanke is going to print the money despite ANY suggestions to the contrary.

16,310,000 ounces of Silver are standing for March delivery at the CRIMEX.  The total registered silver inventory available for delivery at the CRIMEX is 31.122 MILLION ounces.

Considering there are presently 65,443 May Silver contracts open at the CRIMEX, each representing 5000 ounces of Silver, 31.122 million ounces of registered Silver is chump change.  Those May Silver contracts represent 327.165 MILLION ounces of Silver that the CRIMEX OBVIOUSLY doesn't possess.  Is the CFTC aware of this little statistic?

Has demand for physical Silver overwhelmed supply?

PEOPLE!  700 MILLION ounces of Silver are mined GLOBALLY each YEAR.  How can almost 50% of  one year's mined Silver supply be promised under contract at the "just" the CRIMEX...IN JUST THE MONTH OF MAY?

Got Gold You Can Hold?

Got Silver You Can Squeeze?

It's Not Too Late To Accumulate!

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