Archive for the ‘Gold & Silver’ Category
Central banks have routinely manipulated the gold market since the beginning of fractional reserve banking, but they have always eventually failed in their quest. This time there is circumstantial evidence that we could be on the verge of the most spectacular failure so far.
Physical bullion differs from other investment media because today there is no secondary market. Buyers of bullion are not speculators, or even investors: they take delivery, hoarding it from the market, and are not tempted to resupply it at any price. To some degree this loss from the market has been replaced by newly mined gold and scrap, but the size of the market is such that gold from these sources is now insufficient for hoarding demand. So when the bullion banks try to shake out the bulls, as they have recently, they may manage to reduce their short position in the paper markets; but the lower prices for bullion simply generates extra physical demand. The result is that the size of the paper market has become increasingly dangerous relative to the physical gold actually available.
A fascinating insight into this process is recorded in an interview of one of the leading American coin dealers, who described how the fall in the gold price in 2008 from $1,000 to $700 was the opportunity for hoarders to clean out the market. I quote:
“…all product worldwide disappeared. Within weeks the U.S. Mint was shut down. The Canadian, Austrian, and Australian Mints were all eight to 12 weeks back-ordered or shut down. The Australian Mint stopped taking any new orders in July or August for the rest of the year. The Rand Mint, for the first time ever, sold out of all its product. One wealthy Swiss businessman flew his own 747 there and cleaned them out.”
The interview, which is well worth reading in its entirety, can be found here. It is particularly apposite given the recent shake-out in the futures market, raising the question, how much physical disappeared in the process? Not surprisingly, the interviewee is also worried that rising prices will merely generate yet more demand; so the absence of a secondary market is crucial to understanding the problem facing central and bullion banks today.
by Izabella Kaminska
FT Alphaville missed this IMF paper when it first came out in April, 2010.
Authored by Reza Moghadam, director of the IMF’s strategy, policy and review department, it discusses how the IMF sees the International Monetary System evolving after the financial crisis.
We’ll cut to the chase and draw readers’ attention to the final bubble in the following chart, found on page 4:
Which means, in the eyes of the IMF at least, the best way to ensure the stability of the international monetary system (post crisis) is actually by launching a global currency.
And that, the IMF says, is largely because sovereigns — as they stand — cannot be trusted to redistribute surplus reserves, or battle their deficits, themselves.
The ongoing buildup of such imbalances, meanwhile, only makes the system increasingly vulnerable to shocks. It’s also a process that’s ultimately unsustainable for all, says the IMF.
Or as they put it:
The global crisis of 2008/09, for all its costs, has not jeopardized international monetary stability, and the IMS is not on the verge of collapse. That said, the current system has serious imperfections that feed and facilitate policies—of reserves accumulation and reserves creation—that are ultimately unsustainable and, until they are reversed, expose the system to risks and shocks that a reformed system could minimize.
All in all, the IMF believes there has simply been too much reserve hoarding going on:
Reserve accumulation has accelerated dramatically in the past decade, particularly since the 2003-4. At the end of 2009, reserves had risen to 13 percent of global GDP, doubling from their 2000 level, and over 50 percent of total imports of goods and services. Emerging market holdings rose to 32 percent of their GDP (26 percent excluding China). Twenty-seven of the top 40 reserve holders, accounting for over 90 percent of total reserve holdings, recorded doubledigit average growth in reserves over 1999-2008.
Holdings have also become increasingly concentrated, with over half the total held by only five countries. These numbers exclude substantial foreign assets of the official sector not recorded as reserves, including in sovereign wealth funds (SWFs), and yet invested in liquid, dollar denominated financial instruments, that have grown even more in recent years.1
Of course, in the first instance, the solution probably lies in closer collaboration between sovereigns, most likely via the more active use of such things as special drawing rights, says the IMF.
But in the end, a global currency makes the most sense, the paper concludes — especially since the SDR is currently just an accounting tool that draws on the freely usable currencies of member states , not an actual currency itself.
I love this guys outlook and have had the pleasure of talking to his son, Andy, a few times about our current situation in the world and the importance of metals…It was like talking to an old friend and very refreshing to be able to reach him on his cell, he chatting with a veritable stranger…We met because of one of Jason’s first Silver auctions online using the London fix rather than spot for determining the price of our bids which throughly confused most everyone…Because of that I ended up paying the price to buy it from Andy whom of course won the bid…I teased him something awful about rigging the system 
) If after reading this you are interested in either learning or other buying contacts I will attach a list at the bottom from gata.org of excellent resources…You may even become hooked…as I am!!
~jude
Greetings from David’s desk….
An unexpected bill popped up today and I needed extra cash. A quick call to our local wholesaler and he stopped by, picked up 20 Gold Buffalos and a Silver Mint Box and left behind a check for $34,000. From my phone call to the time I had the check in my hands less than 30 minutes had passed. Now that’s what I call liquidity. Try that with your stock or bond certificate. That’s the good news. The bad news is it kills me to sell my metals! I know, I know, that’s what they’re for but you work so hard to build UP your pile that it is not easy to shrink it. I look at it this way – I just spent some of my kid’s inheritance.
Today was not one of my better ones. My daughter and a close friend both insinuated that I was too negative. I spent too much time defending my view that the mosque should be built anywhere BUT near the 9-11 site and that the economy is heading South by the end of the year. As Sergeant Joe Friday says, “nothin’ but the facts mam.” And the facts are clearly laid out in the Chris Wood article, later in this blog, titled Caveat ECRI. Read it and see if you canlogically find a reason to expect the economy to be robust by year’s end. Remember, the ECRI index is a “leading indicator,” and predicts the way the economy will perform six months out.
I feel a kinship with Richard Russell. His logic and way of seeing things dovetails perfectly with my perception of things. In his remarks, today, he mentions that he too is feeling negative. He says, “As my readers know from earlier reports, it would be difficult to find anyone more negative than I am– but perhaps Marc Faber was when he wrote “I truly think we are all toast.”From the August report by Marc Faber, editor of the Gloom, Boom & Doom Reports.
I think Marc really means what he says. Marc is no late-coming dummy. He’s been around a long time, and he’s on the Barron’sprestigious Round Table. But are we all really “toast?”
The Financial Times published a story on 29 July to clarify the gold transaction hidden at the back of the Bank for International Settlements’ latest annual report. This clarification is about as effective as headlights in thick fog and has set off a fair amount of speculation in the gold blog-o-sphere. The FT article is important, because it is a fair assumption that the journalists who wrote it will have cleared its factual basis with the BIS so far as the BIS is concerned.
The hard facts are few. We know that the BIS entered into a gold swap agreement with several commercial banks involving 346 tonnes of gold, worth about $14bn at current prices: that much has been reluctantly revealed in a statement by BIS. However, the BIS does not possess 346 tonnes of gold; the official figure as declared in the World Gold Council statistics at the end of 2009 showed the BIS holding less than 120 tonnes. Either the BIS has more gold than it is letting on (highly unlikely), or most if not all of it has come from somewhere else.
By: “A SOURCE”
As always I remind readers that this has been going on for quite some time under Presidents of BOTH parties… ~jude
So . . . you think you know quite a bit about Obama and his band of thieves.
You don’t know anything yet. Read on all of this as it all comes together in the last part…….. a must read.
-
This is an interesting story put together from various articles and TV shows by the British Times paper. It shows what Obama and his friends are really all about. It’s not hope and change, it is money.
I warn you, the first part is a little boring, but stick with it. The
second part connects all the dots for you (it will open your eyes). The end explains how Obama and all his cronies will end up as
multi-billionaires. (It’s definitely worth the read. You will not be disappointed).
From David’s Desk
www.MilesFranklin.com
“Ownership of gold means you are your own central bank.” Jim Sinclair
On Monday, Richard Russell warned that the market was in very dangerous territory and that the Dow was flirting with danger as it approached the break-down from a long-building head-and-shoulders formation. Support was around 9800. Today, the Dow was down 268.22 to 9870.30. Here is Russell’s chart, once again. You can visualize what he is referring to…
What he wrote is so important; I will show it to you again. He said:
Why do I think the stock market will be so rotten? Here’s why. Look at the chart of the Dow in the current issue of Barron’s. Or study the chart of the Dow below. If this isn’t the mother of all head-and-shoulder top-formations, I’ve never seen one. If this formation falls apart, I expect the break to signal the start of a brutal decline in stocks. The first area of support is Dow 10,000. The base of the entire formation comes in at Dow 9800. If the formation breaks down, I think all previous plans, scenarios and strategies will hit a stone wall. Wall Street and public sentiment will turn black-bearish. Consumers will head for the storm cellars and once in, they’ll shut the door above them and lock it.
Another day like today and the Dow will breach the neck-line support at 9800. Why is that so important? Because most of the action in the stock market is program trading by large funds. Their computers are programmed to buy and sell at certain strategic points like moving averages, previous highs and lows and Fibonacci points. Whether this information is actually significant is not important. What is important is that the funds and their computers think it is and act accordingly. A break-down from a long-term head and shoulders is a big sell signal to most of the computer algorithms. It is like fulfilling your own prophecy. They expect the market to continue to fall, so they sell which forces the market lower which re-enforces the validity of their programmed trading platforms. Once this waterfall drop starts, it can go a LONG way. This is what Russell is alerting you to.
Nation introduces a new Silver-based currency to avoid the fallout of the failing US Dollar.
Victoria, TX (PRWEB) June 23, 2010 — As the U.S. federal government increases its pressure on states and individuals working to reclaim rights guaranteed by the U.S. Constitution, the response from the freedom movement varies across the U.S., from the subtle “Tenth Amendment” resolutions to the re-awakening of state militias
But to the south, the republic of Texas nation has taken a slightly different, yet more pro-active and hands-on approach.
“Everything’s bigger in Texas,” says District 8 senator Robert Wilson, “especially our will to resist tyranny. Remember the Alamo? We won nationhood by international treaty in 1836 when we soundly defeated Mexico’s president Santa Anna and his armies at the battle of San Jacinto. And since the U.S. Constitution doesn’t grant congress the authority to ‘annex’ another nation by a ‘resolution’, we stand on a solid lawful foundation to enjoy all the rights God granted us, like establishing our own separate economic system.”
Executive Summary – This is our writing. At times we get given information by People that are in Restore America Plan at various levels. This is based on our analysis solely.
First an Unverified History of RAP Roots? – This was taken from a post on a forum.
“Hey, the military approached Tom Schultz to reign in Obama with a plan in hand. The plan was based on a War College scenario a Lt Colonel created.
Some members of the Supreme Court validated the Plan and supported it as the one way to reoccupy the vacated seats of the Republic.
The elders went out and rallied the initial grand juries and got the documents filed with the Governors in record time.
Once the initial word came out it went viral around the world. This slowed all concerned so they could endure as they took the USA corporate system of funding down, it would not in-turn collapse the other economies.”
(My insertion) – At some point Sam Kennedy broker from Tim Turner taking numerous Grand Jury members with him and this caused delay while the grand jury members were replaced and trained. This has been done and they are seated now as I am told.
“Ongoing investigations were completed a few weeks back and the World Court and International settlements foundation issued their orders.
Finally a few weeks ago the right actors were assembled to meet and develop lawful orders for the military. The military was OBE with the Gulf situation and now have formulated plans to move forward with their portion of the plan. Execution of orders issued by the recognized constitutional government.
Pretty amazing stuff really, when you consider it will be accomplished peacefully and lawfully. You got to love them founders for including a reset button in the Declaration of Independence.
Tom Jefferson you’re the man.”
Submitted by cpowell on 05:59PM ET Tuesday, June 1, 2010. Section: Daily Dispatches
8:50p ET Tuesday, June 1, 2010
Dear Friend of GATA and Gold:
Michael Zielinski, editor of Coin Update News, last week noticed that the U.S. Mint seemed not to have followed its policy for adjusting the prices of its numismatic coins. Calling the mint about it, Zielinski uncovered a secret codicil in the policy that prevented what ordinarily would have been a reduction in prices.
Writing about it today, Zielinski concludes with polite understatement: “When the new pricing policy was introduced, the U.S. Mint Deputy Director stated, ‘Transparency, agility, and customer service are the catalysts for our new pricing method.’ Having an unrevealed internal policy which can override the published policy doesn’t seem consistent with the claim of transparency.”
If you think the Mint has some shortcomings with transparency on gold, GATA could tell you, over a beer or two, about the secrecy tightly woven around gold by the Federal Reserve and Treasury Department, but we might not finish by closing time. At least Coin Update News didn’t have to sue the mint to get an answer.
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