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Wednesday October 1, 2014
tableTable of Contents
Miles Franklin Q & A: Manipulation of the Markets
From David's Desk: Quotes of the Day
The Holter Report: It's All About the Dollar!
Andy Hoffman's Daily Thoughts: Crescendo
Featured Articles: Le Metropole Cafe, Jim Sinclair, Zero Hedge
Market Recap
About Miles Franklin 


Q: How does this new law in Minnesota affect Miles Franklin business?

Does the law mandate any reporting requirements to the state which would

compromise investor confidentiality? Is there a new state tax involved which would increase your cost of doing business, and thus be passed on to investor's?

See article below:

 

http://www.numismaticnews.net/article/news/general/dealers-to-reject-minnesota-clients?et_mid=680729&rid=238162845

 

David Schectman's Answer:

 

The new Minnesota law does not affect Miles Franklin in a negative way. We have taken all the required and necessary steps to be compliant. The law is geared to police the firms that are shady and this has no effect on us. Also, we are not considered a "dealer" by the State of Minnesota. Client funds are not mailed to Miles Franklin in Minnesota. They are sent to a trust account in North Dakota and our supplier handles the shipping. That is how we have always done business, so in essence, we are not a Minnesota dealer. The "dealer" is a large North Dakota wholesale company. Nothing in the law will compromise your confidentiality and there are no new tax consequences to affect our pricing.

 

Q: Can you explain what the cost basis (compared to actual cost) is on silver mining operations, I keep hearing of different mines that can produce from $8-$14 dollars an ounce? It sounds like a stock pump, but if its even close, I am getting very concerned about the price of silver and a better world for me tomorrow.

 

Bill Holter's Answer:

 

There are several ways to calculate "cost" of production.  First, much of silver is produced as a byproduct of copper, zinc etc. production.  The value of the silver is used as a "credit" to lower the cost of the copper, zinc or whatever production.  As for pure silver mines, there is a "cash" cost and also an "all in" cost.  The cash cost consists of what it costs to mine the silver once the mine is up and running.  This would include equipment, energy, labor etc.  Then you have the "all in" cost which would include any monies spent on drilling and exploration, acquiring land or deposits.  While the average cash cost of production is currently in the mid to high teens per ounce, the average all in cost is mid-twenties.  Yes there are some low cost producers like Fortuna who have a cash cost of only $4 per ounce but as the price has dropped, more and more operations have turned unprofitable.  A perfect example is Aurcana with their Shafter, Texas mine, they have put their property on "care and maintenance" until the price rises presumably to $30 or more per ounce.  This is a deposit with over 100 million ounces which will not come to market and was projected to be the 3rd largest producer in the U.S.  In the end it will be supply and demand ...the current manipulated prices are assuring that supply diminishes and demand increases.  

 

Q: President Obama said in a televised speech this month that American auto & manufacturing are flourishing. Businesses are in their longest, uninterrupted stretch of job creation in history. Is this just more propaganda and lies or is there truth to his claims?

I live in the Raleigh, NC area and I see, in the last year, construction including highway, homes, and apartment complexes really picking up.  Can you shed some light on this type of growth?  Is this going on in other parts of the country?

Many thanks for your Daily Summary, the information is invaluable.

 

Andy Hoffman's Answer:

It sounds like the propaganda is getting to you - as well as the complimentary tools of manipulating markets, to paint a picture that fits that story.  Of course, let's just forget the "glitch" in the story, in that rates have fallen to record lows despite the so-called recovery.  In other words, the "most damning proof yet of QE failure."  Or the fact that commodities are crashing, including lumber.  Or that the majority of stocks are falling, whilst the "Dow Jones Propaganda Average" amazingly never falls.  Or that real economic data is at best flat, and negative when incorporating real inflation rates.  Or for that matter, that U.S. housing data has been declining for a year, as I wrote of in last week's Housing "Recovery" - RIP.

Regarding housing, prices rolled over a year ago, and ONLY "1%" homes above $1 million are still selling - care of endless free money to Wall Street and rigged markets that pad bankers' pockets with large bonuses.  Most new building is in the rental, multi-family units segment as home ownership has fallen to multi-decade lows.  Too bad rents are at all-time highs, too, squeezing consumers on both ends.  Permits, starts, and home sales are down - as are prices in all but the "1% segment."  Not to mention, mortgage purchase applications at a 14-year low.  Frankly, the only "strength" in housing these days is the "confidence" of industry propagandists, who are bearish about the future about as often as Wall Street is about stocks.  Which is NEVER.

As for autos, of course Obama said that as he bailed out GM.  Which, by the way, has been an unmitigated disaster.  GM has executed record channel stuffing (of unwanted vehicles) in the past year, and all industry growth has been in leasing not buying.  Moreover, we're at a record level of subprime auto lending as the Fed's ZIRP policy has re-ignited the horrifying lending practices that led to the 2008 collapse. 

Sorry so rambling, but mountains of evidence refute such conclusions.  And generally speaking, whatever a politician says, the opposite is most likely true - particularly with big elections upcoming.

 

davidFrom David's Desk
David Schectman

Quotes of the Day

 

Yes, $15 silver is a real possibility and only about$2 away tonight. There is nothing but air under the price.the obvious answer is to load up at these prices and be thankful. We'll look back at 2014 in disbelief that silver and gold could fall this far.Look at the fundamentals, the big picture,the long road ahead, and buy all you can.

- Trader Rog, September 30, 2014

 

Even though I already discussed that silver broke the pattern of technical fund net selling being the prime cause of the price decline in the reporting week, the other four metals exhibited a stark similarity in that the managed money category in gold, copper, platinum and palladium all featured big long liquidation and an increase in short positions to the point where the net selling in the managed money category accounted for more selling than any other category. 

 

What this proves is that the collusive commercial trickery of the technical funds, so prevalent in COMEX silver for years, has now spread to all the COMEX metals. Actual supply and demand has been pushed aside in price discovery considerations and has been replaced by crooked dealings on exchanges run by the CME. That's because the quantities of contracts dealt with on the COMEX and NYMEX far exceed the quantities of actual materials being transacted over similar periods of time. And since we know that participants in the managed money category are purely speculative (as are their commercial counterparties), the price of silver, gold, copper, platinum and palladium is being set and manipulated by speculators. This is so against the intent of US commodity law so as to embarrass the crooks at the CFTC and CME. (I would imagine, based upon the regulatory record that the crooks at JPMorgan are beyond being embarrassed). 

Silver analyst Ted Butler, Butler Research, September 27, 2014


 

________________________ 

Today's Featured Articles

LeMetropole Caf� (What's going on with silver?) (China Aims For Official Gold Reserves At 8500t)

 

Jim Sinclair (Every step forward for the Yuan is a long term backwards for the dollar.) (The Economy: "Derivatives Market a $1.2 Quadrillion Time Bomb")

Zero Hedge (What Just Happened In Today's "Crazy" And Biggest Ever "Window-Dressing" Reverse Repo?) (CDC CONFIRMS FIRST EBOLA CASE DIAGNOSED IN THE UNITED STATES) ("Russia Could Ditch Dollar In 2-3 Years")

 

 

Sincerely,

David Schectman
holterThe Holter Report
bill holter
Bill Holter

It's All About the Dollar!

October 1, 2014

 

Sometimes seemingly unrelated news is actually joined at the hip and directly related.  For example, what does Bill Gross leaving PIMCO, China announcing "yuan for euro" direct trade and unrest in Ukraine, ISIS overrunning part of Syria and Iraq, and the recent protests in Hong Kong ...have in common?  I'll talk briefly about each and give you some clues along the way to an obvious ending.

 

First, Bill Gross left PIMCO last week to join Janus funds.  He started the funds over 30 years ago and had grown assets under management to the staggering number of over $2 trillion!  The vast majority of assets held are bonds or some sort of bond/interest rate derivative.  The bull market in bonds which began in 1982 and started with a 15.375% coupon, 20 year Treasury yield has run its course to almost nonexistent yields.  A simple question might be something like "what will happen to bonds when interest rates begin to rise?"  Or another, "what will happen to bond's collateral if these low rates have created asset bubbles?" (They have, everywhere).   

 

Do you think these two questions might have passed through Bill Gross's mind?  Might this thought and the "answers" have contributed to his "exit" from PIMCO?  Might the phrase "getting out while the gittin's good" apply here?  PIMCO already began small asset sales this past Friday and received $10 billion worth of liquidation requests... over the weekend.  This amounts to 1/2% of assets under management without even including a single business day.  Could this be the start of a "run" not only on PIMCO but of U.S. credit markets?

 

Next, and I believe the most significant news ... and not really even reported on, was an announcement out of China on Monday.  The PBOC announced that direct trading of yuan for euros will be allowed in the FX markets.  This move will allow Chinese/European trade and investment to move more freely ...and without the use of any dollars.  We already knew of currency swaps set up with foreign trading partners by China, this latest news is more or less a "starting gun" being fired.  Could this be the start of a "run" on dollars where if they are not needed they will be sent back to the States?  This is truly huge news and how it is not reported on in the U.S. is simply amazing!

 

Another area to look at is the violence and unrest in Ukraine, the new "caliphate" state in Syria and Iraq, and now protests in Hong Kong.  Much speculation has been written which suggests all of these are U.S. sponsored upheavals.  I will only ask questions rather than writing in depth as each one of these issues is long and complicated but Occam's Razor applies.  Was the coup in Ukraine a coincidence while Russia hosted the Olympics?  Is the U.S. now supporting the regime that took power?  Has the U.S. wanted to bomb Syria for at least the last year (or many years)?  Is there a gas pipeline "issue" in both the Ukraine and also Syria?  Did Saudi Arabia want the bombing of Syria last year?  Did they still?  They do "support the dollar," right?  And what if Hong Kong all of a sudden?  Why would "protests for democracy" sprout out of nowhere ...and just before China announced the ability to trade yuan for euros?   Do you see a pattern here where "destabilizing" an area could be disruptive to foreign currencies and supportive of the dollar?

 

So what do all of these stories have in common?  It's all about the dollar!  All of it!  Bill Gross obviously sees and feels the "flows" in the bond market.  If the Fed has (is) truly tapered and no longer taking his "product" off his hands at a profit like they once did, he is simply jumping ship.  China facilitating their trade with Europe without using any more dollars is certainly in their favor and dollar negative while "unrest" which certainly "smells" like it is being stirred up by the U.S. is dollar supportive.   

 

These events are in my opinion all about a currency war where it is the dollar pitted against everything else.  I only tangentially (via Ukraine) even mentioned Russia but we pursued the "brilliant" course of telling them they are shut out and can no longer use dollars.  What will our reaction to this Chinese/European forex deal be?  Will we sanction China and "tell" them they cannot use dollars anymore?  How about Europe as a whole?  Are we going to sanction Germany, France, Belgium, Holland and all the rest for not using dollars?  ...And the "punishment" or sanction will be what exactly?  We will tell all of Europe they also cannot use dollars anymore?  This is like telling a kid that his punishment for eating chocolate is... "No vanilla for you?"

 

At this point it is so important you understand how quickly the world (particularly "our" world if you are American) can and will change.  The rest of the world is now overwhelmingly aligned against the U.S. and thus the dollar.  The dollar has been our position of power and comparable to a heavyweight's overhand right.  Unfortunately for the world as a whole, the odds of a nuclear event occurring when the dollar fails is high and growing.  No one ever willingly gives up power and often times the one losing power resorts to desperate measures.

 

Hemming and hawing and waiting to purchase "real money" for your financial survival is a very bad bet in my opinion.  Gold and silver can and I believe will very easily move to a position of "no offer."  No offer meaning that once foreigners no longer accept dollars for metal, neither will anyone domestically.  In this scenario there will be no "price" for gold or silver in dollars.  I believe the current run up in the dollar on FOREX is a result of the so called tapering making dollars slightly less plentiful and tighter on the margin.  This will completely change when something financial breaks, the monetary spigots will again be forced wide open.  Once foreigners decide they no longer have a use for dollars...they will come flooding back to our shores.  The Fed will have no choice but to "un taper" and monetize massively.  The only problem is this, "how do you buy dollars with dollars" to sop up the supply?  As I wrote yesterday, please do not wait and try to time your purchases of metal now, the world can and will look very different one morning soon.  The day will come when everyone knows exactly what they should do ...without the ability to do it.

 


hoffmanAndy Hoffman's Daily Thoughts

Crescendo

September 30, 2014

 

Last night, I was honored to receive an email from Hugo Salinas Price, the self-made Mexican billionaire who along with being a staunch GATA supporter has lobbied for decades to re-monetize silver. A more amiable man one cannot meet, particularly given his wealth and status. His wisdom is otherworldly, but the most notable aspect of the email was that when it comes to the Cartel's most vicious attacks to date, his frustration like fellow billionaire Eric Sprott, is no less obvious than mine. Together, we are watching a mere handful of corrupt politicians and bankers armed with unfettered printing presses and financial weapons of mass destruction attempt to destroy the world's masses for their own benefit. Of course, he sagely concluded "this too shall pass," mirroring yesterday's comments from the great Richard Russell...

 

In its battle to make its fiat currency the only legal currency, the Fed has adopted a strategy of denouncing the precious metals.  But ultimately the truth will win out, and the fiat dollar will join all the other dead fiat currencies that have become footnotes in economic history.  Remember, every currency that has left the gold standard has died.  Without the backing of gold, no currency has survived, and there are no exceptions.  Sooner or later, a new world reserve currency will be adopted.  It will be at least partly backed by gold.

-King World News, September 30, 2014

 

Price than said "I have the impression events are building up to some great climax.  We are living in a dream world, and the dream will turn into a nightmare soon enough" - which, in turn, inspired today's title, "Crescendo." We couldn't agree more; although by "crescendo," we don't necessarily anticipate a singular apocalyptic event - although of course, such a scenario is eminently possible. Rather, a sharp reversal of six years of Central bank-manufactured, government-abetted market gains; exposing the horror that lies beneath of a financial system so horribly rotted it cannot stand the light of non-QE, non-ZIRP day.

 

Frankly, I've run out of adjectives to describe my incredulity in watching the Cartel attack paper PMs on a 24/6 basis, with not a second passing without a new "cap" or "attack" algorithm. Sixty-seven straight "Sunday night Sentiment" attacks; "2:15 AM" raids on 90% of trading days since Obama's infamous April 2013 "closed door meeting" with the top TBTF bank CEOs; "sixth sigma" raids at the thinnest times of the global trading day; and, of course, unrelenting raids at "key attack times" like the 7:00 AM EST open of the New York pre-market session, the 8:20 AM EST COMEX open, the 10:00 AM EST PM Fix, the 12:00 PM EST "cap of last resort" and the 2:00 PM EST "crybaby" time, if all else fails. Plus raids when any and all news emerges - particularly, "key attack events" like NFP reports, FOMC meetings and Fed Chairman speeches; not to mention, any other time PMs threaten to rise. Such as this morning, when following an utterly horrific "unexpected" plunge in the Shiller Real Estate Index (recall Friday's article, "Housing Recovery - RIP"), gold was stopped by a prototypical "Cartel Herald" algorithm within $1 of going positive for the day - per the DLITG or "Don't Let it Turn Green" stratagem utilized for the past decade. Frankly, the only scheme more blatant is the PPT's ceaseless support of the "Dow Jones Propaganda Average," via the "dead ringer" algorithms I have written of for years - in yesterday's case, utilized at exactly the level I years ago identified as "the ultimate PPT limit down level" for U.S. stocks; yes, the same 1.0% level that marks the Cartel's "limit up" level for 99% of gold's trading days. Remember, "Cartel Rule #1" is "thou shalt not allow PMs to surge, whilst the Dow plunges." And as you can see by the aforementioned Dow "dead ringer" below - and blatantly obvious gold "DLITG" algorithms - preventing violation of this rulewas yesterday's job one.

  

 

 

Yes, we're definitely building to a "crescendo" - but the $64,000 question is, of what? Mathematically, the long-term is set in stone - and likely, the "long-term" will arrive much sooner than most can imagine. As we have noted ad nauseum, the world passed "peak debt" long ago; and thus, with global debt loads exploding and the resulting, deleterious effects of inflation and stagnation proliferating, it's only a matter of time before history's most concentrated doses of money printing, market manipulation and propaganda implodes of its own weight. In a nutshell, the "99%" are poorer than ever; the "1%" more blatantly corrupt; and the economic outlook the worst since the Great Depression. Geopolitical tensions have ballooned to levels not seen since World War II, population explosion is straining a finite level of resources, the "final currency war" is expanding; and much of the world is entering a "demographic hell" that will increase the reach of economy-killing socialism. And what if "extraneous events" continue to besiege humanity, like the horrifying droughts afflicting California and Brazil? Again, per the great Richard Russell...

 

Some experts fear the California drought, which is part of a wider drought across the West that has lasted 14 years, could be the beginning of an historic mega-drought, a decades-long period of extreme dryness that geological studies show occurs in the region every 400-600 years.  A new Cornell study estimates a 20%-50% chance of a 35 year mega-drought by the century's end.  Nevertheless, California's population is expected to grow by 50 million by 2050, making the effects of the potential water crisis even more severe.  Will Richard Russell move back to New York?

-King World News, September 30, 2014

 

Today's headlines speak of collapsing economies in Japan - where real wages and industrial production depict the horrifying stagflationary impact of Abenomics; accelerating European "deflation" - although I assure you, ZERO Europeans are experiencing a lower cost of living; and the all-out bursting of the historic Chinese real estate bubble, as land sales are down an astonishing 50% year over year. Even the Russian economy is suffering miserably; and trust us, the unprecedented Ruble collapse - amidst ill-conceived Western sanctions - will be properly "retaliated" against. Brazil, India and South Africa - i.e., the other "BRICS" - are watching their currencies FREEFALL against the "strengthening dollar"; as the virulent, Fed-exported inflation we warned of yesterday engulfs the planet like financial Ebola. Again, we cannot emphasize enough that the dollar index' recent (modest) increase has nothing to do with an improving U.S. outlook; but rather, as in 2008, a global fear response to the inevitability of the oncoming "big one." Better yet, I'd like to see just one MSM outlet note the "pink elephant" truth that, just as the recent Euro plunge will cause massive European inflation, the simultaneous dollar surge will wreak havoc on U.S. corporate earnings. And this, amidst an environment of record corporate debt, the weakest global economic environment since the Depression and amazingly, despite the aforementioned market goosing, massive pension underfunding.

 

As for gold and silver, sentiment is so low, even "top analysts" are giving up. To wit, Louise Yamada, who was Wall Street's top-ranked technical analyst when markets were still freely traded (I consulted her often when we worked at Salomon Smith Barney) "gave up" on gold today, further validating the "historic capitulation" we wrote of yesterday. Demonstrating just how clueless Wall Street has become, her manipulated charts tell her $700-$800/oz. is now possible, despite the fact the industry is already on the verge of collapse; and oh yeah, the most PM-bullish economic, monetary and geopolitical environment of our lifetimes. To that end, note today's "trifecta" of unexpected plunges in U.S. home prices, the Chicago PMI Index and consumer confidence.

 

However, a strange thing has happened in the physical PM world. Following a brief "deer in headlights" phase in early September, when readers started demonstrating genuine fear and irrationality, the emails have become more bullish than ever. Physical demand has indisputably exploded in recent weeks as exemplified by Andrew MacGuire's comment yesterday that 650 tonnes have been bought in the London OTC market. Indian and Chinese demand have also surged, as have U.S. Mint sales of both gold and silver Eagles. In fact, August was Miles Franklin's second best month of 2014 and September is blowing August away.

 

Silver is particularly vulnerable to an upside explosion; as aside from trading WAY below its cost of production and Shanghai inventories down to essentially nothing, prices have now moved into backwardation - i.e., an extremely rare condition, reflective of significant product shortage. It is also more oversold than at any time in its 14-year bull market; and thus, as demonstrated in 2008, 2011 and 2013, extremely prone to said shortages. And even JP Morgan has quietly whittled its COMEX silver short position to its lowest level since acquiring Bear Stearns' tainted book in 2008.

 

Normally, I'd end with something designed to urge you to financial action. I'm going to take a slightly different tack today, but something tells me the effect will be the same - if not, more so. To wit, Jon Stewart did a segment yesterday about how Congress refuses to debate America's commitment of significant resources to destroying the Middle Eastern ISIS organization. At its end, he posts a quote from departing Congressman Jack Kingston, who obviously spoke his mind only because he just lost his re-election bid. Frankly, even I have never been more disgusted - or terrified - at how rapidly my formerly wonderful country is deteriorating...

 

A lot of people would like to stay on the sideline and say 'just bomb the place and tell us about it later.' It's an election year. A lot of Democrats don't know how it would play in their party, and Republicans don't want to change anything. We like the path we're on now. We can denounce it if it goes bad, and praise it if it goes well - and ask what took him so long.

-MSNBC.com, September 24, 2014

 

Frankly, I can't think of a better reason to run screaming from the fiat currency such monsters "manage" and into the only asset they can't destroy.

 

 

featuredFeatured Articles

9/30 Lemons/Lemonade ... Silver/Silverade - www.lemetropolecafe.com

The ill wind keeps blowing

Bill,

Silver is now up to 106 out of 110 in the lower 6:00 PM access trade open death march. Even more astonishing is that it's up to 160 out of 174 since the first of the year. Nothing like a rig job for virtually an entire year to NOT get the attention of the CFTC, the CME, or ANY media. Based on the secret tape recordings of ex-Fed regulator Carmen Segarra it's easy to understand why. For whatever reason some edict went out at the first of the year to not let silver even get a SNIFF of a rally. Based on this maniacal rigging you can only assume that physical silver is THE biggest cartel Achilles heel, bar none. There are really only 2 explanations for what's been going on with Comex silver:

* There is an EPIC battle going on between spec longs and the cartel shorts. One of the 2 sides is going to get annihilated. The only player capable of winning a battle against crony shorts is China. Any other spec players will get crushed. If this scenario is accurate we are either heading to $10 or $100, take your pick. If this scenario is accurate a force majeure is just a matter of time as either $10 or $100 silver would clean out the vaults, assuming there's any there in the first place.

* The COT is totally fraudulent, and essentially both sides are one and the same. The huge O.I. is no more than algo battlebots creating an illusion of trading, with the ultimate goal of keeping the $ POS suppressed. If this scenario is accurate Comex silver will increasingly divorce itself from reality, i.e. physical. If this scenario is accurate we may already be in a quiet force majeure.

For the month of September, which as you know is seasonally a strong month for gold the cartel went into overdrive. Through yesterday every single London fix was lower, or no higher than $3.25. The cumulative losses for September in the PM fix vs. the AM fix are -$61.75, once more accounting for nearly the entire overall decline in gold for the month. Thus New York easily retains its crown as the gold hating capitol of the world. This ill wind has been blowing for a long time. Only when it quits will gold and silver investor's ships finally come home.

JMc

Not long after James checked in, my pilot friend Norm Bailey forwarded a note he received from "Rhody," who contributed commentary here over the years. This is his take on the silver market and what Caf� member Harvey Organ had to say in his recent Greg Hunter interview...

Harvey is a little inarticulate, so the interview comes off as unclear. I know what he is talking about, but for example, Harvey will refer to 'it' repeatedly and if you do that often enough, the whole thread weakens. A few things are clear: December is a critical month for silver, and therefore gold. These guys think China is behind the huge, entrenched long position at COMEX, now resting at 850 Moz. COMEX, and probably the entire West does not have this silver. So, when China demands delivery, COMEX will default. That, in turn will blow up gold.

Apparently, as told by Harvey Organ and others, back in 2003, the United States exhausted its Strategic Stockpile of silver that it had been using to suppress the silver market. The U.S. approached China, which still had significant silver reserves at its central bank and persuaded them to lease their silver to the U.S. for ten years in exchange for Most Favored Nation Status. How much silver was involved is unknown. It would be a lot.... This silver was sold to back futures contracts to sell down the market. In 2013, the lease was up and China asked for its silver back. The U.S. told them it was gone and defaulted. YOU DON'T DO THAT TO THE CHINESE! The Chinese began buying COMEX futures and holding them, while the West blasted the paper silver market to try to force more silver into the market. The more the price of paper silver fell, the more the Chinese bought and held. (You must realize that this is the opposite of what usually happens in the futures market. Usually as the futures sell off, investors sell out and that causes the Open Interest to fall. When the OI reaches a low, the price does too, and then the market turns as speculative longs buy back the cheapened contracts... That hasn't happened over the past year and a half or so. Now we sit with silver at extreme lows (down from $50) while open interest is at record highs) Increasingly, analysts believe that these persistent longs are the Chinese, wanting their silver back. When they demand delivery COMEX will fold. Harvey thinks this will happen in December because that is when the last bit of silver in Shanghai gets delivered and since China needs over 100 Moz of silver for industrial consumption each year from abroad, Harvey thinks that's when COMEX will face the demand for delivery.

Could Harvey Organ be mistaken? Sure. He has been before, and timing is the most difficult skill in trading. China gets a lot of silver from contract smelting and refining too, so if the price rises a little as Shanghai's stockpiles shrink, more of this contract metal may stay in China because of arbitrage. This would extend the BIG BANG. Squeezing COMEX so that it defaults will end paper pricing of gold and silver and therefore end the cheapened metal manipulation forever. No more cheap bullion for anyone, including the Chinese. I expect there will be discussion and trade offs between China and the U.S. to try to save COMEX and prolong the fraud in these markets.

Silver was hit for 50 cents more this morning. Harvey thinks the suppression goes on until December and then we see the blow up. Ignore the spot price. It's a fabrication. Keep stacking real ounces and avoid futures and derivative forms of gold and silver. This is all good advice. ALL the original directors of the CFTC are gone now. Rats leaving a sinking ship. The CFTC has colluded with the bullion banks and the Government to prolong and cover up the fraudulent pricing of silver particularly but also gold and other commodities. Ducking out is an attempt to distance these directors from the greatest financial scandal the world has ever seen. The futures market is a financial sewer. What is coming in December or early next year is likely to be very ugly.

I hope Harvey Organ, and Bill Holter are wrong, but I very much fear they are right. If the past 15 years has taught me anything, it is that absolutely NOTHING is the way it seems. Fraud and deceit are what keep the West alive, and everyone except the 1% suffers. There are now too many victims for this system to survive.

Perhaps the above will help in understanding Harvey Organ's interview below... It is worth a listen.... Bryan

Inputs and comments

*Trader Rog last night, with his thoughts on silver....

Roger at 8:00 PM

Hi Bill,

Here is a five year silver chart from SilverSeek.silver is so oversold we are due for a bounce, anda classic bull trap. The masses will think the bottomis in, the price is going up, and pile on.This isn't the bottom. Clive Maund just posted onkitco. I like Clive, but he has been calling bottomsfor months now. None of us know where the bottomis. Even the Big Banks don't know how far they canpush this.Yes, $15 silver is a real possibility and only about$2 away tonight. There is nothing but air underthe price.The obvious answer is to load up at these pricesand be thankful. We'll look back at 2014 in disbelief that silver and gold could fall this far.Look at the fundamentals, the big picture,the long road ahead, and buy all you can.

Roger

Le Metropole Cafe

The latest from Koos Jansen...

China Aims For Official Gold Reserves At 8500t

Published: 29-09-2014 20:52

 

China should accumulate 8,500 tonnes in official gold reserves, more than the US, according to Song Xin, President of the China Gold Association, General Manager of the China National Gold Group Corporation and Party Secretary. He wrote this in an opinion editorial published on Sina Finance July 30, 2014. Gold is money par excellence in all circumstances and will help support the renminbi to become an international currency as "gold forms the very material basis for modern fiat currencies", Song notes. In the short term the Chinese will not back the renminbi with gold (establish a fixed renminbi price for gold), but support the renminbi with an appropriate amount of gold in reserve to allot credibility and manage its value - in my humble opinion.

The previous President of the China Gold Association (CGA), Sun Zhaoxue, was also the General Manager of the China National Gold Group Corporation, these jobs are apparently connected. Song took over from Sun as CGA President and Manager of China National Gold in February 2014. Remarkably, when Sun was in office he wrote equally candid articles (in Chinese) about the importance of gold for China's economy. Sun's most renowned article is titled "Building A Strong Economic And Financial Security Barrier For China", published on August 1, 2012, in Qiushi magazine, the main academic journal of the Chinese Communist Party's Central Committee (click here for a translated version). From Sun:

https://www.bullionstar.com/article/china%20aims%20for%20official%20gold%20reserves%20at%208500t

-END-

Some fine input from another Caf� member, and the perfect day to send his comments to us...

 

Re Silver

Good morning, Bill - -

Well, the endgame must be getting close, because the desperation in the metals markets is growing daily. As I write, silver has been pummeled below $17 per ounce, but I just checked prices at APMEX and they are paying significantly ABOVE spot price to buy back generic silver rounds. They are also charging a premium of more than $1.25 above spot price if you are a buyer this morning. How could this happen if silver were in abundant supply and sellers were overwhelming buyers? Answer: it couldn't.

 

In other words, it appears that the physical market is slowly but surely taking over from the criminal paper markets in New York and London. I no longer understand why anyone except a major player with very deep pockets would even bother doing business at the COMEX---especially if they are going long. Even a casual observer can see that the prices on those exchanges are bogus and that only the shorts will be rewarded in this game of fraud and corruption.

 

I have a suggestion: it is my view that we should stop going to Kitco for our precious metals price quotes, because that company seems, to me at least, to be essentially in bed with the criminals, and in fact, given some recent developments there, may itself be facing criminal charges.

 

Now that the Shanghai Gold Exchange has opened, I'm hoping that it will begin providing easily accessible spot price gold and silver quotes in US dollars, along with the actual quantities being bought and sold at a given moment. If anyone is aware of a link that we can all begin using to see what is ACTUALLY going on in the gold and silver markets, I would ask that they kindly share it with your readership in an upcoming Midas column. I looked at the website today, and there is indeed a link for English, but the layout is confusing and needs to be simplified for English readers. Anyone having influence in this regard might want to suggest this to the exchange. Having simple one-ounce bullion quotes for gold and silver would be extremely helpful. If these are already available on the website, my apologies.

 

At any rate, the metals cabal is apparently much more clever than it is wise, because it is driving primary silver producers out of business, thus ensuring that the outcome it so desperately wants to prevent will inevitably occur.

 

I believe you posted in your column recently a quote from someone who said that a friend at a base metals mining company told him that they have lots of silver ounces sitting there in ore heaps or something but that the current price makes it uneconomic to try recovering the silver at this time.

 

So, the two major sources of silver are methodically, but perhaps unintentionally, being quickly eliminated from the supply chain. This is the famous law of unintended consequences. This, of course, guarantees that the price of silver will eventually explode uncontrollably, and it is my belief that, when that happens, it will be a LONG time before prices stabilize again. After all, you don't bring a new mining operation online in just two or three months, and when the price of silver explodes, ALL of the current production around the world will be spoken for before the metal is ever mined. Given silver's importance across hundreds of industries, I would be surprised at that point if any industrialized country even allows silver to be exported.

 

Going by everything I'm reading from around the planet, silver buyers are simply ignoring the New York and London circuses and are instead piling on at these ridiculously low prices, because no one with at least three brain cells still firing has any doubt that a day of reckoning is fast approaching in the world financial sector.

 

So, no one is being thrown off the scent by any of the cartel's shenanigans any longer. Smart investors around the world are simply saying "Thanks for the incredible, artificial discount, schmucks!" and are happily taking advantage of the cartel's failed strategy and buying far more ounces of silver than they would otherwise be able to afford if true market pricing existed. Apparently, the criminals believe that, if they continue hammering the price of silver, they are going to scare away investors from the silver market. Newsflash: it ain't happening.

 

Naturally this will create even more severe supply constraints and bring about the cartel's demise exponentially faster than might otherwise have occurred. Again, it is silver that will bring down the cartel because of its extreme above ground rarity - - not gold, of which there is plenty around the globe to be had at the right price (barring financial Armageddon, in which case gold will not be easily obtained either).

 

I have nothing against gold whatsoever, but facts are facts. Silver is now rarer than gold above ground, and someday soon the market will figure this out and the price of silver will never look back.

 

I mentioned in your column a couple of weeks ago that the single best thing both silver AND gold investors can do to bring about the conclusion to this long-standing charade is to purchase as many ounces of REAL SILVER as they can possibly afford. I suggested a mere 5 ounces per investor, but at current prices, which, for most primary silver producers, are below their cost of production, the average investor can certainly afford a couple hundred ounces of physical silver. If folks will start doing this immediately, then I would think that Harvey Organ's recent predictions to Greg Hunter about silver exploding to more than $100 per ounce by year end (I believe he may actually have said $200 per ounce) could very well materialize. Yes, it sounds outrageous at the moment, but let's not forget that markets can transform literally overnight, especially with instant electronic trading at the push of a button. In any case, even $50 per ounce by year-end would be a pretty dramatic development and would probably bring the cartel's game to a painful and immediate end.

 

Again I will emphasize that if your readers are sick and tired of the same old game of price suppression, the most effective strategy at this point is to buy as many ounces of physical silver as one can possibly afford and then store it safely and wisely. The amount of silver available for investment purposes is a tiny, tiny fraction of the world's investment capital, and I believe that all of the silver on the shelves around the world will disappear literally within 48 hours once word gets out that silver is in fact at least as "precious" as gold insofar as above ground stocks are concerned.

 

Here's hoping that folks will actually take this advice immediately and without concern for the bogus machinations occurring in New York and London. Remember: it is far better to be a year too early than a week too late.

 

Thanks for allowing me my two cents' worth, Bill.

 

Very kind regards as always,

Derek

 

Well, at least September is finally over with, and so is the quarter. It couldn't have been uglier for the shares, with up days hard to find. The month ended the way it started. The XAU fell 1.75 to 81.11. The HUI lost 3.97 to 195.58.

 

No doubt about it. This has been brutal. That said, what we covered today regarding silver is not just fluff, or filler material. What The Gold Cartel/JPM have done is very likely going to lead to a silver launch. It all fits and silverade it will be.

 

GATA BE IN IT TO WIN IT!

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In The News Today - www.jsmineset.com

Posted September 29th, 2014 at 5:13 PM (CST) by Jim Sinclair

 

Jim Sinclair's Commentary

In case you haven't checked it out in a while. http://www.usdebtclock.org/

Jim Sinclair's Commentary

Every step forward for the Yuan is a long term backwards for the dollar.

Yuan to Start Direct Trading With Euro as China Pushes Usage

By Bloomberg News Sep 29, 2014 5:06 AM MT

 

China will start direct trading between the yuan and the euro tomorrow as the world's second-largest economy seeks to spur global use of its currency.

The move will lower transaction costs and so make yuan and euros more attractive to conduct bilateral trade and investment, the People's Bank of China said today in a statement on its website. HSBC Holdings Plc said separately it has received regulatory approval to be one of the first market makers when trading begins in China's domestic market.

The euro will become the sixth major currency to be exchangeable directly for yuan in Shanghai, joining the U.S., Australian and New Zealand dollars, the British pound and the Japanese yen. The yuan ranked seventh for global payments in August and more than one-third of the world's financial institutions have used it for transfers to China and Hong Kong, the Society for Worldwide International Financial Telecommunications said last week.

"It's a fresh step forward in China's yuan internationalization," said Liu Dongliang, an analyst with China Merchants Bank Co. in Shenzhen. "However, the real impact on foreign exchange rates and companies may be limited as onshore trading volumes between yuan and non-dollars are still too small to gain real pricing power."

More...

Jim Sinclair's Commentary

Nice to see a more accurate report on the size of the OTC derivative pile.

The Economy: "Derivatives Market a $1.2 Quadrillion Time Bomb"

Sunday, October 14, 2012 22:40

by The Independent Report

 

"The US economy is run like a casino and Wall St. is the house. Collateralized debt obligations (CDOs), credit default swaps (CDS) and derivatives are Wall Street's casino games. Naturally, the games are always rigged in favor of the house.

Financial jargon is often arcane and perplexing to the average person. While even casual observers have surely heard of derivatives, most are unlikely to know what exactly they are. Derivatives, or swaps, are basically bets between companies and banks that are designed, in essence, to be insurance policies. The problem with derivatives is that since they often involve highly leveraged bets, they can be very dangerous. A small change in market conditions can mean huge losses. Such losses can occur because derivatives use extraordinary leverage, or borrowing. Derivatives allow investors to earn large returns from small movements in the underlying asset's price. However, investors can also lose large amounts if the price of the underlying asset moves against them significantly.

In fact, derivatives were used to conceal credit risk from third parties while protecting derivative counterparties, which contributed to the financial crisis in 2008. That threat still lingers today. If interest rates were to rise unexpectedly, for example, it could result in a financial bloodbath on Wall Street.

Derivatives are used to make the really big money on Wall St. They can be many things, but are basically contracts or bets that derive their value from the performance of something else - an interest rate, a bond or stock, a loan, a currency, a commodity, virtually anything. For traders, derivatives are a perfect product. They can also be highly lucrative to financial institutions. Over the last five years, banks earned an estimated $20 billion selling derivatives just to school districts, hospitals, and scores of state and local governments across the country. Yet, as Warren Buffett famously stated, derivatives are "financial weapons of mass destruction."

More...

 

Continue reading on Jsmineset.com.

 


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What Just Happened In Today's "Crazy" And Biggest Ever "Window-Dressing" Reverse Repo? - www.zerohedge.com

Submitted by Tyler Durden on 09/30/2014 14:58 -0400

 

Something quite "crazy" indeed (not our words).

Continue reading on Zero Hedge.com.

 

***

 

CDC Confirms First Ebola Case Diagnosed In The US, In Dallas Hospital - Press Conference Live Feed - www.zerohedge.com

Submitted by Tyler Durden on 09/30/2014 16:45 -0400

 

As experts (as opposed to President Obama) had warned, the probability of Ebola coming to the US is around 20% by year-end. So it should not be a total surprise that:

  • *CDC CONFIRMS FIRST EBOLA CASE DIAGNOSED IN THE UNITED STATES
  • EBOLA PATIENT IS IN DALLAS HOSPITAL, NEWS 8 REPORTS

*CDC DIRECTOR SAYS: `THERE IS NO DOUBT WE WILL STOP IT HERE'

The patient recently returned (via plane) from traveling from Liberia, West Africa. This perhaps explains why CDC was "taking precautions in the US" as we noted previously. And don't forget the administration's interference in Ebola treatments.

 

Continue reading on Zero Hedge.com.

 

***

 

 

"Russia Could Ditch Dollar In 2-3 Years"; Deputy PM Warns Nuclear Subs "Could Reach Any Country On Any Continent" - www.zerohedge.com

Submitted by Tyler Durden on 09/30/2014 18:18 -0400

 

"Two to three years is enough, not only to launch [settlements in rubles], but also to complete these mechanisms," says Andrey Kostin, head of Russia's second-biggest bank VTB, noting that the possibility of the US and EU widening sanctions to exclude Russia from the SWIFT global money transfer system would become "a point of no return" making any further dialog impossible. However, as Deputy Prime Minister Dmitri Rogozin explains in this interview, how Russia's military and industrial complex is responding to a growing threat from America. Russia is not responding with any talk about the nuclear button (at least not yet); but they are preparing for such an eventuality: "we are creating a nuclear submarine fleet... capable of reaching any country on any continent, if [USA] suddenly becomes the aggressor, and our top-most national interests come under threat," adding that Obama's coup has ushered in "the complete demise of the Ukrainian State."

 

Continue reading on Zero Hedge.com.


recapMarket Recap
Tuesday September 30, 2014




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