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Monday October 20, 2014
tableTable of Contents
From David's Desk: Quotes of the Day
The Holter Report: The Timing Is Curious
Andy Hoffman's Daily Thoughts: Manipulation, Jawboning and Prayer
Featured Articles: Jim Sinclair, Ed Steer, RT.com, The Aden Forecast
Market Recap
About Miles Franklin 

davidFrom David's Desk
David Schectman

Quotes of the Day

Clearly when gold fell below $1536 over a year ago, it turned the gold market bearish. The 10-year-old bull market rise was over, even though the mega uptrend since the late 1960s was still going on. The trend stopped being our friend at that time.

-The Aden Forecast

 

As I said yesterday---and will repeat myself again today---it should be obvious to anyone with two synapse to rub together that the dollar would have crashed---and taken the stock market with it, if the Plunge Protection Team hadn't intervened when they did.  But all they're doing is delaying the inevitable.

- Ed Steer, Casey Research, October 16, 2014

 

The CFTC has reported that the traders in the managed money category have sold roughly 150,000 contracts of NYMEX crude oil futures contracts (apart from selling in other energy contracts) since June. Since each futures contract covers 1,000 barrels of crude oil; that means the technical funds have sold the equivalent of 150 million barrels of oil since June. I know that actual crude oil is different than a futures contract equivalent, but I also know that 150 million barrels of equivalent selling is a massive amount compared to the one million barrels that would put oil in a daily surplus or deficit. In other words, how could the selling of the equivalent of 150 million barrels of oil not cause the price to plunge?

In a very real sense, the crude oil market, along with all COMEX/NYMEX metals has contracted the silver disease - or the sickness of having the price of vital commodities manipulated by a relative handful of speculators - of having the tail of derivatives wagging the dog of the actual market.  I have nothing against speculators (as I am one), but I have everything against letting speculators determine the price of anything. I know that the markets need speculators to provide liquidity to legitimate hedgers and that stands at the core of economic justification for futures trading.  But that is not occurring in crude oil, or silver, or the other metals. Instead, we have speculators (technical funds) trading with other speculators (mostly U.S. and foreign banks) in a private betting game. For allowing this to develop, full blame and everlasting shame must be placed on the regulators, the CFTC and the CME.

- Silver analyst Ted Butler, Butler Research, October 15, 2014

 

While both fell about the same percentage over the past few months, some important distinctions between oil and silver are that silver is at record extremes of managed money short selling---and well below the cost of production for primary producers.  Crude oil prices may have fallen enough to reverse upward here or soon, but silver is more advanced on both counts. Plus, there are continued signs that the supply/demand situation is relatively tighter in silver than they are in crude oil.

Lastly, silver is a natural as a safe haven demand in what are increasingly tenuous financial times. Yes, it's true that silver has been underperforming just about everything under the sun for some time, but that has only resulted in it becoming more of an outstanding undervalued asset. Silver investment demand has, can, and will turn into a torrent at a moment's notice and if ever there were a time for it to soar, that time would appear to at hand.

- Silver analyst Ted Butler, Butler Research, October 15, 2014

 

Considering how long it has taken silver producers to recognize and acknowledge the silver manipulation, I suppose it is possible that the big oil producers might continue to remain unaware of my premise. But there is a big difference between oil and silver when it comes to dollar value. Simply put, the budgets of Saudi Arabia and Russia and other oil exporters are dependent on a certain price for their oil exports; that's not the case in silver. What this translates into is that these countries, whether they wake up to the price scam on the CME's NYMEX or not, they must and will take measures to bolster the price. And in time, they will succeed because history has shown that oil producers, not consumers, will set the price in the end or in a crunch. It's been 40 years since I waited on line due to gasoline rationing and I vividly remember the feeling that I would pay any price to fill the tank on my VW bug. Deprived sufficient supply, I expect most would feel the same way in the future in similar circumstances.

But one potential good outcome is if the oil exporters (or any oil producer) came to realize that the speculators on the NYMEX were responsible for the price plunge and moved against this manipulation, could be to shine the light on the silver scam. After all, it's not that great a distance between the CME's NYMEX manipulating oil prices and the CME's COMEX doing the same in silver (and gold).

- Silver analyst Ted Butler, Butler Research, October 15, 2014

 

Now the IMF appears to corroborate what Austrians have been saying all along: if you give banks cheap money, they will invest it in endeavors that aren't always sustainable. This includes commodities and capital goods. Central bank monetary policy pumps up bank balance sheets, providing the incentive to drive up prices in goods that are deemed profitable. Not all of this investment is reflective of consumer demand. Inflation begets inflation, until the money spreads wide enough in the economy to raise prices at the consumer level. Central banks have two choices at this point: keep printing money or cease the expansion. If money keeps flowing into the system, the currency will soon lose all value. Should the central bank stop printing, there will be a recession of sorts.There is no alternative.

The Austrian theory of the business cycle has never been a radical premise. It only stipulates that any workaround of the natural cycle of economic growth must come with ensuing costs. It's a simple law: you can't get something for nothing. A majority of economists believe the opposite. In other words, they believe in magic.

- James E Miller, Mises Canada, October 17, 2014

 

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Today's Featured Articles

6-Month Gold and Silver Charts

Jim Sinclair (GEAB N°88 is available! Global systemic crisis - 2015: The world is defecting to the East) (Fed's Bullard says QE3 could last longer than October)

 

RT.com ( Richest 1% own 50 percent of world wealth - Credit Suisse report)

The Aden Forecast (Will Tthe December Low Hold, Or Not?)

 

 

Sincerely,

 


David Schectman

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holterThe Holter Report
bill holter
Bill Holter

The Timing Is Curious

October 20, 2014

 

We just finished a wildly volatile week in most all markets across the entire world.  Stocks were dumped early and then pumped at the end of the week, interest rates were dumped until the end of the week and oil simply crashed and actually "sniffed" at a "7" handle.  Greece came completely apart at the seams with their stock market and bond markets collapsing. 

 

An obvious question would be "why."  Why did all of this happen this week?  An obvious answer which surely would be a contributor is the spread (or fear) of the Ebola virus.  But this is truly a strange duck and one I'm not really sure what to make of.  By now I am sure you saw the picture of the Ebola patient wrapped up in a Hazmat suit surrounded by three others in Hazmat suits and ... a guy with a clipboard?  The "clipboard guy" apparently even flew with the patient as there were pictures of him again after the flight ...what's up with this?  Even more strange is President Obama kissed the nurses who were caring for an Ebola patient?  Is there an antidote?  Is it a manmade virus?  Is it real?  Is it a "bio weapon" gone bad or "escaped" by "accident on purpose?" 

 

There are all sorts of questions to this which we really don't have the answers to but suffice it to say, an Ebola pandemic (real or just perceived) would be enough to shut this country (and the financial world) down.  It could be used as a scapegoat for crashing markets, financial closures, martial law and mass quarantining of population segments.  If it is real, what a tragedy. If it is not, yet is used for "cover" and a "reason" for societal and financial collapse, what a travesty.  As for Ebola arising just now, I say the "timing is curious" to say the least... especially since there are reports this is a manmade virus.

 

Another area of "timing" was the emergence of Fed Governor Bullard on Friday morning.  If you recall, he was boisterous on October 9th when he said, "We should be willing to remove some accommodation."  Friday morning he flip flopped and said, "A logical response at this point is to delay the end of QE."  It is important to understand why he has said what he said and in particular "when."  The markets and the dollar were rising and crushing emerging currencies and markets by Oct. 9th, Mr. Bullard stepped in and tried to jawbone some of the building froth from our markets.  It only took a week later and some 1,500 Dow points for him to step out and reverse his words. 

 

There are several problems here as I see it.  First, the Fed is darned if they do and darned if they don't.  The stock markets threw a taper tantrum and dropped nearly 10% in six or seven trading days.  In order to placate the equity markets, QE cannot be shut down.  On the other hand, the Fed cannot continue QE or begin another round because there simply are not enough Treasuries outstanding for them to purchase.  Let me rephrase this, there are enough but whatever the Fed buys ...they are taking out of the collateral pool which then can no longer be lent against.  This in effect actually lowers the amount of credit outstanding which "de"flates rather than "re"flates.

 

Another problem is the leverage that the Fed itself is taking on.  Their capital is now levered at nearly 80 to 1.  The big banks were levered nearly 30-35 to one back in 2008 and we all know how well that worked out.  What will the Fed do?  Lever themselves over 100 to 1 and blow their balance sheet up another trillion dollar?  I suppose they could try this but the markets at some point are going to call their bluff.  The Fed has no margin for error now, a bigger balance sheet and higher leverage will only make the collapse when it comes that much more horrific.  Do you believe there are any odds whatsoever that the Fed can ever even hint at the reality of higher rates?  No matter who would like to deny this truth, "tapering is in fact tightening" and no amount of words can change this.  Make no mistake, this is ultimately, and will also be seen as a "solvency" problem for the Fed itself.  Going one step further, the Fed acted as a white knight back in 2008 and '09, they have now put themselves in a very poor position because they are now the ones in need of a white knight.  Not only will they NOT be seen as the white knight, they very well could become the problem itself?

 

We also got news at the end of the week, India imported 100 tons of gold for the month of September ...this was about half of all gold mined for the month.  There was also a report from Shanghai, they imported over 68 tons for the WEEK!  If China were to import at this run rate, they would import 3,500 tons over the course of a year.  This is an impossibility over the long run as the rest of the world only produces 2,200 tons.  I bring this up because again, we have more evidence of demand completely dwarfing supply while price remains weak.  "Apologize" however much or in whatever manner you'd like, physical demand is blowing out the actual supply while the price is being suppressed.  I believe there is also a "timing issue" here, something behind the scenes is in a precarious state, the "alarm bell" must be silenced. 

 

Last weekend in Washington, the G-20 held a finance minister and central banker meeting.  Do you find it at all odd that immediately following this meeting the markets have become unstuck?  What was discussed or decided behind these closed doors?  The annual G-20 meeting will be held next month in Brisbane Australia, has or is something being decided?  Is something "being" decided "for" the U.S. and her dollar?  Curious timing?

 

One other area which received little to no press were events in France and also Italy.  French bond yields diverged higher from the rest of the core Euro states and they basically have thumbed their noses at the deficit spending targets they were given.  Italy did a currency swap earlier this year and an 8 billion euro trade deal with China this past week.  Again, the timing is curious because Italy is one of the European weak sisters in need of assistance.  Germany has her hands tied trying to support Greece from collapse ...so in comes China to help a struggling Italy.  The fracturing of the Eurozone may be a result of the coming reset?  Again, timing?

 

I bring this last paragraph forth because China has to this point only "courted" western business as opposed to going head to head with the U.S.  I received a note the other day which stated "China could make gasoline $100 per gallon any time of their choosing."  I initially scratched my head on this one but after 10 seconds I "got it."  China can pull the plug on the dollar any time they choose.  Once this is done, hyperinflation will be set our nation and $100 per gallon may become a conservative number.  The upcoming G-20 meeting will be of particular interest to me because I believe there will be (maybe already are?) decisions made "for" the U.S. as opposed to the traditional "by" the U.S.  I believe the problem is now seen globally to be the Federal Reserve, I also believe the world is working to "fix" the problem.  More on this tomorrow. 

 

 

 

hoffmanAndy Hoffman's Daily Thoughts

Manipulation, Jawboning and Prayer

October 17, 2014

 

All I can say is this. Yesterday afternoon's "Miles Franklin All-Star Silver Panel Webinar" was an unmitigated success. Direct questions regarding silver supply, demand, mining costs, inventories, and trading with David Morgan, Harvey Organ, Steve St. Angelo, and Bill Holter enabled listeners to derive a significantly better understanding of how tight the market is - and will likely be - in the coming years. Thus, we courage that you will listen to it on the Miles Franklin Blog - and send it to as many people as possible, the world round.

 

Yes, supply is tight - and likely, will be a lot more so in the coming years, based on surging investment and industrial demand and the inevitable production collapse if prices don't rise materially - for both silver and the base metals that produce silver as by-product. And as for demand, whilst TPTB commit "Cartel Suicide" by pushing prices well below the cost of production, it has never been stronger - worldwide. As you can see below, not only are U.S. and Royal Canadian Mint silver sales and Indian silver imports on pace to either meet or exceed 2013's record levels, but the U.S. Mint is on pace to deliver its third biggest sales month ever - and equally importantly, its largest non-January month, as January is typically the biggest sales month due to late year backordering of the coming year's issuance. And since, per what we validated on the Webinar, worldwide supplies are so tortuously thin, the odds of a physical short squeeze have never been higher - particularly given the terrifying political, economic and financial environment.

 





 

Speaking of said environment, how bad can it get? On essentially any metric, qualitative or quantitative, the world is in far worse economic shape than the 2008 bottom - with, until this month,one "temporary" exception; i.e., the ability of various "PPT operatives" to support equities with unfettered money printing and market manipulation. Given this month's horrific market declines - of not only stocks but bond yields, commodities, and currencies - we are clearly entering an extreme "danger zone," in which the "big one" could break out in full catastrophic form, any day. Europe is an unmitigated disaster - with the PIIGS crisis back in full bloom; the Bank of Japan has been forced to admit relentless Nikkei stock purchases, as Abenomics has been proven to be an unmitigated failure; China's historic construction bubble has been exposed by collapsing commodity prices; and America's economic data is plummeting despite TPTB's best "tape painting" efforts, ahead of next month's midterm elections. And of course, even the vaunted PPT is having difficulty supporting markets that appear to have not only made an "Ali Baba top," but desperately want to plunge to the realm of "valuation reality" at far, far lower levels.

 

Of course, they'll continue fighting this inevitability to the bitter end - which is why day after day, all precious metal surges are fought tooth and nail with relentless "Cartel Herald" algorithms such as yesterdays at the 8:20 AM EST COMEX open, the 12:00 PM EST "cap of last resort "and of course, this morning's 2:15 AM EST open of the London paper "pre-market" session.

  

 

  

Then you have the Cartel's oldest trick, the DLITG or "Don't Let it Turn Green" algorithm utilized to keep the most widely watched paper PM proxies - the GLD and SLV ETFs - from flashing bullish signals. Here's a perfect example of it yesterday, replete with $0.05/oz. attack in the trading day's final minute; and of course, the daily "dead ringer" algorithm utilized to prop the "Dow Jones Propaganda Average." Never forget that 10:00 AM EST not only represents the Cartel's "key attack time #1" because it's when global physical PM markets close, but the PPT's "key goosing time" because it's when the Fed executes its daily POMO or "Permanent Open Market Operations."

  

    

As for U.S. Treasuries, never in history has volatility been so high, as due to a combination of investor fear, high frequency algorithms' destruction of market dynamics, and relentless Federal Reserve manipulation yields are literally all over the place - as I write at 8:20 AM EST, at 2.16%, en route to ZERO when the Fed initiates an Abenomics-like "QE to Infinity" program - and eventually, INFINITY when said program inevitably catalyzes hyperinflation. And per today's article title, the Fed is already telegraphing this with accelerated "jawboning" as the market convulsions expand; along, of course, with accelerated prayer behind the Eccles Building's closed doors. Investors' calls for QE4 are already growing louder - ironically, just two weeks before the Fed is scheduled to end QE3 - to the point that laughably, the MSM is citing Whirlybird Janet's speech this morning at the "Conference on Inequality of Economic Opportunity" as a potentially "bullish catalyst."

  

 

 

Consequently, Fed governors have been giving hawkish speeches en masse - including, in the last week alone, St. Louis Fed President James Bullard, San Francisco Fed President John Williams, Atlanta Fed President James Lockhardt, Chicago Fed President Charles Evans, Minneapolis Fed President Narayana Kocherlakota, and even Federal Reserve Vice Chairman Stanley Fischer. And don't forget, Evans, Lockhardt, and Williams will be joining the FOMC's voting committee in 2015, whilst "token hawks" like Charles Plosser and Richard Fisher, Presidents of the Philadelphia and Dallas Federal Reserve banks, respectively, will be "conveniently" departing.



Thus, as the "ides of October" build to a crescendo, expect nothing less than unprecedented doses of "manipulation, jawboning and prayer" - particularly as relates to the physical gold and silver markets, which likely sooner rather than later will expose the "financial world's Achilles Heel" by exploding higher.

 

PROTECT YOURSELF, and do it NOW!

 

Call Miles Franklin at 800-822-8080, and talk to one of our brokers.  Through industry-leading customer service and competitive pricing, we aim to EARN your business.

 

 

 

featuredFeatured Articles

6-Month Gold and Silver Charts






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In The News Today - www.jsmineset.com

Posted October 16th, 2014 at 6:06 PM (CST) by Jim Sinclair

 

GEAB N�88 is available! Global systemic crisis - 2015: The world is defecting to the East

Two important facts emerge from the past four weeks' news. First, China is becoming the world's largest economic power, officially overtaking the US, based on GDP measured in purchasing power terms (IMF figures) of $17.61 trillion (compared to $17.4 trillion for the US). If the official media hasn't raised the slightest eyebrow to this information, our team believes that it's an historic event: the US is no longer the world's largest economic power and, inevitably, that changes everything !...

More...

 

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In The News Today - www.jsmineset.com

Posted October 16th, 2014 at 6:06 PM (CST) by Jim Sinclair

 

CIDRAP: "We Believe There Is Scientific Evidence Ebola Has The Potential To Be Airborne"

Submitted by Tyler Durden on 10/13/2014 21:46 -0400

 

When CDC Director Tim Frieden first announced, just a week ago and very erroneously, that he was "confident we will stop Ebola in its tracks here in the United States", he hardly anticipated facing the double humiliation of not only having the first person-to-person transmission of Ebola on US soil taking place within a week, but that said transmission would impact a supposedly protected healthcare worker. He certainly did not anticipate the violent public reaction that would result when, instead of taking blame for another epic CDC blunder, one which made many wonder if last night's Walking Dead season premier was in fact non-fiction, he blamed health workers for "not following protocol."

And yet, while once again casting scapegoating and blame, the CDC sternly refuses to acknowledge something others, and not just tinfoil blog sites, are increasingly contemplating as a distinct possibility: namely that Ebola is, contrary to CDC "protocol", in fact airborne. Or as, an article posted by CIDRAP defines it, "aerosolized."

Who is CIDRAP?  "The Center for Infectious Disease Research and Policy (CIDRAP; "SID-wrap") is a global leader in addressing public health preparedness and emerging infectious disease response. Founded in 2001, CIDRAP is part of the Academic Health Center at the University of Minnesota."

The full punch line from the CIDRAP report:

We believe there is scientific and epidemiologic evidence that Ebola virus has the potential to be transmitted via infectious aerosol particles both near and at a distance from infected patients, which means that healthcare workers should be wearing respirators, not facemasks.

In other words, airborne. And now the search for the next LAKE, i.e., a public company maker of powered air-purifying respirator (PAPR), begins.

More...

 

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Jim's Mailbox - www.jsmineset.com

Posted October 16th, 2014 at 5:07 PM (CST) by Jim Sinclair

 

Jim,

QE to infinity?

CIGA Craig

Craig,

QE to Infinity, or whatever new name they decide to give it.

Jim

Fed's Bullard says QE3 could last longer than October

The Federal Reserve should consider extending its bond-buying program beyond October to see how the U.S. economic outlook evolves, said James Bullard, the president of the St. Louis Fed, on Thursday. At the moment, the Fed is buying $15 billion in securities each month. The U.S. central bank has said it expects to end its QE3 program at the end of October, but Bullard noted that the plan was always data-dependent. Bullard said the Fed cannot "abide" the drop in inflation expectations seen in the Treasury Inflation-Protected Securities. "Maybe this is a juncture where we want to invoke this clause that it is data-dependent," Bullard said in an interview with Bloomberg News.

More...

 

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India's Gold Imports Soar 450% in September - www.caseyresearch.com

By Ed Steer

October 16, 2014

 

The Wrap

Well, dear reader, yesterday's action in the equity markets, the currencies---and the precious metals---should leave no doubt in anyone's mind that the Plunge Protection Team is not only alive and well, but was at battle stations yesterday.

Only the willfully blind, along with those whose jobs depend on them not seeing or speaking the obvious, will consider it to be free-market forces at work.  And the word egregious doesn't begin to adequately describe it all, as it was a complete perversion of everything that capitalism really stands for.

As I get sick of writing---and as you're getting sick of reading---if the powers-that-be put their hands in their pockets and let the markets do what they want so desperately to do, the world's financial system would be a smoldering ruin in five business days, or less.  Wednesday's price action in all things financial, before 'da boyz' stepped in at 9:40 a.m. EDT, should leave no doubt in anyone's mind that this would have been the outcome by the close of trading in New York yesterday.

It will all come tumbling down sooner or later, of course---and as I said before, the forces that prevented it from occurring, are only delaying the inevitable.

Continue reading on Casey Research.com.

Critical Reads

World economy so damaged it may need permanent Q.E.

Combined tightening by the United States and China has done its worst. Global liquidity is evaporating.

What looked liked a gentle tap on the brakes by the two monetary superpowers has proved too much for a fragile world economy, still locked in "secular stagnation". The latest investor survey by Bank of America shows that fund managers no longer believe the European Central Bank will step into the breach with quantitative easing of its own, at least on a worthwhile scale.

Markets are suddenly prey to the disturbing thought that the five-and-a-half year expansion since the Lehman crisis may already be over, before Europe has regained its prior level of output. That is the chief reason why the price of Brent crude has crashed by 25pc since June. It is why yields on 10-year US Treasuries have fallen to 1.96pc, and why German Bunds are pricing in perma-slump at historic lows of 0.81pc this week.

We will find out soon whether or not this a replay of 1937 when the authorities drained stimulus too early, and set off the second leg of the Great Depression.

This is the second commentary in a row from Ambrose, but this one showed up on The Telegraph's website at 9:36 p.m. BST yesterday evening---and I found it embedded in a GATA release.  It's definitely worth reading.

Read more...

Calling Russia 'threat to humanity' puts Obama's sanity in doubt - Medvedev

The Russian PM has suggested that Obama's charges against Russia were caused by a "brain aberration" and added that such rhetoric saddened him.

"I am very upset by the fact that President Obama, while speaking from the United Nations' podium and listing the threats and challenges humanity is currently facing, put Ebola in first place, the Russian Federation second and the Islamic State organization was only in the third place. I don't even want to comment on this, this is some sort of aberration in the brain," Dmitry Medvedev said in an interview with CNBC television.

The top Russian official stressed that his country was not isolating itself from the rest of the world, but sought mutually beneficial cooperation with foreign nations. "We want to communicate with all civilized peoples on friendly grounds. Of course, this includes our partners from the United States of America, but for this the situation must be leveled," Medvedev said.

However, the Russian PM also noted that the Western sanctions have inflicted considerable damage to Russia's cooperation with the US, and without cancellation of this policy there can be no return to partnership.

This news item appeared on the Russia Today website at 10:58 a.m. Moscow time on their Wednesday morning---and I thank Roy Stephens for sending it.

Read more...

When It Comes to Beheadings, ISIS Has Nothing Over Saudi Arabia

The escalation of the war against the Islamic State was triggered by widespread revulsion at the gruesome beheading of two American journalists, relayed on YouTube. Since then, two British aid workers have met a similar grisly fate. And another American has been named as next in line by his terrorist captors.

Yet, for all the outrage these executions have engendered the world over, decapitations are routine in Saudi Arabia, America's closest Arab ally, for crimes including political dissent-and the international press hardly seems to notice. In fact, since January, 59 people have had their heads lopped off in the kingdom, where "punishment by the sword" has been practiced for centuries.

The Saudi legal system is based on Islam's Sharia law. Some countries that use Sharia possess a penal code, but Saudi Arabia does not, although some activists have been calling for reform.

If you're on the squeamish side, this Newsweek story may not be for you.  But, now that I've warned you, it's worth reading anyway.  It was posted on their website at 12:56 p.m. EDT on Tuesday---and I thank reader A.V. for bringing it to my attention---and now to yours.

Read more...

Gold Imports by India Seen Rising More Than Fourfold Last Month

Gold imports by India, the largest user after China, probably surged more than fourfold last month on expectations declining prices would boost festival demand.

Purchases are estimated at about 95 metric tons compared with 15 tons to 20 tons in September last year, said Bachhraj Bamalwa, a director at the All India Gems & Jewellery Trade Federation. The government raised import taxes for a third time in August last year after a month earlier obliging importers to set aside 20 percent of purchases for re-export as jewelry.

India represented 25 percent of global demand in 2013. Imports of gold were valued at $3.75 billion in September, 450 percent more than a year earlier, the Commerce Ministry estimates. Buying and gifting of gold is considered auspicious and the most favorable time is the festival of Dhanteras, two days before Diwali which occurs on Oct. 23. Festivals run through November and the wedding season follows to early May.

"These are normal imports before Diwali," Bamalwa said in a phone interview from Kolkata today. "There is no abnormal feature. Prices have fallen in the international market and this is good for Indian consumers."

This gold-related news item, filed from New Delhi, appeared on the Bloomberg Internet site at 3:53 a.m. Denver time on Wednesday morning---and I found it embedded in a GATA release.  Reader U.M. sent us another story on this.  This one is headlined "Country's gold imports rising on price slide & festive demand"---and it showed up on Economic Times of India website at 7:02 p.m. IST on their Wednesday evening.

Read more...

Gold imports soar 450% in India

The Indian government has been proved right once again in not lifting its curbs on gold. Trade deficit has widened the most in 18 months, as imports of the precious metal have surged.

Gold imports jumped about 450% to a new high of $3.75 billion in September (versus $682.5 million y/y). In August 2014, gold imports stood at $2.04 billion.

This as the trade deficit widened to $14.25 billion in September, from $10.84 billion a month before.

Falling inflation might just not be enough, say trade experts. With a muted export performance in September, the trade figures have raised concerns of worsening external account, especially if the global economy continues to remain sluggish.

I know that the headline is similar, as is part of the story, but this article goes into far more depth.  It was filed from Mumbai yesterday as well---and showed up on the mineweb.com Internet site.  It's the final offering of the day from Manitoba reader U.M., for which I thank her.  It's worth reading.

Read more...

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Gold Stubs Swiss National Bank's Toe, and the Financial Times Says 'Ouch!' - www.caseyresearch.com

By Ed Steer

October 15, 2014

 

Saudis Deploy the Oil Price Weapon Against Syria, Iran, Russia, and the U.S.

Asian stock markets continued to fall today, propelled at least in part by the adverse reaction to the Saudi announcement yesterday that they would let oil prices fall to $80 a barrel. And further reports indicate that the Saudis intend to keep oil prices low enough to force a realignment of prices not just among various grades of crude, but also for intermediate and long-term substitutes.

It is critical to remember that the Saudis have no compunction about imposing costs on other nations to maximize the value of their oil resource long term and hence the power they derive from it. The 1970s oil shock produced a nasty recession in the US and most other advanced economies and gave a further impetus to inflation, which was already hard to manage and dampened growth by discouraging investment.

The current alignment of factors gives the Saudis the opportunity to make life miserable for a long list of parties they would like to discipline, including the US.

The sharp rise in the dollar means that lowering the price of oil in dollar terms is unlikely to leave the desert kingdom worse off in local currency terms. But it undermines US energy development, both fracking and development in the Bakken, as well as more development by the majors, who were regularly criticized by analysts for how much they were spending on exploration when the math didn't pencil out well at over $100 a barrel. Countries whose oil is output is mainly heavy, sour crude, like Iran and Venezuela, find it hard to sell their oil when prices are below $100 a barrel (or at least when the dollar was weaker, but the $80 price point, even with a strong dollar, may be low enough to cause discomfort).

In other words, this is a classic case of predatory pricing: set your price low enough long enough to do real damage to competitors, and reduce their market share, not just immediately, but in the middle to long term.

This amazing commentary appeared on the nakedcapitalism.com Internet site yesterday---and it falls into the absolute must read category.  My thanks got out to reader U.M. for bringing it to our attention.

Read more...

Fighting back, First Majestic delays sale of silver amid price weakness

Ninety-nine point nine percent of gold and silver mining companies and their executives are brain-dead, merely geologists and accountants, unaware of the monetary nature of their product and how their product is priced by surreptitious market intervention by central banks. But here and there certain companies and their executives have a clue, and First Majestic Silver Corp. today again proclaimed itself to have far more than a clue.

First Majestic announced that it won't sell its metal into the recent weakness in the silver futures markets. In a statement the company said:

"Silver prices declined 19 percent in the third quarter, representing the second largest quarterly decline since the financial crisis in 2008. As a result of this weakness, the company decided to temporarily suspend silver sales in an attempt to maximize future profits. This suspension of sales will result in lower revenues and earnings for the third quarter. However, it is likely that these inventories of unsold ounces will instead be sold in the fourth quarter. As of September 30, 2014, approximately 934,000 ounces of silver were held in inventory."

CEO Keith Neumeyer and his company First Majestic Silver, not being a member of The Silver Institute, can do what he wants---not like the other bought and paid for companies that are listed as members.  I'm a shareholder in this company---and have been for almost as long as it has been around.  I applaud this move---and so should you, as it takes real courage to lead in times like this.  I just hope that there's no surprise blowback from left field in the near future.  This GATA release is definitely worth reading.

Read more...

Lawrence Williams: Expect big silver price surge if gold stays positive

What a difference 10 days makes. A little over a week ago the gold market was all doom and gloom with the yellow metal crashing back below $1200 an ounce. But with a few extraneous geopolitical and global health factors positively impacting the market, and the possibility of a general stock market crash in the minds of investors, gold has seen positive action on the price front in something of a safe haven turnaround. But silver, on the other hand, has hardly moved at all. Compare the 30-day kitco gold and silver charts below - courtesy kitco.com and kitcosilver.com .

Historically, silver prices have sharply outperformed gold when precious metals prices are rising, and sharply underperformed when they are falling yet this pattern on the upside has just not yet started to appear. But if the recent gold price rise isn't just a blip then we would expect silver to start to move upwards - and move upwards fast.

After all, as we pointed out in our recent article looking at silver supply and demand - see: Silver in supply deficit but price unmoved so far there is no big surplus of silver coming to the market although admittedly there have been some strange movements in and out of the big silver ETFs which could affect short term supplies.

Most recently perhaps the most respected silver analyst, Ted Butler, who scrutinises such matters more closely than anyone else, commented "There was some unusual activity in the big silver ETF, SLV, this week as 4 million oz were withdrawn. I say unusual because deposits into and withdrawals from SLV have been somewhat counterintuitive recently, namely, deposits have come on price weakness and withdrawals on (relative) price strength. One would normally expect the opposite to occur."

The silver price will rise when JPMorgan et al are instructed to let it happen---and not before.  This commentary by Lawrie appeared on the mineweb.com Internet site yesterday---and it's worth reading as well.

Read more...

 

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Richest 1% own 50 percent of world wealth - Credit Suisse report -rt.com

Published time: October 14, 2014 14:36
Edited time: October 16, 2014 10:48

 

World wealth has reached a record $263 trillion but is concentrated in fewer hands. The richest 1 percent have accumulated more wealth, and own almost 50 percent of it, which could trigger recession, according to a new report by Credit Suisse.

The Credit Suisse Global Wealth Report, released Tuesday warns that the "abnormally high wealth income ratios" may spark a recession, as high disparity leads to economic friction.

Global wealth has grown to a record $263 trillion in mid-2014, $20.1 trillion more, and an 8.3 percent increase, over mid-2013. Household wealth has more than doubled since 2000, when the same report calculated it at $117 trillion.

Leading the money trail is the United States, dubbed 'Land of Fortunes' by the report, which again boasts the highest average wealth. It is home to 34.7 percent ($91 trillion) of global wealth. Europe's portion comes in a close second with 32.4 percent, followed by India and China's 23.7 percent share, and then the 18.9 percent concentrated in the Asia-Pacific region.

Continue reading on RT.com.


 
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The Aden Forecast - adenforecast.com

Will the December low hold, or not?

Granted, gold closed a dollar below the December closing low, but for practical purposes it held. Now, here is the deal...If gold closes below $1180 and stays there, this D decline will become a clear second leg down in the bear market... a very bearish sign. It would be saying the bear market is very much alive and well.

As you can see on the chart, the next support level would then be the $1000 mark, which is both the 2008 peak area and the bottom side of the down channel.

But, on the other hand, if gold stays above $1180, the D decline will be breaking out of its bearish mode. Its decline will then be moderate, which would be a good sign.

This month and next will be the true test. Just staying above these lows will be a good thing. A rise above $1230 would be a great start to stability!

What about silver?

The leading indicator (B) is showing that gold shares could decline further to probably test the 2008 lows while the indicator reaches the low level.

That is for now, because on a bigger picture basis, gold shares are extremely oversold, the most in years. A good example is shown on Chart 22, comparing gold shares to gold. This ratio continues to bot- tom at the lower side of a 45-year down channel!

Mining Shares

The mining shares are forming a massive formation and once complete, we should see gold shares explode upward versus gold.

The leading indicator (B) is showing that gold shares could decline further to probably test the 2008 lows while the indicator reaches the low level.

That is for now, because on a bigger picture basis, gold shares are extremely oversold, the most in years. A good example is comparing gold shares to gold. This ratio continues to bottom at the lower side of a 45-year down channel!

This is a massive formation and once complete, we should see gold shares explode upward versus gold.

Latest thoughts

The U.S. dollar index has been softening. It's now below its five-week moving average for the first time since the rise began in July. If it now stays below 85.50, a downward correction will be in place and the foreign currencies will likely continue to head higher. If you still have other currencies, that'll provide a good opportunity to sell. In other words, the U.S. dollar remains poised to rise further once this downward correction ends, probably in the weeks ahead. So keep your cash in U.S. dollars.

 

Gold bounced up this week to a five week high, also rising clearly above its five week moving average for the first time since the July-August highs.  If gold now stays above $1215 it'll be the first step of a bottoming process, which is a good sign for gold overall. Silver and gold shares are stabilizing above the lows, which is also good.  But they have the pressure of the sluggish global economy and the falling stock market to deal with.  Silver will begin to look better above $17.60, just as XAU will look better above 82.

To read the full article, please subscribe to The Aden Forecast.

 


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