David Schectman

According to an industry insider I know, JPMorgan was the largest physical buyer of silver heading into the summer, but then they stepped away, sold the crap out of the metal on the paper market, knocking the price down $3/oz. and then came back in and bought up the silver (physical) at a huge discount. What a scam!

_______________________  

Quotes of the Day

As I mentioned previously, JPMorgan's concentrated short position in COMEX silver is now lower than it has been since acquiring Bear Stearns in early 2008. If anything, JPM's COMEX silver short may even be lower than I have calculated, simply because it is no longer that large relative to the holdings of the three other big shorts. With just over 34,000 contracts held short by the big 4, once you subtract JPM's 10,000 short contracts, the remaining three shorts average 8,000 contracts each. This is a far cry from years earlier when JPMorgan singlehandedly held as many as 40,000 contracts of COMEX silver net short and represented close to 70% of the big 4's total silver shorts. Both the longer term and recent trends seem to indicate JPMorgan may not wish to remain the prime silver manipulator as it clearly had been in the past.

Throw in my previous speculation that JPMorgan has been buying physical silver over the past three and a half years with a reckless abandon and may, in fact, be Mr. Big when it comes to buying in SLV and in Silver Eagles; it is easy to conclude that JPM may hold an extreme net long position in silver despite holding 10,000 COMEX contracts (50 million oz) short. As such, it would appear JPMorgan could be positioned much better for an upside move in silver than at any time in the bank's history, both before and after Bear Stearns. And as a bonus to the bank, none of its suspected holdings on the long side of silver would appear to be reportable; thus keeping the holdings and any eventual gains undisclosed.

- Silver analyst Ted Butler, Butler Research, October 20, 2014  

Today's Featured Articles

King World News (Richard Russell - Expect An Avalanche Of Fiat Money Creation)

Michael Lombardi (About That Referendum in Switzerland...)

Ed Steer (This is the biggest one-month gold purchase the Russians have ever made)

Zero Hedge (Guest Post: There Is A Plunge Protection Team - It's Called The FOMC) (How Japanese Hyperinflation Starts In One Chart) (The Japanese Yen's real effective exchange rate (REER) has collapsed to the weakest since 1982)

LeMetropole Caf� (More war means more debt and higher inflation.) 

Jim Sinclair (China is now the largest gold producer, as well as the biggest gold importer and consumer in the world.) (Russia Is Going On A Gold Reserve Buying Spree To Counteract Sanctions) (Russians and Chinese are ditching the dollar as Europeans start using renminbi in their reserves)

The "Volatility" Fallacy

October 22, 2014

Today's theme shouldn't surprise you at all - of the horrific manipulation of every aspect of the U.S. economy and financial markets. This month it has surged to unprecedented levels; first of all, ahead of the "all-important" mid-term elections; secondly, to "cover" the planned end of overt QE; and last but not least, to prevent what clearly was beginning to look like commencement of the end game.

Let's start with yesterday's "miraculous" equity and Treasury yield surge - and capping of gold, as it again sought to breach the Cartel's $1,250/oz. "line in the sand." To that end, recall our commentary of how "conveniently" at the historic "key attack time" of 3:00 AM EST, a "rumor" that the ECB was considering corporate bond monetization emerged to "save the day." Throw in a healthy suspension of disbelief - in that not only should stocks and bond yields have divergent reactions to such news but higher than expected QE is the most PM-bullish news one could imagine!

By day's end, the PPT had rocketed stocks higher; again, based solely on said ECB "rumor" on extremely low volume. Let alone, the catastrophic earnings reports of bellwether stocks McDonalds and Coca-Cola - and widespread fraud allegations against the world's largest subprime mortgage servicer, Ocwen Financial. And as for PMs; Viola! Following "Cartel Herald" caps at 6:00 AM and the 8:20 AM COMEX open, and a subsequent raid at the 12:00 PM EST "cap of last resort," gold was forced back below $1,250. And wouldn't you know it - the ECB "rumor," despite making little if any sense - was refuted right after the close by the head of the Belgian Central bank stating, "We still haven't had a serious discussion about the purchase of corporate bonds. There is no concrete proposal for that on the table." Long-time PM owners are well-versed in this multi-pronged market manipulation "strategy" - as it has been ongoing for 15 years.

Today was a very light economic news day, so the Cartel didn't have much to work with in the way of "cover." And thus, they said "who cares?" - attacking at the 8:30 AM EST release of the rigged, cooked and generally mocked CPI reading. Not only has the CPI report NEVER effected markets in any meaningful way (especially PMs, which are NEVER allowed to rise when it comes in hot); but in this case, it came in EXACTLY as expected. However, as the Cartel has clearly "sold its soul" (and whatever miniscule inventory it still holds) for the short-term goal of defending $1,250, they did this immediately afterwards.  

And this, despite yesterday's U.S. Mint data depicting enormous Silver Eagle sales on Monday and Tuesday putting it on pace for its third-largest month ever. In fact, following up on the violently bullish conclusions of last week's "Miles Franklin All-Star Silver Panel Webinar" our good friends at Smaulgold and Sharelynx published this fantastic article - depicting the relentless explosive growth of global silver demand.

Look good and hard at the downward gold spike above - which frankly is so egregious even "waterfall decline" doesn't do it justice. Putting such manipulative blatancy into perspective, gold rose every year from 2001 through 2012, from $250 ounce to a (temporary) peak of $1,920/oz. And during that time - at least, starting in 2002 when I started watching - I have NEVER seen gold rise in such a manner compared to literally hundreds of such plunges in most cases at the same two or three "key attack times."

Frankly, there is so much ugly in the world these day it makes me very, very sad. For example, the fact that 113 Federal Reserve staff members make $250,000 per year for doing nothing but destroy the American (and World) Dream. Or that America relentlessly bombs the Middle East without a modicum of Congressional debate - in the process, handing $600 million weapon orders to General Dynamics, to be paid for with money printing and propagandized as "GDP" (not real GDP of course). Or how about the news that Obamacare won't release its 2015 premium changes until a week after the elections? Gee, I wonder if they will be higher than 2014. And finally, how about this ridiculously disingenuine Wall Street Journal headline - claiming the Fed, which is literally owned by the banks, and spends every second of every day supporting them is warning banks to "shape up or risk break-up." Yes, and pigs will fly as well.

Yesterday, I posted this graph depicting higher "fear" in the markets (as measured by the VIX volatility index) than even the 2008 peak. The fact that the "Dow Jones Propaganda Average" actually fell for more than one day in a row is a miracle in and of itself - and at its worst, was down 9% from its all-time high (just 5% now); with its worst intraday decline being just 2.7% for a whopping five minutes before the PPT more than halved such losses with a patented "Hail Mary" rally.

Since then, the PPT has staged four straight days of prototypical "dead ringer" algorithms with a fifth currently in the works - so powerfully overwhelming the market with computer programs, volume has dramatically plunged. Most damning of all, for the first time ever, the VIX had three straight days of double-digit declines! And don't forget Treasury bonds, which also benefit from "QE to Infinity," soaring to record highs despite the poorest fundamentals - and most egregious overvaluation - in fixed income history.

Not so for precious metals, of course; which day after day, week after week are subjected to unrelenting "Cartel Herald" caps, "waterfall declines" and every trick imaginable - such as the relentless mauling of mining shares - to make sure price, or even momentum increases are averted.  And all the while, the gold and silver supply outlook plunges, and demand rockets from record high to record high.

Richard Russell - Expect An Avalanche Of Fiat Money Creation - www.kingworldnews.com

October 21, 2014

Today the Godfather of newsletter writers, 90-year old Richard Russell, warned that the world should now brace itself for the creation of a veritable avalanche of fiat currencies.  The 60-year market veteran also covered gold, silver, stocks, China, the U.S. dollar and more.

Russell: "In the early days of the US, the dollar was trusted. The reason it was trusted was that the dollar was backed by physical gold. Those were the days when the dollar was considered "good as gold." The obvious reason was that a person could take his dollars into any bank, and exchange his dollars for gold.

This changed in 1933 when Americans were forbidden by law to own gold. As far as Americans were concerned, they were now dealing with paper and could no longer exchange their paper for gold.

So in 1933, Americans were no longer on the gold standard. But foreigners who were creditors of the US would settle their accounts in gold. If the US had a debt with a creditor, the creditor could settle his debt by calling in a quantity of gold.

This changed in 1971 when, in the face of an outpouring of US gold, President Nixon slammed the gold window shut. This took the US, both domestically and internationally, off the gold standard. The dollar was simply a piece of paper, comparable to Monopoly money. Following the US' example, the rest of the world abandoned the gold standard.

Recently every nation has wanted a cheaper currency to aid in its exports. With almost all world currencies depreciating, money has flowed to the US dollar. This is because the US, alone, appears to have a thriving economy. Of course the strong dollar will retard US exports and make foreign goods appear to be bargains.

The strong dollar puts pressure on gold. So far gold has held up remarkably well in the face of world deflationary pressures and the collapsing price of oil. In the face of these global deflationary pressures, the question is - Will the Federal Reserve fight deflation by calling off its tapering and opening its money spigots wide?

Continue reading on King World News.com.

___________________________

About That Referendum in Switzerland... - www.profitconfidential.com

Michael Lombardi

October 22, 2014

On November 30, Switzerland's citizens will cast a very critical vote.

Through a referendum, they will vote for or against the Swiss National Bank increasing its gold bullion reserves to 20%, the central bank halting the selling of gold, and the storing of gold bullion in the country. (Source: Kitco News, September 30, 2014.)

If the results are in favor of the referendum, it will mean Switzerland's central bank will be forced to buy a significant amount of gold bullion.

According to the most recent data from the World Gold Council, Switzerland has 1,040 tonnes of gold bullion in its reserves, equal to only 7.8% of its total reserves. (Source: "World Official Gold Holdings," World Gold Council web site, last accessed October 16, 2014.) To bring its gold bullion holdings to 20% of total reserves, the central bank of Switzerland will have to buy 1,600 more tonnes of gold, or about 60% of all global mine output this year. Will the gold market be able to handle this kind of demand shock? I highly doubt it.

And if the central bank of Switzerland stops selling gold bullion, a significant amount of gold will come off the market.

Finally, the vote on gold being stored in the country is just another example of the increasing appetite for the precious metal. We saw this phenomenon happen in Germany not too long ago when the country asked the U.S. for its gold back (the U.S. was "storing" it), but Germany was told it would have to wait seven years to get it.

The big picture: Since 2009, central banks around the world have bought more gold bullion than they have sold. Bring in consumer demand for gold bullion from China and India, and the recent lower gold bullion prices have provided buyers another opportunity to buy gold on the cheap.

If the referendum in Switzerland goes in favor of the country going back to the gold standard (that's essentially what the vote is about), and other factors come into play in the global markets, the precious metal's prices will skyrocket in no time.

With all this said, every time gold bullion prices have declined, I have been telling my readers it's a buying opportunity. The way I look at it, the precious metal has had a solid 12 years of gains and in 2013, when prices declined, it was pretty much a gift for investors.

Critical Reads

Vote all you want. The secret government won't change.

The voters who put Barack Obama in office expected some big changes. From the NSA's warrantless wiretapping to Guantanamo Bay to the Patriot Act, candidate Obama was a defender of civil liberties and privacy, promising a dramatically different approach from his predecessor.

But six years into his administration, the Obama version of national security looks almost indistinguishable from the one he inherited. Guantanamo Bay remains open. The NSA has, if anything, become more aggressive in monitoring Americans. Drone strikes have escalated. Most recently it was reported that the same president who won a Nobel Prize in part for promoting nuclear disarmament is spending up to $1 trillion modernizing and revitalizing America's nuclear weapons.

Why did the face in the Oval Office change but the policies remain the same? Critics tend to focus on Obama himself, a leader who perhaps has shifted with politics to take a harder line. But Tufts University political scientist Michael J. Glennon has a more pessimistic answer: Obama couldn't have changed policies much even if he tried.

Though it's a bedrock American principle that citizens can steer their own government by electing new officials, Glennon suggests that in practice, much of our government no longer works that way. In a new book, "National Security and Double Government," he catalogs the ways that the defense and national security apparatus is effectively self-governing, with virtually no accountability, transparency, or checks and balances of any kind. He uses the term "double government": There's the one we elect, and then there's the one behind it, steering huge swaths of policy almost unchecked. Elected officials end up serving as mere cover for the real decisions made by the bureaucracy.

No surprises here.  This author has just stumbled on the "powers that be" but doesn't give them a name.  G. Edward Griffin spells it out exactly in his book "The Creature From Jekyll Island"---or James Perloff's "The Shadows of Power: The Council on Foreign Relations and the American Decline".  This article appeared on the bostonglobe.com Internet site on Sunday---and I thank reader M.A. for sending it along.

Read more...

All the world's gold to be confiscated and buried in Switzerland by 2020 argues Jim Rickards

In what pretends to be a history looking back from the future 'Currency Wars' author and fund manager Jim Rickards argues that by 2020 all the gold of the G-20 nations will be confiscated and buried in a former nuclear bunker under a mountain in Switzerland to take it out of the global financial system.

This is the conclusion to the astonishing tour de force article that kicks off his new monthly newsletter 'Rickards' Strategic Intelligence' for Agora Financial, publisher of highly successful financial newsletters like Chris Mayers' 'Capital & Crisis'. Has the normally sober and thoughtful Mr. Rickards lost his marbles?

I must confess to having my doubts on reading his first issue with one absurd conclusion leading to another and then to a totally unrealistic world gold confiscation scenario. How would that happen? The G-20 meetings struggle to agree on a final communique. How could they agree something like that?

Mr. Rickards doesn't stop there. In his world not only does money die and cease to exist but there is a sort of death of capitalism that Marx prescribed and Stalin tried to implement without notable success. There are no markets, bonds nor money by 2024 and equality rules.

WTF!  Whatever Jim is smoking, I don't want any of it.  And don't look to me for answers on this one, dear reader, as I'm just as much in shock as you are.  This amazing commentary appeared on the arabianmoney.com Internet site on Sunday evening---and it is certainly a must read.  I thank Dr. Dave Janda for sending it along.

Read more...

Taking Your Gold for "The Greater Good"

But returning to the subject of a crash in the paper-gold market, this suggests that the spin that allows the banks of the world to simply steal all deposits over €100,000 could easily be applied to a similar, ongoing banking scam in the paper-gold market.

Let's say that, rather than wait for the Emperor's new clothes to be seen to be an illusion, the banks of the world decide to preempt this embarrassment in a proactive manner. Let's say that, with the support of their friends in the governments, an announcement is made to the public that a decision has been reached that will aid tremendously in saving the "essential" banks. And-here's the best part-it would not impact the "little man" who has already had to bear so much abnegation as a result of the greed of the rich.

The announcement states that the banks have been given the go-ahead to simply cancel the paper-gold certificates that they have sold. This will enrich the banks by billions of dollars, and the only losers will be the greedy rich who have so much money to burn that they have purchased gold certificates.

Were the banks to do this, they would, instead of being vilified for selling assets that they did not possess, be praised for taking affirmative action for "The Greater Good."

This commentary appeared on the internationalman.com Internet site on Monday.

Read more...

Koos Jansen: The Chinese precious metals market is on fire

China's gold demand, as signified by off take from the Shanghai Gold Exchange, has reached "extraordinary" levels in recent days, while silver is growing shorter in supply as well, according to gold researcher and GATA consultant Koos Jansen.

Jansen's analysis is headlined "The Chinese Precious Metals Market is on Fire" and it was posted on the Singapore Internet site bullionstar.com at 11:07 p.m. local time on their Sunday evening.  It's worth reading---and it's another gold-related item I found in a GATA release yesterday.

Read more...

   ___________________________

Guest Post: There Is A Plunge Protection Team - It's Called The FOMC - www.zerohedge.com

Submitted by Tyler Durden on 10/22/2014 13:54 -0400

Congress gave the Fed a mandate to "promote maximum employment, production, and price stability"; it never explicitly authorized propping up stocks. Yet through a remarkable theoretical stretch called the "wealth effect," that's exactly what the Fed is doing.

Continue reading on Zero Hedge.com.

***

How Japanese Hyperinflation Starts (In 1 Chart) - www.zerohedge.com

Submitted by Tyler Durden on 10/21/2014 20:02 -0400

The Japanese Yen's real effective exchange rate (REER) has collapsed to the weakest since 1982, according to Mitsubishi UFJ Morgan Stanley Securities. Simply put, REER is a trade-weighted measure of Yen strength (or weakness) against, in this case, 59 trading partners; and as the nation posts an unprecedented 27th straight month of trade deficits, Bloomberg reports MUFJ indicates "a structural shift" has taken place.

This is a problem as Daisaku Ueno exclaims,"If the trade deficit doesn't noticeably narrow from here, the yen's real effective rate could fall to levels never seen before," and, ominously, "from a supply and demand perspective, yen selling for foreign currency by Japanese importers will just continue endlessly."

And Japan becomes Venezuela...

Continue reading on Zero Hedge.com.

 ___________________________

10/22 Gary Christenson - Gold Or Crushing Paper Debt? - www.lemetropolecafe.com

A Yahoo headline: Pentagon Readying For Long War in Iraq, Syria.  More war means more debt and higher inflation.  Increasing national debt is as certain as death and taxes.  Increasing consumer prices follow.

National Debt Since 1971

CPI - Less Food and Energy, of course

Then the "something for nothing" crowd adds to the trauma.

• More programs are funded by government - Medicare, disability, military contractors, "war on poverty," banker bail-outs, "food stamps," and many more.
• Central banks "print" currency (something for nothing) and pretend that new dollars, euros, yen, and pounds are valuable. The result is more currency in circulation, higher prices, and more economic distortions.
• "It's all good" propaganda from governments and banks disorients the populace.  The antidote is truth.  (Thanks to James Quinn at www.theburningplatform.com)

Governments respond to problems with more spending (stimulus), central banks support the bond and stock markets (QE), and we pretend debt and deficit spending can increase forever (delusional).  The U.S. official national debt is nearly $18,000,000,000,000.

Occasionally a 1987 or 2000 stock market crash occurs, a 9-11 event changes the world as we know it, a housing bubble deflates, and major wars are created.

What could dramatically change our world - again - like 9-11 did?

• Smaller wars expand to become bigger wars, or even global wars.
• An Ebola pandemic, or merely the fear of a pandemic, temporarily paralyzes the global economy.
• Loss of confidence in fiat currencies and never-ending debt causes a major depression or financial collapse. What could create such a loss of confidence?  Insolvent governments, a global pandemic, derivatives implosion, massive bank failures, financial meltdown, crude oil price spike, debts that will never be repaid, and leaders who don't lead - are just a few.
• Stocks peak and crash as they often do about every 7 years.

Could Anther Crash Occur?

Our financial world seems more unstable and more dangerous than usual.  Which has been safer under difficult economic and political conditions during the past 3,000 years - gold or debt based paper?

Consider the following graph of gold (log scale) since 1968.  Note the rally into the mid 1970s and the subsequent correction.  Is that pattern similar to the rally into 2011 and the correction since then?

Our financial world is dangerous and volatile.  It is possible that:

• The S&P will rise for another decade.
• Middle-east wars will resolve into peace and prosperity.
• The Ebola panic will fade away.
• Confidence in paper currencies and dodgy debt will persist for another decade or two.
• Global peace and harmony are just over the horizon.
• The US gold supposedly at Fort Knox and the NY Fed is still there.
• Derivatives will continue generating revenue for banks with only positive consequences to economies and the 99%.
• Governments will expand the funding for the "something for nothing" programs to buy votes, all without consequences.
• And we will tax and legislate ourselves into wealth and prosperity.

But I doubt it!

I think gold will survive as a store of value far longer than any government, fiat currency, or debt-based paper investment.

To read the full article, please subscribe to Le MetropoleCafe.com.

_________________________

Jim's Mailbox - www.jsmineset.com

The views and opinions expressed in this e-mail are solely those of the original authors and other contributors. These views and opinions do not necessarily represent those of Miles Franklin Ltd., the Miles Franklin Ltd. staff, and/or any/all contributors to this site.  

Readers are advised that the material contained herein is solely for informational purposes. The author and publisher of this letter are not qualified financial advisors and are not acting as such in this publication. The Miles Franklin Report is not a registered financial advisory and Miles Franklin, Ltd., a Minnesota corporation, is not a registered financial advisor. Readers should not view this publication as offering personalized legal, tax, accounting, or investment-related advice. All forecasts and recommendations are based on opinion. Markets change direction with consensus beliefs, which may change at any time and without notice. The information and data contained herein were obtained from sources believed to be reliable, but no representation, warranty or guarantee is made that it is complete, accurate, valid or suitable. Further, the author, publisher and Miles Franklin, Ltd. disclaims all warranties, express, implied or statutory, including, but not limited to, implied warranties of merchantability, fitness for a particular purpose, accuracy and non-infringement, and warranties implied from a course of performance or course of dealing. The reader accepts information on the condition that errors or omissions shall not be made the basis for any claim, demand or cause for action. Past results are not necessarily indicative of future results. Any statements non-factual in nature constitute only current opinions, which are subject to change. The author, publisher, Miles Franklin, Ltd, and their respective officers, directors, owners, employees and agents are not responsible for errors or omissions or any damages arising from the display or use of such information. The author, publisher, Miles Franklin, Ltd, and their respective officers, directors, owners, employees and agents may or may not have a position in the commodities, securities and/or options relating thereto, and may make purchases and/or sales of these commodities and securities relating thereto from time to time in the open market or otherwise. Authors of articles or special reports contained herein may have been compensated for their services in preparing such articles. Miles Franklin, Ltd. and/or its officers, directors, owners, employees and agents do not receive compensation for information presented on mining shares or any other commodity, security or product described herein. Nothing contained herein constitutes a representation, nor a solicitation for the purchase or sale of commodities or securities and therefore no information, nor opinions expressed, shall be construed as a solicitation to buy or sell any commodities or securities mentioned herein. Investors are advised to obtain the advice of a qualified financial, legal and investment advisor before entering any financial transaction.