Thursday November 6, 2014

Table of Contents

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From David's Desk

David Schectman

I usually don't write on Thursday. My usual schedule is Monday, Wednesday and Friday, but there are a few articles I want you to read that help explain what happened yesterday. Don't get upset - just sit back and listen to what just happened.

 

The US Mint is sold out of Eagles. The premium on junk silver bags is up a couple of bucks since Oct. 27. Sales at the Canadian Mint are very strong. There are reported shortages of gold and silver in Germany. China and India are on a buying spree. How can the price drop in such an environment? Easy, that's COMEX naked-shorting gold and silver without having to deliver. Any payout is in dollars, not metals. They are actually doing the buyers of physicals a huge favor, but not everyone sees this for what it is. I do. I added another mint box of Silver Eagles and five ounces of gold to my portfolio on Wednesday afternoon. My son Andy duplicated my order as well. If the prices drop further, I'll add more.

 

Here is an article from GoldCore:

 

"Global Scramble" For Silver - Coins "Hard To Get," "Premiums Likely To Jump"- www.goldcore.com

 

In recent days, there has been a global scramble to acquire silver bullion coins and bars after the price falls according to Reuters. Maple Leaf silver coins are difficult to acquire according to bullion dealers, with the  Royal Canadian Mint on allocation from September. There is a concern that supply times will increase and premiums are likely to jump according to Reuters.

 

"A tumble in silver prices to four-year lows has triggered a global scramble by consumers to purchase silver coins and bars, as the spread between the price of the metal and gold reaches its widest in five years.

 

Retailers and distributors in Asia and the United States said they were struggling to get supplies of items such as Canadian Maple Leaf silver coins.

 

While demand for silver has been strong over the last few months, retailers say buying interest soared in recent days as the metal fell towards its lowest since 2010, along with gold.

 

Here is an article from Silver Doctors:

 

 Breaking Alert: US Mint SOLD OUT of Silver Eagles! 2 Million Coin Surplus Sold in Under 2 Hours! - www.silverdoctors.com

 

The US Mint has just issued an alert to Primary Dealers across the US that Silver Eagle inventories, which according to the Mint began today at over 2 million ounces, are now SOLD OUT as of 12:30pm EST. - The Doc

 

 

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Quotes of the Day

 

Although it's convenient to blame darkling forces, I would think that a large mutual fund or two had to liquidate positions for redemption reasons whether they wanted to or not, as the shares were brutalized far worse than the price action would indicate possible.  We've certainly seen a lot of this in the last 30 days.

 

But the question still remains on down days like this---who were the buyers?

- Ed Steer, Casey Research, November 5, 2014

 

There has been strong, broad based demand for precious metals in Germany in recent weeks and months due to concerns about the Eurozone, the Euro, the conflict with Russia and global uncertainties.

- Goldcore.com, November 4, 2014

 

A few words on the brutal two-day sell off [last Thursday and Friday] and what I have read as to its cause - basically Thursday's decline was due to the Fed's ending of Q.E. and Friday's decline was due to Japan's acceleration of monetary ease. I don't mean to be disrespectful of others' opinions, but those explanations were contradictory and nonsensical. Let me see if I can't back up my assertion.

 

Gold and silver declined sharply for one reason only - technical fund selling on the COMEX. Of course, we'll have to wait until [this Friday's] Commitments of Traders Report (COT) for confirmation; but there has been massive technical fund selling on every price decline in gold and silver for months and years. In fact, there never has been a significant decline in the price of gold or silver without technical fund selling (and commercial buying). Based upon history and the basics of how technical funds operate - selling on price declines and buying on rallies - and considering that new multi-year price lows are the strongest sell signal possible for technical funds, there is little question that the technical funds (in the Managed Money category of the report) were the big sellers last Thursday and Friday.

- Silver analyst Ted Butler, Butler Research, November 1, 2014

 

 

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Today's Featured Articles

 

Paul Craig Roberts (American Financial Markets Have No Relationship To Reality)

 

LeMetropole Caf� (There is no valid trading strategy for dumping 8,780 contracts, or 27.44 tons of paper gold into the Comex night access market in just 5 illiquid minutes.)

 

Investment Research Dynamics (They're Burning The Furniture Now)

 

USAWatchdog (Unprecedented Money Printing Injected into Economy-Fabian Calvo)

 

Ed Steer (You'll note that the [current] lows all occurred at exactly the same time, so this was obviously a coordinated attack)

 

Zero Hedge (The Economy Is So "Strong" It Just Cost Obama The Senate) (The Paradox Goes On: Inequality-Incensed Voters Send Dow To All Time High)

 

Steven Chase (Ottawa, Beijing strike deal on yuan trading hub)

 

 

 

Sincerely,

David Schectman

The Holter Report

Bill Holter

Why Would We Do This ...Now?

November 6, 2014

 

Very big news on the banking front, the Federal Reserve is now apparently allowing Chinese banks to take stakes in U.S. banks.  North of our border, Canada is contemplating becoming one of the many, recent "renminbi hubs".  Why would this be happening?  Why would it be happening now?

 

First, why is China setting up shop all over the world?  This is an easy one, for business, for trade, for relations.  China knows exactly where the U.S. and the dollar stand, they also know fairly well where and how the U.S. and her dollar will fall.  China is merely preparing the groundwork to trade with Western entities in either local currency or the yuan.  In the case of Canada, China sees a very large energy source along with the mining of many necessary resources they will need in the future.   

 

The thing is, China doing a deal with Canada like this hits very close to home.  Actually, Canada doing a deal like this is almost a slap in the face of the U.S.  Don't get me wrong, Canada doing a deal with China is good for Canada for all of the right reasons but this is certainly an action of distancing themselves from the U.S.  Should the monetary hub deal be consummated, trade will be facilitated in a win/win fashion for both Canada and China.  I believe this can be viewed as another straw on the U.S. camel's back and a preparation by Canada for what is about to come.  You must look beneath the surface here, not only will their trade volumes increase, they will actually get paid in a currency issued by an industrial powerhouse where there is no question as to whether or not there is any gold in the vault.  If this deal goes to fruition, it will be clear proof that Canada is attempting to break the leash and no longer being a U.S. lap dog.

 

As for China's banks now being allowed to purchase stakes in U.S. banks, this is VERY interesting from both sides of the coin.  Why would China want to do this and why would the U.S. allow it?  The other and even bigger question is "why now?"  Why not five or 10 years ago?  Why not in a "few years?"  I have my opinions on this which is all they are, opinions and not fact but this is a topic that needs to be thought about because it is very curious indeed!

 

Why would China want to do this if she thinks the U.S. is a bankrupt entity which she surely must?  Could this only be a "toe hold" or an avenue to picking up the pieces later and profiting while doing so?  Yes, probably.  Is this a way to be able to look inside our banks to see how bad it really is?  Again, probably.  Remember, with any "percentage" stake comes the ability to be represented on the board of directors.  Is this a way to put a "spy" on the inside, in plain sight and legally?  I think yes.  Also remember, the way to "control" the masses throughout time has been to control the currency and the banks.  Owning large swaths of the U.S. banking industry in the future can only lead to knowledge, eventual profits and at least some control on our home turf.

 

On the other hand, why would the Federal Reserve allow China into our banking system?  Off the top of my head, maybe because the banks need the capital?  Or worse, maybe China has told the Federal Reserve to "do it or else?"  The "or else" part could be anything at this point.  If China still owns all of the Treasury debt claimed by the Fed as custodian, maybe they are threatening to dump?  Maybe they are threatening to upset the gold, silver or any multitude of commodity markets?  ...which of course would knock the legs out from under the dollar itself.  If you recall, it was about 10 years ago when China wanted to buy out Unocal and were rebuffed for "national security" reasons, why would the Fed agree to this...now?

 

As I mentioned, one of the reasons may be because "we" collectively need the capital.  I say "collectively" because even though we are told our economy is growing, it is not growing in real terms, only nominal terms because of inflation.  The economy is not generating enough income (savings) for future growth.  We are and have been eating our seed corn rather than saving.  The Fed has "printed" money to sustain and "prolong" the economy but this is not real capital.  It is liquidity only rather than real hard capital (unencumbered) for future use, let me explain just a little.  You see, when the Fed injects dollars into the system it boosts the amount of dollars outstanding ...but, eventually those dollars must be paid off.  It is like borrowing money from your credit card to start a business that only breaks even ...the day will eventually come when the credit card must be paid off but the asset (your business) never really grew and really wasn't worth enough to pay off the debt.   

 

This is the American situation and why I believe we are at this point in time allowing China into our banks, we need some real outside capital to shore up our balance sheets.  Of course we are forgetting one other possibility as long as we are talking about balance sheets.  Maybe the Fed's own balance sheet which is levered at nearly 80-1 needs some help?  Maybe they realize their "assets" are not worth nearly what they originally paid and their "true" leverage ratio is who knows, 200-1?  You see, the Fed took all of the crappy assets on to their books from the banks so the market participants would never see "trade prices" of .40 cents on the dollar or .20 cents on the dollar or even worse.  Maybe the Fed threw Bernanke's 1, 2, 3 punch (QE's) and we didn't get the hoped for reflation?  Maybe this is only the Fed screaming "help?" 

 

Andy Hoffman's Daily Thoughts

Zugzwang

November 5, 2014

 

First off, the Republicans took back the Senate. Big deal, it will have absolutely ZERO impact on the economy, financial markets, or the ongoing decline of the once great American society.

 

Democratic victories in the 2006-2012 elections were clearly due to voter disillusion with America's rapid decline during more than a decade of predominantly Republican rule; as the GOP held the House Majority from 1994-2006, and the Senate majority in ten of those 12 years. Throw in George W. Bush's horrific legacy - as well as charismatic lies during Obama's re-election campaign, and you can see why Americans gave Democrats the benefit of the doubt in 2012, irrespective of little or no "hope" or "change" during Obama's first term.

 

But no more; as by 2014, the average American's disillusionment with its despicably corrupt, hopelessly inept Congress yielded an all-time low approval rating of just 9%. True, there are still far more Republicans than Democrats in Congress; but clearly, a "change" was in the cards regarding the Democrats' narrow Senate majority. However, now that Presidential powers border on dictatorial; and Congress' will to even debate long lost; why does anyone believe anything would - or could - possibly change? Just hours after becoming Senate Majority leader, Mitch McConnell already claimed he has no intention of overturning Obamacare. After all, Republicans will need Obamacare recipients' votes in 2016, if (insert name here) is to defeat Bill Hillary Clinton.

 

Next up, a word on the precious metals newsletter writer community - of which essentially all have called "the bottom" at some point this year and all have been wrong. The fact that anyone still relies on technical analysis in a rigged market, or that anyone believes a handful of "special" people have "proprietary" analysis worth is beyond me; but hey, to each his own. I follow a handful of "the best" of this lot's views; and without fail, each one utilizes the same strategy I was taught too well in my seven years of Wall Street sell-side research, principally at Salomon Smith Barney. Which is to couch all statements in such a manner as to claim one was "right" when in fact they could not have been more wrong. Irrespective of such semantics, right or wrong, those who listened to such advice lost significant amounts of money - particularly when investing in the "paper PM investments" like mining stocks, typically pitched.

 

Speaking of mining stocks, the HUI this morning traded as low as 149.3 - i.e., below the September 2008 low of 150.3; whilst the TSX-Venture at 748 is just above the September 2008 low of 697 (down 80% from its May 2007 high) - but only because so many miners have already gone bankrupt, and the fact the Venture exchange has a significant non-miner component. In other words, the large cap miners are back to early 2003 levels - when gold and silver traded at $300/oz. and $4.50/oz., respectively; whilst nearly all junior miners are at all-time lows. And don't forget the closed-end bullion funds CEF (Central Fund of Canada) and GTU (Central Gold Trust). We loudly warned of their risks in February 2013, when they were trading at net asset value - and as of this morning, they are trading at discounts of 11%-13%. Interestingly, the Sprott physical silver fund (PSLV) continues to trade at a 2% premium to net asset value and the Sprott physical gold fund (PHYS) a modest 1.5% discount; attesting to just how strong demand for physical demand is, given that the Sprott funds - unlike the aforementioned "Spicer funds" - are convertible to actual metal. We simply speak the TRUTH about the economy and financial markets hoping you will utilize it to protect yourself from the inevitable collapse of the terminally cancerous fiat currency regime. All of Miles Franklin's principals put their money where our mouth is, in holding significant portions of their savings in physical gold and silver; and anyone who has read or listened to the views of David Schectman, Andy Schectman, Bill Holter or myself knows full well our business goalsnot only do not conflict with our analysis, but are no more important than our life's mission of financial education. This is why we receive essentially no negative feedback on days like today and do not feel compelled to apologize, rationalize or justify our views. In other words, we tell the TRUTH - which inevitably "sets you free."

 

Speaking of truth, what part of someone selling $1.5 billion of gold futures at 12:30 AM EST rings of a freely-traded market - particularly when it's now occurred on five straight days since the "end of QE (LOL)," and all four mornings since the Bank of Japan's nuclear money printing announcement? Not to mention, ahead of yesterday's mid-term elections, tomorrow's potentially momentous ECB meeting, Friday's NFP report, Sunday's ("non-binding") Catalonian secession vote - and oh yeah, the potentially Cartel-ending November 30^th Swiss gold referendum. For the record, 12:30 AM EST represents the uniquely illiquid period between the Japanese morning and afternoon trading sessions - which apparently, has been added to the Cartel's expanding list of "key attack times." Clearly, the Cartel aims to prevent, by all means, the $1,183 "triple bottom" level from being recaptured - so as to cause the aforementioned "technical analysts" to warn of further declines, and "black box" naked shorters to pile on with additional unbacked "sell" orders.

 

Fortunately, this dark moment in financial history cannot last - as not only is the global economy rapidly worsening, but the supply/demand balance in physical PM markets is getting decidedly tighter. In the silver market, premiums and delivery times have started to creep higher; whilst in the gold market, forward rates continue to move deeper into backwardation, as withdrawals from both the COMEX and GLD accelerate. All measures of global demand are surging; and with the mining industry on the verge of collapse - and capital availability essentially ZERO - the prospect of unfathomable production collapses have never been more acute. The fact that even Goldcorp reported a loss last quarter - before the current price smash - should tell you just how dire the industry's condition is. And mark our words, if 2014 ends with prices anywhere near the current historically suppressed levels, the inevitable reserve write-downs, production shut-ins, and industry-paralyzing mergers may well dwarf the relative impact of the late 1990s to early 2000s oil industry consolidation, following oil's brief gambit below $10/bbl.

 

Worldwide, the economy is in all-out collapse - as demonstrated by the fact commodities are falling at their most rapid rate since the September 2008 "Lehman moment." Here in the States, our economic book-cookers work harder than anywhere else. Thus, we are treated to "higher than expected" GDP due to government defense spending to bomb ISIS; multi-year lows in "unemployment" when the Labor Participation Rate - along with Presidential and Congressional approval ratings - are at all-time lows. Let alone, this morning's equally-cooked ADP employment gain of 230,000 jobs released simultaneous with Gallup's job creation index plunging by a whopping 10%. Not to mention, the lowest ISM and PMI service index readings since April and June, respectively (much worse than reported, when this ridiculous "adjustment" is excluded), and a 3% decline in the MBA mortgage purchase/refinancing index. Throw in the horrifying trend depicted by this ugly chart of more than half of all S&P 500 companies reducing earnings expectations, and the gaping chasm between government-manipulated markets and economic reality - much like that of the paper and physical PM markets - has clearly never been wider. To wit, we have now experienced a "Dow Jones Propaganda Average" "dead ringer" algorithm every day since QE supposedly ended, and a "new Hail Mary" algorithm every time the 10-year Treasury yield sought to follow global rates lower below the Fed's current "line in the sand" at 2.3%. And like precious metals, such actions nearly always occur at the "key attack time" of 10:00 AM EST, when global physical gold and silver markets close and the Fed's "open market operations" are executed. In TPTB's desperation to prolong its world-destroying game, they have resorted to manipulating markets every minute of every day - which is probably why "2:15 AM" EST PM raids now occur on 90% of all trading days; "Sunday night Sentiment" attacks essentially every week; "Sixth Sigma" aftermarket attacks and intraday "silver waterfalls" essentially every day; whilst the stock market sports a ratio of up months to down months higher than at any time since 1929.

  

  

On this historic day of market manipulation, I have limited space to speak of today's principal topic. But suffice to say, it's an extension of what we have written all along of, regarding the currency volatility (and destruction) catalyzed by Western hyper-monetary inflation; i.e., the "single most precious metal bullish factor imaginable." Whilst the clueless, disingenuine MSM publishes headlines like "Republican election gains send dollar to seven-year high versus yen" - as opposed to the Bank of Japan's overt hyperinflationary policies - the entire world is suffering from Western money printing madness. Below is an update of the damning chart I have published since the Federal Reserve went "all-in" with Operation Twist/QE3/QE4 following the 2011 global sovereign crisis - depicting the massive inflation the West has exported more than offsetting the recent crude oil price decline.

  

  

 

As we wrote in yesterday's "three death trends," such inflation has accelerated a "final currency war" that can only end with, as WHOPPER from War Games would have put it, mutually-assured destruction. We may well see the next "move" played tomorrow by the ECB, in response to its post-BOJ surge against the Yen; ironically, simultaneous with its post-FOMC plunge against the dollar, after which the U.S. warned the ECB not to push the Euro's devaluation "too far." To that end, I read an article yesterday of the "zugzwand" situation all Central banks currently face. That is referring to a precarious chess position - or the War Games simulation above - a situation in which all potential moves are harmful. To that end, rest assured, the world's bankers - and politicians, be they Democrat or Republican - will make this historically horrific economic situation worse. And thus, on this fifth of November with gold and silver prices battered to unconscionable levels amidst the most PM-bullish fundamentals of our lifetimes, will you be "brave" enough to insure yourself from what must occur?

 

 

 

Featured Articles

American Financial Markets Have No Relationship To Reality - www.paulcraigroberts.org

November 4, 2014

 

Paul Craig Roberts and Dave Kranzler

 

As we have demonstrated in previous articles, the bullion banks (primarily JP Morgan, HSBC, ScotiaMocatta, Barclays, UBS, and Deutsche Bank), most likely acting as agents for the Federal Reserve, have been systematically forcing down the price of gold since September 2011. Suppression of the gold price protects the US dollar against the extraordinary explosion in the growth of dollars and dollar-denominated debt.

 

It is possible to suppress the price of gold despite rising demand, because the price is not determined in the physical market in which gold is actually purchased and carried away. Instead, the price of gold is determined in a speculative futures market in which bets are placed on the direction of the gold price. Practically all of the bets made in the futures market are settled in cash, not in gold. Cash settlement of the contracts serves to remove price determination from the physical market.

 

Cash settlement makes it possible for enormous amounts of uncovered or "naked" futures contracts - paper gold - to be printed and dumped all at once for sale in the futures market at times when trading is thin. By increasing the supply of paper gold, the enormous sales drive down the futures price, and it is the futures price that determines the price at which physical quantities of bullion can be purchased.

 

The fact that the price of gold is determined in a paper market, in which there is no limit to the supply of paper contracts that can be created, produces the strange result that the demand for physical bullion is at an all time high, outstripping world production, but the price continues to fall! Asian demand is heavy, especially from China, and silver and gold eagles are flying off the shelves of the US Mint in record quantities. Bullion stocks are being depleted; yet the prices of gold and silver fall day after day.

 

The only way that this makes sense is that the price of bullion is not determined in a real market, but in a rigged paper market in which there is no limit to the ability to print paper gold.

 

The Chinese, Russians, and Indians are delighted that the corrupt American authorities make it possible for them to purchase ever larger quantities of gold at ever lower prices. The rigged market is perfectly acceptable to purchasers of bullion, just as it is to US authorities who are committed to protecting the dollar from a rising price of gold.

 

Nevertheless, an honest person would think that the incompatibility of high demand with constrained supply and falling price would arouse the interest of economists, the financial media, financial authorities, and congressional committees.

 

Where are the class action suits from gold mining companies against the Federal Reserve, its bullion bank agents, and all who are harming the interest of the mining companies by short-selling gold with uncovered contracts? Rigged markets-especially on the basis of inside information-are illegal and highly unethical. The naked short-selling is causing damage to mining interests. Once the price of gold is driven below $1200 per ounce, many mines become uneconomical. They shut down. Miners are unemployed. Shareholders lose money. How can such an obviously rigged and manipulated price be permitted to continue? The answer is that the US political and financial system is engulfed with corruption and criminality. The Federal Reserve's policy of rigging bond and gold prices and providing liquidity for stock market speculation has damaged the US economy and tens of millions of US citizens in order to protect four mega-banks from their mistakes and crimes. This private use of public policy is unprecedented in history. Those responsible should be arrested and put on trial and they should simultaneously be sued for damages.

 

US authorities use the Plunge Protection Team, the Exchange Stabilization Fund, currency swaps, Federal Reserve policy, and purchases of S&P futures to support an artificial exchange value of the dollar and to provide the liquidity needed to support stock and bond prices, with the latter so artificially high that savers receive negative real interest rates on their saving.

 

The authorities have created a financial system totally out of sync with reality. When the authorities can no longer keep the house of cards standing, the collapse will be extreme.

 

It is a testament to the complicity of economists, the incompetence of financial media, and the corruption of public authorities and private institutions that this house of cards was constructed. The executives of the handful of mega-banks that caused the problem are the people who are running the US Treasury, the New York Fed, and the US financial regulatory agencies. They are using their control over public policy to protect themselves and their institutions from their own reckless behavior. The price for this protection is being paid by the economy and ordinary Americans - and that price is rising.

 

The latest orchestrated takedown of the gold price is related to two events (see the graphs below). One is that the Federal Reserve decided to boost the upward spike in the dollar's exchange rate from the Fed's announcement of the end of Quantitative Easing (QE). The Fed's announcement of the end of dollar creation in order to support bond prices lessened the rising anxiety in the world about the US dollar's value when the supply of new dollars continued to increase faster than the US output of goods and services. The Fed reinforced the boost that its announcement gave to the dollar by having its bullion bank agents drive down the gold price with naked short selling.

  

 

PaulCraigRoberts.org

 

Naked short selling was also used to offset the effect on the gold price by the Bank of Japan's surprise announcement on October 31 of a massive new program of QE. Apparently, the Bank of Japan either has been pressured by Washington to inflate Japan's currency in order to support the dollar's value or is applying a policy based on the Keynesian Phillips Curve that 2-3% inflation stimulates economic growth. Japan has been in the economic doldrums for a long time and is now reduced to pre-Reagan "snake oil" prescriptions in a desperate attempt to revive its economy.

 

Japan's announcement of infinite money creation should have caused the price of gold to rise. To prevent a rise, at 3:00 AM US Eastern Time, during one of the least active trading periods for gold futures, the electronic futures market (Globex) was hit with a sale of 25 tonnes of uncovered Comex paper gold contracts, which dropped the gold price $20 dollars. No legitimate seller would destroy his own capital by selling a position in this way.

 

The gold price stabilized and moved higher, but at 8 AM US Eastern Time, and 20 minutes prior to the opening of the New York futures market (Comex), another 38 tonnes of uncovered paper gold futures were sold. The only possible purpose of such a sale is to drive down the price of gold. Again, no legitimate investor would unload a huge amount of his holdings in this way, thereby wiping out his own wealth.

 

PaulCraigRoberts.org

  

Allegedly, the United States is the home of scientific economics with the predominance of winners of the Nobel Prize in economics. Despite these high qualifications, the price of gold, silver, equities, and bonds that are set in the US bear no relationship to economic reality, and American economists do not notice.

 

The divergence of markets from economic reality disturbs neither public policymakers nor economists, who promote the interests of the government and its allied interest groups. The result is an economy that is a house of cards.

 

For additional reading see: http://investmentresearchdynamics.com/the-system-is-terminally-broken/

  

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11/5 "The Guns of Navarone" - www.lemetropolecafe.com

 

"Professional" traders like D.G. no doubt see a valid trading strategy for dumping 8,780 contracts, or 27.44 tons of paper gold into the Comex night access market in just 5 illiquid minutes. Never mind the previous five minutes saw only 85 contracts change hands. Of course too dumping an additional 14 tons of paper gold between 6:51 and 6:52 AM also involved utilizing the best price discovery method. It's all just part of the 99.9% pure market that is impervious to the corrupt markets in general. Being 99.9% pure also involves the $100 plunge since the CME lowered margin requirements, which compared to the ongoing silver rig job is only a paltry 90% probability. Bullion bank shorts get fat, spec longs get slaughtered. Rinse, repeat. As Dave Kranzler also pointed out the relentless selling during London/NY hours is also just 99.9% pure as driven snow free markets. Counter-seasonal, counter-physical demand, counter-intuitive, counter-EVERYTHING- gold can't possibly be manipulated according to the pompous asses that masquerade as gold experts.

  

  

  

131 for 135..... Move on. Nothing to see here. Please disperse. Please move along.

 

ABX now sits with a $10 handle- just $8 to my $2 prediction, which was in jest. Their rally cry must be "$2 or (literally) bust". I'm sure John Thornton's buddies at GS are squealing with delight however watching their PM portfolios doing so well today. Maybe if every CB on the planet simultaneously announces their QEfinities gold will be $300. I'm just taking black is white and white is black to the extreme.....

 

JMc

 

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

 

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They're Burning The Furniture Now - investmentresearchdynamics.com

November 5, 2014

 

Whenever destroyers appear among men, they start by destroying money, for money is men's protection and the base of a moral existence. Destroyers seize gold and leave to its owners a counterfeit pile of paper.   Francisco's Money Speech - When Atlas Shrugged

 

Last night around 12:30 a.m. EST, $1.5 billion of paper gold was dumped into the Comex Globex computer trading system during one of the least liquid periods of trading in any 24-hour period.  It was done when there was almost no resistance from the physical market.  The two largest physical buying markets in the world were dormant when this hit occurred:  India was closed for holiday observance and Shanghai was on its mid-day trading hiatus.

 

Dumping this enormous load of paper gold onto the market like this can only be done by an entity that has an agenda other than profit motive. Even if a big player wanted to establish or add to a short position to express a bearish view on gold, a position of this size would be carefully set up in order to maximize the price level received for selling-short the gold futures. Instead, a powerful entity who can easily absorb the likely losses dumped this paper gold on the market with the goal of manipulating the price lower.

 

To be sure, hoards of "little guys" in the U.S. seem to understand the real truth.  The record buying of U.S. minted silver eagles - aka "poor man's gold - during September and October bears witness to this assertion.  As the western Governments force the price lower with phony paper gold and continue to loot all visible sources of physical gold in order to meet delivery requirements, it seems that the "hoi polloi" is fighting back by buying even more physical metal.  It's not just in the U.S.  The Royal Canadian Mint reports its silver maple leaf sales on a lagged basis but unofficial reports suggest that buyers there have been wiping clean the cupboard.  And a report surfaced out of Germany about a run on silver coins there by the public (LINK).

 

One can only wonder what the ultimate end-game agenda is here, because if these prices stick for a while the majority of gold/silver mines globally will be forced to shut down.  Many people believe this move in the metals is directed at the Swiss Gold Initiative vote at the end November.  But I believe it's fait accompli predetermined to fail.  I think what's happening now is a desperate attempt to defer much bigger problems.

 

If signifying nothing else, yesterday's election results in the U.S. were a de facto abdication of the Obama Government.  You can be certain that the shift in political control will do nothing other than take the country further down the road of ruin, but at least the little guy was able to express his disgust with a President who turned on those who elected him and reneged on every promise upon which he was originally elected.

 

The political and economic interests who are in control of the west are now exhibiting complete desperation to hold on to their power. And they are employing shock and awe methodologies that can only be described as financial terrorism - the financial markets equivalent of 9/11. This is what we saw when Japan surprised the world last Friday by announcing an even bigger QE money printing program. Not only is the Bank of Japan now monetizing 100% of all Japanese Government debt, it is buying up a not insignificant portion of Japan's stock market. Shock and awe are what we are seeing with the degree of open fraud being committed by banks and corporations and by the unmitigated falsification of almost every economic report released by the Government.   But the country is starting to catch on this and yesterday's middle class political voice, though helpless in initiating real change - was expressed.

 

I've always said that eventually China - or some consortium of countries led by China - would require that the U.S. open up its NY Fed vaults and Fort Knox and demonstrate to the world that it possessed - and held legal title to - the gold that it reports owning.  But I also have always expressed belief that the U.S. would start WW3 before being forced to reveal to the world what it has done with the 8,100 tonnes it supposedly owns.  The U.S. is burning furniture now in an attempt to defer its day of reckoning.  Unfortunately the last gasp will be war.

 

While I've been wrong about the ability of the U.S. to take the price of gold down this far, I have largely correct for over 10 years now about how events would unfold.  With gold I'm not wrong on its eventual price - I'm just wrong on the path it takes and the timing of reaching its eventual price destination.  Let's hope I'm dead wrong about the possibility of WW3.

 

 

  __________________________

 

Unprecedented Money Printing Injected into Economy-Fabian Calvo - usawatchdog.com

By Greg Hunter On November 5, 2014

By Greg Hunter's USAWatchdog.com 

 

Real estate expert Fabian Calvo says forget about the Fed's recent announcement that it was ending its QE, or money-printing program. Calvo contends, "Anyone who thinks the Fed is not somehow fueling the money printing through currency swaps taking place in Japan or in Europe right now is just fooling themselves. This economy has not gotten any better. The only thing that's changed is the unprecedented scale of the money printing that is being injected into the economy."

 

So, why is the U.S. dollar gaining in value against other currencies? Calvo says, "I actually think the dollar rising is another huge manipulation forward, and I think it is a last ditch effort by the Fed to keep the dollar as the world reserve currency. So, that way, you will have a lot of people with this race towards the bottom which will continue to devalue their currency in order to make their exports cheaper. Ultimately, this ends really, really badly. I don't really believe this so-called bull run in the dollar is anything but fabricated, just like the rise in stocks or the rise in real estate prices. I think Japan unveiled, just last week, historic quantitative easing. . . . It's unprecedented in the history of modern economics. Japan will go down as well as all of these other currencies that are being printed into nonexistence."

 

As far as recent bad news coming from the U.S. housing market and recession fears in Europe, Calvo says, "I think this is part of the conditioning and setting the precedent for the Fed to continue to inject liquidity around the world, particularly in the West." Calvo, whose company buys and sells $100 million in real estate annually, goes on to predict, "I think when the next crash happens, it's not just going to be the stock market or the bond market that's going to be on the line. It's literally going to be the world reserve currency on the line. That's what I talk about in my book 'The Global Economic Reset.' The West and the western banking systems are doing everything they can, and they know that event is coming. They are doing everything they can to control it before it becomes completely unraveled."

 

Calvo also says, "Look at the string of bankers who have been suicided. Just this last month, we had two more, and a lot of them dealing with derivatives and regulations and regulatory departments. I have no doubt that the system is so freaked out right now about there being an economic Edward Snowden, or about information getting out that, without a doubt, will prove that this economy is a complete Ponzi scheme or a complete phony. So, they are killing people who potentially pose a threat to the banking system. That shows you how desperate these people are, but it also shows you what is actually on the line. We are talking about a fundamental change of the western banking system or the western economy like we've never seen in thousands of years. I think that is coming sooner than later."

 

Join Greg Hunter as he goes One-on-One with the founder of TheNoteHouse.us.

(There is much more in the video interview.)

 

Video Link

 

Fabian Calvo-World Reserve Currency on Line in Next Crash

 

 __________________________

 

 

Because Nothing Says "Best Execution" Like Dumping $1.5 Billion in Gold Futures at 00:30 EST -www.caseyresearch.com

 

The Wrap

 

Ted Butler's comments on gold and silver in his quote above (in the Quotes section) also applies to every other commodity that is currently under assault in the Comex futures market---and now even the grains aren't immune to the 'silver disease'---as he puts it.

 

And on the other side of this commodity coin is the U.S. dollar index, which is at a record high for this move up---and it's an absolute certainty that the technical funds in the Managed Money category now hold a record long position.

 

And as I type this paragraph, the London open is thirty minutes away---and the HFT boyz and their algorithms have been hard at work in all four precious metals once again.  Both gold and silver printed new lows for this engineered price decline to the downside---and platinum and palladium are rapidly heading in that direction as well.

 

Gold volume is north of 55,000 contracts, with virtually all of it in the current front month, which is December---and that's a sure sign that it's all of the HFT variety, as there are virtually no roll-overs out of the December contract.  Ditto for silver, as the net volume there is 14,000 contracts.

 

You'll note that the [current] lows all occurred at exactly the same time, so this was obviously a coordinated attack---nothing free-market about this at all.

 

Here's the Kitco gold chart as of 2:41 a.m. EST.

 

 

 

 

Maybe it's just me, but this assault on the precious metals appears to have some urgency to it.  I've had a few readers wonder out loud whether this engineered price decline will continue until the Swiss gold referendum has come and gone.  I have no idea, nor does anyone else.  We'll find out in the fullness of time.

 

Maybe it's just me, but this assault on the precious metals appears to have some urgency to it.  I've had a few readers wonder out loud whether this engineered price decline will continue until the Swiss gold referendum has come and gone.  I have no idea, nor does anyone else.  We'll find out in the fullness of time.

 

Continue reading on Casey Research.com.

 

Critical Reads

 

Singer's Elliott Says U.S. Growth Optimism Unwarranted as Data 'Cooked'

 

Paul Singer's Elliott Management Corp. said optimism on U.S. growth is misguided as economic data understate inflation and overstate growth, and central bank policies of the past six years aren't sustainable.

 

The market turmoil in the first half of October may be a "coming attractions" for the next real crash that could turn into a "deep financial crisis" if investors lose confidence in the effectiveness of monetary stimulus, Elliott wrote in a third-quarter letter to investors, a copy of which was obtained by Bloomberg News.

 

"Nobody can predict how long governments can get away with fake growth, fake money, fake jobs, fake financial stability, fake inflation numbers and fake income growth," New York-based Elliott wrote. "When confidence is lost, that loss can be severe, sudden and simultaneous across a number of markets and sectors."

 

Well, dear reader, that last paragraph pretty much sums it all up.  This Bloomberg article was posted on their Internet site at 12:18 p.m. Denver time yesterday---and it's the first offering of many from Roy Stephens.  It's certainly worth reading.

 

Read more...

 

U.S. Trade Deficit Widens More Than Expected Amid Drop In Exports

 

Reflecting a notable pullback in the value of exports, the Commerce Department released a report on Tuesday showing that the U.S. trade deficit widened by much more than anticipated in the month of September.

 

The report said the U.S. trade deficit widened to $43.0 billion in September from a slightly revised $40.0 billion in August.

 

Economists had expected the deficit to tick up to $40.2 billion from the $40.1 billion originally reported for the previous month.

 

While the value of imports was nearly unchanged at $238.6 billion, the value of exports fell 1.5 percent to $195.6 billion. The drop in exports came after they reached a record high in August.

 

This story appeared on the rttnews.com Internet site at 9:30 a.m. EST yesterday---and it courtesy of reader Peter Berge, for which I thank him.

 

Read more...

 

Indian gold bullion imports hit 17-month high

 

In accordance with the latest official trade data, the gold bullion imports by India's Northern state of Gujarat touched highest levels in seventeen months during the month of October 2014, primarily on account of recent relaxations in gold import norms and the sharp decline in international gold prices.

 

As per trade figures released yesterday, the total gold imports during the month of October totaled 24.07 metric tonnes [MT]. This is the third time since June 2013, when gold import restrictions were imposed, that the monthly gold imports have crossed double digits. The gold imports surged nearly 16% upon comparison with the total gold imports of 20.8 MT during the previous month. The imports during October last year had totaled just 0.127 MT.

 

This gold-related news item showed up on the resourceinvestor.com Internet site yesterday---and it's another story that I found on the Sharps Pixley website.

 

Read more...

 

 

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The Economy Is So "Strong" It Just Cost Obama The Senate - www.zerohedge.com

Submitted by Tyler Durden on 11/05/2014 10:08 -0500

 

Based on the ridiculous, seasonally-adjusted data released day after day by the various US "Departments of Truth", also known as the BLS, the Census, the Dept. of Commerce, UMichigan, ADP, the Conference Board and so on, the US economy is so strong and consumer confidence is so resurgent, America is on the verge of a second golden age. Sadly, for Obama, and last night's epic rout for Democrats, it was all a lie - a lie perpetuated by a manipulated S&P500 which hit daily record highs on unprecedented central bank liquidity injections which have now terminally disconnected the "markets" from the economy, and the welfare of the vast majority of the common "folk" - and said "folk" saw right through it.

 

Continue reading on Zero Hedge.com.

 

***

 

The Paradox Goes On: Inequality-Incensed Voters Send Dow To All Time High - www.zerohedge.com

Submitted by Tyler Durden on 11/05/2014 09:41 -0500

 

Because nothing says 'dissatisfaction' with the widening inequality in America like buying stocks at record highs...

 

Continue reading on Zero Hedge.com.

 

 __________________________

 

Ottawa, Beijing strike deal on yuan trading hub - www.theglobeandmail.com

Steven Chase

OTTAWA - The Globe and Mail

Published Tuesday, Nov. 04 2014, 11:00 AM EST

Last updated Tuesday, Nov. 04 2014, 5:44 PM EST

 

Ottawa and Beijing have struck a deal that will see this country designated as a trading hub for China's yuan currency, a benefit that will lower the cost of doing business for Canadian companies seeking Chinese markets.

 

The hub, a financial centre sanctioned by China to clear and settle transactions in the Chinese currency, would likely be based in Toronto, sources say.

 

Some details remain to be worked out but sources say this is expected to be announced during Prime Minister Stephen Harper's trip to China that begins this week.

 

It's a sign that efforts to repair relations between Canada and China are bearing fruit.

 

This hub would mean a great deal in particular to small or medium-sized businesses looking for competitive advantages in dealing with China.

 

It's been estimated by the Canadian Chamber of Commerce that this hub could generate as much as $32-billion in additional exports over 10 years.

 

It also gives Canada the first yuan hub in the Americas, which will result in a significant advantage in trade finance - one that could prompt multinationals to move treasury operations to Canada.

 

Ontario Premier Kathleen Wynne welcomed the news Tuesday morning.

 

Continue reading on TheGlobeandmail.com.

 

 

 

Market Recap

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