David Schectman

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Quotes of the Day

I don't see any wars in the future, the Russian economy is in shambles, and the last thing that Putin needs is an expensive war. I see the major nations coming to their senses and creating a new monetary system backed by gold. I see the gold price set by the Shanghai gold exchange rather than by the paper nonsense that we see in the daily machinations of the COMEX. 

- Richard Russell, Dow Theory Letters

Today's Featured Articles

LeMetropole Caf� (Anything but the real story from Kitco) (Central Bank Intervention In Gold Strikes Again)

USAWatchdog (Global Economy on Unquestionable Decline Leading to War-Gerald Celente)

Bill Holter

Why Does Gold Have To Be So Barbaric?

November 20, 2014

Gold, that "barbaric relic" from yesteryear just won't go away even though the central banks around the world would like just that.  I believe it was Keynes who first coined the phrase "barbarous relic" which has stuck for more than half a century.  But why does it have to be so barbaric?

Gold as you know has had a very long history, some 5,000 years or more.  Wars have been fought over it, kings and queens have won or lost over it, coup de 'tat's have occurred because if it, entire governments have been swept because of gold ...or the lack of.  Gold has been hidden, buried, swept away and stolen over the years.  Maybe JM Keynes called it the "barbarous relic" because of the ugly lengths man has gone to throughout history to attain it?  Yes I know, I was only kidding, he was demeaning gold and tried to tar it as useless versus our "new-fangled" fiat money of the time...

I think a little bit of history is in order.  Let's start with the "non recent" history of Europe.  We saw the leadership change many times over the last 500+ years.  The Dutch, Portuguese, Spanish, French and British all took a turn "at the top."  Each of these countries led the world in trade and economics for various spells.  The British started (in the mid 1600's) what is currently our fractional reserve banking system that we have today, it was however a little less "fractional" when it began.  Each one of these countries at one time or another had larger hoards of gold than anyone else ..."money" and power simply flowed to the strongest economy.  It can be said that this was also a "chicken or the egg" scenario where a strong economy attracted gold and high gold balances augured well for a strong economy.  Gold attained by plunder was another ticket to the top.  On the other side of the globe, the Japanese and Chinese were the powers with the most gold and silver attained by both trade and plunder.

So why the history lesson?  Let's fast forward to more recent times such as WWII onward.  Did you know that Germany by middle to the end of the war could not pay for any trade goods except by using gold because their paper was suspect, gold was their only acceptable currency?  Did you know the Soviet Union was selling gold bars with the "Czar's stamp" on it in 1989?  As a side note, when I heard of this I knew the end was near.  The USSR was selling 89% pure gold bars into a 99.99% market, it was accepted and of course discounted but this wasn't the point.  If they had any "good delivery" gold they would have sold that instead because selling the "dregs" was like laying their cards on the table.  They were demonstrably selling from the bottom of the barrel.  I mention this because back in 2011 and '12 we were hearing stories of 90% gold hitting the market which had the "fingerprint" of coin melt from the 1930's.  Was this the bottom of OUR barrel?

Let me add a few very recent events.  We found out yesterday that Ukraine no longer has any gold left.  Where did this gold go to?  It is speculated the gold was "flown out" (to the U.S.?).  There are also questions as to what happened to Libya's gold after we bombed them back to the stone ages and dethroned Qadaffi.  Same questions regarding Iraq and their gold.  Do you see a pattern here?  In the case of Sadam Hussein and Qadaffi, they both made rumblings of going to gold or silver backed currencies and presto ...they are gone and so is their gold?  Now, ISIS is talking about going to a gold backed dinar, who do we dethrone and where is their gold?  There is one more "recent" event regarding gold.  Germany asked to repatriate her gold in 2013 and doesn't seem to be getting much of it.  Only 5 tons last year of a scheduled 37.  As a funny side note, if Ukraine lost 40+ tons of gold ...and Mr. Putin bought 55 tons over the last quarter ...might some (all?) of this gold have simply come to rest a little bit further to the northeast.  What is even funnier in my mind is that Mr. Putin may have bought exactly what once was Ukrainian gold and paid for it in dollars, did he not give the West something they can create freely for stolen goods of value.  So in essence, Mr. Putin may have sent the U.S. some of their dollars back for what may have been Soviet gold in the first place?  Sorry, I had to put that in here because it strikes me as so ironic!

To finish, let me try to tie some of this together.  Even though gold is supposedly "barbaric," the U.S. guards it diligently (so to speak) in Ft. Knox, West Point and NYC.  We "say" we have it and to this point no one other than the Germans have asked for any of their custodian held gold.  No audits have been done in 60 years, not even Congressmen have been allowed to see it since the 1970's.  In many cases since WWII, gold has turned up missing after "we fixed things" and despotic rulers were ousted.  If gold is so barbaric, how come it keeps turning up as "lost"?  If it is really so barbaric then why do the Chinese (Asians in general) want it so badly?  Why so much secrecy?  Is there something to hide?  The answer of course is "yes" there is something to hide.  Even IF we do have the barbaric gold we say we do, we are still broke and bankrupt.  If we don't then we are more broke, more bankrupt and ...do not have the capital (even marked up many fold) to begin repairing, recovering and picking up the pieces. 

I'll add these thoughts which I believe are worth pondering on.  "Gold is only barbaric if you don't have any"... which means barbaric acts are taken to either hide this fact or to attain some.  For something that is so barbaric and "meaningless," governments around the world sure go to great lengths to guard what gold they do have and to keep secret anything and everything they are doing in this particular money market! 

Splintering

November 18, 2014

According to this chart, the Fed's favorite "inflation barometer" - the "five-year forward five-year inflation expectations index" - has fallen to its lowest level since the 2008 financial crisis; you know, when oil was $40/bbl. and no one bought anything, as a cumulative "deer in headlights" syndrome engulfed the world. Quite amazing , considering U.S. stocks - which theoretically, should be the worst performing assets during deflation - are at (nominal) all-time highs; as well as high-end real estate, rare art and other "1%" assets. Then again, when Central banks are not only monetizing bonds - pushing rates to all-time lows - but stocks as well, it's not so difficult to understand. Hence, the broadest "chasm of destruction" - between economic reality and rigged financial markets - in history.

Unfortunately, wages - both nominal and real - haven't kept up; nor have "99%" homes, personal savings, capital investment, or any of the things that required to sustain economies specifically, and society in general. Which wouldn't be so bad, if "need versus want" items" - like food, for instance - weren't so highly correlated to money printing. To wit, last week's comment from Tilman Fertitta, the billionaire chairman of Landry's Restaurants, which owns national restaurant chains operating in 35 states.

(I just had dinner with Ben Bernanke), who said 'there' no inflation.' Well go buy something, whether at the grocery store, the drug store, the broom and mop store, and there is inflation everywhere. I have many types of businesses, so I buy everything from labor, to mops, to food, shrimp, and steak - and everything is more expensive. We are raising prices: that's why right now you pay more for an airline ticket, a hotel room, a pot of coffee. There is huge inflation going on right now.

-Zero Hedge, November 13, 2014

Unfortunately, the Fed's favorite "inflation barometer" doesn't gauge this; or, for that matter, the inflation I experience in my own "business" - i.e., the neighborhood HOA I have been President of for the past five years. To wit, we will be ratifying our 2015 budget this week - and yet again, are forced to raise dues to meet the inexorable increase in operating costs. We have resisted this trend as best we could but have been forced to raise dues by 10%; and frankly, we probably should raise them by 15%, but will likely do so in stages for "political reasons."

Sadly, such cost pressures are across-the-board - including management fees, insurance, social committee, landscaping, electricity, water and waste removal. And oh yeah, for the first time since I moved in seven years ago, the neighborhood has abandoned homes requiring maintenance and legal expense; not to mention, the associated reduction in dues collection and increased demand on the board's time. And thus, two glaring examples of the inflation reality - from a small town HOA to a big city restaurateur; which unfortunately, will only worsen dramatically, as the Fed responds to said "multi-year low inflation" with unfettered money printing. Not to mention, the expanding currency wars engulfing the planet as the ultimate "race to debase" accelerates.

True, commodity prices are crashing as the global economy collapses into the abyss. However, money printing Ponzi scheme only support the "1%," yielding nothing but the "need versus want" inflation for everyone else. This is why government approval ratings have never been lower, despite the so-called "recovery" suggested by rising stock prices. At least, those included in PPT-supported indices like the "Dow Jones Propaganda Average," and borrowing at Fed-subsidized rates to repurchase stock. Hence, our belief that the global economy, for all intents and purposes, is amidst another "2008, with one temporary difference."

To that end, we are "happy" to notice that with each passing day, the "propaganda leg" of the "evil tripod" of money printing, market manipulation and propaganda creeps closer to its deathbed. In other words, the aforementioned economic reality is overcoming the fa�ade of Central bank supported equity markets; and subsequently, the world is experiencing a "splintering" unlike any before it.

It started with rebellion at the polls (see, U.S. elections 2014) - but that pesky word "war" is permeating all aspects of global society, both internally and externally; no more so than the aforementioned "currency wars," as exemplified by Japan's "Abenomics II" announcement last week. Not to mention, this morning's delay of Japan's planned 2015 sales tax increase, which was supposed to pay for Abenomics. Heck, Japan is not only actively buying bonds and stocks but issuing "free" gift cards to the public, in the height of money printing, currency destroying frenzy. Consequentially, the Yen is in freefall, and the entire world considering retaliatory currency debasement schemes - again, to the benefit of the "1%" at the expense of all else.

Said "splintering," like money printing itself is as contagious as Ebola; as bankers, politicians, and sundry hangers-on seek to protect their interests. To that end, watching Greenspan attempt to whitewash his legacy as the Sith Lord of Money Printing - by extolling gold and denigrating QE, no less - was not even conceivable a few years ago. Not to be upstaged, just yesterday the "godfather of Abenomics" repeated the Maestro's performance, in calling his brain-child a "Ponzi game, which may well yield a Japanese taxpayer revolt." In other words, the rats are racing from the sinking ship positioning themselves for survival when said "temporary exception" departs.

The accelerating "secession movements" we discussed two months ago - and initially predicted three years ago - are another form of splintering; from Scotland, to Catalonia, to Venice, Italy. And don't forget pending secessions from the cancerous monetary regime, which next week's Swiss referendum could rapidly catalyze on a global basis. Which brings me back to yesterday's incredible comment from ECB board member Yves Marche (of Luxembourg), that "the ECB could purchase other assets such as gold, shares, and ETFs to fulfill its promise of adopting further unconventional measures to counter a longer period of low inflation."

Why am I bringing this up two straight days? Because, frankly, no statement exemplifies such "splintering," on so many levels. For one, it flies in the face of the ECB itself, as rising gold prices will clearly serve as a blaring "inflation siren" to the public, making it nearly impossible to execute additional QE schemes. Additionally, it implicitly admits gold is a valuable asset, serving as a "slap in the face" to the Swiss National Bank in its moment of greatest propaganda need - as we discussed yesterday. And last but not least, it affronts the ECB's most important "partner in crime," the Federal Reserve, which openly despises gold and will do anything to denigrate it. Keep in mind, European banks have benefitted more from the Fed's off-balance sheet "swaps" and "on-balance sheet" ZIRP than any other entities on the planet. And thus, it's not too difficult to see the rapidly spreading rift, as the dollar/Euro currency war accelerates. Not to mention, the pound, Swiss Franc and all other currencies affected by Fed policy.

Even within the ECB itself, we are seeing massive splintering of its most powerful member, Germany; which is resisting Draghi's "whatever it takes" QE plans tooth and nail. Without it, the PIIGS (and others) will instantaneously implode - taking with them, by the way, a German banking system with enormous PIIGS exposure. However, if Draghi gets his way, Germany may well experience a reincarnation of the 1920s Weimar Republic. In other words, the ultimate "Hobson's Choice." And Germany is not just revolting against ECB QE, but extending economic ties with the burgeoning Sino-Russian economic axis; as like the rats on Titanic, it knows full well that the economic future will not be dominated by relics like England, France and Spain but BRICS like China, Russia and India.

Speaking of India, how about this year's expulsion of the anti-gold "Congress Party," following a year of unprecedented black market PM activity on the heels of prohibitive tariffs enacted to support India's dying fiat currency regime? It's only a matter of time before the other BRICS act likewise, given their currencies have plunged, on average, by nearly 60% in the past three years, yielding dramatic inflation increases for the 42% of the world's population residing there. Of course, the Chinese could significantly improve the BRICS' lot by removing its destructive dollar peg; but to successfully do so - that is, without an instantaneous economic shock wave - the PBOC would need to simultaneously announce its true massive gold holdings. Hmmm.

As the global fiat Ponzi scheme fulfills its irreversible destiny of widespread poverty, inflation and unrest, the world will experience political, economic and social turmoil unprecedented in history. The "splintering" of TPTB's delicate smoke and mirrors game is expanding at an alarming pace; and eventually, will explode in a horrific blaze of glory. Frankly, I cannot see how anyone cannot consider financial protection right now - particularly as history's most reliable economic insurance has been suppressed to "bargain sub-basement" levels.

To that end, Miles Franklin has been selling (and buying) precious metals for 25 years - with an A+ Better Business Bureau, and not a single registered complaint since opening its doors in 1990. All we ask is an opportunity to earn your business - which I assure you, we will if given the chance!

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.

11/19 Is SOMEBODY Finally Taking On The Gold Cartel? - www.lemetropolecafe.com

Gold Sells Off as U.S. Dollar Index Firms and Crude Oil Weakens

Wednesday November 19, 2014 10:58 AM

(Kitco News) - The gold market continues to be held hostage by the U.S. dollar. The dollar index pushed to its daily, while crude oil futures prices dropped to their daily lows in late-morning dealings Wednesday. This put solid downside price pressure on the gold market, including some sell stop orders being triggered by the shorter-term traders in the futures market. There may have also been some selling interest in gold Wednesday morning ahead of the afternoon release of the FOMC minutes, which some think could lean toward the hawkish side of U.S. monetary policy...

-END-

ANYTHING but the real story from these people. The dollar barely budged and crude oil was slightly higher. Some of the Kitco folks need a lobotomy. Selling interest ahead of the FOMC minutes???? Where was that selling interest prior to the PM Fix? There will be other rumors, which will surface as to the mauling of gold and silver, which were finally acting well after years of destruction, and those rumors will disappear. It will be no different than when our DOW would shoot up in the last 45 minutes of trading on a rumor, one that was never discussed again after The Muppets on CNBC gave it some credibility.

Fireworks? Gold/Silver price explosions? The Gold Cartel finally had enough of that sort of posturing from the likes of me or anyone else who would have the audacity to go there.

Today is a perfect example of why many in our camp say technical analysis of the precious metals markets is nothing more than horse manure. Nothing could be truer when it comes to any sort of bullish technical analysis ... and it all has to do with The Gold Cartel, because they make the rules. They can wipe out any sort of bullish analysis in minutes when they choose to do so, which they just did. And because there is no sheriff to stop them, and no free press to challenge them, they go on and on. 

STOP THE PRESSES AGAIN.

Was on the phone with one of the legends in the gold industry, and veteran GATA supporter, ranting at how obvious The Gold Cartel is. We went over the usual, dug into the silver potential, and then hung up. That's when I received a phone call from another veteran GATA supporter about putting up The Rockets. I thought he was mad, not having looked at the price action for a half hour.

Regard silver:

Well, what NEVER happens (and that NEVER is correct), happened. Gold and silver turned right around and exploded off their bottoms. Gold made a new high for the day, back to $1202, and silver really took off, rising to $16.54, well above its recent recovery highs. The talk here of gold/silver price explosions and fireworks was not far off base after all.

 

Both were shoved back down again by the bums, but silver gave us a new high close for its recovery move.

 

What the heck is going on here?

 

It appears (mind you, just appears) that SOMEONE is taking on The Gold Cartel. Could that actually be ... someone taking on the richest and most powerful in the world? There is no way to know yet, but it just may be that someone out there knows what GATA knows about what The Gold Cartel has done and how vulnerable they are ... vulnerable in that the gold/silver physical markets are going to overpower their ability to continue their nauseating market manipulation drills.

 

The two most likely candidates are Russia and China, both of whom GATA has had contact with in various ways over the last decade. We KNOW they KNOW what we KNOW!

 

*Is Russia fed up with its sanctions?

 

*Does China want its silver back?

 

That is all guesswork. But, CLEARLY, something is going on behind the scenes that is EXTRAORDINARY and just might be changing the precious metals landscape.

 

What we know...

 

*The huge silver open interest, with battered longs hanging in there all year, is unprecedented. We have gone over the why of this many times.

 

*Suddenly, the gold open interest is going bonkers ... and it is with the most bearish sentiment imaginable.

 

*With only five trading days left before First Notice Day in silver, it makes ANOTHER outside reversal day to the upside, the third in just 8 trading sessions. That may also be unprecedented. Note: if it did not do so, silver came that close ... which you can observer around 5 central time in the U.S....

 

Dave from Denver this morning...

 

Central Bank Intervention In Gold Strikes Again

November 19, 2014

 

I woke up this morning with a gut feeling that the precious metals market was about to be hammered on. After all, we had 3 pretty good days in a row, something which must have horrified the Central Planners. Gold was up over $1200 overnight until just after London a.m. "price fix." Have a look:

 

As you can see, from 10:30 a.m. (EST) to 10:45, 2.8 million ozs of gold were dumped onto the Comex. This forced a rapid $20 price plunge. There were no apparent news or event triggers. Zerohedge attributes the hit to the possibility that the Big Banks got ahold of the FOMC minutes early or the latest results from the Swiss gold referendum were leaked. I say bullshit to both.

The GOFO rate is the cost for a gold/cash swap. When it's negative, it means that someone needs to borrow physical gold and will use cash to collateralize the loan. A negative GOFO rate indicates extreme tightness in the physical gold bar market. Not surprisingly, the LBMA has announced that it will stop publishing the GOFO rate in January. Gee, I wonder why..

The GOFO - gold forward rate is -.24 for 1 month. This is the most negative that it's been since April 2000. It's negative out to 6 months right now, which is rare. As you can see from the graph above, it rarely goes negative. The huge spike into negative territory in 1999 was right around the time that Bank of England infamously announced that it was gong to unload 50% of its gold reserves, or 400 tonnes. This was necessitated by a huge short squeeze in the physical gold bar market.

To put the 80 tonnes of paper gold dumped today into perspective, the latest gold warehouse report shows only 25 tonnes of physical gold classified as "registered," or available to be delivered. That's if you trust the numbers and Ted Butler is the only analyst I know who does. So more than 3 times the amount of available to deliver physical gold was unloaded in paper form on the Comex in the space of 15 minutes.

As of yesterday, there were still 570 tonnes of December paper gold open contracts (196,083 contracts). If just 10% of these decided to stand for delivery, the Comex has a problem. This especially true given the tight condition of the LBMA gold market right now.

So you can see the incentives in place for the Fed/Treasury to attack the gold market using paper. India, China and Russia are currently removing more gold from the market than is produced every day. The potential for a massive short-squeeze is brewing.

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

Global Economy on Unquestionable Decline Leading to War-Gerald Celente - usawatchdog.com

By Greg Hunter On November 19, 2014

By Greg Hunter's USAWatchdog.com

Top trends researcher Gerald Celente is forecasting a slowing global economy in 2015, and oil is a leading indicator. Celente explains, "It's all in oil. We've been talking about oil prices since they peaked in June of this year. Now, you are seeing a 30% decline in Brent crude and West Texas (crude oil). This is big and it's not a manipulated market. This is real. Yes, supply is up, but demand is down, and demand is down big time. You don't have to look at that as an assumption, you can look at that as a fact. Here's the fact. The fact is China is one of the biggest consumers of energy and commodities in the world. You are seeing investment in China coming down to 2000 levels. You are seeing production falling back to great recession levels in 2008 and 2009. . . . This is a global slowdown. It's in front of everybody's eyes, and oil is telling the story."

So, what's in store for 2015? Let's start with the global economy. Celente says, "The economy is on a decline and it's unquestionable. They are boosting the equity markets with record low interest rates. It's a Ponzi scheme, and at some point, it has to explode." Celente goes on to preview a taste of the 2015 Trends Journal. Celente says, "One of the trends for 2015 is 'bankism,'not capitalism. Capitalism is dead. This isn't capitalism. Four words killed it, and they are 'too big to fail.' Quantitative easing hasn't stopped. They keep doing it, they just change the game."

So, which do we get first: a global economic crash or a global world war? Celente says, "I would say first would come the economic calamity, but you don't know what will cause it. For example, when 9/11 happened, they closed down Wall Street. If there is a terrorist strike, either false flag or real, they will blame the economic conditions on these terrorists. . . . They will use it as an excuse. So, you don't know whether it's heads or tails, but the coin will be flipped."

On the Middle East U.S. policy, Celente says, "It's madness. Look what they did with Libya. We had to get rid of that Gadhafi. Remember that one? Great job, guys. Terrific. You turned the whole place into chaos, and you created the conditions for more destabilization around the area. People like ISIS and these other people got the guns now and the weapons. . . . There's one failure after another."

What will the economy look like to the man on the street when the economy finally takes a fall? Celente predicts, "It's going to be inflation, but it's going to be currency devaluation rather than commodity inflation, for example: oil. We see oil prices coming down. As the currency becomes devalued, it will cost you more to buy that commodity because they just continue to print more money and put it into the global system. It's not only the United States, look what's going on in China. There are estimates that there are 70 million luxury apartments they can't sell in China. You read the data, and you see the government is boosting the economy."

On gold, Celente says, "When gold was around $1,200 per ounce, I said it had a downside risk of between $100 and $150 an ounce. We sent that out in the Trends Monthly. I am in gold for the long haul. Why would I want to be in Bitcoin, bucks or anything else when I see what's going on. . . . To me, it's a rigged game, and the game only stays rigged for so long. I don't buy gold to speculate. . . . I buy for possession. Gold could go down more, but I invest in gold for my golden years. Why would I invest in anything when I know they are keeping interest rates low worldwide to juice their markets?

Join Greg Hunter as he goes One-on-One with Gerald Celente, Publisher of the Trends Journal.

(There is much, much more in the video interview.)

Video Link

Gerald Celente: First Financial Calamity then War

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