David Schectman

Central Banks Could Lose Control of Fiat Money Creation

December 1, 2014

I sincerely hope all of our readers had a wonderful Thanksgiving. Andy and I did. In fact, it may have been the nicest one ever. Our whole family met at my daughter Betsy's home. We always do on Thanksgiving. It was a warm and loving gathering. And the food was GREAT. We do have so much to be thankful for in America. I know, I tend to highlight the problems and inequalities, but at the end of the day, there is no place I would rather be!

Why did gold and silver get hammered during the low volume trading hours leading up to Thanksgiving? My friend, Trader David R, who is a professional trader with a view from the inside says, "The commodity funds sold gold and silver to raise capital to meet their massive margin calls on underwater positions in commodities - especially oil and copper."

Here is Ted Butler's take on JPMorgan - and Trader David R's interesting comments and very different take on things...

It does remain to be seen if JPMorgan and/or the other eight largest COMEX shorts will add new short positions aggressively on the next silver price rally, but if that occurs at least we should be able to see it in future reports. Highlighting the importance of JPMorgan's involvement in any future silver short selling, without JPM joining in, I doubt the big eight would succeed in capping prices as they have on every past occasion. And considering the swirl of negative news surrounding big banks influencing commodity prices, it's hard for me to imagine JPMorgan not beating it out of Dodge City and quitting their manipulative control of silver to the downside. If JPMorgan (or the big eight) do cap silver prices ahead, I promise not to be anywhere near as polite as I've been to these crooks until now.

Aside from the radical transformation of JPMorgan from being the world's largest silver short to possibly the largest long in history, the recent double cross of the raptors (the smaller commercials who were net long) is remarkable in its own right. The forced sale of more than 12,000 net contracts by around 8 to 10 raptors over the past few weeks has probably knocked those traders out of silver permanently considering the estimated size of their losses (over $200 million). There is no doubt these 12,000 contracts would have been sold on the next silver rally and now that is impossible. Mathematically, this greatly increases the burden on the 8 big shorts if they intend to cap the next silver rally. These 8 big shorts, with or without the collusive cooperation of JPMorgan, will have to sell many more contracts short than they would have had the raptors not been double crossed.

I admit that my reasoning could turn out to be wrong, but I believe the increased short selling burden of the Big 8 will persuade them not to even try, or alternatively, if they do try, they may fail in their manipulative intent.

-Butler Research, November 29, 2014

Trader David R disagrees with Ted Butler. He says...

"Don't blame JPM. There are no traders left at JPM, so I have no clue how they could be long or short. Most banks are just pushing through business.  Nobody takes any risk anymore, as the Dodd Frank Legislation has eliminated this. So this is complete BS! Unless they are holding for ETFs or Algo funds. JPM doesn't trade anymore." 

"Deutsche Bank is leaving the physical business now as well as all the vaulting business. Everything metals is going to be a ghost town soon, all run by ETFs and Algo's. Liquidity is awful these days and that's why we're getting bigger trading ranges. There's not much metal out there since the bullion banks are all gone."

For those of you who wonder, "Who in the heck is Trader David R?" In the 90s, David worked as a gold trader for several of the largest banks in Johannesburg, and then moved on to a key position with Barkleys in London heading up their gold desk. Next, he came to New York and headed up the commodities trading department at one of the most successful privately funded hedge funds in NYC. That's where I met David in the mid 2000s. He was in charge of dozens of the top commodities traders in Manhattan. They were paid on performance and it was one of the most sought after jobs in the industry. He is friends with and personally knows many of the (former) traders at JPMorgan. When he says they are not in the business anymore, and JPMorgan only trades their client's accounts, I have no reason to disbelieve him. He has no horse in the race and has no reason to mislead anyone on this issue. That said, I will continue to publish Ted Butler's comments. Many of our readers love to hear his analysis and I find it interesting as well.   As usual, you can - and should think for yourself and make up your own mind on this issue.

I have posted David R's comments in the past and he did warn that after Dodd Frank, the big banks would leave the business and liquidity would dry up and the price swings would become large and erratic. He has been correct in his predictions.

He also is very bullish on gold - and says as long as our money supply continues to increase, which seems inevitable, gold will continue to rise. Be patient. The gold bull market will resume.

I thought I'd check on what one of my favorite "Old Timers" had to say about today's gold action. Richard Russell (Dow Theory Letters) says one final wipeout and then the bull market resumes. He wrote, "As I write, gold is selling at 1166.8. With gold under 1200 it appears that gold is heading for a final wipeout. I think this will clear the deck of the last hold-outs and complete a base for a resumption of gold's bull market next year."

Late breaking news:

Swiss Voters Reject Measure Forcing SNB to Acquire More Gold - www.bloomberg.com

By Catherine Bosley Nov 30, 2014 5:59 PM CT

Swiss voters rejected a referendum requiring their central bank to hold a portion of its assets in gold, a measure its President Thomas Jordan termed an "invitation to speculators" that could have hamstrung the economy.

The "Save Our Swiss Gold" proposal stipulating the Swiss National Bank hold at least 20 percent of its 520-billion-franc ($540 billion) balance sheet in gold and never sell any bullion was voted down by 77 percent to 23 percent, the government said. Polls had forecast the initiative's rejection. Two other initiatives on tax privileges for foreign millionaires and immigration limits also were rejected.

SNB policy makers warned repeatedly that the measure, which also required the 30 percent of central bank gold stored in Canada and the U.K. to be repatriated, would have made it harder to keep prices stable and shield the central bank's cap on the franc of 1.20 per euro. That minimum exchange rate was set three years ago, with the SNB pledging to buy foreign currency in unlimited amounts to defend it.

"The key word is relief, but it's not a reason to crack the champagne corks yet," said Janwillem Acket, chief economist at Julius Baer Group Ltd. in Zurich. Due to the rejection, "the SNB has more options and fewer constraints on monetary policy," he said.

This is the result we expected.

The SGI decision came after a massive mainstream media campaign to persuade the Swiss voters to reject the Swiss Gold Initiative, which they have duly done. They even had Jordan, SNB President, preaching from a pulpit in Uster last Sunday saying the SGI is dangerous!

This demonstrates just how frightened the central banks are that they could lose control of their monopoly of fiat money creation. Central banks HATE gold. It was in full view in Switzerland and should once and for all put to end the position that the central banks have little interest in gold and do not intervene to hold down the price.

_________________________  

Quotes of the Day

As you know, the central banks of the world are fighting deflationary forces through degrading their various currencies. Nobody, it seems, can escape the damaging forces of world deleveraging and deflating. According to reports put out by the labor department and the Fed, the US economy is the lone success in a world being fragmented by deflation. As all currencies decline, the world's investors turn to the US and its dollar as safe havens. Just as there are questions about the strength of the US economy, there are questions about the gold status of the US. According to the World Gold Council, the US possesses the greatest hoard of gold of any of the hundred nations. Furthermore, 72% of the US monetary reserves are in gold.

What should we believe? Who should we believe? It's ridiculous that we can't get straight answers from the government about the holdings of US gold. After all, it's our government and it's our gold. The great mystery -- why doesn't the President, the Fed or Congress give us the answer to the great gold mystery? I've heard rumors about our gold, or lack of gold, for years. How in the hell can we get the truth? An attempt to get an audit on gold was turned down by the Senate. Why doesn't our imperial president demand an answer on the US gold position? Why is our government hiding the real story on US gold?

- Richard Russell, Dow Theory Letters, November 27, 2014

Plunging oil prices down to 74 dollars a barrel seem to have minimal effect on the price of gold bullion. The bullish breakout point for gold is 1204. It's amazing to me how gold -- the money treasured by our founding fathers, can now be so hated. I guess that if people hear the same opinion put forward by government often enough, they will believe it. On top of this, speculators short paper gold on the exchange.

- Richard Russell, Dow Theory Letters, November 27, 2014

Without a doubt, the main criterion for why this is the best COT setup ever to me is the radical change in JPMorgan's formerly concentrated short position in COMEX silver futures. In the six years in which I had first discovered that JPMorgan (as a result of acquiring Bear Stearns) had become the biggest COMEX silver short, the bank has never held a smaller short position than it does now. In fact, considering what I think the bank has accumulated in physical silver over the past three and a half years, it appears to me that JPMorgan is massively net long in silver overall, to the point of perhaps holding the largest silver position in history.

There is no question that a dominant and concentrated position is at the heart of every manipulation; and JPMorgan's concentrated short position in COMEX silver since March 2008 meant that the bank was the big silver price manipulator (and allowed me to get away with calling JPM crooked). But right now, JPMorgan is no longer the big silver short and may, in fact, be the big silver long. It took years and price rigging that resulted in a sickening drop in the price of silver, but JPMorgan has succeeded in completely reversing its overall position in silver from short to long. This is nothing less than the most radical structural change in silver over the past six years, if not forever.

- Silver analyst Ted Butler, Butler Research, November 26, 2014

Today's Featured Articles

 Greg Hunter (Weekly Wrap Up)

Sprott Money News (A Tidal Wave of Gold Repatriations Could be Unleashed - Nathan McDonald - Sprott Money News)

Willem Middelkoop (Fight for physical gold has started - just like 1968)

SRSrocco Report (SILVER EAGLE & MAPLE LEAF RECORD SALES: Five Times Larger Than 2007)

Ed Steer (Three charts posted below---and shows what happens to the gold price when national currencies go to hell in a hand basket)

Jim Sinclair (CFTC tells CME Group to work more on 'spoofing' detection) (French Political Leader Wants Gold Back In France) (Goldman, BASF, HSBC accused of metals price fixing: U.S. lawsuit)

Zero Hedge (Gold Shortage, Worst In 21st Century, Sends 1Y GOFO To Lowest Ever... And India Just Made It Worse) ("There Will Be Blood": Petrodollar Death Means A Liquidity And Oil-Exporting Crisis On Deck)

Bill Holter

Low Prices Will Cure Low Prices

December 1, 2014

It looks as if another COMEX expiration has come and gone without any "fireworks."  I must say, I in no way expected what has occurred, the longs evaporated unlike any time past AND with the knowledge that physical supplies are very tight.  Were this any other market, a short squeeze for the ages would have been forced.  With less than one week to go, silver had almost 300 million ounces contracted for and gold 16 million.  These bled down to almost 20 million silver ounces and just over 1.1 million gold ounces as of Friday.  Silver is in the clear so to speak because COMEX claims 65 million ounces in available inventory.  Friday's action saw another bleed as gold also looks to be coming in under the existing inventory with only 500,000+ ounces standing versus 870,000 inventory ounces held.

We have seen this happen many times before where the open interest bled down heavily going into first notice day, but never anything like this.  The open interest for both December contracts was staggering with just one week to go... but then just evaporated.  What happened was VERY odd because in past expirations, though total open would shrink slightly, much of it would be rolled into the next active contract.  This has not happened and makes very little sense because there is almost zero cost (premium) to move out to the next contract?  This expiration saw THE biggest build in open interest, followed by THE biggest evaporation ever.  With virtually no contango cost whatsoever, the lack of "roll" is astonishing.  Were these longs bullish going into the last week of trading... and collectively changed their minds?  While I thought I was "on to something" with the outsized OI, apparently I was on "to nothing?"  Some will say I cried wolf, something VERY different has happened even though we ended with the same result.  Arriving at this "same result" was unlike any expiration week I know of.

I think the best question is "what" exactly were they trading?  Were they really trading gold and silver?  I think it is quite clear with gold for example, no, these trades were and are nothing but trading pieces of paper back and forth.  COMEX claimed to have 870,000 ounces of deliverable gold yet contracts outstanding for over 15 million ounces with only 5 days left.  Who in their right mind would buy a contract which promises delivery of an asset where even the exchange itself admits to not have enough of what is contracted for to go around?  By the way, Friday saw another 40 ton sale which broke the "price" by $20.  Over the last month, we have seen three separate 40, 80 and another 40 ton operation performed all within 15 minute windows.  Who would ever sell in this fashion if they wanted to sell at the best price possible?  Why not sell all of this "gold" spread out through the day and not damage the price (and psychology)?  The answer of course is obvious for anyone willing to see, the sales had a purpose of "setting" a price, a LOWER price.

Switching gears to the real world, gold and silver are both in very tight supply.  Gold forward rates in London went more negative on Friday (and again even further today) than ever before with the exception of 1999 when the Washington agreement was announced.  For GOFO to go this far negative suggests a very severe shortage on the institutional and central bank level.  It is very important to understand what this will most likely morph into... a short squeeze or some sort of buying panic for real and tangible metal.  Unlike the COMEX which can "instantly create supply," this cannot be done in the real world.  For example, the 40 tons which was sold on a shortened and sparsely traded Friday will take one full week for the entire world to produce!  I view this disconnect of "price versus supply" as one that will, must be rectified.  I will speak to this "rectification" shortly.  First, let's look further into the "real" world supply situation.

As of this past week, Silver Eagle and Maple sales are on track to at least meet last year's record sales and are now running FIVE times higher than in 2007 (before the financial crisis began)!  We also know GOFO rates are the most negative with the exception of one time in history.  The silver inventory in Shanghai plunged again this past week and is now again under 100 tons.  For perspective, this inventory was over 1,100 tons just over a year ago and has been bled by over 90%.  In just 2 days last week, 21% of the inventory was withdrawn ...and what's left is now "worth" under $50 million (with a lower case "m").  Silver contracts in Shanghai are also in backwardation, another perfect example of short supply.  Refiners in Switzerland are running flat out 24/7 due to Asian and Middle Eastern demand and to top things off, India just eased restrictions on gold imports.  When added together, China, Russia and India are taking nearly 150% of global gold production via physical purchases.  To put it in further perspective, China has the financial ability to purchase ALL central bank gold reserves at current "prices" THREE TIMES OVER!

So, what is my point?  Something very drastic has to and will happen.  One market or the other is very wrong.  Either the paper price is wrong ...or, the physical market is wrongly displaying all the signs of a supply shortage.  Can you figure out which one is wrong?  Is it the market where "gold" can be created at will or the one where it is actually dug up out the ground?  I will say this in my opinion, I cannot understand who in their right mind would trade a COMEX gold or silver contract?  Would you gamble in a casino where you knew the games were rigged ...and not in your favor?  What is the purpose of trading pieces of paper that the exchange itself admits they don't have enough metal for everyone?  Will these contracts save your bacon through a financial implosion?  During a dollar or currency crisis (which is exactly why gold is purchased to begin with) will capital fiercely try to enter COMEX contracts or the real metal?  

Further, assuming you do "win" on your gold contracts (a poor assumption) and the inventory is overwhelmed (a good assumption), COMEX has already told you they will "cash settle."  So you "make" $1 billion dollars, you get the check, it clears, your bank stays open (lucky for you) and does not bail in your "winnings."  If physical gold has become hoarded and gone into hiding because of a currency crisis, you will be "given ...more" of what the problem was in the first place.  What exactly did you win?  More currency of a bankrupt issuer?  In the extreme, ask any Zimbabwean if they would have given up even 1/2 roll of toilet paper for $1 billion Zimdollars?  The answer of course is "no," being a "Zimbabwe billionaire" may not even entitle one to a dinner of beanie weenies!

The disconnect between "price and supply" is exactly what an Austrian economist would predict.  If you price filet mignon below that of chicken, the supply of filet mignon will eventually disappear.  This is what we are seeing with gold and silver.  "Price" does not matter if you cannot get any product just as supply does not matter if the price is too high.  Too high of prices will eventually bring out more supply just as low prices will cure low prices.  Low price has already, and will create excess demand and also will cause a shrinking supply since mines cannot make money producing at these levels.  While COMEX can and has created the price, they cannot create the supply necessary to satisfy the greater demand.  COMEX, by forcing the price too low have set in place the fundamentals for a "re pricing" in explosive fashion.

When it comes to gold, we are at the point now where even central banks are displaying a lack of trust in each other.  I plan to discuss this along with "deflation" and what the collapsed price of oil might mean.  The Saudis are creating a low price of oil by producing more supply than a weak global economy currently needs.  This current low price will cure itself by blowing up the U.S. shale industry...and thus lowering supply coming to market.   

To finish, the Swiss had their chance to leave the rigged casino.  They voted "no" and will instead stay to play the tables until the whole casino burns down.  Shame on them!  Friday's action saw a $25 drop in gold and was followed by another $15 Sunday night/Monday morning.  Gold has recovered ALL but $5 of both day's carnage by early this morning.  If gold were to close above $1,190 (+$5 from here) it will be a sign of strength.  Were gold to close today over $1,200, it would negate ALL of the Friday/Sunday trading and create a very odd looking outside day (remember, the two previous Fridays were outside days also).  Were gold to close over $1,200 today, it would then have absorbed the outlandish (fraudulent) 40 tons sold on Friday to crush the price.  Action like this would be a sign physical supply and demand are finally overwhelming the price "fixing" mechanism!  Please remember this, "price" ALWAYS affects both supply AND demand, you are seeing this in real time! 

"The World's Smartest 0.1%"

December 1, 2014

Never have I had more to say - as literally, my pre-article notes contain a record-setting 14 pages of "horrible headlines." I'd love to devote my daily entirely to the Swiss referendum; and in fact, today's title refers to this weekend's abject failure of the 0.1% of the global population Switzerland's citizens represent. However, upon learning from overseas colleagues that Swiss bankers, politicians and media were as universally "anti-yes" as America's worst propaganda pushers, it couldn't be clearer the referendum was doomed from the start. Then again, as we predicted in Wednesday's "decision of a lifetime," many Swiss that truly understood the long-term decidedly positive ramifications of a "yes" would likely avoid "rocking the boat," given current "common knowledge" that Swiss stocks are correlated to SNB money printing.

Even in Switzerland, the "world's smartest 0.1%" in the topic of monetary discipline didn't care enough to do what's best for their future. And given Switzerland has been hovering near recession for three years with inflation so high that a referendum to raise the minimum wage to $25/hour was voted on earlier this year, my guess is there are far fewer "1%-types" there than one might expect. Let's face it; this was the one and only chance for the people to strike a death blow to TPTB. And instead of doing so, the Swiss not only neglected their own best interests but those of billions of people the world round. In other words, our most likely scenario of the markets ultimately doing TPTB in has now been elevated to the only possible scenario. To that end, the referendum's failure increases the odds of such an event exponentially now that Western central bankers have been given the "all clear" to hyper-inflate.

Next, I could spend pages writing of this month's historic pre-referendum PM attacks - in both the markets and media, in which no "weapon" were spared to minimize gold and silver sentiment. Even as the ECB and BOJ dramatically expanded their monetization schemes - as global growth ground to a halt - TPTB expanded their manipulations by taking Western stock markets like the "Dow Jones Propaganda Average" to record nominal levels whilst commodities, currencies and bond yields crashed. Frankly, I'm so disgusted with the blatancy of Friday's pre-referendum PM raids - on one of the year's thinnest trading days, no less - I'm going to only write of them briefly.

And no, gold and silver did NOT plunge due to Friday's crude oil implosion; as not only are PMs decidedly not "commodities," but in gold's case, its price barely budged on Thanksgiving, when the vast majority of oil's losses occurred. No, it wasn't until the COMEX opened Friday - "conveniently," on "First Notice Day" for the December contract - that the real carnage was unleashed; as usual, in quick algorithm bursts like the below2% waterfall decline in paper silver - whilst the PPT wouldn't allow the Dow to even decline amidst the "all-important" Black Friday shopping spectacle (which was an UNMITIGATED CATASTROPHE); even as bond yields, commodities and currencies crashed like an actual Black Friday market crash. Then again, this is "2008, with one temporary exception"; which, when the PPT inevitably fails, either via deflationary crash or hyperinflationary explosion, will make the 2008 implosion look like a "day in the park." In fact, it was quite surreal watching Friday's "trading"; as everything related to borrowing and spending was higher - whilst, across-the-board, industrial stocks sharply declined. And no, I'm not just referring to oil companies!

Back to oil, in anticipation of the inevitable propaganda characterizing this Fall's - and particularly, Friday's - gold plunge as "oil related," we put together these chart of how oil and gold have fared since the Cartel's September 2011 "point of no return," when it went "all in" suppressing PM prices. In the ensuing 2� years as the global economy plunged from bad to worse, oil prices rose 20% whilst gold plunged 35%; in other words, demonstrating a relatively high negative correlation. Heck, even taking the series through this Fall's horrific oil plunge, you can see gold's decline was far larger; and still, the correlation was negative.

Tomorrow's article will be devoted entirely to this globally important topic; but frankly, no amount of writing can do justice to its horrific, long-term ramifications. To wit, when we wrote "crashing oil prices unspeakable horrors" six weeks ago - with WTI crude at $81/bbl., no less - we could not have been more serious. Unlike precious metals, which are falling due to manipulation, whilst physical demand surges and supply is on the cusp of collapsing, oil is freefalling due to the deadly combination of imploding demand and exploding supply. A situation, we're sorry to say, that will dramatically worsen in the coming years, yielding inconsequential"positives" relative to the terrifying political and economic negatives collapsing oil prices portend. When you see the title of tomorrow's article, you'll know exactly what I mean; as in our mind, the convulsions the entire world will endure at $65/bbl. oil - let alone, significantly lower levels - will be catastrophic no matter what ridiculous propaganda TPTB generate.

Not only did gold forward rates continue their freefall into negative territory Friday - with even the six-month rate turning negative, and the one-year rate on the verge of such for the first time ever; but the Indian government unexpectedly removed the "80/20" import/export restrictions that have served as a severe impediment to gold demand (at least, the official non-smuggled type) this past year.

Better yet, U.S. Mint Silver Eagle sales ended November with a bang, whilst "paper prices" plunged $1/oz; at 3.4 million ounces, on a pace that would have challenged last month's record non-January level if the Mint didn't suspend sales for 12 days when it sold out of silver. Even with the supply suspension, 2014 demand is on pace to exceed last year's record level; as is the Royal Canadian Mint, which released its third quarter sales figures on Wednesday. Not to mention, the world's largest silver consumer, India, which is also on pace to exceed 2013's record silver import levels this year.

As for "inventories," nearly a third of the COMEX's measly 67 million of registered silver inventory was stood for on Friday's "first notice day" - although I think we all know such numbers are bogus, as little or no actual available silver likely exists. That said, the pressure will likely get turned up further at today's unconscionably low prices well below the cost of production, as global money printing explodes amidst Depression-like global economic conditions, unprecedented debt accumulation, collapsing currencies and sovereign bond yields, and broadening geopolitical tensions.

As for Shanghai silver inventories, last month's "$50 million of inventory, that's it?" article is back in play; as in the past two days, an astounding 25.5 tonnes were withdrawn, representing 21% of Shanghai's total silver inventory - taking total inventory back down to just 93 tonnes, worth less than $50 million. This is nearly the exchange's all-time low level, down 95% from when the April 2013 "alternative currency destruction" raid was initiated a day after Obama had a "closed-door" meeting with the top ten "TBTF" bank CEOs.

And last but not least, a quote from the great Egon von Greyerz - fittingly, one of the leaders of the "Save our Swiss Gold" campaign. Putting to bed any remaining doubts as to how strong global physical gold demand has been, it appears Swiss gold refiners are again working round the clock to meet insatiable global demand - which we assure you, will NOT stop growing until inevitably it swamps any and all remaining supply.

In the last few weeks Swiss gold refiners have been working around the clock because of extremely strong demand from the Far East, India, and the Middle East.  And they have indicated to me that they expect the strong gold buying to continue into next year.  So despite the recent weakness in price, 2015 is setting up to be an explosive year for the gold market.

-King World News, November 28, 2014

For those of us that believed and/or hoped the "world's smartest 0.1%" would make a difference, I guess we're all a bit disappointed. Fortunately, a "no" vote doesn't change PM fundamentals in the slightest - and frankly, makes them stronger yet as the entire world realizes the supposedly most "prudent" money managers are fully committed to debauching their currency. At prices well below their respective costs of production, it is difficult to see how anyone would not want to own physical gold and silver today. And for those that don't, what more do you need to see to realize what direction the world's 182 fiat currencies are headed?

WNW 168-Ferguson Analysis, Iran Nuke Deal Stalled, Gold Repatriation - usawatchdog.com

By Greg Hunter On November 28, 2014

By Greg Hunter's USAWatchdog.com    (Friday 11.28.14) 

I told you last week there would be no charges for the police officer who shot and killed Michael Brown, and no charges were brought. Of course, there was rioting and violence, and that seems to be what was wanted. The Governor of Missouri did not deploy the National Guard, and things got out of control. Was it done on purpose? One thing is for sure, this is NOT about race. The Obama Administration wants it to be; otherwise, he would not have sent Al Sharpton to Ferguson. This is about a very bad economy and an economy that is going to get much worse. Ferguson and all the protests around the country are a distraction. The undertone of the protesters' narrative is that white people and white police are hunting down black men and killing them. This is outrageous and totally unsupported by fact. Statistically speaking, America does not have a white on black crime problem. Only 7.6% of blacks are killed by whites. Only 14% of whites are killed by blacks. Former NYC Mayor Rudolf Giuliani said on Meet the Press that 93% of black people are killed by other black people. Likewise, about 83% of whites are killed by white people. Nowhere in the country is the black on black murder problem more obvious than in Chicago. Hundreds of young black men every year are killed in Chicago by blacks. Since Michael Brown died in August, more than 100 black men have been shot and killed in Chicago.

What is Ferguson really about? Again, it's cover for a bad economy and an economy that is going to get much worse. Sure, the third quarter GDP was just revised up to a 3.9% growth rate. I called economist John Williams about this, and he told me that is simply spin and not true. We also just got bad consumer confidence numbers, a spike in unemployment claims and a big drop in PMI numbers.

You want more proof the economy is headed down? Look no further than Democratic Senator Chuck Schumer. He just said the Democrats made a "mistake" in voting for Obama Care. He said, "We blew it," and said Democrats should have focused on the economy. Does that sound like the economy is going to be getting better? Also, didn't I say right after the midterm elections that Democrats would run against Obama and his policies? You know who is up for re-election in 2016? Chuck Schumer. And doesn't he sound like he is throwing President Obama and his policies under the bus? Just as I predicted.

If you need more proof the economy is going to get worse, then look no further than Obama Care and rising insurance premiums. And, just wait until the employer mandate kicks in next year. It is the job killer everyone has warned you about. Speaking of jobs, the youth unemployment rate in the black community is nearly 25%. Blacks in general are unemployed at twice the rate of whites. John Williams says the sub 6% unemployment rate is a big fat lie. The real rate is hovering around 23% for years. A buck an hour raise at a fast food restaurant and a 29-hour workweek with zero overtime is not going to really help anyone, especially the minority communities like Ferguson. Ask yourself this; if the economy was really growing at a 3.9% rate, would we have nearly 93 million people not in the work force? Would we have 47 million on food stamps? Would we have 14 million on disability? The economy is not in a so-called recovery and the Democrats know it-and so does the Obama Administration. This is what Ferguson and the protests around the country are about. This is all about "look over here" and not at the real problem, a stinking and sinking economy for Main Street.

They have extended the negotiations, once again, for Iran and the nuclear deal the west has been working on for years. It will be another seven months before the next expiration date. Iran has said repeatedly it will not curtail its program.

Here are some really the big questions: Will Saudi Arabia and all the other Sunni nations sit and wait? Is Israel going to sit and wait? Those are two very big Middle East wild cards, and I think we get an answer sometime next year.

Finally, there is gold and news that more countries want theirs back. The Dutch just repatriated 122 tons. The leading French candidate in upcoming elections says France should get its gold back. The Swiss are voting this weekend to get their gold back inside its borders. Why all the attention to getting control of physical gold? Could it be central banks don't trust each other's paper? If paper assets devalue or default, would having gold in your possession be a good idea? Countries wanting physical is not a good indication that the global economy is good; and, in fact, it is signaling that it might be getting ready to tank.

Join Greg Hunter as he analyzes these stories and more in the Weekly News Wrap-Up.

Video Link

Ferguson Covers Up Bad Economy, Senator Schumer Trashes Obama Care, Watch Gold

A Tidal Wave of Gold Repatriations Could be Unleashed - Nathan McDonald - www.sprottmoney.com

November 26, 2014

Spott Money

This notion sounds logical to any sane individual, but to a central banker who is gold negative, this is their worst nightmare. To understand why, you need to step back and see the big picture, which shows the stark reality of how rare gold truly is and how little of it remains in western vaults, despite what the mainstream media would have you believe.

 

First it was Germany, then it was the Dutch. Soon it could be Switzerland depending on the results of their gold repatriation referendum, which central bankers are nervously awaiting the results. Now, there is France.

 

There is a strong possibility that France, which is currently part of the problem, could become an ally of the gold community going forward.

 

Marine Le Pen, the leader of the French right-wing Front National party, and who is currently leading in preliminary polls, ahead of president Hollande, wrote a letter to the Central bank of France, which detailed a list of demands.

 

 

Sprott Money

These demands have set central bankers on edge, as they are anything but friendly to their current fiat power structure and which include the following:

 

 

- Urgent repatriation of all of our gold reserves located abroad back to French soil

 

- An immediate discontinuation of any gold sales program

 

- Conversely, a gradual reallocation of a significant portion of foreign exchange reserves in the balance sheet of the Bank of France by buying gold at each significant decrease in the price of an ounce (with a recommendation of 20%)

 

- A suspension of any financial commitment or loan contract of our gold reserves

 

- At the patrimonial and financial balance of the 2004 gold sales transactions ordered by N. Sarkozy

 

Sprott Money

Given the current polling numbers, there is a strong possibility that Marine Le Pen and her party could be elected into power. This letter indicates how she feels towards gold. Clearly, she does not perceive gold as a barbarous relic.

Given this fact, you can expect a strong, organized effort to discredit and bring her popularity down. Western central bankers know how fragile their current fiat system is. Their power rests predominately in their ability to print endless amounts of funny money out of thin air, and gold is their Achilles heel.

 

 

Sprott Money

The double whammy of a YES vote in the Swiss gold referendum and the repatriation of Frances gold from the NY FED, will be more than what the current manipulated system can handle. You will see widespread shortages of gold as the FED "attempts" to fill in the holes that they have drilled in their vaults throughout the years.

 

 

Remember, France is no minor player in the gold market scene. They "officially" hold the fourth largest gold reserve in the World. We aren't talking about a couple of tons; we are talking about thousands of tons!

 

Given the monumental demand that the recent price drop has ushered in, the continued accumulation by Russia and China, and now the rapidly unfolding gold repatriation demands of Germany, The Netherlands, Switzerland and possibly France; gold seems poised for a comeback.

 

The question is how long can the manipulators keep their boat afloat? Leaks are springing up in all directions and they are running out of plugs. The rising price of gold is a tidal wave that no one can stop. It is only a matter of time before the free market unleashes itself and sets the price free. Until then, sit tight and continue to be right.

 

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Fight for physical gold has started (just like 1968) - www.thebigresetblog.com

Posted: 26th Nov 2014
Author: Willem Middelkoop

The Big Reset

Gold is making a remarkable come back into our financial system. Russia and China are openly accumulating gold in an aggressive way, while India has been confronted with huge gold demand, even leading to large trade deficits.

In Europe Germany, Switzerland, France and the Netherlands are in the process of repatriating gold or discussing it. On top of this even the ECB stated they could buy gold, probably in an effort to fight deflation.

You could say a new gold standard is being born without any formal decision. At least that's how the well influential the international business editor of The Telegraph, Ambrose Evans-Pritchard, described the ongoing efforts by countries to lay their hands on as much physical gold as possible last year.  

'The world is moving step by step towards a de facto Gold Standard, without any meetings of G20 leaders to announce the idea or bless the project... Neither the euro nor the dollar can inspire full confidence, although for different reasons. EMU is a dysfunctional construct, covering two incompatible economies, prone to lurching from crisis to crisis, without a unified treasury to back it up. The dollar stands on a pyramid of debt. We all know that this debt will be inflated away over time - for better or worse. The only real disagreement is over the speed... The central bank (gold) buyers are of course the rising powers of Asia and the commodity bloc, now holders of two thirds of the world's $11 trillion foreign reserves, and all its incremental reserves. It is no secret that China is buying the dips, seeking to raise the gold share of its reserves well above 2%. Russia has openly targeted a 10% share. Variants of this are occurring from the Pacific region to the Gulf and Latin America. And now the Bundesbank has chosen to pull part of its gold from New York and Paris. Personally, I doubt that Buba had any secret agenda, or knows something hidden from the rest of us. It responded to massive popular pressure and prodding from lawmakers in the Bundestag to bring home Germany's gold. Yet that is not the end of the story. The fact that this popular pressure exists - and is well organized - reflects a breakdown in trust between the major democracies and economic powers. It is a new political fact in the global system.'

He also quotes Mohammed El Erian, Pimco's former chief investment officer, who is afraid that the repatriation of gold might lead to a growing international mistrust in our financial system:

"In the first instance, it could translate into pressures on other countries to also repatriate part of their gold holdings. After all, if you can safely store your gold at home - a big if for some countries - no government would wish to be seen as one of the last to outsource all of this activity to foreign central banks. If developments were limited to this problem, there would be no material impact on the functioning and well-being of the global economy. If, however, perceptions of growing mutual mistrusts translate into larger multilateral tensions, then the world would find itself facing even greater difficulties resolving payments imbalances and resisting beggar-thy-neighbor national policies.'

The current development reminds us of the implosion of the London gold Pool in 1968.

We quote from The Big Reset;

During meetings of the central bank presidents at the BIS in 1961, it was agreed that a pool of $ 270 million in gold would be made available by the eight participating countries. This so-called 'London Gold Pool' was focused on preventing the gold price from rising above $ 35 per ounce by selling official gold holdings from the central banks gold vaults.

The idea was that if investors attempted to flee to the safe haven of gold, the London Gold Pool would dump gold onto the market in order to keep the gold price from rising. During the Cuban Missile Crisis in 1962, for instance, at least $60 million in gold was sold between 22 and 24 October.  The IMF provided extra gold to be sold on the market when needed.

Contributions to the London Gold Pool per participating country 

The participating countries also had to declare that they would not buy gold in the open market from countries such as Russia. In true BIS fashion, these agreements were not put on paper, thereby ensuring complete secrecy. In 2010, a number of previously secret US telex reports from 1968 were made public by Wikileaks. These messages describe what had to be done in order to keep the gold price under control. The aim was to convince investors that it was completely pointless to speculate on a rise in the price of gold. One of the reports mentions a propaganda campaign to convince the public that the central banks would remain 'the masters of gold'. Despite these efforts, in March 1968, the London Gold Pool was disbanded because France would no longer cooperate. The London gold market remained closed for two weeks. In other gold markets around the world, gold immediately rose 25% in value...The end of the London Gold Pool was the starting shot of a 'bull market' in gold which would last for 13 years and which would see the gold price increasing by over 2,500%.

The implosion of the London Gold Pool lead to the breakdown of the Bretton Woods system in 1971 when Nixon suspended gold conversion. Just like 1971 the current flight towards gold will lead to a monetary reset in the years to come, in which gold will take its place as a monetary metal again.

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SILVER EAGLE & MAPLE LEAF RECORD SALES: Five Times Larger Than 2007 - srsroccoreport.com

by SRSrocco on November 28, 2014

The Royal Canadian Mint just released their figures for the quarter showing record Silver Maples sales for the year.  Sales of Silver Maples weren't as strong in the third-quarter compared to the same period last year, but they outperformed Silver Eagles in percentage terms.

Sales of both the Silver Eagles and Maples were quite strong in the first half of the year, but declined during the summer months.  If we look at the figures below, we can see just how much purchases of Silver Maples and Eagles declined compared to the prior year:

Q3 2013 & 2014 Silver Eagle & Maple Leaf Sales

Q3 2013 Silver Eagle Sales = 11.055,500

Q3 2014 Silver Eagle Sales = 8,202,500 (-26%)

Q3 2013 Silver Maple Sales = 6,700,000

Q3 2014 Silver Maple Sales = 5,400,000 (-19%)

Most of the weakness in sales of these official coins took place in July and August.  However, Silver Eagle sales picked up significantly in September reaching 4,140,000 surpassing last year's monthly figure of 3,013,000. 

The Royal Canadian Mint does not break down its sales figures on a monthly basis (quarterly reports), but I would imagine Silver Maple Leaf sales picked up substantially in September paralleling the huge demand for Silver Eagles.

In the first nine months of the year, Silver Maple Leaf sales reached a record 20.8 million compared to 20.7 million during the same period last year:

SRSRocco Report

When I first opened the Royal Canadian Mint Q3 2014 Report, I thought sales would be higher... however, I forgot to consider the large drop in demand during July and August.  I believe the fourth quarter sales figures will come in substantially higher pushing Silver Maple Leaf demand to a new all-time record.

Looking at the chart above, Silver Maple sales were very strong during the first quarter at 8.2 million oz - largest quarterly record ever.  Then in the second quarter, sales declined slightly to 7.2 million oz, compared to 7.4 during the same period last year.  However, the 1.3 million oz decline of Silver Maple sales in Q3 2014 compared to Q3 2013 was the reason overall sales figure year-to-date wasn't much higher than last year.

But, sales of Silver Eagles increased substantially during the last paper takedown reaching a monthly record for October at 5,790,000.  The U.S. Mint had to suspend sales on November 5th due to its inventory being totally wiped out.  The Royal Canadian Mint also put the sales of its Silver Maples on limited basis due to high demand as well.

If the U.S. Mint provides another update for the last few days in November and sells at least the same number of Silver Eagles in December (1,200,000) as it did last year, we could see nearly 43 million sold for 2014... another record year.  I also believe demand for Silver Maples will increase substantially in the last quarter of 2014 also leading to a new record year.

I estimate Silver Eagle sales for 2014 to be 43 million, while Silver Maples will reach 28.5 million.  The chart below shows total sales of these official coins in 2013 compared to my estimate for 2014:

SRSRocco Report

Again, the reason 2014 sales may not be even stronger than 2013 has to do with the large drop-off during July and August.  However, if we compare the estimated 2014 sales of Silver Eagles and Maples compared to 2007... IT'S OFF THE CHARTS:

SRSRocco Report

Prior to the U.S. Investment Banking and Housing Market collapse, the total sales of Silver Eagles & Maples were only 13,870,000 in 2007.  Hell, Silver Maple Leaf sales were only a paltry 3.5 million compared to the estimated 28.5 million this year.  In just seven years, sales of these two top official coins are 5 TIMES LARGER at an estimated 71.5 million.

 

THIS IS A BIG FIGURE and now represents nearly 9% of global silver mine supply in 2014, compared to 2% in 2007.  Basically, total Silver Eagle and Maple Leaf sales in 2007 represented 2% of global mine production and now almost consume 10%.

 

However, this only includes demand from a very small portion of the investing public.  95% of the public invested in the markets have their wealth tied into the biggest Paper Ponzi Scheme in history.  Right now, Silver Eagles and Maples are totally unknown by the majority of public, but I would imagine this will change in the future as the COLLAPSE OF ASSUMED PAPER WEALTH takes place in earnest.

 

If the Royal Canadian & U.S. Mint have difficulty now trying to meet demand for the 2-5% of public demand... what happens when the GREAT RUSH INTO GOLD & SILVER BEGINS??

 

 

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How JPMorgan Struck Gold With Copper - www.caseyresearch.com

By Ed Steer

November 28, 2014

 

Yesterday In Gold & Silver

 

On Thursday afternoon, Nick Laird passed around the three charts posted below---and shows what happens to the gold price when national currencies got to hell in a hand basket, a fate that will befall the U.S. dollar at some point.

 

Casey Research

Casey Research

Casey Research

  

Continue reading on Casey Research.com.

  

***

India's November Imports Could Exceed 100 Tonnes Again - www.caseyresearch.com

By Ed Steer

November 27, 2014

 

Yesterday In Gold & Silver

 

Here in Canada, the Royal Canadian Mint finally got around to posting its third quarter financial statements---and here is what they had to say about bullion sales for the July/September period on page 6 of that report.

 

"The volume of Gold Maple Leaf (GML) sales declined 29.7% to 137,000 ounces compared to 195,000 ounces in the same period in 2013. Sales of Silver Maple Leaf (SML) coins declined 19.4% to 5.4 million ounces from 6.7 million ounces in the same period last year."

 

"As in the second quarter of fiscal 2014, the decline in GML demand during July and August reflected the shift in investor sentiment as global economies appeared to be recovering. This reversed in early September with somber economic news coming from Europe and China, and as geopolitical tensions in the Middle East caused the price of oil to drop."

 

It's a slam-dunk that what happened to silver maple leaf sales in July and August is exactly what happened to silver eagles sales in the U.S. during the same time period.  "Mr. Big" buyer---Ted thinks JPMorgan---knew that silver prices were about to head lower [because they engineered it] so they stepped away from the table, only to return when deed had been done, saving millions for themselves---and screwing the RCM for the same amount.  [Jamie Dimon's daughter would be so proud!  See the Critical Reads section for that story.]

 

Note in the second paragraph that the key words are "This reversed in early September..." and it's an excellent bet that JPMorgan had returned to the table and bought every SML that the mint hadn't sold up to that point.

 

Using silver eagles sales in the U.S. in the third quarter-to-date as a proxy for third quarter SML sales, it's safe to say that the RCM will have an excellent fourth quarter for silver maple leaf sales---and close to another record year.  However, if that is the case, we won't know about it until the mint files its year-end report, probably at the end of February, if not later.

 

 

_______________________________   

In The News Today - www.jsmineset.com

Posted November 26th, 2014 at 12:58 PM (CST) by Jim Sinclair

Jim Sinclair's Commentary

A daily occurrence in gold and silver.

CFTC tells CME Group to work more on 'spoofing' detection

By Tom Polansek

CHICAGO Mon Nov 24, 2014 6:51pm EST

Nov 24 (Reuters) - CME Group Inc., the world's largest futures market operator, should continue to develop strategies to detect an illegal manipulative trading practice known as "spoofing," the U.S. Commodity Futures Trading Commission said on Monday.

Spoofing involves rapidly placing orders to create the illusion of market demand. Unsuspecting traders are then tricked into buying or selling at artificial prices, only to later find that the orders were canceled.

The practice gained notoriety last month after high-frequency trader Michael Coscia was charged with manipulating commodity futures prices in the first U.S. federal criminal prosecution of spoofing.

The CFTC recommended CME further address its surveillance of spoofing after the agency's Division of Market Oversight reviewed rule enforcement at the New York Mercantile Exchange and Commodity Exchange Inc. from July 1, 2012 to June 30, 2013. The exchanges are owned by Chicago-based CME.

CME said it was reviewing the CFTC's findings.

"A number of the items noted in its reports have already been addressed and remediated," a spokeswoman said.

During the review period, the exchanges' "messaging" research program, which CME initiated in January 2013 to identify spoofing and other problematic messaging behaviors, did not result in the initiation of any spoofing cases, the CFTC said. Of 10 cases opened during the period involving potential spoofing, eight were initiated from complaints.

More...

Jim Sinclair's Commentary

The story is spreading. Good to see.

French Political Leader Wants Gold Back In France

By Neils Christensen of Kitco News
Wednesday November 26, 2014 11:51 AM

(Kitco News) - France could be next on the list of countries that wants to take its gold back, if the leader of a far-right political party has her way.

Tuesday, Marine Le Pen, leader of the Front National party of France, who is also the front runner to potentially be France's new president, penned an open letter, in French, to Christian Noyer, governor of the Bank of France, requesting that the country's gold holdings be repatriated back to France.

Not only does Le Pen want to see the gold back in France but she also recommended that the central bank take advantage of the recent price drop and buy more gold, boosting reserves by another 20%. She also recommends that the central bank never sell its gold reserves.

Finally, Le Pen also asked that an independent body be allowed to audit the country's current holdings of 2,435 metric tons.

More...

Jim Sinclair's Commentary

This is only a start. Suits over manipulation will grow significantly.

Goldman, BASF, HSBC accused of metals price fixing: U.S. lawsuit

By Jonathan Stempel
NEW YORK Wed Nov 26, 2014 5:22am EST

(Reuters) - Goldman Sachs Group Inc. (GS.N), Germany's BASF SE (BASFn.DE) and two other big platinum and palladium dealers have been sued in the United States in what the plaintiff's law firm called the first nationwide class action over alleged price-fixing of the metals.

In a complaint filed on Tuesday in the U.S. District Court in Manhattan, units of Goldman, BASF, HSBC Holdings Plc. (HSBA.L) and South Africa's Standard Bank Group Ltd (SBKJ.J) were accused of having conspired since 2007 to rig the twice-daily platinum and palladium "fixings" and the prices of futures and options based on those fixings.

The plaintiff, Modern Settings LLC, a Florida-based maker of jewelry and police badges, claimed metals purchasers lost millions of dollars.

The defendants illegally shared customer data, used that information to engage in "front-running" of expected price moves, and manufactured phantom "spoof" orders, according to the plaintiff.

More...

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