Q: One news source projects that due to lower fuel costs consumers will focus on spending more on consumer products while other sources are saying that the savings on gas will be eaten up by soaring insurance premiums such as Obummercare, etc.  Which is the truth? 

Some are agreeing with the governments' statistics that unemployment is decreasing; while others are saying that employers are cutting back on 40 hr. employees so they don't have to buy employee insurance while hiring 2 20-hr. employees both of whom will not be eligible for employer insurance.  Which is it? 

Your quick and correct answers will be greatly appreciated.R. S., CA. (One of Our Broke, Fiat Money Corrupt States)

David Schectman's Answer:

Probably some of each. A large number of Americans are living off their credit cards, especially this time of the year. For them, saving $30 bucks on a tank of gas won't change much, it will just reduce the amount of debt they go into for Christmas. Soaring insurance premiums will affect a large number of Americans. Someone has to pay for the extra benefits extended to those previously un-insurable. It looks to me like the winners will be the insurance companies and those finally able to get insurance. The losers will be the doctors and the rest of us.

As far as I understand it, many firms are cutting back on hours to avoid paying the insurance. More people are getting jobs, but a large percentage of them are low paying and/or part time jobs. Also, there are still far fewer people working today than before the collapse in 2008/09. All in all, not a healthy situation, and it is being "spun" by the mainstream media and Wall Street.

Check out the honest, unaltered statistics presented in the graph, below by John Williams (Shadowstats). By any standard, and he gives you three, there is a higher percentage of unemployed Americans today than six years ago. That says it all. Some improvement, but still awful.

Shadowstats.com

Bill Holter's Answer:

They did not do this at the top because there was no necessity and if they could have hit these circuit breakers to the downside they would have, and loved every minute of it!  Yes, demand is swelling in China, India and the rest of the world, gold will be the last man standing when this crisis goes full blown.  The "risk" in price is now and has been for a while now, to the upside in huge amounts.  Volatility is already increasing and I do believe they know what is coming.  The risk which is increasing each day is that Russia asks for gold in exchange for oil and China backs their currency with gold, a one-two punch of sorts.  I think the more telling news is how the budget bill was passed with hugs and kisses while dumping the entire derivatives mess on top of FDIC.  They obviously know something is coming with both of these actions and neither will be good for Joe and Jane America!  The timing of both these actions suggests something will happen quite soon.

I hope this helps.  Please feel free to contact me with any further questions.

David Schectman

Quotes of the Day

One must look away from the COMEX to understand how JPMorgan could be the world's largest silver long (owner) since the data indicate that the bank still holds a short position on the exchange, albeit the smallest such short position in 7 years. The evidence suggests that JPMorgan used its control of silver prices by virtue of its dominant COMEX market share to depress prices, not only to accrue profits on its short position, but even more for the express purpose of accumulating physical silver on the cheap. What evidence?

The evidence lies in the intentionally poor price performance of silver over the past nearly 4 years and the fact that the world has produced as many as 300 million ounces of new silver that has been excess to total fabrication demand. This extra silver had to be bought by the world's investors and those investors did not appear to be aggressive buyers. In other words, someone had to buy the silver and since the world's investors did not appear to be ready buyers, the metal was most likely bought by a non-traditional buyer. JPMorgan most closely fits that description for two reasons. One, buying physical silver was the most practical and efficient manner of closing out JPM's documented COMEX short position and two, the silver purchases would be kept confidential since no reporting requirements attach to physical ownership. By buying physical silver, JPMorgan could cover its massive COMEX short position absent prying eyes.

- Silver analyst Ted Butler, Butler Research, December 10, 2014

At some point in the future, the price of gold will trade "materially" higher than it is now---and also by the fact that certain entities are buying massive amounts of physical silver in all forms, which will ensure that someday, silver will certainly become the new gold.

- Alan Greenspan

Many questions remain. But, gold remains a hedge, an alternative asset and a portfolio diversifier. That answer has not changed.

Maybe I should take some profits next time gold has a huge run because I didn't take any last time. I rode it up but I rode it back down."  

I am always caught up in the big picture. So maybe I'll take a little bit off the table the next time there's a huge rally. But I don't think next year would be early enough, I think I'm going to have to wait."

- Peter Schiff, December 12, 2014

If bail-ins take place, which now seems almost certain when banks get into difficulty again, there is a very significant risk that bail-ins alone will lead to a collapse in consumer and business confidence as consumers and businesses see their savings and capital confiscated. This alone will likely compound a difficult economic environment and lead to sharp recessions and depressions - economic contagion.

Gold Core

There is also the financial contagion risk. Much of the bonds are held by pensions funds, institutions and even leveraged investors like hedge funds. If much of the loss-absorbing debt is held by leveraged investors then there is a risk of contagion across the financial system and the contagion boomerang back to banks.

- Mark O'Byrne, Gold Core, December 9, 2014

Kitco.com

 By Kira Brecht, Kitco.com, December 15, 2014

 __________________________

Today's Featured Articles

Zero Hedge (China, Russia Dump US Treasuries In October As Foreigners Sell Most US Stocks Since 2007) (Sales Of Silver American Eagles Rise To Record High For Second Consecutive Year)

Jim Sinclair (Should this oil rout continue, Credit Default Swaps will be triggered (if not already) and could instigate the same financial collapse as the mortgage market did in 2008, when the Credit Default Swaps couldn't pay. Only this time, bail outs will consist of bail-ins, which will add to the pervasive fear and turmoil) (On the Brink of War and Economic Collapse) (The Devastation Of America's Working Class)

GoldCore (New York Times on Benefits of Gold in Currency Wars)

Greg Hunter (Oil Price Plunge Trigger for Next Global Crisis, Greg Hunter interview)

Sprott Money (The Swiss Referendum & The $1.5 Billion Dump of Gold Futures)

Ed Steer (Ted Butler discusses Comex silver) (Robert Ringer: Dollar Collapse Is Inevitable, So Buy Gold)

Bill Holter

Crashing Oil May Result In "Perestroika?"

December 17, 2014

Oil has crashed and now trading at roughly half the level it was just 6 months ago.  There are winners and losers of course but this is not the point, the point is ...this is either the sign of a credit contraction, the cause of a credit contraction or both.  Consumers are obviously winners and producers the losers, just as oil importing nations are the winners and exporters the losers.  But, as I just mentioned, this is not the point at all.

It is my belief that this was "our" plan to try to bust or at least hamper Mr. Putin and Russia.  This type of action worked during Ronald Reagan's era and the Soviet Union was financially broken.  I believe Washington simply opened up the old playbook, started rubbing their palms together in anticipation and then ..."let 'er rip".  This action obviously included the help of our "friends" the Saudis, a glut could not ever develop without their help.  Please understand this very important data point, supply and demand were only out of balance by less than 2%, something much bigger is at work here.  "What is at work here" as I see it were all the high(est) level meetings held over the last six months between the Saudi royalty and both Russia and China, what do you suppose was discussed?   

Has Saudi Arabia "bowed" to U.S. wishes and held or even increased output...BUT with the blessing of China and the knowledge of Russia?  Let me explain the thought process.  Has China calculated what would happen to the West's highly levered and "derivatised" system were oil to crash "too far?"  Did they have any idea what or how big the derivative time bombs were that are now surely being set off?  Yes, it means cheap oil for China who is a huge importer of oil but I only believe this is just icing on the cake.  In my opinion, this "U.S. plan" to bankrupt Russia was "PLANNED" (by the East) to boomerang back on the U.S.  Yes it has already destroyed our shale industry but more importantly, what is it doing behind the scenes to banks and brokers who are sitting on trillions of $ worth of energy derivatives?  We already know Phibro, the 130 year old commodities firm is shutting their doors... but what about the banks and brokers?

I ask the question and again repeat "there are both winners and losers" ...but please remember, if the losers lose "so badly" as to make them insolvent ...the winners suddenly become losers!  The financial system in the West is so intertwined and leveraged, no one can be allowed to lose "so big" that they are bankrupted.  But this is exactly what has already in most likelihood happened.  Someone is already dead, or better said "someone(s)" plural are already dead!  We are talking about 100's billions or more likely trillions of $ have already changed hands (on P + L statements).   

Another set of time bombs are all of the CDS issued and purchased not just on energy companies but on sovereigns themselves.  Let's assume (which I do not), Russia does actually default on their $200 billion of external debt.  This is actually quite small when compared with other nations but how many credit default swaps have been written on this?  Typically, CDS is insanely written at a 10-1 ration versus the actual credit.  My question is this, if Russia were to default on $200 billion and triggered $2 trillion worth of CDS, someone wins and someone loses.  "Who" could lose $2 trillion in today's world?  What about others like Iran, Venezuela and on down the line not to even mention the various corporate entities could bankrupt?

The oil crash in my opinion is really about a global credit contraction.  Global economies are slowing and yes demand for oil has decreased but this decrease does not account for a 50% drop in price ...leverage does.  Oil, just like anything else is "commoditized" with levered bets which increases the volatility when it occurs.  The leverage works on the upside where the move looks orderly and like it will never end, until it does.  Once the trend has ended, "margin calls" force sales and is exactly what we are seeing now.

Switching gears just a little, the world's monies are all debt or credit based, a credit contraction will also destroy various (all) currencies that are levered into this trap.  What will happen if (I believe when) Russia decides to ask for gold in exchange for their oil and gas?  Think about this question as it is very real.  Were Putin to decide on this strategy, is he dealing from a position of strength or weakness?  Does Russia need the revenue as much as the world needs his oil?  Before making up your mind, remember, Russia is actually a larger producer than Saudi Arabia.   

 If Russia were to ask for gold in return for oil, where would things go from there?  Oil would whipsaw in price as would the ruble.  Gold would then be "remonetized" overnight and its price more than likely explode.  But there is one more step to a "demand" of gold for oil.  This step would "expose some folks" so to speak.  In other words, who really has the gold to pay for oil?  Yes I know, at current prices, sovereign gold would run out pretty quickly, a markup of gold prices versus oil which would be a natural from market forces would change this.  What I am getting at here is, were Mr. Putin to demand gold in payment for oil, we would pretty quickly find out who actually has gold and who doesn't.  

Before you shut your brain down and call it lunacy ... "no one will ever ask for gold as payment for oil" ...ask yourself why China and Russia have been accumulating it so fiercely?  Russia can certainly say "hey, you crashed the price of oil, but now we want something real for our real product".  This would certainly work for China as they are filling their oil reserves and would like their gold stash to be valued at a level to back their currency for the next 100 years or more.  The other side of the coin of course is what will be learned of Western gold reserves.  Do we have it or not to pay?  Is this why the "core four" of Germany, Holland, Belgium and Austria want their gold back within their borders?  Can they see the need to use it for oil and gas purchases or to back a bloc currency?  

Think for a moment, think about the "shorts" in the ruble and now the shorts in oil?  Are the "shorts" of Western origin?  Who would lose the most from a spiking oil, ruble and gold price?  As I mentioned earlier, there are most probably some very dead participants who were caught on the wrong side of oil.  What will happen if some Sunday night Mr. Putin said "we will be happy to ship oil, please ship us gold?"  The oil, ruble and gold shorts will be destroyed along with the record amount of dollar longs followed by the dollar itself!   

Let me add this to the mix.  I have written many times just how easy it would be for the COMEX to be broken.  It would only take $2 billion to physically take out the registered inventories of gold and silver.   

Another $10 billion would probably be enough to include the LBMA and topple their fractional reserve scheme.  If this were done, it would be viewed as a declaration of war on the West by the East.  Instead, we have declared financial war on Russia, who would blame Russia if they retaliated by asking for real money for their real goods?

I will leave you with a couple of questions.  Why did the budget deal just pass in Congress with hugs, kisses and the inclusion of $303 trillion worth of derivatives being "covered" by the FDIC (read; "taxpayer")?  Why did CME expand limits for gold and silver trading to $400 and $12 per day effective next Monday?  Why is Russia testing their own clearing alternative to the West's SWIFT system?  Oh, and one more question, is "gold" a part of this clearing alternative?

Before you write to tell me "this can never happen", please don't waste your time.  It CAN certainly happen!  Will Mr. Putin decide on this?  I have no idea but if I were in his position I would certainly go this route.  Especially since the Western credit edifice has never been more vulnerable than it is now.   A credit "wobble" from a self-inflicted oil price implosion would be ironic.  I would also do this as a way to move away from the dollar and toward an asset I have been steadily accumulating, gold.  I would do this to FORCE a "perestroika" (Russian for "restructuring") on the West! 

The Re-Emergence of Real Money

December 16, 2014

I keep thinking back to the story I related several weeks back; of how, with not a shred of knowledge of the character or intelligence of George W. Bush, I voted for him in the 2000 Presidential election - out of "fear" that the oilfield service stocks I analyzed, marketed and advised of would decline. Yes, my dislike of Al Gore and Joe Lieberman factored into the equation as well. And yes, living in New York, it mattered not who I voted for, as New York always votes Democrat. That said, my decision was entirely selfish - and as it turned out, completely misguided. And for the record, since then, in every subsequent election, my "methodology" has been entirely devoted to voting out incumbents. In other words, I voted for Kerry to get Bush out in 2004; Obama (whom I also knew not a whit about) to get McCain's "neo-cons" out in 2008; and in 2012, Gary Johnson - solely out of dislike for Obama and Romney.

Anyhow, my point in renewing this topic is the incredible popular uprising that has engulfed the world in recent months - from Scotland, to Catalonia, to Switzerland, and this week, Japan and Greece. Whilst the "official" catalysts of these "revenges of the people" vary, there's not a shred of doubt that the common denominator is the economic ruin caused by Central bank money printing. Heck, here in the "United States of Superiority," I read this weekend that the median household income of 81% of the nation's counties peaked 15 years ago - i.e., when the Fed's printing presses were set to "hyper-drive"; and better yet, 10% peaked in the early 1970s - "coincidentally," when the gold standard was abandoned.

Thus far, only the Catalonian vote was successful - and trust us, we'll be hearing more about the Catalan secession movement in 2015. Moreover, only history's most aggressive market manipulation and propaganda campaign - which the Miles Franklin Blog has written and spoken of ad nauseum - prevented a far closer result in Switzerland. Which, by the way, we haven't heard the last of either - as the worse Europe's economy gets, the greater the pressure will become on the doomed Euro/Franc peg that Lady Macbeth Jordan of the SNB so desperately defended. Meanwhile, three critical December Greek votes (the first of which is this Wednesday) may well catalyze the collapse of the European Union; and in our view, there is nothing TPTB can do to alter its outcome. But more on that at year-end, when the final vote is tabulated.

As for Japan, Shinzo Abe's Liberal Democratic Party, as anticipated, won a "landslide" victory in yesterday's snap elections. And thus, one can only wonder what Japanese citizens were thinking. To wit, the laundry list of Japanese economic devastation described in Thursday's Audio blog couldn't have been uglier - and unlike the Swiss, it's difficult to believe the Japanese actually believed a vote supporting Abe would prevent a catastrophic equity market decline. After all, Japan's "retirement colony" has, for all intents and purposes, been withdrawing from equities for some time; and unlike Switzerland, where the stock market sits near a record high, the Nikkei - "Abenomics rally" et al - remains 56% below the high achieved 25 years ago.

That said, there's little doubt the same "stock market fear-mongering" that characterized the Swiss referendum propaganda efforts - and to a lesser extent, the oil patch's pre-2000 election lobbying - played at least a minor role. Or, at the least, suggesting that without Abenomics, Japan's near zero interest rates would increase, devastating bond portfolios and the government's perilous (read hopeless) debt situation. Frankly, it's quite difficult to gauge just how different Japan's culture is from ours, so I don't want to read too much into the "average Japanese's" mindset. However, in voting decidedly for the malignant economic cancer that is Abenomics, clearly the Japanese zeitgeist, at least from a financial standpoint, is difficult to discern from the political hopelessness of mid-1930s Germany - amidst which, Adolf Hitler rose to power. In other words, expect anything from Japan in the coming years - as not only financially, but psychologically it is "coming off the rails." To that end, following this weekend's vote, I more than ever believe the "land of the setting sun" to be the first "first world" nation to experience 21^st century hyper-inflation.

Speaking of Audio blogs, few were less important than "crashing oil prices and currencies, America's death knell." Taped just eleven days ago, oil prices were more than $10/bbl. higher at the time - and far higher for lesser blends like Bakken shale and Canadian heavy. Moreover, the global currency contagion we detailed in September's "single most Precious Metal bullish factor imaginable" has dramatically expanded since - although you'd never know it in reading the commentary of the soon-to-be-completely-ignored MSM. Care of the "strong dollar" resulting, ironically, from the collapse of the only industry that has generated positive GDP and employment growth since America broke in 2008, currencies the world round are in freefall; which is probably why, as we discussed yesterday, the Cartel-orchestrated precious metals "bear market" is OVER.

As for oil - which despite every imaginable algorithm-goosing trick, has plunged below Friday's closing level to $56.50/bbl. as I write Monday morning, likely enroute to the $40/bbl. range hinted at this weekend by the UAE oil minister. Essentially, Saudi Arabia and other OPEC heavies have declared WAR on the world's high cost oil production - which care of maniacal Central bank money printing, has become a bubble at least as large as the mid-2000s real estate bubble. And thus, we couldn't be more serious about our view that "shale oil 2015 = subprime mortgages 2008."

Whilst the Cartel desperately attempts to cap precious metal prices, support the "Dow Jones Propaganda Average," and prevent Treasury yields from crashing ahead of the FOMC's pathetic meeting on Wednesday, global stock markets are crashing, currencies imploding, yields plummeting, and energy-related credit spreads exploding. Frankly, the fact that even Wall Street is even "debating" whether the Fed will substitute "considerable time" with "patient" in its meaningless policy statement is beyond even our comprehension - as with each passing day, the carnage the global energy collapse is causing becomes more and more terrifying.

This past week alone, TPTB's attempts to prevent all-out panic from enveloping the Western world - via relentless market manipulation - have been utterly mind-blowing. Clearly, they are failing miserably, although they still have kept the time bomb that are precious metals in check. Last week, we penned "desperation tutorial" to describe Wednesday's historically blatant suppression efforts - which in our view, were far more desperate on Thursday and Friday. In other words, as the Cartel's urgency has multiplied, so has its ultimately suicidal manipulations.

"Sunday night Sentiment" raid, for example - i.e., the 77^th in the past 78 weeks - was "one for the ages"; so much so, I actually penned "supplemental Cartel manipulation proof" whilst my wife was cooking Sunday night dinner and my Broncos playing the Chargers for the AFC West championship. And following the 347^th "2:15 AM" raid of the past 395 trading days, and another at the COMEX open, they actually have gold and silver prices lower than at Friday's (heavily manipulated) close, despite the aforementioned additional plunges in oil, equity markets; and yes, Treasury yields - which are freefalling anew, despite the Fed's best efforts to prevent universal recognition of the "most damning proof yet of QE failure."

Oh, by the way, this morning's "bullish" economic news was just as comical as last week's eight-year high (LOL) in consumer sentiment - as "industrial production" was slightly better than expectations due to the same subprime auto financing bubble we described in detail last week. Meanwhile, the Empire State Manufacturing Index not only "missed" expectations of +12 by a mile - in plunging to minus 4 instead - but the highly propagandized NAHB Housing Index "unexpectedly" declined as well. In other words, the economic freefall that commenced months ago is accelerating; and if last week's historic plunge in the Baker Hughes rig count is any indication, the aforementioned one-third of S&P 500 capital expenditures that energy companies represent is already gone. Thus, with just two days until the ill-fated FOMC meeting, we simply cannot imagine the manipulative hoops they'll try to jump through to "stabilize" collapsing worldwide financial markets. And again, we can't emphasize enough - as I watch WTI crude hit $56.40/bbl. - that no matter how "omniscient" they'd like to be, U.S. market manipulators will NOT be to prevent the "unstoppable tsunami of reality," particularly as relates to things they have ZERO control over, like plunging oil demand and Greek snap elections.

Which brings us, finally, to today's extremely important principal topic - of the worldwide "re-emergence of real money" that sooner or later will destroy all the Federal Reserve and its Central bank cronies have fought so hard to create - whether by "the pen" or "sword." To wit, last week's "Golden Age" article in the New York Times - which in featuring Paul Krugman as its lead economic commentator is undoubtedly the Cartel's head MSM cheerleader. However, even the Times realizes the global "monetary zeitgeist" is changing - as evidenced by record physical demand that cannot be denied and expanding calls to repatriate gold assets in nations as diverse as Germany, Switzerland, Holland, Belgium and Austria.

Here at the Miles Franklin Blog, we can only warn you to take action before the "jig is up." As when it is, today's once-in-a-lifetime opportunity to protect yourself - at Cartel-subsidized prices, no less - will be long gone, perhaps forever. Miles Franklin itself will eventually be gone too - as will the entire global bullion industry, once supply is no longer to be had. Fortunately, those that have "stacked up" beforehand will have the means to "bridge the gap" to the next monetary system. Moreover, our Brink's storage program in Montreal will likely live on as well, enabling those seeking sanctuary for their metals - as myself and Miles Franklins' principals have - to sleep soundly.

For those wise enough to consider such actions, we hope you'll give us a call at 800-822-8080 and give us a chance to earn your business. After 25 years of industry leading service - with an A+ Better Business Bureau rating, and not a single registered complaint since opening our doors in 1990 - we believe we've earned that right. And through this blog, which David Schectman started writing before even Bill Holter and I considered precious metals, we hopefully have convinced you of the reality of a world gone mad on a crash course with financial infamy.

Submitted by Tyler Durden on 12/15/2014 16:45 -0500

Perhaps the most notable feature of the October Treasury International Capital report is that in October foreigners sold a whopping $27.2 billion in US equities, surpassing the dump just after the first Taper Tantrum, when they sold $27.1 billion in June of 2013 when they also sold $40.8 billion in Treasuries. This was the largest selling of US corporate stocks by foreign entities since the August 2007 quant flash crash, when some $40.6 billion in US stocks were sold by offshore accounts. 

However, what this month's TIC data will surely be best remember for, is that both China and Russia dumped US Treasuries in October, some $14 billion and $10 billion, respectively, in the process sending China's total Treasury holdings to just $1,253 billion, the lowest since February 2013 and just $30 billion more than the TSYs held by America's second largest (offshore) creditor, Japan.

Continue reading on Zero Hedge.com.

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Sales Of Silver American Eagles Rise To Record High For Second Consecutive Year - www.zerohedge.com

Submitted by Tyler Durden on 12/14/2014 14:38 -0500

 

One month ago, shortly after we reported that "Silver Coin Sales At US Mint Soar To Highest In Two Years" we learned that the "US Mint Sells Out Of Silver Eagles Following "Tremendous" Demand." That, however, did not prevent the mint from selling just about 5 million ounces in the period since the announcement, and as Reuters reported last week, "Strong investor demand lifted American Eagle Silver Bullion coin sales to a record for the second straight year, the U.S. Mint said on Tuesday."

Silver Bullion coin sales have reached 42.9 million coins so far this year, up from the previous record 42.7 million coins last year, the U.S. Mint said in a release. The coin sales on Dec. 8 reached 495,500, lifting them above the 2013 record, the Mint said.

Reuters added that "silver coin sales fell 40.8 percent in November to 3.43 million ounces" which perhaps was to be expected considering the Mint had just sold out of Eagles and the delay associated with coining more and putting them into inventory.

In any event, since the Reuters announcement, another half a million American Eagles have sold direct from the mint, and the total now stands at an even recorder 43.3 million ounces.

Zero Hedge

For those confused, it is clear that another year of record demand for physical silver explains why the price of silver is down 12.5% in 2014 after being down 36% last year. Why? Because as we said a month ago, "when it comes to precious metals, thanks to the BIS and the central banks, Paper beats Rock every time."

Continue reading on Zero Hedge.com.

 

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Jim's Mailbox - www.jsmineset.com

Posted December 15th, 2014 at 3:38 PM (CST) by Jim Sinclair

Jim,

With the Euro down only slightly and the Yen showing decent strength today, the US dollar index is not showing any movement.

Therefore, it is NOT Dollar weakness that is contributing to the $24 per ounce gold decline.

I can only suppose that it is the price of oil dropping to a $55 handle and Saudi reports of $40 oil as a possibility that is doing the damage to gold.

Yet should this oil rout continue, Credit Default Swaps will be triggered (if not already) and could instigate the same financial collapse as the mortgage market did in 2008, when the Credit Default Swaps couldn't pay. Only this time, bail-outs will consist of bail-ins, which will add to the pervasive fear and turmoil.

There are few places to hide nowadays, with the bond market and stock market pushing all time highs. I do believe all eyes will be on gold very soon! It has no strings attached and if far from its highs both in nominal and real terms.

The games being played in the paper market are not enduring and will only add to the significant upside potential for gold.

There IS a reason most Central Banks are accumulating gold hand over fist.

Beware of complacency.

CIGA Wolfgang

***

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New York Times on Benefits of Gold as Geopolitical Weapon in Currency Wars - www.goldcore.com

Submitted by By Mark O'Byrne

December 12, 2014

 

New York Times on Benefits of Gold in Currency Wars The New York Times published an important article this week in which the benefits of gold to nation states during a period of currency wars was highlighted. The article was noteworthy as the New York Times has rarely covered gold in a positive manner.

The article, entitled 'The Golden Age' is about the growing use of gold in geopolitical affairs. They drew attention to the gold repatriation movements in Europe and to the accumulation of the precious metals in vast quantities by the central banks of the East - particularly Russia and China.

The Times attempts to get into the mind-set of the central banks that are buying gold or attempting to repatriate their current stocks of the metal. It presents two major rationales for the current trend.

"Some that have interpreted the metal's mini-comeback as an indication that financial Armageddon, in the guise of runaway inflation, is approaching. Others have read the recent move as a symbolic way for central banks and governments to make a show of strength in nervously uncertain economic times."

The first point is one, which we have covered here consistently. The article quotes Jim Rickards who interprets the policies of China and Russia as "they understand how fragile things are and they are getting ready for the demise of the dollar."

The Times refers to the unprecedented waves of money printing by central banks in recent years "which in theory can devalue sovereign currencies." Despite the fact that massive money printing programs have always led to high inflation the Times seems to believe that this time it may be different - famous last words in economic terms.

The other side of the argument as put forward by the Times does not really hold water. It suggests that the accumulation of gold is a largely symbolic act. It is being used to induce a "culture of stability."

Continue reading on GoldCore.com.

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Oil Price Plunge Trigger for Next Global Crisis - Harry Dent - usawatchdog.com

By Greg Hunter On December 14, 2014

By Greg Hunter's USAWatchdog.com (Early Sunday Release)

USAWatchdog

Economist Harry Dent says falling oil prices will be a trigger for another economic calamity. Dent explains, "Normally, oil prices falling in a good economy like the 80's and 90's, where we have falling inflation and booming productivity and good demographic trends, this would be a good thing. It is a good thing for consumers and businesses, but it is a bad thing for financial markets and our whole debt structure. We have the greatest debt bubble in history. It's the greatest asset bubble in history, including stocks, commodities, real estate and everything. The last time this bubble burst was in 2008 because of the subprime crises. A small tranche of loans went bad, and it triggered a whole debt crisis . . . that's what I see. I see a fracking bubble here. What's happened is because of demographic trends, which we predicted years ago, trends in developed countries are set to slow. It will be aging baby boomers spending less money, very simple to see. In addition to that, you get this fracking revolution with all the low cost money from the Fed stimulus and zero interest rates, and what you have now is we created two million extra barrels of oil a day just out of Texas and North Dakota."

Dent, who has a new book out called "The Demographic Cliff," goes on to say, "Now, the only way to counter this is if OPEC and Saudi Arabia said we're going to cut production. Well, Saudi Arabia said no, we're not going to do that because we don't like these frackers. They are competing with us long term, and they are seeing this as an opportunity to squeeze out their competition. The more the price of oil falls, the more of these frackers and other marginal countries like Venezuela go out of business when they can't compete. It's a good long-term move for the Saudis, but I think they are miscalculating that they could help trigger the next global crisis. We have more debt than we had in 2008. The demographics only get worse in more and more countries. . . . So, I think this is the trigger for the global crisis. There's $500 billion in leveraged loans with the fracking industry. I think this thing is going to blow up."

Who is to blame for the shaky economy we are in? Look no further than the government, and Dent contends, "What's happened is the government has created a bubble with all this low short- term interest rates and all this stimulus, and their only defense is to keep this bubble going. . . . We got the greatest bubble in debt in modern history by far. We have the greatest asset bubble across the world in real estate, commodities, stocks; everything is in a bubble. When these bubbles burst, the whole system comes down. They are doing everything to prevent it, but everything they do to prevent it from blowing up is making it worse. This is a game they cannot win-mark my words, cannot win, and we are going to see a major crisis . . . especially over the next two years. These falling oil prices trigger these fracking firms. They have 20% of the junk bond high-yield debt in the United States, and that's all it takes to trigger another financial crisis, just like the subprime crisis back in 2008. All it takes is a trigger and the whole debt thing comes down."

On the stocks, look out below. Dent says, "The next crash is going to take us to a new low around 5,500 on the Dow. . . . That's going to be a 65% to 75% crash."

On the U.S. dollar, Dent says, "I have debated all these experts, including Peter Schiff, and they are just wrong. They are right about an economic crisis, and they are right about the unsustainability of this bubble and debt. They are dead wrong about what happens when debt deleverages. History proves this 100% of the time. When a debt bubble deleverages . . . money is destroyed. When there is less money chasing the same goods, you get deflation-not inflation."

On gold, Dent says, "We've been predicting gold will go down for many years now, and the next target is $700 per ounce. I think we will see that in the next two years at a minimum."

Join Greg Hunter as he interviews financial guru and best-selling author Harry Dent.

(There is much more in the video interview.)

Video Link

Harry Dent-Gold Target $700 or Lower

 

 

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The Swiss Referendum & The $1.5 Billion Dump of Gold Futures - ericsprott.blogspot.com

Monday, December 15, 2014

 

Listen to Eric Sprott share his views on the current shortage of coins, outstanding gold and silver contracts on the Comex, the dump of gold futures this week, the Swiss Referendum, and the gross demand of gold from India and China.

 

-       Source, Sprott Money

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Indian Gold Imports in November Close to 150 Tonnes - www.caseyresearch.com

By Ed Steer

December 16, 2014

 

The Wrap

It was another well-above-average week in the physical turnover among the six licensed COMEX silver warehouses, as more than 6.6 million oz either came in or were removed. Total COMEX silver inventories fell 1.3 million oz to 176.4 million oz, remarkably close to where these inventories, the second largest in the world (behind the SLV), began the year. I know I beat this issue to death, but please consider that the weekly movement of 6.6 million oz annualized is more than 40% of the world mine production of silver.

I also know that this unprecedented physical turnover is one of the "unmentionable" topics of the precious metals market despite being so unusual and so easy to verify. At the very least, I know that no one would undertake the time, effort and expense to move such an unusually large amount of metal into and out from the six COMEX silver warehouses unless it was absolutely necessary to do so. To me, absolutely necessary is another term for insatiable demand. In addition to the remarkable consistency of the unusual movement over the past more than 3.5 years, the data suggest it is actually increasing. - Silver analyst Ted Butler: 13 December 2014

Continue reading on Casey Research.com.

Critical Reads

Robert Ringer: Dollar Collapse Is Inevitable, So Buy Gold

Last month, Kitco News interviewed renowned New York Times Bestselling author Robert Ringer. They began by discussing the current political direction of America, but moved on to the collapse of the dollar. While Ringer will not put a timeline on the collapse of America's currency, he is certain that it will fall apart.

What will that collapse look like? Again, Ringer wouldn't say, but he does have just one piece of advice for everyone: buy gold. Buy physical gold. In fact, he is even more aggressive in his allocation than our Chairman Peter Schiff. Ringer believes 50% of your portfolio should be in gold!

I found this gold-related news item on The Telegraph's Finance webpage late last night when I was looking for something else.  The link led to the talkmarkets.com Internet site.  There's a 6:12 video clip, plus a transcript.

Read more... 

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