China gold

Mutually assured destruction” now best describes the uneasy stand-off between an increasingly indebted US government and an increasingly monetarily frustrated China.
So here’s a quiz: 1) Which country is the world’s largest sovereign miner of gold? 2. Which country doesn’t allow an ounce of that gold to be exported? 3. Which country has advised its citizenry to purchase gold?
Three questions. One answer. In each case: China.
Is it plausible that, at some point yet to be determined, a (largely gold-backed) renminbi will either dethrone the US dollar or co-exist alongside it in a new global currency regime?

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It looks like Austria is taking gold repatriation step by step, just like The Netherlands did.  First there was some discussion in politics about the official gold reserves and then actions began to be taken behind the scenes.
In the case of Austria, they started to allocate their gold.

The fact concrete actions already have been taken since July 2013, tells me there is a significant probability more will follow; such as repatriating gold from London.

Given the ‘risk of a high concentration at the Bank of England’, the examiner advise to ‘rapidly evaluate all possibilities of a better dispersion of the storage locations’… The central bank has not ruled out such a relocation. The existing gold storage concept would be reviewed, potentially it will bring parts of the stored gold in the UK to Austria, OeNB experts have stated.

Bear in mind The Netherlands did not even talk about repatriating openly while preparing it.
Who knows how many countries are preparing or discussing repatriating behind closed doors at this moment.

petro dollar sunset Willie

Currently, we live in a brave new HALCION world, numb and safe from the inner kingdom of truth with all of us.
From dawn to dusk, things turn “Orwellian” as the cycle completes its totalitarian turn.

We are living through this chaos now – the conflict at the heart of what is often deemed as entitlement.
Medical care, education are firmly wrapped in an entitlement display when the real issue is the raw inflation induced by the corporate banking class.

Real banking will not return for some time.   The hidden depression will mirror a hidden inflation.   Electronic food lines, transfer payments replaced by the magical array of chromatic illusions – equally mysterious.

silver mine

We’re not there yet.   The gold price hasn’t been low enough yet for there to be a real cleanse.   The landscape is still littered with the ‘walking dead’ among junior miners and management teams.   For that reason I’m not convinced that we’ve seen the bottom or that we’re going to see a rapid turnaround in mining stocks.
The bull market was especially long.   I’ve never experienced ten years of ‘summertime’ in the mining sector before. Usually the bull market trends are a lot shorter.  During those years of ‘summer’ we saw a horrendous waste of capital. A lot of money was spent on poor projects and poor mines. It’s going to take a while for all that to wash out.

Image: Jonny O'Callaghan

Given the short time involved, it is clear that there is a major change happening in cross-border trade hardly noticed by financial commentators.   But this is not all: sanctions against Russia have turned her urgently against the dollar as well, and together with China these two nations dominate and carry with them the bulk of Asia, representing nearly four billion rapidly industrialising souls.
To this we should add the Middle East, most of whose oil is now exported to China, India and South-East Asia, making the petro-dollar potentially redundant as well.

While the talking-heads are debating the effect on Russia and America’s shale, they are oblivious to the potential tsunami of dollars just waiting for the opportunity to return to the good old US of A.

silver eagle sales

In the wake of a MONSTROUS sales spike with silver’s dip to $14, Silver American Eagles sales have soared above 43 million oz in 2014, a new all-time annual sales record for the second consecutive year. 
In addition, I believe sales of the 2015 Silver Eagles will be very strong in the beginning of the year.  Today, the price of gold and silver are skyrocketing as the broader stock indices plummet.  This may be the sign precious metal investors have been waiting for… A REAL BOTTOM.
If we truly seeing the MOTHER OF ALL REVERSALS, 2015 may turn out to be quite the pivotal year.

falling-bear

The prevailing valuations in the lofty US stock markets are increasingly becoming a bone of contention.
Wall Street calmly asserts stocks are fairly valued or even cheap, since it has a huge vested interest in keeping people fully-invested.  But a growing chorus of dissenters is disputing that idyllic notion, warning that stock valuations are very high and portend great downside risk.  Indeed, topping valuations abound.

Gold Eagle

Gold was the safe haven this week.
This week precious metals continued their recovery, with gold up $35 at $1220 and silver up about $1 at $17 Friday morning, thus building on the improved trend since gold bottomed nearly $90 lower at $1132 on 7 November.
Gold seems to be finding support at the 50-day moving average (MA), which currently stands at $1198 and now rising.
The 200-day MA is at $1246, which suggests supply at this level could cap the rise for the moment: these levels matter to technical traders.
On Comex there is evidence of some buying of gold futures, as opposed to bear closing, which is reflected in the rise in net contracts for the managed Money category shown in the chart below:

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With PM’s rallying while oil & equities crash, in this week’s Metals & Markets The Doc & Eric Dubin discuss:

  • Repatriation Musical Chairs continues: Austria considering repatriating 225 tons of gold from the Bank of England- is France next?
  • Gold & silver rallying while oil & the equity markets roll over- what’s going on?
  • GOFO Rates Surge Positive- did the recent bounce free up bullion? 
  • Venezuela on brink of hyperinflation & collapse- a prelude of whats to come in the US?
  • 2015 Shaping up for Serious Turmoil- Will a Squadron of Black Swans Fly in 2015?

The Doc & Eric Dubin break down all the action in this week’s frenzied markets below: 

It seems rather appropriate that just seven days after the US government hit a whopping $18 trillion in debt, mainstream financial media has picked up the IMF’s recent World Economic Outlook report, which puts the US economy as #2 in the world.
The obvious truth is that the US is in decline.
And it’s being overtaken.