jim willieVeteran financial journalist and gold watcher, John Dizard noted the increasing strain in the physical gold market and detailed how that should lead to much higher gold prices.
Something is unsettling the animals in the forest of the gold market. Usually there is a chorus of chirrups and squeaks that are significant, momentarily, for one species or another, such as a few cents of arbitrage between Zurich and London, or a dollar-an-ounce rise in India caused by a dealer’s near insolvency. Then the noise settles down to the murmur of wind through the trees.  However, the continuing high level of premiums for physical gold over the kinds you can trade on a screen suggests that the next move in the major gold indices or the various exchange traded funds could be discontinuous and dramatic. It would be much better for the financial world if gold were just bumping along, with only enough volatility and liquidity to keep a few dealers’ lights on. That would mean electronic or paper assets have retained their essential credibility with the public ...”
“This could turn into a very violent wake-up call for [screen-traded gold].

bank-holidayDavid Morgan joins Ellis Martin to discuss JP Morgan Chase’s upcoming dictate to limit out of country wire transfers as of November 17, 2013.
Will there be a bank run and an economic collapse caused by a banking system failure? What do the banks know that the country doesn’t?
Morgan also discusses the historical perspective for returning to a gold standard, and his current outlook on the metals.

SHIBORIs Peking panicking again?
Do you recall the June panic in the Chinese banking sector? Rumor of defaults of a secondary bank resulted in the SHIBOR, equivalent of LIBOR for China, spiking abruptly. In the span of a few hours, a “Credit Freeze” developed. The Chinese government has forbid the media to write more on the subject and then, opened credit lines to avoid defaults wherever it was needed, saving banks, industries and speculators.

On the 4th of June,  Wei Yao, the SG Cross assets Research’s China economist wrote that China may be on the verge of a “Minsky moment.”
A few days later, Beijing panicked, the SSE crashed and it seems that many speculators were forced to close their contracts on commodities (soybean mealsoybeansoybean oil, ) bringing to a real disruption of these markets. Gold and Silver also suffered, both bottomed at the end of June.
If the sudden spike in the SHIBOR is any indication, it seems that the Chinese banking sector fears the second part of November.

Global Conventional Assets 2012The world is invested in the largest Ponzi scheme in history.  
In 2012, world gold investment was $234 billion and silver was $7.9 billion for grand total of $242 billion.  In contrast, total investment in global conventional assets under management grew to $7.5 trillion the same year (2011 – $79.7 trillion to 2012 $87.2 trillion).  Thus, total gold & silver investment in 2012 was only 3.2% of these global conventional assets.
The real problem for these conventional assets in the future will be the peaking of global oil production.  These assets derive their value from a growing economy which occurs due to a growing energy supply.  Once the energy supply peaks and declines, it will put severe stress on the $trillions of conventional paper assets.

The 25 statistics that you are about to read are solid proof that the middle class in America is being systematically wiped out Once upon a time, the United States had the largest and most prosperous middle class in the history of the world.  It seemed like almost everyone owned a home, had a couple of nice vehicles and could provide a very comfortable lifestyle for their families.  Sadly, that has all changed.  In America today, prices are rising at a very brisk pace but incomes are not.  There aren’t nearly enough jobs for everyone anymore, and most of the jobs that are being “created” are jobs that pay very little.  The largest employer in America is Wal-Mart, and the second largest employer is actually a temp agency (Kelly Services).  In a desperate attempt to make ends meet, millions of American families endlessly pile up more debt, and millions of other American families find themselves forced to turn to the government for help.  At this point, more than 49 percent of all Americans receive benefits from the federal government each month.  The percentage of Americans that cannot financially take care of themselves is rising every single year, and our independence is being whittled away as we become increasingly dependent on the government.  The following are 25 stats that prove that the American Dream is being systematically destroyed…

BernankeThere is a growing feeling the tide is turning against the dollar after the recent debt-ceiling crisis and therefore in favor of precious metals.  Recent sentiment against gold could hardly have been more negative; and importantly gold has held well above the low of $1180 established in late June. Even gold-friendly analysts had lost confidence and have been recommending caution. It is at moments like this that experienced traders assess the vested interests in the market: if the overwhelming majority are saying sell or stay away, it is usually a reflection of their own market positions.
In other words, the sellers have already sold and in future there are only bears left in the market looking to close their shorts, along with genuine buyers seeking an entry point.

Last week we asked: “will futures buyers chase gold higher?”  They did just that.  This week we’re watching the dollar.  We believe that a continued move downhill in the buck most likely leads to higher gold prices.  In some sense, we think gold right now is about dollar sentiment & confidence, as expressed in exchange rates with other currencies.

A deeper look into China’s gold holdings warrants attention.
Its last reported gold holdings in April 2009 were 1,054 metric tons. After adjusting for net imports from Hong Kong and domestic output, the figure is closer to 5,086 metric tons. If one were to take away gold uses for jewelry, industrial, and other categories and only add implied bar demand to central bank holdings, the figure is likely closer to 2,710 metric tons.
In just 10 years, China’s gold holdings could catch up to the U.S., based on adjusted Chinese consumption for jewelry, industrial and other uses and using implied bar demand as the primary driver of incremental central bank additions.
Given the low gold price, growing reserves in 2014 above this year’s levels appears achievable.
Gold will benefit from the continuing move away from the dollar as the world’s reserve currency as some form of a gold-backed currency emerges.

messengerAs SD readers are likely aware, CPM Group’s Managing Director Jeffrey Christian publicly called out silver manipulation whistle-blower Andrew Maguire as a fraud with no real precious metals market experience Thursday at the Silver Summit in Washington. 
In response to an SD reader (and Coghlan client)’s inquiry regarding the matter, Andrew Maguire’s employer Paul Coghlan of Coghlan Capital issued the following response:

Who are the “extremists” and the “terrorists” that the U.S. military should be concerned about?  For years, we were told that the “terrorists” belong to an organization known as al-Qaeda in the Middle East and other radical jihadist groups that are affiliated with them.  But now that has all totally changed.  We are discovering that time after time U.S. military personnel are being taught that evangelical Christians are “extremists” that belong to a “domestic hate group” and that they are potential terrorists that could use violence at any timeThis vilification of Christians started about the time that Barack Obama was elected and it has greatly accelerated over the past couple of years.  Stunned Christian service members can hardly believe what they are hearing in some of these training sessions.  They are being told that they cannot be affiliated with any of these “hate groups” and that anyone found to be supporting such groups could be disciplined under the Uniform Code of Military Justice.  The U.S. military later publicly disavows many of these training sessions when they are revealed to the public, but the demonization of Christians has not stopped.  In fact, it appears to be getting more frequent.  The following are 8 examples of the U.S. military being taught to treat Christians as extremists and potential terrorists…

smash popSilver has suffered a rough year, but its fortunes are changing.  In recent months its price has firmed at the convergence of multiple major support zones, a powerful technical launchpad.
Silver has soared in parabolic up-legs from the handful of similar past convergences, a very bullish omen. 
And with silver languishing so low in its trading range relative to gold, it has enormous potential to catapult far higher soon.

Play
Reuters/Tamara Abdul Hadi/Files

Reuters/Tamara Abdul Hadi/Files

On this week’s SD Weekly Metals & Markets, gold expert Alasdair Macleod joins The Doc & Eric Dubin to discuss:

  • QEternity:  Indications of a renewed bias of global monetary easing
  • Negative GOFO rates continue, physical gold supply tightening again
  • Bond market implications of the Federal Reserve as bond “buyer of last resort”- how much longer can the Fed maintain control of interest rates?
  • China’s golden global hoover:  China’s intentions vis-à-vis the US Dollar as reserve and trade settlement currency and how gold fits into China’s strategy
  • Alasdair provides an inside look at a Swiss refiner: “They are working 24 hours a day, 7 days a week turning every ounce of gold they see into 1 kilo bars headed to China“. 

bubblesIt is pretty clear that The Fed has created both a colossal asset bubble as well as a debt bubble and that they have boxed themselves (and most of us) into a corner.
Continue QE and you get Hyperinflation (the U.S. is already on the threshold at 9.17% CPI).  Halt, or even Taper, QE and the Markets Crash.
But there are Antidotes – Opportunities for Investors to Profit and Protect.
And one such Opportunity arises in the Precious Metals Market.

end badlyChris Martenson offers the inescapable math showing why the Fed will have to destroy the value of the dollar in its efforts to keep the credit growth our economic system so desperately needs continuing.
As Chris warns: “The Fed is beholden to a broken system, not anything noble”.
The likely result of all this? Quite possibly one of the biggest wealth transfers in human history:

silver shortageOne of my contacts with one of the largest European precious metals brokers told me this morning that they could not find any silver All the refiners they contacted could not take their orders and could not give any delay. “Call us next next month”, they said.  This is the first time that such an event has occurred.
On Wednesday, he attempted to source a ton of silver (32,000 oz), from the three main Swiss refiners. Two of them refused to take the order entirely, and the third refiner stated delivery would take 2 weeks.
The refiners claimed they had been very busy during the last month trying to fulfill an “enormous” Chinese order.

Shared by Nick Laird at Sharelynx.com, is an updated chart illustrating the long-term decline of the US dollar’s purchasing power when compared to gold.
Over this nearly 300 year period, $1,000, which initially purchased nearly 52 oz.’s of gold—finished the period with a purchasing power rate of 0.76 ounces, or roughly 23 grams of gold:

gold crashAnalyst/trader Karl Denninger (who recently went John Galt)  says Obama Care is doomed to failure because of pre-existing conditions of many signing up for coverage. Denninger explains, “If you are an insurance company and you only sell insurance to those who have already lit their house on fire, you’re not going to be in business very longYou have to have people who buy insurance who are not likely to have fires.” As far as the Affordable Care Act, Denninger thinks, “Now we have a huge problem because the only people who are going to enroll are the people who are going to crash the system if everyone else doesn’t show up.” Denninger contends if there are not enough young healthy people signing up for Obama Care, “It will implode before the end of the year.” Denninger goes on to say, “What Congress calculated rather coldly is they could shove a gun up young people’s backs and make them fork up the money.” There are two very big problems with this, according to Denninger, “They have no reason to buy today, and the fine is insufficient motivation because it is a small fraction of the premium.” Denninger predicts, “This is not going to bring down healthcare costs. This is going to accelerate costs. This is an extremely bad law.” Join Greg Hunter as he goes one-on-one with Karl Denninger.

freefallIn a little more than half a year, the Shanghai Silver Stocks have declined to new record lowsBefore the huge take-down in the price of silver in April, there were 1,120 tonnes of silver at the Shanghai warehouses.  By the end of May of this year, the silver stocks fell 32% to only 765 tonnes.
This is a snapshot of the Shanghai silver stocks on April 12th 2013:

Blythe Masters Jamie DimonThis latest move in eligible gold deception at the COMEX is so brazen in its audacity, even I am stunned. But, since no one else is talking about it, maybe I’m just crazy. Let me lay it out for you and you can decide for yourself.
This is NOT business as usual. The extraordinary and counter-intuitive price raids, the massive depletion of the GLD, persistent backwardation in the GOFO rates and JPMorgan’s cornering, 70,000-contract, NET LONG gold futures position all warn you that we are in uncharted territory and major changes are afoot. This eligible gold deception currently being employed by The Comex is just another indicator.
By the looks of it, the end of the fractional reserve bullion banking system is rapidly approaching.

The below video dispels the banking shill lies that claim gold bulls say to buy gold at all and any price.
Federal Reserve Vice Chairman Alan Blinder said, The last duty of a Central Banker is to tell the public the truth. Gold experts and bulls may not be right all the time, but most of us out there aren’t out to defraud the public like banksters, and most gold bulls that truly understand the criminality of the fractional reserve fiat currency system provides support of our sincere beliefs. Short-term, we sometimes may be wrong when we underestimate the criminal extent of Western banking cartel manipulation, but long-term we have always been vindicated for the accuracy of our long-term views.