silverGold and silver have been hammered today after the London fix (ensuring as few physical stackers as possible are able to take advantage of the paper discount), with gold pushed back under critical $1600 support to $1593, and silver towards a $27 handle.

Recall that last month, legendary gold trader Jim Sinclair predicted that gold would see a bottom by March 27th, and would have begun a strong move higher by that date.    While it is too early to tell whether the ultimate bottom is already in, the recent black-swan events in Cyprus while allowing the cartel cover to continue to add short-term pressure to gold and silver, certainly have major, major long-term bullish implications for both metals.


Just as DieselBOOM accidentally admitted Monday, it appears that the Cypriot bail-in is anything but a one-off event, and is in fact the new collapse template for the entire Western banking system, and not just the ECB/ Eurozone!

SD has been alerted to an alarming provision that has been buried deep inside the official 2013 Canadian Budget that will result in depositor haircut bail-ins jumping to this side of the pond during the next bank crisis!

Titled ECONOMIC ACTION PLAN 2013 and tabled in the House of Commons by Minster of Finance James Flaherty on March 21st, the official 2013 Canadian budget contains an explicit provision that Canada will pursue the bail-in model for systemically important banks for future bank failures!

Submitted by Bill Holter:

What is now in play is that if you have money in the bank and are getting a whopping .1% interest…it compensates you for what?  It compensates you for NOTHING that’s what!  It doesn’t compensate you for the real world inflation that we are told everyday by the statisticians that doesn’t exist…nor does it compensate you for the other risk.  The “other risk” (that did not exist but now apparently does) being that your bank might go under and balances over the insured limits are not covered.  It’s simple “risk versus return”.  If risk goes up (which it now has) so must return.  And this is the problem.
The world cannot have a zero interest rate policy AND a banking system where very real risk exists.

Gold IS money.  It is not an investment, it is not currently used as a currency (but can and surely will be used as one).  “Gold pays no interest” has always been the knock, but…neither do bank accounts nor does currencyWhat has now been introduced publicly is (and has) always been present…namely that Gold can neither be debased, NOR can it default!

Nationalized Freddie Mac is reportedly suing 12 of its its bankster masters including JP Morgan, BOA, RBS, and Citi among others over $3 billion in losses tied to manipulation of LIBOR rates from 2007-2010.

The Freddie Mac suit appears to confirm what we suspected in 2012 that JP Morgan and Bank of America were simply fabricating their borrowing rates.  Why then, we might ask, has neither Bank of America nor JP Morgan Chase been charged by regulators, when banks with much less blatantly false LIBOR rates have been fined over half a billion dollars???

gold eagleAt Cheviot’s 2011 Sound Money conference, Dominic Frisby of Frisby’s Bulls & Bears gave a MUST WATCH presentation titled Why Gold is the Currency of the Free.

In light of the recent events in Cyprus, we thought it apropos to republish Frisby’s full presentation below:

As one astute financial journalist said to me “ ‘cash in the bank’ doesn’t have quite the same ring to it anymore.”
In most European countries, except for Germany, Austria and Switzerland, cash has been ‘king’ for some time, but that has now changed. This is especially the case as the expropriation was not the doings of the Cypriot government rather it was that of the Troika – the EU, the ECB and the IMF.
Gold is financial insurance which protects against inflation and expropriation of financial assets – such as pensions and now deposits.

paper goldRick Santelli today gave an EPIC RANT on the difference between physical gold and paper liabilities commonly traded on commodities exchanges.

I don’t even look at gold as gold anymore since they securitized it. If things went badly in the world that I used to observe as a gold bug; the gold would end up in the hands of the gold bugs. If things go badly now, they’re going to end up with checks from ETFs!
Sorry, it’s not the same! The reign of paper gold as the Ayn Rand endgame, to me, that’s over. Game, Set, Match!

Money manager Peter Schiff says, “Cyprus is a wake-up call for everybody who has a bank deposit. . . . When you are depositor, you are in fact . . . lending your money to the bank.” Schiff predicts, “There’s no question . . . banks will fail. The question is will government do the right thing and allow depositors to lose money. Or, do the wrong thing and bailout depositors by printing a bunch of money which, in the long run, means deposits will lose even more value.” The FDIC has just $33 billion to insure more than $10.8 trillion in deposits. Schiff is not expecting bank runs anytime soon. “Don’t expect an immediate stampede on the banks because I don’t think most people are smart enough to realize what the danger is,” says Schiff. What’s the best way to protect yourself? Schiff says, “Why would you leave any extra money in a bank to get zero percent interest. . . . I think pull your money out, put it into some kind of investment. . . . anything other than a piece of paper that’s going to lose value.” Join Greg Hunter as he goes One-on-One with Peter Schiff.

Submitted by Bill Holter:

It looks like Gold has “passed the test” and made a bottom, now it’s Silver’s turn.
Silver has acted quite poorly over the last 10 days while Gold put in a base
“Outside reversal” days are rarely allowed in either Silver or GoldSilver has the chance of placing one today with a strong close.

Cyprus haircutsCyprus’ Finance Minster has now officially confirmed that Laiki depositors with over 100,000 euros in Cypriot banks face at least 80% haircuts, and stated that realistically, very little will be returned.

Now that news has circulated that Russian oligarchs were able to withdrawn billions over the past week when Cypriot banks were closed, we suspect Cypriots are not likely to take this latest news of 80% + haircuts for Laiki customers well.

20121003_grant_0Jim Grant was back on CNBC comparing the ticking shot-clock in a March Madness game to the artificially low interest rates via manipulation by the Federal Reserve, allowing the Fed to stall the game without any real recovery.

Grant also discusses his belief that the problems in Cyprus cannot be contained, and stresses the point that Your money in the Western banking system is not really yours if it is needed by the state!
Grant goes on to state that This is the greatest and most perilous experiment in the history of paper money! and  This will end in immense destruction of wealth!

Full interview is below:

Alix SteelIn a report on Argentina, Bloomberg’s Alix Steel states that:
Demand for gold is so strong in Argentina, the only bank that trades gold is looking to buy bullion directly from mining companies.  A sign of things to come in other countries perhaps, as Argentina fights the highest inflation rate in the Western hemisphere.

superwomanCypriot Central Bank head Panicos Demetriades has just stated that Cyprus is making a ‘superhuman’ effort to reopen banks by Thursday.
Assuming the banks do re-open Thursday (which is probably not a very good assumption considering Cyprus is already set one of the longest bank holidays in history), we suspect Demetriades will discover that a truly superhuman effort will be required to keep Cypriot banks solvent through Friday’s close and into the weekend.

silverSilver is recovering early in Wednesday trading after being smashed to $28 overnight, with the metal already retracing half of its losses to $28.40. 

Silver appears to be stalling however at the bottom of its 4 week trading range of $28.40-$29.50, and having broken out of that range to the downside, will likely see a $27 handle before selling subsides.

*Update: silver has now retraced its entire overnight smash with a vertical move to $28.70

platinumRussia and South Africa, which together control about 80% of the world’s reserves of platinum group metals, plan to create a trading bloc similar to OPEC to control the flow of exports according to Bloomberg.

“Our goal is to coordinate our actions accordingly to expand the markets for realization of these metals,” Russian Natural Resources Minister Sergey Donskoy said yesterday in an interview at a summit of leaders from Brazil, Russia, India and South Africa in Durban. “The price depends on the structure of the market, and we will form the structure of the market.”

South Africa mines about 70 percent of the world’s platinum, while Russia leads in palladium, a platinum group metal used in autocatalysts, with about 40% of output, according to a 2012 report by Johnson Matthey Plc.

Submitted by Stewart Thomson:

Canada’s Globe & Mail newspaper recently published an article showing that gold company insiders are aggressive buyers of their own stock, at current price levels.
In the big picture, that’s great news for gold stock investors!  Unfortunately, while long term market fundamental & technical indicators suggest that gold offers tremendous value to investors, the daily charts of gold and related assets… seem to be presenting quite a different picture.


The US Mint has just updated March Silver Eagle sales for the first time since 3/21. 

TODAY = 3,356,500
March US Mint silver/gold sales ratio: 60/1!

In the wake of the Cyprus banking collapse, the US MINT HAS SOLD NEARLY 1 MILLION OUNCES OF SILVER IN 4 DAYS!!

The Cypriot case is all over the place, in all types of media. However, it is amazing how the following simple facts remain underexposed. It is one thing to look at the news; it is another thing to look at the learning that comes out of the news.
For those who are willing to see, here is what Cyprus is teaching the whole world about money, the debt crisis and gold.

Source: Banzai7

Source: Banzai7

In an interview with TheBlaze, Peter Schiff makes the case that Bernanke is attempting to re-inflate the housing bubble, and states the Fed won’t stop the monetary heroin until we die of an overdose, and that the reckless monetary counterfeiting will result in a total collapse of the US dollar!

i.e.  QE TO INFINITY until the dollar collapses into hyperinflation!

Schiff’s full interview is below: