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On this week’s SD Weekly Metals & Markets the Doc and Eric Dubin cover:
– New Year’s upside reversal: PMs rise for a change a sign of things to come in 2014?
– Chinese buying remains strongover 2,000 metric tons of gold withdrawn from Shanghai vaults in 2013!
Did Jon Nadler turn up at Yahoo Finance?:  18 more years of gold & silver declines?
– The Doc & Eric’s thoughts on bonds, the metals, & stocks for the year ahead

The SD Weekly Metals & Markets With The Doc & Eric Dubin is below:

snapIn America today, there are close to 50 million people living in poverty and there are more than 100 million people that get money from the federal government every month.  As the middle class disintegrates, poverty is climbing to unprecedented levels.  Even though the stock market has been setting record high after record high, the amount of anger and frustration boiling just under the surface in our nation grows with each passing day.  And now extended unemployment benefits have been cut off for 1.3 million unemployed Americans, and it is being projected that a total of 5 million unemployed Americans will lose their benefits by the end of 2014.  In addition, as I have written about previously, 47 million Americans recently had their food stamp benefits reduced.  The conditions for a “perfect storm” are certainly being created.  So how much longer will it be until we see all of this anger and frustration boil over in the streets of our major cities?  Is America about to reach a breaking point?

dollarInstead of being drawn into the futility of making forecasts for 2014 I will only offer readers the barest of basics and focus on the corruption of currencies. My conclusion is the overwhelming danger is of currency destruction and that gold is central to their downfall.
If we take a realistic view of price increases, including capital assets, price inflation may even be in double figures. The corruption of price inflation statistics in turn makes a mockery of GDP numbers, which realistically adjusted for price inflation are contracting.
This gloomy conclusion should come as no surprise to thoughtful souls in any era. These conditions are the logical outcome of the corruption of currencies. I have no doubt that if in 1920-23 the Weimar Republic used today’s statistical methodology government economists would be peddling the same conclusions as those of today. The error is to believe that expansion of money quantities is a cure-all for economic ills, and ignore the fact that it is actually a tax on the vast majority of people reducing both their earnings and savings.

Blythe Masters Jamie DimonAs has been the case for the past five years (since it acquired the concentrated short positions of Bear Stearns), 2013 was the year of JPMorgan in silver and gold. Everything important that transpired in silver and gold can be traced to JPMorgan, just as this bank will dictate what happens in the future. I realize I am being overly specific and that many different factors influence the price of any market; but the circumstances surrounding JPMorgan are so overwhelming as to render all those other factors combined moot when it comes to silver and gold.
From the very beginning of the year to the last two days of 2013, JPMorgan has dominated and controlled the price of silver and gold. Here are the documented facts:

fill and killMuch confusion persists regarding the method, or mechanics, of how the big banks are able to push the price of precious metals around at will for so long.
The confusion comes from declarations that on price drops, the bullion banks are selling. This then triggers the frequent and violent down-drafts we have witnessed over the last 2 years and counting. However, the trading data indicates the contrary. Commitment of Traders (COT) data shows that the big banks always buy on these dips and they always sell on rallies. Always. (This is clear evidence of manipulation in and of itself.)
So how do they get the price moving in one direction or another, usually to the downside?
The mechanism is made clear by the forensic analysts at NANEX, which provides documented real time price action down to the microsecond:
Stacking the Bid with Fill or Kill.

double_bottomEncompassing the year end and its holiday on Wednesday, this week has been notable for precious metals. For gold there have been three important features: firstly, Tuesday saw a powerful one-day reversal, with gold falling $22 before recovering by $32; secondly the $1182 low was first tested six months ago before rallying strongly to $1430, and it looks like gold might be forming a double bottom, the prelude to the next bull leg; and lastly this happened on the last trading day of 2013, which suggests that the fall in price had more to do with window-dressing rather than genuine selling.
The Managed Money category on Comex (mainly hedge funds) has record short positions as shown in the chart below.

Doug Casey on the state of the US financial system as 2014 begins:

We’re really close to the edge of the precipice again. I like to use the analogy of what started in 2007 as being a gigantic economic hurricane, and we went through that in 2008 and part of 2009 and since then, we’ve been in the eye of the storm…which has been quite wide because it’s a gigantic hurricane, but I think we’re coming out the other side now.
This crisis is going to be much more serious than it was back in 2008 and 2009, and it’s going to last much longer and it’s going to be much different.”

Image: Jonny O'Callaghan

Image: Jonny O’Callaghan

Have you noticed that there has been an absolute explosion in the number of people developing chronic illnesses, heart disease, diabetes and cancer?  If you are like most Americans, you probably have quite a few family members and friends that are seriously ill right now.  Sadly, most Americans have absolutely no idea why this is happening.  Most of them just assume that all of this sickness is just “normal”.  But that is not the case at all.  The truth is that we are slowly killing ourselves by what we eat, by what we drink and by what we allow to be injected into our bodiesThe vast majority of people out there have never even heard about the dangers posed by aspartame, fluoride, genetically-modified food, pesticides, high fructose corn syrup, pharmaceutical drugs, cell phones and toxic vaccines.  Most of them have no idea that our food is toxic, our water is toxic and our vaccines are toxic.  Right now, it is estimated that approximately 70,000 chemicals are being used for commercial purposes, and as a result of our “modern lifestyles” we are literally being endlessly bombarded with toxins.  This has resulted in a massive tsunami of death, disease and chronic illness in America.  But very few people actually understand what is being done to all of us.  The following are just a few of the ways that the “soft killing” of the American people is taking place…

James Turk Mike MaloneyThrowback Thursday: in this clip from 2010, James Turk and Mike Maloney discuss how they see the end of the current US fiat monetary system playing out, and their thoughts on the likelihood that the US gov’t will attempt to confiscate gold and silver from US citizens in the aftermath of a dollar collapse.

gold MSM MopeFor those wondering whether Tuesday’s outside reversal off of gold’s June lows will mark the bottom of the 2+ year decline in gold and silver, Yahoo Finance has news propaganda for you: gold is going down for another 18 years!
Gold is pretty ugly- down over 30% year to date.  Do you look at gold here or just stay the heck away from it?
David Nelson: “I can’t find alot of reasons to like gold, you should avoid it.  The whole inflation argument that QE was going to cause inflation and hyper-inflation has been blown out of the water…If you go back and and look at the last bear market in gold, it took 20 years for it to bottom! Even if you think this might be a bottom, we’re only a couple of years into this.  You could be 5-6-7, even a decade early! Finally, the advent of virtual currencies like Bitcoin are a negative for gold buyers.
Can you smell the MSM desperation in the air?

brokeIs the U.S. consumer tapped out?  If so, how in the world will the U.S. economy possibly improve in 2014?  Most Americans know that the U.S. economy is heavily dependent on consumer spending.  If average Americans are not out there spending money, the economy tends not to do very well.  Unfortunately, retail sales during the holiday season appear to be quite disappointing and the middle class continues to deeply struggle.  And for a whole bunch of reasons things are likely going to be even tougher in 2014.  Families are going to have less money in their pockets to spend thanks to much higher health insurance premiums under Obamacare, a wide variety of tax increases, higher interest rates on debt, and cuts in government welfare programs.  2014 certainly promises to be a very “interesting year” as the short-lived bubble of false prosperity that we have been enjoying for the last couple of years is rapidly coming to an end.

gold & silver sold outGold fell 28% in 2013, while silver recorded a 36% decline. It was gold’s first annual drop since 2000 and gold and silver’s worst performance since 1981 and 1984 respectively.
The Perth Mint of Western Australia reported that they saw a very significant increase in sales in 2013 despite the falling prices. Gold sales from the Perth Mint, which refines most of the bullion from the world’s second-biggest producer Australia, climbed 41% last year.
Silver coin sales surged 33% to about 8.6 million ounces from 6.5 million ounces in 2012, according to the Perth Mint.

launch rocket verticalAfter QE was unveiled in 2008, Western investors began to buy gold and related items with aggression. They believed that the Fed’s QE program would dramatically increase the money supply.  They were correct.
Unfortunately, these investors didn’t understand that if a huge money supply has declining velocity, there is no meaningful price inflation created, at least in the short term.
By 2013, mainstream reports showed that inflation had still failed to materialize. Demoralized QE-focused investors began to liquidate their gold and related holdings, and booked substantial losses. 
Did they give up just as money velocity is about to reverse the downtrend?

Chinese gold imports dropped 42% in NovemberChina imported less gold in November compared to the month before, according to the latest data published by the South China Morning Post. Gross imports in November were just 107,36 tonnes, down 42% compared to a 7-month high of 147,92 tonnes in October. Despite the drop in imports compared to one month ago, imports were still higher compared to the same month of 2012.

There were strange things done by fluorescent sun
By the Federal Reserve of old
From Treasury pops to secret swaps
That would make your blood run cold
The Wall Street nights have seen strange sights
But the strangest ever, I’m told
Was that year, oh so mean, known as twenty thirteen
When they crushed the price of gold.

China goldDuring the span of the 100 years in which the gold standard was established, the world economy was quite stable- there was no inflation, and wealth distribution was very fair. Every country who participated benefited a great deal from it. 
The world financial crisis in 2008 is the worst financial crisis in history. We haven’t yet found an alternative to gold which can play a better stabilizing role under these circumstances. We have been trying- for example, we found this thing called SDRs, but SDRs have their limitations. It’s impossible for SDRs to play the same stabilizing effect as gold.
President Xi has proposed the Chinese dream. In the process of chasing a “World Dream” through the pursuit of gold, we aspire to seek peaceful development in the world.
In this process, we still haven’t found a stability factor which is inherent in the system. Since gold had played a stable role in the process of human development, we will put focus on it. 
We think gold will continue to draw much attention from the whole world. Zu He Liang

gold-dec-31-2013Uh, excuse me, but what the heck is this?
Tuesday Morning the cartel was thinking, it’s December 31st.  It’s time to paint the tape.  The cartel would like nothing better than to shoot for a greater than 30% down year in gold.   But a funny thing happened along that road.  The cartel got stuffed.

Thank you to DNA Precious Metals for their sponsorship of Metals and Markets.  Congratulations to WZ for nailing the year end Comex Price at $19.33! 

 

DNA Precious Metals Inc (DNAP : OTC BB) is a gold and silver mining company with seasoned management and a fast track to production on the Montauban tailings mine in mining friendly Quebec Canada. The management team has combined over fifty years in the mining industry working in corporate finance, financial management, geological engineering, project management and government relations.

best2013 saw Cyprus and the West’s first depositor bail-in (and SD uncovering Canada, The FDIC, and the Bank of England’s plans to also bail-in depositors during the next banking crisis), gold and silver hammered to start the summer and again to close out the year, the collapse of the US’ 2nd largest silver mine, QE tapering finally begun, and China consuming nearly every gram of gold mined globally.
It was quite a year for the markets and the metals, and once again, we recap the year that was 2013 with the Top SilverDoctors’ Posts of 2013:

china goldWhile American’s celebrate New Year’s Eve with drunken revelries and watching a mechanized ball drop in Times Square, the Chinese are spending New Year’s Eve participating in a modern day gold rush as they clean Shanghai shopping malls out of phyzz at multi-year-discounted lows. 

New year’s eve is big sales day in Shanghai. The biggest shopping mall usually sells as much goods on 12/31 as it sells in one month. This shopping mall stocked 200 kilos of gold bars and sold out in 3 hours because of a special 15% discount that brings the price closer to cost.  After the discount, the price is close to Hong Kong’s. It rations gold sales to 20 grams per person, the queue started at 9pm on 12/30, 10 hours before the mall opened door.