In the latest Keiser Report, Max discusses the four horsemen of the bondpoclypse riding into town bringing with them the reversal of multi-decades long trends and as pipe swipers steal toilets and as supermarkets hit the limits of cost-cutting, the population confronts the high cost of backsliding trends. In the second half of the show, Max Keiser talks to former energy regulator, Chris Cook, about how we move from dollar diplomacy to gas diplomacy and a world where energy as the modern water hole where you don’t have to kill each other and a natural gas backed currency becomes a new global reserve currency in a post-dollar world.
Competitive currency devaluations are in effect a continuation of currency debasement. Debasement is simply the devaluing of one’s currency or money. In ancient and medieval history it used to be done through the clipping of gold and silver coins.
Today it is done through excessive money creation through the printing of, and indeed the electronic creations of billions and billions of dollars, pounds, euros and other fiat currencies. Indeed, today central bankers are creating billions and billions of electronic money simply by pressing a few buttons on a computer.
Currency wars are set to deepen as most industrial nations in the western world are close to insolvent and look on the verge of recessions – potentially deep ones.
The U.S. will never be able to pay its debts back and so it will attempt to inflate them away through currency devaluation. This poses risks to the global reserve currency status of the dollar – especially as the world moves to a multi polar world where India, Russia, Brazil and China exert their increasing economic and political power.
The Doc sat down with gold and silver expert and billionaire fund manager Eric Sprott Wednesday for the first of a series of interviews regarding the markets.
Eric warned The Doc prior to the interview that the KWN and USAWatchdog sites were maliciously attacked the day they published interviews with Sprott. There appear to be powerful interests that would prefer to keep Eric’s thoughts on precious metals out of the public at the present, as SD also sustained a confirmed co-ordinated Apache flood DOS attack during the recording of the interview.
With gold smashed nearly to $1550 and silver nearly to $28 Wednesday, Eric discussed the latest paper raid in the face of epic physical demand, and stated that the demand for coins has been stunning!
Sprott also stated that there is an absolute shortage in platinum and palladium, and although he still believes silver is the investment of the decade, there is no telling how high platinum and palladium could go.
With silver trading back under $30, Eric states that silver should be $100 today, that he expects it to massively outperform gold, and that he conservatively expects the metal to reach $200/oz. Eric states that $200 shouldn’t be considered the top however, and that All we know is that the price should be up massively. Anyone who’s been a student of the market sees these ridiculous trades, but some day these guys will be brought to their knees by people just taking delivery.
The first of Eric Sprott’s MUST READ interviews with The Doc is below:
BrotherJohnF’s latest Silver Update:
Silver vs. Paper
The CFTC Thursday filed suit against the CME seeking civil monetary penalties and trading and registration bans for to CME employees, William Byrnes & Christopher Curtin for allegedly intentionally disclosing material non-public information pertaining to specific customer traders.
The suit alleges that from February 2008 to September 2010, Byrnes & Curtin intentionally disclosed material nonpublic information about CME NYMEX trading and customers to a commodity broker on nearly 80 occasions.
Full complaint from the CFTC is below:
Venezuela, Switzerland, Libya, Netherlands, Iran…
The announcement by the Bundesbank, the central bank of Germany, saying that it would repatriate 300 metric tons of gold held by the New York Federal Reserve raised many concerns. First, Fed attorney Scott Alvarez told Congressman Ron Paul, R-TX, during a House Subcommittee meeting in June 2011, that the Federal Reserve does not and has not held any gold bullion since 1934. Second, it appears overall trust in the United States and the global monetary system in general is waning faster than the value of the U.S. dollar. Germany also plans to repatriate all of its 374 metric tons of gold stored at the Banque de France in Paris. It is unclear what effect the Bundesbank’s move will have on the price of gold, but history tells us to prepare for a spike.
Guest Post by Bill H.
The FOMC minutes were released yesterday and said that several participants thought that pulling the punchbowl at some point would be necessary. Fat chance! No, NO CHANCE! There is no chance now just as there was no chance back in 2009 and ’10 with all of the talk of “green shoots and exit plans”. Forget about anything and everything else, if the Fed steps back then WHO will buy the Treasury’s bonds? Anyone have an answer for this one? Anyone? Buhler?
In the face of this week’s relentless paper attacks on the gold and silver markets, GATA’s Bill Murphy provides some clarity and perspective on the long term fundamentals for silver. In his latest interview with our friends at AltInvestors, Murphy states that $100 silver is coming soon.
Full MUST LISTEN interview is below:
GoldMoney’s Alasdair Macleod has released an interview with Ben Davies of Hinde Capital. They discuss the idea of nominal GDP targeting as a monetary policy strategy for central banks.
Nominal GDP growth is the sum of real GDP growth plus the inflation rate. Davies says that proponents of a nominal GDP targeting — so-called market monetarists — are gaining momentum in central banks and the media. They discuss how depressions are not caused by tight monetary conditions but rather by the preceding excessive expansion of credit. Davies points out that credit and debt are two sides of the same coin, which makes it impossible to clear one without the other.
Davies says that by driving down long term interest rates, central banks are trying to draw investors into equities in order to create a so-called wealth effect. However, he explains that debt levels are simply too high for this method to translate into sustained long-term growth. He foresees stagflation with low growth and excess liquidity.
Davies’ full interview is below:
More speculative gold buyers appear to have been spooked by the FOMC minutes from the Fed’s January 30th meeting which “said the central bank should be ready to vary the pace of their $85 billion in monthly bond purchases amid a debate over the risks and benefits of further quantitative easing.”
Gold has come under pressure from heavy liquidation by hedge funds and banks on the COMEX this week. The unusual and often ‘not for profit’ nature of the selling, at the same time every day this week, has again led to suspicions of market manipulation.
Short sellers, technical and momentum traders have the upper hand and are pressing their advantage with momentum and sentiment on their side. Nervous longs are being stopped out through stop loss orders and concerns regarding the clear downward short term trend.
Gold market sentiment is the most negative that we have seen in recent years. The ratio of sell orders to buy orders was the highest it has ever been in recent days.
BrotherJohnF discusses today’s silver smackdown on the Fed minutes release in his latest Silver Update:
Fed vs. Silver
While Eric Sprott was speaking with The Doc this morning, Sprott’s Rick Rule was on CNBC discussing gold, silver, platinum, and palladium in the midst of the latest cartel raid on the metals.
While Rule’s entire interview is a MUST WATCH, the below clip was an absolutely classic response to CNBC’s claims that jewelry recycling will prove to bring massive supplies to the market:
In terms of gold and silver with supply, you have to think about historically mine supplies, but there are no substantial inventories of platinum and palladium. It has gone up a smokestack, it has gone out a tailpipe or been turned into jewelry. If you think your wife’s ring is supply, ask her. You’ll find out it isn’t.
When asked which precious metal Rule would recommend owning he responded: I would own the whole bullion suite.
Rule’s full interview is below:
From SD reader Battle Beagle:
If volume is any indicator, the bottom just may have been set this afternoon in silver after the anticipated post Fed Minutes release smash.