cliff edge

The euro’s future could become an important factor.  In today’s analysis I point out that the euro’s inherent weaknesses may undermine its credibility in coming months. This will have two effects: firstly, and most obviously, it increases economic and systemic risks for the Eurozone and therefore the rest of the world; and secondly, it is likely to lead to a new source of demand for physical gold.
It is easy to forget that Europeans have a long history of being avid gold hoarders in troubled times.

warning

The largest source of exported physical goods is China. Demand from other countries for China’s goods is declining, confirmed by the Baltic Dry Index* which is plumbing new lows. This slow-down in economic activity could easily burst the bubble of bank credit, which is in danger of collapsing under the massive burden of bad debts.
The signals are clear: the world has already entered a downturn in economic activity.
Therefore we can expect accelerated money-printing and the imposition of more negative interest rates in a forlorn attempt to avert economic reality.

down fall plunge

In last Friday’s Market Update I commented that it is easy for bullion banks with deep pockets to move markets and change sentiment.
This week’s trading in precious metals was a text-book example, with all precious metals falling sharply during New York trading on Tuesday, setting up gold for a test of the $1200 level the following day:

Even according to the BLS numbers 102 million adults deemed not in the labor force or officially unemployed.
Then there are those who are only partially employed, but counted by the BLS as employed. If we add these 34.7 million people to the BLS’s 102 million figure, only 44.2% of US adults are actually employed for 30 hours or more per week; in other words fully employed by any common-sense definition.
This is the true indication of the state of employment in the US. The BLS could be more up-front in presenting its numbers, however, they are completely open about their methodology.

Assuming caveat emptor should apply, the fault for accepting the BLS headline without question lies with the investing public, careless enough to be egged on by sell-side analysts and the media.

Putin Chess

Alasdair Macleod joins the SGTREport for a MUST LISTEN interview dissecting all of the latest developments in world economics, NATO’s new war in Ukraine, and the ultimate financial nuclear weapon, Russian and Chinese GOLD.

Source: Nanex

This week the US dollar moved strongly upwards against the other major currencies, at the same time weakening gold and silver along with most industrial commodities, before some profit-taking set in Thursday.
The effect on precious metals is a change from previous weeks when a flight into dollars also supported gold and silver prices. Instead, gold and silver were noticeably weak until Friday morning, when prices recovered $8 and $0.13c respectively in early London trading.
So what’s changed?

monkey money

Today’s obvious mispricing of sovereign bonds is a bonanza for spending politicians and allows over-leveraged banks to build up their capital. This mis-pricing has gone so far that negative interest rates have become common.
Macroeconomists will probably claim that so long as central banks can continue to manage the quantity of money sloshing about in financial markets they can keep bond prices up.
But this is valid only so long as markets believe this to be true.
Put another way central banks have to continue fooling all of the people all of the time, which as we all know is impossible.

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This week precious metals continued to consolidate January’s gains in volatile financial markets, with both gold and silver range-bound. Platinum and palladium were up on the week, noticeably stronger than gold and silver.
Physical and paper markets appear to have been behaving differently, with prices tending to be firm in London (where physical deliveries take place) and weaker in New York (which is overwhelmingly derivative trading), though at the close of trading in New York prices appeared more often than not to steady ahead of the Asian markets opening.

moon

Gold and silver prices consolidated recent gains this week, both having become overbought short-term, and they now appear to be building a base before an attempt to convincingly attack higher ground, though Thursday’s price reaction was quite sharp.

gold bull
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David Morgan, Alasdair Macleod, & Bill Murphy join The Doc & Eric Dubin this week for a special Precious Metals Round Table edition of Metals & Markets, discussing: 

  • Is JPMorgan sourcing silver by the warehouseload- directly from the miners via financing global miners’ refining? 
  • Dhragonomics: ECB only 1 step behind Japan- paper fiat currencies on way to collapse in 2015
  • David Morgan: Fundamentals reflect $4800 current value in gold- physical shortage may develop in 2015-2016, resulting in a MASSIVE MANIC/PANIC stampede into metals & mining shares- something could lite a match to the gasoline filled warehouse of this market tomorrow!
  • Alasdair Macleod: Dollar strength distorting the picture- Gold has doubled vs Ruble in past year, all hell is breaking loose across the currency markets- 2015 will be the year for gold
  • Why the short sellers CANNOT be taken down by standing for delivery- is the entire game RIGGED?
  • Bill Murphy: Gold and silver may just Go Bonkers in 2015!  When this blows, we will have the MOST HISTORIC MOVE IN HISTORY

You won’t want to miss the Power Packed Special Edition of Metals & Markets With David Morgan, Alasdair Macleod, & Bill Murphy breaking down whats in store for gold and silver in 2015 and beyond:

gold bottom

The firmly entrenched bearish opinions in recent months for the outlook for gold and silver have backed off from recent extremes.
There is confusion in dealers’ minds, brought about by the threat of deflation and the collapse in oil prices.  Whereas hedge funds would automatically sell gold whenever they detected dollar strength, this is no longer the case.   Precious metals now seem to be responding more to the threat of global financial instability triggered by a strong dollar, and fund managers are selling other commodities instead. Indeed, it is remarkable that despite the USD hitting new highs against nearly all currencies, 
gold has not only held its ground but is actually rising.

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The US Government has suddenly become aware of the derivatives mass financial destruction risk.
In the recent omnibus finance bill a clause was hurriedly inserted transferring derivative liabilities to the Government in the event of a bank failure.  What is alarming is not that this reality has been accepted by the politicians, but the hurry with which it was enacted.
Instead of a normal consultative procedure allowing the legislators to draft the appropriate clause, the wording was lifted at short notice from a submission by Citibank, which has some $61 trillion-worth of derivatives on its own books, with virtually no alterations.   Either the insertion was correcting an oversight at the very last minute or, alternatively,  it has suddenly become an urgent matter for the too-big-to-fail banks.
The coincidence of current market volatility and this hurried legislation cannot be lightly dismissed and suggests it is the latter.

Putin ammo shortage
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Gold & currency expert Alasdair Macleod joined The Doc & Eric Dubin this week for an EXPLOSIVE show discussing: 

  • End game to Russian Ruble collapse: Putin may take the Ruble onto the GOLD STANDARD- if Russia detonates this Nuclear Financial Weapon, the West is DEAD! 
  • Macleod: ABSOLUTELY NO GOLD STOCK IN THE MARKET SUB $1200!
  • Did the US/Saudi Arabia plan the oil crash to collapse Russia & the Ruble? -Putin’s counter-move could result in an EPIC BACKFIRE for the West
  • Is a Global currency crisis is in the making!?!
  • Alasdair provides his outlook on gold & silver, and explains why 2015 is likely to be an EXPLOSIVE YEAR for the metals after a prolonged consolidation- but PM investors won’t like what comes along with MASSIVELY HIGHER gold & silver prices! 

The MUST LISTEN Metals & Markets With special guest Alasdair Macleod is below: