Friday, 2 November 2012

Gold Seeker Closing Report: Gold and Silver Gain About 1%



Gold Seeker Closing Report: Gold and Silver Gain About 1%
By: Chris Mullen, Gold-Seeker.com

-- Posted Wednesday, 31 October 2012 | Share this article | Source: GoldSeek.com




Close
Gain/Loss
Gold
$1721.20
+$11.70
Silver
$32.25
+$0.48
XAU
188.24
+3.03%
HUI
506.33
+3.05%
GDM
1458.10
+3.24%
JSE Gold
2388.92
+80.09
USD
79.93
-0.01
Euro
129.58
+0.20
Yen
125.32
-0.24
Oil
$86.24
+$0.56
10-Year
1.686%
-0.064
T-Bond
149.3125
+0.6875
Dow
13096.54
-0.08%
Nasdaq
2977.23
-0.36%
S&P
1412.16
+0.02%
 
 

The Metals:

Gold climbed to as high as $1725.63 by late morning in New York before it fell back off a bit in afternoon trade, but it still ended with a gain of 0.68%.  Silver surged to as high as $32.411 before it also fell back off, but it still ended with a gain of 1.51%.

Euro gold rose to about €1327, platinum gained $20.80 to $1569, and copper climbed a couple of cents to about $3.53.

Gold and silver equities rose about 3% by midday and remained near that level for the rest of the day.

The Economy:

Report
For
Reading
Expected
Previous
Employment Cost Index
Q3
0.4%
0.5%
0.5%
Chicago PMI
Oct
49.9
50.9
49.7


Tomorrow at 8:15AM EST brings the delayed ADP Employment report for October expected at 143,000. At 8:30 are Initial Jobless Claims for 10/27 expected at 375,000, third quarter Productivity expected at 1.6%, and Unit Labor Costs expected at 1.4%.  At 10AM is the ISM Index for October expected at 51.0, Construction Spending for September expected at 0.8%, and Consumer Confidence for October expected at 72.0.

The Markets:

Charts Courtesy of http://finance.yahoo.com/

Oil rose on increased demand expectations as reconstruction efforts began to repair the extensive damage done by Hurricane Sandy.

The U.S. dollar index ended slightly lower in mixed trade.

Treasuries rose as the Dow, Nasdaq, and S&P struggled to hold gains on uncertainty about the full impact of Hurricane Sandy.

Among the big names making news in the market today were Barclays, GM, Apple, MasterCard, Disney, Citigroup, and Hyatt.

GATA Posts:



The Statistics:
As of close of business: 10/30/2012
Gold Warehouse Stocks:
11,243,299.568
-
Silver Warehouse Stocks:
142,362,051.246
-

Global Gold ETF Holdings
[WGC Sponsored ETF’s]
 

Product name
Total Tonnes
Total Ounces
Total Value
New York Stock Exchange Arca (NYSE Arca) AND Singapore Exchange (SGX) AND Tokyo Stock Exchange (TSE) AND Hong Kong Stock Exchange (HKEx)
SPDR® Gold Shares
1336.301
42,963,411
US$73,703m
London Stock Exchange (LSE) AND NYSE Euronext Paris AND Borsa Italiana AND Frankfurter Wertpapierbörse (Deutsche Börse - Xetra)
Gold Bullion Securities
140.47
4,516,193
US$7,765m
London Stock Exchange (LSE) AND NYSE Euronext Paris AND Borsa Italiana AND Frankfurter Wertpapierbörse (Deutsche Börse - Xetra) AND NYSE Euronext Amsterdam
ETFS Physical Gold
155.94
5,013,574
US$8,175m
Australian Stock Exchange (ASX)
Gold Bullion Securities
11.16
358,789
US$617m
Johannesburg Securities Exchange (JSE)
New Gold Debentures
42.45
1,364,715
US$2,214m
Note: No change in Total Tonnes from yesterday’s data.

COMEX Gold Trust (IAU) Total Tonnes in Trust: 208.59: No change from yesterday’s data.

Silver Trust (SLV) Total Tonnes in Trust: 9,923.19: No change from yesterday’s data.


Barrick Gold’s (ABX) dividend, Randgold’s (GOLD) emergency health aid, Gold Resource’s (GOR) dividend, Keegan’s (KGN) new recruitments, and Excellon’s (EXN.TO) drill campaign were among the big stories in the gold and silver mining industry making headlines today.

WINNERS
1.  Timmins
TGD+10.11% $3.05
2.  McEwen
MUX +8.48% $4.86
3.  Yamana
AUY+8.19% $20.21

LOSERS
1.  Golden Star
GSS -4.31% $2.00
2.  Jaguar
JAG -3.70% $1.04
3.  Northern Dynasty
NAK -3.28% $3.54
Winners & Losers tracks NYSE and AMEX listed gold and silver mining stocks that trade over $1.
       
Please see Yahoo’s Mining/Metals News Wire for all of today’s mining news.

- Chris Mullen, Gold Seeker Report

Golden Haarp & Allocated Gold Exposure

Golden Haarp & Allocated Gold Exposure



By: Jim Willie CB, GoldenJackass.com


-- Posted Wednesday, 31 October 2012 | Share this article | Source: GoldSeek.com


A nasty Golden Harp could soon have its cords plucked, with the resonance working to shake loose the bankster cover of improper illicit duplicitous and probably highly illegal usage of Allocated Gold Accounts. When diverse scattered accounts are pilfered and depleted without authorization in Switzerland, resulting in several multi-$billion class action lawsuits in Zurich, all kept dutifully out of the news, that is one thing. But when a few key official government gold accounts are ransacked in systematic fashion from established trusted locations, defying and betraying the trust of the German Govt and other national governments, that is quite another. To be sure, the system can tolerate ransacking and replacing with scurried harried efforts the Venezuelan gold account like in 2011. The media told the story with creativity and aplomb, avoiding the truth, inventing a tale, but finding a credible pile of dung to feed the public, which swallowed it whole. The global monetary war has been raging for four years, ever since the Lehman Brothers firm was targeted and destroyed with planning and motivated execution, for the benefit of Goldman Sachs full CDS redemptions and exploit by JPMorgan in war chest reload under cover of bankruptcy court orders. The media prefers regularly to refer to the global financial crisis incorrectly and improperly. A crisis passes after a year or so. This war lingers like WWI and WW2 and Vietnam, with a clear emerging agenda to defend the USDollar regime from global isolation shun, to conceal the USTreasury Bond support mechanisms in derivatives, to avoid the US banking system from grotesque insolvency but kept afloat by grand money laundering channels, and to motivate an endless war to secure resource thefts and control that center on oil fields and the poppy fields. Witness the slow gradual inexorable collapse of the global monetary and financial system.

This is a global monetary war as last hurrah for the longest running fiat paper currency regime in modern history, which has run from 1971. The current dying regime has been held up by pressure to maintain USDollar support and not diversify away from it. It has been held up by amplified usage of derivative support in the form of Interest Rate Swap contracts, thereby keeping USTBond yields ultra-low in the face of chronic $1.3 trillion USGovt deficits, and creating an illusion of a flight to safe haven. It has been held up diverse comical USFed support in the form of a cornucopia of liquidity programs, to supply the big US banks with never ending bond redemption and carry trade aid. The current dying USDollar regime has culminated in an admitted permanent monetary policy identified by a toxic 0% official rate and the emerging reality of limitless bond monetization. It has been held up profound distortion of economic statistics, which have become almost laughable in the abuse.

To call this a financial crisis is like calling Hurricane Sandy just a bad storm, or calling a devastating drought just a dry spell, or calling raging cancer just a growth aberration, or calling a rape violation just an unfortunate encounter, or calling a death sequence just a passing, or calling a business bankruptcy just a bad skein on its account, or calling a home foreclosure just an opportunity to clean house. The nation and the world are undergoing a death sequence for the USDollar regime, and a vigorous corrupt defense to extend its life, in order to maintain power, to continue gigantic thefts, to perpetuate gigantic bond frauds, and to enable foreign account thefts of the traditional type and related to gold. The hidden motive in the Libyan overthrow of Qaddafi was to steal his 144 tons of gold held in London. The banksters needed it. The action and the reporting of the events were typical distractions laced with fiction.

HORRENDOUS STORM DAMAGE
The nation is heavily distracted by the Hurricane Sandy, its wind, its water, the resulting floods, the resulting electrical power outage, and ruined businesses, the controversies over flood damage versus wind rain and storm damage for insurance coverage. Look for Sandy to surpass Katrina in its total storm damage, which was $105 billion in 2005. Basic research indicates Sandy and Katrina had much in common, as the mad scientists attempt to play god. The efforts to produce a mild winter a year ago might have had a sling shot effect of generating a potent drought. The path was open for a unique storm, called once in a century, for the NorthEast. My memory is clear of the last hurricane to hit the region, which was Julia. The Jackass taped windows in the Boston area all for naught, since the 50-60 mph winds were nothing but a nuisance and cause for numerous downed trees on power lines. This storm is for the history books, perhaps retaliation by Mother Nature for messing in her kitchen, maybe worse. She always reaps her wrath and delivers her vengeance. The High Frequency Active Auroral Research Program has a shady sinister tone, but it is beyond the scope of the Hat Trick Letter. What Mengele was to medicine, HAARP is to meteorology. What Fort Dietrich is to viral weaponry, it is to weather control and seismic generations. What Monsanto is to modified genetic foods, it is to weather developments. The public seems laughably ignorant of devices to produce earthquakes and to amplify then steer storms, with nuclear power packs. Tesla notes and dreams have indeed come to life. Some personal contacts have close colleagues who actually worked on the project for the Boyz.

The delusional dopey derelict US economists have surfaced with their errant vacant viewpoints of a reconstruction benefit boost to the USEconomy. If only all could break windows and direct garden hoses in living rooms, the national economy could recover quickly. The key news item is that finally the New York Stock Exchange was finally shut down for two days due to uncontrollable liquidity and its widespread damage, due to a Hurricane Sandy Weill margin call on systemic failure. No amount of high frequency flashes to dry out the systems could succeed. No amount of plunge protection teams could open the drains beneath the damage. No amount of derivative exercises could bring workers to the trading pits.

The storm damage is estimated at $20 to $25 billion, again in a process divorced from the real world. Recall the Fannie Mae bailout estimates for $50 to $100 billion at first. Recall that the Iraqi War costs were $200 to $400 billion at first. The Jackass cited cost forecasts multiples higher, all accurate. Quick footnote on storm aftermath. Think Desert Storm, or Desert Shield, or whatever mucky name they offer. The yellow painted bricks taken from the Iraqi central bank were really gold bricks, stolen, then covered by a lame news network story gobbled up by the incredibly braindead public. In a few weeks, some concocted story might emerge about how the New York Fed was without electrical power, its vault systems left unsecure.

The Hurricane Sandy storm damage will reach far past the $100 billion level, probably closer to $200 billion. The center of the impact was the NorthEast, the most densely populated area of the country. Already 20% of the entire US population has been affected, with almost 7 million homes without power. Insurance firms will be depleted, at a time when their income has been hampered by the ultra-low USTBond yields, coupled with mortgage bond losses. The USFed will receive a big boost in destroying final demand, as the central bank has conducted a hidden agenda to keep commodity prices down by harming the general economy and thus reducing final demand. They will next enjoy hypocrisy of high order, as the economy pauses, then energizes with rebuilding and cleanup. The central bankers will talk of a boost and stimulus. The price of lumber and cement might become a problem later on. Time to fix the broken windows and mop up the flooded living rooms. It is all good, as people are back to work, the economic recovery enhanced.

GOLD WAR STAGE SET
Back to the topic today. The global monetary war has escalated. It began with a profound bond fraud backed by mortgages, often with duplicate usage of income streams. It extended to sovereign bond wreckage, from deep government deficits, from wasteful bank aid to ward off insolvency, and lost trust of heretofore sacrosanct bonds. The war continues. It extended to the desperation by big Western banks to redeem their bonds by USFed and EuroCB largesse, even if illegal, even if unsterilized, even if the averted liquidations wreck the national economies, even if the actions directly result in a higher cost structure, even if bank runs are inevitable. It extended to destabilize further the fragile Middle East nations already beset by rising food prices, so that the departing leaders could either leave with gold wealth (see Tunisia) or have their foreign accounts stolen (see Libya). Tiny Ghana demanded its gold return from London, but suddenly its leader showed up dead. Syria does not have oil wealth, but it does possess valuable ports (see Russian naval port in Tartus). The global monetary war extended to collateral grabs and seizures, like in Greece, but with an entire table full of similar attachments being done in Italy, Spain, France, Portugal, and elsewhere, mostly in deep secrecy. It extended to exert extreme pressures on the European Commission to bend the rules, and to European Central Bank to bend the rules, and on the German High Court to bend the rules. The banker elite require rule changes in order to perpetuate the redemption of their busted portfolios at public expense from additional government deficits. One must be a billionaire to receive public aid, as the commoners need not apply.

THE GOLD WAR BEGINS
The absence of solutions offered has forced the major central banks into heretic caustic and destructive policies that are stuck in place. The nations involved are all uniformly subjected to the 0% corner, with their monetary spew reaching all corners of the world. The US Federal Reserve leads the way in justifying the highly destructive ZIRP and QE, the powerful 0% free money clarion call joined by endless bond monetization to pay for the wide stream of federal deficits. The Weimar America has produced a Pied Piper effect among the major central banks, coerced by a powerful Competing Currency War factor, where all must join or see their currencies rise to dangerous levels, sufficient to render deep economic damage in the vaunted export trade. The USFed in effect attacks the successful coveted export trades by monetary recklessness. The impact from the Global QE to Infinity, which the Jackass made reference to in 2011 long before other analysts, is to cause a defense from currency debasement. Wealth is under heavy attack. The impact has caused an undercurrent by the US and UK bankers in pursuit of gold supply to satisfy demands, like from Venezuela. The principal sources of gold continue to be the Bank of England, the Bank For Intl Settlements, and the Roman catacombs. The elite are having their gold vaults raided, done as loans to the major central banks and bullion bank centers. Resentment builds.

Alternative supply sources have been urgently needed, thus the project in Libya. Thus the MFGlobal thefts. The list goes on, but the need is rising far faster than the channels can be supplied. Desperation has set in with the major bullion bankers and their clever craftsmen who manage markets with leverage, derivatives, and propaganda. The Gold War is escalating, as the insolvent bankrupt and desperate Western bankers are resorting to whatever means to locate gold assets. They have a two-fold double whammy at work. They must find new gold supply in order to shore up their own insolvent systems based upon gigantic flawed paper structures built atop debt structures. They must also find new gold supply in order to satisfy gold demands within the LBMA and COMEX, or else face market defaults that expose the acute shortage of Gold & Silver. The MFGlobal theft of private accounts was a direct assault and crime scene designed to satisfy a Silver market demand delivery schedule. Investors awaiting silver delivery had their accounts stolen. While permitted by regulators and the courts, the warning was given for a call to arms to protect and preserve true wealth held in gold accounts. It must be located and secured before it is stolen by the London and New York bankers.

OFFICIAL GOLD REQUESTS AS ESCALATION
The bond fraud and gold market fraud and futures brokerage fraud and central bank bond monetizations, and desperate reactions to insolvent broken national banking systems, and continued flow of government red ink in deficits, all these activities have motivated nations to check their gold bank accounts. What they see scares them witless, but it pushes them into action. The demand by Chavez in Venezuela over a year ago served as a stark wakeup call. Imagine mature experienced savvy German bank officials observing a socialist backwater Latino renegade like Chavez leading the way in defense from Western banker corruption and colossal thefts. Finally, the Germans are taking action. They tried in September to view their gold account in the New York Fed, but were turned away with insults and disdain. Word has come that the shun event in the Big Apple was probably the fifth time in the last few years that a German delegation has been turned away. The situation is as complex as it is dicey. The Germans under the Deutsche Bank flagship had been a principal accomplice and cooperative partner in the great gold game, where as a large collusive group they leased national gold, dumped it on the market, supported their paper currencies, while the banking elite speculated and profited in the $trillions on leveraged bets that were basic betrayals of their nation. The Jackass prefers the words financial treason. To use the metaphor, the Golden Harp will be busy causing deep damage to the global financial structures, from its broken bond foundation to its uncollateralized major currencies. The Golden Harp will act as a great destroyer from the financial tectonic plates that stand as the faulty bond foundation, to the stormy ether in which the baseless currencies float in infinite volumes.

Some historical research reveals that the infamous Brown Folly had a basis in aiding Deutsche Bank. The Bank of England was directed to sell a huge lot of its national gold treasure between 1999 and 2002 to mark the Gold market bottom. It was not sold, but rather handed to D-Bank in order to satisfy a big margin call. They aided both D-Bank and Goldman Sachs, each heavily short and at risk. The Gordon Brown action was done with two unusual signpost markings. The sale was announced in advance, thus permitting front running by London and New York bank buddies. It was done in auction, to assure the lowest possible price. The actions set the low. But the actions bailed out D-Bank secretly. The aid to GSax was one of a string of ugly pearls, which the arrogant elite firm never seems to mind and never bothers to cover up too effectively. They benefited from the TARP Funds as #1 son in the family. They did work feverishly in 2009 to conceal their Unix box for tapping into the NYSE for peeking at trades, front running them, and skimming pennies on billions of trades. They enlisted the help of the FBI to arrest the Russian rogue, painting him as a villain, even prosecuting him, despite the clear legal violations from the GSax tool. He tried to show the world what scum GSax was, how they were common criminals in white collar crime. Back to Germany.

In the summer 2012 months, a significant sequence of events took place. The CEO Josef Ackerman was ousted finally. Few realized that his removal was a key event in the change of tide against the Western banker elite. The story went largely unreported. As leader of D-Bank during many years of solid cooperation with London and New York banker games and gimmicks, he knew too much. My best info source reported last spring that several Interpol agents and high level investigators occupied Ackerman's office while he was present. They obtained files, downloaded documents, and had their way. The shocked CEO made a phone call to an attorney, and was frustrated at the lack of pull. He made another phone call to a ranking judge, but again was frustrated at the lack of pull. He was told that the raid was done from a higher level than the German Govt. The Jackass was told that the raid was the work of a powerful new sheriff in town, with Eastern entity connections, hell-bent on justice, with a no nonsense attitude, with staggering wealth at their disposal.

The global monetary war extended in March, April, May, and June to a profound powerful run of gold bullion by Eastern entities against London banks. Margin calls of unusual type prevailed, where cash cannot satisfy the margin calls, where wrecked leveraged bets on currencies and bonds demand action taken to fortify the margin. In all, approximately 6000 metric tons have departed London bank vaults since March, all headed East, in the biggest raids in modern history. The US press, London press, and Western European press have been silent. The silent spring reminds one of the missing bird chatter from DDT decades ago, chronicled by Rachel Carson. The toxic paper has a chemical parallel. These London trades have been the object of Jackass study for a couple months. My firm belief, backed up by hints of confirmation from sources, indicates the Eastern pressures on London banks could involved enormous amounts of Official Gold Accounts and private Allocated Gold Accounts, improperly used (rifled, pilfered, stolen) for the original margin placement. Satisfy the margin call with like kind asset. Conceal the gold account seizures, but in the process the owners recall their gold bullion in huge volumes, with deals cut and secrecy maintained. The London bankers find their nether onions caught in a powerful vise, and the Easterners are hardly in the mood to relieve the pressure.

GERMAN AND DUTCH DEMANDS
The German Govt demands a full accounting of its official gold accounts held in foreign lands. They demand a careful accounting that involves inspections, weighing, assurance of gold proof, and examination of markings, perhaps even some testing of bar cores. They demand an accounting that cites locations and storage. They demand a full complete audit. The distrust is thick. James Turk, founder of Gold Money, believes the German gold is all gone, used up in the two decades of gold games that defended the fiat paper currency regime. He lives and works in London, has ties there, and probably is privy to the grapevines. The order is part of a compromise between the German central bank and the Audit Court, which has called on the Bundesbank to take stock of its gold holdings outside Germany, saying it has never verified their existence. Apparently, no longer will the word of the New York Fed or the Bank of England be sufficient. They have been caught lying too often. They have been implicated in deep bank corruption too often. They are being depleted of their gold, in regular shipments to cover the demands, the evidence for which is detailed in the October Hat Trick Letter. Call it backlash from the Quantitative Easing and infinite endless unlimited bond monetization that is an absolute guarantee of systemic currency ruin. Call it a backlash from the sequence of rogue bond redemption plans declared by King Draghi at the Euro Central Bank. The Western Governments are scurrying to locate their Gold reserves, realizing that Gold is the only wealth asset they possess, except for the buildings and edifices that house their depleted gutted central banks.

My firm belief is that the Gold Wars have reached a new level, where Germany will be disappointed when it learns the gold is gone. To be sure, big distractions and absurd excuses will be offered. The pressure is on. The Dutch have joined the movement in making demands on London and New York. The call to the corrupt fortress is plain: WHERE IS OUR GOLD?? Maybe like with Jericho, after several calls the walls will fall. The irony is thick, since for 20 years the Western leaders have proclaimed gold as a barbarous relic that pays no yield, a dead asset. So the Germans with Dutch echo want a full accounting of their prized so-called dead asset, which in the end will provide salvation when the new monetary system is put in place. That system is ready, with full trade settlement foundation. It awaits the monetary system full collapse.

The outcome will be shown soon enough. The London and New York bankers improperly used the German gold, and official gold from numerous accounts like from France and Spain, from Venezuela to Mexico, to enforce the Strong Dollar Policy and to defend against its collapse. The Mexicans this month performed a formal genuflection before the London Banker Kings, announcing no need to repatriate their gold, as full confidence was expressed. What lackeys, likely offered a bone somewhere. Allocated Gold Accounts have been pilfered with governments as the owners. They will be angry. They must walk a fine line to express outrage but to protect from revelations pointing to their own complicity and benign neglect. The flagship bank of Germany which bears the national name has been deeply involved. In recent months, D-Bank has been cooperating with the Interpol and Intl Court of Hague in pursuing the banker corruption and high crimes against currency, wealth, savings, and humanity. Delicate deals have been struck with D-Bank. It will be interesting to observe how the German demands for gold account audit are met, and how the German Govt reacts to delays and coverup. My belief is that the D-Bank flip was key to the breaking of the LIBOR bank scandal.

GOLD PRICE REACTION
The Allocated Gold Account scandal is at the doorstep. The German Govt demand for full accounting of its foreign gold account is the knock at the door. They were shown extreme disrespect by the New York Fed in September. The recent demand is the consequence, in a ramped up escalation of the conflict, better described as gold war. My best gold trader source has assured that the eruption of the Allocated Gold Account scandal will come in the wake of the LIBOR scandal. They are related links in the exposure of big bank corruption. The LIBOR scandal began the process of investigation, discovery, and action, if not prosecution. Word repeats from key sources that the biggest banker criminals will never see justice. They will just vanish. An important consequence of the LIBOR followup is the lack of trust between bankers. They are all under investigation for collusion, and therefore must be silent as each is subject to indictment and lawsuit damages. The discovery process is unique, as the investigations can legally pursue and request documents, conversations, emails, and testimony that was previously not available. The strong crowbar is being used widely by strong arms and hands, with formidable bodyguards behind them. The Allocated Gold Account scandal is at the doorstep, possibly to break open by German demands.

The official in major nations are catching on. Expect more national government officials to make demands of London and New York. They suspect their national accounts are stolen, replaced by gold paper certificates, kind of an IOU left behind by the thief with defiant signature. Now a new twist. Romania has joined, as they recently demanded a full audit of their national gold account held by the Kremlin. The irony and contrast is due next. Expect the Kremlin to comply with the request from Bucharest. Their responsible response will put additional pressure on the corrupt Anglo banking centers, the site which the Jackass has long described as the center of the financial crime syndicate. The contrast will be embarrassing to the Western financial centers and their leaders, the dons to syndicate power.

The Gold price is sure to respond to the realization that the London and New York bank vaults do not contain the official gold on account. Supply is not in existence, sure to have an effect on price, as demand escalates globally. The trust has been violated. The anger will be acute. The global reaction will be recognition that the Western Governments do not possess the gold they claim to reinforce the integrity and value of their entire monetary systems. What faith remains in the fiat paper system will vanish quickly. Not only are the various sovereign bonds nearly worthless, but the collateral understood to reinforce their value is gone. The monetary system deserves to be foreclosed upon. The global currency system with the USDollar at its center deserves to be removed, replaced, and reconstructed.

Recall Jim Sinclair and his numerous calls between years 2005 and 2007 for a $1560 Gold price. Many called him crazy, but he was proved correct. The critics to the Gold Sound Money Movement still do not show respect. Rather they are loaded with contempt, clinging to failed Keynesian principles and empty beliefs that central banks can install solutions. They are best qualified to manage their gold thefts, manage the heavy narco money laundering, manage the multi-$trillion grants to banker colleagues, manage the bond shell games, and clean up after the mortgage bond frauds. Those are their best work accomplishments. The Gold bull market is entering an important second gear after a long year of consolidation. The feckless idiots who claim the Gold Bull is done seem the most ignorant in the financial classroom, the dumbest and most deficient in mental processes.

The Gold bull market has several primary cylinders.
1) Negative real rate of interest. With official interest rates stuck under 1% by all major central banks, the actual interest rate after subtracting price inflation is deeply negative. This factor has been and will continue to serve as the most important among many factors. It is the gigantic blind spot among gold critics. The long-term USTreasurys offer a mere 2% or 3% at most, far below the prevailing price inflation in the real world. Effective returns are thus negative. Investment in Gold as a hedge against the absent compensation for the erosion of money, it just makes sense.
2) Bond monetization. With unlimited bond purchases from QE1, then QE2, then Operation Twist, now QE3, and on and on until QE175, the debasement of currency is entrenched, absolute, and shocking. The movement is joined by the Euro Central Bank, the Bank of England, the Swiss National Bank, and the Bank of Japan. The debasement of money is powerful and without abatement. Investment in Gold as a hedge against the reckless production of bond supply, it just makes sense.
3) Unsterilized bond purchases. The QE3 admission of associated bond sales was a story not adequately told. In fact, it was a story told by omission. In the past, especially with the deceptive Operation Twist, the bond purchases were often made with funds derived from other bond sales. Like sell short-term USTBills in order to have funds to buy long-term USTBonds. The QE3 details indicate that Weimar Amerika has arrived, with extraordinary bond purchases using printed money. The debasement of money has turned nuclear. Investment in Gold as a hedge against the unchecked debasement of money, it just makes sense.
4) Permanence of QE. In the summer months of 2009, the Jackass was vocal and adamant, claiming that the Exit Strategy was a ruse, an impossible door to depart from the drastic desperate duplicitous central bank monetary policy. My stated forecast was that the ZIRP would remain and become permanent, and that QE would come in force. The buyers of USTBonds are long gone, except for other central banks playing the Competing Currency War games. The USFed under Bernanke announced last month that ZIRP would be extended until the end of year 2015. This is an admission that it is permanent. Every three to four months, they assure another year of permanence. The debasement of money has become a permanent fixture in a broken buggy. Investment in Gold as a hedge against the permanent debasement of money, it just makes sense.

GOLD BULL BILLBOARDS
The Quantitative Easing coupled with Zero Percent Interest Policy are dual firing chambers of a central bank shotgun aimed at destroying money. They will destroy wealth. They will destroy economies. They will destroy banking systems. They have already destroyed the central bank franchise system and bank integrity. Their actions will lead to a global rebellion against the USDollar, a movement well along. They will assure a USDollar isolation. They will bring about a replacement trade settlement system, which is actually almost in place. When combined with flat-footed Iran sanctions, the movement has accelerated to find USDollar alternatives in trade, and to diversify away from US$-based assets held in reserve.

More importantly, the QE and ZIRP assure the Gold price will rise past the $2000 mark, and that the Silver price will rise past the $60 mark. That is the direct eventual unavoidable effect of QE & ZIRP, the signal flares of central bank failure and monetary system ruin. Their permanent monetary easing is incredibly bullish for the Gold price, a guarantee of an endless bull market. As long as the bond monetization continues with the 0% official rate, the Gold bull market will be equally enduring and endless. It is that simple!!


The QE & ZIRP assure the breakout to new highs. However, the Allocated Gold Account scandal will assure the Gold price reaches $5000 and the Silver price reaches $200. The scandal has begun. The stage is set. The official Gold Accounts from foreign nations have been taken. Choose your word: improperly used, illicitly seized, illegally stolen, desperately hypothecated. The point is that national gold treasures held in London and New York have vanished over the last 20 years, a process begun with the Clinton-Rubin Admin, continued with the Bush-Paulson Admin, defended by the Obama-Geithner Admin. The names of the administrations must include the Goldman Sachs representative in charge of the USDept Treasury, the guy with the stealing rights, as my friend in Reno colorfully calls it.


-- Posted Wednesday, 31 October 2012 | Digg This Article | Source: GoldSeek.com

Some Incredible Gold Charts

Some Incredible Gold Charts
Source: GoldSeek.comm -- Posted Wednesday, 31 October 2012 | Share this article | Source: GoldSeek.com


Technical analysis is a great tool for analyzing where the market has been.  Since human beings almost always behave in cyclical fashion, we can observe patterns in market action that tend to repeat.  Combined with fundamental studies, TA is applied to the markets by virtually all of the successful traders.
Some patterns occur so often that names have been assigned to these patterns such as:  ‘Head and Shoulders’, ‘Cup with Handle’ and ‘A.R.A.T.’
In this essay we draw your attention to another pattern that recently occurred on the gold charts, for only the fourth time in the past seven years.  Each time it appeared during the past seven years, it preceded a strong advance. 
The pattern is called:  ‘Golden Cross’, or ‘Bull Cross’.  Here is a chart (all charts courtesy Stockcharts.com unless specified), that has a blue arrow pointing to the pattern we are referring to.
 
During August of 2005 the 50DMA crossed over the 200DMA for a ‘Bull Cross’.  Gold was trading at $435.  Nine months later gold reached $725.

During December 2006, gold once again produced a ‘Bull Cross’.   Gold was trading at $625.  Eleven months later gold reached $850.

During March 2009, gold again carved out a ‘Bull Cross’.  Gold was trading at $900.  Thirty months later gold topped out at $1920. 

Featured is the daily gold chart.  A few weeks ago the 50DMA once again moved into positive alignment with the 200DMA (blue arrow).  For confirmation we wait till both moving averages are rising (as now).  When price closes above the green arrow we will make the assumption that the pullback that began in early October has run its course.  The RSI at the top of the chart has changed from overbought to oversold.  The MACD at the bottom of the chart is back at a year-old support line.  The CCI just below the chart is making its customary bottoming confirmation pattern (green boxes).
How high will the gold price go this time?  In order to match the 2006 advance, price could reach $2740; to match the 2007 performance gold would top out at $2640, but in the event that gold matches the performance of 2011 we could see gold trading at $3,330.  According to Mark Twain ‘history does not always repeat, but it often rhymes.’

But what about the fundamentals?  After all we need two wheels on the cart for balance.  The energy for the current bull market in gold comes from several sources:
#1:   Budget deficits.
#2:   Negative interest rates (CPI higher than short-term interest rates).
#3    Increasing money supply, (more dollars and Euros chasing a limited amount of gold ounces.
The next chart is a good example of item #3.

This chart courtesy Mises.org shows the U.S. money supply is rising exponentially.  The grey bars indicate a recession is underway.  The Obama recession is now the longest recession since the Great Depression.  As long as the recession continues, the money supply can be expected to rise since politicians cannot seem to stop spending.

Well, and what about silver?  Surely when gold rises, we can expect silver to advance as well?
 
Featured is the daily silver chart from 2005 – 2006.  Notice how the 50DMA rose above the 200DMA as it produced a ‘Bull Cross’.  The rally that followed moved silver from 7.50 to 15.25, for a 100% increase.

This silver chart highlights the next time this pattern presented itself.  It was November 2007.  Silver was trading at 14.50 and the subsequent rally took price to 21.00, for an increase of 45%.

This silver bar chart shows the next time price produced a ‘Bull Cross’ (in April of 2009).  Price rose during the subsequent rally from 14.00 to 49.50, for an increase of 250%.  At the right of the chart you can see where price is just now completing its latest ‘Bull Cross’.   For a close up look we present the next chart.

Here is a close-up look at silver’s latest ‘Bull Cross’.  Will we see a 100% increase like we did in 2005?  Or a 45% price rise like 2007?  Or how about an increase of 250% just as in 2011?  Time will tell.  (In the event that silver matches the 2011 performance, price would top out at $130.)
In the meantime the silver bulls can take comfort from the fact that the RSI (at the top of the chart) is at previous support levels, while the CCI (at bottom of chart) is repeating a bottoming pattern (see blue boxes).

At the same time SIL, the silver producers ETF is carving out a bullish ‘cup with handle’ formation.  A breakout at the blue arrow will be the trigger for the next rally.  The green arrow points to the by now familiar ‘Bull Cross’.

This chart courtesy SRSrocco and shows a dramatic increase in the number of Chinese 1 ounce silver Panda coins.  Every Panda removes an ounce of silver from the market.

This chart courtesy Casey Research, (based on information from the CPM Yearbook), shows silver investors moving out of ‘paper silver’ and ‘digital silver’ (black bars), into physical silver (orange bars).   As more and more investors opt for physical silver, this trend will make it increasingly difficult for traders in ‘digital silver’ to dictate the price at which physical silver is bought and sold.

Finally – one last chart!
 
This chart courtesy Seasonalcharts.com shows the seasonal tendency for gold to produce a rally after the October lows.

Household Deleveraging: Are We There Yet?

Household Deleveraging: Are We There Yet? 

By: Adrian Ash, BullionVault


-- Posted Wednesday, 31 October 2012 | Share this article | Source: GoldSeek.com


Who killed the UK recovery? UK households of course...

DELEVERAGING, like Hamlet's nothing, is only good or bad when you come to think about it.
 
And what view you choose speaks to your moral view of the world too, and so to your economic theory as well, whether or not you know it. Because for every "liquidationist" saying the debt must be paid down, and savings must be built up before a new cycle can begin, there is another economist urging government and central banks to take on releveraging themselves, so the net effect is nil. Otherwise we're doomed to a permanent depression.

UK households care little for such chatter, however. By September 2008, their net debt – their total savings minus their borrowings – were equal to 20% of the UK's annual economy. People owed the banks £300bn more than the banks owed to them.


How things change! Banks won't lend, and people won't borrow even at 0% interest rates. Net result?

Over the last four years, UK households have cut their debt and grown their savings faster than any time on record. They have delevered by more than 15 whole percentage points' worth of GDP – a "cost" to the economy of £235bn in current spending. Or if you prefer, a long-needed boost to household assets after two decades of spending beyond our means.


Of course, the savers and the debtors aren't all the same people. Poor pensioners still trying to pay off their mortgage are very different in spending and financial behaviour from young City workers struggling to spend last year's bonus. Yet across the UK as a whole, people's response to the financial crisis – or rather, their role in creating the economic fallout – has been the same: to cut spending as never before.


The retained money has either gone to paying down household debt (some £104bn on the Bank of England's figures) or building household savings (which have risen by £133bn). Anyone wondering why the UK economy has failed to recover as rapidly as after previous post-war recessions has a good part of their answer. The question now is how much further this deleveraging could run.


Fifty-odd years ago, net banks savings amongst UK households totaled some 26% of GDP on average. That cushion (or "dead money" depending how you see it) got chewed up by the 1970s' inflation, itself tied up with the surge in consumer debt which credit cards and the mass commercialization of hire-purchase wrought.


By the end of the 1980s, we'd tipped from net savers to net debtors. But it wasn't until 15 years ago that the second-leg of Britain's household leveraging got started. That swoon took 10 years to reach the record net debt of 2008. It's been unwound in less than half the time, despite the Bank of England urging people to borrow with zero interest rates, and urging others not to save with quantitative easing.


Can the UK bear another 15% of GDP in household deleveraging? That would only take us back to 1983's level of net savings. But it would likely gut the UK banking sector, let alone the shopping malls.


Again, whether that's good or bad is your personal choice. Policy-makers – right or wrong – have so far been powerless to prevent it. Doesn't mean they won't try again. And again.

U.S. of A(sia) - United to Weaken the Dollar?!

U.S. of A(sia) - United to Weaken the Dollar?!

By: Axel G. Merk, Merk Investments

-- Posted Wednesday, 31 October 2012 | Share this article | Source: GoldSeek.com

Our leaders want a weaker dollar and a stronger Chinese renminbi (RMB). That’s our assessment based on recent comments by President Obama, presidential hopeful Romney and Federal Reserve (Fed) Chair Bernanke. If you join them in that call, OK, just be careful what you wish for, or at least consider taking action to protect your portfolio.
 
In the past few weeks, Bernanke has become ever more vocal in encouraging emerging market countries to allow their currencies to appreciate against the dollar; and Obama and Romney have both been advocating for a weaker dollar versus specifically the Chinese RMB. In the recent presidential debates Romney continued his call for declaring China a currency manipulator, and Obama proudly stated that the RMB had appreciated 11% against the dollar since he took office. It has actually been about 9% according to the data we look at; nevertheless, the point that both were clearly trying to make is that a weaker U.S. dollar is in our economic best interests. Likewise, in an IMF speech Bernanke essentially admitted that accommodative monetary policy in the U.S. causes upward pressure on foreign exchange rates between emerging market currencies and the dollar, and suggested that foreign central banks allow that dollar depreciation to take hold, rather than intervene to prevent it. 

It may be superficially plausible that RMB appreciation is the key to alleviating our economic woes, by promoting exports and therefore jobs in the U.S. However, while lowering one’s currency might give a boost to corporate earnings for the next quarter (as foreign earnings are translated into higher U.S. dollar gains), it is difficult to imagine that the U.S. can truly compete on price – the day we export sneakers to Vietnam will hopefully never come. An advanced economy, in our assessment, must compete on value, not price. Without discussing the merits of this argument in more detail, let’s look at the flip side of a stronger RMB, which is a weaker dollar and potentially higher prices for goods imported from China. Notice that there is a lot of table pounding about China stealing manufacturing jobs, but no protest when it comes to the low prices consumers enjoy as a result of China trade. After all, not all Americans are producers of export goods, but certainly all are consumers of goods in general, many of which are imported from China and emerging Asia.

Even if we accept the argument that a weaker dollar may be good for certain sectors and perhaps for the U.S. economy at large, not all will benefit, in particular, not retirees facing diminished purchasing power. Retirees would not see the nominal wage increases that the active labor force could expect to experience, meaning rising costs of living without an offsetting rise in income, which may only be coming from a fixed-income portfolio still earning zero interest as Bernanke has made it clear that “policy accommodation will remain even as the economy picks up.” 

We agree with our policy makers to the extent that the dollar may be generally overvalued and many Asian currencies undervalued; and therefore the path of least resistance may lead to Asian currencies grinding higher across the board. The below chart illustrates this trend. China’s appetite for currency appreciation against the dollar may have a good deal to do with its currency’s relative strength or weakness compared to its Asian neighbors, who are export competitors. As these other Asian currencies appreciate they provide the RMB more room to appreciate as well.
 
While many Asian currencies may rise over the coming years, we think Asian countries like China, that are moving up the value-added chain, are in a better position to handle more rapid currency appreciation than others. As production processes become more complex, it is harder for low-price competitors to easily replicate that output. As such, higher value-added products provide China’s exporters with greater pricing power in the global market, limiting the need and effectiveness of a cheap currency policy. Additionally, over the medium to longer term, as the Chinese economy continues to grow and the middle class becomes wealthier, domestic consumption will play a larger and larger role in their GDP, and that shift away from economic reliance on the American consumer will also diminish the need for an export oriented currency policy. In fact, we believe a stronger RMB will be beneficial for the Chinese consumer and help that transition along. 

The gradual shift towards greater domestic consumption is occurring in many other Asian countries that have been following the export growth model and, as Bernanke puts it, that “systematically resist currency appreciation.” As we can see in the above chart many Asian currencies haven’t been resisting appreciation as much as you might think, and this gets to Obama’s point on the RMB appreciation since he took office. From an investment standpoint, 9% in four years isn’t a bad return in this environment; it would take over 78 years to reach that return rolling 3-month T-bills at their current yield of 0.11%. 

American consumers (and Chinese exporters) have been subsidized by the artificially weak Chinese currency, to the detriment of Chinese consumers who have faced stunted purchasing power. However, we believe this dynamic will continue to change and suggest that a stronger RMB is very likely not only on Bernanke, Obama, and Romney’s wish list, but increasingly in China’s own interest. That would mean the tables getting turned on the American consumer.

By the way, there is a good reason no President has called China a currency manipulator. Once China is labeled a currency manipulator, it sets in motion a process in which Congress takes up the matter. Without going into detail, our recent Presidents have preferred to seize rather than delegate power: by calling China a currency manipulator, the President would essentially tell Congress to have a stab at the issue; whereas the President has far more flexibility at the executive branch in dealing with China without consulting with Congress. Once Congress gets involved, the threat of a trade war does become more likely. Even if Romney is correct that China may have more to lose in a trade war, our analysis shows that the currency of a country with a trade deficit may be under more strain in a trade war. That may well be what Romney wants to achieve, but again, be careful what you wish for. 

If part of what investors consume is produced in another region, then holding some local currency or local currency denominated assets may be prudent. American consumers should ultimately not be concerned with the number of dollars in the bank, but rather with what those dollars can buy in terms of real goods and services. We suggest that Bernanke may be the currency manipulator to be more afraid of, and moreover, that our de-facto weak dollar policy may be reason to take the purchasing power risk of the dollar into account. 

Please register for our Webinar on Thursday, November 8th, 2012, where we will dive into implications of US policies on China and Asian currencies in more detail. Also sign up to our newsletter to be informed as we discuss global dynamics and their impact on gold and currencies.