Gold and What Moves it.

John Hathaway tells King World News: 

Hathaway:  “Right now I am focused on some very key markets.  Japan obviously is making the headlines, but the U.S. stock market is also giving all of the appearances of being at the beginning stages of a substantial correction.

When you think about what’s been a headwind for gold, it’s been the attitude of, ‘Who needs it?  We’re making money hand-over-fist in stocks.’  But I believe we are at the end of that phase now.  So right now I’m watching with the expectation that we are in the midst of substantial and adverse corrections in what have been competing assets for gold....

 

Today a legend in the business told King World News that another “black swan” is going to create tremendous financial chaos and devastation for investors around the world.  Keith Barron, who consults with major companies around the world and is responsible for one of the largest gold discoveries in the last quarter century, also spoke about what is really taking place behind the scenes in the gold war. 

 

 

Barron:  “The usual suspects are up to the same shenanigans in the gold and silver markets, but the reality is that physical demand still very, very strong.  Premiums are still high in places like Vietnam, Thailand, China, etc.

It’s interesting that new taxes on gold were introduced in India as the government attempts to clamp down on Indian tremendous demand for physical gold.  The Indian government is desperately trying to get people to invest their money in anything else but gold, but it’s not working...

Shanglin is China's gold county as it is rich in gold. The Shanglin people have had a tradition of gold mining for generations.

 

(BullionStreet): Thousands of Chinese miners are still hiding in Ghana, hoping to fulfill their dream of quick riches even after Chinese authorities confirmed the return of more than 1000 gold miners from the West African nation.

 

Those who remained in Ghana are risking their lives to become rich as they could be easily spotted even if they get assistance from mining mafia in Ghana, analysts said.

 

Chinese miners were also accused of causing environmental damage by polluting rivers as they were mining near rivers after most gold deposits in mountainous regions had been monopolized by mining giants from Europe and the US.

 

Most of these illegal miners,sent home and staying back,are from Shanglin County in Southeast China's Guangxi province. More than 10,000 people from Shanglin have moved to Ghana. ...

This week, the US Ministry of Propaganda presented a patently absurd gem of a news article in which it equated a growing percentage of US workers quitting their jobs in April as a sign that Americans’ confidence in the US economy is returning.

Ai Weiwei is a Chinese artist and political dissident.  Although he collaborated on the construction of Beijing National Stadium for the 2008 Olympics, his criticism of the government later led to his arrest without charges and imprisonment for several months.  I believe there are two main takeaways from the following article he wrote for The Guardian. First, he knows what it is like to live in an authoritarian regime with very little freedom or civil liberties. Thus it would be wise to take his warning to heart. Second, he illustrates a key point I have been trying to make for years. All citizens of the world must refuse to allow their respective governments to drag us into a war started by various oligarchs located in distinct geographic locations.

 

99.9% of the population must come together and understand that oligarchs within the U.S. and oligarchs within China are united against us all.  We must never forget this.  These guys don’t fight wars.  Rather, they rape, steal and pillage and then send you to do their dirty work.  Don’t fall for it. ...

(Reuters) - Wal-Mart Stores Inc has in recent months been only hiring temporary workers at many of its U.S. stores, the first time the world's largest retailer has done so outside of the holiday shopping season.

A Reuters survey of 52 stores run by the largest U.S. private employer in the past month, including one in every U.S. state, showed that 27 were hiring only temps, 20 were hiring a combination of regular full, part-time and temp jobs, and five were not hiring at all. The survey was based on interviews with managers, sales staff and human resource department employees at the stores.

 

The new hiring policy is to ensure "we are staffed appropriately," when the stores are busiest and is not a cost-cutting move, said company spokesman David Tovar. Temporary workers, he said, are paid the same starting pay as other workers.

 

Using temporary workers enables the company to have adequate staff on busy weeknights and weekends without having to hire additional full-time staff. ...

Eric King:  “James, what might surprise people this summer?”

 

Turk:  “Normally the summer is a quiet period, Eric, but every once in a while you do get a black swan event and it surprises people, and the market can really take off.  This happened back in 1982 when one of the Mexican debt defaults led to some bank failures in the United States. 

With sentiment so low and very few people paying attention at the moment, maybe the summer is going to be the surprise.  Maybe this will be one of those rare summers where you see a big move in both gold and silver to the upside because of some kind of event. ...

ASTANA(BullionStreet): Central Asian republic of Azerbaijan has continued to accumulate gold reserves by purchasing gold from domestic enterprises.

 

In line with a presidential decree, last year country's central bank, the National Bank was given a priority right to purchase fine gold in bars inside the country.

 

The bank has purchased 32 tons of Kazakhstan's refined gold from domestic enterprises within the last 2 years in purpose of formation of gold and forex reserves of the country. ...

Some issues become tedious to discuss but importance is not diminished by the tedium. While the issue of OMT is extremely important for global financial markets, its significance is understated in the U.S.-centric financial press. The European press had two important pieces on the issue of the ECB and possible violation of German law. First, the Telegraph had a piece by Ambrose Evans-Pritchard, “Germany’s Brother Gladiators Battle Over Euro Destiny in Constitutional Court.” The title of the article reveals the importance of the issue as it will draw lines in Germany behind the two key issues represented by ECB Vice Chairman Jorg Asmussen and ECB Executive Board Member and Bundesbank President Jens Weidmann. The Weidmann argument is that theOMT PROGRAM “blurs the line between fiscal and monetary policy.” It is not the mandate of the ECB to bail out insolvent states. The argument for the Asmussen group is that the OMTprogram saved the breakup of the EU and safeguarded the monetary union. But that of course raises the question of what institution provides the financial backstop for safeguarding the EU?

 

The ECB has no taxing authority and ...

Jim Rogers criticised the stance taken by Fed chairman Ben S Bernanke, saying the action has artificially supported the economy and the culmination of the quantitative easing would result in the global economy to face headwinds as the money was not used to spur the economy productively.

He strongly hopes that Bernanke will leave office by January 2014 when his term expires, as his policies damage the global economy in the long run.

Rogers believes the economies of the US and Japan will be hurt very badly when interest rates start to move up again.

Rogers, who currently resides in Singapore, said the domestic saving pattern of Asians would shield them somewhat from a sharp turn in the global economy but it would not leave them completely unscathed.

Rogers also stressed the currencies market will be in turmoil once the quantitative mea sure s put in plac e currently are withdrawn. ...

PARIS(BullionStreet): France has taken capital controls to a new level, banning the shipment of physical gold, silver, and cash through the mail, effectively shutting down the precious metals trade in France!

France has prohibited the sending of currency, “coins and precious metals” by mail.

In new legislation which was enacted May 23rd, the French government decreed that it is forbidden to send all forms of currency - coins and cash and all forms of precious metals - coins, bars and jewellery by mail.

It's one of those things. You hear about it every day but never stop to really think about it.

 

This began as an email discussion with my friend, Ned, yesterday. All of us in Turdville are aware that the Shanghai Gold Exchange has physically delivered something like 1200 metric tonnes of gold, year to date. That's a staggering number and it far exceeds the amount delivered through London and dwarfs the level delivered through the Comex. Prior to yesterday, I looked at that number and thought, "Wow. That's a lot.", but I never stopped to ask the follow-up questions:

To whom is this being delivered?  ANDOnce it's delivered, where does it go next?

Fostering illusions of prosperity only further cripples our ability to make the necessary difficult decisions.

Have you ever noticed that the decisions made in times of abundance are generally bad? Bad might be too weak a word; catastrophically bad might be more accurate. This causal connection between abundance and flawed decision-making was one of the many stimulating ideas that came up during an afternoon with Aengus Anderson, host of the excellent audio program series The Conversation. This dynamic has two sources:
1. There is no pressure in eras of abundance to make difficult choices. Since everything is going so swimmingly, "more of the same" is what everyone wants. After all, why risk upsetting the gravy train? 2. This pressure to maintain the Status Quo whittles down the options even being discussed to politically safe pseudo-reforms. Any ideas that are outside the more of the SAME box are dismissed or marginalized. (SAME: Socially acceptable middling effort--a telling acronym I found in the work of Michael O. Church.) As a result of this paring away of all bold, daring ideas and solutions, the Status Quo toolbox is devoid of authentic solutions when the bad decisions finally catch up and the era of abundance devolves into ...

As the NSA snoopapalooza continues into its second week, much has been made of its vaunted Utah Data Center, a billion-dollar facility spanning 1.5 million square feet that can process data on the order of zettabytes, or 10^21 bytes. (That’s 10 to the 21st power. If you know how exponents work, that’s a hell of a lot of bytes). ...

Ed Steer writes in his daily:

 

I've noted that since the dollar index high/gold-silver low of May 20th, the dollar index has declined from 84.3 down to 80.7...and the gold price has been capped at the $1,400 mark...and every close above that price, no matter how brief, has been sold down to below the $1,400 price ceiling.

 

During that dollar index decline of 370 basis points...4.4 percent...the gold price has not been allowed to reflect that decline...and is basically trading unchanged from its May 20th price.  Here's the 30-day dollar index chart.

TF Metals writes:

 

In the end, though, unless you think that decades of market control by The Bullion Banks has ended, then the latest Commitment of Traders and Bank Participation Reports tell you everything you need to know about the future direction of price, regardless of what all the chart-readers and media shills think. As discussed here quite a bit recently (http://www.tfmetalsreport.com/blog/4768/getting-ready &http://www.tfmetalsreport.com/blog/4750/speechless-turd), the levels of NET LONG BULLISHNESS now attained by The Bullion Banks will soon lead to higher prices...MUCH higher prices...of that I am 100% certain.

Since falling sharply in April, gold has swung either side of $1400 an ounce, with the gold price falling as low as $1337 and as high as $1478.

 

"The dominant subject on the gold market continues to be the possibility of a premature withdrawal of bond purchases by the US Federal Reserve...in our view, the figures available so far do not constitute any reason to scale back QE3 in the near future." ...

"There's a tug of war between investors putting money into gold and taking it out," adds Bernard Sin, head of currency and metal trading at Swiss refiner MKS, who also cited concerns among investors "worried about is if there's no more quantitative easing".

"With the Chinese out [on holiday] until Thursday," adds a note from ANZ, "the [gold] market is lacking a key stabilizing factor." ...

With Japan’s Nikkei plunging a massive 5.5%, today James Turk warned King World News that markets may be very close to witnessing another “black swan” that would create chaos once again in the global financial system.  Turk also spoke about the recent action in gold and silver and what investors should expect to see going forward.

 

Eric King:  “James, as you know a lot of times something will come and blind-side markets that nobody really has their eye on.  Do you have anything that might be a ‘black swan’ that nobody is focused on?”

Turk:  “We don’t hear too much about derivatives anymore.  That’s always a potential black swan hanging over the markets.  There is always the potential for geopolitical unrest, and we are seeing a lot of that again in the Middle-East, in various countries there.

I suppose the biggest ‘black swan,’ Eric, has to come from the banking system because that is the biggest threat to sound economic activity.

Michael Pento writes:

 

... This is how our central bank views inflation: keeping asset prices (in this example oil) more than 200% above its two-decade average doesn't count as inflation; it's just keeping asset bubbles from correcting. The same can be said about the equity market as well. Stock prices are at all-time nominal highs, which the Fed counts as a victory, and as such, Mr. Bernanke is disregarding the fact that they had previously been in an unsustainable bubble.

 

What's worse is the inflation debate isn't at all over. Money and interest rate manipulations courtesy of the Fed have allowed the government to amass a debt load that far outstrips its tax base. Therefore, since the tax base cannot support the amount of outstanding debt it will have to monetized in a more aggressive and permanent fashion. In other words, if you think prices are already killing the middle class and destroying your standard of living; just stay tuned, the worst is yet to come.