If you're like me, you've bought gold due to the money printing policies of most developed countries and the effect those policies will have on the future purchasing power of our paper money. Probably also because there's no viable way for governments to escape the consequences of all the debt they've piled up. And maybe because politicians can't be trusted to formulate a realistic strategy to avoid any number of monetary, fiscal, or economic crises going forward.
These are valid, core reasons to hold gold in a portfolio at this point in time. But a new trend is under way, and someday soon it will be just as much a driving force for gold prices as anything else: a good old-fashioned supply crunch.
A few metals analysts have mentioned it, but it escapes many and certainly is off the radar of the mainstream financial media ...
"I got up this early to talk, not to listen," Jim Grant berates Fed-apologist Steve Liesman as the two go head-to-head over the fallacy that QE has been a success. "The Fed can change how things look, it cannot change what things are," is the single-sentence summation of the mirage that the Fed's "dangerous monetary manipulation" has created.
Arguing that Grant is wrong because, as we saw this morning with CPI, there is no inflation, Grant blasts back pointing to the massive inflation in asset prices, art, farmland, ferraris as indicative of who the Fed's policies have helped. Grant adds to the list of obvious bubbles and even Joe Kiernan jumps in on his side against Liesman's insistence that the Fed is omnipotent (because the currency hasn't crashed... yet).
150 seconds of perfect disequilibrium at the pretense of central planning...
Someone asked me my view of the reportedly narrowing Government spending deficit. The fact is that the Government uses gimmicks in order to move expenditures "off budget" in order to hide the truth (imagine that...). Notwithstanding this, we can get a pretty accurate accounting of the actual cash in/cash out spending deficit by measuring the change in Government debt outstanding during any Fiscal Year period. To be sure, the total deficit runs in the several trillions, but this would be based on GAAP accounting of all expenses, including the accumulating entitlement expenses, which we know will never be paid.
I've outlined below why, even if you want to believe the Government's story that the deficit is narrowing, it really did not.
The budget deficit is lower this year for a couple reasons, all of them non-recurring:
1) We had a big one-time in tax revenues in December/January (remember the U.S. fiscal year starts in October) because of the tax increase in capital gains on Jan 1 triggered a wave of asset sales that generated a big jump in tax revenues. You can find charts using google that show this. ...
Neofeudal financialization and unproductive State/corporate vested interests have bled the middle class dry, yet we accept the officially sanctioned narratives. Why?
Let's cut to the chase and generalize "what's fake": everything that is officially sanctioned: narratives, policies, statistics, you name it--all fake-- massaged, packaged, gamed or manipulated to serve the interests of the ruling Elites.
Anything that might introduce a shadow of skepticism or doubt about the sustainability, fairness and transparency of the status quo (i.e. anything authentic and genuine) is recast or repackaged into a fake that can be substituted for the authentic when everyone's gaze is distracted by the latest fad/media sensation/scandal.
ObamaCare: fake, a simulacrum of insurance and healthcare.
The National Security State: fake, a cover for global Empire.
The Patriot Act: Orwellian cover for state-corporate fascism.
Student loans: parasitic, exploitive loan-sharking enforced by the Central State for often worthless "higher education." ...
As each day passes we seem to get more technical and fundamental indicators suggesting the sharp two-year decline in gold is ending. However, after you poke your head out of the foxhole only to get slammed hard, you do tend to leave more and more chicken feathers around your self.
Richard Russell: “Today the US debt is $16.7 trillion. The entire Gross Domestic Product of the US is $15.68 trillion. This means that the debt to GDP ratio is over 105%. History shows that a debt to GDP ratio of over 100% is dangerous. With the debt now growing exponentially, we face a situation of inflation, hyperinflation or bankruptcy.
On another subject, we hear that the hedge fund industry has not kept up with the markets. Hedge fund managers tend to be knowledgeable and professional. If professionals can’t keep up with the stock market, what are the odds that amateurs can? The current stock market has been erratic, volatile and very difficult to make money in.
As I see it, we are in the latter phase of perhaps the greatest debt bubble in history. A bubble can inflate just so far, and then it pops. When the current debt bubble bursts, it will prove to be an unmitigated disaster.
There are now 7 distribution days on the S&P and 7 on the NASDAQ (as of Friday). A collection of distribution days are enough to put the brakes on the market. I believe that the current excessive number of distribution days are acting as a brake on the stock market. The institutions are bailing while the retail public continues to pile in. ...
If you haven’t read part one, you can find it here.
In this post I will further analyze the structure of the Chinese gold market, display new findings on how we can measure Chinese gold demand by the amount of gold withdrawn from the Shanghai Gold Exchange (SGE) vaults, discuss the consequences from these findings and touch upon a few other aspects of Chinese demand. Because of my belief that this is highly important information, I will try to be painstakingly accurate in this post and support my analysis by appending various sources. SGE physical delivery year to date is 2023 tons, second number from the right (累计交割量) is gold withdrawn YTD in Kg, and will be 2146 tons by year end. Total demand including PBOC purchases will be over 2500 tons en net import 2000 tons. ...
Peter Schiff is the chief strategist at the brokerage firm Euro Pacific. He has a radio show and has written some books. He’s probably most known as calling for a collapse in the dollar and being generally bearish on the U.S. economy.
Harry Dent is also a well-known financial commentator. He writes a newsletter and is author of several books. He’s probably most famous for his predictions based on demographics. He’s also a vocal deflationist.
Inflation here means generally rising prices. Deflation means prices are generally falling. There are other consequences associated with each. For example, Peter believes interest rates will rise. Harry thinks they will fall. Peter thinks the dollar will lose value, Harry thinks not. ...
The dollar paused today in its downward path and was holding at $1.3753 to one euro. We see it waiting for the FOMC meeting next week before deciding its direction.
It is becoming clearer by the day that India is close to easing or lifting it regulations on gold imports. We may have to wait until 2014 when such an easing could garner the most votes, but we believe they are working on this now. It is difficult for people in the developed world to understand just how important to the Indian culture gold is. In short, it is the bride and her family’s way of providing working capital to the new family. ...
As we see it, the Fed’s economic beliefs are proportioned more closely to political factors than real-life evidence. You might replace Hume with Upton Sinclair, who said “it is difficult to get a man to understand something when his salary depends on him not understanding it.”
In other words, politics and personal incentives are a huge part of the picture, and not just in central banking but in the economics profession more generally.
The theories underpinning current policies, which have built up over the last 80 years or so, can’t be properly understood without thinking through the motivations behind key developments. Some of the motivational factors are obvious, while others are more subtle, but I won’t clutter this post with our musings on the hidden drivers in economics. ...
If credit expansion leads the stock market, the market is in trouble.
Before you buy the dip "because this Bull market will run until 2016," please ponder this chart from our Chartist Friend From Pittsburgh of total credit and the Dow Jones Industrial Average (DJIA). Unsurprisingly, the stock market advances when credit is expanding and declines when credit growth slows.
Why is this unsurprising? Because ours is a debt-dependent consumer economy: everything from local government building projects to the purchase of vehicles to going to college requires borrowing money (i.e. credit expansion). ...
Remember: Debt means slavery. And that's all you need know.
In this season of good will to all and general cheer let us talk of “The Undeserving.”
They are an emotive topic. They divide people. Do they exist or are they a political scapegoat? I personally do not feel anyone is born undeserving. But some people achieve it. Some seem to take a cruel and degenerate delight in causing harm. Others become so out of weakness. They are faced with moral decisions in life and they take the easy path of closing their conscience to the harm they do others. We have all seen them. It may not be politically correct to label them for what they are but I do not like political corectness.
So let us be honest. The feckless and irresponsible exist. ...
For any of you thinking that your underwater mortgage is now covered by the value of your home or for those who were thinking they would take advantage of the housing market "recovery" and sell, you better take a look at facts. The facts are not what is being reported to you by the Government, Wall Street or the various housing industry associations. The facts are what you have to dredge up by wading the through the details of housing market reports. You have to go well beneath the surface of the headline media reports and fluffed up news broadcast sound-bytes.
It just so happens that I have done that and have been doing that. And just like I warned people in 2004 that the housing market would collapse - which it started to do in mid-2005 - I am warning everyone again that the housing market is about to take a long, hard drop.
How do I know this? Because I look at the actual data that is being reported by homebuilders. Not the glossed up b.s. they present to the public at large but the ...
Will TOTO bite the wizard behind the curtain? Toto, in this case, is not Dorothy’s dog but rather the market’s obsession with taper on/taper off, or TOTO. Today’s trading proved to be a “ball of confusion” as the market emerged from a relatively quiet weekend to open in a taper off mode as the bonds and equities were bid. The currency markets were relatively quiet as were the precious metals. Mid-morning, though, the long end of the Treasury curve began to sell off and the yield curve went from a flattening bias to steepening, which seemed to represent the market adopting a taper on bias. However, the currency and precious metals markets reacted contra to previous correlations and rallied as the yields on the long-end of the curve rose. (Again, very confusing in regards to recent patterns.) The BONDS closed toward the lows but the metals and equities held their rallies, which leads me to believe that the market has adapted to the idea of a Fed tapering being tied to a change in the language of forward guidance. ...
Is the unemployment rate real or fake? It is obviously fake, but we want to believe the fake is real for a variety of reasons.
We like to think we know the difference between what's real and what's fake. When we're fooled by a fake Rolex watch purchased for $20 on some humid Asian street corner, we shrug it off: it's no big deal because the fake isn't harming anyone.
And when it's difficult to discern the fake from the legitimate, as in fine art paintings and financial policy, we rely on experts to differentiate between the two.
But what if the "experts" are as clueless as the rest of us? What if they've been corrupted by easy money to authenticate the fake as legitimate? Consider ObamaCare, an extraordinarily complex policy that "experts" assure us is a phenomenal advancement that is "working well."
But what if ObamaCare is a fake? What if it is really not insurance at all, but a giant skimming machine designed to enrich and solidify the power of the state-cartel that operates the sickcare system?
"Experts" (PhDs and Federal Reserve economists) assure us our financial system is the core engine of "growth" in our economy. But what if this assertion is simply a useful illusion, and the reality is that the U.S. financial system is a giant skimming operation that harvests immense profits off the real economy to the benefit of the few, the financial cartels and their lapdogs in the Central State? ...
With everyone awaiting the outcome of this week’s Fed decision, today a man who has been trading major markets for over four decades spoke with King World News about the the ongoing war in the metals markets and what the Fed’s decision will actually be. Below is what James Turk had to say in his powerful interview.
Turk: “The Federal Reserve’s next FOMC meeting is being held this week, Eric, and it promises to be an important one. The question everyone is asking is, what will happen to the Fed’s so-called quantitative easing scheme, by which it turns debt into more dollar currency?....
GENEVA (AP) — The Swiss government has approved a change in how data on gold trade is compiled in an effort to reduce abuses in the precious metals’ market.
The governing Federal Council of ministers, which includes the president, says figures on gold imports and exports will be broken down by country starting next year.
The seven-member Council said in a statement Friday the change is intended to comply with international standards "and thereby contribute to transparency in precious metals trading."
An Associated Press investigation in 2008 involving visits to six bush mines in three West African countries and interviews with more than 150 child miners found gold mined by children was bought by itinerant traders to Mali’s capital city and then to Switzerland, where it entered world markets. ...
Richard Russell tells King World News: “Everybody is now bad-mouthing gold on the basis of ongoing deflation or a lack of inflation. But have these arguments been discounted in the current price of gold? If they are already discounted in the price of gold -- is that why gold is not breaking to new lows? Or has gold already adjusted to all the bad-mouthing?
Below, GLD has gapped higher. With all the negative talk about gold, why did GLD suddenly gap higher? Has all the negative news been discounted, and is gold now looking ahead?
Click over for the charts and his thoughts on what China is watching very closely.
NEW YORK(BullionStreet): US mines have produced 19300 kilograms of gold in September this year, declined 5% when compared to 20400 kg in the previous month and slightly down when compared to 19600 kg in the same period last year, the latest data from the US Geological Survey (USGS) showed.
Gold production in state of Nevada touched 14,500 kg, followed by Alaska at 2,680 kg and other states at 2,170 kg. ...
Julian Phillips looks at the fundamental implications of India’s recent import curbs, US sales of ETFs and how these might change going forward.
Author: Julian Phillips Posted: Friday , 13 Dec 2013
JOHANNESBURG (GOLD FORECASTER) -
The events in India have taken a most interesting turn for gold. The one year-old political party that is anti-corruption is shaking the political foundations there. The ruling National Congress Party is having to change its stance in a hurry and is already losing influence in the capital, Delhi. With elections in May, one of the changes we expect to see will be the Finance Minister relaxing (what effectively is) the blockade on the importing of gold, which is hammering the gold jewelry industry as well as denying Indians access to market gold.
When it comes to gold and silver of late, just pick either one. After the big move higher early this week, gold has now surrendered all of its gains and then some. It is now trading down $4.00 for the week compared to last Friday's close.
The region up near $1260 - $1265 has proved to be a bridge too far at this point. Unfortunately for gold, the move down into support at $1250 - $1245 uncovered not more buying but rather more selling. In other words, the dip buyers did not show up and thus they was nothing to hinder the floor locals and others from reaching those downside sell stops.
So where do things now stand? After what looked like it might be a promising week with the possibility of cementing a double bottom at the $1210 level, gold is back in limbo. Neither side has a clear advantage at this point although the bears remain in control of the market on an intermediate term basis. ...
Some of the most respected prognosticators in the financial world are warning that what is coming in 2014 and beyond is going to shake America to the core. Many of the quotes that you are about to read are from individuals that actually predicted the subprime mortgage meltdown and the financial crisis of 2008 ahead of time. So they have a track record of being right. Does that guarantee that they will be right about what is coming in 2014? Of course not. In fact, as you will see below, not all of them agree about exactly what is coming next. But without a doubt, all of their forecasts are quite ominous. The following are quotes from Harry Dent, Marc Faber, Gerald Celente, Mike Maloney, Jim Rogers and nine other respected economic experts about what they believe is coming in 2014 and beyond...