In their infinity wisdom the Fed thinks they have rescued the economy by inflating asset prices and creating a so called "wealth affect". In reality they have created the conditions for the next Great Depression. Over the last two years the Fed has increasingly intervened in the market to prevent normal corrective moves. As you can see in the chart below this has allowed the stock market to transition from what could've been a normal bull market into a gigantic parabolic bubble. ...
"So there are an awful lot of reasons to be nervous, and yet complacency is still the biggest bubble. If you look at the VIX, it’s creeping higher. The VIX is up 8 or 9 percent this month. This is happening even as the possibility for a severe miscalculation somewhere is ratcheting up every day. ..."
This is not the same market that we dealt with a year ago. That was a market that lived on buys and sells of the public. Today's market is run by the hedge funds. This morning my old broker from E.F. Hutton came over to talk to me. He told me that the quickest way to lose a customer is to keep them out of a rising market. The public will stomach a loss, but will not forgive you if you keep them out of an advancing market.
That applies to today's action. Hedge funds and money managers must be in this market; they cannot afford to be out. The money managers ignore bad news and above all they remain in the market. As a result, the stock market continues to rise regardless of the Ukraine, Gaza, or any other negative news. The question is, how high will the tree grow? ...
"Are there any significant discrepancies between the numbers in the GLD trade settlement spreadsheet and the GLD bar list?"
Here are the two documents we're talking about:
GLD Trade Settlement Spreadsheet (CSV): This document contains information about the funds Net Asset Value, and has records going back to the start of the fund in 2004. http://www.spdrgoldshares.com/usa/historical-data/ (direct link) "This file is updated between 6.00 a.m. and 6.30 a.m NYT the following day after trading." For the record - although the spreadsheet gets updated every day, the inventory number may not necessarily change. This document is also the source for @BurningFiat's inventory tweets. ...
As the curtain rose on the economic stage, it revealed politicians and central bankers hand-in-hand, ready to act out a farce.
A June 23rd article in Bloomberg constituted the first review. It opened, “Germany has decided its gold is safe in American hands.” The gold in question is the massive German reserve that is allegedly stored at the Federal Reserve Bank of New York (NY Fed). On January 16, 2013 Germany’s central bank, the Bundesbank – or BuBa to its critics -- announced an intention to repatriate a sizable portion of its gold from the NY Fed by 2020. But, now, the government's budget spokesman Norbert Barthle declared, “The Americans are taking good care of our gold. Objectively, there’s absolutely no reason for mistrust.”
Objectively, there's no reason for trust. The repatriation was requested precisely because popular opposition leaders areconvinced the NY vaults are either deficient or empty. The German people agree with the opposition and they loudly demanded to see the proof. Moreover, the German government itself has displayed a deep distrust of America. For example, Germany recently declined to renew its contract with the telecom giant Verizon. Tobias Plate, a spokesman for the German Interior Ministry, explained, "There are indications that Verizon is legally required to provide certain things to the NSA." Specifically, the government suspects Verizon will monitor the communications of top officials in the same manner that Chancellor Angela Merkel was “intercepted” by the NSA. ...
Click through for the rest of the article. Good read.
New rules cap deposits for gold retailers, and limit interest rates.
Author: Shivom Seth Posted: Monday , 28 Jul 2014
MUMBAI (MINEWEB) -
An anxious Manisha Kamble, 34-year-old housewife from a Mumbai suburb, has been given a notice by her jeweller: encash the regular installments of money she had deposited at the retailer and buy gold jewellery.
Like Manisha, others who have been depositing small sums of money every month (like a recurring deposit) to make an annual purchase of gold jewellery have been left high and dry, after a recent move by the banking regulator to bring gold installment schemes under the ambit of public deposits. ...
July 27 (King World News) - Forget The Propaganda, This Is What’s really Happening
Baseball great Yogi Berra had a saying “It's déjà vu all over again,” and every year around this time, I am reminded of those words. As we have once again happened upon that magical time of year I call, recovery summer déjà vu. It’s the time of year when Wall Street and Washington apologists trot out their dog and pony narrative, in an attempt to spin the actual data, proving we have finally embarked on the summer that will launch sustainable economic growth....
Yesterday, Gold prices drifted lower on news that Chinese gold demand fell 19% over the first half of this year. Silver prices followed as some investors question whether or not the gold and silver bull markets are still intact. Perhaps it is time to reflect on the purpose of diversifying a portfolio with precious metals.
Historically, gold and silver have been used as a means to store wealth and to protect against unforeseeable financial disaster. In pre-currency times, if crops failed, a store of gold and silver allowed a farmer to purchase what they could not grow or produce themselves. In our modern economy, precious metals have also assumed the role of inflation hedge. As the purchasing power of paper money falls, gold and silver help to preserve that power.
Indeed, smart investors agree that a diversified portfolio is necessary to protect against potential disaster. To a person, I think smart investors would also agree that the best time to take a defensive position is before the disaster strikes when economic times are good or, at least appear to be. If you wait for the disaster to invest, you will either miss out entirely or the protection you seek will be unaffordable. ...
California Lawyer rights on the housing lending practices which helped to put the economy on the skids:
Understand that no economic "recovery" can EVER occur until all of this bad debt is expunged from the system. Until this massive debt is wiped clean, the debtors will either struggle along in debt service, which means NO consumption at the Walmart, thus depriving the economy of vital money velocity and all that it entails, or they will default thus requiring write-downs, and reduction of value of QUADRILLIONS of derivative financial products that are, essentially, worthless. ...
Click through for the full article. It's a good read.
The magic of compound interest is well known. What is lesser known is the magic of the gold/silver ratio, not as a measure as it is mostly viewed, but as an application for increasing one’s holdings substantially, over time. What is so great here is that no magic is involved, rather simply utilizing the market to more than double your holdings.
So-called “Gold Bugs” are considered ardent supporters of the PM [Precious Metal]. Silver stackers are just as avid. Then there are those willing to buy either or both. The chart below is the gold/silver ratio going back 15 years, and this is a hindsight analysis brought forth to the present tense for future consideration that can greatly increase net holdings at almost no cost, those being transaction costs from a dealer.
Consider three investors: 1. a gold-only buyer who loves gold. 2. a silver-only buyer who loves stacking. 3. A buyer of either or both and who wants to maximize what he [she] owns. [Transaction costs are not considered, and some rounding off may occur]. ...
Right now, we are setting a firm foundation for the global crisis that is to come. You must have an open mind about this, because for the most part it will be a type of crisis none of us has lived through, so our perception is distorted. Europe is an absolute mess, and is poised ...
Click through for the full post. Good read. Short.
"The central bank imposed interest rates are the source of global financial instability now and in the future," warns Grant's Interest Rate Observer's Jim Grant, adding that "The Fed... has manipulated us into a period of quite eerie stability and measured volatility." Grant believes, given the values (and aware of the risks) that Russian "stocks stand to do very well," and also likes mining stocks as he warns credit markets are overvalued (especially sovereign debt). His conclusion, own gold as "it stands to benefit from the demonstrated, as opposed the theoretically likely, crack up of the [current] monetary arrangements."
To demonstrate it hasn't failed, the Fed must taper/withdraw its monetary heroin.
That the Federal Reserve's policies have failed is now so painfully evident that even the political class is awakening to this truth. Rather than re-ignite broad-based, self-sustaining economic growth, the Fed's loose-money policies (zero-interest rate policy a.k.a. ZIRP, and quantitative easing a.k.a. QE or free money for financiers), have perversely distorted the economy and widened wealth and income inequality.
After six long years of unprecedented monetary expansion and intervention--more than enough time to have succeeded in its stated purpose of restarting the real economy-- political and financial blowback is forcing the Fed to withdraw its monetary heroin.
Unfortunately for the nation, the Fed's monetary heroin has addicted the economy to ZIRP, loose credit and free money for financiers. As a result, withdrawal will be painful, financially and politically. ...
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This is why I believe gold is going to hold it's own and only move up over time. Hopefully, not dramatically overnight, or in the breath of a high frequency trading bot, but stair step up.
If it does happen dramatically in one fell swoop then the engine fell out of the car and then the wheels. Hopefully all before going over the cliff.
Silver prices have increased but in a disorderly manner. Rather than focus on details, examine the big picture - 43 years of monthly price data in one chart - and divide that 43 year period into four "megaphone" shaped patterns on a ...
Before you buy another ticket for the Bull market bandwagon of "don't fight the Fed," perhaps you should take a look at the quality of the debt the Fed has enabled and the diminishing returns on all that debt.
The mainstream media is delighted to highlight positive economic data, but nobody ever asks about the quality of the borrowers who are behind the rosy numbers. Behind the rosy numbers, sales and profits are increasingly dependent on marginal buyers and borrowers: those buying on credit who would not qualify to borrow money in a system ruled by prudent risk-management.
These marginal borrower/buyers are last on, first off: they qualify for loans at the end of a credit expansion, when lenders throw caution to the winds to reap the profits from issuing new mortgages, auto loans, student loans, credit cards, etc. to marginal borrowers.
These marginal borrowers are the first to default, ...
New guest Erik Townsend is a successful software entrepreneur who is now a hedge fund manager. Eric discusses his short-term and long-term outlook for Gold as well as the factors driving current and future trends. Follow Erik’s work at his website.
The three banks have been accused of fixing the price of trillions of dollars worth of silver.
by Cecilia Jamasmie:
The Bank of Nova Scotia, Deutsche Bank and HSBC have been accused of fixing the price of trillions of dollars worth of silver, an allegation similar to earlier suits involving the London gold fix.
In a court case filed in New York's southern district Monday, investor J. Scott Nicholson filed suit against the three banks for allegedly manipulating the price of silver and in the process, making money at the expense of smaller players. ...
HOUSTON – We have just two stops to make on today’s rabbit trail, but both of them “count” and both are pretty dang important. Today we will be looking at what some are calling a “too-high, too fast” net long position in silver by Managed Money traders and then we will cover an aspect of the huge, record high short position in silver futures held by the mercenary Swap Dealers, and it’s a “keeper.” So, with no further preamble, let’s take the lesser of the two first and move on from there.
I am Shocked! Shocked that Managed Money Traders are So Net Long! Have you noticed some...
The move away from the dollar is now in full force with the BRICs announcing their own version of the World Bank and International Monetary Fund. It remains to be seen how far away from the dollar world commerce can stray, but the desire and motive to challenge the dominance of the dollar is clear. It has also been reported that the large central bank purchases of gold might be part of the strategy for anchoring the finances of this new entity. It can only be good for gold as well as a clear indication that the reserve status of the dollar is at risk.
Last week showed little change in most asset classes. However, there was a sudden spike at ...
Gold fund manager Egon von Greyerz, interviewed today by King World News, notes that gold deposit discoveries have collapsed and that the time required for turning a deposit into a mine has lengthened. Von Greyerz argues that this foretells much higher gold prices.
Not necessarily. For new deposits of paper are being found all the time -- it's a renewable resource -- and there always will be an infinite supply of electrons and numbers for use in assembling bank and investment house balance statements. ...
Like all addicts, Central Planners are confident they can manage the monkey on their back. But this is a self-serving illusion.
Addiction is many things, but beneath its complexities it is a self-destructive expression of the desire to avoid or suppress pain. The pain might be physical or the stuff of the mind, memories or inner demons or tortured misgivings about one's choices, soul and life.
Though the self-destructive aspects of the addiction are painfully visible to observers, to the addict they represent a solution: perhaps not the ideal one or even a good one, but a solution nonetheless.
Fear plays a big part in many addictions--fear of life without the addictive salve. The ...
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