With the Bank of England recently denying any collusion with dealers to manipulate FX rates and exclaiming "it was not our job to go hunting for the rigging of markets," the WSJ reports that none other than that bastion of trust The Federal Reserve examined key FX benchmarks months before global regulators sounded alarms over the manipulations... but took no action.
I have not commented on this for a long time but every week I do monitor the Federal Reserve's Custodial Accounts to try to get a sense of the amount of US Treasury obligations sitting "in the vault" in New York, held there for other foreign Central Banks.
I have been trying to get a sense of why we are seeing this general US Dollar weakness and have been at a loss to explain, especially of late during this geopolitical crisis over in Ukraine.
Take a look at the following chart of US Treasury Holdings by these Foreign Central Banks that are on deposit there in the Custodial account at the Fed.
Look at the steep plunge that has occurred ...
Click through for the full size chart and rest of the post. This is rather concerning in light of the Ukraine situation.
With the end of another wild week of trading in global markets coming to a close, today billionaire Eric Sprott stunned King World News when he said he was looking to file suit against banks which have manipulated the gold market. The Canadian billionaire also told KWN what the fair price of gold would be today without the bank manipulation and the price will surprise KWN readers around the world. Below is what Sprott, Chairman of Sprott Asset Management, had to say in Part I of a remarkable series of interviews that will be released today.
Eric Sprott: “I think it’s very important that your listeners (and readers) understand exactly the chronology and the depth of the investigation into the manipulation that’s gone on (in the gold market). It got a bit of a head of steam when the German regulator came out and said that they were going to investigate the LBMA....
Gold and the dollar are supposed to be mirror images of each other on the charts. This only makes sense as gold is commonly referred to as the "anti-dollar." Over the past 10 plus years Jim Sinclair has referred to this "mirror" relationship many, many times. I can remember so many times in the past where on individual days this did not hold true and the "bashers" would come out of the woodwork to attack Jim. They would say things like, "Look, if they are mirror images then how do explain this?" I had not seen a "monthly" chart on the dollar for quite a while but I had my suspicions so I again asked my buddy Trader Dan Norcini if he could send it. Send it he did, look at this. ...
Click through for the full post and the full size charts.
With gold and silver surging and the US Dollar Index tumbling toward the 79 level, today Egon von Greyerz warned King World News that the world is going to witness the death of the dollar. Egon von Greyerz, who is founder of Matterhorn Asset Management out of Switzerland, also spoke about gold’s rise and included three fantastic charts to go along with his exclusive KWN piece.
By Egon von Greyerz Founder Matterhorn Asset Management
March 14 (King World News) - The Death Of The Dollar
“A country that has been running triple deficits for decades is bankrupt and its currency is worthless. So how come that this country can not only use its currency domestically but that the whole world uses it for trading. It must be because no one dares to say that the Emperor has no clothes....
Precious metals boosters will see gold's nominal price break upward and probably get excited. They will marshal the troops for what could one day turn out to be a full fledged tout, as if the 40% decline of the last 2.5 years had never happened.
Another clue will be to watch SILVER. Currently, silver is being treated as an industrial metal as much as a precious metal, which is keeping silver weak versus the GOLD. The SILVER is holding above the 200-day moving average but it needs to gather momentum to provide support to a more robust precious metal rally. In terms of the GOLD, the gold/currency charts have all rallied to reside above the 200-day, giving an area of support. The gold/swiss broke above the key moving average today. More importantly, the gold/yuan chart has been a beautiful indicator for gold. Last July, I pointed out on Santelli’s segment that the gold/yuan price of 7150 yuan to an ounce of gold was critical for that was where the gold price was when the IMF made that deal to sell 200 tons of gold to the Indian Central Bank November 2, 2009. Time to regroup and gain perspective. ...
When the Census Bureau was told in 2010 that a data collector named Julius Buckmon was falsifying information that went into the nation’s monthly unemployment report, according to a source who knows the case, it halfheartedly assigned the probe to one of its investigators .
That investigator, Rachel Ondrik, has since been charged with and convicted of fraud by the US Attorney in Maryland. She was sentenced last year to eight months in jail.
Ondrik is appealing.
You already know most of this story. Buckmon, who worked out of the Philadelphia Census office, each month falsified household surveys that could have impacted the results of the all-important jobless figures.
Buckmon claims that higher-ups told him to do so — and I’m trying to find out just how high this conspiracy went. ...
Kind of makes your head spin. Click through for the rest.
Gold peaked in August of 2011 and fell erratically into December 2013.
Was that the end of the collapse, or is there more downside coming in gold prices?
Bearish Scenario: Listen to the banks who are forecasting weak prices in 2014 and thereafter.“Nothing to see here folks, the dollar has weakened drastically since 1971, gold sells for 30 times its 1971 price, but it’s all good. Just move on and pretend… Gold will drop below $1000 before you can say 2016 elections…”
I’m not a fan of:
The bearish gold scenario when decades of Federal Reserve “printing” and US government budget deficits have all but guaranteed continued destruction of the purchasing power of the dollar.
Belief that even though dollar debasement practices have accelerated since the 2008 crash, gold prices will fall because bankers say so. ...
With gold near $1,350, and the world worried about war breaking out in Ukraine, today an acclaimed money manager spoke with King World News about $10,000 gold, Russia, China, the United States, and Ukraine. Below is what Stephen Leeb had to say in this powerful and timely interview.
Leeb: “Eric, I’m focused on geopolitical factors and how desperate the West seems to be to keep this world running. Every day that goes by there are more signs of desperation. Putin is giving no sign whatsoever of backing down in Ukraine. It’s very clear that he is going to annex the Crimea.
He will also make a run at other eastern Ukrainian enclaves where there are a lot of Russians. I think the United States and Europe are going to be left holding the bag. ....
The only way to eliminate the financial parasites is to stop subsidizing their skimming and scamming, and the only way to stop subsidizing the financial parasites is to shut down the Fed.
Before I explain how the Federal Reserve has failed America, let's do a little thought experiment. Let's imagine that instead of creating $3.2 trillion and giving it to the banking sector to play with--funding carry trades and high-frequency trading, for example--the Fed had invested in carry trades itself and returned the profits directly to taxpayers.
Before we go through the math, let's recall how a carry trade works: Financiers borrow billions at near-zero interest from the Fed and then use the free money to buy bonds in other countries where the return is (say) 5%. The financiers are skimming 4.75% or more for doing nothing other than having access to the Fed's free money.
If the bonds rise in value (because interest rates decline in the nation issuing the bonds), the financiers skim additional profit. If the trade can be ....
The price of gold is rising, but is this purely because of the tensions in the Ukraine? Not entirely, I think it adds fuel to a supply shortage created by enormous Chinese physical demand since April 2013. While paper sentiment might change today or tomorrow, the physical reality will eventually be the main driver to push the pice upwards.
Throughout history gold has always been the most constant form of money. In 1900 you could buy roughly the same amount of breads with one gram of gold as two thousand years ago. ...
Click through for all the charts and the rest of the post.
Everyone knows that after years of kicking the can and resolutely sticking its head in the sand, China is finally on the verge, if hasn't already crossed it, of a major credit event, confirmed by the first ever corporate bond default which took place a week ago. Few, however, know just why China is in this untenable position. If we had to select one data point with which to explain it all, it would be the following: just in the fourth quarter of 2013, Chinese bank assets rose from CNY147 trillion to CNY151.4 trillion, or, in dollar terms, an increase of almost exactly $1 trillion!
By comparison, US bank assets in the same period rose by just over $200 billion, a number which consists almost entirely of the reserves injected by the Fed. ...
Click over to see the full sized chart and rest of the post. It's a bit alarming.
Gold is above $1,370 today and US Dollar is testing another low of 79.30. Paul Craig Roberts is pouring very cold water on the hot heads from the "DC Command Centre". All these War games can be ended in the very real tears, world is too much interconnected today in order just to punish "the bad guy". Somebody wants the War too bad with any excuse and it is not the good idea at all. Ongoing Financial War already distorting the markets and U.S. recovery is too weak to handle and further external shocks. The very least what BRICS can do now is they will speed up their De-Dollarisation plans. ...
Click through for the video and the rest of the post.
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 key moves being made by Russia as the crisis in the Ukraine heats up.
Barron: “I am looking closely at what is happening with the gold market and what’s happening with uranium. When it comes to gold, we are at a five-month high right now. The interesting thing is what is happening in Shanghai.
The premiums have backed off and gone negative. This is not surprising because the Chinese buy when the price is low, and when the price of gold shoots up they back off a bit. They don’t sell but they back off on the buy side.
The Big Lie is that Central Banks don’t care about gold. Nothing could be further from the truth. Ben Bernanke more than once claimed that he didn’t understand gold. When Ron Paul asked Bernanke in front of Congress why Central Banks own gold if it’s irrelevant, Bernanke flippantly suggested that it was out of tradition. In both cases Bernanke was lying and he knew it.
In comparison, Greenspan seemed to have some respect for the laws of economics and – at least that I can recall – never would outright state that gold was not an economic factor. Greenspan lied as much as Bernanke did about everything else but he never committed himself to lie about gold. Most of you have probably read Greenspan’s 1966 essay, “Gold and Economic Freedom” (linked). I have read it several times because it explains as well as anything out there why gold works as a currency and why Government-issued fiat currency does not. ...
Gold prices rallied in the mid-week session Wednesday to close at a six month high and extend a winning streak to three sessions.
Gold for April delivery advanced $23.80, or 1.8%, to settle at $1,370.50 an ounce on the Comex division of the New York Mercantile Exchange. The price was the highest since gold ended at $1,386.70 an ounce on Sept. 9. ...
-- who seems to have become the first major mining executive to speak candidly about and to acknowledge central bank intervention against the price of gold.
McEwen's comments came in response to a question during McEwen Mining's fourth-quarter and year-end financial results conference call. He was asked what he thought of the growing number of complaints about manipulation of the gold market and whether it would be good for him to complain about it to the Bank of Canada. ...
David Stockman warned King World News that investors should not buy the dip any dips in the stock market because there is going to be a massive “selling panic” in stocks. KWN takes Stockman’s warnings very seriously because he is the man former President Reagan called on in 1981, during that crisis, to become Director of the Office of Management and Budget and help save the United States from collapse. Below is what Stockman had to say in part II of a series of powerful interviews that have now been released.
Stockman: “The greatest danger is the central banks. All the central banks are out of control. They have expanded their balance sheets in a way historians someday will properly and soberly describe as lunatic....
Analysts from Noruma Securities even upgraded its outlook for gold, expecting bullion to climb over the next three years.
Gold’s Bull Days Are Back?
Gold is coming back with a vengeance, experiencing a clear recovery and grabbing the attention of market cynics. Analysts from Noruma Securities even upgraded its outlook for gold, expecting bullion to climb over the next three years, according to Barron’s.
Nomura analysts attribute their increased gold forecast to real interest rates that “don’t seem to be heading anywhere at the moment.” In addition, there appears to be “long-term demand support from Asian nominal income growth, an evolving post-QE macroeconomic environment and lower disinvestment potential.” ...
I have been adamant in stating that without Western-based investment demand for gold, the market cannot mount any sustained rallies. Asian gold buying provides the solid floor of support underneath the gold market but in and of itself, CANNOT maintain gold in a sharp bullish trend move higher. That requires concerted effort by the big Western specs.
My friend John Brimelow's reports on Asian gold demand and premiums/discounts are the best source for gauging demand for the physical metal from that corner of the world but as a gauge of Western demand, I rely on the large gold ETF, GLD in particular. It is the best bellwether we have to ...
Click through for the charts and the rest of the post.