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Richard Russell tells King World News: "The question the European central bank is facing is whether to cut back on money creation (thereby avoiding inflation -- Germany will not tolerate inflation) -- or go full steam ahead, and inflation be damned. So far, it looks as though the ECB is cutting back, and that, warns both Koo and Roubini, will mean recession or depression. "Richard Koo and Nouriel Roubini, both believe that cutting back on spending now could lead to depression in Europe. They both agree that the European centeral bank must open up the spigots. God save the Euro. The way its going, the Euro is going to need God's help. "Note that even with the ECB cutting back, gold is standing its ground. How come? The Russell answer: It's the ‘Chinese Put.’ China is moving in to scoop up gold on any gold weakness. At the low 1600s and below 1600 -- it's ‘enter the dragon.’.."
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The London Trader tells king world new: “An incredible amount of physical gold has been promised for delivery and the amount of promised gold is increasing every day. Meanwhile, back in the casino, the bullion banks don’t know whether it’s day or night. But out back there are trucks carting off some of the remaining Western gold to vaults in the East. "There is very little low hanging fruit left for the paper guys to cover into. Meanwhile, you have the sovereign buyers who are saying, ‘You know what, this elephant herd has kind of stopped now,’ and they want more physical gold at these levels. Every day at the fix, regardless of price, sovereign entities are buying physical gold. They are averaging in at the fixes, as well as during the declines. On top of that, there are bids for hundreds of tons of physical gold starting at the $1,610 level and below. This is why the recent decline in gold halted $2 above that level. "Regardless, these physical buyers will be purchasing at the fix going forward, even if the price of gold rises. This is why the smart money, the few individuals and entities that are in the know, continue to accumulate physical gold. These well financed individuals and entities are buying because they know they will be in profit..."
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"In a sign of the diminishing returns of paper market manipulation, on the heels of today's Fed minutes disappointment, beginning at 2pm EST, over 127,000 contracts, or 637.535 MILLION OUNCES OF PAPER SILVER were dumped on the market in only 1 hour, resulting in a massive silver decline of.... $0.65. "You read that correctly. "Nearly 80% of ENTIRE ANNUAL WORLD MINING SUPPLY was dumped on the market (during the thinly traded Globex session), over a single hour, and all the cartel could muster was a lousy .65 decline in the paper price of silver!"
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South Carolina State Treasurer And Others Agree That #Gold Price Is Suppressed http://t.co/en1DErNF (also reported on by Gata)...
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"World food prices have risen for the third straight month, driven by the increasing cost of global dietary staples oils, fats and cereals prices, according to the United Nations (UN) Food Price Index. "The price index figure continues to edge towards its all-time high, as soaring fuel prices and low food supplies boost food price inflation. "Among the various commodity groups, only oils prices showed strength, compensating for falling dairy quotations, while the indices of cereals, sugar and meat prices were largely unchanged from last month's level," said the UN Food and Agriculture Organisation (FAO), which compiles the monthly index. "March's index figure for overall food prices is 215.9, up nearly one point on the previous month. The index peaked at 237.9 in February 2011, triggering violence and political unrest in parts of North Africa and the Middle East..."
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Tyler Durden: "Pay close attention because this could be a record-breaking amount of mauling ever attempted by the colossus of client care as Goldman shows it does not discriminate between millionaire and billionaire Muppets. In a bizarre story in CNN Money, we are told that two billionaire 'married' executives of Marvell Technologies - MRVL (no, not the comic book though that would be spectacular) are suing Goldman for what initially appears to be a straight-forward alleged fraud of unauthorized transfer of ownership of their MRVL shares to Goldman's internal fund to enable more borrow availability for shorts (1 Corzine-ing). But the story gets better. The executives, upon the advice of another Goldman broker were advised to take levered long positions in competitor NVDA's shares (which GS was allegedly selling out of its own book - 2 Corzine-ings) only to very rapidly face significant losses when the company missed and the stock dropped notably (3 Corzine-ings). Then, GS sends the MRVL execs margin calls on that position (4 Corzine-ings) and unwilling to accept the MRVL shares as collateral due to its low share price (5 Corzine-ings), forces the former MRVL executives to sell their MRVL shares (6 Corzine-ings) to meet cash calls - all the while remembering that GS had transferred the ownership in order that they could allegedly have more of this hard-to-borrow stock to short (7 Corzine-ings). What's more, the couple's suit alleges..." click through for the rest. It's amazing.
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When asked about gold specifically[King World News], Yamada responded, “Gold has to get through $1,800. $1,600 has to hold in the short-term. $1,550 to $1,600 is okay, but I wouldn’t like to see a move to the lower end of that range because your uptrend and support are coming in right now around $1,600. "Gold has a horizontal consolidation in place. I was disappointed gold couldn’t break $1,800 previously, but again, sideways is okay. This sideways action is healthy, this consolidation, but gold now has to prove itself.”
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Good article by Julian Phillips. Here's a snippet: "The collateral damage from this exercise embraced China, India and other nations, who were the customers of Iran. It has become clear to these nations that the power in the hands of the U.S. in oil matters is far too great for their future, and that they should be making plans to remove the impact of that power. If they are (China in particular) to be able to make their own decisions in the future -particularly on oil and currencies-then they must develop a monetary system that is independent of the U.S.
"However, this will mean that the world must move from a world united under the USD to one where there is a fragmented monetary system with at least two parts. This break demands a period where uncertainty, fear confrontation, and conditions generally detrimental to financial harmony must be endured until a new order is established. The potential for damage to the current monetary system is huge as it will be the one in decline while the new system is on the rise..."
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by Jeffrey Nichols: "Analysis of the Chinese gold market suggests not only that the country's gold production and consumption are both far higher than figures suggest, but also that this gold will not find its way back on to the global marketplace..." {I've been under this impression for several years now.}
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Today Bill Fleckenstein, President of Fleckenstein Capital, told King World News that the Fed is trapped and we may see a little panic in stocks. He also discussed the gold and silver smash, but first, here is what Fleckenstein had to say about what is happening in the markets: “We are going to get more money printing out of the Europeans. We got it out of the Japanese, the British, the Swiss, and somehow guys who want to buy stocks at 1,400 on the S&P all conclude that the Fed is going to stop easing.” “I don’t understand how so many people who believe in Santa Claus, the Easter Bunny and Goldilocks can all be employed on Wall Street. I mean the stupid television, Bubble Vision and all of these knuckleheads, it’s just noise. It’s just crap that they make up because they have to say something in that moment in time. "Anyway, it’s a frustrating period for most people, but the resolution to this, the consequences of money printing are going to be more inflation and the metals (gold and silver) are going to be a big beneficiary of that. For all I know, the decline that’s under way right now (in gold and silver) may stop (next) Tuesday. "The stock market is, for the moment, the vehicle of choice for money printing to flow into...."
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Dave in Denver: "How will the U.S. Government fund all of the additional budget deficit spending that has already been built into this year's spending plans if the Fed does not print money in some fashion in order to help finance all of the new Treasury debt issuance in 2012? Before you answer this, you need to be aware, and you can use google to find the numerous sources of this data, from the time QE2 commenced until it ended the Fed directly or indirectly purchased over 100% of of all new Treasury debt issuance during that time period. In other words, it also paid for some of the refunding/rollover issuance... "...I wanted to stop there today, but I came across this revealing blog piece from Felix Salmon. In terms of systemic liquidity and the question of whether or not the Fed will roll out QE3 (I think we all know the true answer to that), Salmon has a chart you have to look at which shows syndicated bank lending by quarter. Syndicated bank loans - which is the big corporate loan market - are starting to cliff dive. This means that corporations are not funding new projects AND that banks are not lending to new projects. To make this data even uglier, most of the syndicated lending that has occurred - 70% in fact - has been refinancing older, higher interest rate debt. Not only are the banks NOT providing liquidity to the corporate market, but only a small relative percentage of the lending is "new blood" lending." click through for the full blog entry from Dave.
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"I am not preaching to the converted however most if not all readers will know that the US banking system is in trouble as evidenced by QE1, QE2 and now suggestions of QE3. Governments would not offer or provide the monstrous bailouts and deposit guarantees unless this was the case. The European bank has also taken steps to prop up their banking system since 2008, with in excess of US$1.2T in new support in the past 4 months. This is a global phenomenon made necessary due to the gradual debt collapse, a deleveraging process that will persist for many years to come. "This kicking of the can down the road is all about buying time for the financial institutions to repair their balance sheets. This expensive ‘time’ purchase is considered the only way out by governments that don’t want a collapse on their watch and because there has been a very real danger of a total collapse of the entire financial system. The counter party risk of this intricately linked system is highly dangerous thanks to the size of the debt, derivatives, credit default swaps and now the bond market bubble. This is all key to understanding what I am about to say about gold and how it fits..." click through for the rest.
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"I consider myself a realistic, but a cautious bull, and count on the demand for resources to act as a defense against irrational government policies. Gold and silver are, by default, becoming the world's new money, and are in demand by individuals, institutions, and the world's governments. Copper will also move up with world growth. Likewise, agriculture and potash along with it, increases in demand as prosperity and populations increase. "There is no question we will always have ups and downs. But long-term, the direction is generally up for companies that can compete and produce. In effect, by accumulating shares in stocks, I have gone long on free-enterprise ingenuity and short government incompetence..."
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"Ben Bernake fancies himself as a student of the Great Depression," says renowned investment broker, global strategist, author, and Austrian economist Peter Schiff, "but... if he were my student he would have gotten an F." "During a lecture entitled "The Fed Unspun: The Other Side of the Story", Schiff responded to Bernake's recent four-part college lecture series, rebutting many of the Federal Reserve Chairman's claims about the cause of the housing crisis, the role of the Federal Reserve, the value of the gold standard, and more. "Cosponsored by the FreedomWorks Foundation and hosted at Reason Foundation's DC office on March 29, 2012, the lecture was followed by a lively Q&A with the assembled audience, including students who attended Bernanke's George Washington University lectures. "Shot by Meredith Bragg and Jim Epstein. Edited by Swain. Additional help from Anthony Fisher. "Approximately 1 hour and 26 minutes long. "Go to Reason.tv for downloadable versions of this video and subscribe to Reason.tv's YouTube channel to receive automatic notification when new material goes live."
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Snippet: "The key to understanding the gold market is to understand that it’s not really about gold at all. Instead, it’s about currencies, and in our case that means the dollar. Gold is really the anti-currency. It serves a valuable purpose in that it keeps all the other currencies honest (or exposes their dishonesty)."
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Tyler Durden: "In what appears to be surprising news for some, Reuters has an article titled "Americans brace for next foreclosure wave" whose key premise is that "a painful part two of the [housing] slump looks set to unfold: Many more U.S. homeowners face the prospect of losing their homes this year as banks pick up the pace of foreclosures." Thank the robosettlement, where in exchange for a few wrist slaps, contract law was thoroughly trampled by America's attorneys general, but far more importantly to the country's crony capitalist system, the foreclosure pipeline was once again unclogged, and whether one does or does not have a legal title on a given house, the banks are now fully in their right to foreclose on it. What this means also is that America's record shadow housing inventory, which is far greater than any fabricated number the NAR reports on a monthly basis, is about to get unleashed on buyers, shifting the supply curve much further to the right, as up to 9 million new properties slowly but surely appear on the market. And while many will no longer be able to live mortgage free, forcing them to go out and rent (and no longer be able to afford incremental iGizmos), it also means that the prevalent price of homes is about to take another major tumble, making buffoons out of..." Click through for the rest and the graph.
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A pair of unexpectedly downbeat economic reports from Germany and the UK on Thursday added to fears of a recession in the euro zone and fueled doubts that manufacturing could power the region's economic recovery. "German industrial output fell by 1.3 percent in February from the previous month, according to the Federal Statistical Office of Germany, undershooting the economists' consensus estimate of a 0.5 percent drop as compiled by Bloomberg News. "January's previously reported gain of 1.6 percent was also revised down to an increase of 1.2 percent. "Germany's construction plunged 17.1 percent while manufacturing production fell 0.4 percent, led by a 2.1 percent decline consumer goods output. The huge drop in construction was exacerbated by the unusually cold weather..."
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Tyler Durden: "Today's aggressive intervention by various monetary authorities to prevent the Swiss Franc from trading anywhere close to its fair value (yes "intervention", the same that happens each day in other capital markets, like stocks and commodities, read gold) reminded us once again that it is always and only a central planner's world. Yet while it is easy to assume there is some big black box doing all this manipulation, the truth is that the decision chain ultimately ends with carbon-based lifeforms, who push the buy or sell button, respectively: i.e., the human element. Which is why we wanted to present our readers the decision making chain expressed in flesh and blood terms, namely the people who over and over demonstrate to the market just who is in control..." Click through for the list.
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The price of gold, which has climbed for years like a blood pressure reading for anxious investors, plunged Wednesday to its lowest level in three months. Gold fell almost $58 to $1,614 per ounce. “It’s difficult to forecast, but I think the gold bull market is over,” said Cetin Ciner, a professor of finance at the University of North Carolina-Wilmington. He likened the surge in gold to dot-com stocks before they collapsed. {LOL so funny when they go to "professors". keep it up bears. When they bash it like this gold most always shows them up.}
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Ed Steer on yesterday's gold action: "As you already know, the trading volume and price action in the Far East on their Wednesday was comatose at best. "That all changed the moment that the high-frequency trading began at the London open...and JPMorgan et al really worked the gold price over pretty good from that time onwards, with the low of the day coming at the precise moment that Comex trading closed in New York at 1:30 p.m. Eastern time. "The gold price rallied a bit in the electronic trading session that followed, but wasn't allowed to get too far. Gold closed at $1,620.40 spot...down $25.40 on the day. Net volume was immense...around 190,000 contracts, so there was lots of spec long liquidation yesterday..."
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Trader Dan on gold: "Gold is seeing a bit of buying across Asia this evening but the damage on the technical price charts has been done. We are now seeing hedge funds becoming active shorters of the Comex gold contract. They still remain net long (even with the liquidation) but a growing percentage of this category of traders is playing gold from the short side. This means that rallies are going to be sold UNLESS gold can clearly get back above $1680. A trip back towards $1660 will flush a few of the weaker handed shorts out but not until and unless gold proves that it has what it takes to stay above $1680 will some of the stronger shorts begin getting squeezed out..."
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Summary: The Founders hoped that America would be a beacon light of hope and liberty to the people of the world. And so we were for two centuries. But we’ve become an example of another kind,... hat tip to http://twitter.com/mikecane
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Caesar Bryan tells King World News: “Obviously, for those long of gold this action is very disappointing. You always have to go back to the fundamental reasons why you are holding gold and gold equities at times like this. The fact is the global economies are experiencing a very weak recovery, if at all, and the monetary authorities are still in an easy mode. "All of this will work to gold’s advantage in the medium-term. At times like this, professionals will revisit why they are in this market and when they come to the conclusion that it makes sense, they will add to or at least maintain their positions. "I have been doing this for a quarter of a century and I’ve discovered over time it’s a very easy sector for the weak hands to be shaken out...."
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Eric De Groot: "An individual, group, or country (hint China) not seeking the label of dumb as a post is highly unlikely to announce their intentions to buy gold."
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