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Gold and What Moves it.
Tracking all things that relate to and affect the price of gold.
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Jim Sinclair's thoughts on why Germany wants their gold back

My Dear Friends,


I respectfully disagree with most of the explanations given today on the why of German actions in gold. My understanding is that the causal event of this notification actually came from the actions of the US Exchange Stabilization Fund and the long term plans to strengthen the euro.

 

I have published a chart from Patrick showing the extreme change in the ratio of gold to fiat currency presently being held in reserve by Euroland.

 

First you need to understand what the Exchange Stabilization Fund is and is not. It is an account at a major gold bank in the name of the Exchange Stabilization Fund. This fund can legally trade in gold and does. The President of the USA and the Secretary of the US Treasury run this fund. Those two managers by law are permitted to designate another manager if they wish. The fund can trade long or short, borrow or lend anything. Basically this is a an account that can legally do anything it wants whenever it wants in secret as the year end statement can easily be brought to only benign activates by warehousing all the trades.

 

Their broker is quite an expert in that strategy to wash year-end positions for clients.

 

What occurred as I am told is an act in Germany in reaction to a ...

Hal's insight:

Click over for the rest of what Jim Sinclair has to say on Germany wanting their gold back.

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Gold prices to peak in 2013: GFMS survey | MINING.com

Gold prices to peak in 2013: GFMS survey | MINING.com | Gold and What Moves it. | Scoop.it
Bullion prices will average an all-time high in the first half of 2013, says Thomson Reuters.

 

The year ahead promises to be very good once again for the gold market, according to Thomson Reuters’ GFMS Gold Survey 2012, presented Wednesday in Toronto.

 

The updated survey results forecast that gold prices will continue to increase, and predicts “gold to average an all-time high over the first half of 2013…. of well into the $1,800s (per ounce).”

 

Additionally, gold production will have a “stronger tone” this year, with gains of 1.25% expected, or 35 tonnes more produced in 2013 than in 2012, Phillip Klapwijik, Global Head of Metals Analytics at Thomson Reuters GMFS, told an audience of more than 100 gathered in Toronto for the release of the survey’s findings. ...

Hal's insight:

Hmm... I have my doubts that it will "peak" this year. I imagine we'll see a new peak reached but here there will be another beyond it as our world governments are doing nothing to change the debt situations.

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Economics Professor Laurence Kotlikoff - Bernanke Playing With Fire

http://usawatchdog.com/bernanke-playing-with-fire-laurence-kotlikoff/ - Economist Laurence Kotlikoff says, "We are actually in worse shape than any developed country. . . We are using accounting that would make Bernie Madoff blush." Kotlikoff thinks the Federal Reserve could easily lose complete control of inflation and warns, "Ben Bernanke is playing with fire here because we could have a tripling of the price level." Join Greg Hunter as he goes One-on-One with Boston University Economics Professor Laurence Kotlikoff.

Hal's insight:

Good Interview. Hat tip to www.jsmineset.com 

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Charles Hugh Smith: Why the Innovation Premium Is Diminishing

Charles Hugh Smith: Why the Innovation Premium Is Diminishing | Gold and What Moves it. | Scoop.it

The acceleration of competition as high-tech tools and skills have dispersed throughout the global economy is an under-appreciated trend.


In the late 1980s, Apple famously reaped $1,000 in gross profit on each Macintosh computer sold: Apple was able to charge a very high premium for the innovations the Mac embodied. (Note: this was back when $1,000 was a substantial sum; that is over $2,000 in 2012 dollars.) This ability to reap a substantial premium for innovation is fundamentally what drives the technology marketplace: since competition arises in any high-profit space, the premium for innovation degrades as competitors enter the space. In the good old days, it took years for serious competition to arise. As the bumper sticker crowed, "Windows 95 = Mac 1985." (As I worked with both Mac 1985 and the crash-prone Windows 95, I would say Win95 was still substantially behind the Mac in stability.) The acceleration of competition as high-tech tools and skills have dispersed throughout the global economy is an under-appreciated trend. Apple has earned billions of dollars in profits over the decades as its innovations enabled the ...
Hal's insight:

This is an interesting article. Will make you think.

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Twitter / jvogler : Russia Says World Is Nearing ...

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International watchdog exposes use of forced labour in Canadian-Eritrean gold project | MINING.com

International watchdog exposes use of forced labour in Canadian-Eritrean gold project | MINING.com | Gold and What Moves it. | Scoop.it
The group claims the Eritrean government has been using forced labour to construct a gold mine, in a joint venture with Canadian Nevsun Resources Ltd.

 

International group Human Rights Watch said Tuesdaythe Eritrean government has been using forced labour to construct a gold mine, in a joint venture with Canadian Nevsun Resources Ltd. (TSX: NSU).

 

According to the report, the Vancouver-based miner failed to ensure that forced labour was not used in the construction of its African Bisha gold project.

 

The 29-page document, Hear No Evil: Forced Labour and Corporate Responsibility in Eritrea’s Mining Sector, describes how mining companies working in Eritrea risk involvement with the government’s widespread exploitation of forced labour. It also documents how Nevsun – the first company to develop an operational mine in Eritrea – initially failed to take those risks seriously, and then struggled to address allegations of abuse connected to its operations. ...

Hal's insight:

I'm not surprised by this, Eritrea does not have a great track record.

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Kumtor to produce 18.7 tons of Gold next year

The company planned to invest in general about $95 millions in the Kumtor deposit in 2013. Some $13,5 million is planned to be spent on exploration work.

 

BISHKEK(BullionStreet): Kyrgyzstan's flagship Kumtour gold mine is expected to produce nearly 19 tons of gold next year, said Canada's Centerra Gold, the mine operator.

 

In a statement, Centerra said gold production on the Kumtor deposit will reach 18,7 tons this year. The statement came a day after Kyrgyzstan acknowledged cut in 2012 GDP due to output collapse at Kumtor.

 

Centerra said by late 2012 about 9,8 tons of gold have been produced on the Kumtor deposit, and the forecast for 2013 is to produce 17,1-18,7 tons. ...

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A China Gold bar that rusts

A gold bar sold by China's state-controlled China National Gold Group showed signs of rust.

 

BEIJING(BullionStreet): A gold bar sold by China's state-controlled China National Gold Group showed signs of rusting, reports Beijing Times.

 

According to the tabloid, In October 2010, a man identified only by his surname, Shen, purchased what he believed to be pure gold product manufactured by China National Gold from a Beijing department store for 14,900 yuan ($2,400).

 

The bar was stored in a bank safe until Dec. 18, when Shen noticed that it had developed red spots and what appeared to be rust corrosion on the base. As the most non-reactive of all metals, gold should never rust unless it has been mixed with other metals or has been contaminated with additives.

 

On Dec. 24, Shen took the gold back to the store and was offered a refund once staff verified that it was the same item he originally purchased.

 

Shen refused, saying that all he wanted was an explanation. ...

Hal's insight:

LOL China not minting pure gold? LOL go figure.

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Germany Wants Their Gold Back | LiveCharts.co.uk

Germany Wants Their Gold Back | LiveCharts.co.uk | Gold and What Moves it. | Scoop.it
The significance of this can not be over-stated.  This is a breakdown of trust between Germany and those who have held their sovereign gold reserves for the

Via Tom Luongo
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KEY GOLD BREAKOUT

KEY GOLD BREAKOUT | Gold and What Moves it. | Scoop.it

Submitted by Stewart Thomson

Gold has risen above HSR (horizontal support & resistance) at $1675, and did so while bursting above a key short term trend line.  The arrival of the gold price at key HSR, in the $1630-$1650 area, was accompanied by rampant bearishness amongst most gold investors. The Hulbert sentiment index for gold is currently at one of the lowest points in the history of the index.


The general sentiment for gold still appears to be very negative.  That’s great news for gold, because markets tend to rise strongly, on the biggest walls of worry!

 

Most gold timers that I keep an eye on, are still looking to short rallies, rather than buy declines.  I think they are making a serious technical error with this strategy.  Gold is the lowest risk asset in the world.  It’s arguably the “ultimate asset”.  There are not many really good shorting opportunities in a gold bull market.

 

1.   The American government credit card limit, aka the debt ceiling, was just increased.  Politicians around the world are loudly cheering this supposedly great news. ...

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SEPERATION OF GOVERNMENT FROM THE PEOPLE « The Burning Platform

SEPERATION OF GOVERNMENT FROM THE PEOPLE « The Burning Platform | Gold and What Moves it. | Scoop.it

Submitted by George Washington

In the classic history of Nazi Germany, “They Thought They Were Free”, Milton Mayer writes:

 

“What happened here was the gradual habituation of the people, little by little, to being governed by surprise; to receiving decisions deliberated in secret; to believing that the situation was so complicated that the government had to act on information which the people could not understand, or so dangerous that, even if the people could not understand it, it could not be released because of national security. And their sense of identification with Hitler (and Obama), their trust in him, made it easier to widen this gap and reassured those who would otherwise have worried about it.

 

“This separation of government from people, this widening of the gap, took place so gradually and so insensibly, each step disguised (perhaps not even intentionally) as a temporary emergency measure or associated with true patriotic allegiance or with real social purposes. And all the crises and reforms (real reforms, too) so occupied the people that they did not see the slow motion underneath, of the whole process of government growing remoter and remoter.

 

Similarly, America has – little by little – gone from a nation of laws to a nation of powerful men making laws in secret. Indeed, even Congress doesn’t know half of what others are doing.


Secretive, unaccountable agencies are making life and death decisions which effect our most basic ...

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Jesse's Café Américain: Money Supply Figures: Monetary Inflation But Real Economy Is Dysfunctional

Jesse's Café Américain: Money Supply Figures: Monetary Inflation But Real Economy Is Dysfunctional | Gold and What Moves it. | Scoop.it

The growth in the MZM and M2 money supplies are very strong, almost remarkably so given the very slack growth in employment and GDP.

So why do we not see any serious inflation in prices?  Or real gains in employment for that matter. 

As an aside, I think some of the more 'modern'  and aggressively modified measures of price inflation, like chained CPI, do not measure price inflation at all, but the consumer behaviour of product substitution under increasingly trying circumstances as people cope by reducing their standard of living. That is a measure of gradual deprivation, not inflation. ...

Hal's insight:

Click through for the charts and analysis.

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Trader Dan's Market Views: Silver Builds on Previous Gains; Nears Breakout Point

Trader Dan's Market Views: Silver Builds on Previous Gains; Nears Breakout Point | Gold and What Moves it. | Scoop.it

"... This latest move higher in the index must therefore be closely monitored as any change in the technical posture of this chart, will be the first sign of inflationary pressures beginning to surface in the economy at large. If, and this is a big, ""IF", the index pushes past BOTH resistance levels noted on the chart and breaks out of the channel, especially if it clears the region near 578, expect to hear increased chatter about inflation. This should especially benefit silver, which is much more sensitive to inflation pressures than is gold, or least has been if recent past is any indication.

 "Quite frankly, I have been a bit surprised that it has taken so long for the sector to see much in the way of money flows, especially with the equity market moving so strongly higher on the thesis that the global economy is recovering. If it is, especially in the case of China, then commodities as a whole would also benefit under such a scenario. ..."
Hal's insight:

Click through for the full analysis and chart.

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Ed Steer on Germany wanting their gold back.

Ed Steer on Germany wanting their gold back. | Gold and What Moves it. | Scoop.it

Ed Steer on Germany wanting their gold back:

 

"... But, having said that, there's no question in my mind that there are big changes going on behind the scenes in the precious metals world, as the move by Germany to repatriate its gold has send shock waves through the entire financial system in general...and the world's largest central banks in particular.

 

"Now that Germany has made the move, it's only a matter of time...and not too much time at that...before other countries will make the same move.  Then we'll find out how much gold there really is in those central bank vaults.  As Bill Gross and Ambrose Evans-Pritchard said, it's obvious that the trust between the world's central bankers is starting to seriously erode...and I think that the New York Fed would be at the top of the list of least trustworthy...at least from a European perspective...and most likely other areas of the world as well. ..."

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US asks Turkey to stop Iran gold trade

US asks Turkey to stop Iran gold trade | Gold and What Moves it. | Scoop.it
US-Turkish relations were hit after the Turks officially acknowledged that the rapid rise of gold exports was related to payments for imports of Iranian gas.

 

WASHINGTON(BullionStreet): Close allies United States and Turkey are again on a collision course over Turkey's surging sales of gold to Iran.

 

According to reports, the US had conveyed a strong message to Turkey over it's gold sales to Iran when top officials of foreign ministry of the two nations met here.

 

US-Turkish relations were hit after the Turks officially acknowledged that the rapid rise of gold exports was related to payments for imports of Iranian gas. ...

Hal's insight:

Pretty please! LOL

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Trader Dan's Market Views: It All Begins in the Public Education System

Trader Dan's Market Views: It All Begins in the Public Education System | Gold and What Moves it. | Scoop.it

"... Let's take what any citizen/patriot understands - the United States is NOT A DEMOCRACY. It never has been nor should it ever become one. The Founding Fathers despised democracy which they regarded as nothing but RULE BY THE MOB. Being the students of history that they were, they had learned the lessons of the city states of ancient Greece and were thus determined to prevent such a system of government from developing here in the new nation that they were constructing. ..."

Hal's insight:

Good article from Trader Dan.

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All the Gold in the World - Visualized in Bullion Bars

All the Gold in the World - Visualized in Bullion Bars | Gold and What Moves it. | Scoop.it
This is how all the gold in the world compressed into a pillar looks like.
Hal's insight:

Hat tip: http://www.mining.com 

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'Physical Gold' to gain on German repatriation plan

'Physical Gold' to gain on German repatriation plan | Gold and What Moves it. | Scoop.it
Financial gold or paper gold served the globe for too long and during the current economic crisis,it may not get the support it enjoyed for long.

 

LONDON(BullionStreet): Germany's decision (not officialised yet) to repatriate a major portion of it's gold stored in the US,UK and France may start the trend of switching to physical gold from financial gold, analysts said.

 

They added that financial gold or paper gold served the globe for too long and during the current economic crisis,it may not get the support it enjoyed for long.

 

They however said the process is definitely in its early stages. But it may eventually appear as people and governments want to see the real gold to fight inflation.

 

Some experts said if gold repatriation becomes a worldwide trend, it will be obvious that both the US and UK have lost their credibility as gold custodians. ...

Hal's insight:

More countries to follow soon, I'm sure.

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Germany bringing home 674 tonnes of gold | MINING.com

Germany bringing home 674 tonnes of gold | MINING.com | Gold and What Moves it. | Scoop.it
Germans want their bullion where they can see it.

 

Following rumors to the effect that have been circulating for months Germany’s central bank will recall some of its gold bullion stored in vaults around the world.

 

The hoard is worth more than $180 billion.

 

The Bundesbank on Wednesday said it will ship back home all 374 tonnes it had stored with the Banque de France in Paris, as well as 300 tonnes held in Manhattan by the US Federal Reserve. ...

Hal's insight:

It's not your gold unless you're in possession of it.

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Fleckenstein - Gold & Silver Set Up For An Explosive 2013

Fleckenstein - Gold & Silver Set Up For An Explosive 2013 | Gold and What Moves it. | Scoop.it

... when asked about the Germans repatriating their gold, Fleckenstein responded, “They want to have their gold inside Germany.  There was a flap inside Germany about them wanting to make sure they had it (their gold).  This is in response to that.


“So, while I think it’s psychologically bullish for gold, I don’t know that there is that much there yet.  We might find reasons for it that suggest there is a lack of trust between central banks.  The people who believe in conspiracies that are determined there’s really no gold there will view this as proof positive that the Germans are now afraid there’s no gold there.

 

"This is part of the argument that central banks are realizing that gold is valuable, which is why you see so many of them buying it with the confetti they print up every night. ...


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Top UBS Analyst Predicts Carnage For The US Dollar & Equities

Top UBS Analyst Predicts Carnage For The US Dollar & Equities | Gold and What Moves it. | Scoop.it

On the heels of Germany looking to repatriate their gold, today King World News spoke with top UBS analyst Peter Lee about his rather frightening forecasts for the US dollar and equities.  Interestingly, his call for the dollar to plunge comes right after Germany expressed that it wants its gold out of the Fed and back inside German vaults.  If Lee is right in his outlook, this will have massive global ramifications.  Lee also provided KWN with some incredible charts to back up his rather ominous predictions for both the dollar and equities.  

Hal's insight:

click through for the full piece and the charts.

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India may impose more tax on Gold

India may impose more tax on Gold | Gold and What Moves it. | Scoop.it

By Rajesh Kumar Singh, Siddesh Mayenkar
India's passion for gold is putting such a strain on state finances that the government may slap higher import taxes on the precious metal, but demand buoyed by heady inflation and meagre savings will blunt the impact of any rise in duties. 

Initial success from a tax hike in March last year was stifled by the arrival of major festivals such as Diwali, when gold is a must-give present, and the winter wedding season.

That has scuppered New Delhi's goal of reining in spending on gold by around a third to $38 billion in the fiscal year that ends in March, prompting Finance Minister P. Chidambaram to say another tax increase could be on the cards. ...

Hal's insight:

Just what is their government trying to convince its people of?

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First Shots Are Fired in the Global 'Currency War'

First Shots Are Fired in the Global 'Currency War' | Gold and What Moves it. | Scoop.it

Faced with a stubbornly slow and uneven global economic recovery, more countries are likely to resort to cutting the value of their currencies in order to gain a competitive edge.

Japan has set the stage for a potential global currency war, announcing plans to create money and buy bonds as the government of Prime Minister Shinzo Abe looks to stimulate the moribund growth pace. (Read More: Japan PM Says BOJ Must Set 2% Medium-Term Inflation Goal)

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How to Read a Priced in Gold Chart

How to Read a Priced in Gold Chart | Gold and What Moves it. | Scoop.it

I have received several questions lately along the lines of, "What do these charts mean?", and "How do I interpret this chart?". This post is an attempt to answer these questions.

 

Price charts are simply a series of marks showing how the price of a thing has changed over time.

 

So what is a price, and what does it mean? The dictionary says a price is "the amount of money expected, required, or given in payment for something". But price often refers to something other than money; for instance the price you pay for eating too many deserts might be that you no longer fit well into your old clothes.  

 

Prices are really about tradeoffs. "Would I rather have this, or that?":  ten gallons of gasoline, or $35? an ounce of gold, or $1650? a kilo of gold, or a year's tuition at Yale?

 

Each time a trade happens, both sides come out better off than they were before they traded – both make a profit.  If I am hungry, I might value an apple more highly that the dollar in my pocket. And the merchant who sells me the apple would rather have the cash. He has more apples than he can eat, but his pen just ran out of ink and he can use the cash to buy a new one. ...

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China, Gold and Reserve Currencies

China, Gold and Reserve Currencies | Gold and What Moves it. | Scoop.it

Our pal, John Butler, has alerted us to this very interesting new report from the OMFIF (Official Monetary and Financial Institutions Forum). The report discusses the likelihood/probability that, one day soon, the world will be offered an additional "reserve currency", the Chinese renminbi.

 

Many of you will recall the podcast I had with John Butler back in May. If you need a refresher, here's a link. Obviously, the material covered is still relevant. http://www.tfmetalsreport.com/podcast/3835/tfmr-podcast-22-john-butler-author-golden-revolution

 

This new report covers some material that is near and dear to our hearts here in Turdville. However, since it was compiled for the OMFIF by the World Gold Council, some of its conclusions are debatable. Namely ...

Hal's insight:

Click over for the letter from Butler.

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