The risks of more aggressive global protectionism – including deliberate manipulation of exchange rates – cannot be dismissed out of hand
.... The latest flashpoint involves the Bank of Japan and its setting of a higher inflation target of 2 per cent, backed by open-ended monetary easing. New Prime Minister Shinzo Abe has made no secret of his determination to combat crippling deflation and to bring down an overvalued yen to boost exporters’ flagging fortunes. Both are key elements of an economic strategy that also involves a heavy dose of fiscal stimulus.
The Japanese central bank’s quick adoption of the new measures has aroused concerns that its cherished independence is being eroded. Bundesbank chief Jens Weidmann bemoaned this dismal prospect the other day, citing “alarming infringements” of central bank autonomy in Hungary and Japan. He warned that such political interference could trigger a destructive round of “competitive devaluations” – which the major industrial and emerging countries have so far managed to avoid since the global financial meltdown of 2008 and the ensuing global recession. ....
Is it brewing? Heck it's been brewing for some time now. The whistle just hasn't blown yet.
Today the art of politics is to take public concern, anger or bigotry and create a channel for it so that like flood water you can destroy one group while protecting another. Mr Cameron and his flag waving concern to restore Britain’s lost sovereignty is a case in point. The Conservative party has, for years, loved to hate Europe. Their rallying cry, now, is to claim back sovereignty from those johnny foreigners in Brussels.
Imagine the righteousness of reclaiming what was lost. Like a modern Henry V riding out to meet the dastardly French on the field of Agincourt. And yet…
This concern for sovereignty rings very hollow to me. Because whatever sovereignty this nation has ceded to Europe, and it has, it is little compared to that which we gave away without a murmur, without discussion to what is now the WTO (World Trade Organization). And no one, ever, talks about offering the people a referendum about that do they?
When Britain signed the Uruguay Round of the GATT agreement (The General Agreement on Trade and Tariffs) it set us on a course to ...
January 23 marked a historic event for the Federal Reserve, the monetary institution which has seen its share of historic events since the onset of the financial crisis in 2007.
However, as of the week ended January 23, the Fed's balance sheet grew to $3 trillion for the first time ever, the largest in the Fed's nearly 100 year history.
The Fed began purchasing $85 billion per month earlier in January as part of its expanded third round of quantitative easing. Initially, the Fed had planned to purchase $45 billion per month in mortgage backed securities. ...
The classical or orthodox gold standard alone is a truly effective check on the power of the government to inflate the currency. Without such a check all other constitutional safeguards can be rendered vain. - Ludwig Von Mises, "The Theory of Money and Credit"
Well, we saw evidence last week that Von Mises was right about fiat currency and constitutional safeguards when nearly every Congressman voted in affirmation - and Obama immediately signed - a law which makes it illegal to have an organized protest in any location where Secret Service personnel are going to be hanging out: LINK Punishable by up to 10 years in prison. Think about this Occupy and Teabag people, if the Government knows in advance of one of your protest gatherings, they'll send some Secret Service people to that location and this law says the local police can arrest you if you show up to have your gathering. I guess in the course of his Constitutional Law studies, Obama forgot to study the 1st Bill of Right - aka the 1st Amendment. Bush referred to the Constitution as merely a piece of paper, Obama has waged a serious war against the Constitution.
The project comes as Ghana seeks to get more out of its natural resources by increasing domestic processing of minerals and commodities, most of which are exported unrefined.
by Ekow Dontoh:
Ghana, Africa’s second-biggest gold producer, will start large-scale domestic refining of the metal for the first time since industrial mining began more than a century ago.
State-owned Precious Minerals Marketing Co., which buys and sells gold and diamonds from small-scale miners, will start output at the 4.5 million-euro ($6 million) refinery by July, Managing Director Rueben Darko Damtey said in an interview on Jan. 21 in Accra, the capital.
“We will be able to buy more and offer better prices for gold from ...
Ours is a dysfunctional debt-based Empire that buys the complicity of its debt-serfs with entitlement bread and circuses.
The road to debt-serfdom is paved by the banks and enforced by the Central State.If there is any point that is lost on ideologues, Progressive and Conservative alike, it is this: the first-order servitude and second-order tyranny of debt-serfdom can only occur if the banks' power is extended and protected by an expansive Central State.
Progressives are blind to the State's essential role in creating and empowering a parasitic financial Aristocracy, and Conservatives are blind to the tyranny of debt-serfdom imposed by the private-sector financial Aristocracy, i.e. the banking sector. ...
Be sure to click through for the rest and chart. Good read. I can't say as I disagree too much with Mr. Smith's thoughts.
Please do not fall for this classic manipulation. Please do not make the gold banks happy by giving away your physical. Please do not throw away gold shares because the hedge fund have worked black PR so well that they even have convinced some well known community physical gold merchants of their bear position of shares.
How many times have you seen this not to recognize what it is? Well, this is the big one and last play to denude you of your position. Remember, for every seller there is a buyer. Has not every reaction in gold since $248 attempted to do just that? This big one is no different.
Fundamentally we are approaching the period in gold when it will move up the most points in the shortest period of time. The paper gold market is being used to shake the bullish tree harder this time than any time before because of what is to come. Fear is the most powerful emotion in markets and it is being used perfectly to enrich the grand names of finance at your expense.
Remember how you felt during the first reaction above $1000? This is nothing different. The take downs are planned for ...
Click through for the rest of Jim's message to his readers.
During the interview, Peter gave a sober outlook on the junior resource market, warned of a frightening class-warfare to arrive shortly in the US, and spoke on which key market will trigger a collapse making 2008 look like just a warm-up.
Peter also spoke on gold and silver, indicating, “It’s a stealth bull-market…what I mean by that is, never in 30 years in this business could I say a market could have risen as much as they have, and still see so few net participants in it…Go to any financial institution in any part of the country and look at any 100 accounts, and you won’t find 1 out of 100 that own physical metal—the bulk of the buying net-net, has been outside of the United States.”
When asked about this excruciating consolidation period for many investors, Peter explained that, “They [the metals] have digested a decade’s worth of large gains, they’ve built a very strong base…as tough as it is for somebody to struggle with it, the longer the base is built, when the inevitable breakout to the upside comes, the bigger that move can be. I believe that move is coming this year ...
Click over for the full interview which you can listen to at the bottom of the page. Peter discuss the difficulty of the past year in a candid interview.
The reliable data which policymakers and the public need if effective solutions are to be found is not available. As Tullett Prebon's Tim Morgan notes, economic data has been subjected to incremental distortion; Data distortion can be divided into two categories. Economic data has been undermined by decades of methodological change which have distorted the statistics to the point where no really accurate data is available for the critical metrics of inflation, growth, output, unemployment or debt. Fiscal data, meanwhile, obscures the true scale of government obligations. While he does not believe that the debauching of US official data is the result of any grand conspiracy to mislead the American people; he does see it as an incremental process which has taken place over more than four decades. From 'owner equivalent rent" to 'hedonics', few series have been distorted more than published numbers for inflation, and few if any economic measures are of comparable importance; and the ramifications of understated inflation are huge. ...
"I suppose it is tempting, if the only tool you have is a hammer, to treat everything as if it were a nail."
Abraham Maslow, The Psychology of Science, 1966
Apparently while Maslow made this saying famous with a more elegant formulation, the original source of the image is from a Mr. Kaplan who wrote his 'law of the instrument' in 1964.
"I call it the law of the instrument, and it may be formulated as follows: 'Give a small boy a hammer, and he will find that everything he encounters needs pounding.'"
Speaking of boys and their toys, the word that has made its way across the trading desks is that the Fed's put is back on, or more colloquially phrased, while Bernanke keeps printing, certain favored classes of assets can keep going higher, without regard to fundamentals, except for significant event-driven incidents, that will be quickly papered over.
Otherwise, the dips will be shallow and the trend will be maintained. For how long I do not know, but as the VIX shows, perceived risk is back down to low levels ...
"As a dog returns to its vomit, so a fool returns to his folly."
A reader who works in commercial real estate finance shared a warning, informed by his own private industry perspective today. This was in response to my post this morning on the Fed's policy error of indiscriminately pumping money into an unreformed banking system, without adding safeguards and provisions for its employment in productive investment rather than wealth transfer control frauds.
It is almost tragically funny to see the economic principles learned from the Great Depression applied so blindly and haphazardly as advocated by some economists and policy makers.
It is hard to explain the realities of things to people who see the rough world of the markets through the abstractions of their theory and models.
Yes, what my acquaintance Richard Fields calls the 'FDR framework' would have favoured the stimulus of government work and investment programs for a depression and liquidity trap, and a certain amount of financial security to ease the pain.
But it would have never been so wilfully complacent about the underlying fraud that caused it in the first place. And austerity without reform is a form of economic suicide. FDR came right at Wall Street and the Banks with serious reform that saved capitalism from itself, and worked for a generation to hold back its darker impulses. This is a lesson that we have ...
US Federal Reserve is reporting a major deposit withdrawal from the nation’s bank accounts. The financial system hasn’t seen such a massive fund outflow since 9/11 attacks.
The first week of January 2013 has seen $114 billion withdrawn from 25 of the US’ biggest banks, pushing deposits down to $5.37 trillion, according to the US Fed. Financial analysts suggest it could be down to the Transaction Account Guarantee insurance program coming to an end on December 31 last year and clients moving their money that is no longer insured by the government.
Gold closed down $16.60 to finish the comex session at $1669.50. Silver also faltered down 71 cents to finish the day at $31.70. As expected, another raid was orchestrated by the bankers for two reasons:
i) options expiry on gold and silver metal contracts. The options expiry is Monday. ii) the huge OI in silver and generally the bankers try and force silver holders to relinquish some of their long positions.
Today, Jill Sommers, a CFTC commissioner who is totally against us resigned. It is possible that many rats are fleeing a leaking ship.
The Royal Canadian Mint announced that it two was rationing silver sales. As this was announced, the silver price was tumbling. Go figure!! ...
Click over for the rest. I wonder if he is indeed right about the rats.
Today legendary value investor Jean-Marie Eveillard, who oversees $73 billion, told King World News, “I say to myself when I’m in a good mood, ‘Wall Street is nothing but a vast promotion machine.’ When I’m not in a good mood I tend to think, Wall Street may be, after all, a den of thieves.” Eveillard also tore into Goldman Sachs for their bearish call on gold, and went on to emphatically state, “I’m not selling any of the gold I own.”
“What’s catching my eye is the Fed is printing enormous amounts of money. Meanwhile the Bank of Japan, which up until recently had been quite reluctant to print money, Mr. Abe has now indicated without any ambiguity they will print very freely.
“To the extent that the central banks continue to print, and at some point the European Central Bank will print again, I think we have the conditions for the pure paper money system, which has been in place now for more than 40 years, to continue to fray at the edges.
So what I’m saying is that I have no idea where the price of gold will go over the short-term, but I think from a medium-to-long-term standpoint the conditions continue to be quite ripe for the price of gold to go up again. Now I understand that Goldman Sachs has recently produced a paper which is negative towards the price of gold.... "
... In December the U.S. mint was hit by another silver shortage and was forced to suspend sales of the Silver American Eagle. By January 7, sales resumed and in just a matter of a few days over 6 million Silver Eagles were sold, far exceeding totals for the entire month of January 2012. Again, the mint was forced to suspend sales.
Last time the mint ran out of silver, the silver price jumped from $34 an ounce to $49, a quick 40% rise. Back then, the silver naysayers called it everything from a fluke to a spike to a bubble. Today, however, the tone of the silver message is changing. The silver shortage is growing.
You see, unlike other precious metals, Silver’s industrial demand is skyrocketing. Silver is known to have the highest electrical and thermal conductivity of all metals. Think about that! Why are today’s cell phones more powerful than yesterday’s giant computers? Silver is playing a major ...
Platinum prices, up 21 percent from their August low, will extend gains as production cuts squeeze supply and consumption climbs, according to South African miner Wesizwe Platinum Ltd.
“You’ve got challenging supply issues and a market that’s recovering in terms of demand,” Chief Operating Officer Paul Smith said in an interview. “The platinum sector as a whole is going to come off quite a low base quite aggressively.”
Strikes that began in August in South Africa, source of three-quarters of the world’s platinum, led to mine halts that drove up prices from a $1,383.75-an-ounce low. They’ve since fluctuated, rising this month on a plan by Anglo American Platinum Ltd. to cut 400,000 ounces a year to curb costs. ...
Yesterday I mentioned that gold had stalled out at its 50 day moving average, which just so happens to come in very near the psychological resistance level of $1700. Today it was knocked lower and hit its 200 day moving average on the downside which has stopped its descent, for now. There looks to me to be a couple of things going on here. The first is a technical failure with its inability to get a handle of $17" in front of it. That must occur for momentum based buying to come in, buying which I might add is necessary if this thing is going to to anything to excite the bulls. The Swap Dealers and Bullion Banks are selling very heavily at this level and are absorbing all of the bids coming into the market. ...
Click through for the rest of Trader Dan's analysis.
The gold price continues to tease and exasperate gold bugs as each attempt to recover and move beyond the $1700 per ounce price point is promptly extinguished with a sharp reversal, which was once again the case in yesterday’s trading session.
From a technical perspective, and as stressed in previous gold market analysis, the $1700 per ounce price point is now taking on increased significance, particularly following the posting of an isolated pivot high on 22nd January which saw gold touch an intra day high of $1695.90. This aligns almost exactly with the isolated pivot high of 2nd January at $1695.40. These price points were further reinforced this week at failures at this level, virtually every day and confirming the weakness in gold which we saw yesterday, as the February GC contract closed at $1669.90.
From a fundamental perspective this lack of interest is partly due to the current move back into ...
TheProspectorSite.com exists to provide proof via current events and history that precious metals are one of the best ways to preserve and grow your wealth.
To fully understand gold and silver’s future we must first absorb the impact, or awakening, when a person as polarizing as O’Reilly uses words like “unsustainable fiscal path” or “collapse of savings” or “dollar collapse” in his opening prime-time monologue. Such a truthful 3:37 minutes I’ve yet to hear in front of an audience of millions.
We will not awaken one morning to $400 or $500 silver overnight. Nor will we awaken one morning to $15,000 – $20,000 gold overnight, either. The progression from where we are now to where we’ll soon be is chucked full of necessary steps of awakening. The video above is yet another one of the steps we’ve spent the last 22 months describing.
Just three people; only three people stood in front of me while I waited to buy more silver ounces from my local coin shop this week. It’s worth questioning why in such an age of economic calamity the line doesn’t wrap around the corner. Is it possible Mr. O’Reilly is correct when he mentioned that most Americans simply will not listen or, worse yet, too stupid enough to care? ...
Click through for the rest and the included video?
"... As we anxiously await the results of the “Fiscal Cliff” drama, it is important to acknowledge that this is only one of the many cliffs over which we have fallen. We have lost transparency through high-frequency trading, faulty economic statistics and dark pools. We no longer have functioning markets to allocate capital and to provide price discovery. We have destroyed our education system. Morality is under attack, and the laws of the land have grown by the tens of thousands. The rule of law is applied whimsically, and the legal system is understood by nobody.
"The current debate about the Fiscal Cliff is a distraction. What this really is about is the Spending Cliff. The debt ceiling debate is not about capping debt, it is about capping spending. It is apparent that almost nobody wants to do that. No solution can exist under that circumstance. We can only go back to our daily lives and await the moment when the system collapses in on itself. The history and mathematics are irrefutable.
"The West went over the spending cliff decades ago. An economic and financial “Blue Screen of Death” lies in waiting. The only question is what triggers it and the timing. Attempting to answer those two questions is trying to figure out what an improperly programmed computer could do given the wrong set of keystrokes. It is an impossible task. ..."
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