"The invisible hand remains in complete control of the silver trend. I anticipate that controlling interests will continue to reduce their leveraged short positions into this weakness and net long as percentage of open interest will surpass the all-time high of -13.35% set on October 21st, 2008 by June 2012."
"ETFs and derivatives may be fine for a trade or a hedge to a trade, but by no means are most of them that I have looked at worthy of a long term hold. I distinguish them by their opacity, leverage, and lack of transparent audits from legitimate physical trusts.
"And some of the ETFs, especially in commodities and on the short equity side, appear to be almost fraudulent both in construction and representation, and are often more instruments of manipulation and raw speculation for extracting wealth from the less sophisticated than investment vehicles.
The great story of this financial era is the same of all the control frauds that have preceded it: leverage founded on paper claims, asymmetrical information, and the calculated mispricing of risk.
"And when the ETFs fail it will be an echo of the market failure of 1929..."
"There is a tide in the affairs of gold that is changing the entire shape of the gold market. We are not just talking about the demand side but the supply side as well. Neither the gold market nor the gold price has factored in these changes yet. And the changes are designed to affect the gold market both unobtrusively and over time. The developed world markets are myopically riveted to short-term factors in the developed world's economies, distracted from reacting to forces considerably greater than those. The changes are significantly deeper than we saw in the 1970's. By extension, the forces involved will change the future of the silver price as well. These forces will prove so decisive because they are not price-dependent or price-sensitive.
"We are currently watching the final moves of a long-term consolidation period, in the near-term and ahead of a strong move either way. A look at the bulk of market commentators shows they are pretty well split on which way the gold and silver prices are headed, up or down? It depends whether the short-term traders take control of the precious metal prices, or whether the forces we are about to describe will take over. It could be a combination of both, with short-term forces breaking resistance, or support, initially, until new pressures take over and force traders and speculators to go with them. We shall see!..."
"Nut cases. That's what they are. And if you take an interest in them, you are a nut case too.
"That's the consensus among credentialed economists who describe advocates of a return to the monetary regime known as the gold standard. In fact, the economic pack will marginalize you as a weirdo faster than you can say "Jacques Rueff" if you even raise the topic of monetary policy in relation to gold.
"An example of such marginalizing appears in a recent issue of the Atlantic magazine. Author Adam Ozimek lists four rules upon which economists overwhelmingly agree. Right away, that puts readers on guard; they don't want to be the only one to disagree with eminences.
"The first rule Ozimek offers is that free trade benefits economies. So obvious. That makes the penalty for disagreement higher. Then you read down to the final principle: "The gold standard is a terrible idea." By putting the proposition..."
"David Einhorn who crushed it this week with huge profits on his short positions in both Herbalife and Green Mountain, finally takes on the ultimate challenger: the Federal Reserve, seemingly unaware to never "fight the Fed", likening its "strategy" to a Jelly Donut policy, and explains what everyone who has been reading Zero Hedge for the past 3 years knows too well: "I will keep a substantial long exposure to gold -- which serves as a Jelly Donut antidote for my portfolio. While I'd love for our leaders to adopt sensible policies that would reduce the tail risks so that I could sell our gold, one nice thing about gold is that it doesn't even have quarterly conference calls." Or, as Kyle Bass said last year, "Buying Gold Is Just Buying A Put Against The Idiocy Of The Political Cycle. It's That Simple!" Not surprisingly, it is only the idiots out there who still don't get what these two investing luminaries are warning about..."
A wildly successful natural-resource speculator reveals how he has made fortunes as a contrarian.
Video Interview with Rick Rule:
"...Louis: Very good. Okay, so resources are broad; are there any focuses within that? Are you more interested in metals, precious metals, oil and gas – what's your favorite flavor right now?
"Rick: A lot of it is personal; and with me it's precious metals. The reason for that is that I'm a reasonably well-known gold broker, and in 2010, as a consequence of the pricing, I was way underweight gold stocks. I was afraid because if gold had broken out, my clients would, for some reason, probably have strung me up. I would like to address those imbalances. It's very seldom that you see an opportunity to buy the junior gold sector – or the senior gold sector – at reasonable prices. This is the first time that I have seen the sector at reasonable prices relative to the price of gold since 2004.
"These are rare events, and in my experience in my career, when you have the opportunity to build positions in high-quality precious metals companies at reasonable prices – not cheap prices, but at reasonable prices – you're well advised to take that opportunity. So my principal focus is in the gold, silver, and platinum sector, in the precious metal sectors as we speak. That isn't to say that I don't like some other sectors, including broadly the energy sector, but I have more opportunities spread over a decade to be in the energy business. It's a much bigger business – it's the business I'm from – and in my experience opportunities to participate efficiently in the precious metals sectors are rare and this is one..."
"With increased demonstrations across the globe, today King World News interviewed James Turk out of Europe. Turk told KWN that banks and governments around the world are set up for a massive collapse, and they will go down together. Turk also discussed key markets and what he is doing with his own money right now. But first, here is what Turk had to say about the situation: “Have you seen the growing demonstrations here in Europe, Eric? So far, the protests have mainly been non-violent. They're protesting in the streets for good reason. Eleven of the seventeen countries in the EU are in a recession. With unemployment growing to record levels in some countries, certain key European nations are definitely in a depression..."
"Apparently ECB President Draghi believes things are going so well over in Euroland that traders are "correct" in their perceptions that no near term stimulus is needed. Down went gold, and silver, and copper, etc. as money flowed out of those markets and elsewhere into I have no idea what based on the fact that the equity markets are lower and are the bonds. Let's call it mattress money flows..."
"Last time gold fell for 3 months running was March 2001. And so...? It had become so rare, you could take its absence for granted to buy gold on the cheap. Between March 2001 and April 2012, the price of gold never fell for 3 months ..."
"You've been sold a bill of goods for the last four to six decades. You've been told that nation-states, democracy and socialism is good. You've been told our monetary system prevents instability. And, while the government and central banks put your unborn children or grandchildren into debt for life they've been telling you that there will be a socialist safety net to protect you and that the "American dream" includes retiring in your 50s or 60s to a wonderful life of golf and lying on the beach..."
Paul Krugman is the high priest of Keynesianism and modern interventionism, of economic improvement through inflation and budget deficits.
Interesting piece by Detlev Schlichter. Here's a snippet:
"Ron Paul started strongly by pointing out that Krugman’s policy is based on the idea that a bureaucratic elite can set interest rates and decide how much money should be created, and that this involves an arrogant and dangerous pretence of knowledge. Very good point.
"Immediately, the apostle Krugman raised his head. “You cannot get the state out of money.” “The Fed has to set interest rates.” “You cannot go back 150 years.”
"I think this is where Ron Paul should have dug in and put Krugman on the defensive:
“Why not? There was no Fed before 1913. That the Fed made things more stable is your assumption. But is it true? People like you and Bernanke tell us that the gold standard was to blame for the Depression. In the run-up to the Depression we had a gold standard but we also had a Fed. How can you say that the gold standard was to blame and the Fed was ultimately the solution?..."
"2. Centralization of the State and economy was the dominant trend for the past two centuries: that model has failed and will be replaced by decentralization. The expansive Central State (a.k.a. the Savior State) now dominates the economy and society; everything not within its direct control is considered a threat. The State enforces a self-serving financial feudalism based on financializing the economy to benefit the few and indenture everyone else into debt-serfs."
"Even as government transparency initiatives and portals like data.gov grow rapidly, the federal government is ending valuable and long-standing data publications.
"One example is the Consolidated Federal Funds Report (CFFR), an annual federal spending report created by the Census Bureau and de-funded in fiscal year 2012. Since 1983, the Census Bureau collected spending information from the back-end systems that track federal awards, contracts, and salaries; compiled it into a single format; and summarized it by program, agency, state, county, and congressional district..."
We've just had the quietest 40 days since the financial crisis began... How often are gold prices as range bound as this? The London gold fix on Wednesday afternoon marked the fortieth trading day in a row that gold fixed ...
by Ben Traynor:
"...There have been signs in recent weeks that the US economy is picking up. This has dampened expectations of further quantitative easing, and has also raised the prospect that the Fed could raise its policy interest rate sooner than previously expected. Few would go so far as to declare the crisis over, but doubts have crept in about how accommodative the Fed will remain.
"I believe this uncertainty is the main reason trading volumes have been low, and gold prices have been stuck in a range. It doesn't help that we are headed towards summer, when the gold market tends to be much quieter (2011 notwithstanding).
"If the tentative US recovery continues, more investors will likely surmise that QE will not happen, and that a rate hike will be sooner rather than later. On the other hand, if the recovery stalls, QE could shoot back up the agenda.
"Sooner or later, gold prices will break out of this range. Whether it will a break higher or a break lower depends a great deal on the health of the US economy...."
"Swiss Gold Stored Internationally – SNB Will Not Disclose Where
"There are increasing calls in Switzerland for transparency regarding the location of the remaining Swiss gold reserves. The Swiss National Bank said overnight that it keeps its gold in “decentralized” locations, according to Walter Meier, a spokesman for the Swiss central bank as reported by Bloomberg.
"The SNB has also sold a large part of the Swiss gold reserves in recent years.
"There are deepening concerns in Switzerland about the debasement of the Swiss franc. The SNB has pegged the franc to the euro and is engaged in the same ultra loose monetary policies as the Federal Reserve, BOE and the ECB. The SNB won't allow the franc to rise above an arbitrary “ceiling” against the euro Walter Meier himself said on April 5 that the SNB is ready to buy foreign currencies in "unlimited quantities."
"Meier’s comments regarding the vastly depleted Swiss gold reserves came after Bayram Dincer, an analyst at LGT Capital Management in Pfaeffikon, Switzerland, called on the SNB to disclose where its gold is stored, in a letter published in the respected Swiss publication Finanz und Wirtschaft..."
"David Levenstein says although gold prices remain range bound, prices firmed up during last week indicating a more bullish sentiment in the short-term."
by David Levenstein:
"...Yet, in spite of the fact that the unemployment rate in Spain hit 24.4%, an 18-year high, and the highest in the industrialised world, and as well as having a contracting economy, a crippled banking sector, soaring bond yields, and increasing unrest in the country, Spain's Economy Minister Luis de Guindos Spanish doesn't see any problem.
"This is exactly how it all started with Greece. And, if you can recall, Papandreou, the then Prime Minister often told the world that Greece does not have a problem. Now in a somewhat familiar tone, Spain's Economy Minister Luis de Guindos Spanish recently said that Spanish banks won't need external aid, nor will Spain need a bailout from its European partners. Mr De Guindos ruled out any Greek-style debt rescue and said there are no plans for new tax increases or budget cuts this year.
"He said the country had no "Plan B", adding: "Spain is not going to ask for a rescue. No intervention will take place.
"A country needs a rescue or an intervention when its sources of financing are cut off. That is to say, what happened in Greece, Portugal and Ireland. That is absolutely not the case in Spain." In the first three months of 2012, Spain's Treasury had already raised 50% of its financing needs for the year, he said, and the banks had enough liquidity to make interest payments for the next two years...."
"Marc Faber: People say the price of gold is in a bubble stage and it is up substantially from the lows in 1999, which was, at the time, around $252 per ounce. But at the same time, we had an explosion of debt, not just government debt, but private sector debt, and an explosion of unfunded liabilities such as in the pension fund industry, and not just with Medicare, Social Security and Medicaid.
"So now, 12 years after the gold's low, we are essentially in a situation where maybe the price of gold should be much higher because the economic and financial conditions are worse than they were 12 years ago. I go to lots of conferences and I usually ask the audience, "How many of you own gold?" Normally, hardly anyone owns it. I've been to conferences with thousands of people attending, and nobody owned any physical gold.
"I doubt we are in a bubble stage. When you went to an investment conference in 1989, everybody owned Japanese stocks. And in 2000, everybody owned tech stocks. That is the bubble, when the majority of market participants own an asset. I think there are more people that own Apple stock than gold...."
Today multi-billionaire Hugo Salinas Price told King World News in stunning detail what he believes to be the frightening plan to “control the world” going forward. He described this as a “very disturbing fact that is facing humanity.” Here is how he described the situation: “Eric, the problems we are seeing in the West are not going to be resolved in any positive way. What we have had in the West, in recent decades, has been the welfare state. The welfare state is, in my view, what I would call, ‘socialism light.’ We’ve had ‘socialism light’ and now we’re going to transition to full-blown socialism.
"This could not be paid for out of taxes: It had to be financed. This is what has caused the explosion of debt in the West. The people who are in power, the elite, do not want to relinquish their power. They plan to retain it under full-blown socialism for the populations of the West.
"This includes all countries that have central banks: They are going to have to follow suit. This is a very disturbing fact that is facing humanity. It means the inevitable decline of industrial civilization, and the inevitable impoverishment of the world’s population..."
A gold standard can work, but only if monetary authorities are honest about the extent to which money has already been debased by rampant printing.
by James G. Rickards:
"Bernanke's public attack on gold comes down to two propositions, both demonstrably false:
"Gold cannot be used as a monetary standard because there's not enough gold. This is one of the most frequent charges used by gold standard opponents. In fact, the quantity of gold is never an issue; the issue is one of price. There are approximately 31,000 metric tons of gold held by central banks today and another 130,000 metric tons in private hands. It is true that if this gold were valued at the current market price of about $1,650 per ounce, a money supply of equivalent value would be far less than the current money supply. This would be highly deflationary and probably result in a contraction of world trade and gross domestic product. However..."
"Doesn’t it sound silly to imagine a proud Olympic champion sporting around a dollar ribbon as first prize? Can you imagine a champion’s homecoming as they parade by a cheering crowd so proud of their winner’s feat, all while wearing a reward made of fiat currency?
"If this scenario sounds silly then I want to ask each reader one question. Is this as silly as a society saving, working, or investing for the same fiat reward?
"The inevitable return to gold will happen by choice or natural monetary forces. We will look back at the last few decades of credit expansion (borrowed or created currency) and see all wealth derived from such a period as futile.
"But like a 4-year-old being told the party must end, we too must accept a lifestyle and society built on easy credit must also come to a sobering end. This is not easy for some, in fact, this is unimaginable for most..."
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