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Rickards on China and QEIII: Coming in Sept.

Rickards on China and QEIII: Coming in Sept. | The Truth Behind the Headlines | Scoop.it
We need another rounding of quantitative easing to force China to revalue its currency and lift U.S. stock markets.

 

The excellent Jim Rickards gives us a brief run-down on the way in which China's response to the Fed's tight moentary policy and creation of the fear trade over Europe will result in the next series of steps to allow QEIII to finally arrive for real.

 

Now, couple this with the other real problem of a world already awash in money, a rising tide swallowing all boats, as it were and this will send the markets and gold substantially higher, just in time for Obama to win in early November.

 

The Fed still has enough time to goose markets and employment data to serve the incumbent.  But, they better be careful that they do not ignite a run-away inflation scenario if China and her trading partners continue to de-emphasize the dollar in their inter-national trade.  At which point the Fed may have to reverse course swiftly and drain moey from the system, but only after the election is over.

 

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Crony Chronicles: I Want To Be A Crony

Children used to have aspirations to achieve greatness in the private sector. But what are they learning now?

H/T to the LRC Blog

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S&P and Gold Top ETF Flows for the Week | stockpricetoday.com

S&P and Gold Top ETF Flows for the Week | stockpricetoday.com | The Truth Behind the Headlines | Scoop.it
For the period from Friday, August 17th through Thursday August 23rd both the S&P 500 ETF (AMEX:SPY) and Gold ETF (AMEX:GLD) saw the biggest flow of funds...
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Gold zooms to new record at Rs 31300 on strong global cues - Times of India

Gold zooms to new record at Rs 31300 on strong global cues - Times of India | The Truth Behind the Headlines | Scoop.it
Gold zooms to new record at Rs 31300 on strong global cuesTimes of IndiaTraders said gold's rally in the global markets where it recorded biggest weekly gain since January amid speculation that the Federal Reserve will take additional steps to spur...


Mix a rally with a weak Rupee and you get this.  The same thing is coming for the Euro.

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Gold Ends the Week Up $56 | stockpricetoday.com

Gold Ends the Week Up $56 | stockpricetoday.com | The Truth Behind the Headlines | Scoop.it

It was a stunning week for the metal of monetary excellence. The technical breakout from horizontal resistance at$1633 per ounce was confirmed with a very bullish closing session for the week on Friday. Gold (AMEX:GLD) closed at $1670.75 on the October contract after the Globex session Friday afternoon. It hit an intraday high near $1678 but settled down on a mix of profit-taking and control near the next level of technical important, $1680-1690. Looking at monthly historical data for Gold, there is still room to the upside for this month, so next week will be interesting to say the least.

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Asia gets its fastest data cable

Asia gets its fastest data cable | The Truth Behind the Headlines | Scoop.it

A new high-speed undersea data cable, Asia Submarine-cable Express, opens to traffic in Asia potentially aiding financial traders.


HFT algo-traders rejoice.  The rest of the world weeps.  Actually, I kid.  This is a big deal in the eventual linking in all of the ASEAN stock exchanges as well as the opening up bandwidth between these some of the most connected countries in the world. 


Connecting Tokyo, Hong Kong and Singapore, the three giants of Asian finance is a noteworthy event.

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Silver Crosses $30, Gold Eyes $1700 | stockpricetoday.com

Silver Crosses $30, Gold Eyes $1700 | stockpricetoday.com | The Truth Behind the Headlines | Scoop.it

Thursday was yet another massive up day for the precious metals as both Gold (AMEX:GLD) and Silver (AMEX:SLV) added to Wednesday’s gains in the Asian markets setting up a continuation of the rally that began last week. We are moving towards the end of the September contract delivery month and the markets for both metals remain extremely tight. By a number of traditional metrics the markets look over-extended in the short-term but do not be surprised if this rally moves forward one more day.

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Gold, Silver Respond to the Fed, Push Higher | stockpricetoday.com

Gold, Silver Respond to the Fed, Push Higher | stockpricetoday.com | The Truth Behind the Headlines | Scoop.it

So, many on the FOMC believe that QE will be necessary if things continue in the way that they have been going for months now. Fine. but, inflation is tame yet M2 is rising at nearly r8% again and the monetary base is expanding as repo operation have begun again for the first time in 4+ years. It’s always a hoot watching the futures market right before the release of anything Fed related because if there is one thing that is Keplerian about the markets it is the direction of Gold (AMEX:GLD) in those moment of anticipation of the pronouncements from the monetary wizards of the hill, which is, of course, down.

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Silver to Join Gold as Reserve Asset - alphaVN.com

Silver to Join Gold as Reserve Asset - alphaVN.com | The Truth Behind the Headlines | Scoop.it

There is a report floating around out there that a former member of the board at the China’s central bank, the People’s Bank of China (PBoC), that he is recommending that China not only disgorge themselves of 20% of the U.S. Treasury reserves and move them into strategic assets but that they add Silver to that list. Silver, at this point, is one of the world’s most important industrial metals, along with being one of the most intriguing from an investment and monetary history perspective. This may have lit the fire underneath Silver earlier in the week which began ignition for Gold.


The minutes from the Federal Reserve’s latest meeting may have poured gasoline on both metals.

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Silver Explodes Past $28.30, Eye Now on $30 | stockpricetoday.com

Silver Explodes Past $28.30, Eye Now on $30 | stockpricetoday.com | The Truth Behind the Headlines | Scoop.it
I’ve kept my mouth shut about the price action in Silver (AMEX:PSLV) for the past few weeks because there was not much to say in the matter. Price action has been constructive but given the uncertainty in the global environment and the obvious hostility towards silver exhibited by the powers that be anyone adding to their position in these past few months should be given a medal for bravery. Under conditions like these and with an asset as volatile as silver taking or adding to a position during a consolidation period is taking an extraordinary risk with your money.
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Canary in the Coal Mine for Silver Manipulation? PBOC Advisor Recommends China Add Silver to Official Reserves | SilverDoctors.com

Canary in the Coal Mine for Silver Manipulation? PBOC Advisor Recommends China Add Silver to Official Reserves | SilverDoctors.com | The Truth Behind the Headlines | Scoop.it
A prominent PBOC Advisor has stated that US Treasuries are not safe in the medium to long term, and has recommended China increase it's gold reserves as we...


They may be overstating the effect, but since silver supply and demand fundamentals are sooooo tight, even just a small amount of buying by the PBoC would crater the silver shorts on the COMEX.  If I were long JPMorgan I wouldn't be by 9:35am tomorrow morning.

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Number of the Week: Millions of Americans Don’t Get Paid Vacations

Number of the Week: Millions of Americans Don’t Get Paid Vacations | The Truth Behind the Headlines | Scoop.it
According to data from the Bureau of Labor Statistics this week, 59% of American workers got access to paid vacation in 2011. 39.7%--or about 55 million people—did not.


The Wal-Mart-ization of the U.S. labor market continues.  Not that we don't deserve it.  We spent the next 4 years of capital so it makes sense that we don't get to have nice things anymore.



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Options Expire, Markets Drift Higher | stockpricetoday.com

Options Expire, Markets Drift Higher | stockpricetoday.com | The Truth Behind the Headlines | Scoop.it

If there was ever a day that could be held up as an example of what the summer doldrums looks like one could do a lot worse than use Friday. With the markets already trading on some of the thinnest volume since the advent of high-frequency churn for most of the month, it should have been no surprise that nothing of consequence would happen on the day of options expiry for August.

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When It All Goes Bidless: What Losing $1 Billion In 100 Milliseconds Looks LIke | ZeroHedge

It's quiet out there; too quiet. But if you were watching carefully this morning, everyone's favorite government-subsidized bank - Citigroup - flash-crashed to the tune of a $1.2bn market-cap loss in a fraction under 100 milliseconds.

Via Graham Jervis
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Apple Beats Samsung in Court, Rationality Weeps | stockpricetoday.com

Apple Beats Samsung in Court, Rationality Weeps | stockpricetoday.com | The Truth Behind the Headlines | Scoop.it
I'm not the world's biggest fan of intellectual property in this world.  Actually, truth to be told, I think intellectual property is an oxymoron.  The...
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Iran banking on American straits strategy. Sanctions work for Iran

Iran banking on American straits strategy. Sanctions work for Iran | The Truth Behind the Headlines | Scoop.it
THE Iranians are laughing at the US. Not chuckling, real belly laughing. They are laughing because the US has fallen right into the trap that they, the Iranians, laid out. And that was their plan.
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Customer Deposits Are Property of the Bank: Close Your Account NOW

Customer Deposits Are Property of the Bank: Close Your Account NOW | The Truth Behind the Headlines | Scoop.it

Susanne Posel, Contributor

 

"In June of 2012, Eric Bloom, former chief executive, and Charles Mosely, head trader of Sentinel Management Group (SMG) were indicted for stealing $500 million in customer secured funds. Both Mosely and Bloom were accused of “exposing” customer segregated funds “to a portfolio of highly risky derivatives.”

 

"These customer funds were used to “back up personal investments” which were part of “collateral for a loan from Bank of New York Mellon” (BNYM). This loan derived from stolen customer monies was “used to purchase millions of dollars worth of high-risk, illiquid securities, including collateralized debt obligations, or CDOs, for a trading portfolio that benefited Sentinel’s officers, including Mosley, Bloom and certain Bloom family members.”

 

"Fast forward to August 9th of 2012, and the 7th Circuit Court of Appeals (CCA) rules that BNYM can be moved to first in line of creditors over the customers that had their funds stolen by SMG. ...."


Via Hal
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Vietnam gold prices jump 5 pct on rising demand-bankers | Reuters

Vietnam gold prices jump 5 pct on rising demand-bankers | Reuters | The Truth Behind the Headlines | Scoop.it
HANOI, Aug 23 (Reuters) - Retail gold prices in Vietnam haverisen about 5 percent in recent days on rising domestic demand,as investors switched savings in dong to the safe-haven metal,bankers said...

The situation in vietnam is becoming dangerous.  The banking sector is being torn apart at the seams by the Central Bank and forces arrayed against it.  That is the only explanation for the arrest of two members of the board tof Asia Commercial Bank. 


Vietnamese have an enormous love affair with gold and for good reason, their national currency has never been stable.  The past year's worth of stability in the dong is nearly unprecedented.  If I could ever have a kind word to say about a central banker it would be the handling of the situation that was inheritied by current Governor Binh.


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Huge Stimulus Fast And An End To The Fed/Legislative Standoff « Jim Sinclair's Mineset

Huge Stimulus Fast And An End To The Fed/Legislative Standoff « Jim Sinclair's Mineset | The Truth Behind the Headlines | Scoop.it

Quoth Jim Sinclair:


Stay the course! The current pressure on gold shares by hedgies is because Romney says, if elected, he will fire Bernanke and will not want to see QE 3.

Now what impact does that have to have on Bernanke? I would say he now really wants to see Obama elected. That speaks very well for huge stimulus fast and an end of the standoff between the Federal Reserve and the US legislative.


To this i would add taht if Bernanke is indeed going to try and save his job by stimulating for Obama at this late date it's a Chinese Finger Trap for both of them as that will not only send Gold over $200 but Brent Crude over $125 and that means $5 gas in California by the Election and Obama can't have that.  Food inflation will take off as well.  If you think $9 per bushel wheat is bad now, I would suggest going primal.


If he counters with a release from the SPR to quell the gasoline markets Romney will have a field day with him.  Of course, Romney is the worst Republican candidate for President since Bob Dole and nearly as bad as the Brilliantly-Inept Walter Mondale so, in the end, Obama may skate through with a win without having to drone strike the living daylights out of Iran.


Remember, folks voters love a war-time president. 



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Pimco Increases Gold Allocation From 10.5% To 11.5% In ...

Pimco Increases Gold Allocation From 10.5% To 11.5% In ... | The Truth Behind the Headlines | Scoop.it
Moments ago, the FOMC members formalized their opinion on where inflation is heading: "Most members continued to anticipate that, with longer-term inflation expectations stable and the existing slack in resource utilization ...


It's not like Bill Gross hasn't been vocal about what he's thought about the economy or the Fed's role in it.  He and El-Erian have both been pretty blunt about the situation.  Good to see that they are putting their money where their mouths have been.  Even the Kings of Bonds have to realize that chasing the last bit of DV01 capital gains is just being piggish after a generation of not fighting the Fed. 


As Jim Sinclair always says, the middle 60-70% of any move is what you want to capture and leave the rest on the table for the God of Greed.



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U.S. Politicians are the Real Money Launderers - alphaVN.com

U.S. Politicians are the Real Money Launderers - alphaVN.com | The Truth Behind the Headlines | Scoop.it

It’s all part of a bigger picture and boils down ultimately to money and fame. A little known regulator going after Standard Chartered, with the backing of a powerful Senator (Chuck Schumer), should be viewed as a move to gain reputation. In the U.S. elections, outside of presidential ones (which seemingly never end anymore), begin in earnest 3-4 months out from Election Day. The timing on these Standard Chartered and HSBC investigations is dubious at best. There are no coincidences in American politics. It all runs according to a particular script whose narrative is intended to confuse and control.

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Gold Follows Silver For Once | stockpricetoday.com

Gold Follows Silver For Once | stockpricetoday.com | The Truth Behind the Headlines | Scoop.it

Normally when a new bullish wave within the precious metals bull market begins it is Gold (AMEX:GLD) that leads the charge. Silver’s (AMEX:SLV) industrial characteristics usually allow it to lag behind, languishing along with the mediocre equities and other secondary commodities while Gold and oil (AMEX:USO) take center stage. Then, when Gold is finally too expensive does money rotate into Silver, a much thinner and more volatile market, and it explodes to the upside, destroying over-confident short-side operators and making short-lived millionaires of the few crazy enough to play its game.


But, sometimes, what a game it is!

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Caterpillar Moving Earth and the Dow - alphavn.com

Caterpillar Moving Earth and the Dow - alphavn.com | The Truth Behind the Headlines | Scoop.it

In these first few days of the current earnings season Wall St. was extremely dejected as misses outnumbered beats by a 3 to 1 margin, mainly due to the European debt crisis, slower growth in emerging markets and headwinds facing the U.S. Even the mighty Apple (NASDAQ:$AAPL) missed expectation, which frankly had gotten even too lofty for Apple. That the very ethical sell-side analysts all missed Apple’s revenue figure by 10% for the quarter betrays just how far the major brokerage firms have fallen towards boiler room status. I keep waiting for Goldman-Sachs to just pull down the mask and reveal themselves to be J.T. Marlin. But, that crowd of vipers got an uplift thanks to a blockbuster report from Caterpillar (NYSE:$CAT) that easily trumped the Street’s expectations.

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Obama’s Quest For Re-Election Points to SPR Release | stockpricetoday.com

Obama’s Quest For Re-Election Points to SPR Release | stockpricetoday.com | The Truth Behind the Headlines | Scoop.it

With Brent Crude (AMEX:BNO) having risen back to $114 per barrel and West Texas Intermediate Crude (AMEX:USO) back over $96 per barrel, the Obama administration is looking to put fear into the oil futures markets with another threat of a release from the Strategic Petroleum Reserve to temporarily dampen prices. The problem, of course, is that oil prices are rising due to a number of factors, all of which Mr. Obama had a great deal of either direct control over or his actions created unintended consequences (for him, of course). Off the top of my head they are

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China's Gold Ambitions and What They Aren't Saying

China's Gold Ambitions and What They Aren't Saying | The Truth Behind the Headlines | Scoop.it
China’s largest gold producer is already a force to be reckoned with. But if the visionary head of China National Gold Corporation gets his way, it’s going to be much, much bigger.


The fact that China is talking about the role of their gold reserves now, in the Financial Times no less, speaks volumes as to where they are in achieving their reserve ratio of gold to foreign exchange reserves for the Yuan.   It's a well-known secret that China has effectively nationalized their mining industry with not an ounce of production leaving the country for export or exchange purposes (except to buy the ood lot of Iranian oil at cut-rate prices) and that they've been doinng this for years.


The last time they announced a change in their official Gold reserves it was June 2009 and it shocked the markets.  from that point forward central banks have been net buyers of gold on a monthly basis far more often than they were net sellers.  The hoarding of Gold for reserve purposes had begun with that announcement. 


They've imported 383 tons of Gold in the first half of the year through Hong Kong.  That's a staggering amount of Gold.


The timing caused maximal damage to the U.S. politically as well.  It  is also no secret that China and the U.S. are headed for a real showdown.  Military showdown?  I don't think so.  I think WWIII is already happening and it's happening in the oil fields of the Middle East and the OTC derivative and gold swap markets in London, NY and Hong Kong.


So, what do we expect to happen with the next announcement?   My guess is it will ignite a massive sale of the Dollar and a commensurate rush into Gold.  China has inked no less than 30 bilateral trade agreements with countries around the world.  They are needing fewer dollars to facilitate their trade and this loss of flow is what is staying the Fed's hand on above-board QEIII.  The Fed has been in a tightening/sterilizing mode for months trying to use the Dollar and the Euro-zonefear tradeto attack its rivals in the currency markets.


With the Bond markets topping I'm wondering if the acceleration of gold importation is being done now with U.S. treasuries and not just recycled trade dollars now that the U.S. economy is falling off a cliff.

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