By: Julie Crawshaw
(MoneyNews.com) Sprott Asset Management CEO Eric Sprott is very long on gold and not very optimistic about cyclical metals like copper.
“Gold looks better today than it ever did before,” Sprott says, because of ongoing sovereign debt concerns in Greece and other "PIIGS" nations — Portugal, Italy, Ireland, Greece and Spain — as well as easy monetary policies across the globe.
“Some of the smartest investors in the world” are bullish on gold, the Canadian hedge fund manager says.
Tuesday, Gold for June delivery jumped $8.20 to settle at $1,162.20 an ounce on the Comex division of the New York Mercantile Exchange.
Meanwhile, “I still have a deep, deep concern over leverage in the banking system,” Sprott said, noting the inability of governments who are spending vast amounts of money to generate much growth in GDP.
Read Entire Article
Wednesday, April 28, 2010
Tuesday, April 20, 2010
Sprott's John Embry Discusses Gold Manipulation
Tyler Durden
ZeroHedge
"While on the subject of gold manipulation, last month I referred to the cartel's specific modus operandi on those days when its members choose to take gold lower. However, this is only one of their ploys.
Another page in their playbook relates to keeping enthusiasm in the gold sector as subdued as possible. Gold is seldom, if ever, allowed to rise more than two percent on a given day. If strong buying propels gold higher, massive selling inevitably appears when it has risen two percent and continues until gold is stopped dead in its tracks. The next day, to ensure that there is no follow-through fervor, any further upside is capped at a one percent gain.
Following that, gold is held in check until the long speculators who propelled the original rise lose patience. At that point, the cartel looks for an opportunity to clean them out. I realize this sounds pretty Machiavellian but I can only point to the trading patterns as confirmation." John Embry of Sprott Asset Management
Read Entire Report
ZeroHedge
"While on the subject of gold manipulation, last month I referred to the cartel's specific modus operandi on those days when its members choose to take gold lower. However, this is only one of their ploys.
Another page in their playbook relates to keeping enthusiasm in the gold sector as subdued as possible. Gold is seldom, if ever, allowed to rise more than two percent on a given day. If strong buying propels gold higher, massive selling inevitably appears when it has risen two percent and continues until gold is stopped dead in its tracks. The next day, to ensure that there is no follow-through fervor, any further upside is capped at a one percent gain.
Following that, gold is held in check until the long speculators who propelled the original rise lose patience. At that point, the cartel looks for an opportunity to clean them out. I realize this sounds pretty Machiavellian but I can only point to the trading patterns as confirmation." John Embry of Sprott Asset Management
Read Entire Report
Monday, April 19, 2010
Now We Know the Truth. The Financial Meltdown Wasn’t a Mistake — It Was a Con
By: Will Hutton
The Observer
The global financial crisis, it is now clear, was caused not just by the bankers’ colossal mismanagement. No, it was due also to the new financial complexity offering up the opportunity for widespread, systemic fraud. Friday’s announcement that the world’s most famous investment bank, Goldman Sachs, is to face civil charges for fraud brought by the American regulator is but the latest of a series of investigations that have been launched, arrests made and charges made against financial institutions around the world.
Big Finance in the 21st century turns out to have been Big Fraud. Yet Britain, centre of the world financial system, has not yet levelled charges against any bank; all that we’ve seen is the allegation of a high-level insider dealing ring which, embarrassingly, involves a banker advising the government. We have to live with the fiction that our banks and bankers are whiter than white, and any attempt to investigate them and their institutions will lead to a mass exodus to the mountains of Switzerland. The politicians of the Labour and Tory party alike are Bambis amid the wolves.
Just consider the roll call beyond Goldman Sachs. In Ireland Sean FitzPatrick, the ex-chair of the Anglo Irish bank was arrested last month and questioned over alleged fraud. In Iceland last week a dossier assembled by its parliament on the Icelandic banks – huge lenders in Britain – was handed to its public prosecution service. A court-appointed examiner found that collapsed investment bank Lehman knowingly manipulated its balance sheet to make it look stronger than it was – accounts originally audited by the British firm Ernst and Young and given the legal green light by the British firm Linklaters. In Switzerland UBS has been defending itself from the US’s Inland Revenue Service for allegedly running 17,000 offshore accounts to evade tax. Be sure there are more revelations to come – except in saintly Britain.
Read More
The Observer
The global financial crisis, it is now clear, was caused not just by the bankers’ colossal mismanagement. No, it was due also to the new financial complexity offering up the opportunity for widespread, systemic fraud. Friday’s announcement that the world’s most famous investment bank, Goldman Sachs, is to face civil charges for fraud brought by the American regulator is but the latest of a series of investigations that have been launched, arrests made and charges made against financial institutions around the world.
Big Finance in the 21st century turns out to have been Big Fraud. Yet Britain, centre of the world financial system, has not yet levelled charges against any bank; all that we’ve seen is the allegation of a high-level insider dealing ring which, embarrassingly, involves a banker advising the government. We have to live with the fiction that our banks and bankers are whiter than white, and any attempt to investigate them and their institutions will lead to a mass exodus to the mountains of Switzerland. The politicians of the Labour and Tory party alike are Bambis amid the wolves.
Just consider the roll call beyond Goldman Sachs. In Ireland Sean FitzPatrick, the ex-chair of the Anglo Irish bank was arrested last month and questioned over alleged fraud. In Iceland last week a dossier assembled by its parliament on the Icelandic banks – huge lenders in Britain – was handed to its public prosecution service. A court-appointed examiner found that collapsed investment bank Lehman knowingly manipulated its balance sheet to make it look stronger than it was – accounts originally audited by the British firm Ernst and Young and given the legal green light by the British firm Linklaters. In Switzerland UBS has been defending itself from the US’s Inland Revenue Service for allegedly running 17,000 offshore accounts to evade tax. Be sure there are more revelations to come – except in saintly Britain.
Read More
Wednesday, April 14, 2010
Gold Specialist Exclusive - Emergency Release
Please feel free to forward this on to your friends and family so they too may take advantage of what I am about to tell you. Some of the signs that we are seeing are very foretelling but unfortunately, the future doesn’t look very good. Of course, you won’t hear any dismal warnings from the Mainstream Media and certainly not from the District of Criminals in Washington, but you will hear it here at the Gold Specialist Blog.
If you did spend your time listening to the Mainstream Media and those in Washington, it might sound something like this:
“[1930 will be] a splendid employment year.” — U.S. Department of Labor, New Year’s Forecast, December 1929
“I am convinced that through these measures, we have reestablished confidence.” — Herbert Hoover, U.S. President, December 1929.
“While the crash only took place six months ago, I am convinced we have now passed through the worst — and with continued unity of effort we shall rapidly recover. There has been no significant bank or industrial failure. That danger, too, is safely behind us.” — Herbert Hoover, U.S. President, May 1930.
“This is the time to buy stocks. This is the time to recall the words of the late J. P. Morgan ... that any man who is bearish on America will go broke. Within a few days there is likely to be a bear panic rather than a bull panic. Many of the low prices as a result of this hysterical selling are not likely to be reached again in many years.” — R. W. McNeel, market analyst, as quoted in the New York Herald Tribune, October 30, 1929
“The Wall Street crash doesn't mean that there will be any general or serious business depression ... For six years American business has been diverting a substantial part of its attention, its energies and its resources on the speculative game ... Now that irrelevant, alien and hazardous adventure is over. Business has come home again, back to its job, providentially unscathed, sound in wind and limb, financially stronger than ever before.” — BusinessWeek, November 2, 1929
“For the immediate future, at least, the outlook (stocks) is bright.” — Irving Fisher, Ph.D. in Economics, in early 1930
The problem with this thinking is that the depression didn’t end until the 1940’s maybe longer depending on who you talk to. Had you heeded the words of the Mainstream Press, Pundits and Talking Heads, you would have been in for a decade of financial disaster.
The Government Wants Your 401K’s and IRA’s, What’s Next?
Some of our more frequent readers might remember last month’s warning that the Federal Government wants your 401K’s and IRA’s – well this month I can report to you that the Government also wants your pensions. This should send chills down the spine of the supporters of a free and open society. It’s almost an immediate answer to the proverbial question of “what’s next” well what’s next is that the Government is wanting to use your pension funds to prop up the assets of failed banks. Take a minute and give that last sentence a second look, then take the time to read the Bloomberg article entitled “Failed Banks May Get Pension-Fund Backing as FDIC Seeks Cash.”
The Real Story on Inflation
It is becoming increasingly obvious that the reckless spending by Governments around the world will lead to an inflationary crisis, perhaps on a scale never before seen. One example is the price of steel. A recent report put out by MSN money, shows that the price of steel is set to rise by more than 1/3 over the next year, a serious indicator of inflation.
Furthermore, since 1996 the Government has changed the way it calculates CPI nine times. The United State Constitution specifies the importance of using just weights and measures. If the calculation of one of the most important economic indicators available has been changed nine times in fourteen years, does that in any way reflect a system of “just” weights and measures? Of course not. But the reasoning behind the change is simply to fleece the public and cover the truth.
In fact, when a broader index of inflationary indicators like the commodity index are included in the CPI it shows that inflation is SOARING and is nowhere near the benign numbers that the Government is reporting.
Make sure to consider the articles “Inflation Warning Etched in Steel” and “The Coming Inflation Wave.”
“Wake Up Fools” – The Bond Market
Houston, we have a problem. The Budget deficit of the United States just hit a record high; the problem though is the interest on Public Debt is at an all time low. In order to finance our ever-growing Nanny State, the endless bailouts of Wall Street and the takeover of the Medical System, Uncle Sam must be able to easily sell its bonds, but this isn’t the case. In fact the recent selloff in United States Treasury’s have risen Sovereign Debt Fears – translation: What happened in Greece could very well, and most likely will, spread Worldwide. Consider the article entitled “Selloff in Treasuries Raises Sovereign Debt Fears.”
Many of us know that the Dow Jones just busted throughout the 11,000 level for the 3rd time in the last decade, but how many of you know that the bank of International Settlements just put out a report saying that here in the land of the free our Debt to GDP level will exceed 400% by 2040? Friends, a Debt to GDP ratio of 400% equals instant, guaranteed default. With a scenario like this brewing does it make sense to own stocks? Consider the article entitled “Bank Of International Settlements Sees US Debt/GDP At Over 400% By 2040.”
How can this news be good for stocks? It isn’t. Moody’s took note and actually put out a warning regarding the profitability of companies, specifically the financials in the years to come. These details are further verified in the article entitled “Moodys Warns of Pain Ahead For Financials; Profitability Concerns Due to Record Charge Offs.”
Since markets never lie, these facts have led to some interesting revelations the most important of which is that according to the bond market, it is currently safer to lend money to Warren Buffet than it is the United States of America. Yup, you read that right, the market says that lending to the United States is more risky than lending to Warren Buffet meaning lending to the United States is sheer lunacy. How did this happen?
Well, Moody’s just issued another separate report warning what we have been warning for the last 12 months - that the United States could be destined to lose its triple AAA Rating. It says that the United States is heavily leveraged adding that acute challenges lie ahead for the United States and other developed nations. Did you ever think you would see the day when the richest most powerful nation on the face of the planet would be seen as a bigger credit risk than Warren Buffets Berkshire Hathaway? That day has come. With evidence such as this, tell me, what foreigners are stupid enough to keep financing our consumption through buying our bonds? Not many.
For more on the unfolding crisis in the Bond Markets, consider the Articles “Obama Pays More than Buffett as US Risks AAA Rating,” “Kiss AAA Goodbye Says Moodys,” and “As Budget Deficit Hits Record High, Interest On US Public Debt Hits Record Low.”
How Does This Effect the Gold and Silver Markets?
Just to recap what we have learned up to this point – Government Officials and the Mainstream Media are lying to you, they want a portion of your IRA’s, and 401K’s forced into annuities based on bonds and they would like to have your Pension Funds to back up the assets of failed banks, inflation numbers are far off base, and the Bond Markets are signaling a crash ahead. All of these events point to much higher Gold and Silver prices in the future, but there is more. Much more.
We told you last year that Central Banks were buying Gold instead of selling it, this has been further verified in the article entitled “Central Bank Gold Holdings Expand at Fastest Pace Since 1964.” We have also warned you that the issue of “peak” Gold was on the horizon, meaning that the readily available Gold in the World had already been mined and was quickly diminishing, this can be researched further in the article entitled “World Gold Council Sees New World of Opportunity as Peoples Bank of China Expected to Buy Gold as their Mines Become Depleted.”
What does this mean for the Gold Market? Well a very respectable General Counsel for a huge hedge fund – Long Term Capital Management – says that a $5,500 Gold price would be fair value based on the economic conditions that are currently in place. Saying there is “Little Time to Avoid Catastrophe and Almost No Exit.” There are others that say Gold can go much higher than that and in the section below, you will find out just how that might happen.
And, don’t forget Silver. Silver has been soaring of late and it is oftentimes overlooked as the poor man’s Gold. Let me assure you though, the market forces setting up for Silver look to be even stronger than that of Gold. I recently read one of the most important articles on Silver in some time, in it the author unveils an amazing fact:
According to the Act that set up the Gold and Silver Eagle programs in the United States, in order to mint Gold and Silver Eagles the United States Mint MUST buy only Gold and Silver minted in the United States. The problem is that Silver Eagle sales are soaring to near 40 Million Ounces of Silver per year which is exactly the amount produced by U.S. mines each year. Couple that information with the fact that 40% of Silver is used for industrial applications, 30% Jewelry, 20% for Photography, with a small fraction being left over for investment. However, according to U.S. mine production 100% of the Silver mined in the United States is being used strictly to mint Silver Eagles.
I shouldn’t have to tell you that this is a perfect setup for a Silver explosion. During the bull market of the 70’s when Gold leapt by 700% it was Silver that took the cake – it went up 1400%. Take the time to read the article entitled “Silver Sales are Soaring,” you will be glad that you did.
None Dare Call it a Conspiracy
We at the The Gold Specialist blog rarely talk about the concerted effort by Governments around the World and Banks working on their behalf, to suppress the price of Gold and Silver. Although the evidence of this is clear and there are many voices within the industry that have been crying foul for many years, we chose not to cover it because the evidence was technically un-provable. Not anymore. The developments of this conspiracy were the driving force behind this emergency mid month release.
Thanks to the insider “whistleblower” Andrew McGuire, it’s going to be extremely hard to put the Gold and Silver Price Manipulation Conspiracy genie back in the bottle. During a recent hearing into the manipulation that was held by the Governmental Regulating Authority the Commodities Futures Trading Commission, Mr. McGuire confirmed the obvious – that the London Bullion Market Association is a Paper Gold Ponzi Scheme. According to McGuire the LMBA is engaging in fraud that is detrimental to both Gold and Silver Markets, claiming that the London Bullion Association is trading over 100 TIMES the amount of Gold that it actually has to back the trades. Within days of his testimony, Mr. McGuire and his family were involved in a hit and run car crash, which is purely coincidence we are sure. Here is more on the subject from the Gold Anti Trust Action Committee:
“On March 23, 2010, GATA Director Adrian Douglas was contacted by a whistleblower by the name of Andrew Maguire. Maguire is a metals trader in London. He has been told first-hand by traders working for JPMorganChase that JPMorganChase manipulates the precious metals markets, and they have bragged to how they make money doing so.
In November 2009 Maguire contacted the CFTC enforcement division to report this criminal activity. He described in detail the way JPMorgan Chase signals to the market its intention to take down the precious metals. Traders recognize these signals and make money shorting the metals alongside JPM. Maguire explained how there are routine market manipulations at the time of option expiry, non-farm payroll data releases, and COMEX contract rollover, as well as ad-hoc events.
On February 3 Maguire gave two days' warning by e-mail to Eliud Ramirez, a senior investigator for the CFTC's Enforcement Division, that the precious metals would be attacked upon the release of the non-farm payroll data on February 5. On February 5, as market events played out exactly as predicted, further e-mails were sent to Ramirez while the manipulation was in progress.
It would not be possible to predict such a market move unless the market was manipulated.”
So what did our strong “REGULATORS” do about the absolutely provable manipulation? Nothing. Not yet anyway.
We have been warning for years to stay away from “Paper” gold like the ETF’s GLD, SLV, and other similar “investment vehicles” if you dare call them investment vehicles. With the testimony of Mr. Mcguire we now know that these ETF’s play a critical role in the manipulation scheme. In fact, the numbers are so dubious that if all exchange traded funds that were supposedly storing gold on your behalf were faced with a demand for delivery from their clientele there would be no Gold left anywhere in the World.
This “rigging” of the market is commodity wide dealing with both Gold and Silver. The problem with trying to rig markets is that NOTHING is stronger than the free market and that market manipulation, 100% of the time, without fail, will eventually blow up into the face of the manipulators. Through trying to suppress the metals markets, the manipulators are trying to hold a beach ball underwater, it’s inevitable that beach ball is going to come rocketing out of the water at some point, and at that point, it’s possible that Gold could soar through $10,000/oz according to some analysts. The same results could be said for Silver. Again, the word is out, the genie is out of the bottle, there is no putting it back in.
Furthermore, this isn’t an isolated event. A recent audit of the Canadian Bullion Bank showed that the vaults are practically empty as well. Although they are supposedly the custodians of a very large ETF, and should be flush with Gold, but they aren’t. It even led one of the men that entered the vault to comment - "The game ends when the people who own all these paper obligations say enough and take physical delivery, and that's when the mess will occur."
Consider the Articles “Former Goldman Analyst Confirms LMBA Gold Market is ‘Paper Gold’ Ponzi Scheme,” “Will Fraud Lift Gold Prices to $10,000 Per Ounce, ” “National Inflation Association Says Silver Short Squeeze Immanent” and “The Latest Gold Fraud Bombshell: Canada’s Only Bullion Bank Gold Vault is Practically Empty.”
Your Open Invitation to Attend!
Mr. McGuire mentioned that the End Game with Paper Gold is near, and that a “mess” is on the horizon. The problem is that the so called “mess” isn’t on the horizon. It is already here, and it seems to be one of the main drivers of the recent surge in Silver and Gold. This massive fraud unfolding could be the instigator of a BIG run in precious metals and now is the time that you can take advantage of it.
Even absent the abysmal fraud and manipulation scheme, the events covered in the first 2/3 of this report should be enough to send Gold and Silver soaring – combine the two and we have the makings of an event that someday will be looked back upon in history. Judging from the evidence, that event will likely include huge advances in the prices of Gold and Silver. An event that could make $3,000 Gold and $100 Silver seem cheap.
If you did spend your time listening to the Mainstream Media and those in Washington, it might sound something like this:
“[1930 will be] a splendid employment year.” — U.S. Department of Labor, New Year’s Forecast, December 1929
“I am convinced that through these measures, we have reestablished confidence.” — Herbert Hoover, U.S. President, December 1929.
“While the crash only took place six months ago, I am convinced we have now passed through the worst — and with continued unity of effort we shall rapidly recover. There has been no significant bank or industrial failure. That danger, too, is safely behind us.” — Herbert Hoover, U.S. President, May 1930.
“This is the time to buy stocks. This is the time to recall the words of the late J. P. Morgan ... that any man who is bearish on America will go broke. Within a few days there is likely to be a bear panic rather than a bull panic. Many of the low prices as a result of this hysterical selling are not likely to be reached again in many years.” — R. W. McNeel, market analyst, as quoted in the New York Herald Tribune, October 30, 1929
“The Wall Street crash doesn't mean that there will be any general or serious business depression ... For six years American business has been diverting a substantial part of its attention, its energies and its resources on the speculative game ... Now that irrelevant, alien and hazardous adventure is over. Business has come home again, back to its job, providentially unscathed, sound in wind and limb, financially stronger than ever before.” — BusinessWeek, November 2, 1929
“For the immediate future, at least, the outlook (stocks) is bright.” — Irving Fisher, Ph.D. in Economics, in early 1930
The problem with this thinking is that the depression didn’t end until the 1940’s maybe longer depending on who you talk to. Had you heeded the words of the Mainstream Press, Pundits and Talking Heads, you would have been in for a decade of financial disaster.
The Government Wants Your 401K’s and IRA’s, What’s Next?
Some of our more frequent readers might remember last month’s warning that the Federal Government wants your 401K’s and IRA’s – well this month I can report to you that the Government also wants your pensions. This should send chills down the spine of the supporters of a free and open society. It’s almost an immediate answer to the proverbial question of “what’s next” well what’s next is that the Government is wanting to use your pension funds to prop up the assets of failed banks. Take a minute and give that last sentence a second look, then take the time to read the Bloomberg article entitled “Failed Banks May Get Pension-Fund Backing as FDIC Seeks Cash.”
The Real Story on Inflation
It is becoming increasingly obvious that the reckless spending by Governments around the world will lead to an inflationary crisis, perhaps on a scale never before seen. One example is the price of steel. A recent report put out by MSN money, shows that the price of steel is set to rise by more than 1/3 over the next year, a serious indicator of inflation.
Furthermore, since 1996 the Government has changed the way it calculates CPI nine times. The United State Constitution specifies the importance of using just weights and measures. If the calculation of one of the most important economic indicators available has been changed nine times in fourteen years, does that in any way reflect a system of “just” weights and measures? Of course not. But the reasoning behind the change is simply to fleece the public and cover the truth.
In fact, when a broader index of inflationary indicators like the commodity index are included in the CPI it shows that inflation is SOARING and is nowhere near the benign numbers that the Government is reporting.
Make sure to consider the articles “Inflation Warning Etched in Steel” and “The Coming Inflation Wave.”
“Wake Up Fools” – The Bond Market
Houston, we have a problem. The Budget deficit of the United States just hit a record high; the problem though is the interest on Public Debt is at an all time low. In order to finance our ever-growing Nanny State, the endless bailouts of Wall Street and the takeover of the Medical System, Uncle Sam must be able to easily sell its bonds, but this isn’t the case. In fact the recent selloff in United States Treasury’s have risen Sovereign Debt Fears – translation: What happened in Greece could very well, and most likely will, spread Worldwide. Consider the article entitled “Selloff in Treasuries Raises Sovereign Debt Fears.”
Many of us know that the Dow Jones just busted throughout the 11,000 level for the 3rd time in the last decade, but how many of you know that the bank of International Settlements just put out a report saying that here in the land of the free our Debt to GDP level will exceed 400% by 2040? Friends, a Debt to GDP ratio of 400% equals instant, guaranteed default. With a scenario like this brewing does it make sense to own stocks? Consider the article entitled “Bank Of International Settlements Sees US Debt/GDP At Over 400% By 2040.”
How can this news be good for stocks? It isn’t. Moody’s took note and actually put out a warning regarding the profitability of companies, specifically the financials in the years to come. These details are further verified in the article entitled “Moodys Warns of Pain Ahead For Financials; Profitability Concerns Due to Record Charge Offs.”
Since markets never lie, these facts have led to some interesting revelations the most important of which is that according to the bond market, it is currently safer to lend money to Warren Buffet than it is the United States of America. Yup, you read that right, the market says that lending to the United States is more risky than lending to Warren Buffet meaning lending to the United States is sheer lunacy. How did this happen?
Well, Moody’s just issued another separate report warning what we have been warning for the last 12 months - that the United States could be destined to lose its triple AAA Rating. It says that the United States is heavily leveraged adding that acute challenges lie ahead for the United States and other developed nations. Did you ever think you would see the day when the richest most powerful nation on the face of the planet would be seen as a bigger credit risk than Warren Buffets Berkshire Hathaway? That day has come. With evidence such as this, tell me, what foreigners are stupid enough to keep financing our consumption through buying our bonds? Not many.
For more on the unfolding crisis in the Bond Markets, consider the Articles “Obama Pays More than Buffett as US Risks AAA Rating,” “Kiss AAA Goodbye Says Moodys,” and “As Budget Deficit Hits Record High, Interest On US Public Debt Hits Record Low.”
How Does This Effect the Gold and Silver Markets?
Just to recap what we have learned up to this point – Government Officials and the Mainstream Media are lying to you, they want a portion of your IRA’s, and 401K’s forced into annuities based on bonds and they would like to have your Pension Funds to back up the assets of failed banks, inflation numbers are far off base, and the Bond Markets are signaling a crash ahead. All of these events point to much higher Gold and Silver prices in the future, but there is more. Much more.
We told you last year that Central Banks were buying Gold instead of selling it, this has been further verified in the article entitled “Central Bank Gold Holdings Expand at Fastest Pace Since 1964.” We have also warned you that the issue of “peak” Gold was on the horizon, meaning that the readily available Gold in the World had already been mined and was quickly diminishing, this can be researched further in the article entitled “World Gold Council Sees New World of Opportunity as Peoples Bank of China Expected to Buy Gold as their Mines Become Depleted.”
What does this mean for the Gold Market? Well a very respectable General Counsel for a huge hedge fund – Long Term Capital Management – says that a $5,500 Gold price would be fair value based on the economic conditions that are currently in place. Saying there is “Little Time to Avoid Catastrophe and Almost No Exit.” There are others that say Gold can go much higher than that and in the section below, you will find out just how that might happen.
And, don’t forget Silver. Silver has been soaring of late and it is oftentimes overlooked as the poor man’s Gold. Let me assure you though, the market forces setting up for Silver look to be even stronger than that of Gold. I recently read one of the most important articles on Silver in some time, in it the author unveils an amazing fact:
According to the Act that set up the Gold and Silver Eagle programs in the United States, in order to mint Gold and Silver Eagles the United States Mint MUST buy only Gold and Silver minted in the United States. The problem is that Silver Eagle sales are soaring to near 40 Million Ounces of Silver per year which is exactly the amount produced by U.S. mines each year. Couple that information with the fact that 40% of Silver is used for industrial applications, 30% Jewelry, 20% for Photography, with a small fraction being left over for investment. However, according to U.S. mine production 100% of the Silver mined in the United States is being used strictly to mint Silver Eagles.
I shouldn’t have to tell you that this is a perfect setup for a Silver explosion. During the bull market of the 70’s when Gold leapt by 700% it was Silver that took the cake – it went up 1400%. Take the time to read the article entitled “Silver Sales are Soaring,” you will be glad that you did.
None Dare Call it a Conspiracy
We at the The Gold Specialist blog rarely talk about the concerted effort by Governments around the World and Banks working on their behalf, to suppress the price of Gold and Silver. Although the evidence of this is clear and there are many voices within the industry that have been crying foul for many years, we chose not to cover it because the evidence was technically un-provable. Not anymore. The developments of this conspiracy were the driving force behind this emergency mid month release.
Thanks to the insider “whistleblower” Andrew McGuire, it’s going to be extremely hard to put the Gold and Silver Price Manipulation Conspiracy genie back in the bottle. During a recent hearing into the manipulation that was held by the Governmental Regulating Authority the Commodities Futures Trading Commission, Mr. McGuire confirmed the obvious – that the London Bullion Market Association is a Paper Gold Ponzi Scheme. According to McGuire the LMBA is engaging in fraud that is detrimental to both Gold and Silver Markets, claiming that the London Bullion Association is trading over 100 TIMES the amount of Gold that it actually has to back the trades. Within days of his testimony, Mr. McGuire and his family were involved in a hit and run car crash, which is purely coincidence we are sure. Here is more on the subject from the Gold Anti Trust Action Committee:
“On March 23, 2010, GATA Director Adrian Douglas was contacted by a whistleblower by the name of Andrew Maguire. Maguire is a metals trader in London. He has been told first-hand by traders working for JPMorganChase that JPMorganChase manipulates the precious metals markets, and they have bragged to how they make money doing so.
In November 2009 Maguire contacted the CFTC enforcement division to report this criminal activity. He described in detail the way JPMorgan Chase signals to the market its intention to take down the precious metals. Traders recognize these signals and make money shorting the metals alongside JPM. Maguire explained how there are routine market manipulations at the time of option expiry, non-farm payroll data releases, and COMEX contract rollover, as well as ad-hoc events.
On February 3 Maguire gave two days' warning by e-mail to Eliud Ramirez, a senior investigator for the CFTC's Enforcement Division, that the precious metals would be attacked upon the release of the non-farm payroll data on February 5. On February 5, as market events played out exactly as predicted, further e-mails were sent to Ramirez while the manipulation was in progress.
It would not be possible to predict such a market move unless the market was manipulated.”
So what did our strong “REGULATORS” do about the absolutely provable manipulation? Nothing. Not yet anyway.
We have been warning for years to stay away from “Paper” gold like the ETF’s GLD, SLV, and other similar “investment vehicles” if you dare call them investment vehicles. With the testimony of Mr. Mcguire we now know that these ETF’s play a critical role in the manipulation scheme. In fact, the numbers are so dubious that if all exchange traded funds that were supposedly storing gold on your behalf were faced with a demand for delivery from their clientele there would be no Gold left anywhere in the World.
This “rigging” of the market is commodity wide dealing with both Gold and Silver. The problem with trying to rig markets is that NOTHING is stronger than the free market and that market manipulation, 100% of the time, without fail, will eventually blow up into the face of the manipulators. Through trying to suppress the metals markets, the manipulators are trying to hold a beach ball underwater, it’s inevitable that beach ball is going to come rocketing out of the water at some point, and at that point, it’s possible that Gold could soar through $10,000/oz according to some analysts. The same results could be said for Silver. Again, the word is out, the genie is out of the bottle, there is no putting it back in.
Furthermore, this isn’t an isolated event. A recent audit of the Canadian Bullion Bank showed that the vaults are practically empty as well. Although they are supposedly the custodians of a very large ETF, and should be flush with Gold, but they aren’t. It even led one of the men that entered the vault to comment - "The game ends when the people who own all these paper obligations say enough and take physical delivery, and that's when the mess will occur."
Consider the Articles “Former Goldman Analyst Confirms LMBA Gold Market is ‘Paper Gold’ Ponzi Scheme,” “Will Fraud Lift Gold Prices to $10,000 Per Ounce, ” “National Inflation Association Says Silver Short Squeeze Immanent” and “The Latest Gold Fraud Bombshell: Canada’s Only Bullion Bank Gold Vault is Practically Empty.”
Your Open Invitation to Attend!
Mr. McGuire mentioned that the End Game with Paper Gold is near, and that a “mess” is on the horizon. The problem is that the so called “mess” isn’t on the horizon. It is already here, and it seems to be one of the main drivers of the recent surge in Silver and Gold. This massive fraud unfolding could be the instigator of a BIG run in precious metals and now is the time that you can take advantage of it.
Even absent the abysmal fraud and manipulation scheme, the events covered in the first 2/3 of this report should be enough to send Gold and Silver soaring – combine the two and we have the makings of an event that someday will be looked back upon in history. Judging from the evidence, that event will likely include huge advances in the prices of Gold and Silver. An event that could make $3,000 Gold and $100 Silver seem cheap.
Monday, April 12, 2010
Will Fraud Lift Gold Prices to $10,000/Ounce?
Geena Paul
CommodityOnline
April 6, 2010
After the sub-prime catastrophe in banking and realty sector, which led to the global recession in 2008-09, it is the turn of bullion markets now.
‘FRAUD’, that is the one word which comes to any investor’s mind when s/he reads about the Commodity Futures Trading Commission (CFTC) hearing on manipulations in bullion market by gold cartels.
So, the small and clean investors have been short-changed by big cartels during the past many years, especially during the recent boom time in bullion markets. Otherwise, how will you explain the biggest boom in paper gold (Exchange Traded Funds, ETFs) in the recent past with hardly any gold available in the market.
In fact, there is no gold left in this world if all the Gold ETFs ask for physical delivery. And, if that happens only god knows what will be the gold prices in the coming months — $10000 per ounce? Maybe, even more. Because, price of a commodity which is not available at all can go up to any level due to the sheer fact that it is not there in the market.
Read entire article
CommodityOnline
April 6, 2010
After the sub-prime catastrophe in banking and realty sector, which led to the global recession in 2008-09, it is the turn of bullion markets now.
‘FRAUD’, that is the one word which comes to any investor’s mind when s/he reads about the Commodity Futures Trading Commission (CFTC) hearing on manipulations in bullion market by gold cartels.
So, the small and clean investors have been short-changed by big cartels during the past many years, especially during the recent boom time in bullion markets. Otherwise, how will you explain the biggest boom in paper gold (Exchange Traded Funds, ETFs) in the recent past with hardly any gold available in the market.
In fact, there is no gold left in this world if all the Gold ETFs ask for physical delivery. And, if that happens only god knows what will be the gold prices in the coming months — $10000 per ounce? Maybe, even more. Because, price of a commodity which is not available at all can go up to any level due to the sheer fact that it is not there in the market.
Read entire article
Silver Sales Are Soaring
Tyler Durden
ZeroHedge
Submitted By Jeff Clark, Senior Editor, Casey's Gold & Resource Report
The U.S. Mint just reported another record, but this time it wasn’t for gold. The Mint sold more Silver Eagles in March and in the first quarter of the year than ever before. A total of 9,023,500 American Silver Eagles were purchased in Q110, the highest amount since the coin debuted in 1986.
While this is certainly bullish, there’s something potentially more potent developing in the background. Namely, how this matches up with U.S. silver production. Like gold, the U.S. Mint only manufactures Eagles from domestic production. And U.S. mine production for silver is about 40 million ounces. In other words, we just reached the point where virtually all U.S. silver production is going toward the manufacturing of Silver Eagles.
Yikes.
This is especially explosive when you consider that roughly 40% of all silver is used for industrial applications, 30% for jewelry, 20% for photography and other uses, and only 5% or so for coins and medals.
To be sure, mine production is not the only source of silver. In 2009, approximately 52.9 million ounces were recovered from various sources of scrap. Further, the U.S. imported a net of about 112.5 million ounces last year. (Dependence on foreign oil? How about dependence on foreign silver!) So it’s not like there’s a worry there won’t be enough silver to produce the Eagle you want next month.
Still, why so much buying? The silver price ended the quarter up 15.5% from its February 4 low – but it was basically flat for the quarter, up a measly 1.9%. We tend to see buyers clamoring for product when the price takes off, so the jump in demand wasn’t due to screaming headlines about soaring prices.
I have a theory.
For some time, silver has been known as the “poor man’s gold.” Meaning, silver demand tends to increase when gold gets too “expensive.” The gold price has stubbornly stayed above $1,000 for over six months now and spent much of that time above $1,100. You’d be lucky to pay less than $1,200 right now for a one-ounce coin (after premiums), an amount most workers can’t pluck out of their back pocket. But Joe Sixpack just might grab a “twelve-pack” of silver.
What would perhaps lend evidence to my theory is if gold sales were down in the face of these higher silver sales.
The U.S. Mint reported a decline in gold bullion sales of 20.8% this past quarter vs. the same quarter in 2009. Further, other world mints have seen sharp declines in gold bullion coin sales as well: the Austrian Mint reported an 80% drop in sales for the first two months of the year and the Royal British Mint a 50% decline in gold coin production for the first quarter.
What’s even more dramatic is the difference in the dollar value of the sales. Gold Eagle sales in the U.S. dropped $10,263,500 from a year earlier – but silver sales increased by $61,855,290. So, not only did silver sales make up the drop in gold sales, they exceeded them by $51,591,790.
Is the rush into “poor man’s gold” underway?
Why the answer to that question is significant is that a shift toward silver for this reason could signal we’re inching closer to the greater masses getting involved in the precious metals arena. And that – for those of us who’ve been invested for awhile now – would be music to the ears. Because when they start getting involved, the mania will be underway, and from that point forward, it’s game on.
I’m not saying the mania is starting, and I actually think we could see another sell-off before things take off for good. Gold could dip to $1,000 and maybe even $950, with silver going to the $14-$15 range. But as clues like these begin to build up, we’ll know we’re getting closer. (And any drop to those ranges would clearly be a major buying opportunity.)
Everyone talks about gold, myself included, but a meaningful portion of one’s precious metals portfolio should be devoted to silver. The market is tiny, making the price potentially explosive. Remember that in the ‘70s bull market gold advanced over 700%, but silver soared over 1,400%.
Don’t be a “poor man” by ignoring gold’s shiny cousin.
ZeroHedge
Submitted By Jeff Clark, Senior Editor, Casey's Gold & Resource Report
The U.S. Mint just reported another record, but this time it wasn’t for gold. The Mint sold more Silver Eagles in March and in the first quarter of the year than ever before. A total of 9,023,500 American Silver Eagles were purchased in Q110, the highest amount since the coin debuted in 1986.
While this is certainly bullish, there’s something potentially more potent developing in the background. Namely, how this matches up with U.S. silver production. Like gold, the U.S. Mint only manufactures Eagles from domestic production. And U.S. mine production for silver is about 40 million ounces. In other words, we just reached the point where virtually all U.S. silver production is going toward the manufacturing of Silver Eagles.
Yikes.
This is especially explosive when you consider that roughly 40% of all silver is used for industrial applications, 30% for jewelry, 20% for photography and other uses, and only 5% or so for coins and medals.
To be sure, mine production is not the only source of silver. In 2009, approximately 52.9 million ounces were recovered from various sources of scrap. Further, the U.S. imported a net of about 112.5 million ounces last year. (Dependence on foreign oil? How about dependence on foreign silver!) So it’s not like there’s a worry there won’t be enough silver to produce the Eagle you want next month.
Still, why so much buying? The silver price ended the quarter up 15.5% from its February 4 low – but it was basically flat for the quarter, up a measly 1.9%. We tend to see buyers clamoring for product when the price takes off, so the jump in demand wasn’t due to screaming headlines about soaring prices.
I have a theory.
For some time, silver has been known as the “poor man’s gold.” Meaning, silver demand tends to increase when gold gets too “expensive.” The gold price has stubbornly stayed above $1,000 for over six months now and spent much of that time above $1,100. You’d be lucky to pay less than $1,200 right now for a one-ounce coin (after premiums), an amount most workers can’t pluck out of their back pocket. But Joe Sixpack just might grab a “twelve-pack” of silver.
What would perhaps lend evidence to my theory is if gold sales were down in the face of these higher silver sales.
The U.S. Mint reported a decline in gold bullion sales of 20.8% this past quarter vs. the same quarter in 2009. Further, other world mints have seen sharp declines in gold bullion coin sales as well: the Austrian Mint reported an 80% drop in sales for the first two months of the year and the Royal British Mint a 50% decline in gold coin production for the first quarter.
What’s even more dramatic is the difference in the dollar value of the sales. Gold Eagle sales in the U.S. dropped $10,263,500 from a year earlier – but silver sales increased by $61,855,290. So, not only did silver sales make up the drop in gold sales, they exceeded them by $51,591,790.
Is the rush into “poor man’s gold” underway?
Why the answer to that question is significant is that a shift toward silver for this reason could signal we’re inching closer to the greater masses getting involved in the precious metals arena. And that – for those of us who’ve been invested for awhile now – would be music to the ears. Because when they start getting involved, the mania will be underway, and from that point forward, it’s game on.
I’m not saying the mania is starting, and I actually think we could see another sell-off before things take off for good. Gold could dip to $1,000 and maybe even $950, with silver going to the $14-$15 range. But as clues like these begin to build up, we’ll know we’re getting closer. (And any drop to those ranges would clearly be a major buying opportunity.)
Everyone talks about gold, myself included, but a meaningful portion of one’s precious metals portfolio should be devoted to silver. The market is tiny, making the price potentially explosive. Remember that in the ‘70s bull market gold advanced over 700%, but silver soared over 1,400%.
Don’t be a “poor man” by ignoring gold’s shiny cousin.
Saturday, April 10, 2010
LTCM General Counsel On Debt Denial: "There Is Little Time To Avoid Catastrophe And Almost No Exit", Suggests Gold Price Of $5,500
Debt Denial, by James Rickards in The Daily Caller
The sovereign debt crisis has crossed a threshold. It’s no longer about economics. It’s about math and a complex system whose dynamics tell us there is little time to avoid catastrophe and almost no exit. Going forward, elections and policies will matter less as the debt plague takes hold and dictates hard outcomes.
It is the case that real debt cannot be repaid through any feasible combination of growth and taxes. We will soon arrive at the point where it cannot be rolled over. Debt includes contingent liabilities as well as bonds. In the U.S., this means social security, healthcare and housing obligations estimated at over $60 trillion. That does not include unfunded pension obligations of the states whose plans use fanciful 8% growth assumptions to limit contributions. Pension debt grows exponentially; a toxic brew of increased benefits, contribution shortfalls and anemic performance.
Even what we call money is debt. Paper money is a contract between citizen and government. As with any contract, it pays to read the fine print. Embossed on each U.S. bill is the phrase “Federal Reserve Note.” Give the Fed credit for full disclosure; these notes are liabilities. If the Fed’s mortgage assets were marked-to-market the Fed itself would be insolvent. In short, it’s all debt. Wealth is illusory if it involves a claim payable in dollars which are but a claim on an insolvent central bank backed only by its ability to print more debt. The situation is worse in the UK, Europe and Japan. The global financial system is a rope of sand.
If this system is illusory, how has it prospered over centuries? The answer is that for many years governments ran surpluses and at times had no debt at all. Growth was robust providing support to the tax base. Governments had the trust of bond markets to rollover maturing obligations. With some fits and starts, tangible wealth creation outpaced debt creation. And until recently paper money was backed by gold at fixed rates of exchange. Today all four legs of the table – surpluses, growth, trust and gold are gone or damaged.
There is no prospect for surpluses; nations hit the brink of disorder at the mere mention of 3% deficit-to-GDP ratios. Growth prospects are likewise dim given current policy. Obama grew spending on a feed-the-beast theory that forces taxes to rise to match spending. If Obama does not get his way, deficits will be ruinous. If he does get his way, taxes will stifle growth. You cannot tax your way to solvency in a world of low growth and compound interest.
As for market trust, go ask the Greeks. Each bond buyer has a critical threshold where he will not buy another bond. Picture bond buyers as theatre patrons. The image of someone yelling “fire” and patrons rushing out in a panic is familiar. More intriguing is the case in which just a few patrons rush out for no apparent reason. Do those remaining follow suit or stay seated? It depends on their individual thresholds. If high enough, everyone remains seated. But if some thresholds are low, those patrons leave too triggering other thresholds and so on until a cascade of exits empties the theatre.
In markets, the array of individual thresholds is immensely complex. The scale, interdependence and adaptability of market participants today are greater than ever. It would take very little to trigger a wholesale revulsion with sovereign debt.
What about gold? The view is that systems on a gold standard system cannot increase money supply as needed; of course, that’s the whole idea. Increasing money beyond the modest levels at which gold supply grows is the Keynesian remedy. But empirical evidence shows the so-called Keynesian multiplier is fractional and therefore a wealth destroyer. Another attack on gold is that there’s not enough of it to support money supply; but of course there’s always enough gold; it’s just a question of price.
The U.S. has never truly gone off the gold standard. The U.S. gold hoard today has a dollar value equal to about 20% of U.S. M1 money supply – a respectable ratio even in the heyday of the fractional gold standard. A gold price of $5,500 per ounce would comfortably support a broader U.S. money supply on a one-to-one ratio and maintain confidence in the dollar and U.S. sovereign debt.
Is there an exit? One path involves hyperinflation to destroy the real value of debt followed by redenomination and a new paper money game. The other path involves a gold backed currency at a non-deflationary price. This is a choice between denial and frank talk. Sound money leads to sound growth and the creation of real, not illusory, wealth.
James G. Rickards is a director of Omnis, Inc. and former general counsel of Long-Term Capital Management. Follow him at twitter.com/JamesGRickards.
The sovereign debt crisis has crossed a threshold. It’s no longer about economics. It’s about math and a complex system whose dynamics tell us there is little time to avoid catastrophe and almost no exit. Going forward, elections and policies will matter less as the debt plague takes hold and dictates hard outcomes.
It is the case that real debt cannot be repaid through any feasible combination of growth and taxes. We will soon arrive at the point where it cannot be rolled over. Debt includes contingent liabilities as well as bonds. In the U.S., this means social security, healthcare and housing obligations estimated at over $60 trillion. That does not include unfunded pension obligations of the states whose plans use fanciful 8% growth assumptions to limit contributions. Pension debt grows exponentially; a toxic brew of increased benefits, contribution shortfalls and anemic performance.
Even what we call money is debt. Paper money is a contract between citizen and government. As with any contract, it pays to read the fine print. Embossed on each U.S. bill is the phrase “Federal Reserve Note.” Give the Fed credit for full disclosure; these notes are liabilities. If the Fed’s mortgage assets were marked-to-market the Fed itself would be insolvent. In short, it’s all debt. Wealth is illusory if it involves a claim payable in dollars which are but a claim on an insolvent central bank backed only by its ability to print more debt. The situation is worse in the UK, Europe and Japan. The global financial system is a rope of sand.
If this system is illusory, how has it prospered over centuries? The answer is that for many years governments ran surpluses and at times had no debt at all. Growth was robust providing support to the tax base. Governments had the trust of bond markets to rollover maturing obligations. With some fits and starts, tangible wealth creation outpaced debt creation. And until recently paper money was backed by gold at fixed rates of exchange. Today all four legs of the table – surpluses, growth, trust and gold are gone or damaged.
There is no prospect for surpluses; nations hit the brink of disorder at the mere mention of 3% deficit-to-GDP ratios. Growth prospects are likewise dim given current policy. Obama grew spending on a feed-the-beast theory that forces taxes to rise to match spending. If Obama does not get his way, deficits will be ruinous. If he does get his way, taxes will stifle growth. You cannot tax your way to solvency in a world of low growth and compound interest.
As for market trust, go ask the Greeks. Each bond buyer has a critical threshold where he will not buy another bond. Picture bond buyers as theatre patrons. The image of someone yelling “fire” and patrons rushing out in a panic is familiar. More intriguing is the case in which just a few patrons rush out for no apparent reason. Do those remaining follow suit or stay seated? It depends on their individual thresholds. If high enough, everyone remains seated. But if some thresholds are low, those patrons leave too triggering other thresholds and so on until a cascade of exits empties the theatre.
In markets, the array of individual thresholds is immensely complex. The scale, interdependence and adaptability of market participants today are greater than ever. It would take very little to trigger a wholesale revulsion with sovereign debt.
What about gold? The view is that systems on a gold standard system cannot increase money supply as needed; of course, that’s the whole idea. Increasing money beyond the modest levels at which gold supply grows is the Keynesian remedy. But empirical evidence shows the so-called Keynesian multiplier is fractional and therefore a wealth destroyer. Another attack on gold is that there’s not enough of it to support money supply; but of course there’s always enough gold; it’s just a question of price.
The U.S. has never truly gone off the gold standard. The U.S. gold hoard today has a dollar value equal to about 20% of U.S. M1 money supply – a respectable ratio even in the heyday of the fractional gold standard. A gold price of $5,500 per ounce would comfortably support a broader U.S. money supply on a one-to-one ratio and maintain confidence in the dollar and U.S. sovereign debt.
Is there an exit? One path involves hyperinflation to destroy the real value of debt followed by redenomination and a new paper money game. The other path involves a gold backed currency at a non-deflationary price. This is a choice between denial and frank talk. Sound money leads to sound growth and the creation of real, not illusory, wealth.
James G. Rickards is a director of Omnis, Inc. and former general counsel of Long-Term Capital Management. Follow him at twitter.com/JamesGRickards.