The Collapse Of U.S. Silver Stocks As Public Debt Skyrockets

The U. S. Empire is in real trouble. This is due to its idiotic business model of selling quality assets while acquiring massive liabilities and debts. Of course, the U. S. Government realizes this is not a sustainable way to do business, but at least for now…. we continue to have our Bread & Circuses, McDonalds & NFL Football for a bit longer.
Furthermore, Americans have no clue that the U. S. Dollar’s world reserve currency status continues to disintegrate each passing day as more countries elect to by-pass the Dollar and trade in other currencies… especially the Chinese Yuan.
The Total Liquidation of U. S. Silver Stocks One such asset the U. S. Government totally liquidated is its massive stocks of silver. In 1940, the U. S. Treasury held 3,135,000,000 oz of silver. That’s correct, 3.1 billion ounces. That is nearly four times the current annual world mine supply of 820 million oz.
This figure is documented on page 64 in the USGS 1940 Gold-Silver Minerals Yearbook:

This post was published at SRSrocco Report on September 15, 2014.

Hedge funds have silver prices wrong as Shanghai inventory running out

Silver is a rare commodity in Shanghai these days. Just look at the graph above showing the falling inventories of silver in the Shanghai Futures Exchange.
At what point will the inventory be low enough to actually reverse the recent price falls in silver?
Tipping point says: ‘The current scarcity has diminished the gap between Chinese and London spot prices. If we subtract 17 per cent VAT from the SGE silver prices, the discount to London spot was four per cent on September 12th.

This post was published at Arabian Money on 16 September 2014.

Producer Price Increase Lowest In 2014 As Energy Slides

PPI Final Demand was unchanged in August ( 0.0% against expectations of 0.0%) making it lowest monthly gain since December 2013 (after revisions moved May’s data). Across the board producer prices rose (or didn’t) as expected with Final Demand YoY 1.8%. Energy prices fell 1.5% MoM and was the biggest driver of PPI’s relative weakness but notably prices for finished goods fell 0.3% – the biggest drop since August 2013.
PPI Final Demand MoM lowest in a year

This post was published at Zero Hedge on 09/16/2014.

Why Money Is Worse Than Debt

Everybody has to spend energy, has to work for his living. This is true for Government as well as for the Billionaires and for the ordinary employee. Nothing – except for Sunshine and Air – comes for free. Note that today, sometimes people even pay for sunshine (vacation) and Air (airports in Venezuela). Not hard to understand that today’s fairy tale of ‘Free Fiat Money’ will have a bad ending…or is it? Few people seem to realize the dramatic situation we are in and that the denial is fed by the Propaganda sold by Politicians through the Mainstream media. The 4th generation (see Galbraith’s Age of Uncertainty) doesn’t seem to be mentally able to grasp the seriousness of the situation the world is in.
Governments and Central Banks (which are like economic Siamese twins) not only print Fiat Money but on top they make the cost to print more money, issue new debt and serve past debt ridiculously low…. In reality, Real Interest rates (nominal interest rate less real inflation rate) or the cost to issue more fiat money has even become negative. Propaganda must be extremely solid to keep such a mirage alive and absolute no accident may happen.

This post was published at GoldSilverWorlds on September 16, 2014.

The NCAA Racket

Americans certainly love college sports, particularly football and basketball. After all, what is better than cheering on student athletes competing for the love of the game? Unfortunately, behind this facade the National Collegiate Athletic Association and university athletic programs are simultaneously running two seemingly diametrically opposed rackets; one taking advantage of the players and the other ostensibly giving them unfair benefits.
The NCAA is a tax-exempt, non-profit association that oversees the athletics of just under 1,300 universities. While the NCAA is not technically a government organization, it might as well be. It’s a burdensome bureaucracy that regulates the athletics of public universities, which are substantially funded and strictly regulated by the government. And like any government, the NCAA regulates in an attempt to restrict competition. As Lawrence Kahn noted, ‘Most economists who have studied the NCAA view it as a cartel that attempts to produce rents by restricting output and limiting payments for inputs such as player compensation.’[1] And don’t let the term ‘non-profit’ fool you. Some non-profits can be quite profitable. Indeed, the NCAA recently agreed to a $10.8 billion, fourteen-year contract with CBS and Turner Broadcasting to televise games. NCAA chairman Mark Emmert was rewarded for his efforts with a cool $1.7 million last year.

This post was published at Ludwig von Mises Institute on Tuesday, September 16, 2014.

Scotland Prepares For Bank Runs; ‘Quietly’ Sends Millions Of Banknotes North

As the Scotish independence vote draws near and remains too close to call, some analysts are suggesting Plan B for Scotland may be to choose to opportunistically default. This has done nothing to calm concerns of the aftermath of a “yes” vote – despite US asset managers proclaiming it irrelevant. Nowhere is that more clear than, as The Independent reports, Britain’s banks have been quietly moving millions of banknotes north of the border to cope with any surge in demand by Scots to withdraw cash in the event of a Yes vote in Thursday’s independence referendum, it has emerged. Bankers stressed there has been no sign yet of any increase in the amount of withdrawals from deposit accounts or ATMs, but the moves have been taking place over the past week or so in order to make sure ATMs do not run out on Friday in the event of a panic reaction to a ‘yes’ vote.
As The Independent reports,
Britain’s banks have been quietly moving millions of banknotes north of the border to cope with any surge in demand by Scots to withdraw cash in the event of a Yes vote in Thursday’s independence referendum, it has emerged.
Sources told The Independent the moves have been taking place over the past week or so in order to make sure ATMs do not run out on Friday in the event of a panic reaction to a ‘yes’ vote. There have been some suggestions that people will want to move their money to English banks in the event of an independence vote.
Bankers stressed there has been no sign yet of any increase in the amount of withdrawals from deposit accounts or ATMs, stressing that there was no need because the Bank of England has pledged to stand behind all accounts for at least 18 months in the event of a ‘yes’ vote.
However, concerns about how safe is their cash still linger.

This post was published at Zero Hedge on 09/16/2014.

Gold Demand In India Triples As China Launches Global Gold Bourse This Thursday

In India, gold demand rises during the festival season from a monthly average of 40-50 tonnes to over 60 tonnes a month. As usual, there is expected to be a pick-up in gold demand this year ahead of the five day festival centred around Diwali.
Diwali is on October 23 but the five day festival really begins with Dhanteras, the first day of Diwali on October 21 and ends with the last day called Bhai Dooj on October 25.
The wedding season is also approaching and this peaks in November and December. Gold is given as gifts and dowries during the wedding season and also acts as a source of demand for jewellery.
Over the last two years, there has been a concerted effort by the Indian government and the central bank, the Reserve Bank of India, to discourage gold imports. This has taken the form of continued hikes in gold import duties, the introduction of various gold import restrictions for banks and trading houses, while at the same time incentivising Indian banks to promote gold-backed products and gold deposit schemes so as to take Indian gold out of circulation and into the hands of the banks.
Without citing the Indian government’s orchestrated campaign to try to smash Indian gold imports, some anti-gold media have recently been calling the death of gold buying in India, pointing to the increased interest by the younger urban population in modern financial savings and investments. However, the fact that Indian gold imports remain strong and bounce back any time government restrictions are lowered proves that this anti-gold media sentiment is mistaken.
Shanghai Gold Exchange
Today the Chinese government backed Shanghai Gold Exchange (SGE) brought forward the launch date of its international gold trading platform which is hosted in the city’s free trade zone (FTZ). The gold trading platform will be known as the ‘international board’.
In a surprise announcement, the SGE said today that the international board will go-live this Thursday September 18, eleven days ahead of its original launch date of Monday September 29.

This post was published at Gold Core on 16 September 2014.

South African gold, PGM, diamond and copper outputs down sharply

The South African mining sector seems to be going through a particularly rough patch at the moment and this will also have a strongly negative effect on the country’s economy given the importance of metals and minerals in the country’s exports. According the latest Statistics South Africa preliminary data for July, the country’s overall mining production decreased by 7.7% year-on-year.
Not surprisingly, given that the month covered the tail end of the country’s debilitating platinum mining strike, platinum group metals output was down a huge 45.2% year on year.  PGMs had been one of the country’s most significant metal exports of late having comfortably overtaken gold – which, somewhat surprisingly, also saw a 14.6% year on year reduction in output.  Diamond production was down 10% and copper 15.9%
Top places for South African mineral sales values in July were held by coal at R8.13 billion (US$739 million) and iron ore R5.16 billion (US$469 million) despite the fall in global prices for these bulk metals and minerals. Even with the strike impact, PGMs followed close behind at R5.1 billion ($464 million) with gold nowadays only at R3.69 billion ($335 million).

This post was published at Mineweb

AngloGold Ashanti of South Africa Abandons Spin Off Plans

AngloGold Ashanti, one of the world’s largest gold mining firms, said on Monday that it would abandon plans to spin off its international mining operations and raise $2.1 billion in new capital.
The company, based in Johannesburg, said last week that it was planning to spin off its operations outside of South Africa into a new entity to be listed in London. AngloGold Ashanti had also sought to raise new capital in order to reduce its debt ahead of the restructuring.
On Monday, the company said that a number of shareholders, although supportive of the strategic logic of the transaction, expressed concerns about several aspects of the deal, including the level of fund-raising needed for the restructuring to go forward.
“AngloGold Ashanti has, therefore, decided not to proceed with the restructuring and capital raising, as currently proposed,” the company said in a news release on Friday. “The company will continue to evaluate all options to address debt levels and unlock value, taking into account the feedback from its shareholders and its business needs.”

This post was published at NY Times

Private homes in Iran hold more gold than Central Bank

The Shahrvand Daily reports that according to Gold and Jewelry Producers and Exporters, more than 100 tonnes of the country's gold is stashed in people's homes.
Although the former head of Iran's Central Bank under the Ahmadinejad administration had said the Bank had 500 tonnes of gold in storage, recent reports from the Central Bank put its gold stores at 90 tonnes: in other words, less than what is stored in Iranian homes.
The report by Shahrvand indicates: "Few countries in the world see the public move toward buying gold or foreign currency as investment and steering away from investing in production and adding value to the economy."

This post was published at Payvand

Export Growth to Lift Italian Gold Jewellery Demand and Bullion Imports to Six-Year High

Metallis are releasing this snapshot on Italy’s export-focused gold jewellery fabrication to coincide with the recent conclusion of the Vicenza Fair as this marks a good opportunity to review developments so far this year and prospects for the rest of 2014 for Italy and its main overseas markets.
The key findings of the consultancy’s recent research is that Italian gold jewellery demand is on track to rise 11% in 2014 to a six-year high of 128 tonnes. This marks a continuation of the growth seen in 2013, when fabrication made a historic turnaround; then a 24% rebound began a recovery from a decade or so of consecutive losses.
Domestic scrap is also forecast to finish 2014 down 22%, while inflows of scrap could fall by almost 30%. All this is slated to lift gross gold bullion imports by 15% to just over 105 tonnes, their highest level since 2008.
Even stronger growth of 39% for the first half is reported in shipments to China/Hong Kong. Meader noted, “this boom is interesting as it shows the 18-carat segment in China is still going strong, even if the far larger 24-carat sector, which Italy doesn’t serve, couldn’t match 2013’s heady results”.

This post was published at Sharps Pixley

NYT: Subprime Loans Rear Their Ugly Heads Again

Remember the subprime mortgage loans that helped spark the 2008-09 financial crisis?
They may be gone for a while, but other areas of the subprime lending market, particularly auto loans, have begun to look worrisome, The New York Times reports.
Deep subprime auto loans, those made to people with credit scores below 550, soared 13 percent in the second quarter from the year-earlier period, according to Experian.
"We're five years into the new cycle, so you've got to imagine that there are excesses cropping up," William Ryan of Portales Partners research firm told the paper.

This post was published at Money News

Deutsche Bank Strategists: Bonds are in a Bubble

Most of the bubble talk these days focuses on stocks. But Deutsche Bank strategists led by Jim Reid see frothiness brewing in the global government bond market.
"The worry is that there is nowhere left for this bubble to go given that it is now in the hands of the lenders of last resort (governments and central banks with regulators ensuring other large captive buyers)," they write in a commentary obtained by MarketWatch.
"Although we think this bubble needs to be maintained to ensure the solvency of the current financial system, the best case scenario is that it slowly pops over time via negative real returns for bondholders. The worst-case scenario being future restructuring."
The Barclays U.S. Treasury 20-Year-Plus index has returned 15.5 percent so far this year.
Bond-investment star Jeff Gundlach, CEO of DoubleLine Capital, doesn't see a bubble brewing in Treasurys. He told CNBC that doesn't anticipate major moves by Treasurys for the rest of the year, with the Federal Reserve unlikely to raise interest rates anytime soon.

This post was published at Money News

China Stocks Tumble Most In Six Months; US Futures Lower As Key Risk Events Loom

If over the weekend we got some terrible economic news out of China, then overnight it was turn for a major disappointment in capital flows, when Chinese Foreign Direct Investment in August crashed by 14%, far below the 0.8% increase expected, attracting just $7.2 billion in FDI, and the lowest in four years. This once again sparked fears of a Chinese hard landing and sent the Shanghai Composite tumbling 1.82%, the biggest drop in six months, after it had been up some 0.2% before the data release. The slump in FDI to -14.0% vs. Exp. 0.8% was a direct result of the anti-trust clampdown on multi-national corporations operating in China after scandals have engulfed the likes of GlaxoSmithKline in recent months.
In addition to China, there was the German ZEW Survey, which while beating expectations of a 5.0 print, dropped from 8.6 to 6.9 in August, the lowest since 2012. In fact, the gauge has decreased every month since December when it reached a seven-year high. And while there is not much other news today ahead of the blitz assault of data later in the week, including the Fed tomorrow, the TLTRO announcement on Thursday and the Scottish referendum results and the BABA IPO on Friday, we are stunned futures aren’t as usual, soaring.
As noted yesterday it wasn’t just China: Asian equities suffered their longest losing streak in 12 years now that fears of a hiking Fed are finally starting to manifest themselves in equity outflows. The weakness in China, coupled with caution ahead of tomorrow’s FOMC policy statement has weakened emerging markets, with emerging markets on track for the ninth consecutive daily decline – the longest losing streak since September 2001. Asian stocks fall with the Kospi outperforming and the Shanghai Composite underperforming. MSCI Asia Pacific down 0.5% to 144.3. Nikkei 225 down 0.2%, Hang Seng down 0.9%, Kospi up 0.3%, Shanghai Composite down 1.8%, ASX down 0.5%, Sensex down 1.2%. 0 out of 10 sectors rise with staples, industrials outperforming and financials, energy underperforming.

This post was published at Zero Hedge on 09/16/2014.

Events Impacting The Gold And Silver Price In The Week Of September 15th

In this article, we summarize the key events of the running week that could have an impact on the price of gold and silver price because of trading in COMEX futures.
During the previous week, between September 8th and 14th, a number of economic data resulted in selling pressure in dollar denominated gold and silver:
Germany CPI year on year (actual 0.8%, expected 0.8%, prior 0.8%) US initial jobless claims (actual 315k, expected 300k, prior 302k) The ‘interesting’ thing is that, although gold and silver prices have been lower over the week, the moves were not exaggerated and the gold stocks have been holding up relatively well, which points ‘contained weakness.’

This post was published at GoldSilverWorlds on September 15, 2014.

Reading Between the Lines With the UK Telegraph

Only a monetary ‘nuclear bomb’ can save Italy now, says Mediobanca …The OECD has drastically cut its growth forecast for Italy. The depression will drag on though most of 2015. The economy will contract by 0.4pc this year. It will remain stuck in the doldrums next year with growth of just 0.1pc. If so, Italy’s public debt will spiral to dangerous levels next year, ever further beyond the point of no return for a country without its own sovereign currency and central bank. “This is catastrophic for the finances of the country. We’re heading for a debt ratio of 145pc next year,” said Antonio Guglielmi, global strategist for Mediobanca. – UK Telegraph
Dominant Social Theme: There is no choice but to inflate. And inflate hard.
Free-Market Analysis: Reading articles by our favorite Telegraph author, Ambrose Evans-Pritchard, we are exposed to news and analysis not found elsewhere in the mainstream press. This article is a good example.
But it is also an example of how elite memes are produced and presented, as he frames the dialogue as one of two choices, which is simply not logical. There are other choices.
Here’s more:
“Who knows the maximum number that the market will tolerate? The number is already scary, but for the time being Draghi’s poker game is proving successful, and there is now the smell of QE keep the game going for a bit longer.”
“It is going to take a nuclear bomb to turn this around. If Draghi ends up doing almost nothing – and there is a lot of scepticism about the ECB’s plans – Italy is dead,” he said.
It has been an abominable few days for the Italian economy. ISTAT said today that industrial output fell by 1pc in July (m/m), and 1.8pc from a year ago. It is down a fifth since 2008.

This post was published at The Daily Bell on September 16, 2014.

Janus Yellen and the Great Transition from Risk-On to Risk-Off

The end of risk-on cannot be prettily managed.
In ancient Roman religion and myth, Janus is the god of transitions–beginnings and endings of conflict, war and peace, journeys, trades and eras. Janus has two faces, as befits a god that looks both to the future and to the past. In our era of omnipotent central banks worshipped by the Status Quo, we have a goddess of financial transitions–Janus Yellen, the two-faced chair/deity of the Federal Reserve–to usher in the Great Transition from risk-on to risk-off. What is risk-on? Speculative bets directly enabled by central bank issued free money for financiers–also known by the bland technocrat perception management labels stimulus and quantitative easing (QE). The primary risk-on policies are: 1. ZIRP–zero interest rate policy. This enables financiers (but not J. Q. Citizen) to borrow money for next to nothing and then use this free money to buy assets that pay dividends or interest. This is effectively a gift to banks and financiers. The goal is straightforward: transfer great wealth from the peasants who once earned interest on their savings to the banks, who have rebuilt their bad-bet-shattered balance sheets on the backs of tax donkeys and savers.

This post was published at Charles Hugh Smith on MONDAY, SEPTEMBER 15, 2014.