Putin “Prepares For Economic War”, Buys Whopping 55 Tonnes Of Gold In Q3

Jon

Just as China is buying ‘cheap’ oil with both hands and feet, so Russia, according to the latest data from The World Gold Council (WGC) has been buying gold in huge size. Dwarfing the rest of the world’s buying in Q3, Russia added a stunning 55 tonnes to its reserves, as The Telegraph reports, Putin is taking advantage of lower gold prices to pack the vaults of Russia’s central bank with bullion as it “prepares for the possibility of a long, drawn-out economic war with the West.”
Bottom line: Russia bought more gold in Q3 then all other countries combined (of course, nobody know what or how much China is buying).

This post was published at Zero Hedge on 11/13/2014.

World Gold Council Issues its Latest Report

Jon

I would urge my readers to take some time perusing the contents of the WGC’s most recent report on supply and demand in the gold market. It is a most informative read.
I wanted to pull a short extract from their section on ETF’s as I found their analysis remarkably similar to mine when it comes to GLD for instance.
From their GOLD DEMAND TRENDS, page 6:
“ETF outflows were far smaller in scale than those in Q3 last year. As of end-September, ETF holdings have declined by a little under 84t, equivalent to just 12% of the outflows over the same period of 2013. This lends weight to our analysis – as laid out in previous research – that more tactical investors have largely exited and the remaining base of ETF positions are held as strategic investments.
There was, however, little during the quarter to encourage fresh investment in ETFs as investors kept their gaze locked on the US economic scenario. The prospect of US interest rates remaining low ‘for a considerable time’ and the widely-anticipated end to quantitative easing( QE) by the Federal Reserve eclipsed all other considerations. The soundness of gold’s underlying fundamentals was widely acknowledged, but in itself offered little fresh impetus to drive an increase in investor positions.”

This post was published at Trader Dan Norcini on November 13, 2014.

Treasury Concludes Weekly Issuance With Poor 30 Year Bond Auction

Jon

If yesterday’s slightly tailing 10 Year auction was a non-event, today’s $16 billion 30 Year refunding was one of the uglier long-end auctions in a while, which perhaps is to be expected in a world in which the Fed is, for the time being, no longer monetizing Treasurys and Dealers no longer have the option to turn around and flip the paper back to the Fed on a whim, and with guaranteed profit.
The highlights: printing at a high yield of 3.092%, this was a notable 1.7 bps tail to the 3.075 When Issued, and certainly wider than last month’s 3.074% yield. Keep in mind yesterday’s 10 Year priced inside of the October 10Y auction.

This post was published at Zero Hedge on 11/13/2014.

3 Things Worth Thinking About (Vol. 17)

Jon

Mean Reverting Profits Earlier this week I discussed the growing detachment between the stock market and the“real” underlying economy. One of the areas I touched on was corporate earnings that have been elevated by an immense amount of accounting gimmackry, cost cutting, and productivity increases. The problem, as I stated, is that historically earnings have grown 6% peak-to-peak before a reversion. Notice, I said peak-to-peak. The issue is that the majority of analysts now estimate that earnings will rise unabated for the next five years.
As shown in the chart below, earnings have never attained the currently expected growth rate…ever.”

However, this also applies to corporate profit margins as well. As Jeremy Grantham once stated:
“Profit margins are probably the most mean-reverting series in finance, and if profit margins do not mean-revert, then something has gone badly wrong with capitalism. If high profits do not attract competition, there is something wrong with the system, and it is not functioning properly.’
Grantham is correct. As shown, when we look at inflation-adjusted profit margins as a percentage of inflation-adjusted GDP we see a clear process of mean reverting activity over time.

This post was published at StreetTalkLive on 13 November 2014.

Amazon To Provide Drone Hunters With Target Practice In Cambridge, UK

Jon

A year ago, in the latest attempt to distract from his company’s inability to generate profit, Amazon’s Jeff Bezos revealed his latest breathless vision for the latest marketing gimmick future in the form of Amazon Prime Air: a fleet of unmanned delivery drones bringing customers the goods they ordered or, as the case may be, didn’t order. Immediately in the aftermath of this announcement, a just as breathless ad hoc group of drone hunters was conceived, and patiently waited for the announcement from Bezos where said Prime Air Drones would be tested so they too could test their sharpshooting skills. As of today they are in luck, because as the FT reports, Amazon has picked one of the intellectual capitals of the Old World, UK’s university town Cambridge, as the place where it will test its fleet of unmanned delivery drones.

This post was published at Zero Hedge on 11/13/2014.

This Fed President is Correctly Worried About a 1937-Style Slump

Jon

On November 6, Bloomberg News reporter, Matthew Boesler, set off a flurry of comments with an article headlined: ‘Fed Concern With Repeat of 1937 Blunder Echoed by Markets.’
The reference to 1937 relates to the fact that as the U. S. economy was showing signs of improvement from the conditions of the Great Depression of the 1930s, the Federal government and the Federal Reserve overreacted to inflationary concerns with contractive measures in 1937, sending the economy into a sharp slump in late 1937 and 1938.
The chief worrier at the Fed about it making the same mistake today is Charles Evans, President of the Federal Reserve Bank of Chicago. Evans’ background is that of a long-term researcher. Prior to becoming President of the Chicago Fed, he served as its Director of Research, and earlier, its Senior Economist in charge of the Macroeconomics Research Group.
In four speeches beginning on September 24, Evans has been effectively telling Fed Chair Janet Yellen and the Federal Open Market Committee of the Federal Reserve Board of Governors not to crash the economy again by ignoring the lessons of 1937 and 1938. Evans’ most pointed warnings came in the September 24 speech with direct references to 1937:
‘Past experience with the zero lower bound also counsels patience. History has not looked kindly on attempts to prematurely remove monetary accommodation from economies that are in or near a liquidity trap. The U. S. experience during the Great Depression – in particular, in 1937 – is a classic example for monetary historians: In response to the positive growth and reinflation that occurred after devaluation and suspension of gold convertibility, the Fed raised reserve requirements, the Treasury sterilized gold inflows, and there was a fiscal contraction. Subsequently, the economy dropped back into recession and deflation. During this time, interest rates remained very low. The discount rate was lower after 1937 than before, and Treasury bill rates were less than 1 percent. By many economic accounts, it took the big fiscal expansion associated with World War II to exit the Great Depression.’

This post was published at Wall Street On Parade By Pam Marte.

Sunshine Profits’ Take on the Swiss Gold Referendum

Jon

We have recently been asked to comment on the upcoming referendum in Switzerland on gold. In particular, we were asked if this could be the turning point for the gold (and other precious metals) market that has been declining for more than 2 years now. The simple law of supply and demand dictates that when the demand for something increases, its price should go up. However, things are rarely simple in the financial markets and it’s definitely not simple in case of gold. Will this be the start of a domino effect and escalation of gold price? You’ll find our take on this timely matter below.
Actually, we have been expecting to see the above question. The referendum for the Swiss Gold Initiative is scheduled for November 30th and the closer we get to the vote, the greater the interest. What is this all about and what win for the initiative would imply for the gold market?
The motions that make up the Swiss Gold Initiative are threefold:
The Swiss National Bank (SNB) does not have the right to sell its gold reserves The gold of the SNB must be stored physically in Switzerland The SNB must hold at least 20% of its total assets in gold The first point would not change anything, because the SNB has not been selling gold since 2007.

This post was published at GoldSeek on 13 November 2014.

13/11/2014: Irish B’They rob people big time!’ JPMorgan’s ‘Worst Nightmare’ Alayne Fleischmann to Max Keiseranks: In a Bad League of Their Own

Jon

The following video was published by RT on Nov 13, 2014
Max interviews Alayne Fleischmann, the JP Morgan whistleblower, profiled in the latest Rolling Stone magazine. They talk about fraud in the mortgage backed securities business, the statute of limitations on wire fraud and what exactly it is that Jamie Dimon wants.

PRIMARY SILVER MINERS: Losing Nearly $3.00 For Every Ounce Of Production

Jon

With more than half of the primary silver miners financial results for the third quarter finally out, the group is now losing nearly $3.00 an ounce at the current market price of silver. We can thank the Fed and Bullion Banks for rigging the paper silver price well below the estimated average break-even for the primary silver miners.
Before I provide my data from the silver miners in my group, I want to discuss the debate on PRECIOUS METALS MANIPULATION. There seems to be a demarcation now between those who are more traders and the group that adheres to fundamentals. While I admire anyone who can make a profit paper trading the precious metals, I find it quite interesting how several of the well-known names find it amusing to BASH those in the fundamental BUY & HOLD CAMP.
I look forward to hearing if either Doug Casey or Dan Norcini finally admit that MANIPULATION has and is taking place in the precious metal markets as evidence is now surfacing. According to the Zerohedge article, A Clear Attempt To Manipulate Fixes In The Precious Metal Market:
Swiss regulator FINMA said on Wednesday that it found a ‘clear attempt’ to manipulate precious metals benchmarks during its investigation into precious metals and foreign exchange trading at UBS.
‘The behaviour patterns in precious metals were somewhat similar to the behaviour patterns in foreign exchange,’ FINMA director Mark Branson said in a conference call with journalists.
He said that as UBS has precious metals and foreign exchange desks under combined leadership, it was not surprising to find similar behaviour.
‘But we have also seen a clear attempt to manipulate fixes in the precious metal markets.’

This post was published at SRSrocco Report on November 12, 2014.

Gold’s Smoking Gun

Jon

Tonight I want to explore the relationship between the US dollar, the Japaneses Yen and gold. Most investors know that a rising US dollar is usually a bad sign for commodities and the precious metals complex. When the US dollar is falling commodities and the precious metals complex usually do pretty well. When the US dollar topped out in 2000 that’s when gold and commodities started their bull markets that lasted until 2011. Since that time the US dollar has been slowly trending higher while most commodities and the precious metals complex have been moving lower. This long term monthly chart for the US dollar shows you the high in 2000 which marked the beginning of gold’s bull market. At the bottom left hand side of the chart, in big base #2, point #4 marks the high for gold’s bull market. Since that low at point #4 you can see how the US dollar has been slowly rising since 2011 which was the peak for gold and most commodities. One last note on the chart below. The US dollar is now in its third month of a breakout move from big base #2 which is a fractal of big base #1. If you’ve been wondering why the US dollar has been so strong lately it’s because it’s in breakout mode. This is what a breakout looks and feels like.

This post was published at GoldSeek on 13 November 2014.

Keiser Report: Whistleblower Alayne Fleischmann (JP Morgan ‘worst nightmare’) talks to Max (E679)

Jon

The following video was published by RT on Nov 13, 2014
In this episode of the Keiser Report, Max Keiser and Stacy Herbert discuss the shouts of ‘Ya Me Cans’ as the people are sick of a corrupt elite above the law. They also look at the headlines of students in India who believe in the right to cheat and at the innocent people who plead guilty to crimes they didn’t commit in America. In the second half Max interviews Alayne Fleischmann, the JP Morgan whistleblower, profiled in the latest Rolling Stone magazine. They talk about fraud in the mortgage backed securities business, the statute of limitations on wire fraud and what exactly it is that Jamie Dimon wants.

ISIS Unveils Its New Gold-Backed Currency To Remove Itself From “The Oppressors’ Money System”

Jon

It appears the rumors are true. Islamic State is set to become the only ‘state’ to back its currency with gold (silver and copper) as it unveils the new coins that will be used in an attempt to solidify its makeshift caliphate. ISIS says the new currency will take the group out of “the oppressors’ money system.”

This post was published at Zero Hedge on 11/13/2014.

Why Indian demand is rising again

Jon

India’s appetite for gold went up significantly in the July-September quarter, even as global demand for the precious metal fell to its lowest in nearly five years.
Gold demand rose 39 per cent to 225.1 tonne during the quarter, according to industry body, World Gold Council. In China, the other major buyer of gold, demand fell 37 per cent during the period on a year-on-year basis.
Here’s why India is buying more gold:
1) Jewellery demand in the country went up by 60 per cent during the quarter, even as investment demand fell 10 per cent. Investment demand fell on softening prices and weak price outlook. ‘Price premiums in India declined sharply after supply pressures loosened as the RBI permitted trading houses to import gold again,’ the World Gold Council said.
2) Soon after the Narendra Modi-government was formed, the Reserve Bank of India (RBI) in May eased some import norms like allowing star trading houses and premium trading houses to import gold, who had been banned from doing so in 2013, to combat trade deficit. This led to an increase in supply in the domestic market, lowering prices in the process.

This post was published at TruthinGold on November 13, 2014.

Why the Rising U.S. Dollar Could Destabilize the Global Financial System

Jon

I have been suggesting for several years that the U. S. Dollar would confound those anticipating its demise by starting a long secular uptrend.
In early September I made the case for a rising U. S. dollar, based on the basic supply and demand for dollars stemming from four dynamics: Demand for dollars as reserves Other nations devaluing their own currencies to increase exports ‘Flight to safety’ from periphery currencies to the reserve currencies Reduced issuance of dollars due to declining U. S. fiscal deficits and the end of QE (quantitative easing) Since then the dollar has continued its advance, and is now breaking out of a downtrend stretching back to 2005 – and by some accounts, to 1985:

This post was published at Charles Hugh Smith on WEDNESDAY, NOVEMBER 12, 2014.

Initial Jobless Claims Rise 12k To 6-Week Highs But Hovers Near 40 Year Lows

Jon

A 12k rise in initial jobless claims (on a seasonally-adjusted basis) missed expectations by the most in 8 weeks and rose to its highest in 7 weeks at 290k. Non-Seasonally-adjusted, claims rose a more interesting 43k but bigger picture shows the average of this noisy time series hovers near 40 year lows as low-paying jobs replace high-paying jobs… but remember a jobs a job in the eyes of the government propagandists.
Miss and rise.. but nothing too scary yet…

This post was published at Zero Hedge on 11/13/2014.

“Now Is A Good Time” To Buy Gold – Fidelity Investments

Jon

Joe Wickwire, research analyst and portfolio manager at Fidelity investments, presented some very grounded, reasonable arguments as to why one should buy gold at the LBMA Precious Metals Conference in Lima, Peru which concluded on Tuesday.
Fidelity Investments Logo
Fidelity Investments are a largely family owned mutual fund and financial services company. It is one of the largest mutual fund and financial services groups in the world. Founded in 1946, the company has since served North American investors. This year they were voted best investment company in an online broker review by Stockbroker.com. They have gradually moved up in the rankings from eighth place in 2011.
They currently manage a massive $2 trillion worth of assets. Gold is a diversification and makes up only a small proportion of their overall assets. Thus their pronouncements concerning gold can be regarded as independent.
“I believe that now is a good time to take advantage of the negative sentiment short-term trading sentiment”, Wickwire said as reported by the Bullion Desk:
Wickwire argues that, from an asset allocation standpoint, actual gold market fundamentals are not linked to transitory US stock market volatility or whether or not the dollar moves up or down against the euro or the yen. Those items can be the basis for short-term trading strategies but not for long-term portfolio construction.
‘I believe that now is a good time to take advantage of negative short-term trading sentiment,’ Wickwire said.

This post was published at Gold Core on 13 November 2014.

24% Of Millennials “Expect” Student Loan Forgiveness

Jon

It appears the concept of no consequences is now deeply embedded in the American society. As Student loan debtloads surge ever higher – and opportunities grow ever lower – NBC News reports a rather stunning 24% of Millennials said they expect their loans will ultimately be forgiven, according to study released Wednesday by Junior Achievement and PwC US. That helps to explain why delinquency rates are at record highs – aside from the massive debtloads and no high-paying jobs – as students see bankers rigging every market in the world with little to no consequence, one can only imagine the lessons being learned.
Heavily delinquent student loans hit a fresh record high of $124.3 billion, up from $121.5 billion in the prior quarter.

This post was published at Zero Hedge on 11/13/2014.

Gold Long & Short ETF Technical Analysis

Jon

The analysis includes GDXJ which is a long gold fund and DGZ which is a short gold fund.
GDXJ Market Vectors Junior Gold Miners ETF The Market Vectors Junior Gold Miners ETF (GDXJ) is an equity index that provides exposure to small and medium sized companies that generate at least 50% of their revenues from gold and/or silver mining. It is listed on the American Stock Exchange (AMEX) with price last trading at $25.73.
GDXJ MONTHLY CHART

The Bollinger Bands show price potentially finding support now at the lower band. These bands have tightened considerably in the last few months which may indicate a consolidation phase and even possibly a major trend change. For the time being, I’d be looking for a rally back up to the upper band which currently stands around $46.
The lower indicators, being the Relative Strength Indicator (RSI), Stochastic and Moving Average Convergence Divergence (MACD), are all showing multiple bullish divergences. Surely something has to give here. A rally perhaps?!

This post was published at Gold-Eagle on November 12, 2014.