Events Impacting The Gold And Silver Price In The Week Of September 29th

Jon

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 21st and 27th, both gold and silver remained somehow stable. There was no specific event driven price change.
Gold and silver are at a key juncture. Were these price levels to be violated to the downside, then the metals are breaking through a mega support level. gold stocks have been holding up relatively well up until a week ago but, unfortunately, have been weakening lately. Gold bulls would like to see two things going forward; first, current support levels need not to be violated and, second, gold stocks need to hold up well.
For the week commencing September 29th, there are some key economic data and the European Central Bank announcement that could impact markets and precious metals.

This post was published at GoldSilverWorlds on September 29, 2014.

28/9/2014: Euro area banks deposits: no sign of significant improvements

Jon

Italy and Slovenia are two countries that managed to raise the deposit levels in their banking system from Q1 2009. Portugal suffered a decline in deposits off the peak, but stayed above 2009 levels. In every other country sampled, deposits fell from 2009 levels. Note: Ireland too suffered a decline in deposits and in fact, once we control for the reclassifications in deposits, the decline has been more dramatic than the one depicted in the chart (see details here:

This post was published at True Economics on September 28, 2014.

Long Term View of Gold ( Monthly Basis)

Jon

It has been some time since I have posted a LONG TERM ( monthly ) chart for gold. I have been using the weekly and daily time frames for analysis purpose but I wanted to take the opportunity to answer – in this format – my critics and those who continue to deny that gold is currently in a bear market.
Over and over again, we get the same worn-out trite from the gold perma-bulls, that “any day now” gold is going to launch and that the current sell off is a GREAT BUYING opportunity.
This is coming from the same people who also have been assuring us for the last THREE YEARS that based on one wild theory and reckless claim after another, that a big short squeeze was imminent and that the “smart investor” should be buying. They told us this at $1800, then at $1700, then at $1600, most certainly at $1500, again at $1400, screamed even louder at $1300 and now they are down to dealing with $1200.
Every time, it is the same foolish and wild claim – “based on such and such theory or such and such “insider” information, gold is getting ready to launch.
How many of these theories have we tried to debunk over here, incurring as the result the wrath and ire of the gold cult members. Let me name a few once more and recall the breathless and dogmatic pronouncements, as if from on high, that once the markets understood this secret gnosis that only those advocating these things were privy to, it was “the sky is the limit” for gold prices.
Merely listing them here brings back the many battles we have had to fight to dispel these things.

This post was published at Trader Dan Norcini on September 28, 2014.

Interesting People: Bill Gross and Mohamed El-Erian

Jon

Day shift leaving, and the night shift not yet arrived.
From the one and only Wikipedia and abbreviated as required:
” Pacific Investment Management Company, LLC (commonly called PIMCO), is an American global investment management firm with over 8,400 employees working in 13 offices across 12 countries. PIMCO is one of the largest active global fixed income investment managers in the world, with over $1.97 trillion in managed assets of 30 June 2014. The company runs the largest bond mutual fund in the world – the PIMCO Total Return Bond Fund, and provides portfolio management and asset allocation solutions for millions of investors worldwide……… PIMCO also has an ETF business, which had approximately $13.581 billion in assets under management, as of Jan. 21, 2014. “
Where did PIMCO come from?
Wiki:
” The firm was founded in 1971, launching with $12 million of assets. Previously, PIMCO had functioned as a unit of Pacific Life Insurance Co., managing separate accounts for that insurer’s clients. In 2000, PIMCO was acquired by Allianz SE, a large global financial services company based in Munich, Germany, but the firm continues to operate as an autonomous subsidiary of Allianz.
….. The firm is known to have coined and popularized the phrase “the New Normal” in the aftermath of the subprime mortgage crisis in 2009. More recently, PIMCO introduced the “New Neutral” thesis to characterize a period of lower but stable economic growth, and interest rates to remain low for a longer period of time. “
And who founded PIMCO?

This post was published at TF Metals Report on September 28, 2014.

“I Am Putting Everything In Goldman Sachs Because These Guys Can Do Whatever The Hell They Want”

Jon

When we first covered the Carmen Segarra lawsuit alleging the capture of the NY Fed by Goldman Sachs back in October 2013, we didn’t have much hope for justice to get done. We said that “while her allegations may be non-definitive, and her wrongful termination suit is ultimately dropped, there is hope this opens up an inquiry into the close relationship between Goldman and the NY Fed. Alas, since the judicial branch is also under the control of the two abovementioned entities, we very much doubt it.”
Sure enough, the lawsuit was dropped, but not before it became clear that the very judge in charge of the case, U. S. District Judge Ronnie Abrams, was herself conflicted, after it was revealed that her husband, Greg Andres, a partner at Davis Polk & Wardwell, was representing Goldman in an advisory capacity. Curiously, before she assumed her current office in March 2013, back in 2008 Abrams returned to Davis Polk herself as Special Counsel for Pro Bono. She had previously worked at the firm from 1994 to 1998. So yeah, some wonder just how far do Goldman’s tentacles stretch not only at the NY Fed, not only at the legislative level (see “With Cantor Down, Which Other Politicians Has Goldman Invested In?”), but at the judicial as well.
And then, on Friday, the Segarra case against the Federal Reserve branch of Goldman Sachs got a second wind, when as a result of another disclosure, ProPublica revealed “How Goldman Controls The New York Fed in 47.5 Hours Of “The Secret Goldman Sachs Tapes.” That is to say, nothing new was revealed per se, because as anyone who has read this website for the past 6 years knows just how vast Goldman’s network is not only at the Fed, but in that all important other continent too, Europe.

This post was published at Zero Hedge on 09/28/2014.

More Evidence That Canadian Success Story Didn’t Rely on Loose Money

Jon

In a previous post, I reviewed the great Canadian success story involving relatively large budget cuts as a way to turn around the fiscal crisis of 1995. On the surface, this seems anomalous to those who think Aggregate Demand is the key to understanding recessions, because at the time Canada was coming off the heels of a bad slump. Even so, the massive reversal of budget deficits into a string of 11 consecutive surpluses went hand-in-hand with falling unemployment.
As I further explained in that post, today’s Keynesians and Market Monetarists try to reconcile the episode with their theoretical framework by claiming that the Bank of Canada offset the ‘fiscal austerity’ with expansionary monetary policy. In other words, today’s Keynesians and Market Monetarists say that the only reason the Canadian government’s budget cuts didn’t plunge them deep into recession was that the central bank saved the day. In the present post, I will show that this is simply not correct; by various measures, the Bank of Canada arguably tightened monetary policy right when the federal government was slashing spending. This is the exact opposite of what the Keynesians and Market Monetarists need for their story to work.
Krugman Comments on Canada in 1996
Before diving into the details, let me reproduce a commentary by Paul Krugman from August 1996, where he used the example of Canada to illustrate a more general point Krugman was making about the danger of targeting a low price inflation rate:

This post was published at Mises Canada on September 28th, 2014.

Bill Cohan: The Truth About the Fed

Jon

“The truth is, although both incidents do reveal something about the way the powerful and famous get away with more stuff than the rest of us, there’s no real comparison. The Segarra Tapes actually reveal little or nothing that was not already known, assuming you have a shred of understanding how the Federal Reserve banks actually work. Nor is William Dudley, the president of the Federal Reserve Bank of New York, about to get pilloried in public like NFL Commissioner Roger Goodell.

This post was published at Jesses Crossroads Cafe on 28 SEPTEMBER 2014.

The Plunge Protection Team Is Opening An HFT-Focused Chicago Office

Jon

For several days we had heard a persistent rumor, that one of the most famous members of the New York Fed’s Markets Group, also known as the Plunge Protection Team, Kevin Henry was moving to the HFT capital of the world, Chicago. We refused to believe it because, let’s face it, when the trading desk on the9th floor of Liberty 33 needs to get its hands dirty in stocks, it simply delegates said task using just a little more than arms length negotiation, with the world’s most levered HFT hedge fund: Ken Griffin’s Citadel. Why change the status quo.
And then, it turned out to be true because as the Chicago Fed announced just a few short days ago:
The Markets Group at the Federal Reserve Bank of New York manages the size and composition of the Federal Reserve System’s balance sheet consistent with the directives and the authorization of the Federal Open Market Committee (FOMC), supports debt issuance and debt management on behalf of the U. S. Treasury, provides foreign exchange services to the U. S. Treasury and provides account services to foreign central banks, international agencies and U. S. government agencies. Markets Group is establishing a presence at the Federal Reserve Bank of Chicago and has openings for both experienced professionals and recent graduates.
So instead of interacting with the HFT momentum ignition algos using the microwave line of sight towers from NY all the way to Chicago, the NY Fed has decided it needs to be present on location in the windy city to buy up every ES contract and reverse the selling momentum when the day of reckoning finally hits.

This post was published at Zero Hedge on 09/28/2014.

Does Surging Demand For Gold & Silver Coins Signal a Bottom?

Jon

Reports of individuals snapping up near-record numbers of gold and silver coins are coming in from around the world:
U. S. Mint American Eagle gold coin sales set to rise sharply in Sept
(Reuters) – The U. S. Mint has sold nearly 50,000 ounces of American Eagle gold coins so far in September, almost double its total in August, as a sharp pullback in gold prices and geopolitical tensions boosted interest for physical products from retail investors.
With only six business days left until the end of September, sales of American Eagle bullion gold coins made for investors were 46,000 ounces, up 84 percent from August sales of 25,000 ounces, the latest U. S. Mint data showed on Monday.
Record highs in U. S. equities also prompted some retail investors to buy precious metal products to diversify their portfolios, said David Beahm, vice president at New Orleans coin dealer Blanchard & Co.

This post was published at DollarCollapse on September 28, 2014.

The Southwest housing mania is overheating: California, Arizona, and Nevada leading the way once again with unaffordable housing markets.

Jon

There is a great book called Willpower that examines the ability of people to actually exercise self-control and how these character traits impact life. Those that can delay gratification typically end up doing better in life throughout marriages, work, and their financial decisions. Why this matters for housing especially here in California is most people look at their left and right and are trying to keep up with their neighbors. It is fascinating to see many people trying to cash in on their current equity so they can leverage up to a bigger home because they can. Forget about paying down the mortgage for retirement. Time to press reset and leverage into a bigger home. Since home ownership in California is largely in the domain of older home owners many are simply diving into this property ladder game once again. Retirement figures show that many older Americans are horribly underprepared for retirement. Yet the advice is always to buy as much house as you can get your hands on. Think about the $700,000 starter crap shack here in SoCal. For a 20 percent down payment, a household will need to save up $140,000. Most are into instant gratification and that is why car leases reign supreme in the land of all hat and no cattle. This is the land of Purnia Dog Chow eating baby boomers living in million dollar homes and welcoming back their heavily indebted offspring. The Southwest once again is paving the way to this new recent housing mania. If we look at California, Nevada, and Arizona we find that home values have quickly outpaced underlying economic activity.

This post was published at Doctor Housing Bubble on 28 Sep, 2014.

The “Only Chart That Matters”, Projected Until 2016

Jon

Three weeks ago, in “A Quick Reminder Of The Only Thing That Matters, In One Chart” we did just that, showing the ever greater amount of global liquidity injected by the central banks, thanks to which they have so far successfully masked the accelerating economic collapse of the world, as shown by cratering “benign” inflation expectations to levels not seen since Lehman: hardly a confirmation of economic stability and growth:

This post was published at Zero Hedge on 09/28/2014.

Rising GDP “Boosts Consumer Demand” To Buy Gold

Jon

GOLD BUYING is boosted more by rising GDP and stronger consumer incomes than by financial crisis, according to a new study from a world-renowned economics professor.
Defying the developed West’s common belief that gold is only for bad times, the report confirms what market-development organization the World Gold Council calls “gold’s positive duality: its ability to benefit from both the contraction and expansion phases of the business cycle.”
The econometric study comes from Avinash Persaud – emeritus professor at Gresham College, visiting fellow at CERF-Cambridge University, and governor of the London School of Economics – who was commissioned by the World Gold Council to study consumer versus investment gold buying both globally and in 11 key countries.
Over the last five years, world demand to buy gold jewelry has accounted for 48% of annual purchases, and a further 10% has gone to electronic products such as PCs and smartphones. With central banks buying 7% on average, and despite the global financial crisis, gold investing has accounted for less than consumer demand – some 35% per year since 2009.
“The new analysis,” says the Council, presenting Professor Persaud’s findings, “shows that a 1% increase in GDP lifted jewellery consumption by an average of 5%, all else equal.” Because “gold jewellery is what economists refer to as a ‘superior’ good,” says Persaud, “where demand increases proportionally more than income.”

This post was published at Gold-Eagle on September 28, 2014.

Wendy McElroy: Aftermath of the GGC Firestorm

Jon

Introduction: Wendy McElroy is a prolific book author, columnist, speaker and contributor to prestigious journals and magazines, often with an “alternative” slant. She made her reputation as a young writer commenting from a libertarian standpoint on feminism, and taking a pro-pornography position that was anathema to the feminist “old guard” that saw pornography as a tool of chauvinist oppression. McElroy has continued to speak out, nonetheless, on issues of the most importance to her: libertarianism, anarchism and, of course, feminism. She has served as a weekly columnist for FoxNews.com and is the editor of the feminist website ifeminists.com. McElroy is also a research fellow at the Independent Institute, and contributing editor to The Dollar Vigilante, Ideas on Liberty (formerly The Freeman), The New Libertarian, Free Inquiry and Liberty magazines. Her writing has appeared in such diverse periodicals as National Review, Marie Claire and Penthouse. For over a decade, McElroy was a series editor for Knowledge Products. She has written and edited many documentary scripts for audio cassette, some of which were narrated by Walter Cronkite, George C. Scott and Harry Reasoner. Ms. McElroy contributes a weekly column to The Daily Bell. Her most recent book is The Art of Being Free: Politics versus the Everyman and Woman.
Daily Bell: Thanks for speaking with us again. How are you?
Wendy McElroy: Doing well, thank you. Life has been a wild ride of late but I am looking forward to a long, hard winter because it will give me the excuse I need to spend every day in front of my computer, writing. Other than time spent with my husband, I’m never happier than when I’m workin’ the words. And I am jazzed about a new book I’m doing about non-political strategies through which to pursue freedom, especially on a personal level in daily life.
Daily Bell: Your editorial, “The Fate of Galt’s Gulch Chile,” which we published at The Daily Bell in August, received an enormous amount of attention. Can you provide a brief history of your involvement in GGC and summary of the points made in your editorial for those not aware of the background?

This post was published at The Daily Bell on September 28, 2014.

Poor Man’s Gold!

Jon

Silver is the Rodney Dangerfield of the precious metals. It gets no respect. Maybe this chart says why. The price noted in the chart above is as of the end of August. Today it is lower around $17.80. On an inflation-adjusted basis, silver is trading around where it was in either the late 1800’s or ‘heavens above’ back around 1780.
Some improvement. Outside of a good run in the mid-1800’s and the famous Hunt Brothers spike into 1980 silver has actually been in a long-term downtrend on an inflation-adjusted basis.
Silver has thrust above the long-term downtrend channel so that is positive. It remains down roughly 65% from the high of 2011. As to the inflation adjusted 1980 high, well silver would have to reach to roughly $128 to equal that run.

This post was published at Silver Bear Cafe on September 27, 2014.

Miracle Man (Who Invented Off-Balance-Sheet Financial Engineering that’s still Sinking Companies Today)

Jon

Ivar Kreuger was an industrial and financial genius who sought complete control over the operations of his global match conglomerate. At the height of his power, Kreuger ran a monopoly that controlled 75% of all global match sales. Kreuger succeeded, in part, by introducing innovations in finance that are still being used today, but which have also been used by companies such as Enron and others to deceive investors. His insatiable desire for complete control and the promises Kreuger made that couldn’t be kept led to the collapse of his company in 1932 and billions of dollars in losses to investors.
Miracle Man
Ivar Kreuger got his start in the construction business, introducing new engineering techniques in Sweden that enabled him to win contracts to build the Stockholm Olympic Stadium (1912) and Stockholm City Hall (1913). He succeeded not only because he used the latest construction technology, but because Kreuger was able to complete these buildings on time and on budget. Unlike other construction companies, Kreuger promised to pay a penalty if buildings were not completed by the contract date. He also asked that he receive a bonus if the projects were completed early, which they often were. Kreuger was a wheeler and dealer from the beginning. He knew how to incentivize his clients to both win contracts and to profit from them.

This post was published at Wolf Street on September 28, 2014.

Know When To Fix A Broken Stock

Jon

A recurring theme has been presented here over the past several years: the performance of certain simple option strategies quite often gives an accurate picture of the mood of the stock market. The mood of traders – the emotion – does not determine the future of stock prices, but it surely determines how traders are likely to react to future news.
As with any indicator, be it a Simple Moving Average (SMA), a Relative Strength Index (RSI), an Elliott Wave or a Fibonacci Retracement, the use of options as an indicator is not useful at predicting the future. But, one does not need to know the future in order to be a successful trader. To be successful requires a trader to be cognizant of the emotions present in the market, thus allowing the trader to observe changes in the stock market in their proper context, and react accordingly.
A trader needs to know when other traders are optimistic, because a dip in stock prices makes optimistic traders likely to buy stocks. On the other hand, pessimism makes traders look for the nearest exit. A dip in stock prices in an optimistic market is not the same as a dip in a pessimistic one. The context is important.
Last week saw the first major shift away from optimism in several months. It is still an optimistic market, but not nearly as optimistic as it was just a few short weeks ago. The shift in optimism has been clearly outlined in three recent articles, available here:

This post was published at ZenTrader on September 28, 2014.

India’s Changing Gold Culture

Jon

India has been the world’s No.1 gold buyer for thousands of years. But traditions are changing…
TODAY marks the last day of Shradh, writesAdrian Ash at BullionVault, the period of “closed observance” on Hindu calendars when it’s deemed “inauspicious” to start new ventures or make new investments.
The end of Shradh has a political angle. Also known as Pitru Paksha, the early autumn shutdown has been used to delay nominations for upcoming elections, reports The Times of India.
Fighting such “superstitions” can be dangerous. Rationalist campaigner Narendra Dabholkar was murdered in summer 2013 when pushing anti-superstition laws. This summer’s delay to India’s electoral process has angered many who want to reduce what they see as the stifling (and corrupting) effect of India’s deep culture of religious observance.
Gold looms large in that culture of course (and also in India’s huge bribery and corruption culture). The peak demand season in the world’s heaviest consumer market starts now, running on until Diwali at the end of October. But long term, many analysts think the wider availability of luxury goods in India will dent India’s gold demand, overcoming superstition where rationalism cannot. Many financial services providers think the same of their products…from bank savings to stock-market funds.

This post was published at Gold-Eagle on September 28, 2014.

The Collapse of the American Economy Has Begun

Jon

Susan Duclos recently interviewed ‘V’ the Guerrilla Economist and the following information was revealed in this landmark interview:
‘The process of undermining the US dollar is well on schedule as well; more than 105 countries have decided that the dollar no longer works for them, joining Russia, China and other BRICS nations in leaving the dollar as the entire world comes to the realization that America’s leaders are insane. Their recklessness and evil ways have left tremendous shame upon our nation. Though there has been much manipulation and propping up, but that is only setting us up for the inevitable massive crash.
‘V’ begins by updating us on recent information that he has received from his 4-Star General source and warns that events are still on schedule, a schedule that he previously warned would leave the US dollar ‘undermined’ by 2015 and the US ceasing to exist as a nation by 2017′.
The interview, can be accessed through the following link. I highly recommend listening to this interview.

This post was published at The Common Sense Show on September 27, 2014.