Home › Forums › 16 to 1 Mine › Gold Enters Major Bull Market
- AuthorPosts
That is better than taxing flatulent activity
Last on gold is $912.60.
/More on China/
U.S. Dollar, Yuan and the New Reserve Currency
Chinese are making small moves to get more and more insulation from the dollar.By Vadim Pokhlebkin
Thu, 02 Apr 2009 10:00:00 ET Email | Print | RSS | My Updates Bookmark and share It!There has been a lot of talk lately about replacing the U.S. dollar as the world’s reserve currency. Read these thoughts on this and another hot subject — China’s dependence on the dollar — by Chris Carolan, the editor of Elliott Wave International’s Sunday-Tuesday-Thursday Asian-Pacific Short Term Update. (Excerpted from the recent APSTU issues.)
…the Chinese have announced that they would like the world to establish a reserve currency alternative to the dollar, perhaps under the auspices of the IMF. The U.S. has responded (through Paul Volcker) that the Chinese have created their own predicament by not allowing the yuan to float higher. But we believe that the larger trends to watch are the inevitable leadership role that the Asian-Pacific markets will play in the next bull market as they have access to cheaper capital than the debt-stressed West.
We think that people who focus on the alleged Chinese problem of holding too many dollars miss the point. In the long run, they can reduce their new dollar positions, while the U.S. government is, through their recent actions especially, committing themselves to issuing greater and greater amounts of dollar debt. The Chinese can (and may) push themselves away from the table, but the U.S. does not have the luxury of that freedom.
The yuan, whose exchange rate is controlled, seems to be pushing higher within the boundaries of its restricted trading. [This] chart shows the dollar falling relative to the yuan.
(Sorry chart would not transfer)
How will the Chinese cut their exposure to the dollar over time? News accounts tend to focus on one big event, such as the possibility of a new reserve currency to replace the dollar. But in all likelihood, the Chinese will be making a series of moves, each one gaining them a little bit of insulation from the dollar. If they can protect one hundred billion (US$) here and another one hundred billion there, pretty soon they will have cut their dollar exposure significantly.
We highlighted one such action in our recent discussion of China’s move into owning more resources as a way of diversifying out of the dollar. Now comes news of China executing more currency swaps, where they trade yuan for a local currency, thereby allowing that trading partner to use the yuan in future trade with China. These swaps then remove the need for dollars as an intermediary exchange between trading partners. The Chinese have signed six such swap agreements since November totaling $95 billion. The latest swap agreement is with Argentina.
Step by incremental step, the Chinese are solving their dollar problem, or at least ameliorating it. Those looking for that one big news event to signal the dollar’s irrelevance may be missing the trend, though such an event may still occur further out in time
Two major problems: 1) our national resources are being rejected as potential pollution, which is a complete oxymoron when economic analysis proves how importation of oil is far more costly than allowing the free market to bring forth our own natural resource oil, and 2) the current administration is doing everything it can dream up to not only kill the free market economy in this country, but condemn any capitalist incentive to see it achieve.
China is laughing its ass off, along with every other country that knows that taxing volcanoes would be about as sensible as hog-tying our own natural resources.
Hey, what a great idea! My new bumper sticker: TAX A VOLCANO, THINK OF THE REVENUE
The reason the dollar has remained strong is because of our gross domestic production of a free market and its reliability to remain stable backed by all of our national resources.
The Chinese are a command economy, more efficient, but less innovative for the individual to drive for success.
Then there is the old quote ” He who has the most gold makes the rules” it is time for us to take the gold from the ground to display for the world to see.Last on gold is $913.80 in Asian markets tonight.
The most significant development for gold has been the recent announcement by China that they have secretly added gold to their reserves over the past few years with a well placed official stating that this trend should continue.
China for some time now has been bartering off US dollars for natural resources around the world. Since they hold large quantities of US Treasuries they have to be delicate in their divestiture of them. As they slide out of some of their Treasuries, it is at the same time they’re maintaining the posture that they continue to buy them but overall their holdings are being scaled down.
China is preparing for their future and it doesn’t involve the US dollar being the world’s reserve currency. China is increasing its central bank hoard of gold in preparation for the Yuan becoming the world’s reserve currency within 20 years or sooner.
The bottom line is that China has declared war against those who are manipulating gold’s price to prop up their ailing fiat currencies as they have being since Bretton Woods and before.
It appears that China, as the number one producer of gold, is no longer willing to stand idly by watching fiat central bank manipulation of the gold price. One has to only recall that it wasn’t too long ago that China suggested that the IMF sell its entire holdings of gold. Not only is China keeping all their domestic gold in country along with nibbling here and there on the international market, they want all the IMF’s gold. One can only guess what amount of gold they are looking for.
Our central bank has manipulated gold where it stands today, well below where their own skewed CPI figures dictates it should be somewhere in the neighborhood of $2500 an ounce just to keep up with the erosion of our money’s real worth.
The paper products shorting of gold at the COMEX by the bullion banks is just a matter of time before it all becomes history and blows up in the end. The supposed largest central bank holdings of gold by the US and Germany may very well be challenged in the not too distant future. It’s my belief that these two countries have known the jig is up for the past 18 months and are scampering to get the gold back quietly. Has anyone wondered where all the scrap gold sales that amounted to about 500 tons went last year? Who is running all these offers on TV to buy the public’s old gold jewelry for “quick cash” during this severe recession?
Let the games begin!
_______________________________________China wants to buy more gold
Posted Apr 24th 2009 6:20PM by Connie Madon
Filed under: International markets, China, Commodities, Financial CrisisIn rare public announcement, China has revealed its gold holdings, which are 1,054 tons up from 600 tons in 2002. Why is China’s gold pot of concern to us? Well, for one thing China has been moving away from the US dollar as part of their reserve holdings since 2005. China is increasingly worried about the world economies and wants to protect itself against any deepening of the world financial crisis.
China is also asserting itself on the world stage. Chinese leaders feel that the country’s gold holdings must be increased because of the size of China’a economy and the strengthening of its currency.
In a policy statement Hou Huimin, vice general secretary of the China Gold Association said that China should build its reserves to 5,000 tons. He feels that China should hold more gold than any other country because of China’s international status and because of the financial crisis. He further said: “The financial crisis means the US dollar’s value is changing fast and it may retreat from being the international reserve currency. If that happens, whoever holds the gold will be at an advantage.”
Last on gold is $902.40
Effectively, Venezuela is reducing their gold exports by requiring the central bank to increase its purchases of the metal. Venezuela joins China in building up their gold reserves.
http://www.bloomberg.com/apps/news?pid=20601086&sid=a._KjQ1aRzBo&refer=latin_america
Gold $885.80
Silver $12.50
Gold/Silver Ratio 70.86
Gold/Xau Ratio 7.36
Canadian Dollar $0.8435The Canadian Dollar’s last sale is provided as an incentive for consideration to follow its action in the months ahead or take action as a result of its recently completed bottom formation against the US dollar when it advanced over $0.83. Smart money will be aggressively trading in their US dollars for Canadian dollars in purchasing Canadian gold orientented securities on any renewed strength in gold. In the mean time, these securities should have strong bids going forward as a result of the US dollar going negative against the Loonie.
Your secured cash wealth can be moved from US Treasuries into Canadian Government bonds with a great probability of success. Thus, avoiding continuing debasement of the US currency which the government likes to call inflation using their Mickey Mouse formula for it.
Just read in this mornings paper that Social Security increases for inflation adjustment will stop for the next two years. Whatever the cooked up reason is for this, it sucks. I guess the bankers are more important to them than are elderly which should require more respect than the government is willing to extend to them in their obvious time of need due to this cruel recession. Cut our Social Security inflation adjustments increases and keep handing out our IOU’s to the banks when they are the big screw-ups is not the way to make friends.
There appears to be a floor in gold market at $860 as a result of China’s declared intention to increase their gold reserves in a boston.com carried report from Shanghai/Beijing Reuters published on April 24, 2009. China revealed that it has been secretly buying gold. Currently, they hold 1,054 tons or $30.9 billion at current levels. Considering the Chinese hold nearly $2 trillion in their reserves account, they will have no trouble coming up with cash for more purchases anytime that they feel the metal is underpriced. The most significant aspect of their announcement is that a new trend has begun to acquire the royal metal by a potential sizable buyer.
Why did China ever make this disclosure if they are still buyers? It’s quite apparent that it was intended as a stern warning to US monetary officials to get their house in order, or else. Reuters reports that Mr. Hou Huimin, vice general secretary of the China Gold Association, said China should build its reserves to 5,000 tons.
It will be a most interesting scenario in the months and years ahead witnessing China buying more gold for cash as opposed to the bullion bankers playing with the gold price on the COMEX with paper instruments or mirrors. The bottom line is that gold exports from China will cease to exist in the years ahead while they are temporarily the biggest world producing country. I say temporarily because China’s gold deposits that can be mined at a profit at prevailing prices are only good for another 6 years or so. Some analysts say it could be as long as 14 years. Massively Putting the drill bit to the ground will tell the final story.
The silver market at $12.50 an ounce is still recovering from the damage done to it by some US banks in shorting it from the later part of last year from just under $20 all the way down to just about $8. The CFTC is a shameful outfit when they turned their heads while miners and silver holders were getting robbed blind during the beginnings of the banking crisis. The CFTC has a habit of listening only to the short manipulators and not the boni fided cash buyers.
As an example of this, years ago when Warren Buffett began acquiring a big silver position through a Connecticut broker and squeezing the shorts they all went crying and complained to the CFTC. The CFTC tracked down the broker buyer and demanded to know who they were representing. The buyer, Buffett, instructed his broker not to give up his name. The end result was that Buffett sold his silver forcing down prices in a hurry and packed his money bags and moved his buying operation to London where he acquired a $1 billion position and left it there, far away from the hands of the CFTC and its friends. When I complained through my Congressional representative concerning the bank’s manipulative activity in the silver market last year, I have yet to see any regulatory action or a response to the complaint. I guess we know who is working for whom.
The Gold/Silver Ratio at 70.86 is still acting in favor of gold over silver. For the ratio to turn positive for silver against gold it has to spend some chart time below the 69.00 mark, then we’ll see.
The Gold/XAU Ratio is in neutral territory at the moment. Above the 7.60 level it supports a better relative strength for gold while below 7.00 supports the case to hold gold shares versus the bullion.
Gold $890.80 UP $0.20
Silver $12.77 UP $0.01Martin Armstrong’s April 9th, 2009 commentary is available from the provided link below.
Mr. Armstrong’s words give a surprising better insight into a Goldman Sach’s conspiracy to control world financial markets along with his explanation why is was sent to prison and why he remains there.
The informative article is a real eye opener and may shake your world of beliefs but it is worth your time.
Gold $897.70 UP $5.10 versus today’s NY close
Memories of 2005 flashed through my memory today when I learned of a Barron’s article attacking another gold related company. This time the news media went after Jim Sinclair’s company, Tanzania Royalty Exploration.
In 2005 the L.A. Times attacked our company and Barron’s, again, Royal Gold. It was just a matter of a few days ago when Mr. Sinclair started drawing reference, again, to the thrashing a Barron’s editorial gave Royal Gold. The source for that publication came from an entity that had an interest in seeing Royal Gold’s stock trade lower which the article facilitated. Was the Sinclair attack coincidence or planned by Barron’s? I guess you can take you pick but I vote for the later.
The article, All That Glitters Is Not Gold by Vito J. Rancanelli, was basically an attack dog stunt something that Original Sixteen To One shareholders know about, too well. Mr Rancanelli unfortunately had his name penned to the story but more importantly for speculative curiosity, who pulled on his strings for the hatchet job?
Most of the media in this country it seems has nothing nice to say about gold or the related companies. I remember some years back mentioning that the Boston Globe in an article trashed gold with some wild talk about “what ifs.” Mr. Rancanelli’s review did more than that, it may have set a Guinness Book of World Records for the most negatives ever submitted with a business report.
The writer started out by stating, “no revenue, no earnings, no proven gold and accounting issues” and it got worse. He attacked Mr. Sinclair for selling his company’s stock 50 or so times last year while at the same time participating in special offering which brought money into the company.
I see Mr. Sinclair’s motives as being genuine in avoiding the investment banks which are notorious for driving down the share prices following secondaries. I view Jim as a talented innovator.
Keeping the investment bankers out of the picture prevents them from getting their hands on warrants to be used as stop gaps for financial protection if their short operation fails. If they obtain a pile of warrants watch out! I have seen this happen far too often and in the end shareholders always suffer watching their stock tank later. In Mr. Sinclair’s selling, he was just rolling over the shares to the market and keeping the bankers from performing their demonic act thus supporting his shareholder’s investments.
Although last year, Mr. Sinclair was no match for the two or three US banks that were allowed to freighten holders of precious metals and the related stocks when they went on a planned and methodical bear raid looting spree.
It’s really kind of sad for shareholders when slanted stories can be so vicious.
My guess is that if you own gold directly or indirectly, you will ALWAYS be subject to attack by the owners and supporters of any fiat money system. So, be prepared.Gold $886.90 Up $7.70
Silver $ 12.55 Up $0.22
Gold/Silver Ratio 7.22
Gold/XAU Ratio 70.67For the past six years the smart way to buy gold is to place mental scale down buy orders in for coins or small bars starting from a 12% retracement below the metal’s previous high. Trading gold is not advocated as it can drive you nuts. Recently, it was mentioned to buy gold when it was off nearly 13% from a previous high just over $1000 at $865.
In 2003 gold reacted from its previous high down 20%, 2004 about 13%, 2005 no 12% reaction, 2006 it sold off 23%, 2007 no 12% reaction, 2008 it sold off 32% and so far this year it has been off the most at about 13% at $860 with a last price of $886.90.
Jim Rogers was interviewed on Bloomberg TV tonight and said for a period of 1 year he would prefer holding oil as opposed to gold. The reason, the IMF wants to sell gold to shore up their finances.
George Soros was interviewed on the same station by Kathleen Hayes and was asked what he thought of the US dollar? Mr Soros said, “I have no opinion.” It sounds to me that Mr Soros is either actively shorting the dollar or buying it. Earlier in the interview he said the extended rally in the stock market is a bear market rally.
Mr. Martin Armstrong’s view is that if the rally is contained below 8400 on the DOW then the possibility of a waterfall decline is still possible. Mr Armstrong has stated that a move to the 4200 level is expected if 8400 or lower is the reaction high on this good rally. If that decline starts it may encourage foreigners to sell stocks and repatriate their funds somewhere else thus weakening the dollar to some degree.
More than likely based on Mr. Soros’ negative opinion on the stock market it appears he has been shorting the dollar and not buying it. If the dollar declines gold should advance. The dollar has been having chart troubles in the 85.00 to 86.00 range and may be setting up for an intermediate decline. We’ll just have to wait and see what happens.
It’s fun guessing and second guessing to add a little excitement to the gold picture as it beats having your gold locked up at the bank which is not too much fun. When this gold decline is over it will be another trip to the bank for another deposit.
Surprised, but due and worthy. After all, the Original Sixteen to One is a real gold mine…
Additional note: I’m quite surprised that Sinclair was watching this forum (or one of his readers pointed it out)
FYI: this morning, Jim Sinclair on http://www.jsmineset.com quoted BlueJay’s January 31st posting about RGLD. There may have been a jump in web traffic to this site today…
Producers vs. Explorers
If gold is a low risk investment during the Kondratieff winter, should we buy the gold producers or the exploration companies? Let’s examine the ‘pros’ and ‘cons’ of each of them.
Gold Producing Companies:
Pros:
· Investment grade. Large Market Caps-appropriate for investment funds.
· Cash flow via production.
· Excellent liquidity.
· Share prices generally rise faster than the price of gold itself.Cons:
· Depleting their resources through production. Difficulty finding sufficient reserves to maintain production at current levels; e.g.
Newmont produces 7.2 million ounces each year. Approximately 9 million ounces is required to replace this production.
· Hierarchal management-slow to make decisions.
· Exploration subject to committee review and budgetary constraints.
· Limited exploration since 1998.
· Only a small number of companies to choose from.Junior Exploration Companies:
Pros:
· Responsible for 70% of discoveries.
· Growing their gold.
· Quick response management.
· Innovative geologists; prepared to see the unconventional.
· The onset of the Kondratieff winter suggests the largest bull market in gold in the entire cycle. In that environment share prices
rise faster than those of their production counterparts.
· A major discovery positively impacts the share prices of most exploration companies.
· An ability to release regular news in progress.
· Management usually owns a large stake in the company and has a vested interest in achieving positive results on the behalf of all shareholders.Cons:
· Management not trusted – think Bre-X
· Viewed as very high risk investments.
· Investors don’t understand news releases, because they are usually not geologists-and are unable to evaluate a discovery in progress.
· Poor liquidity; small market caps-not suitable for most investment funds.
· Difficulty in raising money; major dilution at low share prices.Evaluating Juniors:
The key is Management. The Long Wave approach, developed by my team at Bolder Investment Partners is subjective but still useful.A Simple Evaluation System:
Management: 30 Points
· History
· Integrity
· Technical skills
· Management skills
· Relationships
· Ownership in the companyProperties: 20 Points
· Grass roots/discovery/gold in the ground
· Access/Power/WaterBlue Sky: 15 Points
· How big could this be?Political Risk: 15 Points · A, B, C, or F
· A = Quebec
· F = Venezuela, EcuadorMarket Capitalization: 15 Points
· Comparative values
· Value of gold in the groundPromotion: 5 Points
· How well does the company get the word out?
· Conservative versus flashyI much prefer investing in juniors versus seniors in a gold bull market, because:
· There is significantly more upside price potential, because of the leverage.
· Easy to be selective. There are plenty to choose from. Follow the management.
· Exciting to follow progress; discovery-resources-reserves.
· Management is usually dedicated to enhancing shareholder value. It wins, too.So there you have it, I believe that gold at this point in the Kondratieff cycle is a low risk investment and good junior gold mining shares are arguably an even lower risk than their senior producing counterparts. Please direct any questions, comments or queries to:
Ian Gordon, The Long Wave Analyst
Bolder Investment Partners, Ltd
Phone: 604-742-3200
Email : igordon@bolder.net
http://www.thelongwaveanalyst.caA shareholder called this morning to say, “This is a confusing market. Gold is pushing lower. We seem to be in a total deflationary market.” The real estate/housing sector is proving to be quite influential. Maybe by deflating all other properties/commodities this is a good way to “inflate” real estate and housing or protect values in their well-recognized fall. If everything in the world marketplace declines (or increases) pro rata is there an economic impact?
Other than hot air, my life’s experiences in the market place have been this: it is easier for prices to fall than rise. Many years ago Lee Erdal, a retired director cautioned me about offering opinions on the spot price of gold. It is beyond my control or technical ability to predict. I appreciate your thoughts on the subject. I do know, however, that a little interest in gold or a real undervalued gold mine equals other forms of insurance (peace of mind). It beats worry or sleeping pills.
Last on gold is $869.90 off $24.20
Last on Silver is $12.11 off $0.64
Gold/Silver Ratio 71.81
Gold/XAU Index Ratio 7.05Well, well, well, everyone is selling gold today. Gee, it must be nice to have the luxury to think stupid with your future.
Gold is in a decling phase prior to breaking the $1000 level sooner than most people think. This is the time you buy, not sell.
Soon after April 15th the push begins to reach the $1000 level and trade above it, to stay. The people that are selling gold today and possibly in the next ten trading days will be proven quite foolish.
Buy, Buy, Buy and Buy More!
In the previous submission the supplied link may not work. The article was originally posted to kitco.com under commentaries, “Silver again is outperforming gold” by James Turk.
Last on gold is 963.30, off 28.40.
Check out the following link to a James Turk article on the gold/silver ratio with a nice long term chart.
Spot Gold price per once
high: $1007. 20
Low: $969.70
Close: $993.20The bail out you have stated is pretty much the one that is being adopted for the existing distressed mortgage loans that the 50 billion will be used for.
It is also being reconsidered for the next bank bail out stimulus. This also includes a policy that the bankruptcy court are planning to use for a solution to over indebtedness by official ordering bank and the bankrupt debt holder to renegotiate the mortgage as you recommend.
Congress would like your input.Last on gold tonight is $970.90 after hitting a high of $975.60 earlier.
Gold, with the exception of the US dollar, continues making highs in world currencies. The meltdown continues to pick up intensity all over the world as current bailouts are proving inadequate.
The most intelligent bailout of all seems to have never recieved any attention from officials. That bailout out would be to immediately reduce interest payments on everything for everyone and extend term periods. This would immediately put additional money into the private sector and create demand thus lessening the current rate of layoffs and bailouts.
Dumb ass statement of the day:
Alan Greenspan – “We’re not doing enough to help(some) US banks.”
I remember Greenspan saying during the battle with CFTC Commissioner Brooksley Born in Congress over regulating OTC derivatives, “the banks should be permitted to regulate themselves since they have done such a good job of it so far.” Greenspan needs to be put on the next space shuttle, he’s a buffoon of the highest order.
We need to get real as Martin Armstrong has said, what’s killing the American people is their debt obligations and the interest strangle-hold that the bankers have over them. Usury interest payment limits need to be capped at 10%. In some states they are as high as 27%, that’s what’s killing our economy. The system is all screwed up. Take for example the retired seniors who are practically getting nothing as interest on their T-bills who used to support their living expenses with that income.
If government had any guts they would close down all the banks that got us into this trouble in the first place and redistribute their customer accounts to the “good banks.”
Then the shareholders of the bad banks could proceed with class action suits against all the board of governors in those closed banks and personally recover what they can from those clowns.
As far as the toxic assets are concerned, the American people are already consumed part of them. Some part of the toxic assets should be pledged against the bankers homes after all their other assets have been divided among the shareholders that they screwed. Also, the government should extend long term deductions, to some degree, to all shareholders of the closed banks so that they can recover some portion of their orginal investments as the government’s colossal failure was to trust the banks.
Thanks Alan Greenspan, you POS.
Gold’s last is $953.90, up $12.30.
The following was just reported at the jsmineset.com website:
It’s getting bleaker by the minute in Eastern Europe. In case you didn’t catch the latest from the Telegraph’s Ambrose Evans-Pritchard, he warned at the weekend how a growing crisis in Eastern Europe could cause nothing less than a total collapse in the West, or as he put it: “If one spark jumps across the euro zone line, we will have global systemic crisis within days.”
Sinclair basically says that we have the big Wall Street investment banks and the big commericial banks to thank for this mess that they have delivered to the world via their out-of-control leverage and greed.
I looked at the monthly long term chart on gold tonight and it looks to me that we are in position to put a rhino horn in on the chart which means almost straight up to the $1288 to $1300 area.
The battle between the bears(the big commercial international bankers) and the bulls was fought between $900 and $700 and the bears are currently running for the hills with their tail between their legs.
Last on gold is $937.50, off $4.40.
Another great article on money, debt and interest:
Gold $896.10 off $15.30
The following link is another masterpiece done by the Comex crime fighter, Mr. Ted Butler.
Jake Towne from GATA has prepared an informative article recently submittred to their website. From Rubin, Summers, Geithner and Gensler to the gold price suppression game to a great cartoon of Rothchilds’ stranglehold on all the inhabitants of the planet.
Check it out.
During his first ten days in office President Obama has made several wise decisions. That gives me some confidence, that the problems of the US-Banking Sector will be adressed wisely too.
I have read his book “Audacity of Hope”. Obama wants to lead. And since the financial crisis started in the US, Obama would probably like to lead the financial world out of this crisis by decisive action in the US.
Maybe next week we will hear more on the subject.Gold $927.10 up $18.80
Silver $12.67 up $ 0.32
Gold/XAU Index 7.48
Gold/Silver Index 73.17
Crude Oil 41.75 up $ 0.31
US Dollar 85.84 up 0.01Gold’s fourth up wave including its big push from below $650 in late July of 2007 has traded higher out of a massive nine month old declining flag formation. This prepares the metal to probe out the bear’s defensive line at the $1000 level again. Once the psychological area of $1000 is taken out for good the proponents of the fiat currency system will get a sobering warning, gold will adjust to its rightful price based on inflation, alone, at the $2500 level.
I expect gold to push higher in steps and consolidation phases for some weeks or possibly, months under the 1000 mark while it tunes up enough energy for the final push above.
All this is well enough said but marking the time until gold does escape the reigns of the magical number the big bankers will be fighting it tooth and nail every day with, maybe, another planned bear raid in the makes. It is common knowledge that the bankers smothered the price on two attempts already in the August to September period of 2008 from about $970 to $740 and again, from $930 to $700 in October. All this was done with the blessings of the Treasury and the CFTC.
Our banking system, basically, is bankrupt. The problem is capital. Over the years, as has been pointed out a few times before, the trend of lower interest rates has eaten away banking reserves to a great extent. Adding to this problem the OTC derivative failures and there is no wonder the banking industry is insolvent. If it weren’t for massive cash injections the big irresponsible ones would have declared bankruptcy some time ago for lack of capital.
So in the meantime, if the bankers can make money by forcing gold and silver lower while adding capital to the system then what is there to complain about from the Treasury? The bankers are serving the Treasury in two respects: manufacturing their own capital and putting the shine on the Treasury’s and Fed’s fiat money. Even the CFTC got the word to lay off the banks for manipulation as they just let them exceed limit positions. The question is, don’t you think it is questionable when two or three financial institutions are short 25% of the world’s gold productions like they were back in the July to August period of 2008?
The gold/silver ratio continues contracting at 73.17 while the ratio in its 10th day below a declining 50 day moving average line. In October of last year you could have traded an ounce of gold for 88 ounces of silver, now you just get 73 ounces. I have looked at the candlestick chart at stockscharts.com($GOLD:$SILVER)and it is clearly showing, in my interpretation, continued shorting of silver. In the long term this is positive but during the interim it could keep silver restrained some from doing what it wants to do.
Silver is being described as an industrial metal by the silver bears which it is during normal times. This is not true today with the world getting closer to a systemic meltdown. Today, silver is a monetary metal to many. As anyone in Mexico knows, it is their metal of choice for insurance during these trying times as well as for people in countries around the world.
Into the future the US dollar will not exist anymore. Considering all the debt against the dollar, what do you think happens to silver and gold when a new currency gets introduced? Silver and gold retain their value while the old dollar may have its value cut in half going into a new currency. If you hold dollars in banks or in hoards of cash you could lose 50% of your wealth over night on just one official announcement.
One closing thought and this is a big one: You need to brace yourselves for a possible collapse in stock market prices, including the precious metal shares. The XAU Index has major long term support just below 100 at the 98 level. The current last on the Index is 124.01.
The Plunge Protection Team has been furiously attempting to hold up the stock market over the last four months at the 8000 level of the Dow Jones Industrial Averages(DOW) and time maybe approaching when the level yields to a waterfall drop. Just below the 8000 area is the last remaining long term support for the DOW bull market at 7900. The 7900 level is where the 5000 day moving average resides. Remember, some years back when attention was drawn to the fact that gold broke the 5000 day average to the upside at around $350 an ounce? If this area gives way, WATCH OUT BELOW! My interpretation of a potential quick drop, over a few weeks or so, is into the 6200 area.
I suspect that the Philadelphia Gold and Silver Index(XAU) could drop about 25% in the process. If you are interested in buying into the suspected drop of gold and silver shares I continue to feel that Agnico-Eagle, GoldCorp and Royal Gold are the better senior gold to stay focused on.
When much higher gold prices finally arrive, you’ll know that you did the right thing if you purchased gold stocks on weakness. Jim Sinclair recently stated that with higher gold prices the gold stocks will be like some of the utility stocks of past years, stable dividend payers. If this will be the case, can you imagine what some of the best gold shares will go to in future prices?? I have said many times to friends and relatives that Royal Gold(RGLD-OTC) will in the future be in the 100’s of dollars or in some other other currency maybe, a little less.
We live in a world where the current depression continues to bring us miserable news on a daily basis. Although there is great hope for holders of gold and silver and their shares, always be prepared to stand firm if prices suddenly fall for it will only be temporary.
To Michael:
Why would a Miwok lie to me? The white man’s history is full of lies. For me, I prefer to trust the unwriten history of our native people.
Gold’s last is $897.60 and coming under renewed attack by the cabal at the $900 area.
No surprise in Reno yesterday as the our slime court system sides with the devil and against the Western Shoshone.
http://www.mineweb.co.za/mineweb/view/mineweb/en/page68?oid=77415&sn=Detail
There may be one historical correction with Bluejay’s essay below, and it is an important one. It is the reference to “California offered $5 bounty for any and all Indian scalps.” For the past three years I have been unable to verify this account. Background follows:
The Spaniard missionaries led the first serious cultural impact on native tribes in Califrornia with Father Junipero Serra as leader. Numerous accounts detail this phase of California’s evolvement from a primitive land to the most populated state in the US. Indians joined the work force as slaves and paid workers of the missions. As the missions’ power waned the Spanish/Mexican vaqueros, gauchos and senoritas and senoras gained large ranches and a way of life that evolved into a cultural with Indians and Californians. The Indians were evolving as well. In language of contemporary chatter, the Californian style was a pretty “laid back” life.
Richard Henry Dana, a young drop out from Harvard law school spent Two Years Before the Mast, an epic story about life in California as a sailor of a hide ship off the coast of California in 1830’s. Russians entered northern California looking for food and furs but relinquished their colony, sold its hardware to John Sutter and returned to Russia (1840’s). Canadian (French and English) trappers packed into northern California for trade as well. Indians had bad and good times with these emigrants. The heaviest actions took place between 1846 and 1850, mostly \in Monterey San Francisco and Sacramento. The US picked a fight with Mexico, wining the war just before that famous day, January 24, 1848, when John Marshall rode to Sutter’s fort in Sacramento with a poke of gold. The rush was on and it was a worldwide rush. Some Indians fared poorly and some succeeded. No accounts I have found document the $5 bounty story.
Maybe it did happen; but if it did, the offer could not have been an offer by California. I am confident that some people were pissed off with the Indians. I am sure that some Indians were just as peeved about the settlers in California. An interesting story about Indian fighting tenacity or skills took place way north in Modoc County. Captain Jack (Indian) held off the US Cavalry in a vicious battle. While the fight took place in California it was not by Californians. A puzzling cultural story is how quickly the Californians accepted the federal military take over of their homeland.
Last summer I bought a new book about California’s evolution in the 1800’s by H.D. Brandis, a professor at the University of Texas. I called him in Austin to challenge a couple of his historical presentations. I also asked him specifically about the $5 bounty (his book is really a good one). He said he had heard the story but in his extensive research never could find the source and verify.
My interest in the California gold rush pushed me to read about Francis Drake, Fremont, Vallejo, Sloat, Sutter, Castro, Larkin, Bancroft, Montgomery, Downie, and the unfortunate Juanita, who lost her life dangling at the noose end of a rope on a bridge over the Yuba River. Then there are the diaries of regular people. The survivors were a strong lot. They fought, they lived, they loved and they died. They accepted unimaginable challenges as the State of California evolved. They stood tall when necessary and bended as well. As a native Californian I embrace our culture. I cannot change a thing about its past. I may have an affect on its future. I believe many Californians continue to lose the simple lessons that are found in our social and cultural past.
Native holiness would get a better shot at surviving in California.
What we’ll watch is the Federal angle.
When state’s rights wins this one in Nevada and the mine is allowed to procede, what will be the impact upon California’s mines? Will there be as much hub-bub in the national news over Nevada’s “economically depressed masses” as there is in California?
When there is no obstacle to the procedure of developement in Nevada, won through litigation by the criers of “economic depression issues” where will the same voices be when the Original Sixteen to One wants to go mining????
We’ll watch this one closely. It is a really tough one for me. I mean it.
Putting it into perspective, why is it in Nevada that Native American heritage can’t trump mining development when in California if there’s a gnat in danger of sleeping too long the Feds shut everything down and want to do evrything possible to protect the Earth?
What a farce.
I wish the Nevada tribes hope.
It never seems to amaze me how Barrick Gold continues to attack the lands of indigenous people around the world and get away with it. Their confrontations with ancient native communities and their water resources has been going on for some time, especially in South America. In Tanzania, Barrick has been accused of atrocities.
If there ever were a politically connected gold company, it’s Barrick. Just before George Bush left office the Bureau of Land Management handed over to Barrick some more very prospective gold claims in Nevada. Bush’s father has a long history of involvement with Barrick Gold.
When the white man came west and conquered native North Americans it was an another atrocity. When gold was discovered in South Dakota it just became worse. There may have been treaties signed but the native Indians thought they were just sharing rights to hunt and fish on their lands. Otherwise, they were tricked in giving away their part of the greater Indian Nation of central North America.
The Indians, above all else, were respectful of mother nature and the earth. When the continental railroad was moving west, the Indians watched in disgust as passengers killed free ranging bison from their open windows with sticks of fire just for sport as the passenger cars passed through.
Indian communities were displaced by the great white father and when it wasn’t expedient enough for the conquering white warriors, California offered a $5 bounty for any and all Indians scalps. The espisode, aside from slavery in this country, was one of the most repugnant time periods in our history.
Even today, the way our government treat descendents of the once proud people who just wanted to live and let live still remains disgraceful. Even Canada treats its indigenous people with much greater respect.
So now Barrick’s attorney is discussing economic hardship for the Company concerning the current investment along with negative implications concerning workers and local communities if the court agrees with the Western Shoshone’s claims that they are treading on sacred ground.
It would absolutely amaze me if a restraining order was issued in the Western Shoshone’s favor against Barrick’s intentions of desecrating their sacred land for a hole in the ground but I guess it will be business as usual for Barrick in getting their way, again.
I feel sorry for our native American Indians and I support them. Since the beginning of time Mount Tenabo belonged to the Western Shoshone. Barrick’s big machines have recently begun ripping out their Pinion forest on the mountain where the local Indians have been harvesting Pinion nuts for centuries.
A judge’s ruling is expected in Reno in the early part of next week.
—————————————-
Jan. 25, 2009
Copyright © Las Vegas Review-JournalGold mine ruling may come Monday
THE ASSOCIATED PRESS
RENO — A federal judge intends to rule Monday on a complicated legal battle that pits religious and environmental concerns against the economic interests of hundreds of Nevada miners and the world’s biggest gold mining company.Conservationists and Western Shoshone tribal members are seeking a preliminary injunction to halt part of a huge gold mine project they claim would desecrate a sacred landmark where many have worshipped for centuries on Mount Tenabo in northeast Nevada.
“This case is about one very big, very destructive mine and about one special, unique and very important place, so important that people come hundreds of miles to pray there to their creator,” said Roger Flynn, a lawyer for the tribe and the Great Basin Resource Watch.
“You can’t pray in a blast zone,” he said Friday at the close of the fourth day of a hearing.
Lawyers for the Toronto-based Barrick Gold Corp. and the U.S. Bureau of Land Management counter that the 6,700-acre Cortez Hills project 250 miles east of Reno in Crescent Valley has been properly approved under the Mining Law of 1872.
They say any delay in digging the 2,000-foot deep open pit would cause an undue financial hardship on the company and its workers during tough economic times.
“Barrick is prepared to spend $640,000 a day for the next 15 months and a lot of that money will remain right here in the state,” said Francis Wikstrom, a lawyer for Barrick.
Thirty workers already have been laid off and another 250 to 300 will be out of work and unlikely to find other jobs if the project is halted, he said.
“This is basically the only game in town in Northern Nevada,” Wikstrom said about a state that produces more gold than any other, trailing only South Africa, Australia and China internationally. “People need to feed their families.”
U.S. District Judge Larry Hicks said he will announce his ruling at 3 p.m. Monday.
“All of us know it is a very difficult issue for many people,” Hicks said Friday.
There is talk about a new concept to relieve the German Banking System of bad debt.
The plans call for a “Bad Bank” that is founded to match every major bank with troubled assets.
The State of Germany is supposed to guarantee for the “Bad Banks” and will in return receive a yet unspecified portion ot the banks earnings during the next 50 years or so.
Troubled assets are believed to range from 300 to 1000 billion Euros.
Last on gold is $895.70.
Today is a great up day in gold that begs respect. I say this for a good reason: the powers to be who run our fiat paper system are most probably either using paper instruments to hold today’s strength in check or are devising another plan for a renewed attack on the metal.
You see, we have two very strong forces at work in today’a gold market: one is a force that doesn’t want their fiat money system questioned ever by a rising gold price and the other one would be folks that want to protect their wealth from the destruction by a fiat money system.
The trials of a strong upward bias in gold since Gordon Brown made the collossal “mistake of his life” in selling most of England’s gold at the bottom under $300, has turned into a real tug of war.
I want to take this time, again, to mention that it has been said that Gordon was accommodating Goldman Sachs’ chief, Henry Paulson, so his firm could cover their gold shorts for a substantial profit. Who knows what went on between Paulson and Goldman when he was Treasurer? One just has to search YouTube under Max Keiser to find out his opinion concerning Paulson, it couldn’t be worse for what he has done to the American people according to Max who works out of Paris.
The gold market and their shares as a result of this ongoing war have become extreme and difficult to pinpoint with analysis in projecting important highs and lows.
Even my extrapolations within this forum hasn’t been perfect. I remember back on October 17th that I called a bottom on the gold shares when the Philadelphia Gold and Silver Index(XAU) was about at 90. Ten days later the bottom was put in at 63.52.
The extreme created by the cartel carried the Index lower(along with gold down to $700) about another 30 points. This was a vicious attempt to scare the public out of their shares, for once and all. The decline from about 220 on the Index was the biggest engineered panic drop since the Index was first created. The cartel means business and those who go against them without a stomach to endure their criminal temporary manipulation may fall victim as a sad consequence.
I remember the days following my prediction I felt terrible as the stocks I recommended fell like someone had pushed them off a cliff.
The three were Agnico-Eagle at 35.92, GoldCorp at 20.04 and Royal Gold at 30.44. They were all seriously effected with the continuing lower prices for the following 10 days. Fortunately, with the XAU turning around from its historical low things has wonderfully improved with the last sales on the three as follows: Agnico Eagle at 56.13, GoldCorp at 28.87 and Royal Gold at 47.54.
The key to successfully protecting your wealth is to buy right when events are orchestrated to freighten you and hold tight.
So with gold shinning brightly today, expect the capal to rattle your nerves with some concocted maneuvers, possibly, in the near future, again. The key will ALWAYS be, don’t fall for their tricks.
Gold $895.10 up 38.70
Silver $11.93 up 0.54
Gold/XAU Ratio 7.09
Gold/Silver Ratio 75.03Gold today is knocking at the $900 door. Gold in all currencies of the world is in a bull market and rising.
Some charts depicting part of this major event are available for review at jsmineset.com under the topic heading, “Trader Dan Comments On Gold’s Action In Other Major Currencies.”
Thank you Bluejay
Last on gold is $856.50.
Below is provided a link to another educational article concerning you and your money by Darryl Schoon.
Last on gold is $855.30.
Bad omens coming from DC towards China.
The Treasury Department is attacking China. Does this make sense concerning they are our largest creditor?
Hank Paulson prior to leaving his Treasury post told China that because of their high savings rate that they are responsible for the world’s financial turmoil. Recently, the designee Secretary of the Treasury, Tim Geithner, said that China is manipulating their currency. Nothing like calling the kettle black, Tim.
These attacks are probably out of disdane for China telling the US that they should be doing better job in cleaning up their financial house. Being more specific, China might be wondering why the banks are hanging on to all the TARP money in buying Treasurys instead of injecting it back into the economy.
So our arrogant posture is just to slap China in the face? The Treasury does temporarily have China over a barrel just alone with their massive holdings of US debt. Meaning, they can’t get out fast without devaluing what remains unsold. So China for the moment, may still have to play the waiting game as they trickle out of the dollar and in the process have to listen to insults from their big US debtor.
I’m getting the gut feeling that Geithner, if he becomes the head of the Treasury, will be just like another “Paulson.” If this proves to be true, Heaven Help Us All.
Last on gold is $853.20.
The following article is a must read:
Robert Kiyosaki Why the Rich Get Richer
How the Financial Crisis Was Built Into the System
by Robert KiyosakiPosted on Monday, November 24, 2008, 12:00AM
How did we get into the current financial mess? Great question.
Turmoil in the Making
In 1910, seven men held a secret meeting on Jekyll Island off the coast of Georgia. It’s estimated that those seven men represented one-sixth of the world’s wealth. Six were Americans representing J.P. Morgan, John D. Rockefeller, and the U.S. government. One was a European representing the Rothschilds and Warburgs.
In 1913, the U.S. Federal Reserve Bank was created as a direct result of that secret meeting. Interestingly, the U.S. Federal Reserve Bank isn’t federal, there are no reserves, and it’s not a bank. Those seven men, some American and some European, created this new entity, commonly referred to as the Fed, to take control of the banking system and the money supply of the United States.
In 1944, a meeting in Bretton Woods, N.H., led to the creation of the International Monetary Fund and the World Bank. While the stated purposes for the two new organizations initially sounded admirable, the IMF and the World Bank were created to do to the world what the Federal Reserve Bank does to the United States.
In 1971, President Richard Nixon signed an executive order declaring that the United States no longer had to redeem its paper dollars for gold. With that, the first phase of the takeover of the world banking system and money supply was complete.
In 2008, the world is in economic turmoil. The rich are getting richer, but most people are becoming poorer. Much of this turmoil is directly related to those meetings that took place decades ago. In other words, much of this turmoil is by design.
Power and Domination
Some people say these events are part of a grand conspiracy, and that might well be. Some people say they represent the struggle between capitalists, communists and socialists, and that might be, too.
I personally don’t participate in the debate over a possible global conspiracy; it’s a waste of time. To me, the wider struggle is for power and domination. And while this struggle has done a lot of good — and a lot of bad — I just want to know how to avoid becoming its victim. I see no reason to be a mouse trying to stop a herd of elephants from fighting.
Currently, many people are suffering due to high oil price, the slowdown in the economy, loss of jobs, declines in home values, increased bankruptcies and businesses closings, savings being wiped out, the plummeting stock market, and rising inflation. These realities are all direct results of this financial power struggle, and millions of people are its victims today.
An Extreme Example
I was in South Africa in July of this year. During my television and radio interviews there, I was often asked my opinion on the world economy. Speaking bluntly, I said that South Africans had a better opportunity of comprehending the global turmoil because they’re neighbors to Zimbabwe, a country run by Robert Mugabe.
In my interviews, I said, “What Mugabe has done to Zimbabwe, the Federal Reserve Bank and the IMF are doing to the world.” Obviously, my statements disturbed many of the journalists. I did my best to comfort them and assure them I was not an anarchist. I explained, as best I could, that Zimbabwe was an extreme example of an out of control power struggle.
After they were assured I was only using Zimbabwe to illustrate my point, I said, “If you want to understand the world economy, take a refugee from Zimbabwe to lunch.” I advised them to ask the refugee these questions:
1. How fast did the economy turn?
2. When did you know that you were in financial trouble?
3. When did you finally decide to leave Zimbabwe?
4. If you could do things differently, what would you have done?
Three Approaches to a Crumbling Economy
I spoke to three young couples from Zimbabwe while I was in South Africa. Two couples were recent refugees now living in South Africa, and one couple still lives in Zimbabwe. All three couples had interesting stories to tell.
One couple said that they would have quit their jobs earlier. Instead, they hung on, hoping the economy would change. Then, virtually overnight, the value of the Zimbabwean dollar dropped and inflation went through the roof. Even though they received pay raises, the couple couldn’t survive and soon depleted their savings. They left Zimbabwe by car with almost nothing. If they could’ve done something differently, they told me, they would have started a business in Zimbabwe and began exporting products to South Africa, so that they would have had South African currency and a bank account there before they fled.
The second couple that fled the country said they saved money and paid off their house and other debts even as the Zimbabwean dollar fell in value. Looking back, they say they would’ve saved nothing and gotten deeply in debt in Zimbabwe, allowing them to pay off their debt with the cheaper dollars. Instead, they fled after they lost their jobs, leaving behind their house and owning $200,000 in nearly worthless Zimbabwean dollars.
The third couple still lives in Zimbabwe. When they saw the writing on the wall, they set up a business in South Africa and, with the profits, began acquiring tangible assets in Zimbabwe. Often, they’ll buy an asset in Zimbabwe and pay the seller in South African currency. They believe that once Mugabe is gone and order is restored, they’ll be in a strong financial position.
Many Problems, Few Solutions
There are three major problems with the events of 1913, 1944, and 1971. The first is that the Fed, the World Bank, and the IMF are allowed to create money out of nothing. This is the primary cause of global inflation. Global inflation devalues our work and our savings by raising the prices of necessities.
For example, when gas prices soared, many people said that the price of oil was going up. In reality, the main cause of the high price of oil is the decreasing value of the dollar. The Fed, the World Bank, and the IMF, like Zimbabwe, are mass-producing funny money, thereby increasing prices and devaluing our quality of life.
The second problem is that our economic crises are getting bigger. In the 1970s, the Fed faced and solved million-dollar crises. In the 1980s, it was billion-dollar crises. Today, we have trillion-dollar crises. Unfortunately, these bigger crises mean more funny money entering the system.
Apocalypse Soon
The third problem is that in 1913, the Fed only protected the large commercial banks such as Bank of America. After 1944, the Fed, the World Bank, and the IMF began bailing out Third World nations such as Tanzania and Mexico. Then, in 2008, the Fed began bailing out investment banks such as Bear Sterns, and its role in the Fannie Mae and Freddie Mac debacle is well known. By 2020, the biggest of bailout of all will probably occur: Social Security and Medicare, which will cost at least a $100 trillion.
Even if we find more oil and produce more food, prices will continue to rise because the value of the dollar will continue to decline. The dollar has lost over 90 percent of its value since the Fed was created. The U.S. dollar will continue to decline because of those seven men on Jekyll Island in 1910.
Granted, the funny-money system has done a lot of good — it has improved the world and made a lot of people rich. But it’s also done a lot of bad. I believe somewhere between today and 2020, the system will break. We’re on the eve of financial destruction, and that’s why it’s in gold I trust. I’d rather be a victor than a victim.
Gold $853.00 up $11.10
US Dollar 86.37 up 1.34The gold price is currently taking a rest from today’s highs as the dollar continues to trade higher. It remains to be seen if the dollar can hold ground above its recent reaction high in the 86 area.
In this morning’s entry attention concerning the action of the British Pound failed to be mentioned.
In the US Dollar Index, the pound comprises a 11.9% weighing. Part of the dollar’s nine week old rally can be attributed directly to a consistently declining pound over the same period.
The pound during the time span has collapsed from 2.00 to about 1.40, a 30% drop. Today, the currency is below 1.40 at 1.3932, or 3.33% lower. Things are not good in England.
The Bank of Scotland earlier today reported the largest loss in British corporate history while things grew worse in the market as Lloyd’s Bank Group traded lower by about 50% on the session. The government’s rescue plan today for the economy and the banks apparently was not well received.
- AuthorPosts
- You must be logged in to reply to this topic.