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Gold $858.60 up $16.20
Silver $11.31 up $ 0.09
Gold/Xau Ratio 7.57
Gold/Silver Ratio 75.92
US Dollar 86.09 up 1.06
Crude Oil 35.50 off $ 0.01On presidential inauguration day gold is pushing higher following weakness in Asian markets. Gold declined all the way down to $822.70 and currently, is just under its day’s high of $860.90. In the process the metal has pushed back over a key area on the chart at $840 following weakness from this level that was identified some days ago as being temporary. During gold’s weakness it hit $800.
The dollar is strong along with a higher gold price which is unusual as of late. It is clear gold is becoming the currency of choice as all other currences appear to coming suspect. The Euro is below 1.30 and is searching for some ground of support near 1.26 or above. Not mentioned lately is the fact that the Mexican Peso against the dollar has collapsed in the past weeks from the .10 level to just above the .07 area today.
Mexico’s inflation rate is well over 6% and rising and the slowing down of our economy doesn’t help it as 80% of her exports go to the US. For Mexicans workers in this country it’s turned into a bonanza as flipping back to their pesos from dollars hasn’t been this advantageous for them since January of 1999 when they received 14 pesos for each exchanged dollar. Today, the last on the peso is .0717. Big currency swings will continue in these markets until such time that all currencies are reconnected to gold in some manner or another.
Go gold!
Last on gold tonight is $831.20, off about $10 from Friday’s close.
U.S. Treasury Fraud
(Thanks a lot Hank)posted on Jan 19, 09 08:03PM
Wow, it is bad enough that the U.S. Treasury Dept. allowed fraud to occur on their watch but it is a much more serious issue if they were the ones responsible for orchestrating the fraud. We will see if Obama considers this a serious issue or will he just bury it with the other government frauds? But then again we probably already know the answer as we just have to consider that the bureau of the Internal Revenue Service will soon have a new Secretary of the U.S. Treasury to report to – tax evader Tim Geithner.Same circus only new clowns – VHF(from Agoracom.com, Canada)
Government Regulators Aided IndyMac Cover-Up, Maybe Others
Darrel Dochow May Not Be the Only Official Who Helped Banks Hide Financial Problems
ABC News
By BRIAN ROSS, JUSTIN ROOD, and JOSEPH RHEE
Jan. 16, 2009—A brewing fraud scandal at the Treasury Department may be worse than officials originally thought.
Investigators probing how Treasury regulators allowed a bank to falsify financial records hiding its ill health have found at least three other instances of similar apparent fraud, sources tell ABC News.
In at least one instance, investigators say, banking regulators actually approached the bank with the suggestion of falsifying deposit dates to satisfy banking rules — even if it disguised the bank’s health to the public.
Treasury Department Inspector General Eric Thorson announced in November his office would probe how a Savings and Loan overseer allowed the IndyMac bank to essentially cook its books, making it appear in government filings that the bank had more deposits than it really did. But Thorson’s aides now say IndyMac wasn’t the only institution to get such cozy assistance from the official who should have been the cop on the beat.
The federal government took over IndyMac in July, after the bank’s stock price plummeted to just pennies a share when it was revealed the bank had financial troubles due to defaulted mortgages and subprime loans, costing taxpayers over $9 billion.
Darrel Dochow, the West Coast regional director at the Office of Thrift Supervision who allowed IndyMac to backdate its deposits, has been removed from his position but he remains on the government payroll while the Inspector General’s Office investigates the allegations against him. Investigators say Dochow, who reportedly earns $230,000 a year, allowed IndyMac to register an $18 million capital injection it received in May in a report describing the bank’s financial condition in the end of March.
“They [IndyMac] were able to maintain their well-capitalized threshold and continue to use broker deposits to make loans,” said Marla Freedman, an assistant Inspector General at Treasury. “Basically, while the institution was having financial difficulty, it kept the public from knowing earlier than it otherwise should have or would have.”
Critics Point to Cozy Relationship Between Banks and Regulators
In order to backdate the filings, IndyMac sought and received permission from Dochow, according to Freedman.
“That struck us as very unusual,” said Freedman. “Typically transactions are to be recorded in the period in which they occur, not afterwards. So it was very unusual.”
One former regulator says Dochow’s actions illustrate the cozy relationship between banks and government regulators.
“He did nothing to protect taxpayers in losses,” former federal bank regulator William Black told ABC News. “Instead of correcting it [Dochow] made it worse by increasing the accounting fraud.”
Meanwhile, IndyMac customers who lost their savings are demanding answers and are further infuriated after learning Dochow was also the regulator in 1989 who oversaw the failed Lincoln Savings and Loan, a scandal that sent its CEO Charles Keating to prison.
“He’s the person that claimed that he looked into Charles Keating’s eyes and knew that Charles Keating was a good guy and therefore ignored all of the professional staff that told him that Keating was a fraud, and he produced the worst failure of the Savings and Loan Crisis at $3.4 billion. Now he’s managed more than triple that,” said Black, now an economics professor at the University of Missouri in Kansas City, Missouri.
Following the Lincoln scandal, Dochow was demoted and placed into a relatively obscure office, but later, inexplicably was brought back into the Office of Thrift Supervision.
Dochow declined to answer questions from ABC News.
IndyMac Customers Furious
After Ronnie Lopez was killed in Iraq, his mother Elaine invested the life insurance proceeds at IndyMac. She lost $37,000 of it.
“I was hysterical,” she told ABC News. “I literally thought I was going to kill myself that day, because I felt so bad that I had let him down. I remember going to his grave and telling him “don’t worry, I’m going to get that money back’, and I feel like he was saying ‘hey mom, don’t let them take that. I did the ultimate for that’.”
A group of angry investors has started a website, demanding answers on the extent of Dochow’s actions.
“It’s just the strife and anger,” said IndyMac customer Lisa Marshall. “That this Dochow person is still employed, it’s unbelievable, it’s shocking.”
While Dochow could end up losing his job, neither he nor his colleagues are expected to go to prison.
“This is criminal with the small ‘c’,” said Black. “No one within the regulatory ranks may go to jail, but they have done the worst possible disservice to the taxpayers of America.”
Michael Adams presents his new song on YouTube, “I want My Bailout Money” from his recent album, Beyond All Reason.
The Bank of America is robbing the American people and deserves nothing following their extremly questionable(stupid??) acquisition of Merril Lynch. Still, they continue to present their begging bowls for more free lunches at our expense.
Merrill Lynch was purchased by the bank for $19.4 billion. Now, the bank is saying that they understimated their potential exposure to Merrill’s toxic paper(OTC derivatives).
If I remember correctly, Mr. Jim Sinclair from http://www.jsmineset.com stated some months back that Merrill Lynch was basically worth ZERO considering their OTC derivatives exposure. The Bank of America and their “ship of fools” deserves nothing more based on their inability to perform elementary due diligence.
I just recently read that the bank’s potential exposure to Merrill’s toxic waste is between $100 and $200 billion. How is this the responsibility of the American public?
Everyone should write their representatives in Washington immediately if you care about our financial future, protesting giving the fools from Bank of America another penny. Enough is Enough.
So Bank of America will be getting 20 billion $ in cash and 118 billion $ in garanties from the taxpayer.
I wonder, whether the incoming new president will present some kind of an OFOB (“Obama Fed Opening Balance”). Rather than fight in the courts about not disclosing figures to the public.
But he has got smart staffers. They are probably already adding up the numbers und we will soon be hearing more on that subject in his inaugural speech.
Last on gold is $811.30 with another day of paper smashing prices on the Crimex. The following article is a good enough reason why gold should be higher today, not lower. But oh no, Paulson just has to make a quick call to J.P. Morgan and down come gold prices. Paulson is a big bad gold bear.
By the time it’s over, Paulson and his gang will have sucked more money out of this country than anyone could have ever possibly imagined.
Both the Fed and the Treasury seem to not want to be held accountable. Sounds like Nixon’s attitude when he thought he could keep his unlawful activities from us by pushing the erase buttom on the White House tape recording system.
Fox Business sues Fed for information on bailouts
Mon Jan 12, 2009 3:24pm ESWASHINGTON, Jan 12 (Reuters) – News channel Fox Business Network sued the U.S. Federal Reserve on Monday, saying that the government has failed to release details on financial companies receiving federal funds.
Fox said it made an initial request on Nov. 10 last year under the Freedom of Information Act. The network asked for the identification of the financial institutions receiving funds and details on the collateral provided by these firms between August 2007 and November 2008.
The network made a second request on Nov. 18, asking for more information on financial firms that received lending from Fed programs. It also asked for the amount of collateral held by the Fed as of Nov. 14.
A Fed spokeswoman did not have a comment on the lawsuit.
The Fed has been a critical player in financial rescue packages for companies such as American International Group Inc (AIG.N) and Citigroup Inc (C.N). It has also opened up its discount window to a wider range of entities in an attempt to provide more liquidity to the financial sector.
The Fed continues to create and fine-tune a number of other programs to support credit availability at a time financial market functioning remains impaired.
“The government has power over possibly trillions of the taxpayers’ money and the fact that they are denying requests for enhanced transparency on the distribution of those funds is appalling,” said Steven Mintz, legal counsel for Fox Business, in a statement.
Fox filed a similar lawsuit in December against the U.S. Treasury Department for what it called a failure to respond to repeated requests for information on how it has allocated the $700 billion bailout fund. (Reporting by Karey Wutkowski, additional reporting by Robert MacMillan in New York, editing by Gerald E. McCormick)
Last on gold is $826.00, up $5.80 from the NY close.
At jsmineset.com tonight CIGA(Comrades in Golden Arms) Alex presented a long term French curve on gold predicting that the 3000’s will be reached in the year 2012. Jim agreed with Alex by responding with an emphatic, YES.
Today, the extreme bottom of the formation is located at $735 with the high point being $1100.
By year-end 2009 the extreme low point is $875 with the extreme high point at an exciting $1300. So, the next time the paper’s and the cartel make a bunch of noise like today with lower metal prices, just keep in mind these future prices along with the $3000 plus price in 2012.
Don’t be faked out of your positions with all the negative chatter and especially, don’t let them effect your confidence in buying more on reactions.
Gold $827.40 off $26.30
Silver $10.83 off $ 0.42
Gold/Silver Ratio 76.54
US Dollar 82.74 up 0.01
Crude Oil $39.08 off $1.75Gold is trading lower at $826.30 in early Comex trading. The $840 level has been breached but it is being only viewed as temporary. The Comex paper bashers continue to squash the price in early trading. To me, this early session selling is business as usual on the Comex.
Weakness in gold is being attributed to the European Central Bank lowering key rates sometime this week.
Gold $820.20 off $33.40
Silver $10.60 off $ 0.65
Gold/XAU Ratio 7.67
Gold/Silver Ratio 77.38
US Dollar 83.11 up 0.38
Crude Oil $37.71 off $ 3.12Gold continue lower but up from an earlier level at $814.60. Although prices still remain below a neckline support area that was violated earlier at $840, there is trendline chart support at $810 and further support below at the $800 level from the emeging and advancing 50 day moving average line.
Gold’s weakness today smells very much like a planned campaign by the cartel. It seemed that probabilities favoring this new attack were solely based on the major gold stocks starting to drag as they appeared running out of gas as they zeroed in on their declining 200 day moving average areas. This may have been enough fuel, aside from the rhetoric of interest rate reductions in Europe, for them to get started on another bear raid.
In concert with fresh selling, most probably connected to major banks, their media resources were again summoned to prey on people’s fears.
One significant publication in Canada, The Globe and Mail, printed today a bearish commentary that was put out by Reuters earlier this morning.
Again, there was talk in the article concerning a Thursday meeting with members of the Euro Central Bank to lower rates. This event is assumed to strengthen the US dollar thus putting renewed pressure on gold.
In the Reuter’s article entitled, “Gold Hits 1 Month Low On Firmer Dollar, Weak Demand” the writer Anna Stablum collected some negative opinions and injected them to support her thesis that gold is heading south.
Pradeep Unni from Richcomm Global Services says, “Gold could drop substantially in the next couple of months.”
Citi’s David Thurtell says, “Precious metals, especially gold, should find little support from this front.” The front being a 1,100,000 job loss since November and the inferred lessening of demand for petroleum products from the unemployed. J.P. Morgan must have made a killing today on the oil market weakness as they are the “big daddy” bear on the Comex. If J.P. Morgan operates the same way Bear Stearns did in the silver market prior to their implosion then they are trashing the oil price with nothing more than buckets of paper.
The gold cartel, major bankers along with their financial stooges, find it easy to operate in markets as authorities permit them to basically run “bucket shop operations.” http://en.wikipedia.org/wiki/Bucket_shop_(stock_market)
These guys will mostly always be successful over the short term left unsupervised, less so over the medium term and sometimes over the longer term but NEVER over much longer term. One just has to accept this much longer term perspective based on history alone.
In reviewing China’s monetary history, how many Dynasties tried paper money and failed? All of them, eventually. Two others, the Wiemar experience and the French Revolution events were much shorter lived with both succumbing to the same end results, “gold was the winner.” Meaning gold went into the future while the fiat currencies were left behind as stark reminders that fiat currencies have no long term future.
Aside from all governmental efforts supported by large banking interests to suppress gold’s influence as a wealth hedging factor, the metal always continued to be a real nuisance for fiat managers as it was the main source of competition for their funny money. A supposed financial monopoly allowed to create money, in their definition, gives them ultimate power and influence to go on a slow and methodical spree to steal the hard earned income of the real workers. They steal or confiscate it from us with their silent and effective weapon, INFLATION.
Threaten this establishment and they will come after you. Right now, today, is just another sad instance of their power to subjucate one of the few weapons left in our financial arsenal to compete with their out of control printing presses.
The last sale on the Philadelphia Gold and Silver Index(XAU) is just over 107 on the chart and is very near big support under the 100 level. This is the converging position of the 2500 and 5000 day moving average lines. Royal Gold and Agnico-Eagle are presently, IMHO, available at reduced recent prices and are favored for purchase over all the rest.
Last on Gold is $850.40.
The following link provides access to Antal Fekete’s recent article entitled, “Open The Mint To Gold” from silverseek.com.
Gold $860.20 up $3.30
Silver $11.27 up $0.27
Gold/XAU Ratio 7.55
Gold/Silver Ratio 76.33
US Dollar 82.30 up 0.66
Crude Oil 39.80 up 1.90Gold continues to be in demand each time it approaches the general vicinity of the $840 area. This morning the Comex paper bears took it down early in the morning session, as usual, towards this level but buyers didn’t wait for $840 contact as they started pressuring it higher at $845. The continuing premise here is that gold has broken to the upside from an almost year’s long declining phase with the $840 area being firm ground for getting its footing firmly entrenched prior to major acceleration, barring significant interference from authorities.
Silver is looking quite interesting lately. The chart is near a perfect replica of the chart basing pattern that preceded the Euro’s spike higher from 1.30 to 1.46. That was a quick increase in value of about 12% against the dollar that came close to spelling, “currency crisis.”
It appears that smart conservative money may be putting on large spreads in the precious metal’s arena by selling gold and buying silver. This event is being signaled on the Gold/Silver Ratio chart as the ratio is beginning to roll-over in favor of silver. Currently, the daily ranges are being confined lower under the 50 day moving average line at 78.15 or so. As the days advance with this suspected lower trending average gaining momentum, the odds favor silver outperforming gold on any and all moves to follow.
Silver is an interesting metal aside from its expected higher prices ahead. Did you know that the available ounces of silver above ground are far less than those of gold’s? Currently, there are about 8 times more ounces of gold available than silver.
IMO, aside from certain commodity’s potential during the next hyperinflationary period ahead, silver is super cheap. Historically, the average ratio between gold to silver has been about 16 to one. With the current ratio in excess of 77 to 1, one wonders how it got to such heights? One reason is that it is easier to manipulate than gold. Actually it’s been higher, about 87.5 on two occasions recently, once in the first part of October and again on the first trading day in December.
Although many analysts commenting on silver, to my mind, fail to address the major underlying reason for low silver prices I like to stay focused on the cause. The root of the problem is central bankers concern over silver’s potential to compete and undermine their government’s power and influence which is currently supported by the people’s acceptance of their manufactured fiat money.
One only has to visit the pages of monetary history to realize that government’s from the beginning of time have always forced their will on the people to accept fiat money.
From Wikipedia:
The terms fiat currency and fiat money relate to types of currency or money whose usefulness results not from any intrinsic value or guarantee that it can be converted into gold or another currency, but instead from a government’s order (fiat) that it must be accepted as a means of payment.[1] [2]
The governments’s efforts to keep silver prices tame have actually created the formula for expected shortages. Keeping silver prices low during an inflationary period equals a big backfire for the price manipulators. In this environment, miners will not mine silver for a loss as this will certainly reduce supplies in international markets which asserts upward pressure on prices.
In conclusion, it’s an old game of price suppression of real money, gold and silver, in efforts to prop up the fiat authorities power and influence in sustaining their existence. In the current systemic meltdown, expect more positive changes for them at your expense.
In France from 1789 to 1796 all “hell broke loose” for the people when their government tried one monetary experiment after another in their futile efforts at currency expansion to kick start a failing economy. In the end when all the machinery, plates and and paper that were used in printing the massive amounts of currency(Assignats) had destroyed the working class and the poor which completely wiped them out. Only a few elite in France in the very late 1700’s had the foresight to put their wealth into objects of permanent value.
Your financial well being, hopefully, will be enhanced if you choose to educate yourselves on monetary history and to explore avenues that are available now. Protecting your wealth should be your number one priority as we all move forward into the foreboding environment of unprecedented growth in the money supply.
Not a very good day for news over here in Europe.
The stock of Germany’s second largest bank (Commerzbank) suffered a 20% loss today after Financial Times has reported that the bank needs 10 billion Euros.
And I have seen one article in a prime business publication, wondering in very clear language, how much more US-Debt the markets will be willing to absorb in 2009.
The base-line reads: “There is no way that the two trillion US-Dollars who will be needed in the very near future, may be sold to the markets at current US-Dollar interest rate levels. So, the Federal Reverve System will have to step in and buy some of the debt. These purchases will be paid for with paper instruments that are equivalent to printing US-Dollar bills”If that is the way things will go, US-Dollar prices for gold will probably move much higher in 2009. And the US-Dollar will not only be floating against other currencies. It will be kind of swift-boating.
Gold $848.70 down $26.20
Silver $10.96 down $ 0.57
Gold/XAU Ratio 7.14
Gold/Silver Ratio 77.44
US Dollar 82.68 up 1.34
Crude Oil 46.97 up $ 0.63Gold prices are being dragged lower today with a firmer dollar. The dollar continues to bounce higher at about 83 following the severe beating that it took in December when it collapsed from 89 to almost 78 in just two weeks. The recent 17 day move on the dollar is viewed as a “dead cat bounce” and is expected to fizzle out in due time.
The December dollar drop amounted to a 12% loss for the greenback. It’s snap-back reaction so far has amounted to about 6%. In a bear markets, as the dollar remain in, the 50% reaction following a crushing decline is normal and sometimes can be even greater before the lower major trend re-establishes itself.
Concerning gold, about three weeks ago the metal lifted above the $840 level from an intermediate declining phase restraint that been in force since it traded back under the $1000 level in mid-March of last year. The $840 area is now generally considered, a fortress of powerful support. Resistance areas once considerably broken later evolve into very support levels. “Generally” means that it can even trade lower but that would only be a temporary price condition.
A good example of a temporary condition would be the time gold rapidly approched the 1000 level and continued past it. Unfortunately, for me and many other people we became so excited at the event that we temporarily lost our perspective.
This can be equated to being at a party with four drinks under our belt and feeling that we are invincible. Stepping into a car with this condition, the following events could be disastrous. Considering that gold is in a very strong bull market, the long term buyer could have made a temporary purchasing mistake but the short term trader could have been really hurt if both had followed it past 1000.
History has taught the trained eye that the levels of 1, 10, 100, 1000 and 10,000 are psychologically formidable areas to better on first contact. The same applies to declining markets when prices approach these levels from above. A recent exception to this rule is the Dow Jones Industrial Averages breaking and staying below the 10,000 area on its first contact.
A valid case can be made for the 5 number and 50, 500 and 5000 but the previous set of numbers beginning with 1 are most significant.
Sinclair says, concerning the 1000 level on gold, that the third contact will be the charm needed to finally put it behind us. I personally don’t have Sinclair’s experience but based upon his uncanny success I will accept for now his judgment.
So, this morning with gold prices approaching the $840 area it is in my humble opinion that an OPPORTUNITY currently exists for you in acquiring the metal in the form of your choice.
last on gold is $853.50.
A personal friend of an Agoracom.com user in Canada reports the following:
“We accumulated 3 emini contracts on Comex for December delivery and we had been given serial numbers and weights last week for the three bars. Today we were informed that Comex, which is now a division of NYSE Liffe, is invoking a rule in which they can deny delivery of individual mini bars(roughly 33 ounces) and issue you only a Warehouse Delivery Receipt(WDR) against your mini-contract unless you have 3 WDR’s, and then they’ll issue you a 100 oz. bar. Otherwise, if you have only 1 or 2 mini-contracts, you only own a WDR, which you sell by shorting a mini against it. If you own a WDR for a 100 oz., the WDR insurance encourages you to safeguard the gold at the Comex.”
Following are some more excerpts from the main communication:
“Our back-office guy at RJ O’Brien told us that he’s been doing Comex deliveries for 30 years and he’s never seen anything like this, and he’s never heard of this NYSE Liffe rule on the mini-contract.”
“Out of nowhere, some obscure rule is invoked and is used to override the terms and conditions of the mini-contract that we purchased over a month ago and fully funded for delivery.”
“We have witnessed delivery notices issued for close to 50% of the gold supposedly held in the registered category on the Comex during the month of December, and yet the reported Comex inventory of gold as of 1/2/09 shows almost no physical gold leaving the registered category at the Comex.”
It is only too clear that the mini-contract on the Comex has absolutely no gold behind it while the 100 oz. contract will have to cease trading if the outflow of gold from the Comex continues at its current demand rate.
TV viewers during the past 6 months or so have been innundated with commercials wanting your old gold jewelry. 85% of annual gold production goes into jewelry.
Is the government hiding the fact there is a major shortage of physical gold, thus hiding it from the public??? Would they be doing this to protect their bullion banks who are short? If any bank is over-extended on the short side it is JP Morgan. It is understood that there are some other big US banks short on gold as well.
It seems the Treasury under the leadership of one of the biggest past gold bears, Hank Paulson, is doing everything in his power to protect all of his banking buddies or other major gold shorts from facing the realities of a fully justified higher priced gold market.
Just look what he did for Bear Stearns when it financially imploded. Bear Stearns at the time was underwater with their extremely large short interest in silver which had no metal at all backing that exposure or funds available in case of future trading losses.
Paulson gave the positions to JP Morgan and guaranteed them against loss with US taxpayer money. JP Morgan probably had a little meeting with some of their banking buddies and put together an organized raid in the silver market and attacked gold at the same time just to make sure silver tanked.
How would you like someone to give you a silver short position guaranteed against loss and then be permitted to make naked short sales in silver or not even having to put up any money for any sales that you effected in overwhelming the marketplace? Well, that’s what happened and the US taxpayer who held silver at the time in their investment accounts got nothing from it but the shaft.
Today, Hank’s past buddies from Goldman Sachs, in either connected or not connected positions, were given the $12 to $13 billion dollar IndyBank today for $1.3 billion by the FDIC. Conflict of interest here?? You tell me.
Last on gold is $854.70.
Flash traffic out of Denver indicates that Comex has defaulted on delivering the 33 ounce gold bars tied to the mini-contract.
/More to follow/
Last on gold is $875.70, as silver continues to build relative strength against it while trading higher at $11.46.
Commodity Online January 1, 2009
As we analyze the possible reasons behind future directional move in gold prices in 2009, we get more bullish factors than bearish factors from both supply side and demand side.
Supply side factors:
Gold mine supply has peaked in year 2001(2600 tons). Gold mining supply worldwide has failed to grow during the seven-year bull market in gold and has fallen to 10-year low. As 2009 begins, gold mining projects are now struggling to raise new funds due to the financial crisis, coupled with shortage of skilled labor.
Apart from the credit problem, other reasons for reduction in mining output include accidents in the mining process like rock
falls and poisonous gas, power shortages and environmental concerns due to release of heavy toxic wastages.Despite the strong gold-price, incentives to produce mined gold supply are heavily constrained and any demand growth in the form of investment or jewelry would only see higher prices.
Central Bank Sales
Over centuries, central banks have hoarded gold. World official gold holding (September 2008) is around 29,783.9 tones. The Central Bank Gold Agreement (CBGA) was renewed in 2004, raising the annual gold sales limit to 500 tones, which will expire in September 2009.
The ongoing financial crisis has strengthened gold’s use as the ultimate international currency – the only form of money with intrinsic value and could lead to a considerable slowdown in gold sales by Central banks.
Demand side factors:
One needs to look back the price move of gold to understand how safe heaven sentiment has contributed supporting gold prices in 2008.
The unsustainability of the system of “Live now, pay later” leading to a credit problem was the main feature of the year 2008 that had to collapse. It also saw governments dealing systemic failures in the banking system, spreading out to all financial markets and eroding confidence and trust in the banking system.
The global economy as a result has given a deep recession. Moreover, with higher gold lease rates, gold is even trading in parity with money-market rates and increasing its appeal relative to holding cash. This all suggests that flight-to-safety will still be the main driver of gold prices.
In relative terms gold has witnessed a lesser percentage decline against other asset classes indicating outperformance. While comparing the fall of Commodity prices due to the credit crisis, we see that only gold held on so well, mainly due to the risk premium.
Gold closed out the week at $874.90.
Check out the N.Y. Times story on the town of Battle Mountain, Nevada enjoying boom times as a result of the higher gold price.
The article concludes with the same never ending general inference or theme from US papers that gold will be going lower.
Last on gold is $874.90
Check out the following link:
http://www.321gold.com/editorials/willie/willie010209.html
When you’re finished you may need a glass of wine.
Gold is off its high again at $890 and is now trading lower to $873.00.
Soon after FDR was elected the gold was called in. The majority of FDR’s campaigning expenses were paid for by the banking industry. A few years later the official price was jacked higher by about 70%. Who did this benefit, not the people who turned it in? I think there is a lesson to be learned here.
Does history repeat itself? I don’t believe the Roman State was the original early owner or owners of the Empire’s eventual complete dominion of all the gold placers. Bottom line, they probably confiscated the placers from the people when their currency went sour.
Concerning gold confiscation, governments have done this routinely over history when their fiat currencies entered an explosive inflationary spiral as people’s mounting losses in purchasing power influenced them to seek out gold as a store of value thus abandoning whenever possible the circulating or growing near worthless fiat bills or vouchers or coupons as some referred to them as.
Some eye opening figures:
Since the US moved to fiat paper money(inconvertible paper money made legal tender by government decree) in 1971 the dollar has lost, at least, 80% of it’s purchasing power.
Since the Federal Reserve was established in 1913 the dollar has lost in the excess of 98% of its purchasing value.
Who’s creating the money that causes us to lose our purchasing power or more significantly, our savings or wealth values? It’s the banker’s big brother, the Fed, and the banks themselves.
The banks have the system so rigged that when they nearly go bankrupt from their excessive gambling follies they rob us us through their well placed hired government employees forcing us to reinburse those losses. It is a perfect fool-proof system for success and riches if you happen to be a big banker.
The big banks are so influencial that they even got us to bail out the brokerage companies which they bought for peanuts with the money we gave them plus some smaller struggling banks to increase their market share. Use the TARP money to bail us out? Don’t be absurd squeaks the big-fat-bank-rat.
Let us assume for a moment, that the forecasters, who foresee the US-Dollar price per ounce of gold going to $ 10.000 and who see a new currency replace the US-Dollar in 2012, may be right.
What would that mean for private ownership of gold and gold-mines in the US?
In my opinion, no Administration and no President will let the US-Dollar go down the drain without requiring all privately owned gold to be turned in to government treasury – in exchange for some piece of paper – and without nationalizing all gold-producing properties on US-soil in a desperate attempt to save the currency.
Unfortunately, such measures of last resort may already be a subject of government policy making. And behind all that paper-shorting of gold may be a Plan B that the public does not know about.
I see no way in which all the Federal Debt, that the Fed plans to sell in 2009, may be sold at current interest levels of the US-Dollar. Or does the Fed plan to sell US-Debt in other denominations than the US-Dollar for a change?
Of course, the Fed could always hit the start buttons of the printing presses to avoid selling debt that nobody wants anymore. But that is no long-term solution – as we all know. I sincerely hope, there is a Plan B for that problem.
There is a strange hum in the air over here in Europe these days. European policy-makers understand very well that the incoming president on January 20th, 2009 will need some positive results fast. The faster the better.
European leaders want Barrack Obama to succeed. They will be making a substantial effort to assist him in putting the US-economy back on it’s feet.
And I personally believe, that some European Leaders, like the German Chancelloress, have “been keeping their powder dry” to support a massive and coordinated effort to stimulate economic growth as soon as Barrack Obama has taken office and the “Bretton Woods II” talks move ahead.
On an overall basis, I see a solid base for likely improvements in 2009. If the Bretton Woods II talks go well, the global financial crisis may soon loose it’s awe. And if the US are represented by a President again, who shows some respect for other nations and other cultures, the number of people, who want the US to succeed economically, may grow substantially.
I expect the US-Dollar price of an ounce of gold to fluctuate around the 1.000 US-$ threshold for the next few month. And I wish you all well for 2009.
Mike, it is very true that FDR’s confiscation ocurred in economically weak times. But, many commentators compare the Global Financial Crisis of 2008 to the Great Depression of 1934. Some even believe, the 2009 depression will be more severe, than the depression of 1934. So we are currently living in very weak times, aren’t we?
And in case the Bretton Wood II talks should fail or be postponed beyond the first half of 2009, I fear for very severe economic consequences in the second half of 2009.
The Wall Street Journal has printed an article on the former Russian KGB-Analyst Igor Panarin on Dec. 29th, 2008.
http://online.wsj.com/article/SB123051100709638419.htmJust two years ago such an article could never have appeared in the WSJ. It would have been dismissed as completely irrelevant, russian, antiamerican propaganda.
The formerly unthinkable has made a subtle transition into an unlikely, but not altogether impossible event.
If the Administration should plan to become serious about nationalizing precious metals, you will first get a wake-up call on your Income Tax Return Forms. As soon as there should appear a questionnaire asking for details on precious metals in your possession. (For record only).
The unbelievable pace in the accumulation of trillions of US-debt is scary. This development simply cannot go on much longer. The markets did not tolerate an oil-price of US $ 150 per barrel for a very long time during 2008. And the markets will not tolerate the amount of debt that the US is incurring right now much longer. An adjustment of some sort seems inevitable to me at some point in time during 2009.
In regards to one of Han’s scenarios below, a government call on Americans to turn in privately held gold, here are my quick impressions.
Unlike FDR’s confiscation, which occurred in weak times, gold ownership in the US, a global economy with many options for gold ownership, unthinkable means of communication today compare with 1934, and perhaps most of all the small supply of gold held by US residents or citizens, such a policy will yield very little physical gold for the government. Also an observation I recognized over my past thirty-four years in the gold mining/investment industry, events do not repeat. It will always be a new game with a fresh twist. An ongoing power plan exists between the gold holders and the want-to be (paper holders). As a gold producer this battle is not my concern and is probably an okay reality for us. Sixteen to One operated during the last major bear market for gold, acquired more hard assets and improved its position for the next bull market. When will that flare up, it beyond my expertise to predict.
One fun history of gold during its last escape for the US population between 1968 and 1975, is the amount of and type of gold smuggling that took place. Great stories! The smugglers were much smarter and more motivated than the agents for the Government. I am sure that this new US administration knows this history and will never underestimate the ingenuity of its citizens. If the United State, the fifty individual states and the thousands of county and city governments cannot stop the most terrible habit of nasty drug use, especially meth, gold smugglers will be safe and prosper.
When FDR confiscated gold, his administration also raised the official price from $20.67 to $35 per ounce. This stimulated gold miners and investors to kick up their operations. Between 1934 and WWII, gold people licked their chops with delight. In 1934 bullion receipts of the Sixteen to One mine totaled $578,000 for the year. Dividends that year were $287,000 (almost 50% of bullion receipts).
Following Hans’ theme that the government confiscates gold, it would be prudent for the government to do something to stimulate gold production first. There are several ways to accomplish this. If the US wants to recharge its vaults with the precious metal, it will be because our financial gurus want to sit at the international poker table with a chest full of gold instead of guns and notes. Otherwise, why bother?
It seems to me that those who do not have gold want to diminish its importance in the marketplace and suppress its exchange rate with all currency. Gold gets in the way of those who battle for the value of the Euro vs. the Yen. vs the Dollar or in the good old days of international trade the German Mark and Swiss Franc. (I saw only one article in the Wall Street Journal about the conceptual beginnings of the replacement of Europe’s currencies with a single Euro and gold. The article discussed the debate about the percent of gold backing with a leaning towards thirty percent. Did this come to pass?)
Today no one mentions Fort Knox. Back in the 1970’s it was a hot topic with gold bugs (a peculiar name). I drove by Fort Knox and was surprised to see that weeds grew around the fence and gate. I never gave the question of, “Where has all the gold gone?” a hard study but others offered evidence that Fort Knox was stripped clean of America’s gold. When was the last time you read about Fort Knox as America’s storehouse for its gold? Remember the United States does not print dollars. We trade with Federal Reserve Notes. When FED is used in writing does the writer mean the federal government or the Federal Reserve Board? There are significant differences.
I treasure a vast and diverse library of both mining books and economic books that emphasize gold. I accumulated them over the years and still love to pick one up for a quick review. Maybe we can discuss this topic some more.
Today I will sell 5.67 ounces of gold dust. Here is the reason I am selling today into a rising price: the mine needed to get its smaller loader repaired for the winter season. The large Cat 966 is rougher to operate and not the best for snow removal; therefore, it was transported to a repair yard early December, and now it will be transported back to Alleghany this week. So, for the economic thinkers is our Forum, it is because of demand,not supply,and not demand for gold but the demand for dollars to pay for the repairs.
The option of using a line of credit was no option at all due to the attitude of lenders. I am positive that other real gold producers, the ones who mine and process real gold face similiar decisions. We pay our bills with cash, not gold, except in rare cases. Over the past fifteen years I have been able to manage our gold inventory to gain the maximum returns. This is one of several reasons this company has survived the hard times for the small gold miner. While our owners have not seen rapid increases in the market value for their equity in the Sixteen to One mine, they have not experienced the devestating dilution prevelent in the small cap gold corporations (some of the big ones as well).
I am not a believer in the $2,000 plus spot price for gold, yet it may happen; however, I do believe that the last high over $1,000 will be tested and broken in the months to come. We are very happy with the price today. The bucks we get per ounce of Sixteen to One gold are not the problem. Working capital to go and get the stuff is the problem and one that I will overcome to the benefit of existing shareholders and those who provide the new money.
Where are those who believe the multiple thousand dollar per ouince predictions? If you are one, call me and realize your visions for the future.
Gold $883.40 up $14.70
Silver $10.84 up $ 0.23
US Dollar 80.30 down 0.31
Crude Oil 39.15 up $ 1.44
Gold/XAU Ratio 7.45
Gold/Silver Ratio 81.10Due to the continuing conflict in the Gaza Strip gold is being pushed higher. Earlier in the Asian trading session it reached to nearly $892. The last currently, as it is being whipped around is $882.20.
Jim Sinclair stated tonight at jsmineset.com that Alf Field’s projections made in early December will be met. That’s strong talk as Alf has predicted uplifting waves to reach $3500 then to $6000 followed by a move to $10,000. In that price scenario environment our shares will become a blue chip holding envied by all.
Jim Sinclair, also says tonight, that a new currency will replace our present dollar in 2012. It sounds like it’s the right time for us all to be in hard assets or to be making plans for it.
The dollar chart was checked out tonight and it clearly shows an objective on the graph into the lower general area of 65. Again, the last sale on the greenback is 80.30. The posture for wealth retention should be to exit all dollar denominated assets with the exception of hard assets.
Silver continues to be the red-haired stepchild being ignored as a monetary metal. They would like us to believe that silver is an industrial metal just like other base metals but the truth is the people don’t agree. It’s not that the people arent’t putting some of their wealth into the metal, it’s that the short sellers continue to beat silver back with paper sales on the Comex.
Already, one or two US banks have sold 25% of the annual world production short. This enormous percentage is destined to grow as base metal mining operations are curtailed thus reducing by-product production of silver due mainly to the collapse in copper prices. Copper has fallen from above $4 some weeks ago to just $1.30 recently.
Some months ago when the Bear Stearns fiasco hit the news wires silver was pushing higher and stayed above $20 for awhile. Then a few US banks took control of the market plastering it with paper while taking it down below $9 or so temporarily only to have it inch back slowly. Silver in the past few days has managed to trade higher over a minor technical area at $10.40 and looks slowly higher. Once the $14 area is cleared the bankers could be in trouble as the silver market will be explosive from then on out.
The silver manipulation issue is heating up again with another CFTC investigation underway. For more background read Ted Butler’s recent article at silverseek.com.
One parting comment: We should never underestimate the power and resoursefulness of the people that want to control us as being oriented towards hard assets. The sharp drop in gold and silver prices over the past months should only reinforce this concern. In the past apparent moon shots on the precious metals have been met by temporary serious cooked-up selling maneuvers by the opposition. It is better to buy into declining markets avoiding up-flares for market tactics.
Some current trends: Money continues to flow into the Buffalo 1/10, 1/4 and 1/2 ounce coins. In the precious metal stocks cash continues to flow into royalty companies such as Royal Gold(RGLD-OTC) in the US and Franco-Nevada(CA:FNV at bigcharts.con) in Canada.
Royal Gold made a new high last week at $48.91. Franco-Nevada is still down about 20% at $19.98 from it $24.95 high in Canadian funds as both act superior to the general high priced gold group shares that remain on average at about 40% under their high points of the year.
So this was the last triple witch day this year. My guess is, that a lot of people had been caught on the wrong foot by the recent sell-out of the US-Dollar and have tried to pull the indices in their direction for todays closings. The US-Dollar has appreciated by 4 cents against the Euro. An extraordinary move for a single day! And that has hurt US-$ gold price as usual.
Volumes are not to large any more because many people have already left for their X-mas holidays. And the big players have made their stance for the balance-sheet ratios as well.
As triple witch day goes, fundamentals will probably return.
Gold $339.60
US Dollar 81.08
Crude Oil 36.56A few Gold stocks and a quick review of the Philadelphia Gold and Silver Index(XAU)
In today’s gold sell off there are some pockets of strength in the gold stocks giving the bullion price some relative strength characteristics.
The following stocks will do quite well with higher gold prices and are putting in a good showing today.
RandGold Res.(GOLD_OTC) 42.70 up 2.54 or 6.33%
Royal Gold(RGLD-OTC) 43.49 up 1.47 or 3.5%
Kinross Gold(KGC-NYSE) 16.80 up .46 or 2.82%
Agnico Eagle(AEM-NYSE) up .60 or 1.37%
The XAU, following its naked short selling oriented crash to the 63.52 level, has righted itself. The last on the Index is 110.91, unchanged for today.
The major pivitol area in this market is where the 5000 and 2500 day moving average lines are currently located in area on the chart of about 100. Even though the forced selling that took place in the recent past breached this level the Index has returned to its positive bullish stance.
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Bill Murphy’s Meeting with CFTC – Update
posted on Dec 18, 08 06:05PM
GATA Chairman Murphy reports on meeting with CFTCSubmitted by cpowell on 02:31PM ET Thursday, December 18, 2008. Section: Daily Dispatches
By Bill Murphy, Chairman
Gold Anti-Trust Action Committee Inc.
Thursday, December 18, 2008About 45 minutes before I was to leave for my meeting with Commissioner Bart Chilton of the U.S. Commodity Futures Trading Commission, this news hit the tape:
“Obama to appoint Gary Gensler to lead Commodities Futures Trading Commission — AP.”
Gensler is a former undersecretary of the treasury and assistant secretary of the treasury.
Gensler is a Goldman Sachs alum and a Treasury man. Obama is putting one of the key figures in the Gold Cartel scheme into the top role at the CFTC. Talk about the fox guarding the henhouse! But the bad news might be good news.
My meeting with Chilton went on as scheduled and lasted about 50 minutes. The surprise was that three others from the CFTC staff attended, including the deputy general counsel. One of the other staffers had already viewed the video of GATA’s Gold Rush 21 conference.
Chilton listened intently, took notes, as did one of the others, and asked many questions. I laid out GATA’s presentation. I am not going to get into all the details, as we will see what takes place in the months to come. But I chuckled when telling them that if they really wanted to comprehend what the gold price suppression scheme is all about, all they have to do is go to their new chairman — at the right time. No one knows what is going on better than he does.
I did not hold back. I said the main culprit of the Gold Cartel was our own government, which has been in league with bullion banks like JPMorganChase.
Naturally, I drew parallels to the Madoff scandal and how the Securities and Exchange Commission ignored nine years’ worth of probable cause to suspect a Ponzi scheme. I also laid out how and why what is occurring in gold and silver could lead to a much bigger scandal if the price suppression scheme is not stopped — and that is because the Gold Cartel is running out of the gold needed to meet the growing annual deficit between supply and demand.
I was very impressed with Chilton, and he said my trip to Washington would not be in vain.
There are two things for sure. First, as in the Madoff scandal, no one can say the powers that be didn’t get the scoop, the facts about the gold price suppression scheme — what has happened and why. And second, if there is one person in Washington who will try to get to the truth about gold, this is the man.
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Gold $833.90 off $19.20
Euro 1.3944 off 2.37%
US Dollar up 1.37%
Crude Oil off $ 1.77Gold started getting weak overnight near the close of the Hong Kong market by breaking minor daily support just below $850 and continued lower during the London session hitting $829.20.
Supporting gold’s fall was the continuing dead cat bounce of the US dollar. J.P. Morgan’s suspected continuing bear raid in the oil market persists in bringing down prices giving the US economy some much needed relieve. Merry Christmas motorists. I’ll be locking in some cheap gas prices on a RV fill-up tomorrow.
The cabal in the gold market continues to seize and smother excitement of the metal’s well wishers on daily technical strength. Their message is clear, if you join in on any buying sprees we will give you a hangover. I’m sure recent selling is coming from some big US banks along with the usual bashers at Goldman Sachs and J.P. Morgan.
At the moment in brisk trading gold is coming back with a last of $840 plus. I would suspect that more daily selling pressure will come back into the market at this level as it has shown to be troublesome in today’s trading.
Gold’s free fall from the $880 level is still in motion as we await the stench from the rotting US dollar to resurface.
The big summer rally of the US-$ is probably best explained by roughly 10 Trillion US-$ that European Banks had borrowed from US-Banks earlier and that had to be repaid when lending among banks froze up.
The rally was also funded by large amounts of American investments in other currencies that where terminated and called back home when credit tightened in the US-home-market. I have no information about the size of this “repatriation”-Cash-Flow though.
Now both US-$ buying activities have come to an end and the fundamental trend is back. And the fundamental trend is signalling a much weaker US-Dollar. Much weaker than what we saw in March of 2008.
As long as market-participants are using gold as a hedge-tool against currency risks, the US-Dollar denominated price of gold will continue to go up while the US-Dollar floats against other currencies except the British Pound.
Because that is floating just like the US-Dollar and is nearing parity to the Euro. “Sic transit gloria pfundis”.
Gold $855.60 off $11.80
Silver $11.03 off $ 9.33
Gold/XAU Ratio 7.57
Gold/Silver Ratio 77.57
Crude Oil $38.00 off $2.06
US Dollar Index 79.21 up 0.65Gold’s party of the recent past days got a wet blanket thrown on it this morning near the $880 level and has been back peddling ever since. It appears that gold will be on the defensive for a short unknown period of time to follow.
Crude this morning is lower at $38. Who would have thought? Thanks, J.P. Morgan. See, these guys are good for something after all. Gasoline here in Sebastopol, California was $1.59 yesterday and is expected to go a wee bit lower. This is a nice Christmas present for motorists.
The US dollar is doing a dead cat bounce this morning being up 0.65 at 79.21. The recent intermediate rally to about 90 looked much like the Fannie Mae rally in March of 2008 when it went from $18 to $35. The last on Fannie today is 67 cents.
I looked at the chart on the Euro this morning and saw a significant chart formation that it busted out of to the upside from about five days ago at 1.31. The formation is called a right ascending triangle. The five day run took it near 1.45. That’s about an 11% move, not bad.
The Euro made its high at 1.60 in March this year and during the dollars big rally traded down to a low of 123.50.
I consider $846 to $850 as being support for gold over the days ahead. Go gold!
We’re hitting the road in the RV on Saturday, weather permitting, to spend some Holiday time with our girls in Reno, Nevada. I hope we can get over the icy Sierras in one piece and back again.
Our family wishes one and all a festive and Happy Holiday Season.
The sale of the US-$ aginst the Euro continues today at an unprecedented pace. As well as the sale of the Pound Sterling, by the way.
In €-Denomination the price per ounce of gold has actually dropped below the 600-line in today’s fixing at London.
Physical gold is hard to get in Europe too. The mints in Switzerland are now working three shifts and still cannot meet the demand for coins and small bars. And golden X-mas presents are available only with huge mark-ups.
The US-Dollar lost 8 cents against the Euro within less than 24 hours. I cannot remember such a wild move of the US-$ within the last 45 years that I know from personal experience.
When I was a young man, one of my teachers used to compare the circulation of paper-money to the issuance of corporate stock that is fully transferable without the endorsement of the secretary of the company.
In this comparison, paper-money bills were the share-certificates of the stock of the “issueing company”, the national economy emitting the “stock”.
Bill Bernanke has issued a lot of new certificates recently, watering down indivdual share-holder value. And the outlook for future appreciation or dividends is bleak.
Therefore the shareholders do what you would expect them to do, if stock is underperforming and outlook is dire – they sell. And it seems to me that there are still many stop-loss orders in the market.
Gold will probably go much higher in US-$ denominated prices.
WE HAVE BLAST OFF
Last on gold is $869.30 and its running.
Right on Hans!
Gold is $852.50, up $15.60 and running.
Gold could experience some further strength today as it appears on the verge of breaking a declining 10 month consolidation period around the general area of $850. We’ll have to wait for confirmation that this event has taken place with some trading in the low $860’s.
Next minor resistance is $905.
The last time the metal pushed out of a significant declining consolidation phase like the current one it was in October of 2006 when it cleared $600 to the upside. Following in February of 2008 it hit $1,030, that’s about a 60% advance.
Let’s see, 60% of $850 gives this next possible move a conservative chart chance of hitting $1,360. We’ll just have to wait and see.
Go Gold!
The price of US$-Denominated gold will probably continue to rise as long as the current weekness of the Greenback persists in the currency markets.
But mind thou well, it is not gold that is increasing in value – it is the US-$ that is losing it’s purchasing power abroad.Last on gold is $836.90.
The following link with a lead comment and follow-up story clearly supports what I said a few nights ago, crisis are created for devious reasons. This is an old time and tested Rothschild trick. The TARP a bailout plan for the banks, I don’t think so.
The last on gold is $833.70.
Gold finally surmounted the troublesome $830 today after being higher at $843. There is some more resistance higher up on the chart at $850 and below from a descending recent tops connected line.
Like Hans has said the dollar is looking suspect at the moment. Since the it gave up the 84 support level recently it has preceded to sink to a last of 82 in just a few days. watch out below!
The OTC Pink Sheet market maker took in 6,000 shares of our stock today at 2 cents, what a joke.
The ridiculous trading of our stock is reason enough to always have in some stink bids to keep this guy honest. The trader is probably some young kid in the business for a few years or so that also watches, maybe, another 100 or so inactive issues.
What is really sad is the incompetent broker that failed to adequately represent his customer in securing the best available price. The poor seller ended up with a gross of $120 minus the cost of the ticket which might have been anywhere from $25 to $50 because our stock on the Pink Sheets doesn’t qualify for an automatic transaction which would have been much cheaper.
It’s really sad for this seller as our company’s shares in assets alone are worth over $1.50 in my humble opinion.
The 16 to 1 Mine as mentioned is more than likely worth from $10 to $15 million. The Brown Bear Mine has to be worth well over $2 million and our Plumbago Mine has to be worth well over $1 million and that’s not to mention our other small past producers.
In the future all these past producers will be yielding high grade gold specimens valued by this inside market far in the excess of gold’s general market price.
Hey Rick, I bought four two 1/2 ounce gold sets from the US Mint today. Each set has an Eagle and a discontinued Buffalo gold coin in it. The Mint produced this year only the Buffalo 1/10 of ounce, one quarter of an ounce and 1/2 ounce coins which they will not produce again, as far as they have indicated. These coins will hold a high numismatic premium as they will always be rare for only limited quantities were minted.
Thanks for your comments bluejay.
I shall write a letter to the team of Barrack Obama, asking them to reinstate the M3-Statistics for the US-Dollar.
By the way – the value of the US-Dollar is melting like ice in the sun-shine against all other major currencies since about a week. Markets have obviously given up on the US-Dollar.
That decline of the US-Dollar should result in higher US-Dollar gold prices, well beyond the 830 level. Because many traders are thinking in Yen-, Renmimbi- or Euro-Values. Not so much in US-Dollar price levels.
Gold trading higher at $828.90, up $7.90.(Just as a passing thought: it wouldn’t be surprising to see the evil forces surface at the $830 level with more paper gold selling)
Thanks for your thoughts Hans.
I remember reading back a few months or so comments from John Williams at shawdowstats.com that the money supply would continue to shrink until November or December when he anticipated a trend reversal.
Usually when the banks take in capital, as with the current handout program to them, they would use it for justifying more loans which in effect increases the money supply. This time it’s different as they are content to buy government bonds for safe income while keeping their loan activities to a minimum.
During the depression of the early 1930’s in the US it was not the lack of capital at big banks that kept everyone down, it was the bank’s unwillingness to make loans that extended the problem and forced nearly 30% of the workings class into the unemployment ranks.
The banks have basically halted their lending practices which I think the government is not pleased over. Obama’s stimulous plan of handing out free money to the public in the suspected amount of $1 trillion, the first time around, will get the money supply moving higher quite soon.
It is my belief that this whole collapse was engineered way ahead of time with the creation of OTC derivatives. Brooksley Born the acting commissioner of the CFTC in 1987 tried in vain to regulate these derivatives but was beaten back by the likes of Greenspan, Rubin and Phil Gramm in the Senate.
I believe it was all setup by strong banking interests to purposely create a crisis. The aftermath of a crisis results in the public’s wealth being destroyed to some extent and the influence and capital of large banks being increased.
It is a known fact that J.P. Morgan created a banking crisis in 1907 that cost Americans millions of dollars both in the stock market and in smaller banks which eventually closed their doors.
This crisis was one of the reasons that the Fed was voted in replacing the US Treasury for creating money which was approved by Woodrow Wilson soon after he took office in April of 1913. Wilson’s campaigning for president was strongly supported by the banking industry.
Concerning contacting Bernanke to reinstate M-3 money supply levels, Bernanke takes his orders via J.P. Morgan and they from the Rothschilds in Europe. Not even you, being closer to the source than we are here, stand any kind of a chance trying to persuade by far the richest entity on the plant to change their money making ways.
These are the same people who believe, “Give me a control of a nation’s money and I care not who writes its laws.”
The following link has many interesting graph studies including the current unofficial chart on US M3 money supply.
Deflationary and inflationary impacts of previously unknown size are causing will swings in the money supply M3.
After excessive growth during 2006 and 2007 we have seen a sharp decline in M3 growth during the last 6 month of 2008. It is now down to almost no growth and the trend is pointing at a further decline of M3-growth, that means deflation. The first actual contraction of M3 in decades is looming on the horizon. And that is despite all the huge cash-outlays in 2008-bail-out operations.
The only explanation that I can offer for this phenomen is, that the gigantic equity losses of the global banking industry have triggered balance-sheet clipping operations in the area of some 20 to 30 trillion US-Dollars. Most of this clipping is achieved by reducing the position “Loans outstanding”.
The deflationary impact of such action is substantial and it may be a while until inflationary forces kick in again. The fact, the platin is cheaper than gold these days, shows how desparate some people are strapped for cash. More commodities will be sacrificed at very low price levels to raise cash during 2009. It is not only crooks who are manipulating the price of gold. Some very hard facts, like the need for cash, are supporting deflationary impacts these days.
Please keep that in mind, Mike and bluejay. And maybe, ask Ben Bernanke, to make the Fed publish M3 figures again. It is outraging, that the US-Gov’t has discontinued the publishing of such important information for almost three years by now.
Gold $824.30 up $4.60
Platinum $819 down $17.00
Silver $ $10.21 down $0.10The platinum price has moved under gold’s for the first time since 1996. Sure, this in effect is being caused by the current world recession with 50% of platinum’s yearly production consumed for industrial applications. The remaining past production of 40% goes for jewelry, Japan consumes 90% of this amount, with the remaining 10% going for investment purposes. It is suspected that these last two percentages are on the increase due to wealth protection demand.
Very little has been written about the suspected increased demand for platinum bullion coins. Holding platinum, to some degree, may be more important that holding gold just based alone on its scarcity. Currently there is 16.67 times more gold mined than the metal with silver’s yearly totals being 100 times greater.
Currently there is so much hot money flying around in markets that opportunities do surface once in awhile with price extremes. If you want to bet on scarcity ruling during the hyperinflationary environment coming then platinum bullion coins may have a place in your investment survival kit.
Platinum is down over 60% from its recent highs and remains oversold in comparison to gold.
Some backs back Mr. Jim Rogers was asked if he would buy platinum when it was trading higher over $2,000 an ounce. His answer was, “I’m not interested in platinum at current levels.” What do you think he would say today at $813?
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