The Israel Deception

Is the return of Israel in the 20th century truly a work of God, or is it a result of a cosmic chess move to deceive the elect by the adversary?

Showing posts with label fed. Show all posts
Showing posts with label fed. Show all posts

Saturday, May 6, 2017

Paper gold leverage over 500/1 in order to protect dollar and trillions in derivatives

For those who either invest, trade, or save in precious metals, the past month has not been kind to the value of their holdings.  And in fact, sentiment against gold and silver ownership because of the volatile price swings has really been forged over the course of about six years going back to 2011 when each were crushed by manipulation when they were sitting at their all-time highs.

But to understand the gold market one must understand how its price is tied not to the physical metal itself, but to paper derivatives traded daily on the Comex.  And more importantly, why both the futures market and the regulators allow the bullion banks to sell contracts in which they do not have the actual gold to backstop these trades.

In essence it comes down to two simple and desperate needs... the first is to protect the dollar, and the second is to protect the trillions of dollars worth of derivatives held by the banks which would result in the complete implosion of the Western banking system.

As you can see in the 10-year chart of the dollar below, in 2011 the reserve currency was on the brink of collapsing as it fell below 73 and the last maginot line of support.


And like in 1980 when trust in the dollar was at a previous crossroads, gold and silver were the few assets that individuals could go to for protection against inflation and the collapsing currency.

Former Fed Chairman Paul Volker stated after he saved the dollar by raising interest rates to over 20% in 1981 that the one thing he wished he had done in his process was to manipulate the gold and silver price.  And that lesson was carried over to 2011 when the Fed formulated a program to manipulate and control the price of gold in tandem with their programs of QE which would introduce 10's of trillions of dollars into the monetary system.


Fast forward to 2017.

Unlike from 1980 to around 2002, when the price of gold remained relatively low in the mid-200's due to the exuberance of the Dot Com stock market frenzy and the lack of sentiment in the precious metals, gold demand since 2008 has remained fairly strong and fairly constant, requiring the bullion banks at the behest of the Fed to continuously push down the price using derivatives and naked shorts.  But in doing so what they have also done is create a leverage so vast that according to well respected metals analyst Andrew Maguire, that leverage is now at 500/1 paper contracts to every physical ounce.
As an example, at the BIS (Bank for International Settlements) opex expiry at 3pm UK time on the 30th of April, it was clear by the footprints that they were grossly offside on trillions of dollars worth of derivative positions which they were forced to defend. Anyone doubting that officially transacted BIS gold derivatives exceed $1 trillion, need look no further than their agent banks’ OCC positioning and add this to the Reserve Bank of India’s estimation that there is 92/1 leverage. However, this conservative estimate does note include related derivatives which estimate leverage to be (a staggering) 500/1. - King World News
Owning physical gold and silver is not a short-term trade scenario, but protection for your wealth over a long period of time when the natural cycle of booms and busts, or the collapse of a currency via inflation or loss of confidence, reaches its inevitable outcome.  And just like the way cheap money has artificially propped up stocks, bonds, housing, and other assets, when they eventually break, just as they did in 2008, the collapse of each of these will be horrific, and even greater than the 60% drop we saw in prices between 2008 and their bottoming out in 2010.

Tuesday, April 18, 2017

Another day, another manipulation as gold slammed with naked short contracts after dollar falls below 100 on index

As we at The Daily Economist have continued to say over and over in the investment space, there are no markets, only manipulations.  And whether it is the Fed offering trillions in cheap money for insiders to buy back their stocks, the Exchange Stabilization Fund buying S&P future and the Yen to trigger algo traders, or the bullion banks naked shorting the precious metal markets, the only way to trade in today's world is to go with the manipulators and not use technicals or fundamentals.

Thus it should have come as no surprise on April 18 when in a matter of seconds, a bullion bank dumped over $3 billion in naked short contracts at the same time the dollar fell below 100 on the index, and where gold was working its way towards $1300 per ounce.

While the dollar index tumbles to its lowest level since days after the electiom, someone decided this morning was an opportune time to dump over 22,000 gold futures contracts (almost $3 billion notional) sparking a quick plunge in the precious metal. - Zerohedge
Interestingly, the short position at the Comex had actually fallen to its lowest levels since the elections as gold and silver crossing over their 200 day moving average spelled a strong buy signal for the commodities.  But with today's dumping, short contracts are back up to over 68,000.


(and add 22,000 to the April 11 number)

Thursday, April 13, 2017

Over the past 220 years the one key factor in higher gold prices is when inflation is higher than interest rates

Many analysts have been citing the Fed and their new interest rate hike policies as the catalyst for rising gold prices, as well as a few who have been pointing to geo-political events such as Brexit and the Trump election as the key driver of gold.  But the reality of this is that most moves following these events have been fleeting, especially with the central bank's ability to manipulate prices through derivatives and the paper markets.

So if there was one intrinsic data point we could point to that would ensure a near certainty for gold to move higher and higher in price, which one has the historic evidence to back this up?

How about when real inflation is higher than central bank set interest rates.

Chart of Consumer Price Index, 1800-2005

As we can see from the above chart, when the nation was on a gold standard from the start of the Republic to 1913, inflation was relatively flat except for the periods of war (1812 and 1860-1865) when monetary expansion was needed to conduct them.  And even during the time of the industrial revolution in the late 19th century, the set price of gold remained the same as it was in 1792 and where inflation barely grew at all.

It was only after the creation of a private central bank in 1913 that mirrored the ones controlling Europe that inflation really began to take off in America.  And it was this inflation, coupled with a devaluing of purchasing power of the dollar, that forced FDR to raise the gold price from $20 per ounce to $35.

Yet even this increase in the price of gold to keep up with the jump in inflation that took place over the 20 years from 1913 to 1933 was enough to sustain the dollar's purchasing power until the 1960's when the U.S. began to increase the currency's monetary base to pay for the extended war in Vietnam.  And this led to nations beginning to reject the dollar and demand redemption in gold which began to dwindle the nation's gold supply.

And with a smaller gold supply to back the ever increasing currency supply, the gold price was once again raised in 1972 to $42.22 per ounce.

One year later however, the dollar was completely removed from a gold backing and instead backed by the petrodollar agreement which as part of the deal with Saudi Arabia and the OPEC nations, allowed for a tripling of the oil price so that the U.S. could then triple their money supply.  And this is once again seen in the above chart around 1973 when inflation was finally let loose upon the public in an unprecedented way.

Of course we know from that point on the gold price was free to move as the market's saw fit, and as inflation turned into stagflation, and then high inflation (13% by 1979), the gold price eventually rose to near $850 per ounce before Paul Volker and the Fed did something drastic...

The raised interest rates from 11.5% to 21% over the next 18 months.

And with interest rates now finally being above Real inflation, the gold price began to fall, almost in tandem to inflation itself.

During the 1980's and into the early 1990's the Fed kept interest rates relatively high, and well above the rise of Real inflation.  And you can see on the chart that during this period inflation rose moderately and was easily masked by the economic boom that took place during the Reagan years.  But following the 1987 stock market crash, Alan Greenspan would soon take over control of the Federal Reserve and began to lower interest rates from 7.5% to eventually 1% following 9/11, and as such the gold price once again rose in tandem to real inflation being greater than set interest rates.


Image result for gold price chart 1992 - 2008

And ever since 2003, interest rates have never been above 4.5%, and have mostly been below 1%.

So what has been the REAL inflation during that time period?


Chart courtesy of Shadowstats.com

Around 2015 real inflation has begun to rise once again, and the Fed has summarily been forced to embark on a new rate hike policy that started in December of that year.  And even with three rate hikes over the past 18 months, interest rates are not even close to the real rate of inflation, and thus the gold price has remained constant despite the crash in the gold price between 2009 and 2011 when real inflation dropped by more than 50%.

So what does the future hold for gold both now, and in the coming years?  Well the Fed no longer has the ability to raise interest rates above real inflation since U.S. and global debt levels have made it impossible to do so without bankrupting all sovereign nations.  And this means that while the paper manipulators may succeed in holding down the price in the short run, the invisible hand of the markets will always win out, and rising inflation that is greater than central bank interest rates will mean that the gold price cannot help but keep moving up.

Friday, April 7, 2017

Fed jawboning kills gold and silver rally one day after each crossed their 200 day moving average

Following last night's U.S. missile attack in Syria as a punitive response for the perceived use of sarin gas against civilians, gold and silver both rose more than 1% to end overnight trading above their 200 day moving averages, and above hard resistance levels that had taken five months to recover to.

Gold:



Silver:


Yet while these levels stayed above their 200 day moving averages for a few hours after U.S. markets opened, a sudden and mysterious move in the dollar and yen following some minor comments from NY Fed President Bill Dudley were enough to crush all the gains gold and silver had from last night, and end the week well below the resistance levels that could have opened up the next leg for gold and silver prices.


It was not clear what was the catalyst for the sharp move, however shortly before the move Bill Dudley spoke, discussing the future of the Fed's balance sheet: 
  • FED'S DUDLEY: RATES WILL BE PRIMARY POLICY TOOL, NOT 'GRADUAL' BALANCE SHEET REDUCTION
  • FED'S DUDLEY: PORTFOLIO RUN OFF WILL NOT BE 'ACTIVE' TOOL OF MONETARY POLICY
  • FED'S DUDLEY: ONE REASON TO SHED BONDS IS TO LEAVE OPEN OPTION TO EXPAND BALANCE SHEET IN FUTURE
  • FED'S DUDLEY: LIKELY WON'T RETURN TO PRE-CRISIS SIZE BOND PORTFOLIO
  • FED'S DUDLEY: PREFERS RETAINING CURRENT 'FLOOR' POLICY MECHANISM IN FUTURE, WITH PERHAPS $500 BLN - $1 TRLN IN EXCESS RESERVES
  • FED'S DUDLEY: REPEATS EXPECTS TO BEGIN SHEDDING BONDS LATER THIS YEAR OR NEXT YEAR
in which he pointed out that balance sheet normalization would likely lead to only a "little pause" in rate hikes to avoid concurrent policy moves. 
FED'S DUDLEY: SHEDDING BONDS MAY LEAD ONLY TO 'LITTLE PAUSE' IN RATE HIKES; PERHAPS AVOID SIMULTANEOUS POLICY MOVES - Zerohedge

Wednesday, March 29, 2017

Rising inflation could be the catalyst to finally send gold price beyond ability for market manipulation

At long last real inflation has emerged in the U.S. economy, with even the Federal Reserve acknowledging it between the lines as they rush to enact up to four interest rate hikes before year's end.  And for gold investors who have suffered through central bank and Wall Street manipulation of the metal's price since the advent of ZIRP and QE, inflation is the best friend of gold and silver and likely to be the catalyst for the next strong leg up in this Bull Market.

Gold is poised to rally to levels last seen four years ago as rising inflation and negative real interest rates combine to boost demand, according to Incrementum AG, which says that the precious metal may be in the early stages of a bull market. 
Prices may climb to $1,400 to $1,500 an ounce this year, said Ronald-Peter Stoeferle, managing partner at the Liechtenstein-based company, which oversees 100 million Swiss francs ($101.5 million). Spot bullion -- which was at $1,249 on Wednesday -- last traded at $1,400 in September 2013. 
Gold has climbed this year as investors weigh risks that President Donald Trump won’t be able to implement his agenda, adding to uncertainty surrounding European elections and the Brexit process. Against that backdrop, investors are on alert for signs of faster inflation, with the Federal Reserve’s preferred gauge jumping recently to near the bank’s target. Policy makers raised rates this month, and kept forecasts showing two more hikes in 2017. - Bloomberg

Tuesday, March 21, 2017

As dollar has fallen 200 bps since Fed rate hike on March 15, gold has climbed more than $50

On March 15 the Federal Reserve announced their second quarter point rate hike in the past four months, and third in the past 15 leading the markets to believe that central bank was finally serious about tightening the cost to borrow money.  However, the reactions from the dollar and gold have been exactly the opposite of what should have been expected due to the Fed's efforts to attack rising inflation, and this has all but revealed that the markets as we used to know them are completely broken.

In just the past six days since the Fed raised rates on March 15, the dollar has plummeted 200 bps on the Dollar Index, and gold has risen every single day to its current position of $1244, which is a climb of more than $50 in that period.

Dollar Chart


March gold chart

Live New York Gold Chart [Kitco Inc.]

Gold chart for March 21

Saturday, March 18, 2017

Fed manipulation vs. economic stagflation: who will win the future over gold and stocks

Going back to at least 2008, if not further back into the 1990's and the Dot Com bubble, markets have no longer run on fundamentals and technicals, but rather on central bank and sovereign manipulations.  And all one has to do is look at the fact that despite corporate earnings declining for seven straight quarters, and most like an eighth here in 2017 Q1, the Dow has not only surpassed 20,000, but its acceleration to 21,000 was the fastest in history.

And now this breaking of market fundamentals by the central banks through their keeping interest rates down to near zero for 10+ years and infusing Wall Street with tens of trillions of dollars in credit has reached a crisis point, and a place where the Fed no longer has control over economic forces.  For the inflation they strove so hard to create in asset prices has now broken through into every facet of the economy, and has returned a monster from the that required extraordinary means to defeat.

Stagflation.

Image result for stagflation monster

In the late 1970's the economy reacted to the U.S. removing the monetary system from the Gold Standard and instituting a new Oil Standard (Petrodollar) by opening the door to massive inflation thanks in part to Henry Kissinger's agreement with OPEC that allowed for the price of oil to be raised.  And this then also allowed the U.S. monetary base to expand by that same amount and more to supply the world with dollars to be able to purchase energy.

This huge increase in the monetary base coupled with the economic slowdown of the middle to late 70's created the then unknown environment that would be labeled as Stagflation.  Stagflation of course is where you have slowing growth coupled with rising inflation.

To defeat this economic dragon, Federal Reserve President and later Chairman Paul Volker had to raise interest rates first from 9% in 1978, to its final top of around 20% in 1981.  And it was only from this that Stagflation was able to be crushed.

But unfortunately today the Fed has no possibility of doing a repeat of this since they and the U.S. government have pushed themselves into a corner by accumulating extraordinary debt.  In 1981 the national debt was around $500 billion, and the Fed's balance sheet was nary a blip on the radar.  However today the U.S. debt is now just under $20 trillion, and the Fed has debt based holdings of over $4.8 trillion making it impossible for them to raise interest rates of any substance since the interest alone on those obligations would bankrupt the country when they are rolled over at higher borrowing costs.

So what does this mean for the economy, for stock markets, for inflation projections, and perhaps the one asset we have yet to mention in this mirror world of 40 years ago?

When stagflation hit the economy beginning in the middle 1970's the one asset that excelled during that time was gold.  Gold went from $106.43 in 1973 (the year of the Petrodollar agreement) to over $850 at its peak in 1980.  This was a rise of 800% in just seven years.

1980
$594.90
29.61%
1979
$459.00
120.57%
1978
$208.10
29.17%
1977
$161.10
20.43%
1976
$133.77
-3.96%
1975
$139.29
-24.20%
1974
$183.77
72.59%
1973
$106.48
66.79%

Looking back in hindsight, Chairman Volker later lamented that the one thing he wished he done differently during the central bank's battle to fight stagflation was to manipulate the rising price in gold, which had acted as a barometer against the dollar, and was a much better safe haven than investors trusting in U.S. Treasuries.  And it was this lesson that Ben Bernanke, and now under Janet Yellen, that the Fed would not forego during their implementation of monetary policies that would inevitably lead us back into the straits we are in today.

Thus we are now at a crossroads since Stagflation has returned with a vengeance and the Fed has little if any ammunition to counter it.  And it is for this reason alone that the real asset winner going forward will be gold over stocks, and we may have seen this start last Wednesday when the Fed's latest rate hike resulted in not even a pothole that slowed down either inflation, or the strong rise in the gold price.

Friday, March 17, 2017

Shanghai Gold Exchange on brink of taking over control of gold prices following VIP meeting and actions after Fed rate hike

In a rushed update put out on March 17 by economic analyst Dr. Jim Willie, it appears that following the Federal Reserve's raising of interest rates two days ago, China, through the Shanghai Gold Exchange, may finally be moving up its plans to wrest control over the gold price from markets in the West.

In a new article published in tandem with his normal monthly Hat Trick Letter, Dr. Willie reported that it appears that the Chinese are now accelerating their plans to disconnect from dollar hegemony following the Fed's recent FOMC meeting and rate hike, and in response to the the market reactions made in the dollar and bond rates following the central bank's March monetary policy move.


Something big is afoot in the Shanghai Gold market. It seems that we are at the door of the RESET finally, with China being betrayed by the USGovt and USFed in concerted collusion. The attempt to reduce the USDollar while maintaining ultra-low bond yields seems the final straw. The inference is made that the jig is up finally, and a significant turning point is upon us. 
A contact at Evolution Consulting has reported that his best contact notified him that VIPs are being invited to take tours of the Shanghai Gold Exchange operation. This man was among one of the guests. These tours are not being arranged in some congenial welcoming event, not at all. Rather they are informational and official in granted preview. They are almost surely being staged to inform the opposition that it is all over for them now. With a cherry on top, the VIP guests were required to pay for the tour. The above juicy tidbit was provided by a client, passing the word along. Something big is afoot. 
China seems to have changed its position toward aggressive in the gold market introduction with gusto and emphasis. Conclude easily that where there is smoke, there is fire, and the heat will be on physical gold metal demand in Asia. In turn the pressure will be put on the USDollar, whose custodians are not honorable and for perhaps the last time, have betrayed the Chinese. Lower USDollar valuation combined with already chronic low bond yield could have turned the Chinese hostile in the wake of the USFed rate hike. 
Analyst London Paul believes something significant is on the verge of breaking the paper gold market. The clues have come on the behavior of the gold market since the Yellen Fed announced its small rate hike. It was small but significant, and probably involved a lie to the Chinese Govt finance ministers. Such coincidences do happen, but odds are against a coincidence in this case, since so critically important. Time will bear out the conclusion. The Western bankers have a long history of lies, deceit, betrayal, subterfuge, sabotage, and pilferage. They might have sacked their economies on the road to the Global Fascist State, but China has not signed up for the destructive evil development and pathway. 
EuroRaj also confirmed London Paul’s suspicion and tentative conclusion. He mentioned that such view is absolutely right, given the market reaction. Someone at the Shanghai Gold Exchange spiked the price higher the moment the Fed raised rates, which required the paper market to follow higher. He stated unequivocally that the Chinese do not consider the USFed, the banker cabal, and the US Elite as honest business partners any longer. He expects their harsh clear revenge to follow, with the launch of the long awaited Global Currency RESET to come next. US President Trump visiting the Andrew Jackson grave site was another sign, as Jackson was an arch-enemy of the banker cabal. He survived an assassination attempt. Neither Trump nor China wanted the rate hike. Trump does not want higher USGovt borrowing costs or the added economic headwind. China does not want lower bond principal value and lower USDollar value. Hence the East appears to have burned the Western banker cabal with a paper fire that could turn into a bonfire in gold metal demand. China likely perceived a maneuver to sabotage Trump by the banker cabal, and the Beijing leaders yelled PUNT, game over, no more cooperation. 
At least in the Eastern hemisphere, the USDollar is about to be kicked to the curb, shunned in trade payment usage. The non-USD platforms will be given much greater emphasis. The game is about to change, to enter the extreme danger zone. - Goldseek
Yet even this new information doesn't take into account the sudden exit from the London Silver Fix last week by the CME Group and Thomson-Reuters, who may have also seen the writing on the wall that the West is losing control over the manipulation of gold and silver prices, as well as bond yields for the U.S. Treasuries.

It was said by many that March 15 would be a critical date for the economic, financial, political, and geo-political spectrum's, and that the Ides of March may show itself in mysterious and unpredicted ways.  And going forward with the Fed raising interest rates at a time when economic data is screaming that the U.S., if not the rest of the world is bordering on recession, the reality that the time of protectionism and all countries looking out for themselves may very well be upon the global financial landscape.

Thursday, March 16, 2017

Gold price surges back over its 50 and 100 day moving average following Fed rate hike

Immediately following the Fed's announcement that they were raising interest rates a quarter point on March 15, both gold and silver shot up higher with the yellow metal gaining $22.00 into the close, and following this up with another $7 move early in Thursday trading.

While slightly dropping below it's March 7 position of $1230 from a week ago after the strong move up yesterday, gold nonetheless has gone back above its 50 and 100 moving day average and appears set to rise more based on the Fed's inadequacy in explaining to the public why they chose to raise rates with the economy signalling slow growth and possible recession.

Live New York Gold Chart [Kitco Inc.]
Gold is above its 50- and 100-day moving averages and $1225, and Silver is above $17

Sunday, March 12, 2017

As central banks lose control over inflation, and manipulation of metals slowly ends, what is the real price of gold and silver

In the late 1970's central banks lost control over inflation forcing New York Fed President Paul Volker to push for a boosting of interest rates beginning in 1978.  In fact, during a six month period in that year, rates were increased 2% to a level of 9%, only to find out that inflation still continued to climb.

A year later inflation was raging at a level of 13%, and following President Jimmy Carter's firing of several people in his cabinet, declining confidence in the dollar led to gold shooting up an unprecedented $300 an ounce in a short amount of time.

Gold of course would go on to reach a then historic high of around $850 per ounce until Volker, who would become the next Chairman of the Fed under President Ronald Reagan, took the ultimate step of raising rates from 9% to 20% between late 1979 and 1981.

The moral of this story is that once inflation gets away from central bankers, only a move of raising interest rates to extreme levels will have any chance of taming the inflation monster, but at a cost to the general economy, as well as the stock markets.

Fast forward to 2017...

On March 10 central bankers in Japan and Europe both hinted that they may now be forced to end their policies of ZIRP and could soon commence on monetary policies of raising rather than lowering interest rates because the inflation they have been masking for the past nine years has begun to rise precipitously similar to what occurred in the U.S. economy during the 1970's.  Added to this was what the market titled 'Bond King' Bill Gross said about the 10-year Treasury, that if it reaches and stays above 2.6% it will mean armageddon for almost everything.
Investors need to watch only one number in 2017 to figure out what returns are going to look like across the various markets, bond guru Bill Gross said Tuesday. 
Whether the 10-year Treasury yield crosses the 2.6 percent mark will be critical both to the bond market and to stock prices, the fund manager at Janus Capital wrote in his monthly report for clients. The yield was around 2.39 percent Tuesday morning. Higher yields reduce a bond's face value. 
"If 2.6 percent is broken on the upside ... a secular bear bond market has begun," Gross said. "Watch the 2.6 percent level. Much more important than Dow 20,000. Much more important than $60-a-barrel oil. Much more important than dollar/euro parity at 1.00. It is the key to interest rate levels and perhaps stock prices in 2017."
Gross said the 10-year yield has been in a downward trend line since 1987. If that channel is broken, look out. 
"Investment happiness and/or despair may lie ahead over the next 12 months depending on it," he said. - CNBC

This week will see at least two, if not three or more important financial, economic, and political events occur that will have tangible effects on interest rates, inflation, gold and silver, as well as the overall economy.  These include but are not limited to:  The debt ceiling vote, the Fed's FOMC meeting and announcement, and elections in the Netherlands which could bring another anti-euro and anti-EU candidate to a presidency.

All if this of course is almost meaningless in regards to the potential of inflation moving into a higher gear no matter what the central bank does monetarily, and the Congress does fiscally.  Because through our 100 year plus virtual fiat currency system, where the purchasing power of the dollar has lost over 97% of its value, what would the price of gold and silver be if that inflation completely disconnects from any chance of central bank or government control?

Earlier today on March 12, Matterhorn Capital Management head Egon Von Greyerz laid out a chart of what the actual price of gold and silver should be today using dollar terms if the cost of inflation had been, and was allowed to effect money and asset prices.  And in his charts going back 300 years of actual inflation (not reported or manipulated), then gold today would be around $14000 in 1980 dollars, and silver above $650.
The 300-year chart of gold adjusted for real inflation shows that gold is now at the bottom of the range. Even more interestingly, the $850 top in January 1980, adjusted for inflation, would be $14,463 today.
300 year gold price
The 300-year silver price chart, adjusted for real inflation confirms that the 1980 $50 top would be $669 today. - News.gold-eagle
300 year silver price

Many will say that these prices are absurd, and that central banks will always have the ability to control and manipulate gold and silver markets, as well as obfuscate the reporting of real inflation.  But all one has to do is look back to 2008 when they had to come hat in hand for a taxpayer bailout to save the entire global financial system, or in 1980 when it took extreme measures that are impossible for them to do today regarding interest rates because of how high the U.S. and global debt levels are, and you will see that if the scenario of out of control inflation is already set, then it is only a matter of time now before they lose control over all prices and assets, and gold and silver will very quickly spring back to their equilibrium true values that will not just leave the metals unaffordable, but damn well completely priceless.

Friday, March 3, 2017

After yesterday's manipulated takedown of gold price, divergence between London and Shanghai back to $28

As soon as London markets closed on March 2, bullion banks instantly dumped 1.15 million ounces (23,000 contracts) to smash down the price of gold using naked paper shorts.

The move appears to be in preparation for Friday's announcement by the Federal Reserve, but also because gold recently achieved a Golden Cross formation, signalling to technical traders a strong buy signal.

Silver Has Just Been Smashed 85 Cents to $17.70, and Gold Prices Have Just Been Sent Plunging to a Last of $1232. 
What Just Triggered the Massive Free-Fall Plunge? 
FED GOONS…giving cover for bullion banks to drop $2 BILLION in paper silver (thats over 23,000 contracts, or 1.15 MILLION OZ) as soon as London closed. - Silver Doctors
In the meantime this artificially manipulated takedown of the gold price was not recognized over in China, where the difference between the PM Gold Fix and Shanghai and the AM Gold Fix in London for March 3 is now back up to $28.

Shanghai PM Gold Fix - March 3 2017


London AM Gold Fix - March 3 2017


Thursday, February 23, 2017

Gold price hits 15 week high as it crosses over $1250 for first time since just after election

On Feb. 23 the gold price rose more than $10 per ounce to cross $1250 for the first time since just before Donald Trump won the Nov. 8 Presidential election.

Prior to that election, gold had once again crossed over $1300 per ounce, something it had not done since its massive move last June following the Brexit vote in the UK.  But with the outcome of the ultimate outsider winning the highest office in the land, markets dumped gold contracts en masse which would eventually see the price fall into the low $1100's.

But since the beginning of year, both gold and silver have slowly risen, and are nearing gains of around 10% in just the first two months of 2017.
Gold prices jumped Thursday, attempting to snap a string of three declines, as the dollar lost ground to chief rivals in the wake of a fuzzier-than-expected interest-rate assessment from the Federal Reserve. 
April gold GCJ7, +1.33% rose $10.80, or 0.8%, to $1,244.10 an ounce. A close at that level would mark the highest settlement for a most-active contract since Nov. 10, 2016, according to FactSet data. Thursday’s gain picks up on an after-hours Wednesday rise and dollar decline. Some metals traders read the Fed minutes out Wednesday as casting doubt on the timing and pace in future rate increases. - Marketwatch

Monday, February 20, 2017

Former central bank Chairman gives a mea culpa to Ron Paul and admits the Congressman was right about the Gold Standard

Ever since Alan Greenspan left his office as Chairman of the Federal Reserve, he has embarked on a near decade's long 'roadshow' to try to rebuild his reputation as a fiscal conservative.  And one of the biggest things he has been pushing for has been the belief that gold is money, and that a return to some form of a gold standard would solve many of the world's current financial problems.

This of course is the ironic dichotomy with Greenspan, since he was originally a staunch advocate of the Gold Standard up until he took over the reins of the world's largest central bank.  And it was through his Keynesian style monetary policies of low interest rates and bubble creation that not only led to the financial collapse of 2008, but paved the road for the next two Fed Chairmen to expand upon his policies to absurd degrees.

But now that the former Fed Chair is out of the establishment, he has become once again a crusader for gold as money.  And over the weekend he even admitted that former Congressman Ron Paul was correct all those years when they stood toe to toe during House testimonies, and when Paul pushed Greenspan mercilessly for why we weren't heading back towards a gold standard today.

Image result for ron paul gold standard
Finally, buried at the very end of the interview was perhaps the most interesting statement by Greenspan : the former Fed Chair's implicit admission that Ron Paul was right all along: 
Q. Against a background of ultra-low and negative interest rates, many reserve managers have been large buyers of gold. In your view, what role does gold play as a reserve asset? 
When I was Chair of the Federal Reserve I used to testify before US Congressman Ron Paul, who was a very strong advocate of gold. We had some interesting discussions. I told him that US monetary policy tried to follow signals that a gold standard would have created. That is sound monetary policy even with a fiat currency. In that regard, I told him that even if we had gone back to the gold standard, policy would not have changed all that much. - Zerohedge
For those who may not know, back in the 1960's Alan Greenspan became the architect of electronic banking, as he was also an excellent computer programmer as well as an extraordinary economist.  And in a blueprint discovered by analyst Bix Weir on the website of the St. Louis Fed called the Road to Roota, Greenspan's plans entailed using electronic banking and fiat currency to expand and then implode the monetary system in order to bring it back to a state where a return to the gold standard would be both necessary and viable.

Since China has already stated publicly their end goal is to return money and trade to a gold standard in the near future, what remains is the question of whether the U.S. is both willing and prepared for such a sea change.

And ironically for the first time in decades, the U.S. has a President who is himself a believer in gold.

Thursday, February 2, 2017

With Donald Trump now in Office, Congress finally gets the courage to put the fear of God into the Fed, and Chairman Yellen

There is an interesting dichotomy that is now occurring since the Republican Party took over control of both houses of Congress, and the office of the President... and that is a new focus on the Federal Reserve and the illegal activities they have been allowed to conduct for eight years under Barack Obama.

Image result for hang central bankers

A number of years ago when Ben Bernanke was still the Chairman of the Fed, Democratic Senator Chuck Schumer gave the central bank carte blanche to do anything they saw fit to try to fix the economy.  And this distribution of both monetary and fiscal policies that were the responsibility of the Congress assured that the Fed would never have any real oversight to do as they saw fit... including the re-distribution of the wealth of the Middle Class into the hands of the 1%.

Image result for chuck schumer banks lobby
It appears that Democrats may be taking a more aggressive stand in urging the Fed to do more easing. 
After 5-minute discussion of the economy, and the ongoing disappointing recovery, Chuck Schumer ended his query of Ben Bernanke at the Senate today with this memorable exchange. 
His conclusion: “Get to work, Mr. Chairman.” — CNBC
But this has all changed now that Donald Trump has taken over the White House, and it appears his willingness to call out the Fed, Chairman Yellen, and even Vice-Chairman Stanley Fischer is leading other Republicans to man up and publicly put the central bank on notice that their days of non-transparent oversight may be over.
In what may be a harbinger of major headaches to come for the Fed, a recent letter (Jan. 31) penned by Republican representative  Patrick McHenry, Vice Chairman of the Financial Services Committee, has lashed out at Janet Yellen, telling the Fed chair in no uncertain terms that "despite the clear message delivered by President Donald Trump in prioritizing America's interest in international negotiations, it appears that the Federal Reserve continues negotiating international regulatory standards for financial institutions among global bureaucrats in foreign lands without transparency, accountability, or the authority to do so." 
His assessment of this ongoing activity by the Fed: "This is unacceptable."
McHenry's emphasis is on "international forums" such as the Financial Stability Board, the Basel Committee on Banking and Supervision, and the International Association of Insurance Supervisors, and he notes that "continued participation" in these forums must be "predicated on achieving objectives set by the new Administration", something which will "likely require a comprehensive review of past agreements that unfairly penalized the American financial system in areas as varied as bank capital, insurance, derivatives, systemic risk, and asset management." 
He then adds that "the secretive structures of these international forums must also be reevaluated" because when the deals were negotiated, "international standards were turned into domestic regulations that forced American firms of various sizes to substantially raise their capital requirements, leading to slower economic growth here in America." 
Here one may recall how the Fed secretly provided tens of billions in under the table "rescue loans" to foreign banks doing business in the US (and others) during the peak days of the 2008 financial crisis. 
His conclusion, however, is what must worry the Fed the most, because  as McHenry notes, "it is incumbent upon all regulators to support the U.S. economy, and scrutinize international agreements that are killing American jobs. Accordingly, the Federal Reserve must cease all attempts to negotiate binding standards burdening American business until President Trump has had an opportunity to nominate and appoint officials that prioritize America's best interests." 
The implication: the current Fed officials do not prioritze America's best interests, and are therefore expendable. - Zerohedge
As the MAGA movement begins to invade all aspects of the government and society, those who are now on board the Trump Train to try to Make America Great Again are realizing that the biggest swamp that needs to be drained is located just down the road on Eccles Street.

Entering into February of 2017, gold following same trek upward as it did in first two months of 2016

Back in January we published an article showing how the gold price was following the same path here in 2017 that it did last year following rate hikes made by the central bank during each of the past two Decembers.

And as we enter into February, that trend appears to be continuing like clockwork with the gold price having risen 3% and 5% respectively in each of the past two Januaries.

January 2016


January 2017


The one difference however between January of 2016 and the same month in 2017 is that the price started off the month $80 higher this year, and ended $100 greater than what it closed out at on January 31 of last year.

As we begin the month of February, expectations of this trend continuing are just as prevalent as they were last year when the price made even greater moves than they did in January.  In fact, at the end of the second month of 2016 gold had climbed another $110, or 9% on top of the 3% rise the month before, and set the stage for gold climbing to its highest level since 2011.

February 2016


 Projecting this same percentage gain for February of 2016 forward into 2017, at the end of this month we could expect to see a gold price of around $1326, or a gain of $109 above what it started out the month.

Wednesday, January 18, 2017

Demand for gold surging as paper gold in the GLD ETF running at levels not seen since 2011

2011 was the year gold reached its all-time high against the dollar when it climbed from $1325 at the end of January to over $1900 by early September.  And during that year investments in the GLD ETF were also at record highs.

Subsequently traders saw the gold price fall over the course of the next four years, ending its bear market run in January of 2016.  But as we enter into a new Presidency in January of 2017, and conditions looking very similar to what occurred last year in the gold markets following the central bank's first rate hike in over a decade, something else is occurring that is sure to spark a run in the gold price and it is happening once again in the paper gold market.

On January 17, the GLD ETF had risen 13 of the last 15 trading days, creating a scenario for gold not seen since it rose to its all-time high back in 2011.

Gold chart for September 2011 when it reached its all-time high 
The popular gold-tracking GLD ETF has risen in 13 of the past 15 sessions through Tuesday, the first time it has done so since summer of 2011. 
Gold has suffered a precipitous drop since peaking in mid-2016, with Donald Trump's election and the Federal Reserve's rate hike serving as two notable bearish catalysts. 
Each of the events sent the dollar surging and yields rising — both of which are bad news for gold. After peaking at nearly $1,380 per troy ounce in July, gold found itself below $1,130 per troy ounce in the middle of December. 
Since then, gold has staged a subdued but nonetheless persistent rise. In the 15 sessions since Dec. 22, gold has risen more than 7 percent. 
The last time the GLD rose as consistently was in the 15 sessions ended July 26, 2011, which similarly saw the ETF rise a bit less than 7 percent. 
To be sure, 2011 is not a year that gold fans remember fondly. The metal topped out just a few months later, in September, at $1,923.7. A gut-wrenching decline was ahead, and the value of the metal has pretty much been declining ever since. - CNBC
Gold price to date for 2017

Tuesday, January 17, 2017

The threat of the U.S. banning cash is not over as it becomes a topic at the Davos Economic Forum

Just when Americans thought they might be out of the woods from their government seeking to ban cash, a Nobel-Laureate economist participating at this year's Davos World Economic Forum has proven that to be incorrect.  In fact, the topic of banning cash in the U.S. as well as elsewhere around the world is on the menu of this week's forum, and Joseph Stiglitz is the chef serving that main course.

Indian Prime Minister Narendra Modi has already removed 86% of his country's currency from circulation in an attempt to curb tax evasion, tackle corruption and shut down the shadow economy.
Should the US follow suit? 
Joseph Stiglitz, Nobel Prize-winning economist, thinks so. Phasing out currency and moving towards a digital economy would, over the long term, have “benefits that outweigh the cost,” the Columbia University professor said on day one of the World Economic Forum's Annual Meeting in Davos
Stiglitz was speaking in the session Ending Corruption alongside Mark Pieth from the Basel Institute of Governance and APCO Worldwide Founder and Executive Chairman Margery Kraus. Stiglitz and Pieth co-authored a report, Overcoming the Shadow Economy, in November last year. 
Quantifying the scale of the problem, Stiglitz said: “You can put it into the context of one of the big issues being discussed in Davos this year - the backlash against globalization, the darker side of globalization ... The lack of transparency in global financial markets, the secrecy havens that the Panama Papers exposed, just reinforced what we already knew ... There is a global framework for both corruption and tax evasion and tax avoidance. 
“The fact that you can hide ill-gotten gains so easily in these secrecy havens really provides incentives for people to engage in this activity as they can get the economic returns and then enjoy the benefits of those returns. If there were not these secrecy havens then the benefits from engaging in these kinds of illicit activity would be much diminished.” 
One of the countries that has not done enough to fight corruption is the US, Stiglitz went on to say, and one remedy could be to phase out cash and embrace digital currencies. - World Economic Forum
Stiglitz, like two other economists (Larry Summers and Ken Rogoff) who spent 2016 promoting the end of cash to protect the failures of the central banks, sees taking away the freedoms that physical money provides all individuals as the only alternative to allow the Fed to begin negative interest rates.  However, like with nearly all Keynesian economists running Western monetary systems today, they ignore the real culprits behind the use of cash in illegal activities, and refuse to call out the very banks they wish to protect from when they were tightly involved in money laundering, and helping fund terrorism and the drug war.

As we have seen in India, the European Union, and Venezuela these past few months, governments are not afraid to eliminate currencies or formulate policies meant to ban cash entirely from an economy.  And this leaves the only recourse for the common man to simply opt out of the system, and get their wealth into physical gold, silver, or bitcoin, and offshore as much of it as possible so that it is outside the hands of the financiers who want to take it from you.

Tuesday, November 29, 2016

Donald Trump interviewing a potential Treasury Secretary who advocates gold standard and ending the Fed

If there is one thing you can say about President-Elect Donald Trump so far is that he has been very thorough in interviewing candidates for his administration.  From appointing a loyal supporter like Dr. Ben Carson to the position of Director of HUD while at the same time dumping former loyalist Chris Christie, to being willing to listen to and talk with a staunch adversary like Mitt Romney, to date Trump is sticking to his word in trying to finding the best person for the job no matter what side of the aisle they are on.

Yet one cabinet position remaining to be filled in his administration has seen as much contention as that of Secretary of State.  And so far the only real candidates interviewed have been those from the establishment, and tied to the banking cabal that are at the core of Washington's elite swamp.

Until now.

On Nov. 28 Donald Trump met with the former CEO of BB&T to perhaps discuss his potential to become the next Secretary of the Treasury.  And what makes John Allison unique is that as opposed to a banker from Goldman Sachs or J.P. Morgan who would strive to keep the status quo, Allison is a staunch advocate of returning the monetary system to a gold standard, and eliminating the Federal Reserve as the country's money printer.

On Monday, Trump will meet with John Allison, the former CEO of the bank BB&T and of the libertarian think tank the Cato Institute. 
There have been reports that Allison is being considered for Treasury secretary.
Trump's has on the campaign trail questioned the future of the Federal Reserve's political independence, but Allison takes that rhetoric a step further. While running the the Cato Institute, Allison wrote a paper in support of abolishing the Fed. 
"I would get rid of the Federal Reserve because the volatility in the economy is primarily caused by the Fed," Allison wrote in 2014 for the Cato Journal, a publication of the institute. 
Allison said that simply allowing the market to regulate itself would be preferable to the Fed harming the stability of the financial system. 
"When the Fed is radically changing the money supply, distorting interest rates, and over-regulating the financial sector, it makes rational economic calculation difficult," Allison wrote. "Markets do form bubbles, but the Fed makes them worse." 
Allison also suggested that the government's practice of insuring bank deposits up to $250,000 should be abolished and the US should go back to a banking system backed by "a market standard such as gold." - Business Insider
What makes John Allison different than the string of too big to fail bank executives that have proliferated the office of the Treasury over the last several administrations is that BB&T is considered to be a mid-size regional bank, and not among the protected financial oligarchies that have a history of fraud and corruption, and who are reliant upon the expansion of cheap credit from the Fed to be able to continue running their criminal schemes.

With both Russia and China very open to a return to some form of a gold standard in international trade or reserve currency standard, the confirmation of a pro-gold standard Secretary of the Treasury would go a long way in helping Donald Trump to negotiate a currency reset to deal with the untenable debt that both the U.S. and most of the world are being suffocated under.  And this would also mean that the gold price would finally be released to climb to its true value, as the supply of metal would need to be valued much much higher to backstop the amount of currency and debt that are currently floating around the global financial system.

Saturday, September 24, 2016

Perfect storm for gold is now in place as asset bubbles created by central banks are on the cusp of imploding

Central banks around the world no longer are tied to their original mandates of stemming inflation, and formulating monetary policies that aid in keeping unemployment at low levels.  Instead, their 'new' mission has been to prop up assets at all costs, even if this means buying them hand over fist in every market available.

Leading up to the 2008 Credit Crisis, central banks had used low interest rates to create artificial bubbles in housing, equities, and securities.  And when they burst in October of that year, their reactions were to simply double and triple down on these failed policies, and add in tens of trillions of dollars in money printing to ensure these types of assets not only rose to new highs, but would be protected from ever crashing again.

Ahhh... the folly of men.

Unfortunately for economies, the natural laws that govern the Invisible Hand of markets will always have the final say, just as nature is always more powerful than any technology humanity can create to try to stop its exponential power.  (See New Orleans and Katrina)  And despite the Fed, ECB, and Bank of Japan using every tool they could dream up, including outright buying of stocks, mortgage backed securities, sovereign bonds, and corporate bonds, they have been unable to stop the specter of deflation and stand on the threshold of seeing the mother of all bubble implosions about to take place.

Gold will likely soar to a record within five years as asset bubbles burst in everything from bonds to credit and equities, forcing investors to find a haven, according to Old Mutual Global Investors’ Diego Parrilla. 
The metal is at the start of a multi-year bull run with a “few thousand dollars of upside” in a world of “monetary policy without limits” where central banks print lots of money and low or negative interest rates prevail, said Parrilla, who joined the firm as managing director of commodities last month. He’s worked at Goldman Sachs Group Inc. and Bank of America Merrill Lynch. 
“As some of the excesses in other asset classes get unwound, gold will perform very strongly,” said 43-year-old Parrilla, who has almost 20 years experience in precious-metals markets. The “perfect storm scenario will mean that gold will perform best when other classes are doing worst.” - Bloomberg
We saw this month that neither the Federal Reserve, the European Central Bank, nor the Bank of Japan could come up with any new monetary policies that could sate the market's thirst for more, nor their demand for higher and greater yields.  Which means that unless these 'Masters of the Universe' are willing to initiate ultimate protocols, such as taking the banning of cash from the blackboard to the boardroom, the inevitable result will be a bursting of all these asset bubbles and an explosion for gold that will make its $1940 high in 2011 look like pocket change.

Thursday, September 22, 2016

Gold price and gold miner ETF both spike following Fed's confused position on economy following another failed FOMC meeting

Immediately following the Fed's announcement that once again they would not be raising rates in September, gold shot up over $20 as continuing confusion from the U.S. central bank is driving investors into the best safe haven.

But gold bullion was not the only precious metal asset to benefit from the Fed's remaining at the status quo as the primary market index for gold miners, the GDX, also rose 7% on Wednesday signalling that expectations of much higher prices to come will encapsulate stocks tied to the precious metal.

SPDR Gold Shares (GLD), which tracks the spot price of gold, jumped 1.5% through the close. The ETF recaptured its 50-day moving average for the first time since Sept. 8. It had come under pressure from uncertainty surrounding the Fed's next move on interest rates. 
Higher rates tend to weigh on gold, a nonyielding haven asset, while lifting the dollar in which it is globally priced. 
VanEck Vectors Gold Miners (GDX) vaulted 7.1% on the stock market today. Mining companies are widely regarded as a leveraged play on the price of gold. 
Silver and silver-backed mining ETFs also flew higher in big volume, with iShares Silver Trust (SLV) breaking through resistance at its 50-day moving average and closing at the top of the day's range. - Investors Business Daily
With the Fed nearly assured of propping up equities into the foreseeable future, investing in well positioned mining stocks has become a great addition to buying physical gold as many have risen by more than 100-500% since the beginning of the year.